Article 1 in order to further improve the corporate governance structure of Guangxi Guiguan Electric Power Co.Ltd(600236) (hereinafter referred to as the “company”), strengthen the restraint and supervision mechanism for non independent directors and management, protect the interests of minority shareholders and promote the standardized operation of the company, refer to the standards for the governance of listed companies, the rules for independent directors of listed companies, and the guidelines for self-discipline supervision of listed companies of Shanghai Stock Exchange No. 1 – standardized operation The Guangxi Guiguan Electric Power Co.Ltd(600236) articles of Association (hereinafter referred to as the “articles of association”) and relevant regulations formulate this system.
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.
Independent directors have the obligation of integrity and diligence to the company and all shareholders. Independent directors should earnestly perform their duties in accordance with the requirements of relevant laws, regulations and the articles of association, safeguard the overall interests of the company, and pay particular attention to the non infringement of the legitimate rights and interests of minority shareholders.
Article 3 independent directors shall perform their duties independently and impartially, and shall not be influenced by the company’s major shareholders, actual controllers or other units or individuals with interests in the company and its major shareholders and actual controllers. 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 timely notify the company and submit his resignation.
Article 4 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 the duties of independent directors.
Article 5 an independent director shall have the qualifications suitable for the exercise of his functions and powers. Independent directors 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 basic knowledge of the operation of listed companies and be familiar with relevant laws, administrative regulations, rules and rules;
(III) more than five years of legal, economic or other work experience necessary for the performance of the duties of independent directors;
(IV) other conditions stipulated by laws, regulations and the articles of association.
Article 6 independent directors must be independent, and the following persons shall not serve as independent directors:
(I) personnel who work 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.);
(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 company and their immediate family members;
(IV) personnel who work in the actual controller of the company and its subsidiaries; (V) personnel providing financial, legal and consulting services for the company and its controlling shareholders or their respective subsidiaries, including all personnel of the project team of the intermediary providing services, reviewers at all levels, personnel signing the report, partners and main principals;
(VI) serve as a director, supervisor and senior manager in a unit that has significant business dealings with the company and its controlling shareholders or their respective subsidiaries, or serve as a director, supervisor and senior manager in the controlling shareholder unit of the business dealings unit;
(VII) persons who have had the situations listed in the preceding six items in the most recent year; (VIII) the situation that the CSRC or Shanghai stock exchange determines that it does not have independence.
Article 7 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. The cumulative voting system shall be implemented for the election of independent directors. 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, 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 and objective judgment. Candidates for independent directors shall have no following bad records:
(I) he has been subject to administrative punishment by the CSRC in the last 36 months;
(II) during the period when the stock exchange publicly determines that it is not suitable to serve as a director of a listed company;
(III) having been publicly criticized by the stock exchange for more than 36 months;
(IV) during the period of serving as an independent director, he did not attend the meetings of the board of directors for two consecutive times or did not attend the meetings of the board of directors in person, accounting for more than one-third of the meetings of the board of directors in that year;
(V) the independent opinions expressed during the period of serving as an independent director are obviously inconsistent with the facts;
(VI) other circumstances recognized by Shanghai Stock Exchange.
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 8 a candidate nominated as an independent director as an accounting professional shall have rich accounting professional knowledge and experience and meet at least one of the following conditions:
(I) have the qualification of certified public accountant;
(II) having a senior professional title, associate professor or above or a doctor’s degree in accounting, auditing or financial management;
(III) have senior professional titles in economic management, and have more than 5 years of full-time working experience in professional posts such as accounting, audit or financial management.
Article 9 before the shareholders’ meeting for the election of independent directors is held, the company shall submit the relevant materials of all nominees to the CSRC and Shanghai Stock Exchange at the same time. 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 10 the term of office of independent directors is the same as that of other directors. Upon expiration of the term of office, they can be re elected, but the term of re-election shall not exceed six years.
Article 11 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 company may remove him through legal procedures. In case of early dismissal, the company shall disclose it as a special disclosure.
Except for the situation that the performance of duties should be stopped immediately, if the independent director of the company has other circumstances unsuitable for performing the duties of independent director after taking office, he shall resign from the position of independent director within one month from the date of such circumstances. If he fails to resign as required, the board of directors of the company shall start the decision-making procedure within 2 days after the expiration of the time limit and remove his position as an independent director.
Article 12 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 number of independent directors or members of the board of directors is lower than the minimum number specified in the statutory or the articles of association due to the resignation of independent directors, the independent directors shall still perform their duties in accordance with laws, administrative regulations and the articles of association before the re elected independent directors take office.
The board of directors shall convene a general meeting of shareholders within two months to elect independent directors. If the meeting is not held within the time limit, and the proportion of independent directors in the board of directors is lower than the minimum number specified in relevant regulations, the resignation report of the independent director shall take effect after the next independent director fills the vacancy.
Article 13 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:
(I) related party transactions with a transaction amount of more than 300000 yuan between the company and related natural persons, and related party transactions with a transaction amount of more than 3 million yuan between the company and related legal persons, or accounting for more than 0.5% 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 making judgment, independent directors can hire intermediaries to issue independent financial advisory reports;
(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) solicit voting rights from shareholders in public before the general meeting of shareholders is held; (VI) independently employ intermediary institutions to audit, verify or express professional opinions;
(VII) other functions and powers specified in laws and regulations, relevant provisions of CSRC and Shanghai Stock Exchange and the articles of association.
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 independent directors shall exercise the functions and powers in Item (VI) of the preceding paragraph with the consent of all the directors.
Items (I) and (II) of paragraph 1 of this article shall be approved by more than half of the independent directors before they can be submitted to the board of directors for discussion.
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.
Article 14 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:
(I) nomination, appointment and removal of directors;
(II) appointing or dismissing senior managers;
(III) remuneration of directors and senior managers of the company;
(IV) employment and dismissal of accounting firms;
(V) changes in accounting policies, accounting estimates or corrections of major accounting errors due to reasons other than changes in accounting standards;
(VI) the company’s financial and accounting reports and internal control are issued with non-standard unqualified audit opinions by accounting firms;
(VII) internal control evaluation report;
(VIII) scheme for the relevant parties to change their commitments;
(IX) the impact of the issuance of preferred shares on the rights and interests of various shareholders of the company;
(x) formulate profit distribution policies, profit distribution plans and cash dividend plans;
（11） Related party transactions to be disclosed, provision of guarantees (excluding guarantees for subsidiaries within the scope of consolidated statements), entrusted financial management, provision of financial assistance, use of raised funds, investment in stocks and their derivatives and other major matters;
（12） Major asset restructuring plan, management acquisition, equity incentive plan, employee stock ownership plan, share repurchase plan and debt repayment plan of related parties of the company;
（13） The company intends to decide that its shares will no longer be traded on the Shanghai Stock Exchange;
（14） Matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
（15） Other matters required by laws, regulations and relevant provisions of the exchange. The types of independent opinions expressed by independent directors include consent, reservation, objection and unable to express opinions. The opinions expressed shall be clear and clear. 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 15 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 state the reasons and obstacles to express their opinions.
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 16 in addition to attending the meeting of the board of directors, independent directors shall ensure to arrange a reasonable time every year to conduct on-site investigation on the construction and implementation of the company’s production and operation status, management and internal control systems, and the implementation of the 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 Shanghai Stock Exchange in time.
Article 17 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 Shanghai Stock Exchange in time. If necessary, he shall hire an intermediary to conduct special verification:
(I) important matters fail to perform the review procedures 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 information disclosure;
(IV) other situations suspected of violating laws and regulations or damaging the legitimate rights and interests of minority shareholders.
Article 18 under any of the following circumstances, independent directors shall report to Shanghai Stock Exchange:
(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 incomplete or 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 19 independent directors shall submit and disclose their work report to the annual general meeting of shareholders of the company. The work report shall include the following contents:
(I) ways, times and voting of attending the board of directors throughout the year, and times of attending the general meeting of shareholders as nonvoting delegates;
(II) the situation of expressing independent opinions;
(III) on site inspection;
(IV) proposing to convene the board of directors, proposing to hire or dismiss accounting firms, and independently hiring external audit institutions and consulting institutions;
(V) other work done to protect the legitimate rights and interests of minority shareholders. Article 20 in order to ensure the effective exercise of functions and powers by independent directors, the company shall provide necessary conditions for independent directors:
(I) the company shall ensure that independent directors enjoy the same right to know as other directors. 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
