Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd
Working rules for independent directors
Chapter I General Provisions
Article 1 in order to promote the standardized operation of Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (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, especially small and medium-sized shareholders, from damage, 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 China Securities Regulatory Commission (hereinafter referred to as the “CSRC”), the rules for independent directors of listed companies (hereinafter referred to as the “rules for independent directors”), the rules for the listing of shares on the gem of Shenzhen Stock Exchange (hereinafter referred to as the “rules for the listing of shares on the gem”), the guidelines for self discipline supervision of listed companies on the Shenzhen Stock Exchange No. 2 – standardized operation of companies listed on the gem and other laws and regulations These rules are formulated in accordance with the administrative rules and normative documents and the relevant provisions of the articles of association of Guangdong Jiangxi Wannianqing Cement Co.Ltd(000789) Pharmaceutical Co., Ltd. (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 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 laws and regulations, the rules for independent directors and the articles of association, and pay particular attention to 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, the independent directors appointed by the company can concurrently serve as independent directors in up to five listed companies at home and abroad, and ensure that they have enough time and energy to effectively perform the duties of independent directors.
Article 5 the members of the board of directors of the company shall include at least one-third of the independent directors, including at least one accounting professional.
Article 6 if the independent directors fail to meet the independent conditions or other circumstances unsuitable for performing the duties of independent directors, resulting in the failure of the company’s independent directors to reach the quorum, the company shall make up for the number of independent directors in accordance with the regulations.
Article 7 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 requirements of the CSRC.
Article 8 the provisions relating to directors in relevant laws, regulations and the articles of association shall apply to independent directors.
Chapter II Conditions of appointment of independent directors
Article 9 an independent director of the company shall meet the following basic conditions:
（1） Provisions of the company law on the qualification of directors;
（2） Have basic knowledge of the operation of listed companies, and be familiar with relevant laws, administrative regulations, rules and business rules of stock exchanges;
（3） At least five years of working experience in law, economics, management, accounting, finance or other necessary work experience for performing the duties of independent directors;
（4） Relevant provisions of the civil service law (if applicable);
（5） Relevant provisions of the rules for independent directors;
（6） The provisions of the notice of the CPC Central Commission for Discipline Inspection on standardizing the appointment of central management cadres as independent directors and independent supervisors of listed companies and fund management companies after resigning from public office or retirement (if applicable);
（7） Relevant provisions of the Organization Department of the CPC Central Committee on further regulating the part-time (post holding) of Party and government leading cadres in enterprises (if applicable);
（8） Relevant provisions of the opinions on strengthening the anti-corruption construction of colleges and universities issued by the CPC Central Commission for Discipline Inspection, the Ministry of education and the Ministry of supervision (if applicable);
（7） Other circumstances stipulated by laws, administrative regulations, departmental rules and the articles of association.
Article 10 independent directors must be independent and do not fall under the following circumstances:
（1） Personnel who work in the company or its affiliated enterprises and their immediate family members and major social relations; （2） Directly or indirectly holding more than 1% of the issued shares of the company or natural person shareholders among the top ten shareholders of the company and their immediate family members;
（3） 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;
（4） Persons who hold posts in the controlling shareholders, actual controllers and their affiliated enterprises of the company and their immediate family members;
（5） The service provided by all levels of partners, controlling persons and their main staff in charge of the company’s projects, such as the legal review team or the financial review team, but not limited to those who provide services to their respective partners, controlling persons and their main staff in charge of the company’s projects;
（6） 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 of such business dealings;
（7） Persons who have had one of the situations listed in the preceding six items in the most recent year;
（8） Circumstances that are recognized by the CSRC and the Shenzhen Stock Exchange and do not have independence as stipulated in the articles of association.
The affiliated enterprises of the controlling shareholder and actual controller in items (4) to (6) of the preceding paragraph do not include the affiliated enterprises that do not form an affiliated relationship with the company as stipulated in the GEM Listing Rules.
In the first paragraph, “immediate relatives” refer to spouses, parents and children; “Major social relations” refer to brothers and sisters, parents of spouses, spouses of children, spouses of brothers and sisters, brothers and sisters of spouses; “Major business transactions” refer to the matters that need to be submitted to the general meeting of shareholders for deliberation in accordance with the GEM Listing Rules and other relevant provisions of the Shenzhen Stock Exchange or the articles of association, or other major matters recognized by the Shenzhen Stock Exchange; “Holding office” refers to serving as a director, supervisor, senior manager and other staff.
Article 11 candidates for independent directors shall have no following bad records:
（1） 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;
（2） 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;
（3） Being publicly condemned or criticized by the stock exchange for more than three times in the last 36 months;
（4） 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;
（5） 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;
（6） Other circumstances recognized by other laws, regulations or stock exchanges or stipulated in the articles of association.
Article 12 a candidate nominated as an independent director as an accounting professional shall have rich accounting professional knowledge and experience and meet at least one of the following conditions:
（1） Have the qualification of certified public accountant;
（2） Having a senior professional title, associate professor or above or a doctor’s degree in accounting, auditing or financial management;
（3） Senior professional title 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 nomination, election and replacement of independent directors
Article 13 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 14 the nominees of independent directors shall obtain the consent of the nominees before nomination, and the candidates shall make a written commitment to accept the nomination before the shareholders’ meeting.
Article 15 the nominee shall fully understand the nominee’s occupation, educational background, professional qualifications, 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 statement on any 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 and submit relevant materials of all nominees to Shenzhen 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. The nominees shall promise that their information is true, accurate and complete, and ensure that they will earnestly perform their duties as directors after being elected.
Article 16 The term of office of independent directors is the same as that of other directors of the board of directors of the company. Upon expiration of their term of office, they can be re elected, but the term of re-election shall not exceed six years. If he has served as an independent director of the company for six consecutive years, he shall not be nominated as an independent director candidate of the company within 12 months from the date of this fact.
Article 17 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.
The company shall disclose it as a special disclosure.
Article 18 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 is lower than the minimum requirements specified in the independent director rules 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. The original nominee of the independent director or the board of directors of the company shall nominate new independent director candidates within two months from the date of resignation of the independent director.
Article 19 If an independent director of the company fails to meet the qualifications of an independent director as stipulated in these rules after taking office, he shall resign from the position of an independent director within one month from the date of such circumstances. 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 one month, review and submit the matter to the general meeting of shareholders to replace the independent director, and complete the by election of independent directors within two months.
Chapter IV special functions and powers of independent directors
Article 20 the duties of loyalty and diligence that independent directors should perform include:
（1） Attend the board of directors in person, act diligently with normal and reasonable prudence, and express clear opinions on the matters discussed; If it is unable to attend the board of directors in person for some reason, it shall carefully choose other independent directors to vote by proxy;
（2） Carefully read the company’s business and financial reports and public media reports on the company, timely understand and pay attention to the company’s business operation and management status, major events that have occurred or may occur and their impact, timely report the problems existing in the company’s business activities to the board of directors, and shall not shirk responsibility on the grounds of not directly engaging in operation and management or not knowing;
（3） Other duties of loyalty and diligence stipulated in the company law and recognized by the society.
Article 21 independent directors shall perform their duties independently and impartially, and shall not be influenced 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.
Article 22 independent directors shall fully exercise the following special functions and powers:
（1） Major connected transactions shall be approved by independent directors in advance; Independent directors can hire intermediaries to issue special reports before making judgments;
（2） Propose to the board of directors to employ or dismiss the accounting firm;
（3） Propose to the board of directors to convene an extraordinary general meeting of shareholders;
（4） Solicit the opinions of concentrated 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;
（5） Propose to convene the board of directors;
（6） Publicly solicit voting rights from shareholders before the general meeting of shareholders;
（7） Independently employ external audit institutions and consulting institutions to audit and consult the specific matters of the company; （8） Other special functions and powers stipulated by laws, regulations and the articles of association.
Independent directors shall obtain the consent of more than half of all independent directors when exercising the special functions and powers in items (1) to (6) of the preceding paragraph; The exercise of the special functions and powers in Item (7) of the preceding paragraph shall be subject to the consent of all independent directors.
Items 1 and 2 of paragraph 1 of this article 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 company shall disclose the relevant information.
For the remuneration and assessment, audit and Nomination Committee under the board of directors, independent directors shall account for more than half of the members of the committee, and independent directors shall act as the convener. The strategy committee under the board of directors should have at least one independent director.
Article 23 If an independent director finds that the 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:
（1） Important matters are not submitted to the board of directors or the general meeting of shareholders for deliberation as required;
（2） Failing to fulfill the obligation of information disclosure in time;
（3） There are false records, misleading statements or major omissions in information disclosure;
（4） Other situations suspected of violating laws and regulations or damaging the legitimate rights and interests of minority shareholders.
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 24 in addition to attending the meeting of the board of directors, independent directors shall ensure to arrange a 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.
Article 25 an independent director shall report to SZSE in time in case of any of the following situations:
（1） Being dismissed by the company, and I think the reason for dismissal is improper;
（2） The independent director resigns due to the company’s situation that hinders the independent director from exercising his functions and powers according to law; （3） The meeting materials of the board of directors are incomplete or the argument is insufficient, and the proposal of two or more independent directors in writing to postpone the meeting of the board of directors or postpone the consideration of relevant matters has not been adopted;
（4） The board of directors fails to take effective measures after reporting the company or its directors, supervisors and senior managers suspected of illegal acts to the board of directors;
（5） Other circumstances that seriously hinder independent directors from performing their duties.
Article 26 independent directors shall submit and disclose their work report to the annual general meeting of shareholders of the company. The work report shall include the following contents:
（1） The way, number and voting of attending the board of directors throughout the year, and the number of attending the general meeting of shareholders as nonvoting delegates;
（2） Publish independence
