Independent director work system (revised in April 2026)
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Hunan Nanxin Pharmaceutical Co., Ltd.
Chapter 1 General Provisions
Article 1 In order to further improve the legal person governance structure and the company's board of directors structure of Hunan Nanxin Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), strengthen the restraint and incentive mechanism for directors and managers, protect the interests of small and medium-sized shareholders and stakeholders, and promote the company's standardized operations, in accordance with the Company Law of the People's Republic of China (hereinafter referred to as the "Company Law"), the Code of Governance for Listed Companies (hereinafter referred to as the "Governance Code"), and the "Guidelines for the Self-Discipline Supervision of Companies Listed on the Science and Technology Innovation Board of the Shanghai Stock Exchange" No. No. 1 - Standardized Operations", "Measures for the Management of Independent Directors of Listed Companies" and other laws and regulations, normative documents and the relevant provisions of the "Articles of Association of Hunan Nanxin Pharmaceutical Co., Ltd." (hereinafter referred to as the "Articles of Association"), this system is formulated.
Article 2 Independent directors of a company refer to directors who do not hold other positions in the company other than directors, and have no direct or indirect interest relationship with the company, major shareholders or actual controllers, or other relationships that may affect their independent and objective judgment.
Article 3 Independent directors have the duty of loyalty and diligence to the company and all shareholders.
Independent directors shall conscientiously perform their duties in accordance with laws, administrative regulations, provisions of the China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission"), stock exchange business rules and the Articles of Association, play a role in decision-making, supervision and balance, and professional consultation on the board of directors, safeguard the overall interests of the company, and protect the legitimate rights and interests of small and medium-sized shareholders.
Article 4 Independent directors shall maintain their independence in identity and performance of duties, shall perform their duties independently and impartially, and shall not be influenced by the company, its major shareholders, actual controllers and other units or individuals during the performance of their duties.
If a conflict occurs between the company's shareholders or directors and has a significant impact on the company's operation and management, the independent directors should proactively perform their duties and safeguard the overall interests of the company. If it is found that there are circumstances affecting the independence of the matters under review, they should declare it to the company and withdraw from it. If any situation that obviously affects independence occurs during the term of office, the company should be notified in a timely manner, solutions should be proposed, and resignation should be offered if necessary.
Chapter 2 Qualifications of Independent Directors
Article 5 The company’s board of directors must have at least 1/3 independent directors, and at least 1/3 of the independent directors must be independent directors.
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Include an accounting professional. Those who are nominated as candidates for independent directors as accounting professionals should have relatively rich accounting professional knowledge and experience, and meet at least one of the following conditions: (1) Have the qualification of a certified public accountant; (2) Have a senior professional title, associate professor title or doctoral degree in accounting, auditing or financial management; (3) Have a senior professional title in economic management, and have more than 5 years of full-time work experience in accounting, auditing or financial management and other professional positions.
Article 6 The independent directors of a company shall have the qualifications suitable for the exercise of their powers and shall meet the following basic conditions:
(1) Qualified to serve as a director of a listed company in accordance with laws, administrative regulations and other relevant provisions;
(2) Have the independence required by this work system;
(3) Have basic knowledge of the operation of listed companies and be familiar with relevant laws, regulations and rules;
(4) Have more than five years of legal, accounting or economic work experience necessary to perform the duties of an independent director;
(5) Have good personal moral character and have no bad records such as major breach of trust ("bad records" refers to:
- Those who have been subject to administrative penalties by the China Securities Regulatory Commission or criminal penalties from judicial authorities due to securities and futures violations and crimes in the past 36 months; 2. Those who have been investigated by the China Securities Regulatory Commission or judicial authorities for suspected securities and futures violations and crimes, but no clear conclusion has been reached; 3. In the past 36 months, Being publicly reprimanded by the stock exchange or criticized in three or more notices within a month; 4. Having bad records such as serious breach of trust; 5. During the previous period of serving as an independent director, the board of directors proposed to the shareholders' meeting to be removed from office due to failure to attend in person or appoint other independent directors to attend the board of directors meeting twice in a row, less than 12 months; 6. Other circumstances recognized by the Shanghai Stock Exchange);
(6) Other conditions stipulated in laws, administrative regulations, regulations of the China Securities Regulatory Commission, business rules of stock exchanges and the Articles of Association.
Independent directors should continue to strengthen their study of securities laws, regulations and rules, and continuously improve their ability to perform their duties.
In principle, independent directors can serve as independent directors in up to three domestic listed companies (including the company), and should ensure that they have sufficient time and energy to effectively perform their duties as independent directors, and have not served as independent directors in the company for more than six consecutive years.
Article 7 Independent directors must be independent. The following persons are not allowed to serve as independent directors of the company:
(1) Personnel working in the company or its affiliated enterprises and their spouses, parents, children, and major social relations;
(2) Directly or indirectly holds more than 1% of the company’s issued shares or is one of the top ten shareholders of the company
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Natural person shareholders and their spouses, parents, and children;
(3) Shareholders who directly or indirectly hold more than 5% of the company’s issued shares or persons who hold positions among the top five shareholders of the company and their spouses, parents, and children;
(4) Personnel working in affiliated enterprises of the company’s controlling shareholder or actual controller and their spouses, parents, and children;
(5) Persons who have significant business dealings with the company, its controlling shareholders, actual controllers, or their respective subsidiaries, or persons who hold positions in units with significant business dealings, their controlling shareholders, or actual controllers;
(6) Personnel who provide financial, legal, consulting, sponsorship and other services to the company and its controlling shareholders, actual controllers or their respective affiliated enterprises, including but not limited to all members of the project team of the intermediary agency providing services, reviewers at all levels, persons who signed the report, partners, directors, senior managers and principal persons in charge;
(7) Persons who have had the circumstances listed in items 1 to 6 in the last 12 months;
(8) Other personnel who are not independent as stipulated in laws, administrative regulations, regulations of the China Securities Regulatory Commission, business rules of stock exchanges and the Articles of Association.
"Office" as mentioned in the preceding paragraph refers to serving as directors, supervisors, senior managers and other staff; "major social relationships" refers to brothers and sisters, spouses of brothers and sisters, parents of spouses, brothers and sisters of spouses, spouses of children, parents of children's spouses, etc.; "Major business dealings" refers to matters that need to be submitted to the shareholders' meeting for review in accordance with the "Shanghai Stock Exchange Science and Technology Innovation Board Stock Listing Rules" or the "Articles of Association", or other major matters determined by the Shanghai Stock Exchange. The subsidiaries of the company's controlling shareholders and actual controllers in items (4) to (6) do not include enterprises controlled by the same state-owned asset management institution as the company and which are not affiliated with the company in accordance with relevant regulations.
Independent directors should conduct self-examinations on their independence every year and submit the self-examination results to the board of directors. The board of directors should evaluate the independence of serving independent directors every year and issue special opinions, which should be disclosed at the same time as the annual report.
Article 8 The qualifications of independent director candidates shall meet the following requirements:
(1) "Company Law" and other provisions on director qualifications;
(2) The provisions of the Civil Servant Law on concurrent duties held by civil servants (if applicable);
(3) Relevant provisions of the China Securities Regulatory Commission's "Measures for the Administration of Independent Directors of Listed Companies";
(4) "On Regulating the Resignation of Public Offices or Retirement of Central Management Cadres" by the Central Commission for Discipline Inspection of the Communist Party of China and the Organization Department of the Central Committee of the Communist Party of China.
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Notice on Serving as Independent Directors and Independent Supervisors of Listed Companies and Fund Management Companies after Retirement (if applicable);
(5) The provisions of the Organization Department of the Central Committee of the Communist Party of China’s “Opinions on Further Regulating the Part-time Work (Office) of Party and Government Leading Cadres in Enterprises” (if applicable);
(6) The provisions of the "Opinions on Strengthening Anti-corruption and Integrity Construction in Colleges and Universities" issued by the Central Commission for Discipline Inspection of the Communist Party of China, the Ministry of Education, and the Ministry of Supervision (if applicable);
(7) Relevant regulations such as the People's Bank of China's "Guidelines on the System of Independent Directors and External Supervisors of Joint-stock Commercial Banks" (if applicable);
(8) Relevant provisions of the China Securities Regulatory Commission's "Measures for the Supervision and Administration of Directors, Supervisors, Senior Managers and Practitioners of Securities Fund Business Institutions" (if applicable);
(9) Relevant regulations such as the "Measures for the Administration of the Qualifications of Directors (Councillors) and Senior Managers of Banking Financial Institutions", the "Management Regulations for the Qualifications of Directors, Supervisors and Senior Managers of Insurance Companies", "Measures for the Administration of Independent Directors of Insurance Institutions", etc. (if applicable);
(10) Other laws, administrative regulations, departmental rules, Shanghai Stock Exchange and Articles of Association.
Chapter 3 Nomination, Election and Replacement of Independent Directors
Article 9 The company's board of directors and shareholders individually or collectively holding more than 1% of the company's issued shares may propose candidates for independent directors, which shall be elected and decided by the shareholders' meeting.
Investor protection institutions established in accordance with the law may publicly request shareholders to entrust them to exercise the right to nominate independent directors on their behalf.
The nominators specified in the preceding paragraph shall not nominate persons with whom they have an interest or other closely related persons who may affect their independent performance of duties as candidates for independent directors.
Article 10 The nominee of an independent director shall obtain the consent of the nominee before nomination.
The nominator should fully understand the nominee's occupation, academic qualifications, professional titles, detailed work experience, all part-time jobs, and whether there are any bad records such as major breach of trust, etc., and should carefully verify whether the nominee meets the conditions and qualifications, ability to perform duties, and whether there are circumstances that affect his independence, etc., and make a statement and commitment on the verification results. The nominee should make a public statement and commitment on his compliance with laws, regulations and relevant provisions of the Shanghai Stock Exchange regarding the conditions, qualifications and independence requirements for independent directors and other conditions for serving as an independent director.
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Article 11 The nomination committee of the company's board of directors shall review the qualifications of the nominees and formulate clear review opinions.
At the latest when issuing a notice of shareholders’ meeting to elect independent directors, the company shall submit relevant materials of independent director candidates to the Shanghai Stock Exchange through the Shanghai Stock Exchange’s corporate business management system, including the “Statement and Commitment of Independent Director Nominee”, “Statement and Commitment of Independent Director Candidate”, “Resume of Independent Director” and other written documents, disclose relevant statements and commitments and the review opinions of the Nomination Committee, and ensure that the submitted materials and announcements are true, accurate and complete. The nominator shall promise in the statement and undertaking that the nominee has no interest relationship with the nominee or other circumstances that may affect the nominee's independent performance of duties. If the company's board of directors has objections to the relevant circumstances of the independent director candidates nominated by shareholders, it shall simultaneously submit the board's written opinions to the Shanghai Stock Exchange.
The company's board of directors, independent director candidates, and independent director nominees shall truthfully answer inquiries from the Shanghai Stock Exchange within the specified time, and promptly supplement relevant materials to the Shanghai Stock Exchange as required. When the Shanghai Stock Exchange raises objections to the conditions and independence of independent director candidates, the company shall disclose it in a timely manner.
When convening a shareholders' meeting to elect independent directors, the company's board of directors shall explain whether the independent director candidates have been objected to by the Shanghai Stock Exchange. For independent director candidates raised by the Shanghai Stock Exchange, the company shall not submit them to the shareholders' meeting for election. If it has been submitted to the shareholders' meeting for review, the proposal should be cancelled.
If a company's shareholders' meeting elects two or more independent directors, a cumulative voting system shall be implemented, and the voting results of small and medium-sized shareholders shall be counted separately and disclosed. Depending on the actual situation and conditions permitting, the company may implement differential elections.
After the company's independent directors are elected by the shareholders' meeting, the company should submit the "Declaration and Commitment Letter of Directors (Senior Managers, Controlling Shareholders, Actual Controllers) of Companies Listed on the Science and Technology Innovation Board" to the Shanghai Stock Exchange within 30 days from the date of election, and fill in or update their basic information on the Shanghai Stock Exchange website.
Article 12 The term of each independent director is the same as that of other directors. When the term expires, he or she may be re-elected, but the term of re-election shall not exceed 6 years. Anyone who has served as an independent director of the company for six consecutive years shall not be nominated as an independent director candidate of the company within 36 months from the date of occurrence of this fact. For independent directors who have served before the initial public offering, their term of office shall be counted consecutively.
Article 13 Except for the circumstances stipulated in laws, regulations, Articles of Association and this work system that prohibit serving as independent directors, independent directors shall not be removed from office without reason before the expiration of their term of office.
If the director is removed from office in advance, the company shall disclose it as a special disclosure matter. If the removed independent director believes that the company's reason for removal is inappropriate, he may make a statement.
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Article 14 Before the expiration of the term of independent directors, the company may remove them from their posts in accordance with legal procedures. If an independent director is dismissed from his position in advance, the company shall disclose the specific reasons and basis in a timely manner. If an independent director is dismissed from his position before the expiration of his term and believes that the reason for dismissal is inappropriate, he may raise objections and reasons, and the company shall disclose them in a timely manner.
If the removal of independent directors results in the proportion of independent directors on the board of directors or its special committees not complying with the provisions of this working system, the Articles of Association or other company systems, or if there is a lack of accounting professionals among independent directors, the company shall complete the by-election within 60 days from the date of the occurrence of the aforementioned facts.
Article 15 If an independent director fails to comply with the provisions of Paragraph 1 or Paragraph 2 of Article 6 of this System, he shall immediately stop performing his duties and resign from his position. If a person fails to resign, the board of directors shall immediately terminate his/her duties in accordance with regulations after becoming aware or should be aware of the fact.
Article 16 Independent directors may resign before the expiration of their term of office.
An independent director who resigns shall submit a written resignation report to the board of directors, and shall explain any circumstances related to his resignation or that he deems necessary to attract the attention of the company's shareholders and creditors. The company should disclose the reasons for the resignation of independent directors and matters of concern.
The resignation report of an independent director shall take effect after it is delivered to the board of directors. However, if the proportion of independent directors on the company's board of directors is lower than the minimum requirements stipulated in laws, regulations or the Articles of Association due to the resignation of an independent director, the resignation report of the independent director shall take effect after the next independent director fills the vacancy. Before the resignation report takes effect, independent directors shall still perform their duties in accordance with laws, administrative regulations and the provisions of this system. The company shall convene a shareholders' meeting within 60 days to elect independent directors.
Article 17 If the proportion of independent directors on the board of directors or its special committees does not comply with the provisions of laws, regulations or the Articles of Association due to the resignation or dismissal of independent directors, or there is a lack of accounting professionals among independent directors, the company shall complete the by-election within 60 days from the date of the occurrence of the aforementioned facts.
If the relevant director should stop performing his duties but does not stop performing his duties or should be dismissed but has not yet been dismissed, if he attends and votes at meetings of the board of directors and its special committees, and special meetings of independent directors, his vote will be invalid and will not be counted in the number of attendees.
Article 18 The company's board of directors shall establish a strategy committee, an audit committee, a nomination committee, and a remuneration and assessment committee. The special committees are all composed of directors. The members of the audit committee are composed of three or more board members appointed by the board of directors. They should be directors who do not serve as senior managers of the company, and accounting professionals among independent directors serve as conveners. Independent directors shall constitute the majority of the Audit Committee, Nomination Committee, and Remuneration and Appraisal Committee and serve as the convener.
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Chapter 4 Rights and Powers of Independent Directors
Article 19 Independent directors shall perform the following duties:
(1) Participate in the decision-making of the board of directors and express clear opinions on the matters discussed;
(2) Supervise the potential major conflicts of interest between the company and the company’s controlling shareholders, actual controllers, directors, and senior managers as listed in Articles 23, 26, 27, and 28 of the "Measures for the Administration of Independent Directors of Listed Companies", to promote the board of directors to make decisions that are in line with the overall interests of the company, and to protect the legitimate rights and interests of small and medium-sized shareholders;
(3) Provide professional and objective suggestions on the company’s business development and promote the improvement of the board’s decision-making level;
(4) Other responsibilities stipulated in laws, administrative regulations, relevant provisions of the China Securities Regulatory Commission and the Shanghai Stock Exchange, and the Articles of Association.
Article 20 In addition to the powers granted to directors by the Company Law, Articles of Association and other relevant laws and regulations, independent directors also enjoy the following special powers:
(1) Independently hire intermediaries to audit, consult or verify specific matters of the company;
(2) Propose to the board of directors to convene an extraordinary shareholders’ meeting;
(3) Proposing to convene a board meeting;
(4) Publicly solicit shareholder rights from shareholders in accordance with the law;
(5) Express independent opinions on matters that may damage the rights and interests of listed companies or small and medium-sized shareholders;
(6) Other powers stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and the Articles of Association. The exercise of the powers listed in items 1 to 3 of the preceding paragraph by independent directors shall be subject to the consent of more than half of all independent directors.
If an independent director exercises the powers listed in paragraph 1, the company shall disclose it in a timely manner. If the above powers cannot be exercised normally, the company shall disclose the specific circumstances and reasons.
Article 21 The independent opinions issued by independent directors on major matters shall at least include the following contents:
(1) Basic information on major matters;
(2) The basis for expressing opinions, including the procedures performed, documents verified, and the content of on-site inspections;
(3) Legality and compliance of major matters;
(4) The impact on the rights and interests of the company and small and medium-sized shareholders, possible risks, and whether the measures taken by the company are effective;
(5) Concluding opinions issued. Express reservations, objections or inability to express opinions on important matters
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
, the relevant independent directors should clearly explain the reasons.
Independent directors should sign and confirm the independent opinions issued, and report the above opinions to the board of directors in a timely manner. The opinions of independent directors should be disclosed at the same time as the company's relevant announcements.
Article 22 The following matters shall be submitted to the board of directors for review after being approved by more than half of all independent directors of the company:
(1) Related transactions that should be disclosed;
(2) Plans for the company and relevant parties to change or waive their commitments;
(3) The decisions made and measures taken by the board of directors of the acquired company regarding the acquisition;
(4) Other matters stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and the Articles of Association.
Article 23 Before a board meeting, independent directors may communicate with the board secretary to inquire about matters to be considered, request supplementary materials, and provide opinions and suggestions, etc. The board of directors and relevant personnel should carefully study the issues, requirements and opinions raised by the independent directors, and provide timely feedback to the independent directors on the implementation status of amendments to the proposals.
Article 24 Independent directors shall attend board meetings in person on time. If they are unable to attend the meeting in person for any reason, independent directors shall review the meeting materials in advance, form clear opinions, and authorize other independent directors in writing to attend on their behalf.
If an independent director fails to attend the board meeting in person for two consecutive times and does not entrust another independent director to attend on his behalf, the board of directors shall request the shareholders' meeting to remove the independent director within 30 days from the date of occurrence of this fact.
Article 25 If an independent director votes against or abstains from voting on a proposal of the board of directors, he shall explain the specific reasons and basis, the legality and compliance of the matters involved in the proposal, possible risks, and the impact on the rights and interests of the company and small and medium-sized shareholders. When a company discloses board resolutions, it shall also disclose the dissenting opinions of independent directors and state them in the board resolutions and meeting minutes.
Article 26 Independent directors shall continue to pay attention to the implementation of board resolutions related to the matters listed in Articles 23, 26, 27 and 28 of the "Measures for the Administration of Independent Directors of Listed Companies". If they find that there is a violation of laws, administrative regulations, provisions of the China Securities Regulatory Commission, Shanghai Stock Exchange Business Rules and the Articles of Association, or a violation of the resolutions of the shareholders' meeting and the board of directors, they shall promptly report to the board of directors, and may require the company to make a written explanation. If disclosure matters are involved, the company shall disclose them in a timely manner.
If the company fails to make explanations or timely disclosures in accordance with the provisions of the preceding paragraph, the independent directors may report to the China Securities Regulatory Commission and the Shanghai Stock Exchange.
Article 27 The company shall, as necessary, convene a meeting attended by all independent directors (hereinafter referred to as
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
"Special meeting of independent directors"). The matters listed in Items 1 to 3 of Paragraph 1 of Article 20 and Article 22 of this work system shall be reviewed by a special meeting of independent directors. Special meetings of independent directors can study and discuss other matters of the company as needed.
Special meetings of independent directors shall be convened and chaired by an independent director jointly elected by more than half of the independent directors; if the convener fails or is unable to perform his duties, two or more independent directors may convene and elect a representative to preside.
The company shall provide convenience and support for the convening of special meetings of independent directors.
Article 28 Independent directors shall perform their duties in the special committee of the company's board of directors in accordance with laws, administrative regulations, regulations of the China Securities Regulatory Commission, business rules of the Shanghai Stock Exchange and the Articles of Association. Independent directors shall attend the meeting of the special committee in person. If they are unable to attend the meeting in person for any reason, they shall review the meeting materials in advance, form clear opinions, and entrust other independent directors in writing to attend on their behalf. When independent directors pay attention to major company matters within the scope of the special committee's responsibilities during the performance of their duties, they can promptly submit them to the special committee for discussion and review in accordance with the procedures.
Article 29 Independent directors shall work on-site at the company for no less than 15 days each year. In addition to attending shareholders' meetings, the board of directors and its special committees, and special meetings of independent directors as required, independent directors can perform their duties by regularly obtaining information on the company's operations and other information, listening to management reports, communicating with the person in charge of the internal audit agency and accounting firms that handle the audit business of listed companies and other intermediaries, conducting on-site inspections, and communicating with small and medium-sized shareholders.
Article 30 The company's board of directors, its special committees, and special meetings of independent directors shall prepare meeting minutes in accordance with regulations, and the opinions of independent directors shall be stated in the meeting minutes. Independent directors should sign and confirm the meeting minutes.
Independent directors should make work records and record in detail the performance of their duties. Information obtained by independent directors in the course of performing their duties, relevant meeting minutes, communication records with company and intermediary agency staff, etc., form an integral part of the work records. For important contents in work records, independent directors may require the secretary of the board of directors and other relevant personnel to sign for confirmation, and the company and relevant personnel shall cooperate.
The work records of independent directors and the information provided by the company to independent directors should be kept for at least 10 years.
Article 31 Independent directors shall effectively safeguard the interests of the company and all shareholders, understand the company's production, operation and operation conditions, and give full play to their role in investor relations management.
Article 32 Independent directors shall submit an annual work report to the company's annual shareholders' meeting, explaining the performance of their duties. The annual work report should include the following:
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
(1) Methods, frequency and voting status of attendance at the board of directors, and number of attendance at shareholders’ meetings;
(2) Participation in the work of special committees of the board of directors and special meetings of independent directors;
(3) Review of the matters listed in Articles 23, 26, 27, and 28 of the "Administrative Measures for Independent Directors of Listed Companies" and the exercise of the special powers of independent directors listed in Article 20, Paragraph 1 of this system;
(4) Major matters, methods and results of communication with the internal audit institution and the accounting firm that undertakes the company’s audit business regarding the company’s financial and business conditions;
(5) Communication status with small and medium-sized shareholders;
(6) The time, content, etc. of working on-site at the company;
(7) Other circumstances in the performance of duties.
The annual performance report of independent directors shall be disclosed at the latest when the company issues notice of the annual shareholders' meeting.
Article 33 If any of the following circumstances occurs, independent directors shall report to the Shanghai Stock Exchange in a timely manner:
(1) Being dismissed from office by the company and I believe that the reason for the dismissal is improper;
(2) The independent director resigns due to circumstances in the company that prevent the independent director from exercising his powers in accordance with the law;
(3) The materials for the board of directors meeting are incomplete or the arguments are insufficient, and the written request from two or more independent directors to postpone the board of directors meeting or postpone the review of relevant matters is not adopted;
(4) After reporting suspected violations of laws and regulations by the company or its directors and senior managers to the board of directors, the board of directors fails to take effective measures;
(5) Other circumstances that seriously hinder independent directors from performing their duties.
Chapter 5 Guarantee of the Work of Independent Directors
Article 34 In order to ensure that independent directors effectively exercise their powers, the company shall provide necessary working conditions and personnel support for independent directors, and designate specialized departments and personnel such as the board of directors' office and board secretary to assist independent directors in performing their duties. The secretary of the board of directors shall ensure smooth flow of information between independent directors and other directors, senior managers and other relevant personnel, and ensure that independent directors have access to sufficient resources and necessary professional advice when performing their duties. The board secretary should actively cooperate with independent directors in performing their duties. The company should ensure that independent directors have the same right to know as other directors, provide relevant information to independent directors in a timely manner, regularly report the company's operations, and organize or cooperate with independent directors on-site inspections when necessary.
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Before a board meeting, independent directors can communicate with the board secretary to inquire about matters to be considered, request supplementary materials, provide opinions and suggestions, etc. The board of directors and relevant personnel should carefully study the issues, requirements and opinions raised by the independent directors, and provide timely feedback to the independent directors on the implementation status of amendments to the proposals. Based on the actual situation, the company can organize independent directors to participate in research and demonstration and other aspects before the board of directors considers major and complex matters, fully listen to the opinions of independent directors, and provide timely feedback to independent directors on the adoption of opinions. The company should improve the communication mechanism between independent directors and small and medium-sized shareholders, so that independent directors can promptly verify issues raised by investors with the company.
Article 35 The company shall promptly issue board meeting notices to independent directors, provide relevant meeting materials no later than the notice period for board meetings stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission or the Articles of Association, and provide effective communication channels for independent directors; if a special committee of the board of directors convenes a meeting, the company shall in principle provide relevant materials and information no later than 3 days before the special committee meeting. The company should keep the above meeting materials for at least 10 years.
If two or more independent directors believe that the meeting materials are incomplete, insufficiently demonstrated, or not provided in a timely manner, they may submit a written proposal to the board of directors to postpone the meeting or postpone the consideration of the matter, and the board of directors shall adopt it, and the company shall disclose relevant information in a timely manner.
In principle, meetings of the Board of Directors and special committees shall be held on site. On the premise of ensuring that all participating directors can fully communicate and express their opinions, the meeting may be held by video, telephone or other means in accordance with procedures when necessary.
Article 36 When independent directors exercise their powers, the company's directors, senior managers and other relevant personnel shall cooperate and shall not refuse, obstruct or conceal relevant information, or interfere with their independent exercise of powers. If independent directors encounter obstacles in exercising their powers in accordance with the law, they may explain the situation to the board of directors, require directors, senior managers and other relevant personnel to cooperate, and record the specific circumstances and resolution of the obstacles in their work records; if the obstacles still cannot be eliminated, they may report to the China Securities Regulatory Commission and the Shanghai Stock Exchange.
If the performance of duties by an independent director involves disclosure of information, the company shall handle the disclosure in a timely manner; if the company does not disclose the information, the independent director may directly apply for disclosure or report to the China Securities Regulatory Commission and the Shanghai Stock Exchange.
Article 37 The cost of hiring an intermediary agency and other expenses required for independent directors to exercise their powers shall be borne by the company.
Article 38 The company shall provide independent directors with allowances commensurate with their responsibilities. The standard of allowances shall be formulated by the board of directors, reviewed and approved by the shareholders' meeting, and disclosed in the company's annual report. In addition to the above-mentioned allowances, independent directors shall not receive any compensation from the company, its major shareholders or interested institutions and persons.
Working system of independent directors of Hunan Nanxin Pharmaceutical Co., Ltd.
Members obtain additional, undisclosed other benefits.
Article 39 Based on the actual situation and when conditions permit, the company may establish an independent director liability insurance system to reduce risks that may arise from the normal performance of duties by independent directors.
Chapter 6 Supplementary Provisions
Article 40 Any matters not covered by this system, or that conflict with laws, regulations, normative documents and the Articles of Association shall be governed by the relevant provisions of the relevant laws, regulations, normative documents and the Articles of Association.
Article 41 This system shall become effective and implemented after being reviewed and approved by the board of directors, and the same shall apply when it is modified. The company's board of directors is responsible for interpreting this system.