Hengdian Entertainment Co.Ltd(603103)
Working system of independent directors
(revised in March 2022)
Chapter I General Provisions
Article 1 in order to establish and improve the modern enterprise system and standardize the operation of the company, this system is formulated in accordance with the relevant provisions of the company law of the people’s Republic of China (hereinafter referred to as the “company law”), the rules for independent directors of listed companies and the Hengdian Entertainment Co.Ltd(603103) 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 must be independent and free from the influence of the company’s major shareholders, actual controllers or other units or individuals with an interest in the company.
Article 4 independent directors have the obligation of good faith and diligence to the company and all shareholders.
Article 5 independent directors 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 protection of the legitimate rights and interests of minority shareholders.
Article 6 independent directors shall account for more than 1 / 3 of the board of directors; Including at least one accounting professional (referring to the person with senior professional title or certified public accountant qualification). The company may appoint experts in the industry where the company’s business is located among the independent directors.
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 the CSRC and its authorized institutions in accordance with the requirements of the CSRC.
Chapter II Conditions of employment
Article 9 independent directors are natural persons. Their qualifications shall comply with the relevant provisions of relevant laws and regulations. Article 10 an independent director shall have the qualifications suitable for the exercise of his / her functions and powers. In addition to the conditions for the company’s directors as stipulated in the articles of association, an independent director shall also meet the following basic conditions: (I) be qualified to serve as a director of the company in accordance with laws, administrative regulations and other relevant regulations; (II) have the independence required by laws and regulations to be an independent director;
(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;
（5） Other laws and regulations of the company.
In addition to the above conditions, the company shall also focus on whether the candidates for independent directors have the following circumstances:
（1） In the past, he was often absent or often did not attend the meeting of the board of directors in person during his tenure as an independent director; （2） 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;
（3） Being punished by the CSRC and other relevant departments in the past three years;
（4） Being publicly condemned or criticized by the stock exchange in the past three years;
（5） Over 70 years old and working in multiple companies, institutions or social organizations at the same time;
（6） Failing to comply with the provisions of other relevant departments on the qualifications of directors and independent directors;
(VII) other circumstances that affect the integrity, diligence and independent performance of duties of independent directors.
The nominees of independent directors shall verify whether the candidates for independent directors have the above circumstances and make explanations.
Article 11 the following persons shall not serve as independent directors:
(I) persons who are not allowed to serve as directors of the company according to the articles of Association;
(II) the personnel working in the company or its affiliated enterprises and their spouses, immediate relatives and main social relations;
(III) 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 10 shareholders of the company;
(IV) 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;
(V) persons who have had the situations listed in the preceding four paragraphs in the last year;
(VI) personnel providing financial, legal and consulting services for the company or its subsidiaries;
(VII) concurrently serving as independent directors in more than 5 (excluding 5) listed companies;
(VIII) other personnel stipulated by laws, administrative regulations and departmental rules;
(IX) other personnel recognized by the CSRC.
The immediate family members mentioned in this article refer to 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.
Chapter III nomination, election and replacement
Article 12 the board of directors, the board of supervisors and shareholders who individually or jointly hold more than 1% of the total issued voting shares of the company have the right to 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.
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 of the preceding paragraph. And submit relevant materials of all nominees to the stock exchange. If the board of directors of a listed 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 14 for the letter of concern about the qualifications of independent directors issued by the CSRC and the stock exchange to the company, the company shall disclose the opinions of concern before the general meeting of shareholders. Nominees who raise objections to the CSRC and the exchange may be candidates for directors of the company, but shall not be submitted to the general meeting of shareholders for voting as candidates for independent directors. 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.
Article 15 independent directors shall be elected and decided by the general meeting of shareholders by open ballot.
Article 16 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 6 years.
Article 17 independent directors shall attend the meeting of the board of directors in person. If they fail to attend the meeting in person for three consecutive times, the board of directors shall request the general meeting of shareholders to replace them.
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 addition to the above circumstances and the circumstances stipulated in the company law that an independent director shall not be removed from office without reason before the expiration of his term of office.
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 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.
If the proportion of independent directors in the board of directors of the company is lower than the statutory minimum due to the resignation of independent directors, the resignation report of the independent director shall take effect after the general meeting of shareholders elects a new independent director to fill the vacancy.
When the number of independent directors of the company fails to meet the conditions for independence or other circumstances unsuitable for performing the duties of independent directors, resulting in the number of independent directors not meeting the requirements of this system, the company shall make up the number of independent directors according to the regulations.
Chapter IV functions and powers of independent directors
Article 19 independent directors shall perform their duties independently and properly, and shall not be affected by the company’s major shareholders, actual controllers or other units or individuals with interests 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 his independence during his term of office, he shall timely notify the company and submit his resignation.
Independent directors shall attend the meeting of the board of directors on time, understand the production, operation and operation of the listed 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 20 in addition to the functions and powers conferred on directors by the company law and the articles of association, independent directors also have the following special functions and powers:
(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 assets) shall be submitted to the board of directors for discussion after being approved by independent directors; 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 employ or dismiss the 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) independently employ external audit institutions or consulting institutions to audit and consult the specific matters of the company;
(VI) the voting rights may be publicly solicited from shareholders before the general meeting of shareholders is held.
Article 21 independent directors shall obtain the consent of more than 1 / 2 of all independent directors when exercising the functions and powers in items (I), (II), (III), (IV) and (VI) of Article 20 of the system; The exercise of the functions and powers in Item (V) of Article 20 shall be subject to the consent of all independent directors.
Article 20 items (I) and (II) can be submitted to the board of directors for discussion only after more than half of the independent directors agree.
If the proposal made by the independent director to perform the functions and powers in Article 20 of the system is not adopted or the 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 22 If the board of directors of the company sets up special committees for audit, nomination and remuneration, the independent directors shall account for more than 1 / 2 of the members of the Committee and act as the convener.
Article 23 the company shall bear the expenses for the independent director to hire an intermediary institution to perform his / her functions and powers and other expenses required for the exercise of his / her functions and powers.
Chapter V responsibilities
Article 24 independent directors shall ensure that they have enough time and energy to perform their duties.
Article 25 independent directors are responsible for giving independent opinions to the board of directors or the general meeting of shareholders on the following major matters of the company:
(I) nomination, appointment and removal of directors;
(II) appointing or dismissing senior managers of the company;
(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) connected transactions (including funds provided by the company to shareholders, actual controllers and their affiliated enterprises);
(VI) change the purpose of the raised funds;
(VII) external guarantees;
(VIII) equity incentive plan;
(IX) matters that independent directors believe may damage the rights and interests of minority shareholders;
(x) other matters stipulated by laws, administrative regulations, CSRC and the articles of association.
Article 26 the independent directors shall express one of the following opinions on the major matters in the preceding article:
(I) consent;
(II) reservations and their reasons;
(III) objections and their reasons;
(IV) inability to express opinions and its obstacles.
The opinions expressed by independent directors shall be clear and clear.
Article 27 independent directors shall bear the responsibility of confidentiality for the information provided by the company before it is officially announced and disclosed.
Article 28 after the company is listed, when performing the obligation of information disclosure, if the relevant matters belong to the matters that need to be disclosed, the company shall disclose the opinions of independent directors according to law. When 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 29 after the company is listed, if the independent directors find that the company has the following circumstances, they shall actively perform the obligation of due diligence and, if necessary, 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 rights and interests of public shareholders.
Article 30 in addition to attending the meeting of the board of directors, independent directors shall ensure that they have at least 10 days to conduct on-site investigation 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.
Article 31 independent directors shall submit a work report to the annual general meeting of shareholders of the company, which shall include the following contents:
(I) the number of times of attending the board of directors and shareholders’ general meeting and voting in the previous year;
(II) the situation of expressing independent opinions;
(III) work done in protecting the legitimate rights and interests of minority shareholders;
(IV) other work performed by independent directors, such as proposing to convene the board of directors, proposing to hire or dismiss accounting firms, independently hiring external audit institutions and consulting institutions, conducting on-site inspection, etc.
Article 32 independent directors have the right to conduct on-site investigation 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.
Article 33 independent directors shall make written records of their performance of duties.
Article 34 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.
Chapter VI working conditions and remuneration
Article 35 the company shall ensure that independent directors enjoy the same right to know as other directors. The company must notify the independent directors in advance of the matters to be decided by the board of directors according to the legal time and provide sufficient information at the same time. If the independent directors think the information is insufficient
