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Announcement on Resolutions of the Eleventh Meeting of the Fifth Board of Directors of Jilin Zixin Pharmaceutical Co., Ltd

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Stock code: 002118 Securities abbreviation: Zixin Pharmaceutical Announcement No.: 2014-009

Jilin Zixin Pharmaceutical Co., Ltd.

Announcement on Resolutions of the Eleventh Meeting of the Fifth Board

The company and all members of the board of directors guarantee that the content of the information disclosure is true, accurate and complete, and there are no false records, misleading statements or major omissions.

The eleventh meeting of the fifth session of the Board of Directors of Jilin Zixin Pharmaceutical Co., Ltd. (hereinafter referred to as the “Company”) was held on the morning of February 24, 2014 by way of on-site voting. The meeting was notified by telephone on February 14, 2014. E-mails, etc. are issued in accordance with the provisions of the Company Law and the Articles of Association. The meeting should attend 7 directors and actually attend 7 directors. The convening of this meeting is in line with the relevant provisions of the Company Law and the Articles of Association. The convening procedures and voting results of this meeting are legal and valid.

The meeting was held in the conference room of the company and was presided over by Mr. Cao Enhui, the chairman of the board. Supervisors Tian Feng, Fan Shuibo, Zhang Hongfa, deputy general manager Han Ming, financial director Xu Jifeng, and secretary of the board Zhong Yunxiang attended the meeting. After careful consideration by the participating directors, the following proposals were passed:

1. The meeting voted and approved the "2013 2013 Work Report of the Board of Directors" with the result of voting by 7 votes, 0 votes against and 0 abstentions.

The board of directors of the company submitted the “2013 Annual Work Report of the Board of Directors” according to the work and operation in 2013. For details, please refer to the “Report of the Board of Directors” in the fourth section of the “2013 Annual Report”.

The independent directors of the company, Ms. Li Fei, Mr. Fu Wei and Ms. Wang Xu submitted the “Independent Directors' 2013 Debriefing Report” to the Board of Directors for details of the website of www.cninfo.com.cn.

This proposal still needs to be submitted to the company's 2013 annual general meeting for consideration.

2. The meeting voted and approved the "2013 General Manager Work Report" with the result of voting by 7 votes, 0 votes against and 0 abstentions.

The board of directors of the company believed that the management team fully implemented the resolutions of the board of directors in 2013 and completed the 2013 work well.

3. The meeting voted and approved the "2013 Annual Report of the Company" and its summary with the result of voting by 7 votes, 0 votes against and 0 abstentions.

For details of the 2013 Annual Report of the Company, please visit www.cninfo.com.cn. For details of the 2013 Annual Report of the Company, please refer to the company's designated information disclosure media, Securities Times, China Securities Journal and Shanghai. Securities News, Securities Daily and Juchao Information Network (http://www.cninfo.com.cn).

This proposal still needs to be submitted to the company's 2013 annual general meeting for consideration.

4. The meeting voted and approved the 2013 Financial Statements with 7 votes in favor, 0 votes against, and 0 abstentions.

According to the audit results of the 2013 annual financial report of Zhongzheng Certified Public Accountants Co., Ltd. (special general partnership), in 2013, the company realized a total operating income of 476,668,800 yuan, an increase of 13.42% over the same period of the previous year; the total profit was 51,418,300 yuan, compared with the same period of the previous year. The decrease was 41.64%; the net profit attributable to shareholders of listed companies was RMB 50.48 million, a decrease of 41.51% over the same period of the previous year.

This proposal still needs to be submitted to the company's 2013 annual general meeting for consideration.

V. The meeting voted and approved the 2013 Profit Distribution Plan by the vote of 7 votes, 0 votes against and 0 abstentions.

According to the audit report issued by Zhongzhun Certified Public Accountants Co., Ltd. (Special General Partnership) [2014] No. 1087, the net profit attributable to shareholders of the listed company in 2013 is 50,480,288.62 yuan, and the parent company realizes after-tax profit of 133,005,834.46 yuan. After extracting 10% of the statutory surplus reserve of 13,300,583.45 yuan, the profit available to shareholders for the year was RMB 119,705,251.01. As of December 31, 2013, the accumulated profit available to the shareholders of the parent company was RMB 406,950,766.25.

As the company's ginseng industry is currently in the investment period, raw material prices are rising, the company is actively preparing raw materials for ginseng products, and the factories and equipment related to ginseng products have been completed, and the funds required for business investment are large. To ensure the sustainable development of the company and reduce the company's financing costs, the company intends not to distribute profits in 2013, nor to convert capital reserve into share capital. The above profit distribution plan has legality, compliance and rationality, and is in compliance with the provisions of the CSRC and the Articles of Association.

The independent directors expressed independent opinions on the proposal.

This plan is subject to review and approval by the 2013 Annual General Meeting.

6. The meeting voted with the results of the vote of 7 votes, 0 votes against, and 0 abstentions, and passed the "Proposal on the Special Report on the Auditing Report of the Certified Public Accountants"

Zhongzhun Certified Public Accountants Co., Ltd. (special general partnership) audited the company's 2013 financial report and issued an audit report on reserved opinions. According to the relevant provisions of the “Stock Listing Rules of Shenzhen Stock Exchange”, the board of directors of the company made a special explanation on the matters involved in the audit report on the reservation.

The company's board of supervisors issued an audit opinion, and the company's independent directors issued independent opinions.

VII. The meeting voted and approved the “Special Report on the Storage and Use of Raised Funds in 2013” ​​with the result of voting with 7 votes, 0 votes against and 0 abstentions.

According to the deposit and use of funds raised by the company, the board of directors submitted the “Special Report on the Deposit and Use of Raised Funds in 2013”, and Zhongzheng Certified Public Accountants (Special General Partnership) issued the “Assurance Report on the Storage and Use of Raised Funds in 2013” The full text is published on the company's designated information disclosure website www.cninfo.com.cn.

This proposal still needs to be submitted to the 2013 Annual General Meeting of Shareholders for consideration.

8. The meeting passed the "Resolution on Renewing the Appointment of Accounting Firms" with the result of voting by 7 votes, 0 votes against and 0 abstentions.

The company decided to re-appoint Zhongzheng Certified Public Accountants (special general partnership) as the company's financial auditing organization in 2014, responsible for the company's financial audit work.

The independent director of the company expressed independent opinions on this.

This proposal still needs to be submitted to the company's 2013 annual general meeting for consideration.

IX. The meeting voted and approved the “Proposal on Hiring Legal Advisers” with 7 votes in favor, 0 votes against, and 0 abstentions.

The company decided to re-appoint Beijing Branch of Beijing Law Firm as the company's 2014 legal counsel.

X. The meeting voted and approved the “Proposal of the Board of Directors on the 2013 Internal Control Self-evaluation Report” with the result of voting by 7 votes, 0 votes against and 0 abstentions.

For the company's "2013 Internal Control Self-evaluation Report", the company's independent directors issued independent opinions; the company's supervisory board issued an audit opinion; the company's "2013 internal control self-evaluation report" is detailed in the website of http://www.cn.cn. Cninfo.com.cn).

This proposal still needs to be submitted to the 2013 Annual General Meeting of Shareholders for consideration.

XI. The meeting voted and approved the “Proposal for Holding 2013 Annual General Meeting of Shareholders” with the result of voting by 7 votes, 0 votes against and 0 abstentions.

The company is scheduled to start at 9:00 am on Monday, March 17, 2014, and will adopt a combination of on-site voting and online voting. The full text of the "Announcement on Holding the 2013 Annual General Meeting of Shareholders" was published on the company's designated information disclosure website www.cninfo.com.cn.

12. The meeting voted and approved the “Proposal on Related Party Transactions” with 3 votes in favor, 0 votes against, and 0 abstentions.

The company's annual audit institution, Zhongzhun Certified Public Accountants Co., Ltd. issued a reservation for the appropriateness of the company's book inventory in the past three years. The company considers that the wild ginseng goods are rare and valuable, the unit value is high, it is difficult to form a foreign sales to realize the fund repayment in a short time, and it is difficult to find a convincing market trading quotation system. To solve the above difficulties, the company's largest shareholder Dunhua Kangping Investment Co., Ltd. (hereinafter referred to as “Kangping Company”) agreed to undertake wild ginseng in the company's book inventory. (For details, please refer to the “Announcement of Related Party Transactions” (2014-012) issued by the company on February 25, 2014 at www.cninfo.com.cn.

Company directors Cao Enhui, Guo Chunlin, Zu Chunxiang and Yin Jinlong abstained from voting.

This daily connected transaction has been independently approved by the independent director and published an independent opinion.

The related party transaction still needs to be reviewed and approved by the shareholders' meeting. The company's largest shareholder, Kang Ping Company and its second largest shareholder, Mr. Zhong Weiguang, abstained from voting.

 

 

Special announcement

Jilin Zixin Pharmaceutical Co., Ltd. Board of Directors

February 25, 2014