Henan Liliang Diamond Co.Ltd(301071)
Cumulative voting management system
Chapter I General Provisions
Article 1 in order to further improve the corporate governance structure of Henan Liliang Diamond Co.Ltd(301071) (hereinafter referred to as "the company"), standardize the election of directors and supervisors, ensure that all shareholders fully exercise their rights and safeguard the interests of minority shareholders, This system is formulated in accordance with the standards for the governance of listed companies, the Listing Rules of Shenzhen Stock Exchange on the gem, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 - standardized operation of companies listed on the gem, the Henan Liliang Diamond Co.Ltd(301071) articles of Association (hereinafter referred to as the "articles of association") and other relevant provisions, and in combination with the actual situation of the company.
Article 2 the term "cumulative voting" in this system refers to that when the general meeting of shareholders elects directors or supervisors, each voting share held by shareholders has the voting right equal to the number of directors or supervisors to be elected, and the total number of voting rights held by shareholders is equal to the product of the voting shares held by shareholders and the number of directors or supervisors to be elected. A voting system in which shareholders can concentrate all their voting rights on one or more candidates for directors and supervisors according to their wishes, or distribute all their voting rights to each candidate for directors or supervisors.
Article 3 the term "director" in this system includes independent directors and non independent directors, and the term "supervisor" refers specifically to the supervisor held by the shareholder representative. Supervisors held by employee representatives are democratically elected or replaced by the company's employees, which is not applicable to the relevant provisions of this system.
Article 4 the company shall implement the cumulative voting system when electing directors or supervisors. The number and structure of directors and supervisors elected by the general meeting of shareholders shall comply with the provisions of the articles of association.
Article 5 The term of office of the directors and supervisors elected by the company through the cumulative voting system shall not implement the staggered term system, that is, the term of office of the directors and supervisors elected by election due to vacancy during the term of office shall be the remaining term of office of the current term and shall not serve across terms.
Chapter II nomination of candidates for directors and supervisors
Article 6 the company shall determine the candidates for directors and supervisors in accordance with the methods and procedures stipulated in the articles of association to ensure the openness, fairness and impartiality of the election.
Article 7 in the notice of convening the general meeting of shareholders, the company reminds shareholders, especially the public shareholders, that except for the shareholders with voting shares, they can submit proposals for new candidates for directors and supervisors 10 days before the general meeting of shareholders:
（1） Candidates for non independent directors shall be nominated by the board of directors and shareholders who individually or jointly hold more than 3% of the total voting shares of the company for 180 consecutive days;
（2） Candidates for independent directors shall be nominated by the board of directors, the board of supervisors and shareholders who individually or jointly hold 3% of the total voting shares of the company for 180 consecutive days, and the board of directors shall submit them to China Securities Regulatory Commission and Shenzhen stock exchange for examination and verification of their qualifications and independence;
（3） Candidates for non employee representative supervisors shall be nominated by the board of supervisors of the company and shareholders who individually or jointly hold more than 3% of the total voting shares of the company for 180 consecutive days.
The above nominated candidates for directors or supervisors shall be examined by the current board of directors and submitted to the general meeting of shareholders for election. For the nominees who do not meet the qualifications, the board of directors shall not submit them to the general meeting of shareholders for election, but shall explain them at the general meeting of shareholders.
When the number of candidates proposed by all proposals exceeds the number of candidates to be elected, a differential election shall be held.
Article 8 the candidates for directors or supervisors shall make a written commitment before the general meeting of shareholders, agree to accept the nomination and disclose their detailed information according to the needs of the company, promise that the disclosed personal information is true and complete, and ensure to earnestly perform the duties of directors or supervisors after being elected. Candidates for independent directors shall also make a public statement that there is no relationship between themselves and the company that affects their independent and objective judgment.
Chapter III voting principles of cumulative voting system
Article 9 when voting on candidates for directors or supervisors at the general meeting of shareholders, the voting rights of each shareholder shall be equal to the product of the number of shares held by him multiplied by the number of directors or supervisors to be elected.
Article 10 when the general meeting of shareholders votes on the candidates for directors or supervisors, shareholders can exercise their voting rights in a centralized manner and vote all their voting rights to one or more directors or one or more candidates for supervisors; They can also vote for all directors or all supervisors respectively. The details are as follows:
1. When the company elects independent directors, the number of votes each shareholder attending the meeting has is equal to the product of the number of shares he holds multiplied by the number of independent directors he is entitled to elect. The number of votes can only be cast on the candidates for independent directors of the company, and each shareholder can cast all his votes on a candidate for independent directors, It can also be arbitrarily allocated to all or part of the independent director candidates it has the right to elect.
For independent director candidates, each shareholder can vote all his votes for a non independent director candidate, or arbitrarily distribute them to all or part of the non independent director candidates he has the right to elect.
3. When the company elects supervisors, the number of votes each shareholder attending the meeting has is equal to the product of the number of shares he holds multiplied by the number of shareholder representative supervisors he has the right to elect. The number of votes can only be cast on the candidate of shareholder representative supervisor of the company, and each shareholder can cast all his votes on a candidate of supervisor, They can also be arbitrarily assigned to all or part of the supervisor candidates they have the right to elect.
Article 11 the number of candidates for directors or supervisors may be more than the number of candidates to be elected at the general meeting of shareholders, but the number of candidates voted by each shareholder shall not exceed the number of candidates to be elected.
Article 12 when the total number of voting rights exercised by a shareholder on one or more candidates for directors or supervisors is more than all the voting rights it has, the shareholder's voting shall be deemed as abstention; When the total number of voting rights exercised by a shareholder on one or more candidates for directors or supervisors is less than all the voting rights it has, the shareholder's vote is valid, and the difference is deemed to have waived the voting rights.
Article 13 independent directors and non independent directors shall vote separately. When electing independent directors, the number of votes each shareholder has the right to obtain is equal to the product of the number of shares he holds multiplied by the number of independent directors to be elected, and the number of votes can only be cast on the candidates for independent directors of the company; When electing non independent directors, the number of votes each shareholder is entitled to obtain is equal to the product of the number of shares held by him multiplied by the number of non independent directors to be elected. The number of votes can only be cast on the candidates for non independent directors of the company.
Chapter IV election principles of directors and supervisors
Article 14 the number and structure of directors and supervisors elected by the general meeting of shareholders shall comply with the provisions of the articles of association. Candidates for directors and supervisors shall be ranked from high to low according to their total number of votes. Candidates for directors and supervisors who rank ahead of the number of directors and supervisors to be elected this time shall be elected, but the total number of votes of elected directors and supervisors shall exceed half of the total number of voting shares held by shareholders attending the general meeting of shareholders (subject to the number of shares not accumulated).
Article 15 in the case of equal election, if the number of voting shares obtained by the candidate for director or supervisor exceeds half of the total number of voting shares represented at the general meeting of shareholders (subject to the number of shares not accumulated), he shall be elected as a director or supervisor.
Article 16 in the case of differential election, if the number of candidates for directors or supervisors who obtain more than one-half of the total number of voting shares represented at the general meeting of shareholders (subject to the number of non accumulated shares) exceeds the number of directors or supervisors to be elected, they shall be elected as directors or supervisors according to the number of votes. If the number of voting shares of two or more candidates with less voting shares is equal, and the election of the candidate will result in the number of elected directors or supervisors exceeding the number of directors or supervisors to be elected, the candidate shall be deemed not to have been elected. The general meeting of shareholders shall re elect the candidates for directors and supervisors with the same total number of votes in accordance with the prescribed procedures. The cumulative voting system is still implemented in the re-election.
Article 17 If the number of elected directors or supervisors is less than the number of directors or supervisors to be elected at the general meeting of shareholders, all candidates for directors or supervisors who do not have enough votes shall be voted again for the vacancy. If the number of votes is still not enough, the by election shall be held at the next general meeting of shareholders of the company. If more than two candidates for directors or supervisors have the same votes, but only some people can be elected due to the limitation of the number of candidates to be elected, the candidates for directors or supervisors with the same votes shall be re elected by separate voting.
Article 18 after the voting of shareholders attending the meeting, the accounting staff of the shareholders' meeting shall count the votes, announce the total number of votes obtained by each candidate for directors and supervisors, and determine the elected directors and supervisors in the above way; The chairman of the meeting shall announce the list of elected directors and supervisors on the spot. If the proposal to elect directors and supervisors is approved by the shareholders' meeting, the new directors and supervisors shall take office immediately after the meeting.
Chapter V supplementary provisions
Article 19 matters not covered in this system shall be implemented in accordance with relevant national laws, regulations, normative documents and the articles of association.
Article 20 in case of any situation not listed in this system in the election of the general meeting of shareholders, it shall be settled by the shareholders attending the meeting through negotiation. If no consensus can be reached through consultation, it shall be handled according to the opinions formed by shareholders with more than half of the total voting shares attending the general meeting of shareholders.
Article 21 the system shall be interpreted by the board of directors of the company.
Article 22 the system shall come into force after being deliberated and approved by the general meeting of shareholders of the company, and the same is true for the modification.
Henan Liliang Diamond Co.Ltd(301071) February 25, 2022
