Eaglerise Electric & Electronic (China) Co.Ltd(002922)
Related party transaction decision system
(revised in March 2022)
Chapter I General Provisions
Article 1 in order to regulate the related party transactions of Eaglerise Electric & Electronic (China) Co.Ltd(002922) (hereinafter referred to as “the company”), protect the legitimate rights and interests of the company, shareholders and creditors, and ensure the fairness of the company’s decision-making on related party transactions, this system is hereby formulated in accordance with laws, regulations, normative documents and the relevant provisions of Eaglerise Electric & Electronic (China) Co.Ltd(002922) articles of Association (hereinafter referred to as “the articles of association”).
Article 2 in this system, related party transactions refer to the transfer of resources or obligations between the company, its holding subsidiaries and its related parties.
Affiliated persons of the company include affiliated legal persons and affiliated natural persons.
The holding subsidiary of the company refers to the company that is the controlling shareholder, or the company can actually control its production and operation according to the equity ratio, the articles of association or the operation agreement.
Article 3 a legal person under any of the following circumstances shall be an affiliated legal person of the company:
(I) legal persons or other organizations that directly or indirectly control the company;
(II) legal persons or other organizations other than the company and its holding subsidiaries directly or indirectly controlled by the legal persons 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 listed in Article 4 of the system, or where the affiliated natural persons act as directors (excluding independent directors of both parties) and senior managers;
(IV) legal persons or other organizations holding more than 5% of the company’s shares and persons acting in concert;
(V) China Securities Regulatory Commission, Shenzhen Stock Exchange or other legal persons or other organizations recognized by the company according to the principle of substance over form as having special relationship with the company, which may lead to the preference of the company’s interests.
If the company and the legal person listed in Item (II) of Article 3 are controlled by the same state-owned assets management institution and form the situation described in Item (II) of Article 3, it does not constitute an affiliated relationship, except that the chairman, general manager or more than half of the directors of the legal person belong to the situation listed in Item (II) of Article 4.
Article 4 the affiliated natural person of the company refers to:
(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 the legal person listed in Item (I) of Article 3;
(IV) the close family members of the persons mentioned in items (I) and (II) of this article include spouses, children over the age of 18 and their spouses, parents and parents of spouses, brothers and sisters and their spouses, brothers and sisters of spouses and parents of children’s spouses.
(V) the CSRC, Shenzhen Stock Exchange or other natural persons identified by the company as having special relationship with the company according to the principle of substance over form, which may lead to the preference of the company’s interests.
Article 5 a legal person or natural person under any of the following circumstances shall be deemed to be an affiliate of the company:
(I) according to the agreement or arrangement signed with the company’s affiliates, after the agreement or arrangement takes effect or within the next 12 months, it will have one of the circumstances specified in Article 3 or 4 of this system; (II) one of the situations specified in Article 3 or Article 4 of this system has occurred in the past 12 months. Article 6 the related party transactions referred to in this system include but are not limited to the following matters:
(I) purchase or sale of assets;
(II) foreign investment (including entrusted financial management and investment in subsidiaries, except for the establishment or capital increase of wholly-owned subsidiaries);
(III) providing financial assistance (including entrusted loans);
(IV) provide guarantee (including guarantee for holding subsidiaries);
(V) assets leased in or leased out;
(VI) entrusted or entrusted management of assets and businesses;
(VII) donated or donated assets;
(VIII) reorganization of creditor’s rights and debts;
(IX) sign a license agreement;
(x) transfer or transfer of R & D projects;
（11） Waiver of rights (including waiver of preemptive right, preemptive right to subscribe capital contribution, etc.);
（12） Purchase of raw materials, fuel and power;
（13） Selling products and commodities;
（14） Providing or receiving labor services;
（15） Entrusted or entrusted sales;
（16） Deposits and loans with related party financial companies;
（17） Joint investment with related parties;
（18） Other matters that may lead to the transfer of resources or obligations through agreement;
（19） Other transactions recognized by Shenzhen Stock Exchange.
Article 7 the related party transactions of the company shall follow the following basic principles:
(I) the principle of good faith;
(II) the principles of fairness, impartiality and openness;
(III) if the related party enjoys the voting right of the company’s general meeting of shareholders, it shall withdraw;
(IV) directors who have any interest with related parties shall withdraw when the board of directors votes on the matter;
(V) the board of directors shall judge whether the related party transaction is beneficial to the company according to objective criteria. Article 8 the pricing of related party transactions of the company shall be fair and implemented with reference to the following principles:
(I) if the transaction is priced by the government, the price can be directly applied;
(II) if the transaction is subject to the government guided price, the transaction price can be reasonably determined within the scope of the government guided price;
(III) in addition to the government fixed price or government guided price, if there is a comparable market price or charging standard of an independent third party for the transaction, the transaction price can be determined with priority by referring to the price or standard;
(IV) if there is no comparable independent third party market price for related matters, the transaction price can be determined by referring to the price of non related transactions between related parties and third parties independent of related parties;
(V) if there is neither the market price of an independent third party nor the price of an independent unrelated transaction for reference, a reasonable constituent price can be used as the basis for pricing, and the constituent price is a reasonable cost plus reasonable profit. Article 9 when determining the price of related party transactions in accordance with item (III), (IV) or (V) of the preceding article, the company may adopt the following pricing methods according to different related party transactions:
(I) cost plus method, which is based on the reasonable cost of related party transactions plus the gross profit of comparable non related party transactions. Applicable to related party transactions such as procurement, sales, transfer and use of tangible assets, provision of labor services, financing and so on;
(II) resale price method: the fair transaction price of goods purchased by related parties is the price of goods purchased by related parties for resale to non related parties minus the gross profit of comparable non related transactions. It is applicable to simple processing or simple purchase and sales business in which the reseller does not change the appearance, performance, structure or change the trademark of the goods;
(III) the comparable uncontrolled price method is based on the price charged by non related parties for the same or similar business activities as related party transactions. Applicable to all types of connected transactions;
(IV) transaction net profit method: the net profit of connected transactions is determined by the profit level index of comparable non connected transactions.
Applicable to related party transactions such as procurement, sales, transfer and use of tangible assets and provision of labor services;
(V) the profit split method is to calculate the amount of profits that should be distributed according to the contribution of the listed company and its related parties to the consolidated profits of related party transactions. It is applicable to the situation that the related party transactions of all participants are highly integrated and it is difficult to evaluate the transaction results of all parties separately.
Article 10 if the company’s connected transactions cannot be priced according to the above principles and methods, it shall disclose the principles and methods for determining the price of the connected transactions, and explain the fairness of the pricing.
Chapter II report on connected transactions
Article 11 any director, supervisor and senior manager who has an interest in the company’s existing or planned related party transactions shall report the nature and extent of their interest to the board of directors as soon as possible, regardless of whether the related party transactions need the approval of the board of directors under normal circumstances. Article 12 when the board of directors deliberates on related party transactions, interested directors may attend the meeting of the board of directors, express their opinions on the fairness of related party transactions and whether they are beneficial to the company, and explain the questions raised by other directors.
Article 13 when the general meeting of shareholders deliberates on related party transactions, shareholders (including shareholders’ agents) who are related to the transaction may attend the general meeting of shareholders, clarify their views to the shareholders present in accordance with the procedures of the general meeting, and explain the questions raised by other shareholders.
Article 14 when the board of supervisors and independent directors inspect related party transactions, interested directors or shareholders shall make a detailed description of the content, quantity, amount and other information of related party transactions and provide necessary documents.
Chapter III avoidance system
Article 15 when a related party signs an agreement involving related party transactions with the company, it shall abide by the following provisions: (I) any individual can only sign an agreement on behalf of one party;
(II) affiliated persons shall not interfere with the company’s decision in any way.
The daily related party transaction agreement shall at least include the transaction price, pricing principle and basis, total transaction volume or its determination method, payment method and other main terms.
Article 16 when the board of directors of the company votes on connected transactions, the directors who are related to the enterprises or individuals involved in the meeting proposal shall not participate in the voting or exercise the voting rights on behalf of other directors. The board meeting can be held when more than half of the non affiliated directors are present.
If a director who fails to attend the meeting of the board of directors is a director with related relationship, he shall not authorize other directors to vote on such matters.
The affiliated directors mentioned in the preceding paragraph include the following directors or directors under any of the following circumstances:
(I) counterparty;
(II) working 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;
(III) having direct or indirect control over the counterparty;
(IV) close family members of the counterparty or its direct or indirect controller (see item (IV) of Article 4 of these rules for the specific scope);
(V) close family members of the directors, supervisors and senior managers of the counterparty or its direct or indirect controllers (see item (IV) of Article 4 of these rules for the specific scope);
(VI) directors whose independent business judgment may be affected determined by the CSRC, Shenzhen Stock Exchange or the company based on the principle of substance over form.
Article 17 in the case that the affiliated directors withdraw from voting, the resolutions formed at the relevant board meeting shall be adopted by more than half of the non affiliated directors. If the number of non affiliated directors attending the board of directors is less than 3, the matter shall be submitted to the general meeting of shareholders for deliberation.
Article 18 when the general meeting of shareholders of the company votes on connected transactions, connected shareholders shall not participate in the voting, and the number of voting shares represented by them shall not be included in the total number of valid votes.
In addition to the number of shares held by the chairman and the number of proxies present at the meeting, the shareholders shall not be entitled to vote on the proposal before the meeting.
If a related shareholder participates in voting in violation of the provisions of this article, the voting on related transaction matters in his voting vote shall be invalid.
The affiliated shareholders mentioned in the preceding paragraph include the following shareholders or shareholders under any of the following circumstances:
(I) is the counterparty;
(II) being the direct or indirect controller of the counterparty;
(III) directly or indirectly controlled by the counterparty;
(IV) directly or indirectly controlled by the same legal person or other organization or natural person as the counterparty;
(V) 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) that is directly or indirectly controlled by the counterparty; (VI) close family members of the counterparty and its direct and indirect controllers;
(VII) shareholders whose voting rights are restricted and affected due to unfulfilled equity transfer agreements or other agreements with the counterparty or its affiliates;
(VIII) shareholders identified by China Securities Regulatory Commission or Shenzhen stock exchange that may cause the interests of listed companies to favor them.
Chapter IV decision making authority of connected transactions
Article 19 for the related party transactions between the company and related parties (except for the company’s cash assets, debt relief and guarantee) with an amount of more than 30 million yuan and accounting for more than 5% of the company’s latest audited net assets, the subject matter of the transaction shall be evaluated or audited, and the transaction shall be submitted to the general meeting of shareholders for deliberation.
In case of any of the following transactions between the company and related parties, the company may be exempted from audit or evaluation:
(I) daily connected transactions stipulated in article 6.3.19 of the Listing Rules of Shenzhen Stock Exchange; (II) all parties such as related parties make capital contributions in cash, and the equity proportion of each party in the invested subject shall be determined according to the proportion of capital contribution.
Article 20 related party transactions (except guarantees provided by listed companies) with a transaction amount of more than 300000 yuan between the company and related natural persons and transactions with related 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 (except guarantees provided by listed companies) shall be deliberated and decided by the board of directors.
Article 21 any guarantee provided by the company for related parties, regardless of the amount, shall be submitted to the general meeting of shareholders for deliberation after being deliberated and approved by the board of directors.
Article 22 Where a company and its affiliates jointly contribute to the establishment of a company, the amount of capital contribution of the company shall be taken as the transaction amount.
Article 23 when related party transactions involve “providing financial assistance”, “providing guarantee” and “entrusted financial management”, the amount incurred shall be taken as the calculation standard and shall be calculated cumulatively within 12 consecutive months according to the transaction type. Article 24 transactions that have fulfilled the decision-making procedures shall not be included in the relevant cumulative calculation scope.
Similar related party transactions (daily related party transactions) related to the subject matter of the transaction occurred in the company within 12 consecutive months shall be subject to the provisions of Article 20 according to the principle of cumulative calculation.
Article 25 when the company conducts other related party transactions other than those in the preceding article, the provisions of Articles 20, 21 and 22 shall apply respectively in accordance with the following standards and the principle of cumulative calculation within 12 consecutive months:
(I) transactions with the same related party;
(II) transactions related to the category of transaction objects conducted with different related parties.
upper
