Hainan Strait Shipping Co.Ltd(002320) : Announcement on continuous connected transactions with COSCO Shipping finance company in 2022

Stock abbreviation: Hainan Strait Shipping Co.Ltd(002320) Stock Code: Hainan Strait Shipping Co.Ltd(002320) Announcement No.: 202207 Hainan Strait Shipping Co.Ltd(002320)

About COSCO Shipping finance in 2022

Announcement of continuous connected transactions

The company and all members of the board of directors guarantee that the contents of the announcement are true, accurate and complete, and are liable for false records, misleading statements or major omissions in the announcement.

1、 Basic information of related party transactions

(I) overview of related party transactions

Hainan Strait Shipping Co.Ltd(002320) (hereinafter referred to as "the company") signed the financial service agreement with COSCO Shipping Group Finance Co., Ltd. (hereinafter referred to as "the finance company") in December 2021 in order to broaden the company's financing channels and reduce financing costs and financial expenses. The financial services agreement stipulates that the finance company will provide a series of financial services to the company within its business scope according to the requirements of the company and its subsidiaries. At present, the company and the finance company have carried out financial businesses such as deposits. In 2022, the company and its subsidiaries are expected to continue to develop a series of financial businesses such as survival and loans with the finance company. Now, in combination with the financial service related party transactions between the company and the finance company, the company estimates the continuous related party transactions with the finance company in 2022.

On March 9, 2022, the sixth meeting of the seventh board of directors of the company deliberated and adopted the proposal on continuous connected transactions with COSCO Shipping finance company in 2022 with 6 affirmative votes, 5 avoidance votes, 0 negative votes and 0 abstention votes. The controlling shareholder of the company, Hainan port and shipping Holding Co., Ltd. (hereinafter referred to as "port and shipping holding") and the finance company are both subsidiaries of COSCO Shipping Group. The finance company is an affiliated legal person. The conduct of the company and the finance company in carrying out financial service business constitutes a connected transaction. The directors of the company, Wang Shanhe, Lin Jian, Zhu huomeng, Li Hua and Li Jianchun, are affiliated directors and avoid voting when considering this proposal.

The related party transaction does not constitute a major asset reorganization stipulated in the administrative measures for major asset reorganization of listed companies, and does not need to be approved by other relevant external departments.

The above related party transactions must be approved by the general meeting of shareholders of the company, and the related shareholder Ganghang holdings will be listed in the shareholders' meeting

The motion was withdrawn from voting at the meeting.

(II) category and amount of estimated related party transactions

1. Daily maximum deposit balance of the company and its affiliated companies in the finance company (including accrued interest and handling charges)

No more than 4.3 billion yuan, which constitutes the highest deposit balance of 1.9 billion yuan in a single day, with a net operating cash flow of 24

Billion; The deposit interest rate shall not be lower than the similar deposit services stipulated by the people's Bank of China (hereinafter referred to as the "central bank") from time to time

The lower limit of interest rate and the interest rate of similar deposit services provided by independent commercial banks of China in the mainland.

2. The maximum total loan balance of the company and its affiliated companies in the finance company shall not exceed RMB 1 billion every day;

The loan interest rate shall not be higher than the upper limit of interest rate for similar loan services stipulated by the central bank from time to time and within the scope of independent commercial banks in China

The interest rate charged for similar loan services.

3. The credit line provided by the finance company to the company and its affiliated companies shall not exceed 1 billion yuan.

2、 Actual occurrence of related party transactions in 2021

At the end of 2021, the deposit balance of related party transactions between the company and its subsidiaries and financial companies was 636.99 million

Yuan, the loan balance is 0 billion yuan, and the interest income of the current year is 274434 million yuan.

Unit: RMB

Hainan Strait Shipping Co.Ltd(002320)

Summary of deposits, loans and other financial businesses involving COSCO Shipping Group Finance Co., Ltd. in 2021

Monetary unit: RMB

Name of interest items paid by the bank: the balance at the beginning of the next year is increased this year, and the interest and procedures charged for the decrease of the balance at the end of the year this year Cost expenditure

1、 Stored in COSCO Shipping

Group Finance Co., Ltd. 1185948994706165227206811774521798934636992638872342746036

Company deposit II. Loan from COSCO Shipping Group Finance Co., Ltd

(I) short term borrowings 3

Short 4 term loan from COSCO Shipping Group Finance Co., Ltd

(II) long term borrowings 5

Long term 6 loan from COSCO Shipping Group Finance Co., Ltd

3、 Basic information of related parties

1. Introduction to finance company

Name: COSCO Shipping Group Finance Co., Ltd

Address: 8th floor, No. 5299 Binjiang Avenue, Pudong New Area, Shanghai

Nature of enterprise: limited liability company (sole proprietorship of legal person)

Legal representative: Sun Xiaobin

Registered capital: 6 billion yuan

Unified social credit Code: 91310109698814339l

Date of establishment: December 30, 2009

Equity structure: COSCO holds 312082% and Cosco Shipping Development Company Limited(601866) holds 233840%. The remaining shares are held by Cosco Shipping Energy Transportation Co.Ltd(600026) and other member units.

Business scope:

Handle financial and financing consulting, credit assurance and related consulting and agency business for member units; Assist member units to realize the receipt and payment of transaction funds; Approved insurance agency business; Provide guarantee to member units; Handle entrusted loans between member units and entrusted investment of member units; Handle bill acceptance and discount for member companies; Handle the internal transfer settlement between member units and the corresponding settlement and clearing scheme design; Absorbing deposits from member units; Handle loans and financial leases for member units; Engage in interbank lending; Underwriting corporate bonds of member units; Securities investment; General derivatives trading business on behalf of customers (only limited to forward foreign exchange settlement and sales, forward foreign exchange trading, and agent trading of RMB and foreign exchange swap products initiated by customers).

(for projects subject to approval according to law, business activities can be carried out only after approval by relevant departments)

2. History, main business and relevant financial data

(1) History: COSCO Shipping Group Finance Co., Ltd., the predecessor of COSCO Shipping Group Finance Co., Ltd., was established on December 30, 2009. Due to the reorganization of China Ocean Shipping Co., Ltd. and China Shipping Group Co., Ltd. into China Ocean Shipping Group Co., Ltd., according to the reply of Bank Of China Limited(601988) Insurance Regulatory Commission on the equity change of China Shipping Group Finance Co., Ltd. and the absorption and merger of COSCO Finance Co., Ltd. (Yin Bao Jian Fu [2018] No. 75), China Shipping Group Finance Co., Ltd. was renamed "COSCO Shipping Group Finance Co., Ltd." on January 18, 2019.

(2) Main business

The finance company is a non bank financial institution established with the approval of Bank Of China Limited(601988) Insurance Regulatory Commission, and has all the business qualifications in Articles 28 and 29 of the measures for the administration of enterprise group finance companies. Provide financial services to the member units of the financial company in accordance with the laws and regulations on the financial company of the enterprise group. Including deposit services, credit services, clearing services, foreign exchange services, and other businesses that the finance company can engage in with the approval of Bank Of China Limited(601988) Insurance Regulatory Commission.

(3) Relevant financial data

According to the financial statements of COSCO, as of December 31, 2021, the monetary capital of the finance company (including the amount deposited with the central bank) was 70.871 billion yuan, including 63.560 billion yuan deposited with banks; In 2021, the finance company realized a net interest income of 2.198 billion yuan, a total profit of 456 million yuan and a net profit after tax of 340 million yuan. (the above data has not been audited).

3. Association description

The actual controllers of the company and the finance company are COSCO Shipping Group. According to the stock listing rules of Shenzhen Stock Exchange, the finance company is the affiliated legal person of the company, so the above transactions constitute affiliated transactions. 4、 Basic information of related party transactions

Within the approved business scope, the finance company provides a series of financial services according to the requirements of the company and its subsidiaries, including but not limited to deposit services, settlement services, loan services and other businesses that the finance company can engage in approved by the CBRC.

5、 Main contents and pricing basis of related party transactions

The interest rate at which the finance company absorbs deposits from group members of the company shall be determined in accordance with the principle of fairness and reasonableness with reference to the corresponding market interest rate (which refers to the interest rate determined by an independent third-party commercial bank to provide the same kind of deposit services in the same service location or adjacent areas according to normal commercial terms in its daily business); In addition to the foregoing, the interest rate of the finance company absorbing the deposits of the group members of the company shall also refer to the interest rate determined by the finance company absorbing the same kind of deposits of other units.

The interest rate of loans granted by the finance company to the company's member units shall be determined by reference to the corresponding market interest rate (which refers to the interest rate determined by the independent third-party commercial bank to provide the same kind of loan services in the same service location or adjacent areas according to normal commercial terms in daily business) in accordance with the principle of fairness and rationality; In addition to the foregoing, the interest rate of loans granted by the finance company to group members of the company shall also refer to the interest rate determined by the finance company for the same kind of loans granted by other units.

With regard to clearing services, unless otherwise stipulated by the CIRC, the finance company will not charge any fees from the company and its subsidiaries for the time being.

As for other services, including but not limited to foreign exchange services, the fees charged by the finance company for providing services to the company and its subsidiaries shall follow the following principles:

Refer to the handling fees charged by independent third-party commercial banks for providing the same type of services to members of the company group; Refer to the handling charges for the same service provided by the finance company to other third-party units with the same credit rating.

6、 Purpose of related party transactions and its impact on the company

The company and the finance company carry out financial service business, aiming to broaden the company's financing channels, reduce financing costs and financial expenses, disperse investment risks, obtain safe and efficient financial management services, and improve the efficiency of the company's capital use. At the same time, the non bank financial business engaged in by the finance company belongs to a part of the national financial system and is subject to the continuous and strict supervision of the national regulatory authorities. In addition, the financial service agreement signed between the company and the finance company stipulates that the pricing of various financial services provided by the finance company to the company shall follow the principle of fairness and rationality. Therefore, the company's financial service business with the finance company will not damage the interests of the company and its shareholders, especially the minority shareholders, and the interests of the company have been reasonably guaranteed.

As a subsidiary controlled by COSCO Shipping Group, the finance company has good assets and good credit. The company has established a risk assessment mechanism and formulated corresponding risk disposal plans to further ensure the safety of deposit and loan funds in the financial company, and can effectively prevent, timely control and resolve deposit and loan risks.

7、 Prior approval and independent opinions of independent directors

(I) prior approval opinions of independent directors

1. COSCO Shipping Group Finance Co., Ltd., as a normative non bank financial institution approved by Bank Of China Limited(601988) Insurance Regulatory Commission, provides financial services for the company and its subsidiaries within its business scope, which complies with the provisions of relevant national laws and regulations.

2. The company expects that the maximum deposit balance (including accrued interest and handling charges) of the company and its subsidiaries in the finance company will not exceed RMB 4.3 billion, the maximum total loan balance of the company and its subsidiaries in the finance company every day will not exceed RMB 1 billion, and the credit line provided by the finance company to the company and its subsidiaries will not exceed RMB 1 billion, In line with the company's capital stock and operation and investment needs in 2022, the financial services agreement signed between the company and COSCO Shipping Group Finance Co., Ltd. follows the principles of openness, fairness and impartiality, conducts transactions based on the principles of voluntariness, equality and mutual benefit, and the pricing is fair. The implementation of the above related party transactions is conducive to the sustainable and sound development of the company, It does not affect the independence of the company.

3. It is agreed to submit the continuous related party transactions with COSCO Shipping finance company in 2022 to the board of directors of the company for deliberation.

(II) independent opinions of independent directors

1. COSCO Shipping Group Finance Co., Ltd., as a normative non bank financial institution approved by Bank Of China Limited(601988) Insurance Regulatory Commission, provides financial services for the company and its subsidiaries within its business scope, which complies with the provisions of relevant national laws and regulations.

2. The company expects that the maximum deposit balance (including accrued interest and handling charges) of the company and its subsidiaries in the finance company will not exceed RMB 4.3 billion, the maximum total loan balance of the company and its subsidiaries in the finance company every day will not exceed RMB 1 billion, and the credit line provided by the finance company to the company and its subsidiaries will not exceed RMB 1 billion, In line with the company's capital stock and operation and investment needs in 2022, the financial services agreement signed between the company and COSCO Shipping Group Finance Co., Ltd. follows the principles of openness, fairness and impartiality, conducts transactions based on the principles of voluntariness, equality and mutual benefit, and the pricing is fair. The implementation of the above related party transactions is conducive to the sustainable and sound development of the company, It does not affect the independence of the company

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