Working rules for independent directors
Guangzhou, Guangdong
January 2002
Working rules for independent directors
Chapter I General Provisions
Article 1 in order to promote the standardized operation of Ligao Foods Co.Ltd(300973) (hereinafter referred to as “the company” or “the company”), safeguard the overall interests of the company and protect the legitimate rights and interests of all shareholders from damage, In accordance with the company law of the people’s Republic of China (hereinafter referred to as the “company law”), the guidelines for the standardized operation of companies listed on the gem of Shenzhen Stock Exchange and other laws and regulations, as well as the relevant provisions of the Ligao Foods Co.Ltd(300973) articles of Association (hereinafter referred to as the “articles of association”), These rules are formulated with reference to the guiding opinions on the establishment of independent director system in listed companies (hereinafter referred to as the “guiding opinions”), the guidelines for information disclosure of listed companies of Shenzhen Stock Exchange No. 8 – filing of independent directors and other relevant provisions, and in combination with the actual situation of the company.
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, administrative regulations, rules, normative documents and the articles of association, safeguard the overall interests of the company, and pay particular attention to the protection of the legitimate rights and interests of minority shareholders.
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.
Article 4 in principle, independent directors can concurrently serve as independent directors in up to five listed companies, and shall ensure that they have enough time and energy to effectively perform their duties. Among the members of the board of directors of the company, there shall be more than 1 / 3 independent directors, including at least one accounting professional (accounting professional refers to those who have the qualification of certified public accountant and have senior professional titles, associate professor or above professional titles and doctoral degrees in accounting, audit or financial Management).
Article 5 the company shall set up 2 independent directors as required.
Article 6 If an independent director does not meet the conditions for independence or is not suitable for performing the duties of an independent director, the independent director shall resign from the position of an independent director within one month from the date of the occurrence of the situation; If the company fails to resign as required, the board of directors of the company shall convene the board of directors in time after the expiration of the one month period to consider and submit the matter to the general meeting of shareholders to remove and replace the independent director, and complete the by election of independent directors within two months.
Article 7 independent directors shall participate in the training organized by the CSRC and the stock exchange in accordance with the requirements of the China Securities Regulatory Commission (hereinafter referred to as “CSRC”).
Chapter II Conditions of appointment of independent directors
Article 8 a person who serves as an independent director of the company shall have the qualifications appropriate to the exercise of his functions and powers:
(I) be qualified to serve as a director of a listed company in accordance with laws, administrative regulations and other relevant provisions;
(II) comply with the relevant provisions of the civil servant law of the people’s Republic of China;
(III) have the independence described in Article 10 of these rules;
(IV) have basic knowledge related to the operation of listed companies, and be familiar with relevant laws, administrative regulations, departmental rules, normative documents and business rules of Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”);
(V) have more than five years of working experience in law, economics, management, accounting, finance or other work necessary to perform the duties of independent directors, and have obtained the qualification certificate of independent directors recognized by the stock exchange.
(VI) other laws, administrative regulations, departmental rules, normative documents, business rules of Shenzhen Stock Exchange and other provisions on the qualifications, conditions and requirements of independent directors.
Article 9 candidates for independent directors shall have no following bad records:
(I) being prohibited from entering the securities market by the CSRC, and the time limit has not expired;
(II) 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;
(III) 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;
(IV) 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;
(V) being publicly condemned by the stock exchange or criticized in more than three circulars within the last 36 months; (VI) 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 serve as a director of a listed company;
(VII) 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;
(VIII) other circumstances recognized by Shenzhen Stock Exchange.
Chapter III independence of independent directors
Article 10 independent directors must be independent, and the following persons shall not serve as independent directors:
(I) personnel working in the company or its affiliated enterprises and their immediate family members and main social relations;
(II) natural person shareholders and their immediate family members who directly or indirectly hold more than 1% of the company’s shares 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 company’s shares 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 and consulting 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) persons who work in units with significant business dealings with the company and its controlling shareholders, actual controllers or their respective subsidiaries, or persons who 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 last 12 months;
(VIII) in the last 12 months, the candidates for independent directors, the units in which they have served and the persons who have other circumstances affecting their independence;
(IX) other personnel identified by Shenzhen Stock Exchange as having no independence.
The immediate relatives mentioned in the preceding articles refer to spouses, parents, children, etc., the 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., and the major business transactions refer to matters to be submitted to the general meeting of shareholders for deliberation or other major matters recognized by Shenzhen Stock Exchange.
Chapter IV nomination, election and replacement of independent directors
Article 11 the candidates for the first independent director shall be nominated by the sponsors, and the candidates for the next independent director may be nominated by 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, and 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, educational 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 13 when nominating candidates for independent directors, the nominees of independent directors shall also focus on whether the candidates for independent directors are under the following circumstances:
(I) failing to attend the meetings of the board of directors in person for two consecutive times or more than half of the total number of meetings of the board of directors in 12 consecutive months during the previous period of serving as an independent director;
(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) serving as a director, supervisor or senior manager in more than five companies at the same time;
(IV) the independent directors previously served were removed by the listed company before the expiration of their term of office;
(V) being punished by other relevant departments other than the CSRC within the last 36 months;
(VI) other circumstances that may affect the integrity, diligence and independent performance of duties of independent directors.
In case of any of the above circumstances for an independent director candidate, the nominee shall disclose the specific circumstances, the reasons for still nominating the candidate, whether it has an impact on the standardized operation and corporate governance of the company and the countermeasures.
Article 14 The term of office of independent directors is 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.
Article 15 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. In addition to the above circumstances and the circumstances stipulated in the company law that an independent director shall not be removed 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 considers 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 number of independent directors on the board of directors of the company is less than that specified in 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; Before the newly elected independent director takes office, the original independent director shall still perform the duties of independent director in accordance with laws, administrative regulations, departmental rules, normative documents and the articles of association.
Chapter V special functions and powers of independent directors
Article 17 in order to give full play to the role of independent directors, in addition to the functions and powers conferred by the company law, other relevant laws, administrative regulations and the articles of association, the company shall also entrust independent directors with the following 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 company’s recently audited net asset value) shall be approved by independent directors and submitted to the board of directors for discussion. 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) solicit the opinions of minority shareholders, put forward profit distribution proposals, 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 to audit and consult the specific matters of the company, and the relevant expenses shall be borne by the company;
(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.
Independent directors shall obtain the consent of more than 1 / 2 of all independent directors when exercising the above functions and powers.
Chapter VI independent opinions and responsibilities of independent directors
Article 18 in addition to performing the above duties, independent directors shall also express independent opinions on the following major matters of the company to the board of directors or the general meeting of shareholders:
(I) nomination, appointment and removal of directors;
(II) appoint or dismiss 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) 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, the company’s independent change of accounting policies, investment in stocks and their derivatives and other major events;
(VI) major asset restructuring plan, equity incentive plan, employee stock ownership plan and share repurchase plan;
(VII) the company intends to decide that its shares will no longer be traded on the Shenzhen Stock Exchange, or instead apply for trading or transfer on other trading places;
(VIII) matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
(IX) other matters stipulated in relevant laws, administrative regulations, departmental rules, normative documents, business rules of Shenzhen Stock Exchange and the articles of association.
The types of opinions that independent directors should express on the above matters 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.
Article 19 the independent opinions issued by independent directors on major matters shall at least include the following contents: (I) basic information of major matters;
(II) basis for expressing opinions, including 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, report the above opinions to the board of directors in time and disclose them together with the relevant announcements of the company.
Article 20 If an independent director finds that a listed company has any of the following circumstances, he shall actively perform the obligation of due diligence and report to the Shenzhen Stock Exchange in time. If necessary, he shall hire an intermediary institution for special verification:
(I) important matters not submitted to the board of directors for deliberation;
(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 21 in addition to attending the meeting of the board of directors, independent directors shall ensure to arrange reasonable time 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.
In case of any of the following circumstances, the independent directors shall report to the Shenzhen Stock Exchange in time:
(I) being removed from office by the company, and I think the reason for removal is improper;
(II) due to the company’s circumstances that hinder the independent directors from exercising their functions and powers according to law, the independent directors
He resigned
