Hengdian Group Dmegc Magnetics Co.Ltd(002056)
Rules of procedure of the board of directors
Chapter I General Provisions
Article 1 in order to improve and standardize the deliberation and decision-making procedures of the board of directors of Hengdian Group Dmegc Magnetics Co.Ltd(002056) (hereinafter referred to as “the company”) and ensure the smooth operation and management of the company, in accordance with the company law of the people’s Republic of China (hereinafter referred to as “the company law”), the securities law of the people’s Republic of China (hereinafter referred to as “the securities law”) and the governance standards of listed companies These rules of procedure are formulated in accordance with the provisions of relevant laws, administrative regulations, normative documents and the articles of association, such as the Listing Rules of Shenzhen Stock Exchange, (hereinafter referred to as the Listing Rules), the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board (hereinafter referred to as the standardized operation), etc.
Article 2 the purpose of these rules of procedure is to standardize the procedures of the board of directors and improve the work efficiency and scientific decision-making level of the board of directors.
Article 3 the board of directors is the decision-making body of the company’s operation and management, safeguarding the interests of the company and all shareholders, and is responsible for the decision-making of the company’s development objectives and major business activities within the scope of authorization of the articles of association and the general meeting of shareholders.
Article 4 the board of directors represents the company externally, and the chairman is the legal representative of the company. Under the leadership of the board of directors, the general manager of the company is responsible for the daily business, operation and administrative activities of the company, and is responsible for and reports to the board of directors. Directors are responsible to all shareholders and have the obligation of loyalty and diligence to the company.
Article 5 the board of directors accepts the supervision of the board of supervisors of the company and respects the opinions or suggestions of the employee congress. Chapter II qualification, appointment and resignation of directors
Article 6 a director of the company is a natural person and cannot serve as a director of the company under any of the following circumstances:
(I) no or limited capacity for civil conduct;
(II) being sentenced to criminal punishment for corruption, bribery, misappropriation of property, misappropriation of property or undermining the order of the socialist market economy, less than five years after the expiration of the execution period, or being deprived of political rights due to a crime, less than five years after the expiration of the execution period;
(III) being a director, factory director or manager of a company or enterprise in bankruptcy liquidation and personally responsible for the bankruptcy of the company or enterprise, less than three years have elapsed since the completion of the bankruptcy liquidation of the company or enterprise;
(IV) having served as the legal representative of a company or enterprise whose business license has been revoked or ordered to close down due to violation of law, and having personal responsibility, less than three years have elapsed since the date of revocation of the business license of the company or enterprise;
(V) a large amount of personal debt is not paid off when due;
(VI) being prohibited from entering the securities market by the CSRC, and the time limit has not expired;
(VII) the market entry prohibition measures publicly recognized by the stock exchange as unsuitable for serving as directors, supervisors and senior managers of listed companies have not expired;
(VIII) other contents stipulated by laws, administrative regulations or departmental rules.
If a director is elected or appointed in violation of the provisions of this article, the election, appointment or employment shall be invalid. If any of the circumstances in items (I) to (VI) of this article occurs to a director during his term of office, the relevant director shall immediately stop performing his duties and be dismissed by the company in accordance with the corresponding provisions. If any of the circumstances in Item (VII) and (VIII) of this article occurs to a director during his term of office, the company shall remove him from his post within one month from the date of the occurrence of the fact.
The qualifications of independent directors shall comply with relevant laws, administrative regulations, departmental rules, normative documents, listing rules, standardized operation guidelines and other relevant provisions.
Article 7 directors shall be elected or replaced by the general meeting of shareholders, and may be removed by the general meeting of shareholders before the expiration of their term of office. The term of office of a director is three years. Upon expiration of his term of office, he may be re elected.
The term of office of the directors shall be calculated from the date of taking office to the expiration of the term of office of the current board of directors.
If a director is not re elected in time at the expiration of his term of office, or if the number of members of the board of directors is less than the quorum due to the resignation of a director during his term of office, the original director shall still perform his duties as a director in accordance with laws, administrative regulations and the articles of association before the re elected director takes office.
Article 8 the company does not have staff representative directors. A director may be concurrently held by the general manager or other senior managers, but the total number of directors concurrently holding the posts of general manager or other senior managers shall not exceed one-half of the total number of directors of the company.
Article 9 when electing more than two (including two) directors at the general meeting of shareholders, the cumulative voting system shall be adopted and the voting shall be carried out in accordance with the specific rules of the cumulative voting system stipulated in the articles of association. If the shareholders’ meeting elects directors by cumulative voting, the voting of independent directors and non independent directors shall be conducted separately.
Article 10 the list of candidates for directors shall be submitted by the board of directors to the shareholders’ meeting for resolution in the form of proposal. The board of directors of the company shall provide the shareholders with the resumes and basic information of the candidate directors.
Shareholders may propose a list of candidates for directors in accordance with the provisions of the articles of association on the temporary proposal of shareholders and the proposal of shareholders to convene the general meeting of shareholders.
Article 11 according to the needs of its own business development, the company may increase or reduce the members of the board of directors within the scope specified in laws, administrative regulations and the articles of association. However, any change in the members of the board of directors, including increase or decrease in the number of directors, removal or by election of directors, shall be decided by the general meeting of shareholders in accordance with the articles of association. Article 12 the directors shall abide by the provisions of laws, administrative regulations and the articles of association, and bear the following obligations of loyalty to the company:
(I) not to take advantage of the company’s property or other illegal income;
(II) not misappropriate the company’s funds;
(III) the company’s assets or funds shall not be stored in an account opened in its own name or in the name of other individuals;
(IV) the company shall not, in violation of the provisions of the articles of association, lend the company’s funds to others or provide guarantee for others with the company’s assets without the consent of the general meeting of shareholders or the board of directors;
(V) not to enter into contracts or conduct transactions with the company in violation of the provisions of the articles of association or without the consent of the general meeting of shareholders;
(VI) without the consent of the general meeting of shareholders, it is not allowed to take advantage of his position to seek business opportunities that should belong to the company for himself or others, and operate businesses similar to the company for himself or for others;
(VII) shall not accept the Commission of trading with the company as his own;
(VIII) not disclose company secrets without authorization;
(IX) it is not allowed to use the affiliated relationship to damage the interests of the company;
(x) other loyalty obligations stipulated in laws, administrative regulations, departmental rules and the articles of association.
The income obtained by a director in violation of this article shall be owned by the company; If losses are caused to the company, it shall be liable for compensation.
Article 13 the directors shall abide by the provisions of laws, administrative regulations and the articles of association and bear the following obligations of diligence to the company:
(I) exercise the rights conferred by the company carefully, seriously and diligently to ensure that the company’s business activities comply with the requirements of national laws, administrative regulations and national economic policies, and that the business activities do not exceed the business scope specified in the business license;
(II) all shareholders should be treated fairly;
(III) timely understand the business operation and management of the company;
(IV) sign written confirmation opinions on the company’s periodic reports and securities issuance documents to ensure that the information disclosed by the company is true, accurate and complete; If it is impossible to guarantee the authenticity, accuracy and completeness of the contents of the periodic report and securities issuance documents, or there are objections, it shall express its opinions and state the reasons in the written confirmation opinions;
(V) it shall truthfully provide the board of supervisors with relevant information and materials, and shall not hinder the board of supervisors or supervisors from exercising their functions and powers;
(VI) other duties of diligence stipulated in laws, administrative regulations, departmental rules, listing rules, standardized operation and the articles of association.
Article 14 If a director fails to attend the meeting in person or entrust other directors to attend the meeting of the board of directors for two consecutive times, he shall be deemed unable to perform his duties, and the board of directors shall recommend the general meeting of shareholders to replace him.
Article 15 a director may resign before the expiration of his term of office. When a director resigns, he shall submit a written resignation report to the board of directors, and shall state the time of resignation, the reason for resignation, the position of resignation, whether to continue to serve in the company and the company’s holding subsidiaries after resignation (if he continues to serve, explain the situation of continuing to serve), etc. The board of directors shall disclose relevant information within two days after receiving the resignation report of directors.
If the board of directors of the company is less than the minimum quorum (five persons), the number of independent directors is less than one-third of the members of the board of directors due to the resignation of directors, or there are no accounting professionals among the independent directors, the original directors shall still perform the duties of directors in accordance with laws, administrative regulations, departmental rules and the articles of association before the re elected directors take office. When the number of the board of directors is lower than the minimum quorum, the company shall complete the by election within two months.
Except for the circumstances listed in the preceding paragraph, the resignation of a director shall take effect when the resignation report is delivered to the board of directors.
Article 16 when the resignation of a director takes effect or the term of office expires, all handover procedures shall be completed with the board of directors. His duty of loyalty to the company and shareholders is not automatically relieved after the end of his term of office.
After the resignation takes effect or the term of office expires, the director shall still bear the obligation of loyalty for two years after the resignation takes effect or the term of office expires. However, for the company secrets (including but not limited to technical secrets and trade secrets), he shall continue to perform the obligation of confidentiality after leaving office until the relevant information is disclosed.
Article 17 directors who violate laws, administrative regulations, departmental rules or the articles of association when performing their duties and cause losses to the company shall be liable for compensation.
Article 18 independent directors shall implement in accordance with laws, administrative regulations and relevant provisions of the CSRC and the stock exchange.
Chapter III nomination, appointment and powers of independent directors
Article 19 Where there are no special provisions on independent directors in this chapter, the provisions of Chapter II of these rules of procedure shall apply. Article 20 the company shall establish an independent director system in accordance with relevant regulations. Independent directors refer to directors who do not hold other positions in the company except directors and have no relationship with the company and its major shareholders that may hinder their independent and objective judgment.
Article 21 independent directors shall perform their duties independently and impartially, and shall not be affected by the company’s major shareholders, actual controllers or other units and individuals having an interest in the company. If it is found that the matters under consideration affect its independence, it shall declare to the company and withdraw. In case of any situation that obviously affects the independence during his term of office, he shall notify the company in time and put forward solutions. If necessary, he shall resign.
Article 22 nomination, election and replacement of independent directors
(I) the board of directors, the board of supervisors and the 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.
(II) the nominee of an independent director shall obtain the consent of the nominee before nomination. 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 objective judgment. Before the shareholders’ meeting for the election of independent directors is held, The board of directors of the company shall announce the above contents in accordance with the provisions.
(III) the board of directors of the company shall check the qualification and independence of independent director candidates. If it is found that they do not meet the relevant requirements, it shall require the nominees to revoke the nomination of independent director candidates. Before the general meeting of shareholders for the election of independent directors is held, the company shall submit the relevant materials of independent director candidates (including but not limited to the statement of nominees, candidate statement and resume of independent directors) to Shenzhen stock exchange for filing and review in accordance with relevant regulations. If the board of directors of the company has any objection to the relevant information of independent director candidates, it shall also submit the written opinions of the board of directors, No objection can be submitted to the general meeting of shareholders of the company for deliberation after being filed by Shenzhen Stock Exchange. 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 Shenzhen Stock Exchange. (IV) 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 in the company for six consecutive years, he shall not be nominated as an independent director candidate of the company within 12 months from the date of this fact.
Before the expiration of the term of office of an independent director, the company may remove his / her position through legal procedures. If he / she is removed in advance, the company shall disclose it as a special disclosure.
(V) 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.
(VI) independent directors may resign before the expiration of their 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.
If the number of independent directors or members of the board of directors is lower than the minimum number prescribed by law or the articles of association due to the resignation of independent directors, or there are no accounting professionals among independent directors, the independent directors who propose to resign shall still comply with the provisions of laws, administrative regulations and the articles of association before the re elected independent directors take office, Continue to perform his duties until the new independent director is elected. The board of directors shall convene a shareholders’ meeting to elect independent directors by election within two months from the date of resignation of independent directors.
Article 23 in addition to the functions and powers conferred on directors by the company law and other relevant laws and administrative regulations, independent directors shall also have the following special functions and powers:
(I) related party transactions that need to be submitted to the general meeting of shareholders for deliberation shall be submitted to the board of directors for discussion after being approved by independent directors. Independent directors can hire intermediaries to issue special reports before making judgments;
(II) propose to the board of directors to employ or dismiss the accounting firm;
(III) propose to the board of directors to convene an extraordinary general meeting of shareholders;
(IV) solicit the opinions of minority shareholders, put forward profit distribution proposals and directly submit them to the board of directors for deliberation; (V) propose to convene the board of directors;
(VI) publicly solicit voting rights from shareholders before the general meeting of shareholders;
(VII) independently employ external audit institutions or consulting institutions to audit and consult the specific matters of the company.
Independent directors shall obtain the consent of more than half of all independent directors when exercising the functions and powers in items (I) to (VI) of the preceding paragraph. The exercise of the functions and powers in Item (VII) of the preceding paragraph shall be subject to the consent of all independent directors. Above
