Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357)
Working system of independent directors
Chapter I General Provisions
Article 1 in order to ensure the standardized operation of Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) (hereinafter referred to as “the company” or “the company”) and the exercise of functions and powers by the independent directors of the company according to law, ensure the independent directors’ discussion procedures, improve the independent directors’ system, improve the independent directors’ work efficiency and scientific decision-making ability, give full play to the role of independent directors and safeguard the legitimate rights and interests of the company and directors, This system is formulated in accordance with the rules for independent directors of listed companies, the guidelines for the governance of listed companies, the Listing Rules of science and Innovation Board of Shanghai Stock Exchange, the Luoyang Jalon Micro-Nano New Materials Co.Ltd(688357) articles of Association (hereinafter referred to as the “articles of association”) and other relevant laws, administrative regulations and normative documents. 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 independent and objective judgment.
Article 3 independent directors shall have the obligation of integrity and diligence to the company and all shareholders, and shall earnestly perform their duties in accordance with the requirements of relevant laws and regulations and the articles of association, safeguard the overall interests of the company, and pay particular attention to the legitimate rights and interests of minority shareholders.
Article 4 the members of the board of directors of the company shall include at least one-third of the independent directors.
The board of directors of the company has a remuneration and assessment committee, an audit committee, a nomination committee and a strategy committee. Independent directors shall account for the majority of the remuneration and assessment committee, the audit committee and the nomination committee and act as the convener. Article 5 the independent directors of the company shall strictly abide by the procedures stipulated in the system and exercise the functions and powers conferred by laws, administrative regulations, departmental rules and the articles of association.
Chapter II independence of independent directors
Article 6 independent directors must be independent. 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 having an interest in the company.
In principle, independent directors can concurrently serve as independent directors in up to five listed companies, and ensure that they have enough time and energy to effectively perform their duties.
Article 7 the following persons shall not serve as independent directors:
(I) persons who work in the company or its affiliated enterprises, their immediate family members and their main social relations (immediate family members refer to spouses, parents, children, etc.; main social relations refer to brothers and sisters, parents of spouses, spouses of children, spouses of brothers and sisters, brothers and sisters of spouses, etc.);
(II) shareholders who directly or indirectly hold more than 1% of the issued shares of the company or are natural persons among the top ten shareholders of the company and their immediate family members;
(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 listed company and their immediate family members;
(IV) persons who have had the situations listed in the preceding three items in the most recent year;
(V) personnel who provide financial, legal and consulting services for the company or its affiliated enterprises;
(VI) other personnel stipulated by laws, administrative regulations and departmental rules;
(VII) other personnel specified in the articles of Association;
(VIII) other personnel recognized by China Securities Regulatory Commission (hereinafter referred to as “CSRC”). Chapter III Conditions of appointment of independent directors
Article 8 an independent director shall have the conditions for holding a post suitable for the exercise of his functions and powers.
Article 9 serving as an independent director of the company shall meet the following basic conditions:
(I) be qualified to serve as a director of a listed company in accordance with laws, administrative regulations and other relevant provisions; (II) have the independence required by this system;
(III) have basic knowledge of the operation of listed companies and be familiar with relevant laws, administrative regulations, rules and rules; (IV) have more than five years of working experience in law, economics or other work necessary to perform the duties of independent directors; (V) other conditions stipulated by laws, regulations and the articles of association.
Independent directors and persons who intend to serve as independent directors shall participate in the training organized by the CSRC and its authorized institutions in accordance with the provisions.
Article 10 the independent directors appointed by the company shall include at least one accounting professional.
Chapter IV nomination, election and replacement of independent directors
Article 11 the nomination, election and replacement of independent directors shall be carried out in accordance with the law and standards.
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.
The nominee shall fully understand the nominee’s occupation, education 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 objective judgment.
Article 14 before the shareholders’ meeting for the election of independent directors is held, the board of directors of the company shall publish the relevant contents in accordance with the relevant provisions of this system, and submit the relevant materials of all nominees to Shanghai Stock Exchange (hereinafter referred to as “Shanghai 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.
Article 15 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.
Article 16 If an independent director fails to attend the meeting of the board of directors in person for three consecutive times, the board of directors shall request the general meeting of shareholders to replace him.
Article 17 before the expiration of the term of office of an independent director, the listed company may remove him through legal procedures. In case of early dismissal, the company shall disclose it as a special disclosure.
Article 18 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 deemed necessary to attract the attention of shareholders and creditors of the company.
Article 19 If the proportion of independent directors in the board of directors of the company is lower than the minimum requirements specified in this system due to the resignation of independent directors, or there are no accounting professionals in the independent directors, the resignation report of the independent director shall take effect after the next independent director fills the vacancy.
Article 20 if the number of independent directors of the company fails to meet the requirements of this system due to the fact that the independent directors do not meet the conditions for independence or are not suitable for performing the duties of independent directors, the company shall make up the number of independent directors in accordance with the regulations.
The company shall complete the by election of independent directors within three months after the occurrence of articles 19 and 20 of the system. Article 21 when the company holds a general meeting of shareholders to elect independent directors, the board of directors of the company shall explain whether the candidates for independent directors are objected by Shanghai Securities Exchange.
For independent director candidates who raise objections from Shanghai Securities Exchange, the company shall not submit them to the general meeting of shareholders for election as independent directors, and shall postpone or cancel the general meeting of shareholders, or cancel the relevant proposals of the general meeting of shareholders. Chapter V functions and powers of independent directors
Article 22 independent directors shall perform their duties as directors according to law, fully understand the operation of the company and the contents of the board meeting, safeguard the interests of the company and all shareholders, and pay special attention to the protection of the legitimate rights and interests of minority shareholders. In case of any conflict between shareholders or directors of the company, which has a significant impact on the operation and management of the company, the independent directors shall take the initiative to perform their duties and safeguard the overall interests of the company.
Article 23 independent directors shall attend the meeting of the board of directors on time, understand the production, operation and operation of the company, and take the initiative to investigate and obtain the information and materials needed to make decisions.
Independent directors shall submit an annual report on their work to the general meeting of shareholders of the company to explain their performance of their duties.
Article 24 in order to give full play to the role of the independent directors of the company, the independent directors of the company shall have the following special powers in addition to the powers conferred on the directors by the company law and other relevant laws and regulations:
(I) major related party transactions (referring to related party transactions with a total amount of more than 3 million yuan or more than 5% of the company’s recently audited net asset value) shall be approved by independent directors in advance;
Before making a judgment, independent directors can hire an intermediary to issue an independent financial consultant report as the basis for their judgment;
(II) propose to the board of directors to hire or dismiss an accounting firm;
(III) propose to the board of directors to convene an extraordinary general meeting of shareholders;
(IV) propose to convene the board of directors;
(V) publicly solicit voting rights from shareholders before the general meeting of shareholders;
(VI) independently employ external audit institutions and consulting institutions to audit and consult the specific matters of the company. When exercising the functions and powers in items (I) to (V) of the preceding paragraph, independent directors shall obtain the consent of more than half of all independent directors; The exercise of the functions and powers in Item (VI) of the preceding paragraph shall be subject to the consent of all independent directors.
Items (I) (II) can be submitted to the board of directors for discussion only after more than half of the independent directors agree. If the proposals listed in the first paragraph of this article are not adopted or the above functions and powers cannot be normally exercised, the company shall disclose the relevant information.
Where laws, administrative regulations and the CSRC provide otherwise, such provisions shall prevail.
Article 25 in addition to performing special duties, independent directors shall also express independent opinions to the board of directors or the general meeting of shareholders on the following matters:
(I) nomination, appointment and removal of directors;
(II) appointing and dismissing senior managers;
(III) remuneration of directors and senior managers of the company;
(IV) the company’s shareholders, actual controllers and their affiliated enterprises’ existing or new loans or other capital transactions with a total amount of more than 3 million yuan or more than 5% of the company’s recently audited net asset value, and whether the company has taken effective measures to recover the arrears;
(V) major events that need to be disclosed, such as related party transactions, external guarantees (excluding guarantees for subsidiaries within the scope of consolidated statements), entrusted financial management, external financial assistance, change of purpose of raised funds, independent change of accounting policies of the company, investment in stocks and their derivatives, etc;
(VI) formulate and adjust profit distribution policies, profit distribution plans and cash dividend plans;
(VII) major asset restructuring plan;
(VIII) employee stock ownership plan or equity incentive plan;
(IX) share repurchase;
(x) management buyout of the company;
（11） Changes in accounting policies, accounting estimates or correction of major accounting errors due to reasons other than changes in accounting standards;
（12） The company’s financial and accounting reports are issued with non-standard unqualified audit opinions by certified public accountants;
（13） Employment and dismissal of accounting firms;
（14） Internal control evaluation report of the company;
（15） The company’s commitment and the commitment change plan of relevant parties;
（16） The impact of the issuance of preferred shares on the equity of various shareholders of the company;
（17） Matters that independent directors believe may damage the rights and interests of the company and minority shareholders;
（18） Other matters stipulated by laws, administrative regulations, CSRC and the articles of association.
Independent directors shall express one of the following opinions on the above matters: agree; Reservations and their reasons; Objections and their reasons; Inability to express opinions and its obstacles.
If the matters mentioned in the first paragraph of this article are matters that need to be disclosed, the company shall announce the opinions of the independent directors. If the independent directors have different opinions and cannot reach an agreement, the board of directors shall disclose the opinions of each independent director separately.
Article 26 the independent opinions issued by independent directors on major matters shall at least include the following contents:
(I) basic information of major events;
(II) the basis for expressing opinions, including the procedures performed, verification documents, contents of on-site inspection, etc; (III) legality and compliance of major matters;
(IV) the impact on the rights and interests of the company and minority shareholders, possible risks and whether the measures taken by the company are effective;
(V) concluding observations. In case of reservations, objections or inability to express opinions on major matters, the relevant independent directors shall clearly explain the reasons.
The independent directors shall sign and confirm the independent opinions issued, and timely report the above opinions to the board of directors, which shall be disclosed together with the relevant announcements of the company.
Article 27 If an independent director finds that the company has any of the following circumstances, he shall actively perform the obligation of due diligence and report to the stock exchange in time. If necessary, he shall hire an intermediary to conduct special investigation:
(I) important matters are not submitted to the board of directors for deliberation as required;
(II) failing to perform the obligation of information disclosure in time;
(III) there are false records, misleading statements or major omissions in the public information;
(IV) other situations suspected of violating laws and regulations or damaging the legitimate rights and interests of minority shareholders.
Article 28 independent directors shall conduct on-site inspection on the company’s production and operation status, the construction and implementation of management and internal control systems, and the implementation of resolutions of the board of directors. If any abnormality is found in the on-site inspection, it shall be reported to the board of directors of the company and the stock exchange in time.
Article 29 in case of any of the following circumstances, the independent directors shall report to the CSRC, Shanghai Stock Exchange and the dispatched office of the CSRC where the company is located in a timely manner:
(I) being dismissed by the company, and I think the reason for dismissal is improper;
(II) the independent director resigns due to the company’s situation that hinders the independent director from exercising his functions and powers according to law; (III) the meeting materials of the board of directors are insufficient, and the written request of two or more independent directors to postpone the meeting of the board of directors or postpone the consideration of relevant matters has not been adopted;
(IV) the board of directors fails to take effective measures after reporting the suspected illegal acts of the company or its directors, supervisors and senior managers to the board of directors;
(V) other circumstances that seriously hinder independent directors from performing their duties.
Article 30 independent directors shall submit and disclose their work report to the annual general meeting of shareholders of the company.
Article 31 independent directors shall make written records of their performance of duties. During the term of office, independent directors shall participate in the follow-up training of independent directors recognized by the stock exchange in accordance with relevant regulations.
Chapter VI
