*ST Gaosheng (000971): Letter Of Concern

Stock Code: 000971 securities short: *ST, Gao Sheng Announcement No.: 2019-111

Gao Sheng's announcement on the letter of concern to the stock exchange

Apart from the director Xu Lei, Dong Hong and the independent director, Tian Ying Chun, all members of the company and the board of directors guarantee the authenticity, accuracy and completeness of the announcement. There is no false record, misleading statement or major omission.

Gao Sheng (hereinafter referred to as "company" or "Gaosheng Holdings") received the attention letter from Gaosheng (the company's letter of concern (2019) 108th) issued by the stock exchange immediately after the relevant issues were thoroughly combed, and asked the board of supervisors and lawyers for verification. The following questions are answered as follows:

First, the company should combine the provisions of the company law, the rules of shareholders' meetings of the listed companies and the articles of association of the company to show whether the board of supervisors has the duty and obligation to examine the contents of the shareholders' proposals. If so, please elaborate on whether the previous board of supervisors has been diligent and conscientious in failing to carry out the audit; if not, please further explain whether the audit of the shareholders' meeting after the meeting of the board of supervisors is beyond the powers and powers of the board of supervisors, and whether the resolutions and contents of the meetings of the last board of supervisors are lawful and effective. Ask your company lawyer to verify the above contents and make clear opinions.

Reply:

The ninth rule of the general meeting of shareholders of listed companies stipulates: "individually or jointly holding common stockholders of more than 10% of the company's shares (including the preferred shareholders who have the right to resume voting) shall have the right to request the board of directors to convene a provisional general meeting of shareholders, and shall submit it to the board of directors in writing." If the board of directors does not agree to convene the provisional shareholders' meeting or fails to make any feedback within 10 days after receiving the request, the common shareholders (including the preferred shareholders who have the right to resume the voting rights) individually or jointly shall have the right to propose a provisional shareholders meeting to the board of supervisors, and shall make a written request to the board of supervisors for a request of 10% days. The board of supervisors agreed to convene a temporary shareholder.

The General Assembly shall, within 5 days of receiving the request, issue a notice to hold the shareholders' meeting. The notice shall, in the notice, make the consent of the relevant shareholders for the change of the original request. The thirteenth provision states: "the contents of the proposal shall belong to the terms of reference of the shareholders' meeting, have clear issues and specific resolutions, and comply with the relevant provisions of laws, administrative regulations and articles of association." The fourteenth third paragraph stipulates:

"The shareholders' meeting shall not vote or make a resolution in the notice of shareholders' meeting that it does not specify or does not conform to the provisions of the thirteenth provision of these rules." The nineteenth provision: "after the notice of shareholders' meeting is issued, without a proper reason, the shareholders' meeting shall not be postponed or cancelled, and the bill specified in the notice of shareholders' meeting shall not be cancelled. In case of delay or cancellation, the convenor shall announce and explain the reason at least 2 working days before the scheduled date. "

The forty-eighth provision of the articles of association stipulates: "when the board of supervisors agrees to convene an interim shareholders general meeting, it shall issue a notice to convene the general meeting of shareholders within 5 days of receiving the request. In the notice, the change of the original proposal shall be subject to the consent of the relevant shareholders. If the board of supervisors fails to issue a notice of shareholders' meeting within the prescribed time limit, it shall be deemed that the board of supervisors shall not convene and preside over the general meeting of shareholders. Shareholders who hold more than 10% of the company's shares separately or jointly for more than 90 consecutive days may convene and preside on their own. The fifty-second provision states: "the contents of the proposal shall belong to the terms of reference of the shareholders' meeting, have clear issues and specific resolutions, and comply with the relevant provisions of the laws, administrative regulations and the articles of association." The fifty-third clause, the fourth paragraph, provides that "no proposal is made in the notice of shareholders' meeting or does not conform to the proposals laid down in article fifty-second of this statute, and the shareholders' meeting shall not vote and make resolutions." The fifty-seventh rule: "after the notice of shareholders' meeting is issued, the shareholders' meeting shall not be postponed or cancelled without proper reasons, and the proposal specified in the notice of shareholders' meeting shall not be cancelled. In case of delay or cancellation, the convenor shall announce and explain the reason at least 2 working days before the scheduled date. "

The rules of the shareholders' meeting of listed companies include ninth, thirteenth, fourteenth, third, and forty-eighth articles, fifty-second articles and fifty-third fourth articles of the articles of association, which clearly stipulate the procedures, contents and compliance of shareholders' submission of proposals.

The contents of the proposal shall belong to the terms of reference of the shareholders' meeting, have clear issues and specific resolutions, and comply with the relevant provisions of the laws, administrative regulations and articles of association, and the proposals submitted by shareholders shall not be submitted to the shareholders' meeting for consideration. The nineteenth party under the rules of the general meeting of shareholders of listed companies and the fifty-seventh articles of the articles of association stipulate that the convenor shall have the right to cancel the proposal after explaining the reasons; and third, paragraph three (three) of the memorandum of understanding on the motherboard information disclosure No. twelfth - matters related to shareholders' meetings. If the board of directors or the board of supervisors disagrees with the convening of the shareholders' meeting, it shall promptly announce and explain the reasons, and invite the law firm to issue legal opinions on the relevant reasons and their legal compliance. According to the above provisions, the convener will be able to determine whether the relevant motions comply with the relevant provisions of the laws, administrative regulations and articles of association after examining the shareholders' proposals, so that the reasons for legal compliance can be raised when the shareholders' meeting is rejected or the proposal is cancelled. In summary, the company's board of supervisors (hereinafter referred to as the "convener") is the convenor of the shareholders' meeting and has the right to examine whether the contents of the proposal conform to the relevant provisions of the laws, administrative regulations and articles of association.

According to the ninth rules of the shareholders' meeting of the listed companies and the forty-eighth provision of the articles of association, the convenor shall issue a notice of shareholders' meeting within 5 days after receiving the shareholder's request. According to the information provided by the company, the board of supervisors of the company (hereinafter referred to as the "convener") received the letter in July 26, 2019 and the written application received in July 29, 2019. The letter from the shareholders submitted to Ping and Weng yuan on the request for the holding of the provisional stock East Conference of the high rise board of supervisors (hereinafter referred to as the "letter to the provisional shareholders' meeting") and the relevant shareholders' meeting motion. The board of supervisors of the company held the Twelfth Meeting of the ninth supervisory board in July 30, 2019 (hereinafter referred to as the "previous board of supervisors"), and examined the letter and proposal concerning the request for the convening of the provisional shareholders' meeting. At this time, only 2 working days were received from the board of supervisors, and the three supervisors were regarded as non legal professionals. At the previous meeting of the board of supervisors, the contents of the proposals were not found to be in conformity with the relevant provisions of the laws, administrative regulations and articles of association.

According to the ninth rules of the general meeting of shareholders of listed companies and the forty-eighth provision of the articles of association, the motion on holding the first provisional shareholders' meeting on 2019 was deliberated and issued a notice of the relevant shareholders' meeting. At the same time, according to Article twelfth (three) of the memorandum of motherboard information disclosure Memorandum No. third - related matters of shareholders' meeting, "... If the board of directors or the board of supervisors disagrees with the convening of the shareholders' meeting, it shall promptly announce and explain the reasons, and invite the law firm to issue legal opinions on the relevant reasons and their legal compliance. If there is no reason for legal compliance, the board of supervisors shall perform the duties of convenor and convene and preside over the general meeting of shareholders. In summary, at the previous meeting of the board of supervisors, the board of supervisors issued a notice of shareholders' meeting in accordance with the time limit stipulated in the rules of the shareholders' meeting of the listed companies and the articles of association, without any consent to convene the shareholders' meeting, which is in line with the provisions of the ninth rules of the shareholders' meeting of the listed companies and the forty-eighth provision of the articles of association.

In September 5, 2019, the board of supervisors of the company received some submissions from the shareholders and objected to the motion of the first provisional shareholders' meeting in 2019. The board of supervisors, as the convenor of the shareholders' meeting, held the fourteenth meeting of the ninth supervisory board in September 8, 2019 (hereinafter referred to as the "post supervisory meeting"). In view of the questions raised by the shareholders' opinions, it was held that the contents of some shareholders' meetings were not in conformity with the relevant provisions of the laws, administrative regulations and the articles of association. It also cancelled some of the bills which were not considered in accordance with the relevant provisions of the laws, administrative regulations and the articles of association, and should not be submitted to the general assembly for consideration. The relevant actions of the board of supervisors were in line with the nineteenth rules of the general meeting of shareholders of listed companies and the fifty-seventh provision of the articles of association. The previous meeting of the board of supervisors of the company has examined the shareholders' proposals and issued a notice of shareholders' meeting. Although the previous meeting of the board of supervisors did not find that some of the motions did not conform to the provisions of the articles of association, there were certain flaws. However, since the supervisors were not legal professionals, they were considered by the latter board of supervisors within the time limit prescribed by the law, and some of the bills were not in accordance with the provisions of the articles of association. According to the provisions of the nineteenth rules of the shareholders' meeting of the listed companies and the fifty-seventh articles of the articles of association, the relevant non compliant motions were cancelled according to the relevant provisions.

Diligently and conscientiously.

According to the relevant regulations, the board of supervisors has the right to examine the compliance of the contents of shareholders' proposals. The previous meeting of the board of supervisors of the company has examined the shareholders' proposals and issued a notice of shareholders' meeting. Although the previous meeting of the board of supervisors did not find that some of the bills did not conform to the provisions of the articles of association, there were certain flaws. However, since the supervisors were not legal professionals, they were considered by the latter board of supervisors within the time limit prescribed by the law, and some of the bills were not in accordance with the provisions of the articles of association. In accordance with the provisions of the nineteenth rules of the shareholders' meeting of the listed companies and the fifty-seventh articles of the articles of association, the relevant non compliant motions were cancelled according to the statutory deadline. In summary, the board of supervisors believes that: according to the company law, the rules of shareholders' meeting of listed companies and the articles of association of the company,

Two, according to the provisions of article forty-eighth of your company's articles of association, your board of supervisors may decide to convene and preside over the shareholders' meeting within 5 days after receiving relevant shareholders' request for shareholders' meeting, or decide not to convene and preside over the general meeting of shareholders. In the near future, your company's board of supervisors will convene a meeting after receiving the request of shareholders to hold the shareholders' meeting at Ping and Weng yuan. It will consider and adopt the motion on holding the first extraordinary shareholder meeting in 2019. 40 days later, your board of supervisors will convene a meeting to deliberate and adopt the motion on cancelling the first part of the provisional shareholders' meeting in 2019. Your company will explain in detail whether the behavior of your board of supervisors is restricted by shareholders in exercising their lawful rights in accordance with the law.

Reply:

The company board of supervisors received the mail in July 26, 2019 and received the written application in July 29, 2019. The letter of the shareholders' meeting on the convening of the provisional shareholders' meeting and the relevant shareholders' meeting motion were submitted by the shareholders at Ping Weng yuan. According to the rules of the shareholders' meeting of listed companies, Ninth articles of association, forty-eighth articles of the articles of association and twelfth memorandum of information disclosure of motherboard.

The third article (three) of the general meeting of shareholders: "... If the board of directors or the board of supervisors disagrees with the convening of the shareholders' meeting, it shall promptly announce and explain the reasons, and invite the law firm to issue legal opinions on the relevant reasons and their legal compliance. If the convener does not agree to convene the shareholders' meeting after receiving the shareholder's proposal, he shall timely announce and explain the reasons. If there is no reason for legal compliance, the convenor shall convene and preside over the shareholders' meeting, and shall give the shareholders' meeting notice in accordance with the articles of Association within the prescribed time limit. Therefore, the board of supervisors of the company held the Twelfth Meeting of the ninth supervisory board in July 30, 2019, and deliberated and adopted the motion to convene the first provisional shareholders' meeting in 2019, and issued a notice of the shareholders' meeting. In summary, the board of supervisors shall convene the first provisional shareholders' meeting in 2019 without lawful reasons.

The fourteenth paragraph and the second paragraph of the rules of the shareholders' meeting of listed companies stipulate: "except in the preceding paragraph, the convenor shall not amend the proposals listed in the notice of shareholders' meeting or add new proposals after the notice of shareholders' meeting is issued."

The fifty-second article of the articles of association stipulates: "the contents of the proposal shall belong to the terms of reference of the shareholders' meeting, have clear issues and specific resolutions, and comply with relevant provisions of the laws, administrative regulations and the articles of association." The fifty-third rule: "no proposal is made in the notice of shareholders' meeting or does not conform to the proposals laid down in article fifty-second of this Charter. The shareholders' meeting shall not vote and make resolutions." The fifty-seventh rule: "after the notice of shareholders' meeting is issued, the shareholders' meeting shall not be postponed or cancelled without proper reasons, and the proposal specified in the notice of shareholders' meeting shall not be cancelled. In case of delay or cancellation, the convenor shall announce and explain the reason at least 2 working days before the scheduled date. "

In September 8, 2019, the company held the fourteenth meeting of the ninth supervisory board, and deliberated and adopted the motion to cancel the first provisional shareholders' meeting in 2019. According to the resolution of the fourteenth meeting of the ninth supervisory board of the company, the board of supervisors held that the motion 2 to the motion 7 did not conform to the fifty-second provision of the articles of association, according to the articles of association fiftieth

The three item is that the notice of shareholders' meeting does not conform to the proposals laid down in article fifty-second of the articles of association, and the shareholders' meeting shall not vote and make resolutions. In accordance with the provisions of the fourteenth paragraph and the second paragraph of the rules of the shareholders' meeting of the listed companies, the convenor shall not amend the proposals listed in the notice of the shareholders' meeting after issuing the notice of the shareholders' meeting. In accordance with the provisions of the nineteenth rules of the shareholders' meeting of listed companies and the provisions of article fifty-seventh of the articles of association, after the notice of the shareholders' meeting is issued, the convener shall explain the reasons, and the proposal listed in the notice of the shareholders' meeting may be cancelled.

In September 11, 2019, the company voted on the first provisional shareholders' meeting in 2019 and voted by the shareholders' meeting to vote against the motion put forward by the relevant shareholders to tighten up the company's illegal guarantee and joint loan. Therefore, the board of supervisors does not exist to restrict shareholders exercising their lawful rights in accordance with the law.

Article ninth of the articles of association and the provisions of the forty-eighth articles of the articles of Association; the board of supervisors has cancelled part of the proposals in accordance with the provisions of the nineteenth rules of the general meeting of shareholders of listed companies and the fifty-seventh chapter of the company's chapters. Although the previous board of supervisors has some flaws, it has been amended through the subsequent supervisory board. The above actions of the board of supervisors are to ensure that the proposal of the shareholders' meeting is in accordance with the provisions of the articles fifty-second and fifty-third of the articles of association, comply with the relevant provisions of the nineteenth rules of the general meeting of shareholders of listed companies and the fifty-seventh articles of the articles of association. The company's first provisional shareholders' meeting convened on 2019 and deliberated on the relevant legal compliance motions submitted by the relevant shareholders, and there was no restriction on shareholders exercising their lawful rights in accordance with the law. In summary, the previous supervisory board meeting was consistent with the rules of shareholders' meeting of listed companies ninth

Notice hereby

Gao Sheng board two O 19 September 30th