Independent director system
Chapter I General Provisions
Article 1 in order to further improve the corporate governance structure of Blue Sail Medical Co.Ltd(002382) (hereinafter referred to as “the company”), strengthen the restraint and supervision mechanism for the board of directors and management, better safeguard the legitimate rights and interests of the company’s shareholders and promote the standardized operation of the company, according to the company law of the people’s Republic of China (hereinafter referred to as “the company law”) and the rules for independent directors of listed companies The system is formulated in accordance with the Blue Sail Medical Co.Ltd(002382) articles of Association (hereinafter referred to as the “articles of association”) and other relevant provisions.
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 shall earnestly perform their duties in accordance with the requirements of relevant laws and regulations 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 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 in principle, independent directors can concurrently serve as independent directors in up to five companies, and ensure that they have enough time and energy to effectively perform their duties.
Article 6 the company has three independent directors, including at least one accounting professional. The independent director candidate nominated 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 5 years of full-time working experience in professional posts such as accounting, audit or financial management.
The members of the special committee under the board of directors of the company are all composed of directors. Among the audit, nomination, remuneration and assessment committees, the independent directors shall account for the majority and act as the convener, and the convener of the audit committee shall be an accounting professional.
Chapter II Conditions of appointment of independent directors
Article 7 an independent director 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;
(hereinafter referred to as “independent board of directors”) required by the CSRC;
(III) have basic knowledge of the company’s operation and be familiar with relevant laws, administrative regulations, rules and rules;
(IV) more than five years of legal, economic or other work experience necessary for the performance of the duties of independent directors;
(V) other conditions stipulated by laws, regulations and 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.
Article 8 the following persons shall not serve as independent directors:
(I) persons who work in the company or its affiliated enterprises, their immediate family members and their 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 among 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 company’s controlling shareholders, actual controllers and their affiliated enterprises and their immediate family members;
(V) personnel providing financial, legal and consulting services for the company, its controlling shareholders, actual controllers or their respective subsidiaries, including but not limited to all personnel of the project team of the intermediary providing services, reviewers at all levels, personnel signing the report, partners and main principals;
(VI) personnel working in units with significant business dealings with the company and its controlling shareholders, actual controllers or their respective subsidiaries, or personnel working in units with controlling shareholders with significant business dealings;
(VII) personnel who have been in one of the situations listed in the preceding six items in the last 12 months;
(VIII) other personnel without independence recognized by the CSRC and Shenzhen Stock Exchange.
Chapter III nomination, election and replacement of independent directors
Article 9 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 10 candidates for independent directors shall not be nominated as directors of listed companies as stipulated in the guidelines for self regulation and supervision of listed companies No. 1 – standardized operation of listed companies on the main board, and shall not have the following bad records: (I) they have been subject to administrative punishment by the CSRC or criminal punishment by judicial organs due to violations and crimes of securities and futures in the past 36 months;
(II) being put on file for investigation by the CSRC or by the judicial organ due to suspected illegal and criminal acts of securities and futures, and there is no clear conclusion;
(III) being publicly condemned by the stock exchange or being criticized in more than three circulars within the last 36 months;
(IV) as the object of punishment for dishonesty, he has been identified and restricted by the national development and Reform Commission and other ministries and commissions to hold the post of director of the company; (V) within 12 months after the board of directors requested the general meeting of shareholders to replace the independent director who failed to attend the meeting of the board of directors in person for three consecutive times or failed to attend the meeting of the board of directors in person for two consecutive times and did not entrust other directors to attend the meeting of the board of directors;
(VI) other circumstances recognized by Shenzhen Stock Exchange.
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.
Article 12 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 of Article 11 of this system, and submit the relevant materials of all nominees to Shenzhen Stock Exchange. If the board of directors of the company has any objection to the relevant information of the nominee, it shall submit the written opinions of the board of directors at the same time.
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.
If he has served as an independent director for six consecutive years in the same company, he shall not be nominated as an independent director candidate of the company within 12 months from the date of the occurrence of the fact.
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 propose to the general meeting of shareholders for replacement.
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.
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.
The independent director shall state in the resignation report the time of resignation, the reason for resignation, the position resigned, whether to continue to serve in the company and its holding subsidiaries after resignation (if continuing to serve, explain the situation of continuing to serve), etc.
Article 17 the resignation of an independent director shall take effect when the resignation report is delivered to the board of directors or the board of supervisors. However, if the number of independent directors is less than one-third of the members of the board of directors or there are no accounting professionals among the independent directors due to the resignation of an independent director, the resignation report shall not take effect until the next independent director fills the vacancy caused by his resignation. Before the resignation report takes effect, the independent director who intends to resign shall continue to perform his duties in accordance with relevant laws, administrative regulations and the articles of association. The board of directors shall convene a general meeting of shareholders within two months to elect independent directors. If the general meeting of shareholders is not held within the time limit, the independent directors may no longer perform their duties.
Article 18 when the number of independent directors of the company fails to reach the above-mentioned number due to the fact that the independent directors do not meet the conditions for independence or are not suitable for performing the duties of independent directors, the company shall make up for it in accordance with the provisions.
Chapter IV special functions and powers of independent directors
Article 19 in addition to the functions and powers conferred by the company law and other relevant 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 approved by independent directors in advance; Before making a judgment, independent directors can hire an intermediary to issue an independent financial consultant report as the basis for their judgment;
(II) propose to the board of directors to employ or dismiss the accounting firm;
(III) propose to convene the board of directors;
(IV) propose to the board of directors to convene an extraordinary general meeting of shareholders;
(V) solicit the opinions of minority shareholders, put forward profit distribution proposals, and directly submit them to the board of directors for deliberation;
(VI) solicit voting rights from shareholders in public before the general meeting of shareholders is held;
(VII) independently employ external audit institutions and consulting institutions to audit and consult the specific matters of the company. Independent directors shall obtain the consent of more than half of all independent directors when exercising the functions and powers in items (I) to (VI) of the preceding paragraph; The exercise of the functions and powers in Item (VII) of the preceding paragraph shall be subject to the consent of all independent directors. Items (I) and (II) of the preceding paragraph can be submitted to the board of directors for discussion only after more than half of the independent directors agree.
If the above proposal is not adopted or the above functions and powers cannot be normally exercised, the company shall disclose the relevant information. Where laws, administrative regulations and the CSRC provide otherwise, such provisions shall prevail.
Article 20 independent directors shall attend the board meeting on time. In addition to attending the board meeting, independent directors shall ensure to arrange reasonable time to conduct on-site inspection on the company’s production and operation status, the construction and implementation of management and internal control systems, and the implementation of resolutions of the board of directors. If any abnormality is found in the on-site inspection, it shall be reported to the board of directors of the company and Shenzhen Stock Exchange in time.
Article 21 when the independent director finds that the company has the following circumstances, he shall actively perform the obligation of due diligence and, if necessary, employ an intermediary institution for special investigation:
(I) major issues are not submitted to the board of directors or the general meeting of shareholders for deliberation as required;
(II) failing to perform the obligation of information disclosure in time;
(III) there are false records, misleading statements or major omissions in the public information;
(IV) other situations suspected of violating laws and regulations or damaging the legitimate rights and interests of minority shareholders.
Article 22 independent directors shall also express independent opinions to the board of directors or the general meeting of shareholders on the following matters:
(I) nomination, appointment and removal of directors;
(II) appointing and 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 financial and accounting reports and internal control of listed companies 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) related party transactions, external guarantees (excluding guarantees for subsidiaries within the scope of consolidated statements), entrusted financial management, external financial assistance, matters related to the use of raised funds, investment in stocks and their derivatives and other major matters that need to be disclosed;
（11） Major asset restructuring plan, management acquisition, equity incentive plan, employee stock ownership plan, share repurchase plan and debt repayment plan of related parties of listed companies;
（12） The formulation, adjustment, decision-making procedures, implementation and information disclosure of the company’s cash dividend policy, and whether the profit distribution policy damages the legitimate rights and interests of small and medium-sized investors;
（13） The company plans to decide that its shares will no longer be traded in Shenzhen Stock Exchange;
（14） Matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
（15） Other matters stipulated in relevant laws, administrative regulations, departmental rules, normative documents, business rules of Shenzhen Stock Exchange and the articles of association.
Article 23 independent directors shall express one of the following opinions on the above matters:
(I) consent;
(II) reservations and reasons;
(III) objections and reasons;
(IV) inability to express opinions and obstacles.
The independent opinions issued by independent directors on major matters shall at least include the following contents:
(I) basic information of major events;
(II) the basis for expressing opinions, including the procedures performed, verification documents, contents of on-site inspection, etc; (III) legality and compliance of major matters;
(IV) the impact on the rights and interests of the company and minority shareholders, possible risks and whether the measures taken by the company are effective;
(V) concluding observations. In case of reservations, objections or inability to express opinions on major matters, the relevant independent directors shall clearly explain the reasons.
The independent directors shall sign and confirm the independent opinions issued, and timely report the above opinions to the board of directors, which shall be disclosed together with the relevant announcements of the company.
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.
Article 24 independent directors shall submit an annual work report to the annual general meeting of shareholders of the company to explain their performance of duties and responsibilities. The contents of the annual work report shall at least include:
(I) the way, number and voting of attending the board of directors and the number of attending the general meeting of shareholders throughout the year;
(II) the situation of expressing independent opinions;
(III) on site inspection;
(IV) proposed convening of the board of directors, proposed employment or dismissal of accounting firms, independent employment of external audit institutions and consulting institutions, etc;
(V) other work done to protect the legitimate rights and interests of minority shareholders.
