Midea Group Co.Ltd(000333) independent director working system
April 2022
catalogue
Chapter I General Provisions- 1 –
Chapter II Conditions of appointment and independence of independent directors- 1 –
Chapter III nomination, election and replacement of independent directors- 2 –
Chapter IV rights and obligations of independent directors- 3 –
Chapter V necessary conditions for independent directors to perform their duties- 7 –
Chapter VI Supplementary Provisions- 8 –
Working system of independent directors
Chapter I General Provisions
Article 1 in order to standardize the procedures of independent directors of Midea Group Co.Ltd(000333) (hereinafter referred to as “the company”), ensure the work efficiency and scientific decision-making of independent directors, promote the standardized operation of the company, and protect the legitimate rights and interests of all shareholders, especially minority shareholders, from infringement, in accordance with the company law of the people’s Republic of China (hereinafter referred to as “the company law”) This system is formulated in accordance with the securities law of the people’s Republic of China, the Midea Group Co.Ltd(000333) 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 integrity and diligence to the company and all shareholders, earnestly perform their duties in accordance with relevant laws and regulations, the rules for independent directors of listed companies and the articles of association, safeguard the overall interests of the company, and pay special attention to the legitimate rights and interests of minority shareholders. Independent directors shall perform their duties independently and shall not be affected by the major shareholders, actual controllers, or interested units and individuals of the listed company. And ensure that there is enough time and energy to effectively perform the duties of independent directors.
Independent director candidates can concurrently serve as independent directors in up to five domestic and foreign listed companies, and ensure that they have enough time and energy to effectively perform their duties as independent directors.
Chapter II Conditions of appointment and independence of independent directors
Article 4 independent directors shall meet the following basic conditions:
(I) be qualified to serve as a director of a listed company in accordance with laws, administrative regulations and other relevant provisions; (II) have the independence required by the rules for independent directors of listed companies, the articles of association and other laws, regulations and normative documents;
(III) have basic knowledge of the operation of listed companies and be familiar with relevant laws, administrative regulations, rules and regulations;
(IV) more than five years of working experience in law, economics or necessary for performing 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 and its authorized institutions in accordance with the provisions.
Article 5 independent directors must be independent, and 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 major social relations (major social relations refer to brothers and sisters, parents of spouses, spouses of children, spouses of brothers and sisters, brothers and sisters of spouses);
(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 10 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 have had the situations listed in the preceding three items in the most recent year;
(V) personnel who provide financial, legal and consulting services for the company or its affiliated enterprises;
(VI) other personnel specified in the articles of Association;
(VII) other personnel recognized by the CSRC.
Chapter III nomination, election and replacement of independent directors
Article 6 the independent directors of the company account for at least one-third of the members of the board of directors, and the independent directors include at least one accounting professional (accounting professional refers to the person with senior professional title or certified public accountant qualification). Article 7 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 8 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 make a public statement on any relationship that affects his independent and objective judgment.
Article 9 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.
Article 10 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.
Article 11 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. If the proportion of independent directors in the board of directors of the company is less than one-third due to the resignation of independent directors, or the number of members of the board of directors is less than the minimum specified in the statutory or the articles of association, the resignation report of the independent director shall take effect after the next independent director fills his vacancy. Before the resignation report takes effect, he shall still perform his duties in accordance with laws, administrative regulations, the articles of association and the system. The board of directors of the company 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 director may no longer perform his duties.
Article 12 the board of directors of the company has a strategy, nomination, remuneration and assessment and audit committee. Independent directors shall serve in each committee, and independent directors shall account for a majority of the members of the nomination, remuneration and assessment and audit committee and act as the convener. At least one independent director in the audit committee shall be an accounting professional. Chapter IV rights and obligations of independent directors
Article 13 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 and more than 0.5% of the company’s recently audited net asset value) shall be submitted to the board of directors for discussion after being approved 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;
(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 proposals on profit distribution and conversion of capital reserve into share capital, and directly submit them to the board of directors for deliberation;
(V) propose to convene the board of directors;
(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.
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) above; The exercise of the functions and powers mentioned in Item 7 above shall be subject to the consent of all independent directors.
Items (I) and (II) of paragraph 1 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 are not adopted or the above functions and powers cannot be normally exercised, the listed company shall disclose the relevant information.
Article 14 in addition to performing the above duties, 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 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 submitted to the board of directors for consideration, providing guarantees (except for providing guarantees to subsidiaries within the scope of consolidated statements), entrusted financial management, providing financial assistance, matters related to the use of raised funds, the company’s independent change of accounting policies, investment in stocks and their derivatives and other major events;
（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 listed companies;
（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 rights and interests of minority shareholders;
（15） Other matters specified in the articles of association and relevant regulatory authorities.
Independent directors shall express one of the following opinions on the above matters: agree; Reservations and their reasons; Objections and their reasons; Inability to express opinions and its obstacles.
Article 15 the independent opinions issued by independent directors on major matters shall at least include the following contents: (I) basic information of major matters;
(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 listed companies and minority shareholders, possible risks and whether the measures taken by the company are effective;
(V) make 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 16 the company shall keep the independent opinions expressed by independent directors on file. 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 17 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) important matters 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 rights and interests of public shareholders.
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 18 in addition to attending the meetings of the board of directors, independent directors shall use a certain time every year to conduct on-site inspection on the 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 19 under any of the following circumstances, the independent director shall make a public statement:
(I) being removed from office by the company and in my opinion having improper reasons for removal;
(II) the independent director resigns due to the company’s situation that hinders the independent director from exercising his functions and powers according to law;
(III) when the meeting materials of the board of directors are insufficient, the proposal of two or more independent directors in writing to postpone the meeting of the board of directors or postpone the consideration of relevant matters is not adopted;
(IV) the board of directors fails to take effective measures after reporting the company’s suspected violations to the board of directors;
(V) other circumstances that seriously hinder independent directors from performing their duties.
Article 20 independent directors shall submit a work report to the annual general meeting of shareholders of the company, which shall include the following contents:
(I) ways, times and voting of attending the board of directors throughout the year, and times of attending the general meeting of shareholders as nonvoting delegates;
(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.
Chapter V necessary conditions for independent directors to perform their duties
Article 21 independent directors enjoy the same right to know as other directors. The company must notify the independent directors in advance of the major matters that need to be decided by the board of directors 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. When two or more independent directors consider that the information is insufficient or the argument is unclear, they may jointly propose in writing to postpone the convening of the board of directors or postpone the deliberation of some matters discussed by the board of directors, which shall be adopted by the board of directors. The information provided by the company to the independent directors and the information provided by the independent directors to the company shall be kept by the company and the independent directors themselves for at least 5 years.
Article 22 the company shall provide the working conditions necessary for independent directors to perform their duties. The Secretary of the board of directors of the company shall actively assist the independent directors in performing their duties, such as introducing the situation, providing materials, etc. Regularly report the operation of the company and organize independent directors if necessary
