STAR SPORTS MEDICINE CO., LTD. (“STAR SPORTS MED”) has released the “Terms of Reference of the Remuneration and Appraisal Committee under the Board of Directors,” providing a comprehensive framework for director and senior management compensation, performance assessment, and governance procedures as the company advances toward a Hong Kong Stock Exchange listing.

Key highlights include:

1. Committee Structure • The Remuneration and Appraisal Committee will comprise three directors, with independent non-executive directors forming the majority. • An independent non-executive director will serve as chairman. • Committee members will serve concurrent terms with directors and can be re-elected.

2. Primary Responsibilities • Draft remuneration plans covering monetary and non-monetary benefits, pension rights, and compensation for loss or termination of office. • Formulate performance evaluation standards and conduct annual assessments for directors and senior management. • Recommend remuneration packages for executive and non-executive directors, ensuring no individual participates in decisions about their own pay. • Review and approve compensation arising from dismissal or misconduct, ensuring alignment with contractual terms and reasonableness. • Oversee share-based incentive matters under Chapter 17 of the Hong Kong Listing Rules.

3. Decision-Making & Approval • Proposals require Board approval; director remuneration must also receive shareholder approval. • The Board retains veto power over any remuneration plan deemed detrimental to shareholder interests.

4. Meeting Protocols • At least one regular meeting per year; extraordinary meetings may be convened with three-day notice. • Resolutions pass with a simple majority of all committee members, provided two-thirds are present. • Members with a conflict of interest must abstain; if fewer than two eligible voters remain, matters escalate to the Board.

5. Transparency & Reporting • Detailed minutes must be circulated promptly and retained for not less than 10 years. • The committee chairman is required to attend the annual shareholders’ meeting to address remuneration-related queries.

6. Effective Date The new terms will take effect on the day STAR SPORTS MED’s overseas-listed shares begin trading in Hong Kong, at which point the previous implementation rules will automatically become void.

By codifying these provisions, STAR SPORTS MED aligns its governance practices with PRC regulations and Hong Kong Listing Rules, reinforcing oversight of executive pay and performance as the company moves closer to its initial public offering.