Shanxi Lu’An Environmental Energydev.Co.Ltd(601699)
Criteria for related party transactions
Chapter I General principles
Article 1 in order to regulate the related party transactions of Shanxi Lu’An Environmental Energydev.Co.Ltd(601699) (hereinafter referred to as “the company”), ensure the legality, fairness and rationality of the related party transactions between the company and all related parties, and protect the legitimate rights and interests of shareholders and the company, this system is formulated in accordance with the provisions of the company law, the stock listing rules of Shanghai Stock Exchange, the articles of association and other relevant laws, regulations and normative documents, and in combination with the actual situation of the company. Article 2 the company shall follow and implement the following principles when confirming and handling the related relationships and related transactions between related parties:
（1） Try to avoid or reduce related party transactions with related parties;
（2） When determining the price of related party transactions, the principle of “fairness, impartiality, openness and compensation for equal value” shall be followed and determined by written agreement;
（3） For the related party transactions that should be disclosed, the relevant provisions on information disclosure shall be earnestly implemented.
（4） The principle of affiliated directors and affiliated shareholders avoiding voting;
（5） The principle of employing independent financial consultants or professional evaluation institutions to express opinions and reports according to regulations;
（6） Strictly define related parties and related transactions in accordance with the principle of substance over form. Article 3 when dealing with related party transactions with related parties, the company shall not damage the legitimate rights and interests of all shareholders, especially minority shareholders and non related shareholders.
Chapter II related persons and related relationships
Article 4 the affiliated persons of a company are divided into affiliated legal persons (or other organizations) and affiliated natural persons.
（1） A legal person (or other organization) under any of the following circumstances is an affiliated legal person (or other organization) of the company:
1. A legal person (or other organization) that directly or indirectly controls the company;
2. Legal persons other than the company and its holding subsidiaries and other entities controlled directly or indirectly by the legal persons (or other organizations) in Item 1 above;
3. Legal persons (or other organizations) other than the company, holding subsidiaries and other entities controlled by the company listed in paragraph (2) below, which are directly or indirectly controlled by the affiliated natural persons of the company, or where the affiliated natural persons act as directors (excluding independent directors and senior managers of both parties);
4. Legal persons (or other organizations) holding more than 5% of the shares of the company and their persons acting in concert.
（2） A natural person under any of the following circumstances shall be an affiliated natural person of the company:
1. Natural persons who directly or indirectly hold more than 5% of the shares of the company;
2. Directors, supervisors and senior managers of the company;
3. Directors, supervisors or other persons directly or indirectly controlled by the company;
4. Close family members of the persons mentioned in Items 1 and 2 of this paragraph, including 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;
Other legal persons (or other organizations) and natural persons identified by China Securities Regulatory Commission, Shanghai Stock Exchange or the company according to the principle of substance over form as having a special relationship with the company, which may or has led to the preference of the company’s interests are affiliated persons of the company.
Within the past 12 months or within 12 months after the relevant agreement or arrangement takes effect, the legal person (or other organization) or natural person who has one of the circumstances specified in paragraph (2) or (3) of this article is the affiliated person of the company.
If the company and the legal person (or other organization) listed in Item 2 of paragraph 2 of this article are controlled by the same state-owned assets management institution, it does not form an affiliated 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 the directors, supervisors and senior managers of the company, the shareholders holding more than 5% of the company 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 board of directors of the company, and the company shall do a good job in registration management. The full-time department under the company’s financial audit risk control committee shall confirm the list of the company’s connected persons and report to the board of directors and the board of supervisors in a timely manner, and the Secretary of the board of directors shall timely fill in or update the list of the company’s connected persons and the information of the connected relationship through the company’s business management system of Shanghai Stock Exchange.
Article 6 the company shall ensure the legality, necessity, rationality 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 related parties shall not use other means to evade the obligation to disclose the related party transactions or the related party transactions.
Chapter III related party transactions
Article 7 related party transactions refer to the transfer of resources or obligations between the company, its holding subsidiaries and other entities controlled and related parties. include:
（1） Purchase or sale of assets;
（2） Foreign investment (including entrusted financial management, investment in subsidiaries, etc.);
（3） Provide financial assistance (including interest bearing or interest free loans, entrusted loans, etc.);
（4） Provide guarantee (including guarantee for holding subsidiaries);
（5） Leased in or leased out assets;
（6） Entrusted or entrusted management of assets and businesses;
（7） Donated or donated assets;
（8） Reorganization of creditor’s rights and debts;
（9） Sign the license agreement;
（10） Transfer or transfer of research and development 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. Chapter IV decision making of related party transactions
Article 8 in addition to daily connected transactions, if the transactions between the company and connected persons meet one of the following standards, they shall be reviewed and disclosed in time:
（1） Related party transactions (excluding guarantees provided by the company) with a transaction amount (including debts and expenses) of more than 300000 yuan between the company and related natural persons shall be submitted to the meeting of the board of directors for deliberation and timely disclosure;
（2） The transaction amount between the company and related legal persons (or other organizations) (including debts and expenses) is more than 3 million yuan, accounting for 0.5% of the absolute value of the company’s latest audited net assets More than 5% of the connected transactions (except the guarantee provided by the company) shall be submitted to the board meeting for deliberation and timely disclosure;
（3） If the amount of transactions (including debts and expenses undertaken) between the company and related parties (except for guarantees provided by the company and cash assets donated by the company) is more than 30 million yuan and accounts for more than 5% of the absolute value of the company’s latest audited net assets, the transaction shall be submitted to the general meeting of shareholders for deliberation and disclosed in a timely manner.
If the company meets the standard specified in Item (3) of the preceding paragraph and the subject matter of the transaction is the company’s equity, the company shall disclose the financial and accounting report of the subject asset for the latest year audited by an accounting firm. The audit opinion issued by the accounting firm shall be standard and unqualified, and the audit deadline shall not exceed 6 months from the date of the shareholders’ meeting to consider relevant transactions; If the subject matter of the transaction is other assets other than the equity of the company, the appraisal report of the subject assets issued by the asset appraisal institution shall be disclosed. The benchmark date of the appraisal shall not be more than one year from the date of the general meeting of shareholders to consider relevant transactions.
If the company’s related party transactions fail to meet the standards specified in Item (3) of paragraph 1 of this article, but the CSRC and Shanghai Stock Exchange require in accordance with the principle of prudence, or the company voluntarily submits them to the general meeting of shareholders for deliberation in accordance with its articles of association or other provisions, it shall perform the deliberation procedures and disclosure obligations in accordance with the provisions of the preceding paragraph, and apply the requirements of relevant audit or evaluation.
Article 9 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, and the provisions of paragraph 1 of Article 8 shall apply. When the capital contribution of the company reaches the standard specified in Item (3) of paragraph 1 of Article 8, if all capital contributors contribute in cash and the equity ratio of each party in the established company is determined according to the proportion of capital contribution, the provisions on submission to the general meeting of shareholders for deliberation may be exempted.
Article 10 in case of entrusted financial management between the company and related parties, if it is difficult to perform the review procedures and disclosure obligations for each investment transaction due to transaction frequency and timeliness requirements, the investment scope, investment amount and duration can be reasonably predicted, and the amount shall be taken as the calculation standard, and the provisions of paragraph 1 of Article 8 shall apply.
The service life of the relevant limit shall not exceed 12 months, and the transaction amount at any point in the period (including the relevant amount of reinvestment of the income of the above investment) shall not exceed the investment limit.
Article 11 Where the company directly or indirectly waives the right of preemptive purchase or subscribed capital contribution of its holding subsidiaries or other entities under its control, resulting in related party transactions with its related parties, resulting in changes in the scope of the consolidated statements, the provisions of paragraph 1 of Article 8 of these Rules shall apply based on the amount waived and the relevant financial indicators of the entity; If the company’s waiver of rights does not lead to changes in the scope of the company’s consolidated statements, but the proportion of the equity of the subject decreases compared with the non waiver of rights, the provisions of paragraph 1 of Article 8 of these Rules shall apply based on the amount of waiver and the relevant financial indicators calculated according to the proportion of changes in equity. Where the company waives its rights in part, the provisions of paragraph 1 of Article 8 of these Rules shall also apply to the above amount and indicators and the actual amount of assignment or capital contribution.
Article 12 Where the relevant arrangements for transactions between the company and related parties involve conditional amounts such as consideration that may be paid or received in the future, the expected maximum amount shall be the transaction amount, and the provisions of paragraph 1 of Article 8 shall apply.
Article 13 the following connected transactions of the company within 12 consecutive months shall be subject to the provisions of paragraph 1 of Article 8 in accordance with the principle of cumulative calculation:
（1） Transactions with the same related party;
（2） Transactions related to the subscript of the same transaction category with different connected persons; The above-mentioned same related persons include other related persons who are controlled by the same subject or have equity control relationship with each other.
Article 14 when the company’s transactions are subject to the cumulative calculation principle for 12 consecutive months in accordance with the provisions of this system, if they meet the disclosure standards, they can only disclose the transactions in this transaction in accordance with the relevant requirements, and explain the transactions that have not met the disclosure standards in the previous period in the announcement; If it meets the standards that should be submitted to the general meeting of shareholders for deliberation, it can only submit the transaction to the general meeting of shareholders for deliberation, and explain the transaction matters that have not fulfilled the deliberation procedures of the general meeting of shareholders in the previous period in the announcement.
If the company has performed relevant obligations in accordance with paragraph 1 of Article 8, it will not be included in the corresponding cumulative calculation range. The transactions disclosed by the company but not fulfilled the deliberation procedures of the general meeting of shareholders shall still be included in the corresponding cumulative calculation scope to determine the deliberation procedures to be fulfilled.
Article 15 if the transaction amount between the company and its related parties fails to meet the standard specified in Item (1) (2) of paragraph 1 of Article 8, it shall be deliberated and determined by the general manager’s office meeting and reported to the board of directors for the record.
Article 16 in case of daily connected transactions between the company and connected persons listed in items (12) to (16) of Article 7 of these rules, the company shall perform the review procedures and disclose them in accordance with the following provisions:
（1） For the daily connected transaction agreement that has been deliberated and approved by the general meeting of shareholders or the board of directors and is being implemented, if the main terms have not changed significantly during the implementation process, the company shall disclose the actual performance of each agreement in the annual report and semi annual report as required, and explain whether it complies with the provisions of the agreement; If the main terms of the agreement change significantly during the execution or the agreement needs to be renewed at the expiration of the agreement, the company shall submit the newly revised or renewed daily connected transaction agreement to the board of directors or the general meeting of shareholders for deliberation according to the total transaction amount involved in the agreement. If there is no specific total transaction amount in the agreement, it shall be submitted to the general meeting of shareholders for deliberation.
（2） For the daily connected transactions that occur for the first time, the company shall perform the review procedures and disclose them in time according to the total transaction amount involved in the agreement. If there is no specific total transaction amount in the agreement, it shall be submitted to the general meeting of shareholders for review. If the main terms of the agreement change significantly during the performance of the agreement or need to be renewed at the expiration of the agreement, it shall be handled in accordance with the above provisions.
（3） The company can reasonably estimate the amount of daily connected transactions in the current year according to the category, perform the review procedures and disclose; If the actual implementation exceeds the expected amount, the review procedure shall be re performed and disclosed according to the excess amount.
（4） The company’s annual report and semi annual report shall disclose the actual performance of daily connected transactions by classification, summary and disclosure.
（5） If the term of the daily connected transaction agreement signed between the company and its connected persons exceeds 3 years, it shall re perform the relevant review procedures and disclosure obligations every 3 years in accordance with the requirements of this system.
Article 17 a guarantee provided by the company to a related person shall be deliberated and approved by more than half of all non related directors, and shall also be deliberated and approved by more than 2 / 3 of the non related directors attending the board meeting, and a resolution shall be made, and 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 a transaction or connected transaction, while implementing the transaction or connected transaction, the company shall perform corresponding review procedures and information disclosure obligations on the existing connected guarantee.
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.
Article 18 the company shall not provide financial assistance to related persons, except for the case of providing financial assistance to related joint-stock companies not controlled by the controlling shareholder and actual controller of the company, and other shareholders of the joint-stock company provide financial assistance with the same conditions according to the proportion of capital contribution.
If the company provides financial assistance to the affiliated joint-stock company specified in the preceding paragraph, it shall be reviewed by more than half of all non affiliated directors
