Foshan Haitian Flavouring And Food Company Ltd(603288)
Working system of independent directors
(revised in March 2022)
Chapter I General Provisions
Article 1 in order to further improve the corporate governance structure of Foshan Haitian Flavouring And Food Company Ltd(603288) (hereinafter referred to as the company), create a good working environment for independent directors and promote the standardized operation of the company, this system is hereby formulated in accordance with the company law of the people’s Republic of China (hereinafter referred to as the company law), the rules for independent directors of listed companies and the Foshan Haitian Flavouring And Food Company Ltd(603288) articles of Association (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 its major shareholders that may hinder his independent and objective judgment.
Article 3 independent directors have the obligation of good faith and diligence to the company and all shareholders. Independent directors must earnestly perform their duties in accordance with relevant laws and regulations, regulatory provisions and the requirements of the articles of association, safeguard the overall interests of the company and the interests of all shareholders, and pay particular attention to the legitimate rights and interests of minority shareholders.
Article 4 independent directors shall perform their duties independently and shall not be influenced by the company’s major shareholders, actual controllers or other units or individuals with an interest in the company.
Article 5 the members of the board of directors of the company shall include not less than one-third of the independent directors, including at least one accounting professional (accounting professional refers to the person with senior professional title or certified public accountant qualification).
Article 6 when the independent directors fail to meet the conditions for independence or other circumstances unsuitable for performing the duties of independent directors, resulting in the failure of the company’s independent directors to meet the quorum, the company shall make up the number of independent directors in accordance with the regulations.
Article 7 independent directors shall participate in the training organized by the CSRC and its authorized institutions in accordance with the requirements of the China Securities Regulatory Commission (hereinafter referred to as the CSRC).
Chapter II Conditions of appointment of independent directors
Article 8 the independent directors of the company shall have the following basic qualifications suitable for the exercise of their functions and powers:
(I) be qualified to serve as a director of the company in accordance with laws, administrative regulations, the articles of association and other relevant provisions;
(II) have the independence required by this system;
(III) have basic knowledge of the operation of listed companies and be familiar with relevant laws, administrative regulations, rules and rules;
(IV) have more than five years of working experience in law, economics or other work necessary to perform the duties of independent directors;
(V) other conditions stipulated in the articles of association.
Independent directors and persons who intend to serve as independent directors shall participate in the training organized by the CSRC or its authorized institutions in accordance with relevant regulations.
Chapter III independence of independent directors
Article 9 the independent directors of the company must be independent. The following persons who do not meet the independence requirements shall not serve as independent directors of the company.
(I) persons who work in the company or its affiliated enterprises, their immediate family members and their main social relations; (II) shareholders who directly or indirectly hold more than 1% of the issued shares of the company or are natural persons among the top ten shareholders of the company and their immediate family members;
(III) 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;
(IV) personnel who work in the actual controller of the company and its subsidiaries;
(V) personnel providing financial, legal and consulting services for the company and its controlling shareholders or their respective subsidiaries, including all personnel of the project team of the intermediary providing services, reviewers at all levels, personnel signing the report, partners and main principals;
(VI) serve as a director, supervisor and senior manager in a unit that has significant business dealings with the company and its controlling shareholders or their respective subsidiaries, or serve as a director, supervisor and senior manager in the controlling shareholder unit of the business dealings unit;
(VII) persons who have been under the circumstances listed in the preceding six items in the last 12 months;
(VIII) other situations where the Shanghai stock exchange determines that it does not have independence.
The affiliated enterprises of the controlling shareholders and actual controllers of the company in items (IV), (V) and (VI) of the preceding paragraph do not include the affiliated enterprises that do not form an affiliated relationship with the company according to article 6.3.4 of the stock listing rules.
“Immediate family members” mentioned in the preceding paragraph refer to spouses, parents and children; “Major social relations” refer to brothers and sisters, parents in law, daughter-in-law and son-in-law, 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 stock listing rules or the articles of association, or other major matters recognized by Shanghai Stock Exchange; “Holding office” refers to serving as a director, supervisor, senior manager and other staff.
Chapter IV 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.
Article 11 the nominee of an independent director shall obtain the consent of the nominee before nomination. The nominee shall fully understand the nominee’s occupation, education background, professional title, detailed work experience and all part-time jobs, and express his opinions on his qualification and independence as an independent director. The nominee shall make a public statement that there is no relationship between himself and the company that affects his independent 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 regulations and submit the relevant materials of all nominees to the 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.
Article 12 candidates for independent directors shall have no following bad records:
(I) having been subject to administrative punishment by the CSRC in the last 36 months;
(II) during the period when the stock exchange publicly determines that it is not suitable to serve as a director of a listed company;
(III) having been publicly condemned by the stock exchange or criticized twice or more in the last 36 months; (IV) during the period when he served as an independent director, he did not attend the meeting of the board of directors for two consecutive times or did not attend the meeting of the board of directors in person, accounting for more than one-third of the meetings of the board of directors in that year;
(V) the independent opinions expressed during the period of serving as an independent director are obviously inconsistent with the facts;
(VI) other circumstances recognized by Shanghai Stock Exchange.
Article 13 independent directors shall ensure that they have enough time and energy to effectively perform their duties. Those who have served as independent directors in five domestic and foreign listed companies shall not be nominated as independent director candidates of other listed companies.
An independent director who has been serving as an independent director for six consecutive years shall not serve as an independent director again.
Article 14 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:
(I) have the qualification of certified public accountant;
(II) having a senior professional title, associate professor or above or a doctor’s degree in accounting, auditing or financial management;
(III) have senior professional titles in economic management, and have more than five years of full-time working experience in professional posts such as accounting, audit or financial management.
Article 15 in addition to the circumstances under which the performance of duties shall be suspended as stipulated in the system, if the independent director of the company has other circumstances that are not suitable for performing the duties of independent director, he shall resign from the position of independent director within one month from the date of such circumstances. If he fails to resign as required, the board of directors of the company shall start decision-making procedures within two days after the expiration of the time limit and remove him from the post of independent director. If the proportion of independent directors in all members of the board of directors is less than one-third due to the resignation of independent directors, the independent directors who propose to resign shall continue to perform their duties until the date of the emergence of new independent directors. The original nominee of the independent director or the board of directors of the company shall nominate new independent director candidates within three months from the date of resignation of the independent director.
Article 16 an independent director shall make a statement on whether he meets the requirements of laws, regulations and relevant provisions of Shanghai Stock Exchange on the employment conditions and independence of independent directors. The nominee of independent directors shall carefully verify the ability of independent director candidates to perform their duties and whether there are circumstances affecting their independence, and make a statement on the verification results.
Article 17 the company shall, at the latest when issuing the notice and announcement of the general meeting of shareholders on the election of independent directors, submit relevant materials of independent director candidates to Shanghai stock exchange through the company business management system of Shanghai Stock Exchange, including written documents such as declaration of independent director candidates, statement of independent director nominees, resume of independent directors of listed companies and so on.
Article 18 when the company holds a general meeting of shareholders to elect independent directors, the board of directors of the company shall explain whether the candidates for independent directors are objected by Shanghai Stock Exchange. For independent director candidates who raise objections from Shanghai Stock Exchange, the company shall not submit them to the general meeting of shareholders for election as independent directors, and shall postpone or cancel the general meeting of shareholders or cancel the relevant proposals of the general meeting of shareholders in accordance with the rules of the general meeting of shareholders of listed companies of CSRC.
Article 19 candidates for independent directors shall meet the requirements of the following laws and regulations:
(I) provisions of the company law on the appointment of directors;
(II) provisions of the civil servant law of the people’s Republic of China on civil servants holding concurrent posts (if applicable); (III) relevant provisions of the independent director rules of listed companies (hereinafter referred to as the independent director rules) of the CSRC;
(IV) the provisions of the notice on regulating central management cadres to resign from public office or serve as independent directors and independent supervisors of listed companies and fund management companies after retirement (if applicable) issued by the Discipline Inspection Commission of the CPC Central Committee and the Organization Department of the CPC Central Committee;
(V) provisions of the Organization Department of the CPC Central Committee on further regulating the part-time (tenure) of Party and government leading cadres in enterprises (if applicable);
(VI) the 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);
(VII) relevant provisions of the guidelines on the system of independent directors and external supervisors of joint-stock commercial banks issued by the people’s Bank of China (if applicable);
(VIII) relevant provisions of the measures for the supervision of the qualifications of directors, supervisors and senior managers of securities companies issued by the CSRC (if applicable);
(IX) relevant provisions of the China Banking and Insurance Regulatory Commission, such as the measures for the administration of the qualifications of directors (directors) and senior managers of banking financial institutions, the provisions for the administration of the qualifications of directors, supervisors and senior managers of insurance companies, and the measures for the administration of independent directors of insurance institutions (if applicable);
(x) other circumstances stipulated by laws and regulations and Shanghai Stock Exchange.
Article 20 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 21 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.
Article 22 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 V responsibilities of independent directors
Article 23 independent directors shall actively perform their duties in corporate governance, internal control, information disclosure, financial supervision and other aspects. Independent directors shall perform their duties independently and impartially, and shall not be affected 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 24 in addition to the functions and powers conferred by the company law and other laws and regulations, independent directors shall actively exercise the following special functions and powers:
(I) related party transactions that need to be submitted to the general meeting of shareholders for deliberation shall be submitted to the board of directors for deliberation after the independent directors express their prior approval opinions. Independent directors can hire intermediaries to issue special reports before making judgments;
(II) propose to employ or dismiss an accounting firm;
(III) propose to the board of directors to convene an extraordinary general meeting of shareholders;
(IV) propose to convene the board of directors;
(V) publicly solicit voting rights from shareholders before the general meeting of shareholders;
(VI) independently employ intermediary institutions to audit, verify or express professional opinions;
(VII) other functions and powers specified in laws and regulations, relevant provisions of CSRC and Shanghai Stock Exchange and the articles of association.
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) and (II) of paragraph 1 of this article shall be approved by more than half of the independent directors before they can be submitted to the board of directors for discussion.
Article 25 in the audit committee, nomination committee and remuneration and assessment committee under the board of directors of the company, independent directors shall account for more than half of the members of the committee, and independent directors shall act as the convener. Article 26 independent directors shall express independent opinions on the following major matters of the company:
(I) nomination, appointment and removal of directors;
(II) appointing and dismissing senior managers;
(III) remuneration of directors and senior managers;
(IV) employment and dismissal of accounting firms;
(V) changes in accounting policies, accounting estimates or corrections of major accounting errors due to reasons other than changes in accounting standards;
(VI) the company’s financial and accounting reports and internal control are issued with non-standard unqualified audit opinions by accounting firms;
(VII) internal control evaluation report;
(VIII) the existing or new loans or other capital transactions of shareholders, actual controllers and their affiliated enterprises to the listed company with a total amount of more than 3 million yuan or more than 5% of the latest audited net asset value of the listed company, and whether the company has taken effective measures to recover the arrears;
(IX) scheme for relevant parties to change their commitments;
(x) the impact of the issuance of preferred shares on the rights and interests of various shareholders of the company;
（11） Formulate profit distribution policies, profit distribution plans and cash dividend plans;
（12） Related party transactions to be disclosed and guarantees to be provided (excluding guarantees to subsidiaries within the scope of consolidated statements)
