PHANCY Releases Terms of Reference for Nomination Committee, Enhancing Board Governance Framework

Phancy Group Co., Ltd. (“PHANCY”) has issued the “Terms of Reference and Rules of Procedures of the Nomination Committee,” formalising the scope, composition, powers and operating rules of the Board-level Nomination Committee.

Key provisions:

• Committee structure: A minimum of three directors, with the majority being independent non-executive directors and at least one member of a different gender. An independent non-executive director chairs the Committee.

• Core responsibilities: – Annual review of Board structure, size, composition and diversity. – Recommendations on the nomination, appointment, re-appointment or removal of directors and senior management. – Assessment of the independence of independent non-executive directors. – Formulation and monitoring of nomination, diversity and broader corporate governance policies. – Oversight of Board performance evaluations and leadership succession plans.

• Operational authority: Direct access to senior management, the right to obtain adequate resources, and the ability to engage external professional advisers at the Company’s expense.

• Meeting procedures: A minimum of one meeting per year with three-day notice; quorum requires two members, including at least one independent non-executive director. Resolutions pass by simple majority, and detailed minutes must be retained for Board inspection.

• Reporting and disclosure: Committee recommendations are submitted to the Board, while director nominations require shareholder approval at a general meeting. The Committee chair attends annual general meetings to address shareholder questions.

• Effective date and amendments: The rules are effective upon Board approval and will also apply to PHANCY’s planned A-share listing on Shenzhen’s ChiNext. Any future amendments must be reviewed by the Committee and approved by the Board.

The framework aligns with the Company Law of the People’s Republic of China, the Securities Law and the Hong Kong Listing Rules, aiming to strengthen PHANCY’s corporate governance and ensure a systematic, transparent approach to Board appointments and succession planning.