Working system of independent directors of Beijing Fuyuan Pharmaceutical Co., Ltd. (revised in October 2025)
Working system of independent directors of Beijing Fuyuan Pharmaceutical Co., Ltd.
Chapter 1 General Provisions
Article 1 In order to further improve the governance structure of Beijing Fuyuan Pharmaceutical Co., Ltd. (hereinafter referred to as the "Company"), promote the company's standardized operations, and give full play to the role of independent directors, in accordance with the China Securities Regulatory Commission's "Administrative Measures for Independent Directors of Listed Companies" (hereinafter referred to as the "Administrative Measures"), "Shanghai Stock Exchange Stock Listing Rules" and "Shanghai Stock Exchange Self-Regulatory Supervision Guidelines for Listed Companies No. 1 - -Standardized Operations" and other laws, regulations, normative documents and relevant provisions of the "Articles of Association of Beijing Fuyuan Pharmaceutical Co., Ltd." (hereinafter referred to as the "Articles of Association"), this system is formulated.
Article 2 Independent directors refer to directors who do not hold other positions in the company other than directors, and have no direct or indirect interest relationship with the company, its major shareholders (those holding more than 5% of the company's shares, or shareholders who hold less than 5% of the shares but have a significant influence on the company), actual controllers, or other directors that may affect their independent and objective judgment. Independent directors shall perform their duties independently and shall not be influenced by the company, its major shareholders, actual controllers and other units or individuals.
Article 3 Independent directors have the duty of loyalty and diligence to the company and all shareholders. Independent directors should conscientiously perform their duties in accordance with the "Administration Measures", the Articles of Association, other laws, regulations and the requirements of this system, play a role in decision-making, supervision and balance, and professional consulting in the company's board of directors, safeguard the overall interests of the company, and pay special attention to the legitimate rights and interests of small and medium-sized shareholders from being harmed.
Article 4 The proportion of independent directors of a company shall not be less than one-third of the board of directors, and shall include at least one accounting professional. The company should set up an audit committee in the board of directors. The members of the audit committee shall be directors who do not serve as senior managers of the company, among whom the majority shall be independent directors, and the accounting professionals among the independent directors shall serve as the convener. The company may set up special committees such as nomination, remuneration and assessment, and strategic decision-making in the board of directors as needed. If the aforementioned committees are set up, independent directors shall constitute the majority of the nomination committee and the remuneration and assessment committee and serve as the convener.
Chapter 2 Conditions for serving as independent directors
Article 5 To serve as an independent director of a company, one must meet the following qualifications:
(1) Qualified to serve as a director of a listed company in accordance with laws, administrative regulations and other relevant provisions;
(2) Have the independence required by the Management Measures and this system;
(3) Have basic knowledge of the operation of listed companies and be familiar with relevant laws, regulations and rules;
(4) Have more than five years of legal, accounting or economic work experience necessary to perform the duties of an independent director;
(5) Have good personal moral character: He has not been subject to administrative punishment by the China Securities Regulatory Commission or criminal punishment by judicial authorities for securities and futures violations in the past 36 months; he has not been investigated by the China Securities Regulatory Commission or judicial authorities for suspected securities and futures violations, and there has been no clear conclusion. ; has not been publicly condemned by the stock exchange or criticized three times or more in the past thirty-six months; has not been dismissed by the board of directors due to failure to attend two consecutive board meetings in person or to entrust other independent directors to attend board meetings during the past 12 months; and has no bad records such as major breach of trust;
(6) Other conditions stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission, business rules of stock exchanges and the Articles of Association.
Article 6 In principle, independent directors can serve as independent directors in up to three domestic listed companies, and should ensure that they have sufficient time and energy to effectively perform their duties as independent directors of the company.
Article 7 Independent director candidates nominated as accounting professionals shall have extensive accounting professional knowledge and experience, and meet at least one of the following conditions:
(1) Possess the qualification of certified public accountant;
(2) Have a senior professional title, associate professor or above, or a doctoral degree in accounting, auditing or financial management;
(3) Have a senior professional title in economic management and have more than five years of full-time work experience in professional positions such as accounting, auditing or financial management.
Chapter 3 Independence of Independent Directors
Article 8 Independent directors must maintain their independence. The following persons are not allowed to serve as independent directors:
(1) Persons working in the company or company-affiliated enterprises (referring to enterprises directly or indirectly controlled by the company) and their spouses, parents, children, and major social relationships (referring to brothers and sisters, spouses of brothers and sisters, parents of spouses, brothers and sisters of spouses, spouses of children, parents of children’s spouses, etc.);
(2) Directly or indirectly hold more than 1% of the company’s issued shares or are natural person shareholders and their spouses, parents, and children among the top ten shareholders of the company;
(3) Shareholders who directly or indirectly hold more than 5% of the company’s issued shares or persons who hold positions among the top five shareholders of the company and their spouses, parents, and children;
(4) Personnel working in affiliated enterprises of the company’s controlling shareholder or actual controller and their spouses, parents, and children;
(5) Persons who have major business dealings with the company, its controlling shareholders, actual controllers or their respective subsidiaries (referring to transactions, business and other matters that need to be submitted to the company’s shareholders’ meeting for review), or persons who work in units with major business dealings and their controlling shareholders or actual controllers;
(6) Personnel who provide financial, legal, consulting, sponsorship and other services to the company and its controlling shareholders, actual controllers or their respective affiliated enterprises, including but not limited to all members of the project team of the intermediary agency providing services, reviewers at all levels, persons who signed the report, partners, directors, senior managers and principal persons in charge;
(7) Persons who have had the circumstances listed in items 1 to 6 in the past twelve months;
(8) Other personnel who are not independent as stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission, business rules of stock exchanges and the Articles of Association.
Article 9 Independent directors shall conduct self-examinations on their independence every year and submit the self-examination results to the company's board of directors. The company's board of directors should evaluate the independence of serving independent directors every year and issue special opinions, which should be disclosed together with the company's annual report.
Article 10 If an independent director of the company fails to meet the conditions for independence, the relevant independent director shall immediately stop performing his duties and the company shall remove him from his position in accordance with the corresponding regulations. The relevant independent director shall be removed from his office but has not yet been removed. If he participates in and votes at meetings of the board of directors and its special committees, and special meetings of independent directors, his vote shall be invalid.
Chapter 4 Nomination, Election and Replacement of Independent Directors
Article 11 The company’s board of directors, audit committee, and shareholders individually or collectively holding more than 1% of the company’s issued shares may propose candidates for independent directors, who shall be elected and decided by the shareholders’ meeting. The above-mentioned nominator shall not nominate persons who have an interest in him or persons who have other close relations that may affect the independent performance of his duties as independent director candidates. Investor protection institutions established in accordance with the law may publicly request shareholders to entrust them to exercise the right to nominate independent directors on their behalf.
Article 12 The nominee of an independent director shall obtain the consent of the nominee before nomination. The nominator should fully understand the nominee's occupation, education, professional title, detailed work experience, all part-time jobs, etc., and express opinions on his/her independence and other conditions for serving as an independent director. The nominee shall make a public statement regarding his/her independence and other conditions for serving as an independent director.
Article 13 If a company sets up a nomination committee in the board of directors, the nomination committee shall review the qualifications of the nominees and formulate clear review opinions.
Article 14 Before the shareholders' meeting to elect independent directors, the company's board of directors shall review the relevant qualifications of the nominees and disclose the detailed information of the independent director candidates, and submit the relevant materials of all independent director candidates to the stock exchange. The relevant submitted materials shall be true, accurate and complete. The stock exchange shall review relevant materials of independent director candidates in accordance with regulations, prudently determine whether independent director candidates meet the qualifications and have the right to raise objections. If the stock exchange raises objections, the company shall not submit to the shareholders' meeting for election. If it has been submitted to the shareholders' meeting for review, the proposal should be cancelled.
Article 15 When a company's shareholders' meeting elects two or more independent directors, a cumulative voting system shall be implemented, and the voting results of small and medium shareholders on such proposals shall be counted separately and disclosed.
Article 16 The term of each independent director is the same as that of other directors of the company. When the term expires, he or she may be re-elected, but the term of re-election shall not exceed six years. An independent director who has served the company continuously for six years shall not be nominated as a candidate for the company's independent director within thirty-six months from the date of occurrence of this fact.
Article 17 The company may remove independent directors from their posts in accordance with legal procedures before their term of office expires. If an independent director is dismissed from his position in advance, the company shall disclose the specific reasons and basis in a timely manner. If an independent director has any objection, the company shall disclose it in a timely manner.
Article 18 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, explaining any circumstances related to his resignation or that he deems necessary to attract the attention of the company's shareholders and creditors. The company should disclose the reasons for the resignation of independent directors and matters of concern. If the resignation of an independent director will result in the proportion of independent directors on the board of directors or its special committee not complying with the provisions of this system or the Articles of Association, or if there is a lack of accounting professionals among the independent directors, the independent director who intends to resign shall continue to perform his duties until the date of the appointment of the new independent director. The company shall complete the by-election within 60 days from the date of resignation of the independent director.
Article 19 If an independent director fails to attend two consecutive board meetings in person or entrust other independent directors to attend the board of directors' meeting, the board of directors shall propose to convene a shareholders' meeting to remove the independent director from his duties within 30 days from the date of occurrence of this fact.
Article 20 If an independent director fails to comply with the provisions of Paragraph 1 or Paragraph 2 of Article 5 of this System, he shall immediately stop performing his duties and resign from his position. If a person fails to resign, the board of directors shall immediately dismiss him or her from office after becoming aware or should be aware of the fact. If an independent director resigns or is dismissed due to the above-mentioned circumstances, resulting in the proportion of independent directors on the board of directors or its special committees not complying with the provisions of this system or the Articles of Association, or there is a lack of accounting professionals among independent directors, the company shall complete the by-election within 60 days from the date of the occurrence of the above-mentioned facts.
Chapter 5 Responsibilities and performance methods of independent directors
Article 21 As a member of the board of directors, independent directors have a duty of loyalty and diligence to the company and all shareholders, and prudently perform the following duties:
(1) Participate in the decision-making of the board of directors and express clear opinions on the matters discussed;
(2) Supervise potential major conflicts of interest between the companies listed in Articles 23, 26, 27 and 28 of the "Administrative Measures" and their controlling shareholders, actual controllers, directors and senior managers, urge the board of directors to make decisions that are in line with the overall interests of the company, and protect the legitimate rights and interests of small and medium-sized shareholders;
(3) Provide professional and objective suggestions on the company’s business development and promote the improvement of the board’s decision-making level;
(4) Other duties stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and the Articles of Association.
Article 22 Independent directors shall exercise the following special powers:
(1) Independently hire intermediaries to audit, consult or verify specific matters of the company;
(2) Propose to the board of directors to convene an extraordinary shareholders’ meeting;
(3) Proposing to convene a board meeting;
(4) Publicly solicit shareholder rights from shareholders in accordance with the law;
(5) Express independent opinions on matters that may damage the rights and interests of the company or small and medium-sized shareholders;
(6) Other powers stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and the Articles of Association.
The exercise of the powers listed in items 1 to 3 of the preceding paragraph by independent directors shall be subject to the consent of more than half of all independent directors.
If an independent director exercises the powers listed in paragraph 1, the company shall disclose it in a timely manner. If the above powers cannot be exercised normally, the company shall disclose the specific circumstances and reasons.
Article 23 Before a board meeting, independent directors may communicate with the board secretary to inquire about matters to be considered, request supplementary materials, and provide opinions and suggestions, etc. The board of directors and relevant personnel should carefully study the issues, requirements and opinions raised by the independent directors, and provide timely feedback to the independent directors on the implementation status of amendments to the proposals.
Article 24 If an independent director expresses an independent opinion, the opinion expressed shall be clear and clear, and shall at least include the following contents:
(1) Basic information on relevant matters;
(2) The basis for expressing opinions, including the procedures performed, documents verified, contents of on-site inspections, etc.;
(3) Legality and compliance of relevant matters;
(4) The impact on the rights and interests of the company and small and medium-sized shareholders, possible risks, and whether the measures taken by the company are effective;
(5) Concluding opinions issued, including concurring opinions, reservations and their reasons, objections and their reasons, inability to express opinions and their obstacles.
Independent directors should sign and confirm the independent opinions issued, report the above opinions to the board of directors in a timely manner, and disclose them at the same time as the company's relevant announcements.
Article 25 Independent directors shall attend board meetings and special committee meetings in person. If he is unable to attend the aforementioned meeting in person for any reason, the independent director shall review the meeting materials in advance, form a clear opinion, and entrust other independent directors in writing to attend on his behalf.
Article 26 If an independent director votes against or abstains from voting on a proposal of the board of directors, he shall explain the specific reasons and basis, the legality and compliance of the matters involved in the proposal, possible risks, and the impact on the rights and interests of the company and small and medium-sized shareholders. When a company discloses board resolutions, it shall also disclose the dissenting opinions of independent directors and state them in the board resolutions and meeting minutes.
Article 27 The following matters shall be submitted to the board of directors for review after being approved by more than half of all independent directors of the company:
(1) Related transactions that should be disclosed;
(2) Plans for the company and relevant parties to change or waive their commitments;
(3) If the company is acquired, the decisions made and measures taken by the company’s board of directors regarding the acquisition;
(4) Other matters stipulated in laws, administrative regulations, provisions of the China Securities Regulatory Commission and the Articles of Association.
Article 28 The company shall regularly or irregularly hold meetings attended by all independent directors (hereinafter referred to as "special meetings of independent directors"). Items 1 to 3 of Paragraph 1 of Article 22 of this System,
The matters listed in Article 27 shall be reviewed by a special meeting of independent directors.
Article 29 A special meeting of independent directors shall be convened and presided over by an independent director jointly elected by more than half of the independent directors. If the convener fails or is unable to perform his duties, two or more independent directors may convene and preside over the meeting by nominating a representative.
Minutes of special meetings of independent directors shall be made in accordance with regulations, and the opinions of independent directors shall be stated in the minutes. Independent directors should sign and confirm the meeting minutes.
The company provides convenience and support for the convening of special meetings of independent directors.
Article 30 Independent directors shall work on-site at the company for no less than fifteen days each year. Independent directors should make work records and record in detail the performance of their duties. The work records of independent directors and the information provided by the company to independent directors must be kept for at least ten years.
Article 31 Independent directors shall submit an annual work report to the company's annual shareholders' meeting, explaining the performance of their duties. The annual performance report of independent directors shall be disclosed at the latest when the company issues notice of the annual shareholders' meeting.
The annual work report should include the following contents:
(1) Number of attendances at the board of directors, methods and voting conditions, and number of attendances at shareholders’ meetings;
(2) Participation in the work of special committees of the board of directors and special meetings of independent directors;
(3) The "Management Measures" and other laws, regulations and regulatory requirements require independent directors to review and exercise this system
The special powers of independent directors listed in Article 22;
(4) Major matters, methods and results of communication with the internal audit institution and the accounting firm that undertakes the company’s audit business regarding the company’s financial and business conditions;
(5) Communication status with small and medium-sized shareholders;
(6) The time, content, etc. of working on-site at the company;
(7) Other circumstances in the performance of duties.
Article 32 If any of the following circumstances occurs, independent directors shall report to the stock exchange in a timely manner:
(1) Being dismissed from office by the company and I believe that the reason for the dismissal is improper;
(2) The independent director resigns due to circumstances in the company that prevent the independent director from exercising his powers in accordance with the law;
(3) The board meeting materials are incomplete, insufficiently demonstrated or not provided in a timely manner, and two or more independent directors’ written requests to postpone the board meeting or postpone the review of relevant matters are not adopted;
(4) After reporting suspected violations of laws and regulations by the company or its directors and senior managers to the board of directors, the board of directors fails to take effective measures;
(5) Other circumstances that seriously hinder independent directors from performing their duties.
Article 33 In addition to performing the duties stipulated in this system, independent directors shall also express independent opinions on matters that may damage the rights and interests of the company or small and medium-sized shareholders upon timely notification by the company.
Chapter Six Duty Performance Guarantees
Article 34 The company shall ensure that independent directors have the same right to know as other directors. In order to ensure that independent directors effectively exercise their powers, the company should regularly inform independent directors of the company's operations, provide information, and organize or cooperate with independent directors to conduct on-site inspections and other work.
Article 35 The company shall provide necessary working conditions and personnel support for independent directors to perform their duties, and designate specialized departments and personnel such as the board of directors' office and board secretary to assist independent directors in performing their duties. The secretary of the board of directors shall ensure smooth flow of information between independent directors and other directors, senior managers and other relevant personnel, and ensure that independent directors have access to sufficient resources and necessary professional advice when performing their duties.
Article 36 The company shall promptly issue board meeting notices to independent directors, provide relevant meeting materials no later than the notice period for board meetings stipulated in laws, regulations or the Articles of Association, and provide independent directors with effective communication channels; if a special committee of the board of directors convenes a meeting, the company shall, in principle, provide relevant materials and information no later than three days before the special committee meeting. The company shall keep the above meeting materials for at least ten years.
Article 37 If two or more independent directors believe that the meeting materials are incomplete, insufficiently demonstrated or not provided in a timely manner, they may submit a written proposal to the board of directors to postpone the meeting or postpone the consideration of the matter, and the board of directors shall adopt it.
Article 38 In principle, meetings of the Board of Directors and special committees shall be held on site. On the premise of ensuring that all participating directors can fully communicate and express their opinions, the meeting may be held by video, telephone or other means in accordance with procedures when necessary.
Article 39 When independent directors exercise their powers, the company's directors, senior managers and other relevant personnel shall cooperate and shall not refuse, obstruct or conceal relevant information, or interfere with independent directors' independent exercise of their powers. If independent directors encounter obstacles in exercising their powers in accordance with the law, they may explain the situation to the board of directors, require directors, senior managers and other relevant personnel to cooperate, and record the specific circumstances and resolution of the obstacles in their work records.
Article 40 The fees for independent directors to hire professional institutions and other expenses necessary for the exercise of their powers shall be borne by the company.
Article 41 The company shall provide independent directors with allowances commensurate with their responsibilities. The standard of allowance shall be formulated by the board of directors, reviewed and approved by the shareholders' meeting, and disclosed in the company's annual report. In addition to the above-mentioned allowances, independent directors shall not obtain other benefits from the company, its major shareholders, actual controllers or interested units and personnel.
Article 42 The company may establish a necessary independent director liability insurance system to reduce the risks that may arise from the normal performance of duties by independent directors.
Chapter 7 Supplementary Provisions
Article 43 Matters not covered by this system shall be implemented in accordance with relevant national laws, administrative regulations, normative documents and the relevant provisions of the Articles of Association. If there is a conflict between this system and the relevant national laws, regulations, normative documents and the Articles of Association, the relevant national laws, regulations, normative documents and the Articles of Association shall prevail.
Article 44 This system is formulated and interpreted by the Board of Directors. It will come into effect upon review and approval by the Board of Directors, and the same applies to modifications.
Beijing Fuyuan Pharmaceutical Co., Ltd.
October 2025