Haitian Water Group Co.Ltd(603759)
Working system of independent directors
Chapter I General Provisions
Article 1 with reference to the rules for independent directors of listed companies, the guidelines for corporate governance of listed companies, relevant national laws and regulations and the relevant provisions of the Haitian Water Group Co.Ltd(603759) articles of Association (hereinafter referred to as the “articles of association”), in order to standardize the behavior of Haitian Water Group Co.Ltd(603759) (hereinafter referred to as the “company”), give full play to the role of independent directors in corporate governance and promote the independent directors of the company to perform their duties, This system is specially formulated.
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 board of directors of the company shall have more than one-third of independent directors, including at least one accounting professional.
The board of directors of the company has special committees for nomination, audit, remuneration and assessment, strategy and development. Among the members of the nomination, audit, remuneration and assessment committee, independent directors shall account for more than half of the members and serve as the convener.
Article 4 independent directors have the obligation of good faith and diligence to the company and all shareholders. Independent directors shall faithfully perform their duties and safeguard the interests of the company, especially paying attention to the legitimate rights and interests of minority shareholders.
Chapter II independence requirements of independent directors
Article 5 independent directors must be independent.
Independent directors shall perform their duties independently and shall not be affected by the company’s major shareholders, actual controllers or units or individuals with interests in the company.
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 6 the following persons shall not serve as independent directors:
(I) personnel working in the company or affiliated enterprises and their immediate family members, main social relations (immediate family members refer to spouses, parents, children, etc.; 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.); (II) natural person shareholders and their immediate family members who directly or indirectly hold more than 1% of the issued shares of the company or are the top ten shareholders of the company;
(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) persons who hold posts in the actual controllers of listed companies and their affiliated enterprises;
(V) personnel providing financial, legal, consulting and other 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, 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 had the situations listed in the preceding three items in the last 12 months;
(VIII) other personnel stipulated by laws, administrative regulations, departmental rules and the articles of Association;
(IX) other personnel recognized by the China Securities Regulatory Commission (hereinafter referred to as “CSRC”) and the stock exchange.
Chapter III Conditions of appointment of independent directors
Article 7 an independent director shall have the conditions for holding a post suitable for the exercise of his functions and powers. Independent directors shall meet the following basic conditions:
(I) be qualified to serve as a director of the company in accordance with laws, administrative regulations and other relevant provisions;
(II) have the independence required by Article 6 of the 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, economy, finance, management or other work necessary for performing the duties of independent directors;
(V) other conditions stipulated in laws and regulations and the articles of association.
Chapter IV selection and replacement of independent directors
Article 8 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 9 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 provisions.
Article 10 before the shareholders’ meeting for the election of independent directors is held, the company shall publish the relevant contents in accordance with the provisions of Article 9 of this system, 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 11 after examination by the CSRC, the nominees who have objections to their qualifications and independence may be candidates for directors of the company, but not candidates for independent directors. When the general meeting of shareholders is held to elect independent directors, the board of directors of the company shall explain whether the candidates for independent directors are objected by the CSRC.
Article 12 independent directors shall be elected separately from other directors. In case of differential election of independent directors, they shall be elected by the shareholders attending the general meeting of shareholders by cumulative voting. The operating rules are as follows: (I) each share owned by the shareholders of the company has the same number of votes as the number of independent directors to be elected, that is, all the votes owned by the shareholders when electing independent directors, Equal to the product of its shares multiplied by the number of independent directors to be elected;
(II) a shareholder may elect one person in a centralized manner or several persons in a decentralized manner, but the cumulative number of votes cast by a shareholder shall not exceed the total number of votes it enjoys;
(III) the number of independent directors elected shall be determined according to the number of nominees, with the higher number of votes, but the number of votes of each elected independent director must exceed one-half of the valid voting shares held by the shareholders attending the general meeting of shareholders. When the number of independent directors elected fails to meet the requirements of the articles of association, the company shall re nominate and re elect at the next general meeting of shareholders to make up the number; If the number of independent directors elected exceeds the number of independent directors to be elected by the company due to the same number of votes, a new round of voting shall be held for the candidates with the same number of votes who exceed the number of independent directors to be elected until the independent directors to be elected by the company are elected.
Article 13 The term of office of an independent director is the same as that of other directors of the company. Upon expiration of his term of office, he may be re elected, but the term of re-election shall not exceed six years. The term of office of independent directors shall be calculated from the date of adoption of the resolution of the general meeting of shareholders to the expiration of the term of office of the current board of directors.
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.
Article 15 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 dismissed independent director believes that the company’s reason for dismissal is improper, he may make a public statement.
Article 16 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.
Article 17 If the resignation of an independent director causes the number of independent directors or members of the board of directors to be lower than the minimum number specified in the statutory or the articles of association, the independent director shall still perform his duties in accordance with laws, administrative regulations and the articles of association before the re elected independent director takes office. Chapter V responsibilities of independent directors
Article 18 independent directors shall be diligent and provide sufficient time to perform their duties. Article 19 independent directors shall attend the meeting of the board of directors on time, understand the production, operation and operation of the company, and take the initiative to investigate and obtain the information and materials needed to make decisions. Independent directors shall submit the annual report of all independent directors to the annual general meeting of shareholders of the company to explain their performance of duties.
Article 20 the meeting of the board of directors shall be attended by independent directors in person. If an independent director is unable to attend for some reason, he may entrust other independent directors in writing to attend on his behalf. The power of attorney shall specify the agent’s name, agency matters, authority and validity period, and shall be signed or sealed by the principal. The independent director who attends the board meeting on his behalf shall exercise the rights of the independent director within the scope of authorization. If an independent director fails to attend the meeting of the board of directors or entrust another independent director to attend the meeting, he shall be deemed to have waived his voting right at the meeting.
Article 21 in order to give full play to the role of independent directors, in addition to the functions and powers entrusted to directors by relevant national laws and regulations, independent directors also have the following special functions and powers:
(I) major related party transactions (referring to related party transactions with a total amount of more than 3 million yuan or more than 5% of the company’s recently audited net asset value) shall be submitted to the board of directors for discussion after being approved in advance by independent directors; Before making a judgment, an independent director may engage an intermediary to issue an independent financial advisory report as the basis for his judgment;
(II) propose to the board of directors to employ or dismiss the 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 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.
Article 22 independent directors shall express independent opinions on the following matters to the board of directors or the general meeting of shareholders:
(I) nomination, appointment and removal of directors;
(II) appointing or dismissing senior managers;
(III) remuneration of directors and senior managers of the company;
(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) scheme for the relevant parties to change their commitments;
(IX) the impact of the issuance of preferred shares on the rights and interests of various shareholders of the company;
(x) formulate profit distribution policies, profit distribution plans and cash dividend plans;
（11） Related party transactions to be disclosed, provision of guarantees (excluding guarantees for subsidiaries within the scope of consolidated statements), entrusted financial management, provision of financial assistance, use of raised funds, investment in stocks and their derivatives and other major matters;
（12） Major asset restructuring plan, management acquisition, equity incentive plan, employee stock ownership plan, share repurchase plan and debt repayment plan of related persons of listed companies;
（13） The company plans to decide that the shares will no longer be traded on the Shanghai Stock Exchange;
（14） Matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
Independent directors shall express one of the following opinions in writing on the above matters: agree; Reservations and their reasons; Objections and their reasons; Inability to express opinions and its obstacles. Article 23 If the relevant matters need to be disclosed, the company shall announce the opinions of the independent directors. If the independent directors have different opinions and can not reach an agreement, the board of directors shall disclose the opinions of each independent director separately.
Chapter V working conditions of independent directors
Article 24 the company guarantees that independent directors enjoy the same right to know as other directors, timely provide relevant materials and information to independent directors, regularly report the operation of the company, and organize independent directors to conduct factual investigation when necessary.
Article 25 for any matter that needs to be decided by the board of directors, the company must notify the independent directors in advance according to the legal time and provide sufficient information at the same time. If the independent directors think the information is insufficient, they can ask for supplement.
Article 26 when two or more independent directors consider that the information is insufficient or the argument is unclear, they can jointly submit a written proposal to the board of directors to postpone the convening of the board meeting or the deliberation of the matter; The board of directors shall adopt it.
Article 27 the information provided by the company to the independent directors shall be kept by the company and the independent directors for at least 5 years.
Article 28 Where the independent opinions, proposals and written explanations issued by independent directors should be announced, the listed company shall assist in handling the announcement in time.
Article 29 when independent directors exercise their functions and powers, relevant personnel of the company shall cooperate, and shall not refuse, hinder or conceal, or interfere with their independent exercise of functions and powers.
Article 30 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 31 the company shall give appropriate allowances to independent directors. The standard of allowance shall be formulated by the board of directors, reviewed and approved by the general meeting of shareholders, and disclosed in the annual report of the company.
Article 32 in addition to the above allowances, independent directors shall not obtain additional undisclosed interests from the company, its major shareholders or interested institutions and personnel.
Chapter VI supplementary provisions
Article 33 matters not covered in this system shall be implemented in accordance with relevant laws, regulations, normative documents and the relevant provisions of the articles of association.
Article 34 in case of any inconsistency between this system and relevant laws, regulations, normative documents and the articles of association, the relevant laws, regulations, normative documents and the articles of association shall prevail.
Article 35 The term “above” in this system includes the number, and the terms “over” and “over” do not include the number.
Article 36 this system shall come into force from the date of deliberation and adoption by the general meeting of shareholders.
Article 37 the system shall be revised and interpreted by the board of directors.
