Fuyao Glass Industry Group Co., Ltd. (“Fuyao Glass”) has released the first amendments to its Articles of Association, effective 2026, detailing comprehensive revisions to corporate governance, share capital management, profit distribution and audit oversight.
Key highlights are as follows:
1. Corporate Identity and Capital • Fuyao Glass remains a perpetual joint-stock limited company with a registered capital of RMB 2.61 billion, divided into 2.61 billion shares (2.00 billion A-shares and 606.76 million H-shares). • The chairman of the board acts as the statutory legal representative.
2. Share Issuance, Transfer and Buyback • Ordinary shares must be maintained at all times; other classes may be issued subject to regulatory approval. • The company may repurchase up to 10% of issued shares for employee stock ownership, convertible bond conversion or value protection through open-market transactions, requiring board approval by a two-thirds majority. • External guarantees exceeding 50% of latest audited net assets, or single guarantees above 10% of net assets, must be approved by shareholders holding at least two-thirds of voting rights present.
3. Shareholder Rights and Meetings • Each share carries one vote; major connected transactions exclude connected shareholders from voting. • Annual general meetings must be held within six months of fiscal year-end; extraordinary meetings can be triggered by shareholders holding 10% or more of shares, the Audit Committee, or when board size falls below two-thirds of statutory minimum.
4. Board Composition and Independent Oversight • The board comprises 11 directors: four independent, one employee-elected, and up to one vice-chairman. • Independent directors form more than half of the Nomination and Remuneration & Assessment Committees and a majority in the three-member Audit Committee. • The Audit Committee, rather than a supervisory board, oversees financial reporting, internal control and auditor engagement.
5. Profit Distribution Policy • When statutory conditions are met, at least 20% of annual distributable profit must be paid as cash dividends. • Interim cash dividends are permitted, subject to board resolution within shareholder-approved limits. • Stock dividends may be issued when earnings growth and capital structure allow, but cash dividends take precedence. • If net profit or cash flow is insufficient or asset-liability ratio exceeds 70%, the company may suspend distributions and must disclose reasons.
6. Internal Control, Audit and Disclosure • A dedicated internal audit department, reporting to the board and Audit Committee, will monitor risk management and internal controls. • An external accounting firm is appointed annually to audit financial statements and verify net assets; the appointment requires shareholder approval. • Annual and interim reports must be filed within four and two months, respectively, after period-end.
7. Party Organization • In line with the PRC Company Law, Fuyao Glass will maintain a Chinese Communist Party organization within the company and provide resources for party activities.
These amendments codify stricter governance standards, enhance minority shareholder protections, and formalize dividend expectations, aligning Fuyao Glass with both Shanghai and Hong Kong regulatory frameworks.
Comments