Jiangsu Shagang Co.Ltd(002075)
Related party transaction management system
Chapter I General Provisions
Article 1 in order to ensure that the related party transactions between Jiangsu Shagang Co.Ltd(002075) (hereinafter referred to as “the company”) and related parties comply with the principles of fairness, impartiality and openness, and ensure that the related party transactions of the company do not damage the legitimate rights and interests of the company and non related shareholders, In accordance with the company law of the people’s Republic of China, the securities law of the people’s Republic of China, the stock listing rules of Shenzhen Stock Exchange (hereinafter referred to as the “Stock Listing Rules”), the self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 7 – transactions and related party transactions and other relevant laws and regulations This system is formulated in accordance with the relevant provisions of normative documents and Jiangsu Shagang Co.Ltd(002075) articles of Association (hereinafter referred to as the “articles of association”).
Article 2 related party transactions between the company and related parties shall comply with the relevant provisions of this system in addition to the provisions of relevant laws, regulations, normative documents and the articles of association.
Chapter II related persons and related relationships
Article 3 affiliated persons of the company include affiliated legal persons (or other organizations) and affiliated natural persons.
Article 4 a legal person or other organization under any of the following circumstances shall be an affiliated legal person (or other organization) of the company:
(I) legal person (or other organization) that directly or indirectly controls the company;
(II) legal persons (or other organizations) other than the company and its holding subsidiaries directly or indirectly controlled by the legal persons (or other organizations) mentioned in the preceding paragraph;
(III) legal persons (or other organizations) other than the company and its holding subsidiaries that are directly or indirectly controlled by the affiliated natural persons of the company listed in Article 5 of the system, or serve as directors (excluding independent directors of both parties) and senior managers;
(IV) legal persons (or other organizations) holding more than 5% of the shares of the company and their persons acting in concert;
(V) other legal persons (or other organizations) identified by the CSRC, Shenzhen Stock Exchange or the company according to the principle of substance over form, which have a special relationship with the company and may or have caused the company to favor its interests.
If the company and the legal person (or other organization) listed in Item (II) of this article are controlled by the same state-owned assets management institution and form the situation described in this item, it does not constitute a related relationship, except that its legal representative, chairman, general manager or more than half of the directors concurrently serve as directors, supervisors or senior managers of the company.
Article 5 a natural person under any of the following circumstances shall be an affiliated natural person of the company:
(I) natural persons who directly or indirectly hold more than 5% of the shares of the company;
(II) directors, supervisors and senior managers of the company;
(III) directors, supervisors and senior managers of legal persons or other organizations that directly or indirectly control the company;
(IV) close family members of the persons mentioned in items (I) and (II) of this article, including spouses, parents and parents of spouses, brothers and sisters and their spouses, children over the age of 18 and their spouses, brothers and sisters of spouses and parents of children’s spouses;
(V) other natural persons identified by China Securities Regulatory Commission, Shenzhen Stock Exchange or the company as having special relationship with the company and may or has caused the company to favor its interests according to the principle of substance over form.
Article 6 a legal person (or other organization) or natural person under any of the following circumstances shall be deemed to be an affiliate of the company:
(I) due to signing an agreement or making an arrangement with the company or its affiliates, after the agreement or arrangement takes effect or within the next 12 months, it has one of the circumstances specified in Article 4 or 5 of this system;
(II) one of the situations specified in Article 4 or Article 5 of the system has occurred in the past 12 months. Article 7 related relationships mainly refer to the ways or means that have the ability to directly or indirectly control or exert significant influence on the company in financial and business decisions, including but not limited to the equity relationship, personnel relationship, management relationship and commercial interest relationship between related parties and the company.
Article 8 the affiliated relationship shall be substantially judged from the specific ways, ways and extent of the affiliated person’s control or influence on the company.
The company’s directors, supervisors, senior managers, shareholders holding more than 5% of the shares and their persons acting in concert and actual controllers shall timely submit the list of relevant connected persons and the description of their relationship to the company’s board of directors, and the company shall do a good job in registration management, And timely fill in or update the list of related persons and related relationship information of the company through the business management system of the website of Shenzhen Stock Exchange.
When the company and its subordinate holding subsidiaries have trading activities, the relevant responsible person shall carefully consult the list of connected persons and carefully judge whether it constitutes connected transactions. If it constitutes a connected transaction, it shall perform the obligations of examination and approval and reporting within their respective authorities.
Chapter III related party transactions
Article 9 related party transactions refer to the transfer of resources or obligations between the company, its holding subsidiaries and related parties, including but not limited to:
(I) purchase of assets;
(II) sale of assets;
(III) foreign investment (including entrusted financial management, investment in subsidiaries, etc.);
(IV) provide financial assistance (including entrusted loans);
(V) providing guarantee;
(VI) lease in or lease out assets;
(VII) entrusted or entrusted management of assets and businesses;
(VIII) donated or donated assets;
(IX) reorganization of creditor’s rights or debts;
(x) transfer or transfer of R & D projects;
（11） Sign the license agreement;
（12） Waiver of rights (including waiver of preemptive right, preemptive right to subscribe capital contribution, etc.);
（13） Purchase of raw materials, fuel and power;
（14） Selling products and commodities;
（15） Providing or receiving labor services;
（16） Entrusted or entrusted sales;
（17） Deposit and loan business;
（18） Joint investment by related parties;
（19） Other matters that may cause the transfer of resources or obligations through agreement.
Article 10 related party transactions of the company shall follow the following basic principles:
(I) conform to the principle of good faith;
(II) the principle of not damaging the legitimate rights and interests of the company and non affiliated shareholders;
(III) affiliated shareholders shall have the right to vote at the general meeting if they withdraw;
(IV) any interested director shall withdraw when the board of directors votes on the matter; (V) the board of directors of the company shall judge whether the related party transaction is beneficial to the company according to objective criteria. Professional appraisers or financial consultants shall be employed when necessary;
(VI) independent directors shall clearly express independent opinions on major connected transactions.
Article 11 the company shall take effective measures to prevent related parties from interfering in the operation of the company by monopolizing procurement and sales business channels and damaging the interests of the company and non related shareholders.
The price or charging principle of connected transactions shall not deviate from the price or charging standard of independent third parties in the market. The company shall fully disclose the pricing basis of related party transactions.
Article 12 related party transactions between the company and related parties shall be subject to written contracts or agreements, which shall follow the principles of equality, voluntariness and compensation for equal value. The contents of the contracts or agreements shall be clear and specific.
Article 13 directors, supervisors and senior managers shall pay attention to whether the company has been occupied by related parties and other issues that encroach on the interests of the company. Independent directors and supervisors shall check the capital transactions between the company and related persons at least once a quarter to understand whether the company is occupied or transferred by directors, supervisors, senior managers, controlling shareholders, actual controllers and their related persons. In case of any abnormality, they shall timely submit to the board of directors to take corresponding measures.
In case of any loss, the board of directors shall timely take protective measures such as litigation and property preservation to avoid or reduce the loss, and investigate the responsibilities of relevant personnel.
If a related person forces, instructs or requires the company to provide funds or guarantees in violation of regulations, the company and its directors, supervisors and senior managers shall refuse, and shall not assist, cooperate or acquiesce.
Chapter IV decision making procedures for connected transactions
Article 14 when signing contracts, agreements or other arrangements involving related party transactions with related parties, the company shall take necessary avoidance measures:
(I) any individual can only sign the agreement on behalf of one party;
(II) affiliated persons shall not interfere with the company’s decision in any way;
(III) when the board of Directors considers related party transactions, related directors shall avoid voting and shall not exercise voting rights on behalf of other directors. Affiliated directors include the following directors or directors under any of the following circumstances:
1. Counterparty;
2. Work in the counterparty, or in the legal person (or other organization) that can directly or indirectly control the counterparty, or the legal person (or other organization) directly or indirectly controlled by the counterparty;
3. Having direct or indirect control over the counterparty;
4. Close family members of the counterparty or its direct or indirect controller (the specific scope shall be subject to the provisions of item 4 of Article 5 of this system);
5. Close family members of the directors, supervisors and senior managers of the counterparty or its direct or indirect controllers (the specific scope shall be subject to the provisions of item 4 of Article 5 of the system);
6. Directors whose independent business judgment may be affected due to other reasons identified by the CSRC, Shenzhen Stock Exchange or the company.
(IV) when the general meeting of shareholders deliberates on related party transactions, related shareholders shall avoid voting and shall not exercise voting rights on behalf of other shareholders. Affiliated shareholders include shareholders under any of the following circumstances:
1. Counterparty;
2. Having direct or indirect control over the counterparty;
3. Directly or indirectly controlled by the counterparty;
4. Directly or indirectly controlled by the same legal person (or other organization) or natural person as the counterparty;
5. Work in the counterparty, or in the legal person (or other organization) that can directly or indirectly control the counterparty, or the legal person (or other organization) directly or indirectly controlled by the counterparty;
6. Close family members of the counterparty and its direct and indirect controllers;
7. The voting right is restricted or affected due to the unfulfilled equity transfer agreement or other agreements with the counterparty or its affiliates;
8. Shareholders identified by China Securities Regulatory Commission or Shenzhen stock exchange that may cause the company to tilt its interests. Article 15 when the board of directors of the company deliberates on related party transactions, it can be held only when more than half of the non related directors are present. The resolutions made at the meeting of the board of directors must be adopted by more than half of the non related directors. If the number of non affiliated directors attending the board of directors is less than three, the company shall submit the transaction to the general meeting of shareholders for deliberation.
When the company convenes the board of directors to consider related party transactions, the chairman of the meeting shall remind the related directors to avoid voting before the meeting voting. If a related director fails to take the initiative to declare and withdraw, the director who knows the situation shall require the related director to withdraw.
Article 16 when the general meeting of shareholders deliberates on related party transactions, related shareholders shall not participate in voting, and the number of voting shares they represent shall not be included in the total number of voting shares; The announcement of the resolution of the general meeting of shareholders shall fully disclose the voting of non affiliated shareholders.
If the related shareholders explicitly indicate their withdrawal, other shareholders attending the general meeting of shareholders shall deliberate and vote on the related transaction matters, and the voting results shall have the same legal effect as other resolutions adopted by the general meeting of shareholders.
When the company’s general meeting of shareholders deliberates on related party transactions, the chairman of the meeting and the witness lawyer shall remind the related shareholders to avoid voting before the shareholders vote.
Article 17 If the transactions between the company and related parties (except for providing guarantee and financial assistance) meet one of the following standards, they shall be submitted to the board of directors for deliberation and approval and disclosed in time:
(I) transactions with connected natural persons with a transaction amount of more than 300000 yuan;
(II) transactions with affiliated 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.
When the connected transactions mentioned in this article are submitted to the board of directors for deliberation, the independent directors shall express independent opinions. Independent directors may employ intermediaries to issue special reports as the basis for their judgment before making prior recognition and expressing independent opinions.
Article 18 If the transaction amount between the company and related parties (except for the company’s cash assets and guarantee) exceeds 30 million yuan and accounts for more than 5% of the absolute value of the company’s latest audited net assets, it shall be disclosed in time and submitted to the general meeting of shareholders for deliberation, It shall also disclose the audit report or evaluation report that meets the requirements of article 6.1.6 of the stock listing rules.
If the related party transaction fails to meet the standards specified in this paragraph, but the CSRC and Shenzhen Stock Exchange require the company to submit it to the general meeting of shareholders for deliberation, the company shall disclose the audit or evaluation report in accordance with the regulations.
Related party transactions related to the daily operation of the company may be exempted from audit or evaluation. The audit report and evaluation report specified above shall be issued by a securities service institution that complies with the provisions of the securities law of the people’s Republic of China. Article 19 related party transactions not approved by the board of directors or the general meeting of shareholders shall be approved by the chairman of the board of directors.
Article 20 the board of supervisors shall clearly express its opinions on whether the connected transactions that need to be approved by the board of directors or the general meeting of shareholders are fair and reasonable, and whether there is any situation that damages the legitimate rights and interests of the company and non connected shareholders.
Article 21 when considering related party transactions, the company shall:
(I) understand the real situation of the transaction object in detail, including the operation status, profitability, whether there are rights defects such as mortgage and freezing, and legal disputes such as litigation and arbitration;
(II) learn more about the integrity record, credit status and performance ability of the counterparty, and carefully select the counterparty;
(III) determine the transaction price according to sufficient pricing basis;
(IV) according to the requirements of the stock listing rules and when the Company deems it necessary, it shall hire an intermediary to audit or evaluate the transaction object.
The company shall not consider and make decisions on related party transactions involving unclear status of the subject matter of the transaction, uncertain transaction price and uncertain situation of the counterparty.
Article 22 the general meeting of shareholders shall make decisions on related party transactions
