First Tractor : RULES OF PROCEDURES FOR BOARD OF DIRECTORS (in PDF)

FIRST TRACTOR COMPANY LIMITED RULES OF PROCEDURES FOR BOARD OF DIRECTORS

April 2022

Chapter 1 General Provisions

Articles 1 These Rules are formulated in accordance with the Company Law of the People's Republic of China ("Company Law"), the Securities Law of the People's Republic of China ("Securities Law"), the Code on Corporate Governance of Listed Companies ("Corporate Governance Code") and the Articles of Association of First Tractor Company Limited ("Articles of Association") and other relevant laws and regulations to further regulate the discussion methods and decision-making procedures of the Board of Directors of the Company, to procure effective performance of the duties of the Directors and the Board, and to improve the standards of regulated operation and scientific decision-making of the Board.

Chapter 2 Composition and Establishment of the Board

Article 2 The Company shall establish its Board. The Board shall comprise 7-9 Directors, with one chairman and there may be 1 vice chairman according to actual needs. No less than half of the members of the Board shall be the external Directors (refer to Directors who do not take any positions in the Company). The external Directors shall have sufficient time and necessary knowledge and ability to perform their duties. The external Directors shall be provided with necessary information by the Company in performing their duties. The external Directors shall include the Independent Directors of not less than one-third of the total number of the Directors, and at least one of the Independent Directors must possess appropriate professional qualifications or accounting or related financial management expertise (Independent Directors shall mean the Directors who are independent of the shareholders of the Company and do not hold any internal positions in the Company and the same shall apply to the Articles below).

Article 3 The office under the Board handles the daily affairs of the Board and keeps the seals and stamps of the Board.

Article 4 The Directors shall be elected at general meetings, and a Director shall be removed from his office by the general meeting prior to the expiry of his term of office. The term of office of a Director shall be 3 years. At the expiry of a Director's term of office, the term is renewable upon re-election, but any Independent Director cannot serve as the Company's Independent Director for a consecutive period of over 6 years.

Any written notice by the shareholders to the Company in accordance with the provisions of the Articles of Associations regarding his intention to nominate a candidate for election of Directors and the written consent of the candidate to accept such nomination shall be given to the Company not less than 7 days. Such time limit shall commence from 1 day (the next day) after the despatch of the notice convening the general meeting (no earlier than that), and until at least 7 days before the date of such general meeting.

The number of the Directors for rotation each year shall not exceed one-third of the number of the Board unless the term of that session of the Board or the relevant Directors expires or the relevant Directors resign or as required by laws and regulations, and the listing rule(s) of the place(s) where the shares of the Company are listed.

The Board shall have the right to examine the qualifications of Directors and resolutions in respect of the qualifications of Directors shall be passed by more than one-half of all the Directors.

The Chairman of the Board shall be elected and removed by more than half of all the Directors. The Chairman of the Board and the vice chairman (or vice chairmen) of the Board shall serve a term of 3 years and may serve consecutive terms if reelected upon the expiration of their terms.

The general meeting may by ordinary resolution remove any Director before the expiration of his term of office (but without prejudice to such Director's rights to claim damages based on any contract) in accordance with the relevant laws, administrative regulations and Listing Rules, unless otherwise provided by the relevant laws and regulations, Listing Rules and the Articles of Association.

The removal of the Chairman, vice-chairman and Directors in violation of Article 70 of the Articles of Association shall be void.

Directors may assume the position as general managers or other Senior Management of the Company (other than supervisors). The Directors are not required to hold shares of the Company.

Article 5 The Company shall disclose personal particulars of the Director candidates prior to the convening of the general meeting, so that the shareholders can acquire enough knowledge of the candidates before voting.

Prior to the convening of the general meeting, the Director candidates shall give a written undertaking of their consent with the nomination and the information disclosed to the public being authentic and complete, and that they will duly exercise the duties of Directors when they are elected.

Article 6 The Directors may be elected at general meeting by way of cumulative voting. Upon election of more than 2 Directors, the number of votes held by each shareholder shall be equal to the multiple of the number of his shares held and the number of Directors he is entitled to elect. Each shareholder shall be entitled to cast all his votes for a single candidate for Director, arbitrarily distribute votes to all candidates for Director who he has the right to elect, or distribute his votes at his discretion or cast all his votes for two or more candidates for Director. The candidate(s) with the most votes shall be elected as Director(s).

Article 7 The appointment of new Directors, upon passing the resolutions thereof, shall be effective on the time as directed at the general meeting.

Chapter 3 Resignation of Directors

Article 8 Directors may resign prior to the expiry of their term of office. Directors shall submit to the Board a written report in relation to their resignation, whereas Independent Directors shall also state any circumstance relating to their resignations or which they consider to be necessary to draw to the attention of the shareholders and creditors of the Company.

In case where the number of Directors falls short of the quorum of the Board as a result of the resignation of the Director, the resignation report of the said Director shall not become effective until the vacancy resulting from his resignation is filled up by succeeding Director. The remaining Directors shall convene an extraordinary general meeting as early as possible to elect the Director and fill up the vacancy resulting from the said resignation. Prior to any resolutions passed for the election of the Director at general meeting, powers of the resigning Director and the remaining Directors shall be subject to reasonable restraints.

Should the resignation of Independent Director result in the proportion of Independent Directors in the Board of Directors of the Company falling below the minimum requirement as required by the relevant regulatory authorities or the Listing Rules, the resignation report of the said Independent Director shall not become effective until the vacancy resulting from his resignation is filled up by succeeding Independent Director.

Other than the circumstances referred to in the preceding paragraphs, resignation of a Director shall become effective upon submission of his resignation report to the Board.

Chapter 4 Duties of Directors and Powers of the Board

Article 9 The Directors shall have a duty of good faith and diligence to the Company and the shareholders as a whole. The Directors shall perform their duties conscientiously in accordance with the relevant rules, regulations, the Listing Rules and the Articles of Association, and act in the interest of the Company as a whole, with particular concern in the protection of the lawful rights and interests of the minority shareholders of the Company.

Directors shall perform their duties independently, not being prejudiced by the substantial shareholders, the de facto controllers of the Company or other units or individuals who have relationships of interests with the Company

Article 10 In the absence of special reasons, Directors and Chairman shall not change randomly during their terms as required under the Articles of Association and shall maintain relatively stable. Any change shall be in compliant with the statutory procedures and formalities (including relevant requirements under the Listing Rules) and shall be disclosed to the public and filed with the CSRC.

Directors may resign prior to the expiry of their terms of office. A resigning Director shall submit a written resignation report to the Board. Should other Directors think the resignation of such Director prior to the expiry of his term of office prejudices the interests of the Company, the Board may conduct a vote regarding whether to consent to the resignation and the resigning Director shall be abstain from voting. In case that the Board dissents his resignation, such Director shall continue to perform his duties until expiry of his term of office. In the event that such Director leaves his office without permission, the Company shall have the right to take legal action against him.

Article 11 The Chairman is entitled to the following powers:

• (1) to preside over general meetings and to convene and preside over the Board meetings;

• (2) to check the implementation of resolutions of the Board;

• (3) to sign the securities issued by the Company;

• (4) to exercise other powers conferred by the Board;

• (5) to sign the securities issued by the Company and other important documents or power of attorney to authorize one or more Directors to sign other important documents of the Company.