Huasi Holding Company Limited(002494)
Working system of independent directors
Chapter I General Provisions
Article 1 in order to further improve the corporate governance structure of the company, give full play to the role of independent directors in the standardized operation of the company, strengthen the restraint and supervision mechanism for internal directors and managers, protect the legitimate interests of investors and promote the standardized operation of the company, according to the company law, the securities law and the governance standards of listed companies This system is formulated in accordance with the guiding opinions on the establishment of independent director system in listed companies (hereinafter referred to as the “guiding opinions”), the stock listing rules of Shenzhen Stock Exchange, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and other laws, regulations and rules.
Chapter II General Provisions
Article 2 an independent director refers to a director who does not hold any position other than an independent 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 and safeguard the overall interests of the company in accordance with relevant national laws, regulations and the requirements of the articles of association. 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.
Article 5 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 6 among the independent directors of the company, at least one accounting professional with rich accounting professional knowledge and experience shall meet at least one of the following conditions:
(I) have the qualification of certified public accountant;
(II) have 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 more than 5 years of full-time working experience in professional posts such as accounting, audit or financial management..
Chapter III Conditions of appointment of independent directors
Article 7 serving as an independent director of the company 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 this system;
(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 in the articles of association.
Article 8 independent directors must be independent, and persons under the following circumstances shall not serve as independent directors of the company:
(I) personnel working in the company or its affiliated enterprises and 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 in law, daughter-in-law and son-in-law, 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 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 hold posts in the controlling shareholders, actual controllers and affiliated enterprises of listed companies and their immediate family members;
(V) personnel who provide financial, legal, consulting and other services for listed companies and their controlling shareholders or their respective subsidiaries, including but not limited to all personnel of the project team of the intermediary institution providing services, reviewers at all levels, personnel signing the report, partners and main principals;
(VI) 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;
(VII) personnel who have been in one of the situations listed in the preceding six items in the past year;
(VIII) other circumstances recognized by Shenzhen Stock Exchange.
Article 9 candidates for independent directors shall have no following bad records:
(I) being subjected to administrative punishment by the CSRC or criminal punishment by judicial organs for securities and futures violations and crimes within the last 36 months;
(II) being put on file for investigation by the CSRC or by the judicial organ due to suspected illegal and criminal acts of securities and futures, and there is no clear conclusion;
(III) being publicly condemned by the stock exchange or being criticized in more than three circulars within the last 36 months; (IV) as the object of punishment for dishonesty, he is identified and restricted by the national development and Reform Commission and other ministries and commissions to hold the post of director of a listed company;
(V) within 12 months after the board of directors requested the general meeting of shareholders to replace the independent director who failed to attend the meeting of the board of directors in person for three consecutive times or failed to attend the meeting of the board of directors in person for two consecutive times and did not entrust other directors to attend the meeting of the board of directors;
(VI) other circumstances recognized by Shenzhen Stock Exchange.
Chapter IV selection and replacement of independent directors
Article 10 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 11 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.
Article 12 the announcement on the election of independent directors of the company shall be submitted to the Shenzhen Stock Exchange at the latest. 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.
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 Shenzhen Stock Exchange. The company shall not submit the independent director candidates who raise objections from Shenzhen Stock Exchange to the general meeting of shareholders for election as independent directors. If the proposal has been submitted to the general meeting of shareholders for deliberation, the proposal shall be cancelled.
Article 13 independent directors shall be elected separately from other directors. In case of differential election of independent directors, they shall be elected by the shareholders attending the general meeting of shareholders in the form of cumulative voting. The operating rules are as follows:
(I) each share owned by the shareholders of the company has the same number of votes as the number of independent directors to be elected, that is, the total number of votes owned by the shareholders when electing independent directors is equal to the product of their shares multiplied by the number of independent directors to be elected;
(II) a shareholder may elect one person in a centralized manner or several persons in a decentralized manner, but the cumulative number of votes cast by a shareholder shall not exceed the total number of votes it enjoys;
(III) the elected independent directors shall be determined according to the number of nominees, and the one with the highest number of votes shall be determined.
When the number of independent directors elected fails to meet the requirements of the articles of association, the company shall re nominate and re elect at the next general meeting of shareholders to make up the number; If the number of independent directors elected exceeds the number of independent directors to be elected by the company due to the same number of votes, a new round of voting shall be held for the candidates with the same number of votes who exceed the number of independent directors to be elected until the number of independent directors to be elected by the company is produced.
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. The term of office of independent directors shall be calculated from the date of adoption of the resolution of the general meeting of shareholders to the expiration of the term of office of the current board of directors.
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. 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 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. If the board of directors of the company is lower than the minimum quorum due to the resignation of independent directors, or the number of independent directors is less than one-third of the members of the board of directors, or there are no accounting professionals among independent directors, or the proportion of independent directors is lower than the minimum requirements specified in the guidance, the resignation report of the independent director shall take effect after the next independent director fills his vacancy.
Article 17 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 the guiding opinions, the company shall make up the number of independent directors in accordance with the regulations.
Chapter V responsibilities of independent directors
Article 18 independent directors shall perform their duties independently and impartially, and shall not be affected by the company’s major shareholders, actual controllers or other units and individuals with an interest 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 the independence during his term of office, he shall notify the company in time and put forward solutions. If necessary, he shall resign.
In order to give full play to the role of independent directors, in addition to the functions and powers entrusted to directors by relevant national laws and regulations, independent directors also have 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 discussion after being approved by independent directors. Independent directors can hire intermediaries to issue special reports before making judgments;
(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 and consulting institutions;
(VI) publicly solicit voting rights from shareholders before the general meeting of shareholders;
(VII) independently employ external audit institutions and consulting institutions.
Independent directors shall obtain the consent of more than half of all independent directors when exercising the functions and powers in items (I) to (VI) of the preceding paragraph; The exercise of the functions and powers in Item (VII) of the preceding paragraph shall be subject to the consent of all independent directors. The expenses incurred by independent directors in employing intermediaries and other expenses required for exercising their functions and powers shall be borne by the listed company.
Items (I) and (II) of paragraph 1 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 paragraph 1 are not adopted or the above functions and powers cannot be normally exercised, the listed company shall disclose the relevant information.
Article 19 in addition to performing the above duties, 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) 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 financial and accounting reports and internal control of listed companies 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) 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;
（11） Related party transactions that need to be disclosed, providing guarantees (excluding guarantees for subsidiaries within the scope of consolidated statements), entrusted financial management, providing financial assistance, matters related to the use of raised funds, stock and Derivative Investment 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 listed companies;
（13） The company intends to decide that its shares will no longer be traded on the exchange;
（14） Matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
（15） Other matters stipulated by relevant laws and regulations, relevant provisions of the exchange and the articles of association.
The types of independent opinions expressed by independent directors include consent, reservation and its reasons, objection and its reasons, inability to express opinions and its obstacles, and the opinions expressed shall be clear and clear.
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 listed companies 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 20 the company shall keep the independent opinions expressed by independent directors and report to relevant departments in time. If relevant matters need to be disclosed, the company shall announce the opinions of independent directors. 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 21 if the company’s financial and accounting report is issued with non-standard unqualified audit opinions by certified public accountants, the company shall submit the opinions of independent directors on the matters involved in the audit opinions to Shenzhen Stock Exchange at the same time of submitting the periodic report.
Article 22 independence
