Guangdong Kitech New Material Holding Co.Ltd(300995)
Working system of independent directors
Chapter I General Provisions
Article 1 in order to further improve the corporate governance structure of Guangdong Kitech New Material Holding Co.Ltd(300995) (hereinafter referred to as “the company”), strengthen the restraint and supervision system for the board of directors and management, 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 (hereinafter referred to as “the company law”) 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”) and the Guangdong Kitech New Material Holding Co.Ltd(300995) 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.
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 or individuals having 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.
Article 4 independent directors shall, in accordance with the requirements of the CSRC, participate in the training organized by the CSRC and its authorized institutions, and obtain the qualification certificate of independent directors recognized by the stock exchange.
Article 5 the company has three independent directors, including at least one accounting professional.
The independent director candidate nominated 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 five years of full-time working experience in professional posts such as accounting, audit or financial management.
Article 6 the independent directors appointed by the company can only serve as independent directors in five listed companies at most, and ensure that they have enough time and energy to effectively perform the duties of independent directors.
Chapter II independence and term of office of independent directors
Article 7 the independent directors employed by the company shall be independent, and the following persons shall not serve as independent directors: (I) the persons serving 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 of spouses, spouses of children, spouses of brothers and sisters, brothers and sisters of spouses, 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 hold posts in the company’s controlling shareholders, actual controllers and their affiliated enterprises and their immediate family members; (V) personnel providing financial, legal, consulting and other services for the company and its controlling shareholders or their respective subsidiaries, including but not limited to all personnel of the project team of the intermediary providing services, reviewers at all levels, personnel signing the report, partners and main principals;
(VI) work in units with significant business dealings with the company and its controlling shareholders, actual controllers or their respective subsidiaries, or work in units with controlling shareholders with significant business dealings;
(VII) personnel who have had one of the situations listed in the preceding six items in the most recent year;
(VIII) being prohibited from entering the securities market by the CSRC and still in the prohibition period;
(IX) the time limit has not expired if the stock exchange publicly determines that it is not suitable to serve as a director, supervisor and senior manager of a listed company;
(x) being punished by the CSRC in the last three years;
（11） Being publicly condemned or criticized by the stock exchange for more than three times in the past three years;
（12） Other personnel recognized by the securities regulatory authority.
Article 7 candidates for independent directors shall have no following bad records:
（1） Being prohibited from entering the securities market by the CSRC, and the time limit has not expired;
（2） Being publicly recognized by the stock exchange as unfit to serve as directors, supervisors and senior managers of a listed company, and the term has not expired;
（3） Those who have been subject to administrative punishment by the CSRC or criminal punishment by judicial organs due to securities and futures violations and crimes within the last 36 months;
（4） 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;
（5） Being publicly condemned or criticized by the stock exchange for more than three times in the last 36 months; （6） 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 position of director of a listed company;
（7） In the past, 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 for two consecutive times and did not entrust other directors to attend the meeting of the board of directors, and less than 12 months have passed;
（8） Other circumstances recognized by the stock exchange.
Article 8 If an independent director has served in the same listed company for six consecutive years, he shall not be nominated as an independent director candidate of the listed company within 12 months from the date of the occurrence of the fact.
Article 9 serving as an independent director of the company shall meet the following basic conditions:
(I) be qualified to serve as an independent director 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 working experience in law, economics, management, accounting, finance or other necessary work experience for performing the duties of independent directors;
(IV) have the independence required by Article 7;
(V) other conditions stipulated in laws, regulations, normative documents 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.
Chapter III nomination, election 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 and 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 before the shareholders’ meeting for the election of independent directors is held, the company shall provide all shareholders with relevant materials of the nominees (including but not limited to the statement of the nominees, the statement of candidates, the resume of independent directors and the qualification certificate of independent directors). 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 13 independent directors shall perform their duties from the end of the shareholders’ meeting at which the proposal for the election of independent directors is adopted. The term of office of independent directors shall be calculated from the date of taking office. Each term of office of independent directors shall be 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 six years. If a director is not re elected in time after the expiration of his term of office, the original independent director shall still perform his duties as an independent director in accordance with laws, administrative regulations, departmental rules and the articles of association before the re elected independent director takes office.
Article 14 If an independent director fails to attend the meeting of the board of directors in person for three consecutive times, he shall be deemed unable to perform his duties, and the board of directors shall request the general meeting of shareholders to replace him. An independent director shall not be removed from office without reason before the expiration of his term of office, except in the case that he is not allowed to serve as a director as stipulated in the company law. 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 15 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 minimum requirements specified in laws, regulations, normative documents and the articles of association due to the resignation of independent directors, or the number of members of the board of directors is lower than the quorum, or there are no accounting professionals in the independent directors, the resignation report of the independent director shall take effect after the next independent director fills his vacancy. Before the re elected independent director takes office, the independent director shall still perform his duties in accordance with laws, administrative regulations and the articles of association.
Except for the circumstances listed in the preceding paragraph, the resignation of an independent director shall take effect when the resignation report is delivered to the board of directors.
Chapter IV responsibilities of independent directors
Article 16 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, regulations and normative documents, 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 latest audited net asset value of the listed company) and related party transactions that need to be submitted to the general meeting of shareholders for deliberation shall be approved by independent directors in advance. Before making a judgment, independent directors may hire an intermediary to issue an independent financial advisory 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) solicit the opinions of minority shareholders, put forward proposals on profit distribution and conversion of capital reserve into share capital, and directly submit them to the board of directors for deliberation;
(V) propose to convene the board of directors;
(VI) independently employ external audit institutions and consulting institutions;
(VII) publicly solicit voting rights from shareholders before the general meeting of shareholders, but it shall not be solicited by means of compensation or compensation in disguised form.
Article 17 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 Article 16; The exercise of the functions and powers in Item (VII) of Article 16 shall be subject to the consent of all independent directors.
The exercise of items (1) (2) of Article 16 shall be approved by more than half of the independent directors before it can be submitted to the board of directors for discussion.
With the consent of all independent directors, independent directors can independently hire external audit institutions and consulting institutions to audit and consult the specific matters of the company, and the relevant expenses shall be borne by the company. If the above proposal is not adopted or the above functions and powers cannot be normally exercised, the company shall disclose the relevant information.
Article 18 in the remuneration and assessment, audit, nomination and other committees under the board of directors of the company, independent directors shall account for more than half of the proportion and act as the convener.
Article 19 independent directors shall express independent opinions on the following major issues of the listed company:
(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, external guarantees (excluding guarantees for subsidiaries within the scope of the consolidated statements), entrusted financial management, external financial assistance, matters related to the use of raised funds, the company’s independent change of accounting policies, investment in stocks and their derivatives and other major matters that need to be disclosed;
（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 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;
（14） Matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
（15） Other matters stipulated in relevant laws, administrative regulations, departmental rules, normative documents and the articles of association.
Article 20 independent directors shall express one of the following opinions on the matters mentioned in Article 19: 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 matters;
(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.
Chapter V independence
