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All members of the Company’s Supervisory Board hereby certify that the contents of this announcement are true, accurate, and complete, and that there are no false records, misleading statements, or material omissions. |
The Fourth Session of the Supervisory Board of Dalian Refrigeration Co., Ltd. (“the Company”) held its seventh meeting on April 25, 2006, in the Company’s fifth-floor conference room. All three supervisors attended the meeting, which was chaired by Mr. Yu Fuchun, Chairman of the Supervisory Board. The meeting reviewed and adopted the following resolutions:
I. Report on the Work of the Company’s Supervisory Board for the Year 2005;
Approved: 3 votes; Opposed: 0 votes; Abstentions: 0 votes.
II. The “Supervisory Board Report” in the Company’s 2005 Annual Report;
Approved: 3 votes; Opposed: 0 votes; Abstentions: 0 votes.
III. Report on the Amendment of the Rules of Procedure for the Supervisory Board Meeting; (Attachment 6)
Approved: 3 votes; Opposed: 0 votes; Abstentions: 0 votes.
IV. Audit Opinions on the 2005 Annual Report and the First Quarter Report for 2006.
1. The preparation and review procedures for this annual report and quarterly reports comply with applicable laws, regulations, the Company’s Articles of Association, and the Company’s various internal management systems.
2. The content and format of this annual report and quarterly reports comply with all relevant regulations issued by the China Securities Regulatory Commission and the Shenzhen Stock Exchange, and the information contained therein accurately reflects the Company’s operational management and financial condition for the year 2005 and the first quarter of 2006 from all material aspects.
3. Prior to the issuance of this annual report and quarterly reports, no violations of confidentiality provisions were detected among personnel involved in the preparation and review of the annual and quarterly reports.
Approved: 3 votes; Opposed: 0 votes; Abstentions: 0 votes.
The Supervisory Board hereby expresses the following independent opinion on the following matters:
1. Compliance with the law in the company’s operations. The company’s decision-making procedures are lawful, and a relatively comprehensive internal control system has been established. During the performance of their duties, the company’s directors and managers have not engaged in any conduct that violates laws, regulations, the company’s articles of association, or that harms the company’s interests.
2. Financial condition of the company. Both Dalian Hualian Certified Public Accountants LLP and PwC Zhongtian Certified Public Accountants LLP issued unqualified audit reports. The financial statements faithfully reflect the company’s financial position and operating results.
3. During the reporting period, the Company did not raise any new capital, nor did it continue to utilize funds raised in prior years.
4. During the reporting period, the Company acquired a 21% equity interest in Wuhan New World Refrigeration Industry Co., Ltd. held by Dalian Bingshan Group Co., Ltd. for RMB 8.75 million using its own funds. The transaction price was reasonable, there was no insider trading, and the rights and interests of certain shareholders were not impaired.
5. During the reporting period, the company’s principal related-party transactions consisted of purchases of goods from affiliated companies. Such transactions were conducted on arm’s-length terms and did not prejudice the company’s interests.
6. The company’s provision for asset impairment for the year 2005 was made in accordance with lawful resolution procedures and supported by sufficient supporting evidence.
Supervisory Board of Dalian Refrigeration Co., Ltd.
April 27, 2006
Appendix 6: Report on Amendments to the Rules of Procedure for the Supervisory Board
In accordance with the new Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Guidelines for the Articles of Association of Listed Companies (Revised in 2006), and the Company’s amended Articles of Association, all effective as of January 1, 2006, the following amendments are hereby made to the Rules of Procedure of the Company’s Supervisory Board:
1. Article 3 is amended to read:
“The Supervisory Board shall exercise the following powers: (1) review the periodic reports of the Company prepared by the Board of Directors and submit written audit opinions; (2) examine the financial affairs of the Company; (3) supervise the performance of duties by directors and senior management personnel, and propose their removal if they violate laws, administrative regulations, these Articles of Association, or resolutions of the Shareholders’ Meeting; (4) require directors and senior management personnel to rectify any conduct that harms the interests of the Company; (5) propose the convening of an extraordinary general meeting and, when the Board of Directors fails to perform its statutory duties under the Company Law to convene and preside over such a meeting, convene and preside over it; (6) submit proposals to the Shareholders’ Meeting; (7) bring lawsuits against directors and senior management personnel in accordance with Article 152 of the Company Law; (8) conduct investigations upon discovering abnormal operating conditions of the Company; and (9) such other powers as are prescribed by laws, regulations, these Articles of Association, or delegated by the Shareholders’ Meeting.”
2. Article 15 of the original regulations stipulated: “When the Supervisory Board votes on resolutions concerning the matters listed in Article 3 of these Rules, such resolutions shall be adopted only if approved by more than two-thirds of all supervisors.”
It is now amended to read: “When the Supervisory Board votes on resolutions concerning matters listed in Article 3 of these Rules, such resolutions shall be adopted only upon the approval of more than half of all supervisors.”
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