Working system of independent directors
(revised in March 2022)
Chapter I General Provisions
Article 1 in order to further improve the corporate governance structure of Nanjing Baose Co.Ltd(300402) (hereinafter referred to as “the company”), strengthen the restraint and supervision mechanism for the board of directors and senior managers, better safeguard the interests of minority shareholders and promote the standardized operation of the company, according to the company law of the people’s Republic of China, the securities law of the people’s Republic of China and the governance standards of listed companies The rules for independent directors of listed companies (hereinafter referred to as the “rules for independent directors”), the rules for the listing of shares on the gem of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 2 – standardized operation of listed companies on the gem, the guidelines for the performance of duties of independent directors of listed companies and other relevant laws, regulations and rules This system is hereby formulated in accordance with the relevant provisions of normative documents and Nanjing Baose Co.Ltd(300402) 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 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 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 independent directors shall perform their duties independently and shall not be influenced by the company’s major shareholders, actual controllers, or other units or individuals with 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 5 the members of the board of directors of the company shall include at least one-third of the independent directors, including at least one accounting professional. Accounting professionals refer to those who have senior accounting titles, certified public accountant qualifications or meet the requirements of China Securities Regulatory Commission and Shenzhen Stock Exchange.
Among the special committees on remuneration and assessment, audit, strategy and nomination under the board of directors of the company, independent directors shall account for the majority of the members of the audit committee, nomination committee and remuneration and assessment committee and act as the convener. The convener of the audit committee shall be an accounting professional.
Chapter II Conditions of appointment of independent directors
Article 6 an independent director shall have the qualifications appropriate to the exercise of his / her functions and powers. Serving as an independent director 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 Article 7 of the 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.
The training of independent directors to be organized by and authorized by the CSRC shall be conducted in accordance with the provisions of the independent directors and their authorized institutions.
Article 7 independent directors must be independent, and 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) 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 have had the situations listed in the preceding three items in the most recent year;
(V) personnel providing financial, legal and consulting services for the company or its subsidiaries;
(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 CSRC and Shenzhen Stock Exchange.
Chapter III nomination, election and replacement of independent directors
Article 8 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 9 the nominees of independent directors shall obtain the consent of the nominees 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 10 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 provisions of Article 9 of this system, and submit the 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.
Article 11 the nominees who have objections to the Shenzhen Stock Exchange may be candidates for directors of the company, but not candidates for independent directors. When the general meeting of shareholders is held to elect independent directors after the listing of the company, the board of directors of the company shall explain whether the candidates for independent directors are objected by Shenzhen Stock Exchange.
Article 12 when nominating candidates for independent directors, in addition to the provisions of Article 7 of the system, the nominees of independent directors shall also focus on whether the candidates for independent directors have the following circumstances:
(I) during the past period of serving as an independent director, he was often absent or often did not attend the meeting of the board of directors in person;
(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) being punished by the CSRC and other relevant departments in the past three years;
(IV) being publicly condemned or criticized by the stock exchange in the past three years;
(V) serving as a director (independent director), supervisor or senior manager in more than five companies at the same time;
(VI) over 70 years old and working in multiple companies, institutions or social organizations at the same time;
(VII) failing to meet the requirements of other relevant departments on the qualifications of directors and independent directors;
(VIII) other circumstances that affect the integrity, diligence and independent performance of duties of independent directors.
Article 13 The term of office of independent directors is the same as that of other directors of the company. Upon expiration of their term of office, they can be re elected, but the term of re-election shall not exceed six years.
Article 14 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 15 before the expiration of the term of office of an independent director, the company may remove him through legal procedures. In case of early dismissal, the company shall disclose it as a special disclosure.
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, and shall 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 requirements specified in laws, regulations and the articles of association 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.
Article 18 If the number of independent directors of the company fails to meet the requirements of laws and regulations and the articles of association, the company shall make up the number of independent directors in accordance with the regulations.
Chapter IV functions and powers of independent directors
Article 19 in order to give full play to the role of independent directors, in addition to the functions and powers conferred on directors by the company law, other relevant laws and regulations and the articles of association, independent directors shall also enjoy the following special functions and powers:
(I) major related party transactions of the company (referring to related party transactions between the company and related natural persons with a transaction amount of more than 300000 yuan; related party transactions between the company and related legal persons with a transaction amount of more than 3 million yuan and accounting for more than 0.5% of the absolute value of the company’s latest audited net assets) shall be submitted to the board of directors for discussion after being approved in advance 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) may publicly solicit voting rights from shareholders before the general meeting of shareholders is held, but may not solicit voting rights by means of compensation or compensation in disguised form;
(VI) 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 more than half of all independent directors when exercising the functions and powers in items (I) to (V) above; The exercise of the above-mentioned functions and powers in Item (VI) 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 20 in addition to exercising the functions and powers listed in Article 19, 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 or dismissing senior managers;
(III) remuneration of directors and senior managers of the company;
(IV) formulation, adjustment, decision-making procedures, implementation and information disclosure of the company’s cash dividend policy, and whether the profit distribution policy damages the legitimate rights and interests of small and medium-sized investors;
(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) 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;
(VII) major asset restructuring plan and equity incentive plan;
(VIII) the company plans to decide that its shares will no longer be traded in Shenzhen Stock Exchange, or apply for trading or transfer in other trading places instead;
(IX) matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
(x) other matters stipulated by relevant laws, administrative regulations, departmental rules, normative documents, CSRC and the articles of association.
Independent directors shall express one of the following opinions in writing on the above matters: agree; Reservations and their reasons; Objections and their reasons; Inability to express opinions and its obstacles.
Article 21 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 22 If the relevant matters need to be disclosed, the company shall announce the opinions of the independent directors. If the independent directors have different opinions and can not reach an agreement, the board of directors shall disclose the opinions of each independent director separately.
Article 23 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 institution 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 24 in addition to attending the meetings of the board of directors, independent directors shall, in principle, arrange a reasonable time every year to 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 Shenzhen Stock Exchange in time.
Article 25 in case of any of the following circumstances, the independent director shall report to the Shenzhen Stock Exchange in time: (I) being dismissed by the company, 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) when the meeting materials of the board of directors are insufficient, the proposal of two or more independent directors in writing to postpone the meeting of the board of directors or postpone the consideration of relevant matters is not 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 26 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 of independent directors shall include the following contents:
(I) the way, number and voting of attending the board of directors in the previous year, and the number of attending the general meeting of shareholders as nonvoting delegates;
(II) the situation of expressing independent opinions;
(III) on site inspection;
(IV) proposed convening of the board of directors, proposed employment or dismissal of accounting firms, independent employment of external audit institutions and consulting institutions, etc;
(V) other work done to protect the legitimate rights and interests of minority shareholders.
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