Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) rules of procedure of the board of directors
Article 1 in order to standardize the discussion methods and decision-making procedures of the board of directors of Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) (hereinafter referred to as the “company”), promote the directors and the board of directors to effectively perform their duties, and improve the standardized operation and scientific decision-making level of the board of directors, according to 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 (hereinafter referred to as the “Securities Law”) These rules are formulated in accordance with the relevant provisions of the standards for the governance of listed companies and the stock listing rules of Shanghai Stock Exchange.
Article 2 under the board of directors, the Secretariat of the board of directors is set up as the daily business management service department of the board of directors and corporate governance. The seal of the board of directors is kept and led by the Secretary of the board of directors.
Article 3 the meetings of the board of directors are divided into regular meetings and interim meetings.
The board of directors shall hold a regular meeting at least once a year in the previous two and a half years.
Article 4 before issuing the notice of convening the regular meeting of the board of directors, the Secretariat of the board of directors shall fully solicit the opinions of all directors, preliminarily form the meeting proposal and submit it to the chairman of the board of directors for formulation.
The chairman of the board of directors shall solicit the opinions of the general manager and other senior managers as necessary before formulating a proposal.
Article 5 under any of the following circumstances, the board of directors shall convene an interim meeting:
（1） Shareholders representing more than one tenth of the voting rights propose;
（2） When more than one-third of the directors jointly propose;
（3） When proposed by the board of supervisors;
（4） When the chairman considers it necessary;
（5） When more than half of the independent directors propose;
（6） When proposed by the general manager;
（7） When required by the securities regulatory authority;
（8） Other circumstances stipulated in the articles of association.
Article 6 Where an interim meeting of the board of directors is proposed in accordance with the provisions of the preceding article, a written proposal signed (sealed) by the proposer shall be submitted to the chairman through the Secretary of the board of directors or directly. The written proposal shall specify the following items:
（1） The name of the proposer;
（2） The reasons for the proposal or the objective reasons on which the proposal is based;
（3） Propose the time or time limit, place and method of the meeting;
（4） Clear and specific proposals;
（5） Contact information and proposal date of the proposer.
The contents of the proposal shall fall within the scope of the board of directors’ functions and powers specified in the articles of association, and the materials related to the proposal shall be submitted together.
After receiving the above written proposals and relevant materials, the Secretary of the board of directors shall transmit them to the chairman of the board of directors on the same day. The Secretary of the board of directors and the chairman of the board of directors may require the proposer to modify or supplement the proposal if they believe that the content of the proposal is unclear, not specific or the relevant materials are insufficient.
The chairman of the board of directors shall convene and preside over the meeting of the board of directors within 10 days after receiving the proposal or the request of the securities regulatory authority.
Article 7 the meeting of the board of directors shall be convened and presided over by the chairman; If the chairman is unable or fails to perform his duties, a director jointly elected by more than half of the directors shall convene and preside over the meeting.
Article 8 when convening regular and interim meetings of the board of directors, the Secretary of the board of directors shall deliver the notice of the meeting to all directors and supervisors, as well as the general manager, Secretary of the board of directors and other senior managers through personal delivery, written form, e-mail, fax and other means 10 and 5 days in advance respectively. If it is not delivered directly, it shall also be confirmed by telephone, e-mail and other means, and corresponding records shall be made.
If it is necessary to hold an interim meeting of the board of directors immediately under special circumstances, the notice of the meeting can be sent immediately by telephone or other means of communication, which is not limited by the time limit for the advance notice of the meeting, but the notice of the emergency meeting needs no objection from all directors. The convener shall make an explanation at the meeting.
Article 9 the written notice of the meeting shall at least include the following contents:
（1） Time and place of the meeting;
（2） The method of holding the meeting;
（3） Duration of the meeting;
（4） Matters to be considered (proposal of the meeting);
（5） The convener and moderator of the meeting, the proposer of the interim meeting and his written proposal;
（6） Meeting materials necessary for directors’ voting;
（7） The directors shall attend the meeting in person or entrust other directors to attend the meeting on their behalf;
（8） Contact person and contact information;
（9） Date of notification.
The notice of oral meeting shall at least include the contents of items (I) and (II) above, as well as the description of the urgent need to convene an interim meeting of the board of directors as soon as possible.
Article 10 after the written meeting notice of the regular meeting of the board of directors is issued, if it is necessary to change the time, place and other matters of the meeting or add, change or cancel the meeting proposal, a written change notice shall be issued three days before the originally scheduled meeting to explain the situation and the relevant contents and materials of the new proposal. If it is less than three days, the date of the meeting shall be postponed accordingly or the meeting shall be held on schedule after obtaining the approval of all directors.
After the notice of the interim meeting of the board of directors is issued, if it is necessary to change the time, place and other matters of the meeting or add, change or cancel the proposal of the meeting, it shall obtain the approval of all directors in advance and make corresponding records.
Article 11 the meeting of the board of directors shall be held only when more than half of the directors are present. When the relevant directors refuse to attend or are lazy to attend the meeting, resulting in failure to meet the minimum number of people required for the meeting, the chairman and the Secretary of the board of directors shall report to the regulatory authority in time. The Secretary of the board of directors shall attend the meeting of the board of directors, and the supervisors, members of the Party committee, the general manager and other senior managers of the company shall attend the meeting of the board of directors as nonvoting delegates. If the chairman of the meeting deems it necessary, he may notify other relevant personnel to attend the meeting of the board of directors as nonvoting delegates.
Article 12 directors shall attend the meeting of the board of directors in person. If he is unable to attend the meeting for some reason, he shall review the meeting materials in advance, form a clear opinion, and entrust other directors in writing to attend the meeting on his behalf. The power of attorney shall state:
（1） The names of the trustor and the trustee and the matters entrusted;
（2） Brief comments of the client on each proposal;
（3） The scope of authorization, validity period and instructions on the voting intention of the proposal of the trustor;
（4） Date of signature of the principal, etc.
The entrusted director shall submit a written power of attorney to the chairman of the meeting and explain the entrusted attendance on the attendance book of the meeting. The directors shall sign written confirmation opinions on the periodic report according to law, and shall not entrust others to sign.
Article 13 the following principles shall be followed in the entrusted and entrusted attendance at the meeting of the board of directors: (1) when considering related party transactions, non related directors shall not entrust related directors to attend the meeting on their behalf; Affiliated directors shall not accept the entrustment of non affiliated directors;
（2） Independent directors shall not entrust non independent directors to attend on their behalf, and non independent directors shall not accept the entrustment of independent directors;
（3） A director shall not fully entrust other directors to attend on his behalf without stating his personal opinions and voting intention on the proposal, and the relevant directors shall not accept the entrustment with full authorization and unclear authorization.
（4） A director shall not accept the entrustment of more than two directors, nor shall a director entrust a director who has accepted the entrustment of two other directors to attend on his behalf.
Article 14 the board meeting shall be held on site. If necessary, on the premise of ensuring that the directors can fully express their opinions, the meeting can also be held by video, telephone, fax or e-mail voting with the consent of the convener (host) and the proposer. The meeting of the board of directors can also be held at the same time as other methods.
If the meeting is not held on site, the number of directors attending the meeting shall be calculated by video showing the directors present, the directors who express their opinions in the teleconference, the effective voting votes such as fax or email actually received within the specified time limit, or the written confirmation letter submitted by the directors who have participated in the meeting afterwards.
Article 15 the chairman of the meeting shall request the directors attending the board meeting to express clear opinions on various proposals.
For proposals that require prior approval of independent directors according to regulations, the meeting host shall designate an independent director to read out the written approval opinions reached by independent directors before discussing relevant proposals.
If a director obstructs the normal progress of the meeting or affects the speeches of other directors, the chairman of the meeting shall stop it in time.
Unless unanimously agreed by all directors, the board meeting shall not vote on the proposal not included in the meeting notice. If a director is entrusted by other directors to attend the board meeting on his behalf, he shall not vote on the proposal not included in the meeting notice on behalf of other directors.
Article 16 the directors shall carefully read the relevant meeting materials and express their opinions independently and prudently on the basis of full understanding of the situation.
Before the meeting, the directors may ask the Secretary of the board of directors, the convener of the meeting, the general manager and other senior managers, various special committees, accounting firms, law firms and other relevant personnel and institutions for the information required for decision-making, or suggest to the chairman during the meeting to invite the representatives of the above personnel and institutions to attend the meeting to explain the relevant situation.
Article 17 after full discussion of each proposal, the host shall timely submit it to the directors present for voting.
Voting at the meeting shall be conducted by one person, one vote, and shall be conducted by means of show of hands, written voting or electronic voting.
The voting intentions of directors are divided into consent, objection and waiver. The directors attending the meeting shall choose one of the above intentions. If they fail to choose or choose more than two intentions at the same time, the chairman of the meeting shall require the relevant directors to choose again. If they refuse to choose, they shall be deemed to have abstained; Those who leave the venue halfway and do not return without making a choice shall be deemed to have abstained.
Article 18 when written voting is adopted, after the voting of the directors attending the meeting is completed, the relevant staff of the Secretariat of the board of directors shall timely collect the voting votes of the directors and submit them to the Secretary of the board of directors for statistics under the supervision of a supervisor or independent director.
If a meeting is held on site, the host of the meeting shall announce the statistical results on the spot; In other cases, the chairman of the meeting shall require the Secretary of the board of directors to notify the directors of the voting results before the next working day after the end of the specified voting time limit.
If a director votes after the chairman of the meeting announces the voting results or after the specified voting time limit expires, the voting situation shall not be counted.
Article 19 in addition to the circumstances specified in Article 20 of these rules, if the board of directors deliberates and adopts the meeting proposal and forms relevant resolutions, more than half of all directors of the company must vote for the proposal. Where laws, administrative regulations and the articles of association stipulate that the formation of a resolution by the board of directors should obtain the consent of more directors, their provisions shall prevail.
In accordance with the provisions of the articles of association, the resolution of the board of directors on the guarantee matters within its authority must be approved by more than two-thirds of the directors attending the meeting, except that more than half of the directors of the company agree.
In case of any conflict between the contents and meanings of different resolutions, the later resolution shall prevail.
Article 20 under the following circumstances, the directors shall withdraw from voting on the relevant proposals: (1) the circumstances under which the directors shall withdraw according to the stock listing rules of Shanghai Stock Exchange;
（2） Circumstances that the director thinks should be avoided;
（3） Other circumstances specified in the articles of association that must be avoided due to the connection between the directors and the enterprise involved in the meeting proposal.
In the case that the directors avoid voting, the relevant board meeting can be held when more than half of the unrelated directors are present, and the formation of a resolution must be passed by more than half of the unrelated directors. If the number of unrelated directors attending the meeting is less than three, they shall not vote on the relevant proposal, but shall submit the matter to the general meeting of shareholders for deliberation.
Article 21 the board of directors shall act in strict accordance with the authorization of the general meeting of shareholders and the articles of association, and shall not form resolutions beyond its authority.
All statutory functions and powers of the board of directors of the company shall be exercised collectively by the board of directors, and shall not be authorized to be exercised by others. The authorization principles and contents of the board of directors for senior managers shall be clear, and the authorization shall not affect or weaken the exercise of the rights of the board of directors. The board of directors shall not authorize its subordinate professional committees to exercise their statutory functions and powers.
Article 22 the company attaches importance to the reasonable return on investment to investors, and the company’s profit distribution policy is:
（1） Profit distribution principle: the company’s profit distribution should take into account the reasonable return on investment to investors and the sustainable development of the company, and the profit distribution policy should maintain continuity and stability. The profit distribution of the company shall not exceed the scope of accumulated profits available for distribution, and shall comply with the relevant provisions of laws and regulations.
（2） Form and interval of profit distribution: the company may distribute profits in cash, stock, combination of cash and stock or other ways permitted by laws and regulations, and shall give priority to cash distribution. Under the conditions of profit distribution, the company shall, in principle, make profit distribution every year, and can make interim profit distribution.
（3） Conditions and proportion of cash dividend: in the case of annual profit, reserve sufficient legal reserve to meet the capital needs of the company’s normal production and operation. The audit institution shall issue a standard unqualified audit report on the company’s annual financial report. The company’s asset liability ratio at the end of the year shall not exceed 70%, or the net cash flow generated from operating activities in the current year shall be positive. If there is no major investment plan or major cash expenditure plan, etc, The company shall distribute dividends in cash.
（4） Under the condition that the company meets the conditions of cash dividend, the accumulated profits distributed in cash in the last three years shall not be less than 30% of the average annual distributable profits realized in the three years.
If the company makes profits during the annual report period and the accumulated undistributed profits are positive, there is no cash dividend, or the ratio of the total cash dividend to be distributed to the net profit attributable to the company’s shareholders in the current year is less than 30%, the company shall disclose the following matters in detail in the resolution of the board of directors on profit distribution:
1. A description of the reasons for the failure to pay cash dividends or the low level of cash dividends in combination with the characteristics of the industry, development stage, its own business model, profitability, capital demand and other factors;
2. The exact purpose of retained undistributed profits and estimated income.
（5） Conditions for stock dividend distribution: the company can distribute stock dividends on the premise of ensuring full cash dividend distribution and reasonable capital stock scale and ownership structure of the company. Article 23 when more than half of the directors or two or more independent directors attending the meeting think that the proposal is not clear and specific, or they are unable to judge relevant matters due to insufficient meeting materials and other reasons, the chairman of the meeting shall request the meeting
