Article 1 In order to improve the working efficiency of the board of directors, faithfully perform its duties, safeguard the interests of the company, and ensure the legality of meeting procedures and resolutions, These Rules are formulated in accordance with the relevant provisions of the Company Law of the People's Republic of China (hereinafter referred to as the Company Law), the Securities Law of the People's Republic of China (hereinafter referred to as the Securities Law) and the Articles of Association of Shanghai Xuanhong Power Equipment Co., LTD. (hereinafter referred to as the Articles of Association).

Ii. Directors

Article 2 A director of a company who is a natural person may not serve as a director of the company under any of the following circumstances:

(1) having no or limited capacity for civil conduct;

(2) Being sentenced to criminal punishment for embezzlement, bribery, embezzlement of property, misappropriation of property, or undermining the order of the socialist market economy and the term of execution has not exceeded five years, or being deprived of political rights for a crime and the term of execution has not exceeded five years;

(3) if he serves as a director, factory director or president of a company or enterprise in bankruptcy liquidation and is personally responsible for the bankruptcy of the company or enterprise, it has not been more than three years since the date of completion of the bankruptcy liquidation of the company or enterprise;

(4) Acting as the legal representative of a company or enterprise whose business license is revoked or ordered to close due to violations of the law, and having personal responsibility, it has not been more than 3 years since the date of the company or enterprise's business license is revoked;

(5) debts owed by individuals in a relatively large amount are not repaid when they mature;

(6) Being banned from the securities market by the China Securities Regulatory Commission for a period not expired;

(7) Other contents stipulated by laws, administrative regulations or departmental rules.

Where a director is elected or appointed in violation of the provisions of this Article, the election, appointment or appointment shall be invalid. If a director occurs under this Article during his term of office, the Company shall relieve him of his post.

Article 3 The directors shall be elected or replaced by the shareholders' meeting and may be removed by the shareholders' meeting before the expiration of their term of office. The term of office of the directors is three years and they may be re-elected at the end of their term.

The term of office of a director shall be counted from the date of his appointment until the expiration of the term of office of the current board of directors. If a director is not re-elected in time after the expiration of his term of office, the former director shall still perform his duties as a director in accordance with laws, administrative regulations, departmental rules and the articles of association before the newly elected director takes office.

The president or other senior managers may concurrently serve as directors, but the total number of directors who concurrently serve as president or other senior managers and the number of directors who are employees' representatives shall not exceed half of the total number of directors of the company.

Article 4 The directors shall abide by laws, administrative regulations and the articles of association of the Company, and bear the following obligations of loyalty to the company:

(1) shall not take advantage of their power to accept bribes or other illegal income, and shall not seize the property of the company;

(2) Shall not misappropriate company funds;

(3) Shall not store the assets or funds of the company in its own name or in an account opened in the name of other individuals;

(4) In violation of the provisions of the articles of association of the company, without the approval of the general meeting of shareholders or the board of directors, the company shall not lend funds to others or provide security for others with company property;

(5) Not enter into contracts or transactions with the Company in violation of the articles of association or without the approval of the general meeting of shareholders;

(6) Without the approval of the general meeting of shareholders, shall not take advantage of his position to seek business opportunities that should belong to the Company for himself or others, or operate the same business as the Company for himself or for others;

(7) shall not accept the commission of transactions with the company as his own;

(8) Shall not disclose company secrets without authorization;

(9) shall not use its affiliated relationship to harm the interests of the company;

(10) Other obligations of loyalty stipulated by laws, administrative regulations, departmental rules and articles of association.

Any income obtained by a director in violation of this article shall be owned by the company; If any loss is caused to the company, it shall be liable for compensation.

Article 5 The directors shall abide by laws, administrative regulations and the articles of association of the company and shall have the following obligations of diligence towards the company:

(1) The Company shall exercise the rights granted by the Company prudently, conscientiously and diligently to ensure that the Company's business conduct complies with the requirements of national laws, administrative regulations and various economic policies of the State, and its business activities do not exceed the business scope specified in the business license;

(b) All shareholders shall be treated fairly;

(3) Timely understanding of the company's business operation and management;

(4) A written confirmation opinion shall be signed on the company's periodic report. Ensure that the information disclosed by the company is true, accurate and complete;

(5) The Board of supervisors shall be provided with the relevant information and materials truthfully and shall not prevent the Board of supervisors or the supervisors from exercising their functions and powers;

(6) Other obligations of diligence stipulated by laws, administrative regulations, departmental rules and the company's articles of association.

Article 6 If a director fails to attend the board meeting in person for two consecutive times, nor does he entrust other directors to attend the board meeting, he shall be deemed unable to perform his duties, and the board of directors shall propose to the general meeting of shareholders to replace him.

Article 7 A director may resign before his term of office expires. A director who resigns shall submit a written resignation report to the Board of Directors. The board of directors will disclose the relevant situation within two days.

If, as a result of the resignation of a director, the number of directors on the board of directors of the company is lower than the statutory minimum, the original director shall continue to perform his duties as a director in accordance with laws, administrative regulations, departmental rules and the articles of association before the newly elected director takes office.

Except as set out in the preceding paragraph, the resignation of a director shall take effect when the resignation report is served on the Board of Directors.

Article 8 When a director's resignation takes effect or his term of office expires, he shall complete all the transfer procedures to the Board of directors. His duty of loyalty to the company and the shareholders shall not be duly rescinded after the expiration of his term of office and shall remain valid within a reasonable period of time stipulated in the articles of association.

Within two years after the expiration of the term of office of a director, he shall not operate or operate for others any business similar to that of the Company.

The obligation of a director to keep the Company's trade secrets confidential shall remain valid after the end of his or her term of office until the secret becomes public information.

The duration of other duties of loyalty shall be determined on the basis of fairness, depending on the length of time between the occurrence of the event and the departure, and on the circumstances or conditions under which the relationship with the company is terminated.

Article 9 Where a director violates laws, administrative regulations, departmental rules or the articles of association while performing his duties, thereby causing losses to the company, he shall be liable for compensation.

Iii. Board of Directors

Article 10 According to the Articles of Association, the board of directors shall be composed of 9 directors, including 1 chairman and 3 independent directors, who shall be elected by the shareholders' meeting.

Article 11 The board of directors shall exercise the following functions and powers:

(1) to convene a general meeting of shareholders and report its work to the general meeting of shareholders;

(2) implementing the resolutions of the general meeting of shareholders;

(3) to decide on the company's business plan and investment plan;

(4) To formulate annual financial budget plans and final accounting plans of the company;

(5) formulating profit distribution plans and plans for making up losses of the company;

(6) To formulate plans for the company to increase or decrease its registered capital, issue bonds or other securities and go public;

(7) To draw up plans for major acquisitions of the company, purchases of shares of the company under the circumstances specified in items (1) and (2) of Article 22 of the company's articles of association, merger, division, dissolution and change of company form;

(8) Within the scope authorized by the general meeting of shareholders, decide on the company's foreign investment, acquisition and sale of assets, provision for asset impairment and write-off of asset losses, asset mortgage, foreign guarantee matters, entrusted financial management, related transactions and other matters;

(9) Deciding on the establishment of the company's internal management organization;

(10) appointing or dismissing the president and secretary of the board of directors of the company; Appoint or dismiss vice President, chief financial officer and other senior management personnel of the company according to the nomination of the President, and decide on their remuneration, rewards and punishments;

(11) To formulate the basic management system of the company;

(12) formulating plans for amending the articles of association;

(13) Managing the company's information disclosure;

(14) to submit to the general meeting of shareholders to hire or replace the accounting firm for the company's audit;

(15) Listen to the work report of the president of the company and check the work of the president;

(16) To make resolutions on the purchase of shares of the company by the company under the circumstances provided for in items (3), (5) and (6) of Article 22 of the Articles of Association;

(17) Other powers granted by laws, administrative regulations, departmental rules or the articles of association of the company.

Article 12 The business plan, investment plan and basic management system of the company shall be formulated by the president and submitted to the Board of directors for approval. The company's annual financial forecast, final account plan, profit distribution plan and loss recovery plan shall be formulated by the financial officer and submitted to the Board of directors. The amendment plan of the Articles of Association shall be formulated by the secretary of the Board of Directors and submitted to the Board of Directors.

Article 13 The board of directors shall determine the authority to purchase or sell assets, reserve for asset impairment and write off asset losses, foreign investment, asset mortgage, foreign guarantee matters, entrusted financial management and related transactions, and establish strict review and decision-making procedures; Major investment projects shall organize relevant experts and professionals to review and submit to the general meeting of shareholders for approval.

The Board of Directors has the right to decide on the following matters: acquisition or sale of assets, provision for asset impairment and write-off of asset losses, asset mortgage, foreign investment, entrusted financial management, loans, related transactions, etc. :

1. Non-affiliated transactions:

(1) The purchase or sale of assets of the company (excluding the purchase of raw materials, fuel and power, and the sale of products, commodities and other assets related to daily operation, but the purchase or sale of such assets in asset exchange is still included), foreign investment (including entrusted financing, entrusted loans, and investment in subsidiaries), Excluding securities investment, risk investment), leased or leased assets, asset mortgage, pledge, signing management contracts (including entrusted operation, entrusted operation, etc.), gift or gift assets, creditor's rights or debt restructuring, transfer of research and development projects, signing licensing agreements and other transactions, meeting the following criteria (if the data involved in the calculation of the following indicators are negative, Take its absolute value) :

(1) Review transactions involving the total assets (there are both carrying amounts and assessed values, whichever is higher) accounted for more than 10% of the company's total audited assets in the latest period; However, if the total amount of the underlying assets of the transaction accounts for more than 50% of the total audited assets of the company in the latest period, it shall be submitted to the general meeting of shareholders for deliberation and approval;

(2) Review transactions where the transaction amount (including liabilities and expenses assumed) accounts for more than 10% of the company's audited net assets in the latest period; However, if the transaction amount of the subject matter of the transaction (including debts and expenses assumed) accounts for more than 50% of the company's audited net assets in the latest period, it shall be submitted to the general meeting of shareholders for deliberation and approval;

(3) examine matters where the net profit related to the subject matter of the transaction (such as equity) in the most recent fiscal year accounts for more than 10% of the company's audited net profit in the most recent fiscal year; However, if the net profit related to the subject matter of the transaction (such as equity) in the most recent fiscal year accounts for more than 50% of the audited net profit of the company in the most recent fiscal year, it shall be submitted to the general meeting of shareholders for deliberation and approval;

(4) To examine matters where the main business income related to the subject matter of the transaction (such as equity) in the most recent fiscal year accounted for more than 10% of the company's audited main business income in the most recent fiscal year; However, if the main business income related to the subject matter of the transaction (such as equity) in the latest fiscal year accounts for more than 50% of the audited main business income of the company in the latest fiscal year, it shall be submitted to the general meeting of shareholders for deliberation and approval.

(2) Reviewing the company's risk investment matters other than securities investment of less than 50 million yuan;

(3) To examine matters where the cumulative amount of financial assistance provided to external parties for consecutive months does not exceed 10% of the company's audited net assets in the latest period;

(4) To review transactions related to the day-to-day operations of the Company (including the purchase of raw materials, fuel and power, and the sale of products, commodities and other assets related to the day-to-day operations of the company; Bank loans, etc.), the amount of a single contract is more than 50 million yuan (the cumulative amount of similar transactions in 12 consecutive months does not exceed 10% of the company's audited operating income in the most recent fiscal year).

For the transactions of the same kind that occur within 12 months, the above provisions shall be applied in accordance with the principle of cumulative calculation. If the relevant obligations have been fulfilled in accordance with the above provisions, they will no longer be included in the relevant cumulative calculation scope.

If the data involved in the calculation of the above indicators is negative, its absolute value is calculated.

2. Related Transactions:

(1) Review transactions between the Company and associated natural persons with an amount of more than 300,000 yuan but less than 30 million yuan;

(2) Review of the following transactions between the Company and related legal persons:

① Transactions with an amount of more than 3 million yuan and less than 30 million yuan;

② The amount of the company's most recent period of audited net assets more than 0.5%, less than 5% of the transaction.

For the transactions of the same kind that occur within 12 months, the above provisions shall be applied in accordance with the principle of cumulative calculation. If the relevant obligations have been fulfilled in accordance with the above provisions, they will no longer be included in the relevant cumulative calculation scope.

If the data involved in the calculation of the above indicators is negative, its absolute value is calculated.

(3) Review the company's assets impairment provisions in a fiscal year, the cumulative amount of more than 5% of the latest period of audited net assets but not more than 10% of the latest period of audited net assets;

4, review the company's single asset write-off of more than 1 million yuan, but not more than 5 million yuan, or the year's cumulative write-off of more than 5 million yuan, but not more than 30 million yuan matters;

5. The Board of directors shall, in addition to the provisions of Article 40 of the Articles of Association, strictly follow the following provisions when deliberating matters concerning external guarantees:

(1) The external guarantee matters must be reviewed and approved by more than two-thirds of the directors present at the board of directors, and by more than two-thirds of all independent directors;

(2) Without the approval of the general meeting of shareholders, the Company shall not provide guarantees for any unincorporated entity or individual;

(3) The company's external guarantee must require the other party to provide counter-guarantee, and the provider of counter-guarantee should have the corresponding capacity to bear;

(4) An external guarantee subject to the approval of the shareholders' meeting may not be submitted to the shareholders' meeting for approval until it has been examined and approved by the Board of directors.

Article 14 The board of directors shall have the right to advise the President to request the Board of directors to dismiss the vice president or the chief financial officer for administrative, criminal, serious dereliction of duty or other incompetence. If the president does not propose dismissal, he shall bear the corresponding responsibility for the consequences arising therefrom.

Article 15 The basic management system of the company includes the labor and personnel system, financial system, and production safety system.

Iv. Chairman

Article 16 In accordance with the provisions of the Articles of Association, the chairman shall exercise the following functions and powers:

(1) to preside over general meetings of shareholders and to convene and preside over meetings of the board of directors;

(2) To supervise and inspect the implementation of the resolutions of the Board of directors;

(3) to sign the company's stocks, bonds and other marketable securities;

(4) Sign important documents of the Board of Directors and other documents that should be signed by the legal representative of the company;

(5) Exercising the functions and powers of the legal representative;

(6) In the event of an emergency of force majeure such as a major natural disaster, to exercise the special disposal power of the company's affairs in accordance with the provisions of law and the interests of the company, and to report to the board of directors and the general meeting of shareholders afterwards;

(7) Other functions and powers conferred by the Board of Directors.

Article 17 The chairman, as the legal representative of the company, shall represent the company externally, and all documents made to the outside world shall be signed by the chairman. In order to improve work efficiency, according to the specific circumstances of the company, the chairman may authorize others to sign relevant documents in the name of the company within the scope of authorization.

Article 18 Important documents of the Board of directors refer to reports, statements, announcements, notices, etc. sent or issued by the Board of directors in the name of the relevant government departments, other enterprises and institutions, lending banks, securities underwriting institutions, shareholders of the company, directors, etc.

5. Independent Directors