Working system of independent directors
Chapter I General Provisions
Article 1 in order to improve the governance structure of Hvsen Biotechnology Co.Ltd(300871) (hereinafter referred to as “the company”), promote the standardized operation of the company and safeguard the interests of the company and shareholders, in accordance with the company law of the people’s Republic of China (hereinafter referred to as “the company law”) This system is formulated in accordance with the relevant provisions of the securities law of the people’s Republic of China, the rules for independent directors of listed companies, the self regulatory guidelines for companies listed on the gem of Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on the gem, and the Hvsen Biotechnology Co.Ltd(300871) articles of Association (hereinafter referred to as the “articles of association”) and in combination with the actual situation of the company.
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 have the obligation of good faith and diligence to the company and all shareholders. Independent directors shall earnestly perform their duties in accordance with the requirements of relevant laws, administrative regulations, normative documents 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 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.
Article 5 the independent directors appointed by the company shall have a certain degree of independence. The independent directors shall work for the company for no less than 10 working days every year, and ensure that they have enough time and energy to effectively perform the duties of independent directors.
Article 6 independent directors account for at least one-third of the members of the board of directors of the company. The independent directors of the company include at least one accounting professional (accounting professional refers to the person with senior accounting professional title or certified public accountant qualification).
Article 7 when the independent directors fail to meet the conditions for independence or other circumstances unsuitable for performing the duties of independent directors, resulting in the failure of the company’s independent directors to reach the quorum, the company shall make up for the number of independent directors in accordance with the regulations.
Article 8 independent directors and persons who intend to serve as independent directors shall participate in the training organized by them in accordance with the requirements of relevant competent authorities.
Chapter II qualifications of independent directors
Article 9 an independent director of the company shall meet the following basic conditions:
（1） Be qualified to serve as a director of the company in accordance with laws, administrative regulations and other relevant provisions;
（2） It has due independence and does not fall under the circumstances specified in Article 10 of this system;
（3） Have the basic knowledge of the operation of listed companies, and be familiar with relevant laws, administrative regulations, rules and rules;
（4） At least five years of working experience in law, economics, finance, management or other work necessary for performing the duties of independent directors;
（5） Has obtained the qualification certificate of independent director recognized by Shenzhen Stock Exchange in accordance with the guidelines for the training of senior managers of listed companies and relevant regulations;
（6） Other conditions stipulated in the articles of association.
Article 10 independent directors must be independent, and the following persons shall not serve as independent directors:
（1） Personnel working in the company or its affiliated enterprises and their immediate family members and main social relations (immediate family members refer to spouses, parents, children, etc.; main social relations refer to brothers and sisters, parents in law, daughter-in-law and son-in-law, spouses of brothers and sisters, brothers and sisters of spouses, etc.);
（2） Directly or indirectly holding more than 1% of the issued shares of the company or natural person shareholders and their immediate family members among the top ten shareholders of the company;
（3） 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;
（4） Persons who hold posts in the controlling shareholders, actual controllers and their affiliated enterprises of the company and their immediate family members; （5） 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;
（6） Work in units with significant business dealings with listed companies and their controlling shareholders, actual controllers or their respective subsidiaries, or work in units with controlling shareholders with significant business dealings;
（7） Persons who have had the situations listed in the preceding six items in the most recent year;
（8） Being prohibited from entering the securities market by the CSRC and still in the period of prohibition;
（9） Being publicly recognized by the stock exchange as unfit to serve as directors, supervisors and senior managers of a listed company;
（10） Those who have been punished by the CSRC in the last three years, or have been publicly condemned by the stock exchange or criticized for more than three times in the last three years;
（11） Persons who are not allowed to serve as directors of the company in accordance with laws, regulations and the articles of Association;
（12） Other personnel recognized by China Securities Regulatory Commission and Shenzhen Stock Exchange.
Chapter III nomination, election and replacement of independent directors
Article 11 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 (hereinafter referred to as “nominees”) may propose candidates for independent directors, which shall be elected and decided by the general meeting of shareholders.
Article 12 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 necessary public statement that there is no relationship between himself and the company that affects his independent objective judgment.
Article 13 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 14 The term of office of independent directors is the same as that of other directors. Upon expiration of their term of office, they can be re elected, but the term of re-election shall not exceed six years.
Article 15 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. Before the expiration of the term of office of an independent director, the listed company may remove him from his post through legal procedures. In case of early dismissal, the company shall disclose it as a special disclosure matter. If the dismissed independent director believes that the company’s reason for dismissal is improper, he may make a public statement.
Article 16 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 17 If the proportion of independent directors in the board of directors of the company is lower than the minimum number specified in relevant regulations due to the resignation of independent directors, the resignation report of the independent director shall take effect after the next independent director fills the vacancy.
Before the re elected directors take office, the original independent directors shall still perform the duties of independent directors in accordance with laws, administrative regulations, departmental rules and the articles of association. Except for the circumstances listed in the preceding paragraph, the resignation of an independent director shall take effect when the resignation report is delivered to the board of directors.
Article 18 for the independent directors who do not have the qualification or ability of independent directors and fail to perform their duties independently, the shareholders who individually or jointly hold more than 1% of the shares of the company may raise a challenge or removal proposal to the board of directors of the company. The challenged independent director shall explain the questioned matters in time. The board of directors of the company shall timely convene a special meeting for discussion after receiving relevant queries or removal proposals. If it is confirmed that the existing independent directors no longer have the corresponding qualifications and abilities, they shall suspend the performance of their duties as independent directors, and the company shall immediately start the re-election procedure.
Chapter IV rights and obligations of independent directors
Article 19 in addition to the functions and powers conferred on directors by the company law and other relevant laws and regulations, independent directors shall also have the following special functions and powers:
（1） Major related party transactions (refer to the 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 submitted to the board of directors for discussion after being approved by independent directors. Before the independent directors make a judgment, they can hire an intermediary to issue an independent financial consultant report as the basis for their judgment;
（2） Propose to the board of directors to employ or dismiss the accounting firm;
（3） Propose to the board of directors to convene an extraordinary general meeting of shareholders;
（4） Propose to convene the board of directors;
（5） Publicly solicit voting rights from shareholders before the general meeting of shareholders, but it shall not be solicited by means of compensation or compensation in disguised form;
Independent directors shall obtain the consent of more than half of all independent directors when exercising the above functions and powers. Items (I) and (II) shall be approved by more than half of the independent directors before being submitted to the board of directors for discussion. （6） Independently employ external audit institutions and consulting institutions to audit and consult the specific matters of the company;
Independent directors shall obtain the consent of all independent directors when exercising the above functions and powers.
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 20 among the remuneration and assessment, audit, nomination and other relevant committees under the board of directors of the company, independent directors account for more than half of the proportion and act as the convener.
Article 21 in addition to performing the duties and rights described in the preceding article, independent directors also express independent opinions to the board of directors or the general meeting of shareholders on the following matters:
（1） Nomination, appointment and removal of directors;
（2） Appoint or dismiss senior managers;
（3） Determine or adjust the remuneration of directors and senior managers of the company;
（4） 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;
（5） Matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
（6） Other matters stipulated by laws and regulations and the articles of association.
Article 22 independent directors shall express one of the following opinions on the above matters: agree; Reservations and reasons; Objections and their reasons; Inability to express opinions and its obstacles.
Article 23 in order to ensure the effective exercise of functions and powers by independent directors, the company shall provide necessary conditions for independent directors:
（1） The company shall ensure that independent directors enjoy the same right to know as other directors, regularly inform independent directors of the company’s operation, and organize independent directors to conduct factual investigation when necessary. For matters that need to be decided by the board of directors, the company must notify the independent directors in advance according to the legal time and provide sufficient information at the same time. If the independent directors think the information is insufficient, they can ask for supplement. When two or more independent directors consider that the information is insufficient or the argument is unclear, they can jointly submit a written proposal to the board of directors to postpone the convening of the meeting of the board of directors or postpone the consideration of the matter, which shall be adopted by the board of directors. The information provided by the company to the independent directors shall be kept by the company and the independent directors for at least five years.
（2） The company shall provide the working conditions necessary for independent directors to perform their duties. The Secretary of the board of directors shall actively assist the independent directors in performing their duties, such as introducing the situation, providing materials, etc.
（3） When independent directors exercise their functions and powers, relevant personnel of the company shall actively cooperate, and shall not refuse, hinder or conceal, or interfere with their independent exercise of functions and powers.
（4） The expenses incurred by independent directors in employing intermediaries and other expenses required for exercising their functions and powers shall be borne by the company.
（5） The company shall give appropriate allowances to independent directors. The standard of allowance shall be formulated by the board of directors, deliberated and approved by the general meeting of shareholders, and disclosed in the annual report of the company. In addition to the above allowances, independent directors shall not obtain additional and undisclosed interests from the company, its major shareholders or interested institutions and personnel.
（6） The company may establish a necessary independent director liability insurance system to reduce the risks that may be caused by the normal performance of duties by independent directors.
Article 24 independent directors have the obligation of good faith and diligence to the company and all shareholders. 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 25 the independent directors of the company shall attend the meeting of the board of directors on time, understand the production, operation and operation of the company, take the initiative to investigate and obtain the information and materials required for making decisions. The independent directors shall submit an annual report to the general meeting of shareholders of the company to explain their performance of their duties. When independent directors find that the company has the following circumstances, they shall actively perform the obligation of due diligence and, if necessary, employ an intermediary agency for special investigation:
（1） Important matters are not submitted to the board of directors for deliberation as required;
（2） Other situations suspected of violating laws and regulations or damaging shareholders’ rights and interests.
Article 26 under any of the following circumstances, the independent director shall make a public statement:
（1） Being dismissed by the company, and I think the reason for dismissal is improper;
（2） The independent director resigns due to the company’s situation that hinders the independent director from exercising his functions and powers according to law;
（3） When the meeting materials of the board of directors are insufficient, 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 is not adopted;
（4） The board of directors fails to take effective measures after reporting the company’s suspected violations to the board of directors; （5） Other circumstances that seriously hinder independent directors from performing their duties.
Article 27 independent directors shall submit a work report to the annual general meeting of shareholders of the company to explain their performance of duties. The work report shall report the following contents:
（1） Number of attendance and voting at the board of directors and shareholders’ meeting in the previous year;
（2） The situation of expressing independent opinions;
（3） Work done in protecting the legitimate rights and interests of shareholders;
（4） Perform other work done by independent directors, such as proposing to hold a meeting of the board of directors, proposing to hire or dismiss an accounting firm, independently hiring external audit institutions and consulting institutions, etc.
Article 28 If an independent director resigns or his term of office expires, his obligations to the company and shareholders shall be reported in the resignation report
