Ningxia Building Materials Group Co.Ltd(600449)
Independent director system
Chapter I General Provisions
Article 1 this system is formulated in accordance with the company law of the people’s Republic of China (hereinafter referred to as the company law) and the securities law of the people’s Republic of China in order to standardize the company’s behavior, give full play to the role of independent directors in corporate governance and promote the independent directors to perform their duties. Article 2 the term “independent director” as mentioned in this system refers to a director who does not hold any position other than 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 the members of the board of directors of the company shall include at least one-third of the independent directors.
Where the board of directors of the company has a remuneration and assessment committee and an audit committee, the independent directors shall account for the majority of the members of the audit committee and the remuneration and assessment committee and act as the convener.
Article 4 independent directors shall have the obligation of good faith and diligence to the company and all shareholders, and shall earnestly perform their duties in accordance with the requirements of relevant laws and regulations, these rules 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.
Chapter II independence requirements of independent directors
Article 5 independent directors must be independent.
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 having an interest in the company.
There are five independent directors in the company, and they have enough time and energy to perform their duties effectively.
Article 6 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) 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) persons who have had the situations listed in the preceding three items in the most recent year;
(V) personnel who provide financial, legal and consulting services for the company or its affiliated enterprises; (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 the China Securities Regulatory Commission (hereinafter referred to as the CSRC).
Chapter III Conditions of appointment of independent directors
Article 7 an independent director shall have the conditions for holding a post suitable for the exercise of his functions and powers.
Article 8 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 these rules;
(III) have basic knowledge of the company’s operation 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.
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 provisions.
Article 9 the company shall appoint appropriate personnel as independent directors, including at least one accounting professional.
Chapter IV nomination, election and replacement procedures of independent directors
Article 10 the nomination, election and replacement of independent directors shall be carried out in accordance with the law and norms. Article 11 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 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 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 relevant contents in accordance with the provisions of the preceding article of this system, and submit the relevant materials of all nominees to the 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 14 The term of office of an independent director is the same as that of other directors of the company. Upon expiration of his term of office, he 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.
Article 16 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 17 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 18 If the proportion of independent directors in the board of directors of the company is lower than the minimum requirements specified in the system 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 19 If 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 these rules, the company shall make up the number of independent directors in accordance with the provisions.
Chapter V functions and powers of independent directors
Article 20 independent directors shall attend the meeting of the board of directors on time, understand the production, operation and operation of the company, and take the initiative to investigate and obtain the information and materials needed to make decisions.
Independent directors shall submit an annual work report to the general meeting of shareholders of the company to explain their performance of duties.
Article 21 in order to give full play to the role of independent directors, in addition to the functions and powers given to directors by the company law and other relevant laws and regulations, the company shall also give independent directors 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 deliberation after the independent directors express their prior approval opinions. Independent directors can hire intermediaries to issue special reports before making judgments;
(II) propose to employ or dismiss an 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) publicly solicit voting rights from shareholders before the general meeting of shareholders;
(VI) independently employ intermediary institutions to audit, verify or express professional opinions;
(VII) other functions and powers stipulated by laws and regulations, CSRC 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 exercise of the functions and powers in Item (VI) of the preceding paragraph 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 22 independent directors shall express independent opinions on the following matters to the board of directors or the general meeting of shareholders:
(I) nomination, appointment and removal of directors;
(II) appointing and dismissing senior managers;
(III) remuneration of directors and senior managers;
(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) related party transactions, 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 that need to be disclosed;
(VIII) matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
(IX) other matters stipulated by laws, administrative regulations, CSRC and the articles of association of the company. Independent directors shall express one of the following opinions on the matters mentioned in the preceding paragraph: agree; Reservations and their reasons; Objections and their reasons; Inability to express opinions and its obstacles.
If the matters mentioned in the first paragraph of this article are matters that need to be disclosed, the company shall announce the opinions of the independent directors. If the independent directors have different opinions and cannot reach an agreement, the board of directors shall disclose the opinions of each independent director separately.
Chapter VI guarantee for the performance of independent directors
Article 23 in order to ensure the effective exercise of functions and powers by independent directors, the company shall provide necessary working conditions for independent directors to perform their duties. The Secretary of the board of directors of the company shall actively provide assistance to the independent directors in performing their duties, such as introducing the situation and providing materials, regularly report the operation of the company, and organize the independent directors to make a factual investigation when necessary.
If the independent opinions, proposals and written explanations issued by independent directors should be announced, the company shall assist in handling the announcement in a timely manner.
Article 24 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 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.
Article 25 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.
Article 26 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.
Article 27 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.
Article 28 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 VII supplementary provisions
Article 29 the system shall be implemented after being deliberated and approved by the general meeting of shareholders of the company. The independent director system of Ningxia horse racing industry Co., Ltd. revised by the company in 2009 shall be abolished at the same time.
