Huitong Construction Group Co., Ltd
Related party transaction management system
Chapter I General Provisions
Article 1 in order to regulate the related party transactions of Huitong Construction Group Co., Ltd. (hereinafter referred to as "the company"), safeguard the legitimate rights and interests of the company's shareholders and ensure that the related party transactions between the company and related parties comply with the principles of fairness and impartiality, This system is hereby formulated 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 Shanghai Stock Exchange, the self regulatory guidelines for listed companies of Shanghai Stock Exchange No. 5 - transactions and related party transactions and other relevant laws, regulations and normative documents, as well as the articles of association of Huitong Construction Group Co., Ltd. (hereinafter referred to as the "articles of association").
Article 2 the related party transactions of the company shall follow the following basic principles:
(I) the principles of good faith, equality, voluntariness, fairness, openness and fairness shall not harm the interests of the company and other shareholders;
(II) when determining the price of related party transactions, it shall follow the principles of fairness, impartiality, openness and compensation for equal value, and shall be determined by written agreement;
(III) the principle of affiliated directors and affiliated shareholders avoiding voting.
Chapter II related persons and related relationships
Article 3 the 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, holding subsidiaries and other entities controlled directly or indirectly by the entities listed in Item (I) above;
(III) legal persons (or other organizations) other than the company, holding subsidiaries and other entities controlled by affiliated natural persons directly or indirectly, or serving 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) the China Securities Regulatory Commission (hereinafter referred to as "CSRC"), the Shanghai Stock Exchange or the company, in accordance with the principle of substance over form, identify other legal persons or other organizations that have a special relationship with the company and may or have caused the company to favor its interests.
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) who 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, children over the age of 18 and their spouses, brothers and sisters and their spouses, parents of spouses, brothers and sisters of spouses and parents of children's spouses;
(V) China Securities Regulatory Commission, Shanghai Stock Exchange or the company shall, in accordance with the principle of substance over form, identify other natural persons who have a special relationship with the company and may or have caused the interests of the company to be inclined to their interests. Article 6 within the past 12 months or within 12 months after the relevant agreement or arrangement takes effect, the legal person (or other organization) and natural person under one of the circumstances mentioned in Articles 4 and 5 of this system shall be the affiliated person of the company.
Article 7 the company's directors, supervisors, senior managers, shareholders holding more than 5% of the company's shares and their persons acting in concert and actual controllers shall timely submit the list of the company's related persons and the description of the related relationship to the company's board of directors, and the company shall do a good job in registration management.
Article 8 the audit committee of the company shall determine the list of related parties of the company and update it in time to ensure that the list of related parties is true, accurate and complete.
When the company and its holding subsidiaries conduct trading activities, the relevant responsible persons shall carefully consult the list of connected persons and prudently 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.
Article 9 the related party transactions of the company referred to in this system refer to the transfer of resources or obligations between the company, its holding subsidiaries and other entities controlled and its related parties. Including but not limited to the following matters:
(I) purchase or sale of assets;
(II) foreign investment (including entrusted financial management, investment in subsidiaries, etc.);
(III) providing financial assistance (including interest bearing or interest free loans, entrusted loans, etc.);
(IV) provide guarantee (including guarantee for holding subsidiaries);
(V) leased in or leased out assets;
(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 subscription right, 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） Deposit and loan business;
（17） Joint investment with related parties;
（18） Other matters that may lead to the transfer of resources or obligations through agreement;
（19） Other matters identified by Shanghai Stock Exchange as related party transactions.
Article 10 the capital transactions between the company and its controlling shareholders and other related persons shall comply with the following provisions:
(I) in the business capital transactions between the controlling shareholders and other related persons and the company, the occupation of the company's funds shall be strictly restricted. The controlling shareholders and other related persons shall not require the company to advance wages, benefits, insurance, advertising and other expenses, nor shall they bear costs and other expenses on behalf of each other;
(II) the company shall not directly or indirectly provide funds to controlling shareholders and other related persons in the following ways:
1. Lending the company's funds to the controlling shareholders and other related persons with compensation or free of charge;
2. Providing entrusted loans to related parties through banks or non bank financial institutions;
3. Entrust the controlling shareholders and other related persons to carry out investment activities;
4. Issue commercial acceptance bills for controlling shareholders and other related persons without real transaction background, and provide funds in the form of purchase payment, asset transfer payment, advance payment, etc. without consideration for goods and services or obviously contrary to commercial logic;
5. Repay debts on behalf of controlling shareholders and other related persons;
6. Other methods recognized by the CSRC.
Article 11 in case of any loss or possible loss to the company due to the occupation or transfer of the company's funds, assets or other resources by related parties, the board of directors of the company shall timely take protective measures such as litigation and property preservation to avoid or reduce the loss, and investigate the responsibilities of relevant personnel.
Chapter III identification and pricing of related party transactions
Article 12 connected transaction price refers to the transaction price of goods or services involved in connected transactions between the company and related parties.
Article 13 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;
The reasonable constituent price can be used as the basis for pricing, and the constituent price is reasonable cost plus reasonable profit. Article 14 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 pricing 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. It is applicable to related party transactions such as procurement, sales, transfer and use of tangible assets, provision of labor services, etc.
(V) profit split method: calculate the amount of profits that should be distributed according to the contribution of the 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.
Chapter IV avoidance measures for related party transactions
Article 15 when a related party of the company signs a related party transaction agreement with the company, any person can only sign the agreement on behalf of one party, and the related party shall not interfere with the decision of the company in any way.
Article 16 Where a director is associated with the enterprise involved in the resolution of the board of directors, he shall not exercise the voting right on the resolution, nor shall he exercise the voting right on behalf of other directors. The meeting of the board of directors can be held only when more than half of the non affiliated directors are present, and the resolutions made at the meeting of the board of directors must be adopted by more than half of the non affiliated directors. If the number of non affiliated directors attending the board meeting is less than 3, the company shall submit the transaction to the general meeting of shareholders for deliberation.
The affiliated directors mentioned in the preceding paragraph include the following directors or directors under any of the following circumstances:
(I) is the counterparty;
(II) having direct or indirect control over the counterparty;
(III) 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;
(IV) close family members of the counterparty or its direct or indirect controller (see item (IV) of Article 5 of the system for the specific scope);
(V) close family members of the directors, supervisors or senior managers of the counterparty or its direct or indirect controllers (see item (IV) of Article 5 of the system for the specific scope);
(VI) directors whose independent business judgment may be affected determined by the CSRC, Shanghai Stock Exchange or the company based on the principle of substance over form.
Article 17 the avoidance measures of affiliated directors are:
(I) when discussing and voting on matters related to a director at the meeting of the board of directors, the director shall report to the board of directors and make necessary withdrawal. If there are circumstances that should be withdrawn but did not take the initiative to withdraw, other directors and non voting supervisors may make a withdrawal request to the host and explain the detailed reasons for withdrawal;
(II) when the board of directors votes on related transactions, the director shall not participate in the voting, nor entrust other directors to vote on his behalf, and shall not be included in the quorum of this voting.
Article 18 when the company's 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; The voting rights held by affiliated shareholders are not included in the total number of voting shares attending the general meeting of shareholders.
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) having direct or indirect control over 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 directly or indirectly controlled by the counterparty;
(VI) close family members of the counterparty or its direct or indirect controller;
(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 Shanghai stock exchange that may cause the interests of the company to favor them.
Article 19 the avoidance measures for affiliated shareholders are:
When related shareholders consider related party transactions at the general meeting of shareholders, the board of directors of the company shall remind related shareholders to avoid voting before shareholders vote. Affiliated shareholders shall take the initiative to explain the situation to the general meeting of shareholders and make it clear that they will not participate in the voting. If a shareholder fails to actively explain the relationship and avoid, other shareholders may require him to explain the situation and avoid. If the shareholder insists on voting, other shareholders attending the general meeting of shareholders shall vote in accordance with the special resolution procedure.
If the shareholders of the voting matters are all affiliated shareholders, all shareholders can participate in the voting.
Chapter V consideration of connected transactions
Article 20 decision making authority of related party transactions:
(I) in addition to the related party guarantee, the related party transaction (except for providing guarantee) in which the transaction amount (including the debts and expenses undertaken) between the company and the related natural person is less than 300000 yuan, and the transaction amount (including the debts and expenses undertaken) between the company and the related legal person (or other organization) is less than 3 million yuan, or less than 0.5% of the absolute value of the company's latest audited net assets can be implemented only after being approved by the general manager of the company;
(II) in addition to related party guarantees, related party transactions with the amount of transactions (including debts and expenses undertaken) between the company and related natural persons of more than 300000 yuan, and transactions with related legal persons (or other organizations) of more than 3 million yuan, accounting for more than 0.5% of the absolute value of the company's latest audited net assets, It can be implemented only after being reviewed and approved by the board of directors of the company (except for those that can be exempted from disclosure and review in the form of connected transactions according to relevant laws, regulations and rules);
(III) amount of transactions between the company and its affiliates (or other organizations) (excluding related party guarantees)
