Yifan Pharmaceutical Co.Ltd(002019) YIFAN PHARMACEUTICAL CO.,LTD.
Related party transaction decision system
Revised in April 2002
Chapter I Preface
Article 1 in order to ensure that the related party transactions between Yifan Pharmaceutical Co.Ltd(002019) (hereinafter referred to as “the company” and “listed 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 and the securities law of the people’s Republic of China Relevant laws, regulations and normative documents such as the Listing Rules of Shenzhen Stock Exchange (hereinafter referred to as the “Listing Rules”), accounting standards for Business Enterprises No. 36 – disclosure of related parties, self regulatory guidelines for listed companies of Shenzhen Stock Exchange No. 7 – transactions and related party transactions, and the relevant provisions of Yifan Pharmaceutical Co.Ltd(002019) articles of Association (hereinafter referred to as the “articles of association”) in combination with the actual situation of the company, Formulate this system.
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 relationships and related persons
Article 3 affiliated relationship refers to the relationship between the controlling shareholders, actual controllers, directors, supervisors and senior managers of the company and the enterprises directly or indirectly controlled by them, as well as other relationships that may lead to the transfer of the interests of the company.
Article 4 affiliated persons of the company include affiliated legal persons (or other organizations) and affiliated natural persons.
A legal person or other organization under any of the following circumstances shall be an affiliated legal person (or other organization) of a listed company:
(I) legal persons (or other organizations) that directly or indirectly control the listed company;
(II) legal persons (or other organizations) other than listed companies and their holding subsidiaries directly or indirectly controlled by the legal persons (or other organizations) mentioned in the preceding paragraph;
(III) legal persons (or other organizations) holding more than 5% of the shares of the listed company and their persons acting in concert; (IV) legal persons (or other organizations) other than the listed company and its holding subsidiaries that are directly or indirectly controlled by the affiliated natural persons of the listed company listed in this system, or serve as directors (excluding independent directors of both parties) and senior managers;
A natural person under any of the following circumstances shall be an affiliated natural person of a listed company:
(I) natural persons who directly or indirectly hold more than 5% of the shares of the listed company;
(II) directors, supervisors and senior managers of listed companies;
(III) directors, supervisors and senior managers of legal persons (or other organizations) that directly or indirectly control the listed company;
(IV) close family members of the persons mentioned in items (I) and (II) of this paragraph. Legal persons (or other organizations) and natural persons who have any of the situations mentioned in paragraphs 2 and 3 in the past 12 months or in the next 12 months according to relevant agreements are affiliated persons of the listed company. According to the principle of substance over form, the CSRC, Shenzhen Stock Exchange or listed companies identify other natural persons, legal persons (or other organizations) that have special relationship with the listed company and may or have caused the listed company to favor its interests as the related persons of the listed company.
Article 5 the company shall refer to the listing rules and other relevant provisions of Shenzhen Stock Exchange to 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.
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 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.
When the company and its subordinate holding subsidiaries have transaction activities, the relevant responsible person shall carefully consult the list of related parties and carefully judge whether it constitutes related party transactions. If it constitutes a connected transaction, it shall perform the obligations of examination and approval and reporting within its respective authority.
Chapter III related party transactions
Article 6 related party transactions refer to the transfer of resources or obligations between the company or its holding subsidiary and its related parties, including:
(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) provide guarantee (including guarantee for holding subsidiaries);
(VI) assets leased in or leased out;
(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 with related parties;
（19） Other matters that may cause the transfer of resources or obligations through agreement or other matters recognized by the exchange.
Article 7 when conducting related party transactions, the company shall ensure the legality, necessity and fairness of related party transactions, maintain the independence of the company, and shall not use related party transactions to adjust financial indicators and damage the interests of the company. The parties to the transaction shall not conceal the related party relationship or take other means to circumvent the company’s related party transaction review procedures and information disclosure obligations.
Article 8 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 9 related party transactions between the company and related parties shall be subject to written contracts or agreements, and follow the principles of equality, voluntariness and compensation for equal value. The contents of the contracts or agreements shall be clear and specific.
Article 10 the company shall prevent the controlling shareholders and other related parties from directly or indirectly occupying the company’s funds, assets and resources through various means.
Chapter IV decision making procedures for connected transactions
Article 11 when the board of directors of the company considers related party transactions, related directors shall avoid voting and shall not exercise voting rights 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 of directors is less than three, 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) 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) that is directly or indirectly controlled by the counterparty; (III) directly or indirectly controlled by the other party;
(IV) close family members of the counterparty or its direct or indirect controllers;
(V) close family members of the directors, supervisors and senior managers of the counterparty or its direct or indirect controllers;
(VI) directors whose independent business judgment may be affected due to other reasons recognized by the CSRC, Shenzhen Stock Exchange or the company.
Article 12 when the general meeting of shareholders deliberates on related party transactions, related shareholders shall withdraw from voting and shall not exercise voting rights on behalf of other shareholders..
The affiliated shareholders mentioned in the preceding paragraph include shareholders under any of the following circumstances:
(I) 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) that is directly or indirectly controlled by the counterparty;; (VI) close family members of the counterparty and its direct and indirect controllers;
(VII) the voting rights are restricted or affected due to the existence of outstanding 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 company to tilt its interests.
Article 13 the withdrawal and voting procedures of affiliated directors are as follows:
(I) affiliated directors shall take the initiative to declare and apply for withdrawal, otherwise other directors who know the situation have the right to ask them to withdraw;
(II) when there is a dispute over whether it is an affiliated director, the board of directors shall put forward a request to its regulatory department or the company’s lawyer to confirm the affiliated relationship, and decide whether to withdraw according to the reply of the above institutions or personnel;
(III) related directors may attend the meeting as nonvoting delegates to discuss related transactions;
(IV) when the board of directors votes on related transactions, the chairman of the meeting shall remind the related directors to avoid voting before the meeting voting, and the related directors shall not exercise their voting rights or act on behalf of other directors. The matter can be held when more than half of the unrelated directors are present, and the resolution must be adopted by more than half of the unrelated directors. If the number of unrelated directors attending the board of directors is less than 3, the matter shall be submitted to the general meeting of shareholders for deliberation.
Article 14 the withdrawal and voting procedures of affiliated shareholders are as follows:
(I) affiliated shareholders shall actively apply for withdrawal, otherwise other shareholders who know the situation have the right to apply for withdrawal of affiliated shareholders to the general meeting of shareholders;
(II) when there is a dispute over whether it is an affiliated shareholder, the chairman of the meeting shall review it, and the lawyer attending the meeting shall judge whether the relevant shareholder is an affiliated shareholder according to relevant regulations;
(III) when the general meeting of shareholders votes on related transactions, the host and witness lawyers shall remind the related shareholders to avoid voting before the shareholders vote. The related shareholders shall not participate in the voting, and the number of voting shares represented by them shall not be included in the total effective voting. After deducting the number of voting shares represented by the related shareholders, The non affiliated shareholders attending the general meeting of shareholders shall vote in accordance with the articles of association and the rules of procedure of the general meeting of shareholders.
Article 15 decision making authority of related party transactions:
(I) related party transactions with a transaction amount of more than 300000 yuan between the company and related natural persons shall be disclosed in time after deliberation by the board of directors;
(II) related party transactions between the company and 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 shall be disclosed in time after deliberation by the board of directors; (III) if the amount of related party transactions (excluding financial assistance and external guarantee) between the company and related parties 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 submitted to the general meeting of shareholders for deliberation.
1. If the subject matter of the transaction is the equity of the company and meets the standards specified in this paragraph, the company shall disclose the audit report of the subject matter of the transaction in the latest year and another period, and the audit deadline shall not exceed six months from the date of the shareholders’ meeting to consider the transaction; If the company is unable to audit the financial and accounting report of the transaction target in the latest year or provide corresponding audit report due to objective reasons such as the company’s inability to form control, joint control or significant influence on the transaction target before and after the transaction, the company may fully disclose the relevant information and be exempted from disclosing the audit report, unless otherwise stipulated by the CSRC or Shenzhen Stock Exchange.
2. If the subject matter of the transaction is non cash assets other than equity, an evaluation report shall be provided, and the benchmark date of the evaluation shall not exceed one year from the date of the shareholders’ meeting to consider the transaction;
3. Although the transaction does not meet the standards specified in this paragraph, but the Shenzhen Stock Exchange deems it necessary, the company shall disclose the audit or evaluation report in accordance with the provisions of the preceding paragraph.
4. Related party transactions related to daily operations or related parties make capital contributions in cash, and the equity ratio of each party in the invested subject is determined according to the proportion of capital contribution, which can 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.
(IV) where the company provides guarantee for related persons, in addition to being deliberated and approved by more than half of all non related directors, it shall also be deliberated and approved by more than two-thirds of the non related directors attending the meeting of the board of directors and make a resolution, which shall be submitted to the general meeting of shareholders for deliberation. Where the company provides guarantee for the controlling shareholder, actual controller and their affiliates, the controlling shareholder, actual controller and their affiliates shall provide counter guarantee.
If the guaranteed party becomes an affiliate of the company due to the transaction, the company shall perform corresponding review procedures and information disclosure obligations on the existing affiliated guarantee while implementing the transaction or affiliated transaction.
If the board of directors or the general meeting of shareholders fails to consider and approve the related guarantee matters specified in the preceding paragraph, all parties to the transaction shall take effective measures such as early termination of the guarantee.
(V) related party transactions between the company and related natural persons and related legal persons that fail to meet the criteria for submission to the board of directors for deliberation shall be implemented after being approved by the chairman of the company and reported to the board of directors for the record.
Article 16 the following transactions between the company and related parties may be exempted from being submitted to the general meeting of shareholders for deliberation in accordance with Article 15:
(I) public bidding, public auction or listing for unspecified objects (excluding restricted methods such as bidding invitation), except for those that are difficult to form a fair price;
(II) transactions in which the listed company unilaterally obtains benefits without paying consideration and without any obligations, including receiving cash assets, obtaining debt relief, etc;
(III) the pricing of related party transactions shall be stipulated by the state;
(IV) the related parties provide funds to the listed company, the interest rate is not higher than the quoted interest rate in the loan market, and the listed company has no corresponding guarantee.
Article 17 the following transactions between the company and its affiliates may be exempted from performing relevant obligations in accordance with the provisions of this section, but they belong to Article 6 of the listing rules
