Working system of independent directors
Chapter I General Provisions
Article 1 in order to further improve the corporate governance structure and promote the standardized operation of the company, this system is hereby formulated in accordance with the relevant provisions of the company law of the people’s Republic of China, the rules for independent directors of listed companies, the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 1 – standardized operation of listed companies on the main board and the Shanghai Step Electric Corporation(002527) articles of Association (hereinafter referred to as the “articles of association”).
Chapter II Conditions of appointment and independence of independent directors
Article 2 an independent director of the company 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 and safeguard the overall interests of the company in accordance with relevant laws and regulations, the rules for independent directors of listed companies and the articles of association, especially pay attention to the legitimate rights and interests of minority shareholders.
Independent directors shall be independent. The performance of the duties of the company’s independent shareholders, independent directors or other major interested persons shall not be affected by the company’s actual relationship with the company’s independent shareholders or individuals.
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 as independent directors.
Article 4 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 requirements of the CSRC.
Article 5 an independent director shall meet the following basic conditions:
(I) be qualified to serve as an independent director of a listed company in accordance with laws, administrative regulations and other relevant provisions;
(II) the independence required by the rules for independent directors of listed companies;
(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 necessary to perform the duties of independent directors;
(V) other conditions stipulated in the articles of association.
Article 6 the following persons 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 (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) 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) 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) persons who have served as independent directors in more than five (including five) other companies;
(IX) other personnel specified in the articles of Association;
(x) other personnel recognized by China Securities Regulatory Commission and Shenzhen Stock Exchange (hereinafter referred to as “Shenzhen Stock Exchange”).
Article 7 candidates for independent directors shall not be under the following circumstances:
(I) circumstances under which the company law stipulates that he shall not serve as a director;
(II) the market entry prohibition measures taken by the CSRC not to serve as directors of listed companies have not expired;
(III) being publicly recognized by the stock exchange as unfit to serve as a director of a listed company, and the term has not expired; (IV) other circumstances stipulated by laws and regulations and Shenzhen Stock Exchange.
Article 8 the company has three independent directors, including at least one accounting professional. Among them, those nominated as independent director candidates as accounting professionals 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;
At least 5 years of full-time working experience in accounting and management.
Chapter III nomination, election and replacement of independent directors
Article 9 the nomination, election and replacement of independent directors shall be standardized according to law:
(I) 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.
(II) the nominee of an independent director shall obtain the written 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 and objective judgment.
(III) before the general meeting of shareholders to elect independent directors is held, the board of directors of the company shall publish relevant contents in accordance with item (II) of this article and submit relevant materials of 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. Nominees who have objections from the securities regulatory authorities shall not be candidates for independent directors.
(IV) the company shall disclose the details of the candidates for independent directors before the shareholders’ meeting to ensure that the shareholders have enough knowledge of the candidates when voting.
(V) the term of office of independent directors is the same as that of other directors of the company. Upon expiration of their term of office, they can be re elected, but the term of re-election shall not exceed six years.
(VI) 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.
(VII) independent directors may resign before the expiration of their 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. If the proportion of independent directors in the board of directors of the company is lower than the minimum requirements specified in the rules for independent directors of listed companies due to the resignation of independent directors, the resignation report of the independent director shall take effect after the next independent director fills the vacancy.
(VIII) if an independent director fails to meet the conditions for independence during his term of office, the relevant independent director shall immediately stop performing his duties and be dismissed by the company in accordance with the corresponding provisions. If the relevant independent director should be dismissed but has not been dismissed, his vote will be invalid if he participates in the meeting of the board of directors and votes.
Chapter IV rights and obligations of independent directors
Article 10 in addition to the functions and powers entrusted to the directors by the company law and other relevant laws and regulations, the company shall entrust the independent directors with the following special functions and powers:
(I) major connected transactions (connected transactions between the company and connected natural persons with a transaction amount of more than 300000 yuan; connected transactions between the company and connected legal persons with a transaction amount of more than 3 million yuan and accounting for more than 0.5% of the absolute value of the company’s latest audited net assets) shall be submitted to the board of directors for discussion after being approved by independent directors; Independent directors can hire intermediaries to issue special reports before making judgments;
(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) solicit the opinions of minority shareholders, put forward profit distribution proposals and directly submit them to the board of directors for deliberation; (V) propose to convene the board of directors;
(VI) publicly solicit voting rights from shareholders before the general meeting of shareholders;
(VII) independently employ external audit institutions and consulting institutions to audit and consult the specific matters of the company;
(VIII) other functions and powers specified in the articles of association.
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. 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.
Items (I) and (II) of paragraph 1 of this article can be submitted to the board of directors for discussion only after more than half of the independent directors agree.
Article 11 if the proposals listed in paragraph 1 of Article 10 of the independent director are not adopted or the functions and powers cannot be normally exercised, the company shall disclose the relevant information.
Article 12 for the proposal of independent directors to convene an extraordinary general meeting of shareholders, the board of directors shall, in accordance with the provisions of laws, administrative regulations and the articles of association, give written feedback on whether to agree or disagree to convene an extraordinary general meeting of shareholders within 10 days after receiving the proposal. If the board of directors agrees to convene an extraordinary general meeting of shareholders, it will issue a notice of convening the general meeting of shareholders within 5 days after the resolution of the board of directors is made; If the board of directors does not agree to convene an extraordinary general meeting of shareholders, it shall explain the reasons.
Article 13 independent directors shall be responsible to all shareholders and focus on the legitimate rights and interests of minority shareholders. In addition to performing the general duties of directors, independent directors express independent opinions in writing on the following matters:
(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) 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;
（11） Related party transactions that need to be disclosed, providing guarantees (excluding guarantees for subsidiaries within the scope of consolidated statements), entrusted financial management, providing financial assistance, matters related to the use of raised funds, stock and Derivative Investment 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 parties of the company;
（13） The company plans to decide that its shares will no longer be traded on the Shenzhen Stock Exchange;
（14） Matters that independent directors believe may damage the legitimate rights and interests of minority shareholders;
（15） Other matters stipulated by relevant laws and regulations, relevant provisions of Shenzhen Stock Exchange and the articles of association.
The types of independent opinions expressed by independent directors include consent, reservation and its reasons, objection and its reasons, inability to express opinions and its obstacles, and the opinions expressed shall be clear and clear.
Article 14 the independent opinions issued by independent directors on the major matters in the preceding Article 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.
Article 15 independent directors have the obligation of integrity 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 non infringement of the legitimate rights and interests of minority shareholders.
Article 16 independent directors shall perform their duties independently and shall not be affected by the company’s major shareholders, actual controllers, or other units or individuals having an interest in the company.
Article 17 in order to ensure the effective exercise of functions and powers by independent directors, the company provides the following conditions for independent directors:
(I) ensure 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. For any matter that needs to be decided by the board of directors, the independent directors must be notified in advance according to the legal time, and sufficient information must be provided at the same time. If the independent directors think the information is insufficient, they can ask for supplement. When two or more independent directors consider that the information is insufficient or the argument is unclear, they can jointly propose in writing to the board of directors to postpone the convening of the board meeting or the deliberation of the matter, which shall be adopted by the board of directors, and the company shall disclose the relevant information in time. 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.
(II) the Secretary of the board of directors shall actively assist the independent directors in performing their duties, such as introducing the situation, providing materials, etc.
(III) when independent directors exercise their functions and powers, relevant personnel of the company shall actively cooperate, and shall not refuse, hinder or conceal, or interfere with their independent exercise of functions and powers.
(IV) the company shall bear the expenses for the independent director to hire an intermediary and other expenses required for the exercise of his / her functions and powers.
(V) with the approval of the general meeting of shareholders, the company shall give appropriate allowances to independent directors. In addition to the above allowances, independent directors shall not obtain additional and undisclosed interests from the company, its major shareholders or interested institutions and personnel.
(VI) the company will establish necessary independent director liability insurance system when conditions are met to reduce the risks that may be caused by the normal performance of duties by independent directors.
Article 18 If an independent director finds that the company has one of the following problems, he shall actively perform the obligation of due diligence and report to the Shenzhen Stock Exchange in time. If necessary, he shall hire an intermediary to conduct special investigation:
(I) important matters
