Heungkong Charitable Foundation Charter

Chapter 1 General Provision

Article 1. The name of the foundation is Heungkong Charitable Foundation.

Article 2. The Foundation is a private foundation.

Article 3. Purposes of the Foundation: Uphold the humanitarian spirit, help the needy and disadvantaged and promote social welfare.

Article 4. The initial funding of the Foundation is RMB fifty million from donations of Heungkong Group and its subsidiaries.

Article 5. The registration and administrative authority of the Foundation is Ministry of Civil Affairs of the People’s Republic of China.

Article 6. The Foundation has the office address at Room 506, Jianguo International Apartment, No.9 Gongyuanxijie, No.7 Street inside Jianguomen, Beijing.

Chapter 2. Scope

Article 7. Scope of social welfare of the Foundation

 (1) Provide the following people in need with help:

1. Actively assist the old, ill, disabled and disadvantaged in villages and towns, participate in poverty alleviation, and support the construction of social welfare facilities.

2. Support the education development, award the exceptionally excellent youth, and provide assistance to school-age children and teenagers that need funding.

3. Actively help the stabilization of the society, provide assistance to people in distress during occurrence of earthquakes, floods, storms, heavy snow and other natural disasters and social emergencies and disasters.

4. Support activities helpful to social progress and development such as scientific research, national defense, health and disease prevention, medical treatment, sports, cultural exchanges etc., and provide necessary funding to projects that meet the purposes of Foundation.

5. Concern people from all walks of life who have made outstanding contribution to the society, provide necessary funding when they experience difficulties in their personal lives.

6. Encourage active exploration and constant pursuit of excellence in the social and economic development, award and fund the people who have made outstanding achievements in theoretical research and practice.

 (2) Assist governments in the development of social welfare;

 (3) Contact domestic, including Hong Kong, Macao and Taiwan, and international organizations and individuals that are enthusiastic of social welfare through various means; start, organize and hold a variety of public service activities, seek all forms of support and participation to jointly explore and develop the ways and means for social welfare.

 (4) Actively promote domestic, including Hong Kong, Macao and Taiwan, and international exchange activities of public welfare.

Chapter 3 Organization and Responsible Individuals

Article 8. The Foundation has a Council of 8-15 directors.

The Foundation’s directors are elected for a term of 5 years, as the term expires, she or he can be re-elected.

Article 9. Qualification of directors

 (1) Enthusiasm for social welfare; 

 (2) Full capacity for civil conduct;

 (3) Good health, able to work normally;

Article 10. Election and removal of a director:

 (1) The first directors are nominated individually and decided jointly by the administrative authority, key donors and founders.

 (2) When the Council’s term expires and is re-elected, the administrative authority, Council and key donors jointly nominate candidates and form an election leading committee to organize all candidates to elect the new directors.

 (3) Removal and addition of a director ought to be approved by voting in the Council, and submitted to the administrative authority for approval.

 (4) The result of election and removal of a director ought to be submitted to the registration authority for the record.

 (5) The number of directors who are close relatives must not exceed 1/3 of the total number of directors.

Article 11. Rights and obligations of directors

 (1) Abide by the Foundation Charter;

 (2) Actively participate in various social welfare activities organized by the Foundation;

 (3) Provide necessary voluntary services to the Foundation according to needs;

 (4) Actively raise funds for the Foundation;

 (5) In the name of the Foundation director take part in a variety of social activities in line with the purposes of the Foundation;

 (6) Recommend candidates eligible for funding to the Foundation according to the purposes of the Foundation;

 (7) Eligible for award if he/she has made significant contributions to the Foundation.

Article 12. The Foundation’s decision-making body is the Council. The Council shall exercise the following rights:

 (1) Enact and amend the Charter;

 (2) Elect and remove the chairman, executive director, vice chairman, and the secretary-general;

(2) Decide major business activities, including fund raising, management and use plans;

 (4) Approve annual budget for revenue and expenditure and final accounting of revenue and expenditure;

 (5) Establish internal management system;

 (6) Decide to establish offices, branches, representative offices;

 (7) Decide the Foundation's division, merger or termination;

 (7) Decide on other major matters.

Article 13. The Council holds at least 2 meetings annually. Council meetings are convened and presided by the chairman.

In the event of proposal by 1/3 of directors, a Council meeting must be convened. If the chairman is able to convene, the proposing directors can elect a convenor.

Five days before a Council meeting, the chairman or the convenor ought to notify all directors and supervisors of the meeting.

Article 14. A Council meeting can only be convened when there are 2/3 of the directors present; decisions in the Council resolutions can only be passed by a majority of directors present.

The resolution of the following important issues shall be validated by more than two-thirds of the directors present:

 (1) Re-election of the Council;

 (2) Election or removal of chairman, the executive director, vice chairman, the secretary-general;

 (3) Amendment of the Charter;

 (4) Change of the Foundation’s name, address, and scope;

 (5) Establishing offices, branches, representative offices;

 (6) The Foundation’s division, merger or termination;

 (7) Investment projects involving an amount exceeding 10% of the initial fund;

 (8) Acceptance of donation involving an amount exceeding 2% of the initial fund;

 (9) Donation projects involving an amount exceeding 10% of the initial fund;

 (10) Establishment of a special fund that involves an amount exceeding 10% of the initial RMB fund;

 (11) Other major issues that the Council considers important.

Except the major issues specified in this Charter, other general decision-making issues ought to be submitted by the secretary-general to the executive director for approval.

Article 15. Meeting minutes ought to be prepared for council meetings. When a resolution is validated, a minute needs to be made in the meeting, and reviewed and signed by the directors present. In the case that a council resolution violates laws, regulations or the Charter, and results in loss to the Foundation, the directors involved in the resolution shall be held liable. If a director can be proved from the minute that he/she has voted against the resolution, the director shall be exempted from liability.

Article 16. The Foundation shall have 1-5 supervisors. The supervisors shall have the same term of office as a director, and be eligible for re-election after his/her term expires.

Article 17. A director, close relatives of the director and the Foundation’s accountants shall not take the position of supervisor.

Article 18. Appointment and removal of a supervisor:

 (1) Supervisors are appointed by the key donors, administrative authority;

 (2) The registration authority appoints supervisors in accordance with the work requirements;

 (3) The replacement of supervisor is in accordance with the procedure of appointment.

Article 19. The rights and obligations of supervisors:

The supervisors check the Foundation’s financial and accounting information, directors’ compliance with laws and the Charter in accordance with the provisions and procedures specified in the Charter.

Supervisors attend council meetings and have the right to raise questions and suggestions to the Council, and should report the situation to registration authority, administrative authority, tax department and department supervising the Council.

The supervisors shall comply with relevant laws and regulations and the Charter, faithfully perform their duties.

Article 20. The number of supervisors on the payroll of the Foundation shall not exceed 1/3 of the total number of directors. A supervisor without a full-time job in the Foundation shall not receive remuneration from the Foundation.

Article 21. If a supervisor has personal interest associated with the interest of the Foundation, he/she shall not participate in the decision-making involved with matters related to the interest associated; the directors, supervisors and their close relatives shall not conduct any transaction with the Foundation.

Article 22. The Council shall have chairman, executive director, vice chairman and secretary-general, who are elected from the directors.

Article 23. The Foundation’s chairman, executive director, vice chairman and secretary-general must have the following qualifications:

 (1) Possess great influence in the scope of the Foundation;

 (2) The chairman, executive director, vice chairman and secretary-general shall not be older 70, the office of secretary-general is a full-time position;

 (3) Good health, able to work normally;

 (4) Full capacity for civil conduct;

Article 24. Any individual meeting one of the following criteria shall not take office as the Foundation’s chairman, executive director, vice chairman and secretary-general:

 (1) An incumbent personnel of the government;

 (2) An individual who has been sentenced to administrative control, criminal detention or imprisonment; is in a period less than 5 years since the date of completion of the sentence served;

 (3) An individual who is in the deprivation period of political rights or has been sentenced to deprivation of political rights;

 (4) An individual who has served a position as chairman, vice chairman or secretary-general in a foundation whose registration was revoked due to violation of laws, and was personally liable for the illegal activities of the said foundation; is in a period less than 5 years since the date of registration revocation of the said foundation.

Article 25. The term of the Foundation’s chairman, executive director, vice chairman and secretary-general is 5 years; no individual shall be re-elected for more than two consecutive terms. Under special circumstances that an extra term is required, the term shall be approved by voting in the special procedure of the Council, after being reviewed and approved by registration authority the said term can be valid.

Article 26. The Foundation’s Chairman is the legal representative of the Foundation, who shall not serve as the legal representative of any other organizations.

The legal representative of the Foundation shall be a resident of mainland China.

During the term of legal representative of the Foundation, in the event of violation of Regulations on Foundation Administration and the Charter, the legal representative shall be liable. The same individual shall be personally liable for violation of law or loss of the Foundation resulted from his/her delinquency.

Article 27. The chairman of the Foundation exercises the following rights:

 (1) Convene and preside over meetings of the Council;

 (2) Check the implementation of Council resolutions;

 (3) Sign important documents on behalf of the Foundation;

 (4) Supervise daily work and organize the implementation of Council resolutions;

 (5) Propose appointment or dismissal of the secretary-general and financial officer, and submit to the Council for approval;

 (6) Propose appointment or dismissal of the key responsible people in various departments, and submit to the Council for approval;

 (7) Other functions and rights specified by the Charter and the Council.

Article 28. The executive director, vice chairman and secretary-general work under the leadership of the chairman, the secretary-general exercises the following rights:

 (1) Organize the implementation of the Foundation’s annual plans of social welfare activities;

 (2) Draft plans of fund raising, management and use for the Foundation;

 (3) Draft the Foundation's internal management regulations and submit them to the Council for approval;

 (4) Coordinate work of all departments;

 (5) Decide the employment of full-time staff in various departments;

 (6) Other functions and rights specified by the Charter and the Council.

Chapter 4. Management and Use of Assets

Article 29. The Foundation is a private foundation, whose revenue comes from:

 (1) Donations from the founders;

 (2) Voluntary donations from natural persons, legal persons or other organizations;

 (3) Gain from investment;

 (4) Other legitimate income

Article 30. The Foundation’s acceptance of donations shall comply with the laws and regulations, the scope and the purposes of the Foundation set forth in the Charter.

Article 31. The Foundation's assets and other income shall be protected by law, no organization or individual shall have the right to embezzle, privately divide, and appropriate.

Article 32. The assets of the Foundation shall be used according to its purposes and scope specified in the Charter; a donation that has a donation agreement specifying the use of donation shall be used according to the donation agreement.

In the event that donated items that do not fit the purposes of the Foundation, the Foundation shall be entitled to auction or sell the said items, the income of which shall be used for the purposes of the donation.

Article 33. Assets of the Foundation is mainly used for:

 (1) Organizing social welfare activities;

 (2) Funding individuals who satisfy the requirements in Article 7 under this Charter;

Article 34. The major fund-raising, investment activities of the Foundation mean:

 (1) Donations involving an amount exceeding 10% of the initial fund;

 (2) Investments involving an amount exceeding 10% of the initial fund;

 (3) Investments that have a significant influence nationwide.

Article 35. The Foundation shall preserve and increase its value legally, safely and effectively.

Article 36. The Foundation’s spending on social welfare specified in the Charter each year shall not be less than 8% of the fund balance of the previous year.

Wages, benefits of staff and administrative expenditures of the Foundation shall not exceed 10% of the total expenditure that year.

Article 37. In the event of funding project undertaken by the Foundation, the information on the type of funding project, its application and review process shall be accessible to the public.

Article 38. A donor shall have the right to inquire the use and management of donated property from the Foundation, and provide opinions and suggestions. For inquiries from a donor the Foundation shall promptly and truthfully reply.

In the case that the Foundation violates the use of donated property specified in the donation agreement, the donor is entitled to demand the Foundation to abide by the donation agreement or file an application to the people's court for revocation of donation or termination of the donation agreement.

Article 39. The Foundation shall have the right to enter into agreement with the recipient to specify funding method, funding amount, use of funding and ways of use.

The Foundation reserves the right to supervise the use of funding. In the event that the recipient fails to use the funding as specified in the agreement or violates the agreement, the Foundation is entitled to terminate the funding agreement.

Article 40. The Foundation shall comply with the unified national accounting system, audit and establish a complete and sound internal monitoring system to ensure the validity, integrity, accuracy of the accounting data.

The Foundation accepts supervision on tax and accounting by the tax authority and accounting authority according to laws.

Article 41. The Foundation shall have qualified accounting personnel. The accountants must not assume a cashier position. Before the accounting personnel transfers to other position or leaves, he/she needs to first finish the handover of work with the personnel to take his/her position.

Article 42. The Foundation has a fiscal year starting from January 1 to December 31; every year before March 31, the Council reviews the following issues:

 (1) Financial reports and final accounting of revenue and expenditure of the preceding year;

 (2) Operation plans and budget for revenues and expenditures of the current year;

 (3) Inventory of assets.

Article 43. In the event of annual inspection, re-election at expiration of term, change of the legal representative and liquidation, the Foundation shall conduct a financial audit.

Article 44. The Foundation shall be inspected annually by the registration authority in accordance with the provisions of the Regulations on Foundation Administration

Article 45. After the annual inspection by the registration and administrative authority, the Foundation shall publish the annual operation report in the media specified by the registration and administrative authority for public inquiries and monitoring.

Chapter 5. Termination and Disposal of Residual Assets

Article 46. The Foundation shall be terminated under one of the following circumstances:

 (1) Completion of the purposes under the Charter;

 (2) Inability to continue social welfare activities in accordance with the purpose under the Charter;

 (3) Division or merger of the Foundation;

 (D) Other circumstances specified by laws and regulations.

Article 47. The termination of the Foundation shall be submitted to the administrative authority for approval within 15 days after the Council has approved by voting.

Within 15 days after the administrative authority’s approval, file an application to the registration authority for cancellation of registration.

Article 48. Before applying for cancellation of registration, a liquidation organization shall be established under the guidance of the registration and administrative authority to finish liquidation.

The Foundation shall, within 15 days after the completion of liquidation, apply for cancellation of registration to the registration authority; in the duration of liquidation, no activity other than liquidation shall be conducted.

Article 49. The residual assets of the Foundation shall be donated to libraries, art galleries, orphanages, nursing homes, other social welfare organizations and institutions in the names of "Zhiqiang", “Mei Qing” under the supervision of the registration and administrative authority;

For assets that cannot be disposed of in accordance with the above manner, the registration and administrative authority ought to donate the said assets to social welfare organizations having the same nature and purposes of the Foundation and announce to the public.

Chapter 6. Amendment of the Charter

Article 50. The amendment of the Charter shall be submitted to the administrative authority for approval within 15 days after the Council has approved by voting. After the administrative authority’s approval, submit the amendment to registration authority for approval.

Chapter 7. Supplementary Provisions

 

Article 51. The Charter has been approved by voting by the Council on July 23, 2010

Article 52. The Council reserves the right to interpretation of the Charter.

Article 53. The Charter comes into effect on the date of approval by the registration and administrative authority

 

Heungkong Charitable Foundation

July 23, 201