Working system of independent directors
Chapter I General Provisions
Article 1 in order to further improve the corporate governance structure of Apt Medical Inc(688617) (hereinafter referred to as “the company”), strengthen the restraint and supervision system for the board of directors and management, better safeguard the interests of minority shareholders and promote the standardized operation of the company, in accordance with the company law of the people’s Republic of China (hereinafter referred to as “the company law”) The provisions of the securities law of the people’s Republic of China, the rules for independent directors of listed companies, the self regulatory guidelines for companies listed on the science and Innovation Board No. 7 – matters related to annual reports and other laws, regulations and normative documents, as well as the articles of association of Shenzhen Apt Medical Inc(688617) Equipment Co., Ltd. (hereinafter referred to as the “articles of association”), Formulate this system.
Article 2 an independent director refers to a director who does not hold any position other than an independent 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 the number of independent directors of the company shall not be less than one-third of the total number of directors of the company. Where the board of directors of the company sets up special committees for remuneration and assessment, audit and nomination, the independent directors shall account for the majority of the members of the audit committee, nomination committee and remuneration and assessment committee and act as the convener.
Article 4 independent directors shall have the obligation of good faith and diligence to the listed company and all shareholders, and shall earnestly perform their duties in accordance with the requirements of relevant laws and regulations, these rules and the articles of association, safeguard the overall interests of the company, and pay particular attention to the legitimate rights and interests of minority shareholders.
Article 5 the Independent Directors established by the company shall include at least one accounting professional (accounting professional refers to the person with the title of senior accountant or the qualification of certified public accountant).
Chapter II independence and term of office of independent directors
Article 6 the independent directors employed by the company shall be independent. Independent directors shall perform their duties independently and shall not be affected by the major shareholders, actual controllers or other interested parties of the listed company
The influence of the Department’s unit or individual. In case of any situation that affects the identity independence, the independent director shall timely notify the company and eliminate the situation. If the conditions for independence cannot be met, he shall submit his resignation. In principle, independent directors can concurrently serve as independent directors in up to five listed companies, and ensure that they have enough time and energy to effectively perform their duties.
Article 7 the following persons shall not serve as independent directors:
（1） Personnel working in the company or its affiliated enterprises and their immediate relatives and main social relations (immediate relatives refer to spouses, parents and children; 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.);
（2） Directly or indirectly holding more than 1% of the issued shares of the company or natural person shareholders and their immediate family members among the top ten shareholders of the company;
（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 have had the situations listed in the preceding three items in the most recent year;
（5） Personnel who provide financial, legal and consulting services for listed companies or their affiliated enterprises;
（6） Other personnel stipulated by laws, administrative regulations and departmental rules;
（7） Other personnel specified in the articles of association.
（8） Other personnel recognized by China Securities Regulatory Commission (hereinafter referred to as “CSRC”).
Article 8 an independent director shall have the conditions for holding a post suitable for the exercise of his functions and powers. Article 9 an independent director shall meet the following basic conditions:
（1） Be qualified to serve as a director of a listed company in accordance with laws, administrative regulations and other relevant provisions;
（2） Have basic knowledge of the operation of listed companies, and be familiar with relevant laws, administrative regulations, rules and rules;
（3） At least 5 years of working experience in law, economics or other necessary to perform the duties of independent directors;
（4） Have the independence required by relevant laws, regulations and the articles of Association;
（5） Other conditions stipulated in relevant laws and regulations or the articles of association.
Independent directors and persons who intend to serve as independent directors shall participate in the training organized by the CSRC and its authorized institutions in accordance with the provisions.
Chapter III nomination, election and replacement of independent directors
Article 10 the board of directors, the board of supervisors and shareholders who individually or jointly hold more than 1% of the issued shares of the company may propose candidates for independent directors, which shall be elected and decided by the general meeting of shareholders. The nominee of an independent director shall obtain the consent of the nominee before nomination. The nominees shall fully understand the relationship between their qualifications and their working experience as independent directors and the nominees of the company, and shall not make a public statement on their qualifications and working experience as independent directors.
Article 11 before the shareholders’ meeting for the election of independent directors is held, the board of directors of the company shall publish the relevant contents in accordance with the provisions, and the nomination, election and replacement of independent directors shall be carried out in accordance with the law and norms. When nominating candidates for independent directors, the nominees of independent directors shall focus on whether the candidates for independent directors have the following circumstances:
（1） Failing to attend the board meeting in person for two consecutive times or more than half of the total number of board meetings in 12 consecutive months during the previous period of serving as an independent director;
（2） Failing to express the opinions of independent directors as required or the opinions of independent directors proved to be obviously inconsistent with the facts during the past period of serving as independent directors;
（3） Serving as a director, supervisor or senior manager in more than five companies at the same time; （4） The former independent director is dismissed by the company before the expiration of his term of office;
（5） Being punished by other relevant departments other than the CSRC within the last 36 months; （6） Other circumstances that may affect the integrity, diligence and independent performance of duties of independent directors.
In case of any of the above circumstances, the nominee of the independent director candidate shall disclose the specific circumstances, the reasons for nominating the candidate, whether it has an impact on the standardized operation and corporate governance of the company and the countermeasures.
Article 12 before the general meeting of shareholders for the election of independent directors is held, the board of directors of the company shall go through the relevant procedures for the nomination of independent directors in accordance with the regulations, and disclose the detailed information of the candidates for independent directors, so as to ensure that shareholders have enough knowledge of the candidates before voting.
Article 13 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 14 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.
Before the expiration of the term of office of an independent director, the company may remove him through legal procedures. In case of early dismissal, the company shall disclose it as a special disclosure. If the removed independent director considers that the company’s reasons for removal are improper, he may make a public statement.
Article 15 when a listed company has the following circumstances that seriously hinder the independent directors from performing their duties and exercising their functions and powers, the independent directors have the right to report to the CSRC, the dispatched office of the CSRC and the stock exchange where the company’s securities are listed:
（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 insufficient, and the written request of two or more independent directors 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’s suspected violations to the board of directors;
（5） Other circumstances that seriously hinder the independent directors from exercising their functions and powers.
Article 16 if the number of independent directors is less than the quorum due to the resignation of independent directors during their term of office, the original independent directors shall continue to perform the duties of independent directors according to law before re-election of new independent directors, except for resignation and removal due to loss of independence. If the number of independent directors is lower than the quorum due to the resignation and removal of independent directors due to the loss of independence, the listed company shall elect independent directors as soon as possible to make the number of independent directors meet the statutory requirements. Article 17 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.
Chapter IV responsibilities of independent directors
Article 18 independent directors shall attend the meeting of the board of directors on time, understand the production, operation and operation of the listed company, and take the initiative to investigate and obtain the information and materials needed to make decisions. Independent directors shall submit an annual report on their work to the general meeting of shareholders of the company to explain their performance of their duties.
Article 19 when the annual general meeting of shareholders of a listed company is held, independent directors shall submit an annual report on their work, explain their performance of their duties, and focus on corporate governance matters such as the internal control, standardized operation and the protection of the rights and interests of small and medium-sized investors of the listed company. In order to give full play to the role of independent directors, independent directors should have the following special powers in addition to the powers conferred on directors by the company law and other relevant laws and regulations:
（1） Major connected transactions shall be recognized by independent directors; Before making a judgment, independent directors can hire an intermediary to issue an independent financial consultant report as the basis for their judgment; （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） Propose to convene the board of directors;
（5） Voting rights may be publicly solicited from shareholders prior to the convening of the general meeting of shareholders, but shall not be solicited in a paid or disguised way.
（6） Independently employ external audit institutions and consulting institutions to audit and consult the specific matters of the company;
When exercising the functions and powers in items (I) to (V) of the preceding paragraph, independent directors shall obtain the consent of more than half of all independent directors; The exercise of the functions and powers in Item (VI) of the preceding paragraph shall be subject to the consent of all independent directors. Items (I) (II) 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 of this article are not adopted or the above functions and powers cannot be normally exercised, the listed company shall disclose the relevant information. Where laws, administrative regulations and the CSRC provide otherwise, such provisions shall prevail.
Article 20 independent directors shall express independent opinions on the following matters to the board of directors or the general meeting of shareholders:
（1） Nomination, appointment and removal of directors;
（2） Appoint or dismiss senior managers;
（3） Remuneration of directors and senior managers of the company;
