Henan Liliang Diamond Co.Ltd(301071)
Working rules for independent directors
Chapter I General Provisions
Article 1 in order to promote the standardized operation of Henan Liliang Diamond Co.Ltd(301071) (hereinafter referred to as “the company”), safeguard the overall interests of the company and protect the legitimate rights and interests of all shareholders, especially minority shareholders, from damage, in accordance with the company law of the people’s Republic of China (hereinafter referred to as “the company law”) and the rules for independent directors of listed companies (hereinafter referred to as “the rules for independent directors”) Shenzhen Stock Exchange Stock Listing Rules (hereinafter referred to as “Stock Listing Rules”), Shenzhen Stock Exchange self regulatory guidelines for listed companies No. 2 – standardized operation of GEM listed companies (hereinafter referred to as “guidelines No. 2”) and other laws and administrative regulations These rules are formulated in accordance with the relevant provisions of the China Securities Regulatory Commission (hereinafter referred to as the “CSRC”) and Shenzhen Stock Exchange (hereinafter referred to as the “Shenzhen Stock Exchange”) and the relevant provisions of the Henan Liliang Diamond Co.Ltd(301071) articles of Association (hereinafter referred to as the “articles of association”).
Article 2 an independent director refers to a director who does not hold any position other than a director in the company and has no relationship with the company and its major shareholders that may hinder his objective and independent judgment.
Article 3 the board of directors of the company shall include at least one-third of the independent directors. Independent directors shall have basic knowledge related to the operation of listed companies, be familiar with relevant laws and regulations and the business rules of the exchange, and have more than five years of working experience in law, economy, management, accounting, finance or other necessary work experience for performing the duties of independent directors.
Article 4 independent directors shall have the obligation of integrity and diligence to the company and all shareholders, and shall faithfully perform their duties, safeguard the interests of the company, especially pay attention to the legitimate rights and interests of minority shareholders.
Article 5 independent directors shall perform their duties independently and shall not be affected by the company’s major shareholders, actual controllers, or other units or individuals with an interest in the company. If it is found that the matters under consideration affect their independence, it shall declare to the company and withdraw. In case of any situation that obviously affects the independence during the term of office, the company shall be notified in time and resign if necessary.
Article 6 independent directors shall ensure that they have enough time and energy to effectively perform their duties; Attend the board meeting on time to understand the production, operation and operation of the company; Submit an annual work report to the general meeting of shareholders of the company to explain their performance of duties.
Chapter II Conditions of appointment and independence of independent directors
Article 7 candidates for independent directors shall comply with the relevant provisions of the following laws, administrative regulations, departmental rules, normative documents and business rules of Shenzhen Stock Exchange on the qualifications, conditions and requirements of independent directors:
(I) be qualified to serve as a director of a listed company in accordance with laws, regulations and other relevant provisions; (II) have the independence required by the rules for independent directors issued by the CSRC:
(III) have basic knowledge of the operation of listed companies and be familiar with relevant laws, administrative regulations, rules and rules;
(IV) more than five years of working experience in law, economics, management, accounting, finance or other work necessary to perform the duties of independent directors;
(V) other conditions stipulated by laws and regulations, business rules of Shenzhen Stock Exchange and the articles of association.
Article 8 independent directors and persons who intend to serve as independent directors shall participate in relevant training in accordance with the requirements of the independent director rules and obtain the qualification certificate of independent directors recognized by Shenzhen Stock Exchange in accordance with relevant regulations.
Candidates for independent directors who have not obtained the qualification certificate of independent directors shall make a written commitment to participate in the latest training of independent directors and obtain the qualification certificate of independent directors recognized by Shenzhen Stock Exchange, and make a public announcement.
Article 9 candidates for independent directors shall be independent, and the following persons shall not serve as independent directors: (I) persons holding positions in the company or its affiliated enterprises and their immediate family members and main social relations; (II) natural person shareholders and their immediate family members who directly or indirectly hold more than 1% of the issued shares of the company or are among the top ten shareholders of the company;
(III) persons who work in shareholder units that directly or indirectly hold more than 5% of the issued shares of the company or in the top five shareholder units of the company and their immediate family members;
(IV) persons who hold posts in the company’s controlling shareholders, actual controllers and their affiliated enterprises and their immediate family members; (V) personnel providing financial, legal, consulting and other services for the company and its controlling shareholders or their respective subsidiaries, including but not limited to all personnel of the project team of the intermediary providing services, reviewers at all levels, personnel signing the report, partners and main principals;
(VI) persons who work in units with significant business dealings with the company and its controlling shareholders, actual controllers or their respective subsidiaries, or in units with controlling shareholders with significant business dealings; (VII) personnel who have been in one of the situations listed in the preceding six items in the last 12 months;
(VIII) persons who have been banned from entering the securities market by the CSRC and are still in the period of prohibition;
(IX) persons who are publicly recognized by the stock exchange as unfit to serve as directors, supervisors and senior managers of listed companies;
(x) persons who have been subject to administrative punishment by the CSRC or criminal punishment by judicial organs for securities and Futures Crimes in the last 36 months;
（11） Persons who are suspected of securities and Futures Crimes and have been placed on file for investigation by the CSRC or judicial organs without clear conclusions;
（12） Persons who have been publicly condemned or criticized by the stock exchange for more than 3 times in the last 36 months;
（13） As the object of punishment for dishonesty and other personnel who are recognized by the national development and Reform Commission and other ministries and commissions to be restricted from holding the post of director of listed companies;
（14） Those who have not attended the meeting of the board of directors for three consecutive times or failed to attend the meeting of the board of directors for two consecutive times and did not entrust other directors to attend the meeting of the board of directors in the past and have been proposed by the board of directors to be replaced by the general meeting of shareholders for less than 12 months;
（15） Other personnel who are stipulated in laws, administrative regulations, departmental rules, rules of Shenzhen Stock Exchange, normative documents, these articles of association, detailed rules for the work of independent directors, or who are determined not to be independent by CSRC and Shenzhen Stock Exchange.
The subsidiary enterprises of the controlling shareholder and actual controller of the company in items (IV), (V) and (VI) of the preceding paragraph do not include the subsidiary enterprises that do not form an affiliated relationship with the company.
Article 10 candidates for independent directors can serve as independent directors in up to five listed companies.
Article 11 those who are nominated as independent director candidates as accounting professionals shall have rich accounting professional knowledge and experience and meet at least one of the following conditions:
(I) have the professional qualification of certified public accountant;
(II) having a senior professional title, associate professor or above, or a doctor’s degree in accounting, auditing or financial management;
(III) have senior professional titles in economic management, and have more than five years of full-time working experience in professional posts such as accounting, audit or financial management.
Chapter III nomination, election, replacement and appointment of independent directors
Article 12 the board of directors, the board of supervisors and shareholders who individually or jointly hold more than 1% of the issued shares of the company may propose candidates for independent directors, which shall be elected and decided by the general meeting of shareholders.
Article 13 the nominee of an independent director shall obtain the consent of the nominee before nomination.
Article 14 the nominee shall fully understand the nominee’s occupation, educational background, professional title, detailed work experience and all part-time jobs, and express his opinions on his qualification and independence as an independent director. The nominee shall make a public statement that there is no relationship between himself and the company that affects his independent and objective judgment.
Before the shareholders’ meeting for the election of independent directors is held, the board of directors of the company shall publish the above contents in accordance with the provisions.
Article 15 when nominating candidates for independent directors, the nominees of independent directors shall focus on whether the candidates for independent directors have the following circumstances:
(I) failing to attend the meetings of the board of directors in person for two consecutive times or more than half of the total number of meetings of the board of directors in 12 consecutive months during the previous period of serving as an independent director; (II) failing to express the opinions of independent directors as required or the independent opinions expressed are proved to be obviously inconsistent with the facts during the past period of serving as independent directors;
(III) serving as a director, supervisor or senior manager in more than five companies at the same time;
(IV) being removed from office by a listed company before the expiration of the term of office of an independent director in the past;
(V) being punished by other relevant departments other than the CSRC within the last 36 months;
(VI) other circumstances that may affect the integrity, diligence and independent performance of duties of independent directors.
In case of any of the above circumstances, the nominee of the independent director candidate shall disclose the specific circumstances, the reasons for still nominating the candidate, whether it has an impact on the standardized operation and corporate governance of the company and the countermeasures.
Article 16 before the general meeting of shareholders to elect independent directors is held, the company shall submit relevant materials of all nominees to Shenzhen Stock Exchange. If the board of directors of the company has any objection to the relevant information of the nominee, it shall submit the written opinions of the board of directors at the same time.
After the CSRC or Shenzhen Stock Exchange has reviewed the qualifications and independence of the nominees as independent directors, the nominees who have no objection can be used as independent director candidates. When the general meeting of shareholders is held to elect independent directors, the board of directors of the company shall explain whether the candidates for independent directors are objected by the CSRC or the Shenzhen Stock Exchange.
Article 17 when the general meeting of shareholders elects directors, independent directors and non independent directors shall vote separately.
Article 18 The term of office of independent directors is the same as that of other directors of the company. Upon expiration of the term of office, they can be re elected, but the term of re-election shall not exceed six years. If he has served as an independent director of the company for six consecutive years, he shall not be nominated as a candidate for independent director of the company within 12 months from the date of this fact.
Article 19 If an independent director fails to meet the qualifications of an independent director specified in the detailed rules after taking office, he shall resign from the position of an independent director within one month from the date of such situation; If the company fails to resign as required, the board of directors of the company shall convene the board of directors in time after the expiration of one month, review and submit the matter to the general meeting of shareholders to replace the independent director, and complete the by election of independent directors within two months.
Article 20 for independent directors who do not have the qualification or ability of independent directors, fail to perform their duties independently, or fail to safeguard the legitimate rights and interests of the company and small and medium-sized investors, shareholders who individually or jointly hold more than 1% of the shares of the company may put forward a challenge or removal proposal to the board of directors of the company. The challenged independent directors shall explain the questioned matters in time and disclose them. The board of directors of the company shall timely convene a special meeting for discussion after receiving relevant queries or removal proposals, and disclose the discussion results.
Article 21 If an independent director fails to attend the meeting of the board of directors for two consecutive times and fails to entrust other independent directors to attend the meeting on his behalf, or fails to attend the meeting of the board of directors in person for three consecutive times, the board of directors of the company shall determine him as an inappropriate independent director, and the board of directors shall propose to the general meeting of shareholders of the company to replace him.
Unless otherwise stipulated in the articles of association, the articles of association and the company’s regulations on independence, directors shall not be removed without cause. In case of early dismissal, the company shall disclose it as a special disclosure. If the dismissed independent director believes that the company’s reason for dismissal is improper, he may make a public statement.
Article 22 an independent director may resign before the expiration of his term of office. When an independent director resigns, he shall submit a written resignation report to the board of directors to explain any situation related to his resignation or that he deems necessary to attract the attention of shareholders and creditors of the company.
If the number or proportion of independent directors in the board of directors of the company is lower than the minimum requirements specified in the articles of association due to the resignation of independent directors, the company shall make up the number of independent directors in accordance with the provisions, and the resignation report of the independent director shall take effect after the next independent director fills in the vacancy.
Article 23 Where an independent director does not meet the conditions for independence or is not suitable for performing the duties of an independent director, it shall be implemented in accordance with the relevant provisions of articles 3.2.11 and 3.2.13 of guideline 2. Article 24 candidates for independent directors shall make a statement on whether they meet the requirements of laws, regulations and relevant rules of Shenzhen Stock Exchange on the qualifications and independence of independent directors.
The nominees of independent directors shall carefully verify the conditions of appointment of independent director candidates and whether there are circumstances affecting their independence, and make a statement on the verification results.
Article 25 the company shall submit the statement of independent director nominees, the statement of independent director candidates and the resume of independent director candidates to the Shenzhen Stock Exchange at the latest when issuing the notice of the general meeting of shareholders on the election of independent directors, and disclose the relevant announcements. If the board of directors of the company has any objection to the relevant information of independent director candidates, it shall submit the written opinions of the board of directors at the same time.
Article 26 the board of directors of the company shall, at the latest when issuing the notice of the general meeting of shareholders on the election of independent directors, submit the detailed information such as the occupation, educational background, professional qualification, detailed work experience and all part-time jobs of the candidates for independent directors to the website of Shenzhen stock exchange for publicity. The publicity period is three trading days. During the publicity period, if any unit or individual has any objection to the employment conditions and independence of independent director candidates, they can give feedback to Shenzhen Stock Exchange on the employment conditions of independent director candidates and the situation that may affect their independence through the channels provided on the website of Shenzhen Stock Exchange.
Independent director candidates and nominees shall check all relevant information disclosed or publicized by the company. If there are errors or omissions in the contents disclosed or publicized, they shall inform the company to correct them in time. Article 27 the board of directors, independent director candidates and independent director nominees of the company shall truthfully answer the inquiries of the Shenzhen Stock Exchange within the specified time, and timely supplement relevant materials to the Shenzhen Stock Exchange as required.
Article 28 candidates for independent directors do not meet the requirements of independent directors
