Securities code: 000703 stock abbreviation: Hengyi Petrochemical Co.Ltd(000703) Announcement No.: 2022-013 Hengyi Petrochemical Co.Ltd(000703)
Announcement on financial support and related party transactions provided by controlling shareholders to the company
The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.
1、 Overview of related party transactions
1. In order to meet the production and operation activities of the company’s businesses and improve the financing efficiency and flexibility of fund use, Hengyi Petrochemical Co.Ltd(000703) (hereinafter referred to as “the company” or ” Hengyi Petrochemical Co.Ltd(000703) “) and its subsidiaries intend to apply to Zhejiang Hengyi Group Co., Ltd. (hereinafter referred to as “Hengyi group”), the controlling shareholder of the company, for short-term working capital support of a total amount of 1 million yuan. When the annual interest rate of financial support is the loan, the latest one-year loan market quotation rate (LPR) published by the national interbank lending center authorized by the people’s Bank of China shall prevail. The term is 12 months, the interest is calculated from the date of actual transfer, and the purpose is to supplement the working capital for daily operation; The chairman of the company is authorized to handle the signing of documents related to the above loan matters. No mortgage, pledge or guarantee measures are provided for this financial support. 2. As Hengyi group is the controlling shareholder of the company, according to the relevant provisions of the stock listing rules of Shenzhen Stock Exchange, the above borrowings constitute related party transactions.
3. On January 21, 2022, the 16th meeting of the 11th board of directors deliberated and adopted the proposal on financial support and related party transactions provided by controlling shareholders to the company. According to the relevant provisions of the Listing Rules of Shenzhen Stock Exchange, among the nine directors of the company, three affiliated directors, Mr. Qiu Yibo, Mr. Fang Xianshui and Mr. Ni Defeng, abstained from voting, and the other six non affiliated Directors voted unanimously.
4. According to the articles of association and relevant provisions, this connected transaction needs to be submitted to the general meeting of shareholders for deliberation.
5. The independent directors of the company recognized the related party transaction in advance and expressed independent opinions.
6. This connected transaction does not constitute a major asset reorganization as stipulated in the administrative measures for major asset reorganization of listed companies, and does not need to be approved by relevant departments.
2、 Introduction to related parties
1. Name: Zhejiang Hengyi Group Co., Ltd
2. Date of establishment: October 18, 1994
3. Unified social credit Code: 91330109143586141l
4. Registered capital: 51.8 million yuan
5. Address: room 620, block a, Hangzhou International Expo Center, No. 353, Benjing Avenue, Qianjiang Century City, Xiaoshan District, Hangzhou, Zhejiang Province, Xiangyang Village, Yaqian Town, Xiaoshan District
6. Nature of enterprise: limited liability company (invested or controlled by natural person) private limited liability company (controlled by natural person or controlled by private enterprise)
7. Legal representative: Qiu Jianlin
8. Main business: general projects: information consulting services; Enterprise management consulting; Socio economic advisory services; Financial consultation; Industrial investment; Production: textile raw materials and products, chemical raw materials and products (except chemical dangerous and precursor chemicals); Sales: metal materials, mechanical and electrical products and accessories, coal (no storage); Operate the self-produced products of the enterprise and its member enterprises, as well as the raw materials, mechanical equipment, instruments and meters, spare parts and related import and export business required for production and scientific research (except for the projects subject to approval according to law, carry out business activities independently according to law with the business license). 9. Main financial data of the latest period one year after another (consolidated)
Unit: 10000 yuan
Major projects December 31, 2020 September 30, 2021 (audited) (Unaudited)
Total assets 11357453.07 12684253.70
Total liabilities 8085726.61 9017427.86
Owner’s equity 3271726.46 3666825.84
Accounts receivable 519991.67 548418.27
Total amount involved in contingencies 400944.89 492789.10
Major projects January December 2020 January September 2021 (audited) (Unaudited)
Operating income 9258506.72 10284311.86
Operating profit 408471.36 434683.79
Net profit 346197.20 389716.16
Net cash flow from operating activities 419472.05 321180.82
10. Relationship with the company: Hengyi group and its subsidiaries hold 1745271755 shares of the company, accounting for 47.60% of the total shares of the company, and are the controlling shareholders of the company. The company’s borrowings from Hengyi group constitute related party transactions. 11. After investigation, Hengyi group is not the subject of liability for breach of trust, nor is it a party to a major tax violation case.
3、 Main contents of transaction
According to the specific capital needs of the company, the company and its subsidiaries intend to apply to the related party Zhejiang Hengyi Group Co., Ltd. for short-term working capital support with a total amount of no more than RMB 1 million to supplement the working capital for daily operation of the company. The annual interest rate is the latest one-year loan market quotation interest rate (LPR) published by the national interbank lending center authorized by the people’s Bank of China, and the term is 12 months (calculated from the actual withdrawal date).
4、 Pricing policy and basis of transaction
The annual interest rate supported by short-term working capital is the latest one-year loan market quotation interest rate (LPR) published by the national interbank lending center authorized by the people’s Bank of China, with a term of 12 months. The pricing of related party transactions follows the principles of fairness, rationality and fairness, and there is no situation that damages the interests of listed companies and shareholders, especially the interests of minority shareholders.
5、 Main contents of loan contract
1. Both parties: borrower: Hengyi Petrochemical Co.Ltd(000703) and its subsidiaries, lender: Zhejiang Hengyi Group Co., Ltd
2. Purpose of loan: to supplement the working capital for daily operation.
3. Amount and term: the loan is provided for recycling within the total loan limit of no more than RMB 1 million, and the loan term is 12 months.
4. Interest rate: the annual interest rate is the latest one-year loan market quotation rate (LPR) published by the national interbank lending center authorized by the people’s Bank of China at the time of borrowing. If the one-year loan market quotation rate (LPR) is adjusted during the borrowing period, the new quotation rate will not be implemented during the borrowing period, and the quotation at the beginning of the borrowing date shall prevail.
5. Repayment method: arrange the loan and repayment according to the loan with repayment method. The loan interest under this contract shall be calculated according to the actual loan amount, actual loan days and loan interest rate of Party A. The loan interest is settled quarterly. The interest settlement date is the 20th day of the last month of each quarter. If the interest payment date falls on a non working day, it will be postponed to the next working day. When the last loan is due and returned, the interest will be paid with the principal.
6. Rights and obligations of both parties
Rights and obligations of the borrower
(1) Have the right to withdraw and use the loan according to the term and purpose agreed in the contract.
(2) The principal and interest of the loan shall be paid off in accordance with the contract.
Rights and obligations of the Lender
(1) Have the right to inspect and understand the operation of the company and the use of loans.
(2) On the premise that the company has fulfilled its obligations under the contract and met the loan conditions, Hengyi group shall lend funds to the borrower in full and on time in accordance with the contract.
7. Liability for breach of contract
If this agreement cannot be performed or fully performed due to the fault of either party, the party at fault shall be liable for breach of contract; If both parties are at fault, both parties shall bear their respective liabilities for breach of contract according to the actual situation. 8. Take effect
(1) This agreement is sealed by both parties and signed by their legal representatives or authorized representatives;
(2) The loan was reviewed and approved by the board of directors of the company.
6、 Other arrangements involving connected transactions
This connected transaction does not generate horizontal competition with connected persons and will not affect the normal operation of the company.
7、 Transaction purpose and impact on Listed Companies
The controlling shareholders provide the above financial support for the company, which aims to support the development of the company, meet the business needs of the company, help the company improve financing efficiency, promote the sustainable development of the company, and play a positive role in the development of the company. This connected transaction follows the principles of fairness, impartiality and marketization. There is no damage to the interests of the company and all shareholders, and will not have a significant impact on the company’s financial status, operating results and independence. The company’s main business will not rely on connected persons, affect the company’s independence, and there are no interest transmission and transaction risks.
8、 From the beginning of 2022 to the disclosure date, the total amount of various related party transactions with the related party has been accumulated
In addition to applying to the controlling shareholder for short-term liquidity support this time, the company did not have related party transactions with Zhejiang Hengyi Group Co., Ltd. from the beginning of 2022 to the disclosure date.
9、 Prior approval opinions and independent opinions of independent directors
In order to have an objective and fair understanding of this related party transaction, the independent directors reviewed the company’s proposal on financial support and related party transactions provided by the controlling shareholders to the company in advance before the board meeting, and signed a written document approving the related party transaction in advance.
The independent directors believe that this related party transaction is the short-term working capital support applied by the company to the controlling shareholder Zhejiang Hengyi Group Co., Ltd. and is the need of the company’s business development and business plan, which is conducive to the company’s improvement of financing efficiency and used to supplement the working capital for the company’s daily operation. This related party transaction is based on the principle of fairness, the interest expense paid does not exceed the actual financing cost of the controlling shareholder, the pricing is fair and reasonable, follows the transaction principle of fairness, impartiality and good faith, has no negative impact on the current and future financial status and operating results of the company, and will not affect the independence of the company, There is no situation that damages the legitimate rights and interests of the company and minority shareholders. During the voting process of the board of directors of the company, relevant related directors have avoided voting according to law, and the voting procedures comply with the requirements of relevant laws and regulations.
10、 Verification opinions of the recommendation institution
After verification, the sponsor believes that the controlling shareholders of the company have fulfilled the necessary examination and approval procedures for providing financial support and related party transactions to the company, and the decision-making procedures comply with the requirements of the company law, the stock listing rules of Shenzhen Stock Exchange and other documents and the provisions of the articles of Association. This matter needs to be submitted to the general meeting of shareholders for deliberation. At the same time, the pricing principles of the above related party transactions are fair.
To sum up, the recommendation institution has no objection to the financial support and related party transactions provided by the controlling shareholder of the company to the company. 11、 Documents for future reference
1. Resolutions of the 16th meeting of the 11th board of directors of the company;
2. Hengyi Petrochemical Co.Ltd(000703) prior approval letter of independent directors on matters considered at the 16th meeting of the 11th board of directors of the company;
3. Hengyi Petrochemical Co.Ltd(000703) independent opinions of independent directors on relevant matters of the 16th meeting of the 11th board of directors of the company.
It is hereby announced.
Hengyi Petrochemical Co.Ltd(000703) board of directors January 21, 2002
