Liaoning Chengda Biological Co., Ltd. Related Transaction Management System
Liaoning Chengda Biological Co., Ltd.
Related party transaction management system
Chapter 1 General Provisions
Article 1 In order to further strengthen the related-party transaction management of Liaoning Chengda Biological Co., Ltd. (hereinafter referred to as the "Company" or the "Company"), clarify management responsibilities and division of labor, safeguard the legitimate rights and interests of the company's shareholders and creditors, especially the legitimate rights and interests of small and medium-sized investors, and ensure that the related-party transaction contracts entered into between the company and related parties comply with the principles of fairness, openness and impartiality, in accordance with the "Company Law of the People's Republic of China" and "The People's Republic of China" This system is formulated in accordance with the Securities Law of the People's Republic of China (hereinafter referred to as the "Securities Law"), the Stock Listing Rules of the Science and Technology Innovation Board of the Shanghai Stock Exchange (hereinafter referred to as the "Listing Rules"), the Shanghai Stock Exchange Self-Regulatory Supervision Guidelines for Listed Companies No. 5 - Transactions and Related Transactions, and other relevant laws, regulations and the Articles of Association of Liaoning Chengda Biotechnology Co., Ltd. (hereinafter referred to as the "Articles of Association").
Article 2 The decision-making management, information disclosure and other matters of the company’s related-party transactions shall comply with this system.
Article 3 The company shall follow the following principles when handling related party transactions:
(1) Comply with the principle of good faith and ensure the legality, necessity, rationality and fairness of related-party transactions;
(2) A written agreement should be signed for related-party transactions between the company and related parties, and the signing of the agreement should follow the principles of equality, voluntariness, equal value and compensation;
(3) Related directors and related shareholders shall abstain from voting on matters related to the related transaction;
(4) The company’s board of directors should judge whether the related transaction is beneficial to the company based on objective standards;
(5) Related transactions shall not be used to adjust financial indicators and harm the interests of the company.
Chapter 2 Related Persons and Related Relationships
Article 4 Related parties of a company include related legal persons and related natural persons.
Article 5 A natural person, legal person or other organization that meets any of the following circumstances is a related person of the company:
(1) Natural persons, legal persons or other organizations that directly or indirectly control the company;
(2) Natural persons who directly or indirectly hold more than 5% of the company’s shares;
(3) Directors or senior managers of the company;
Liaoning Chengda Biological Co., Ltd. Related Transaction Management System
(4) Close family members of the related natural persons mentioned in items 1, 2 and 3 of paragraph 1 of this article, including spouses, children over 18 years old and their spouses, parents and spouse’s parents, brothers and sisters and their spouses, spouse’s brothers and sisters, and children’s spouse’s parents;
(5) Legal persons or other organizations that directly hold more than 5% of the company’s shares and persons acting in concert;
(6) Directors, supervisors, senior managers or other principal persons in charge of legal persons or other organizations that directly or indirectly control the company;
(7) Legal persons or other organizations that are directly or indirectly controlled by related legal persons or related natural persons listed in Items 1 to 6 of Paragraph 1 of this Article, or where the aforementioned related natural persons (except independent directors) serve as directors or senior managers, except for companies and their controlled subsidiaries;
(8) Legal persons or other organizations that indirectly hold more than 5% of the company's shares and their persons acting in concert;
(9) The China Securities Regulatory Commission (hereinafter referred to as the "China Securities Regulatory Commission"), the Shanghai Stock Exchange or other natural persons, legal persons or other organizations determined by the company based on the principle of substance over form to have a special relationship with the company that may cause the company's interests to be tilted towards them.
Within 12 months before the date of the transaction, or within 12 months after the relevant transaction agreement came into effect or the arrangement was implemented, any legal person, other organization or natural person who has one of the circumstances listed in the preceding paragraph shall be deemed to be a related party of the company.
Article 6 The company's directors, senior managers, shareholders holding more than 5% of the shares, actual controllers and persons acting in concert shall promptly inform the company of their associated relationships with the company, and the company shall do a good job in registration management.
Chapter 3 Related Transactions
Article 7 Related transactions refer to transactions that occur between a company or its subsidiaries and other entities within the scope of its consolidated statements and its related parties, as well as matters that occur within the scope of daily operations that may lead to the transfer of resources or obligations.
Article 8 Related transactions include but are not limited to the following matters:
(1) Purchase or sell assets;
(2) Foreign investment;
(3) Transfer or transfer of research and development projects;
(4) Sign a license agreement;
(5) Provide guarantee;
(6) Lease or lease assets;
Liaoning Chengda Biological Co., Ltd. Related Transaction Management System
(7) Entrust or entrust the management of assets and business;
(8) Donating or receiving donated assets;
(9) Creditor's rights and debt restructuring;
(10) Provide financial assistance;
(11) Waiver of rights;
(12) Purchase raw materials, fuel, and power;
(13) Selling products and merchandise;
(14) Providing or accepting labor services;
(15) Entrusted or entrusted sales;
(16) Joint investment by related parties;
(17) Deposits and loans in financial companies of related parties;
(18) Other matters that may result in the transfer of resources or obligations through agreement.
Article 9 Related party transaction activities shall follow the commercial principles of openness, fairness and impartiality. The company should take effective measures to prevent related parties from interfering in the company's operations and harming the company's interests by monopolizing procurement and sales business channels.
A written agreement must be signed between the company and related parties for related transactions, and the content of the agreement should be clear and specific.
Article 10 The management of related party transaction prices shall follow the following principles:
(1) Both parties to the transaction pay according to the payment method and payment time agreed in the related-party transaction agreement;
(2) The company’s finance department should track the execution of related transactions and settle the price on time;
(3) For related transactions involving products, raw materials, and equipment, the supply and sales departments should track changes in market prices and costs, record the changes in a timely manner, and report the changes to other relevant departments of the company.
Chapter 4 Decision-making Procedures for Related Party Transactions
Article 11 Related transactions involving a transaction amount of more than 300,000 yuan between the company and related natural persons (except for the company providing guarantees and providing financial assistance) shall be disclosed in a timely manner after review by the board of directors. Related transactions with a transaction amount of less than 300,000 yuan (excluding guarantees and financial assistance provided by the company) shall be jointly decided by the chairman and co-chairmen. However, related transactions with a related relationship with the chairman shall be decided by the co-chairman; related transactions with a related relationship with a co-chairman shall be decided by the chairman; related transactions management system of Liaoning Chengda Biotechnology Co., Ltd. with the chairman and co-directors
Related party transactions where the chairman of the board of directors are related, shall be reviewed and approved by the board of directors.
Article 12 The transaction amount between the company and related legal persons accounts for more than 0.1% of the company's latest audited total asset value or market value and exceeds 3 million yuan (except for the company's provision of guarantees and financial assistance), which shall be disclosed in a timely manner after review by the board of directors.
Article 13 If the amount of a single transaction between the company and a related legal person accounts for less than 0.1% of the company's latest audited total asset value or market value (except for the company's provision of guarantees and financial assistance), the general manager shall report it to the chairman and co-chairmen for approval. However, related transactions that are related to the chairman shall be decided by the co-chairman; related transactions that are related to the co-chairman shall be decided by the chairman; related transactions that are related to both the chairman and the co-chairmen shall be reviewed and approved by the board of directors.
Article 14 If the related party transactions between the company and related parties meet the following standards, it shall provide an audit or evaluation report on the transaction subject matter issued by a securities service institution that complies with the provisions of the Securities Law in accordance with the relevant regulations of the Shanghai Stock Exchange. It shall be disclosed in a timely manner after being reviewed and approved by the board of directors, and submitted to the shareholders' meeting for review: The amount of the transaction (excluding the provision of guarantees and financial assistance) accounts for more than 1% of the company's latest audited total assets or market value, and exceeds 30 million yuan. Related party transactions related to daily operations are exempt from audit or evaluation.
Article 15 If a company provides guarantees to related parties, it must have reasonable business logic. In addition to being reviewed and approved by a majority of all non-related directors, it must also be reviewed and approved by more than two-thirds of non-related directors attending the board meeting and a resolution must be made. After deliberation and approval by the board of directors, it will be disclosed in a timely manner and submitted to the shareholders' meeting for review.
If the company provides guarantees for its controlling shareholder, actual controller and its related parties, the controlling shareholder, actual controller and its related parties shall provide counter-guarantee.
If the company causes the guaranteed party to become a related party of the company due to a transaction or related transaction, when implementing the transaction or related transaction, it shall perform corresponding review procedures and information disclosure obligations with respect to the existing related guarantee.
If the board of directors or shareholders' meeting fails to review and approve the related-party guarantee matter, the parties to the transaction shall take effective measures such as early termination of the guarantee.
Article 16 The company's related-party transactions that meet the disclosure standards shall be discussed at a special meeting of the company's independent directors and approved by more than half of all independent directors before being submitted to the board of directors for review.
Article 17 When the company's board of directors considers related party transactions, related directors shall abstain from voting and shall not exercise voting rights on behalf of other directors. The board meeting can only be held if more than half of the non-related directors are present, and the resolutions made at the board meeting must be passed by more than half of the non-related directors. If the number of non-related directors present at the board of directors is less than three, the company shall submit the transaction to the shareholders' meeting for review. Non-related directors may not entrust related directors to attend meetings on their behalf, and independent directors may not entrust non-independent directors to attend meetings on their behalf. Directors' responsibilities for voting matters will not be relieved by entrusting other directors to attend.
The related directors mentioned in the preceding paragraph include directors who have one of the following circumstances:
(1) Be the counterparty;
(2) Be the direct or indirect controller of the counterparty;
(3) Served in the counterparty of the transaction, or in a legal person or other organization that can directly or indirectly control the counterparty, or a legal person or other organization directly or indirectly controlled by the counterparty;
(4) Close family members of the transaction counterparty or its direct or indirect controller (for specific scope, please refer to Article 5 (4));
(5) Close family members of the directors, supervisors or senior managers of the counterparty or its direct or indirect controller (for specific scope, please refer to Article 5 (4));
(6) Directors whose independent business judgment may be affected as determined by the China Securities Regulatory Commission, the Shanghai Stock Exchange or the company based on the principle of substance over form.
Article 18 When the shareholders’ meeting considers related party transactions, shareholders who fall into any of the following circumstances shall abstain from voting:
(1) Be the counterparty;
(2) Be the direct or indirect controller of the counterparty;
(3) Directly or indirectly controlled by the counterparty;
(4) Directly or indirectly controlled by the same legal person or other organization or natural person as the counterparty;
(5) Working for the counterparty, or for a legal person or other person that can directly or indirectly control the counterparty.
Organization, legal person or other organization directly or indirectly controlled by the transaction counterparty;
(6) Close family members who are the counterparty to the transaction or its direct or indirect controller;
(7) Shareholders whose voting rights are restricted and affected due to the existence of unfulfilled equity transfer agreements or other agreements with the counterparty or its related parties;
(8) Related transaction management system of Liaoning Chengda Biotechnology Co., Ltd. that may cause the company to tilt its interests as determined by the China Securities Regulatory Commission or the Shanghai Stock Exchange.
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Article 19 When the shareholders' meeting considers related matters related to related transactions, related shareholders shall abstain from voting and shall not exercise voting rights on behalf of other shareholders. The number of voting shares they represent shall not be included in the total number of voting shares. Related shareholders and their agents shall not participate in vote counting or supervision. The resolution announcement of the shareholders' meeting shall fully disclose the voting status of non-related shareholders.
Chapter 5 Approval and Disclosure of Related Transactions
Article 20 If a company entrusts financial management to related parties, and it is difficult to fulfill the review procedures and disclosure obligations for each investment transaction due to the frequency of transactions, timeliness requirements, etc., it can make reasonable estimates of the investment scope, amount, and duration, and apply Articles 11 to 14 based on the amount.
Article 21 The company shall not lend the company's funds (including entrusted loans) with or without compensation to the controlling shareholders, actual controllers and other related parties, except where other shareholders of the company in which the company holds shares provide funds in the same proportion. The aforementioned "joint-stock companies" do not include companies controlled by controlling shareholders and actual controllers.
If the company provides financial assistance to an affiliated company specified in the preceding paragraph, it must be reviewed and approved by more than half of all non-associated directors, and more than two-thirds of the non-associated directors present at the board meeting, and submitted to the shareholders' meeting for review.
Article 22 If a company conducts the following related-party transactions, the amount of related-party transactions shall be calculated based on the principle of cumulative calculation within twelve consecutive months, and Articles 11 to 14 shall apply respectively:
(1) Transactions with the same related party;
(2) Related transactions under the same transaction category with different related parties.
The above-mentioned same related party includes other related parties that are controlled by the same entity as the related party, or have equity control relationships with each other.
Those that have fulfilled relevant obligations in accordance with the Listing Rules and the provisions of this system will no longer be included in the cumulative calculation scope.
Article 23 When the company conducts daily related transactions with related parties, it shall disclose and perform review procedures in accordance with the following provisions:
(1) The company can reasonably estimate the annual amount of daily related transactions by category to perform the review process; if the actual execution exceeds the estimated amount, the review process shall be re-implemented based on the excess amount. When applying the provisions on the actual execution of Liaoning Chengda Biotechnology Co., Ltd. Related Party Transaction Management System exceeding the estimated amount, the total amount of various types of related transactions actually occurring between each related person under the same control and the company shall be compared with the corresponding estimated total amount;
(2) The company's annual report and semi-annual report shall disclose daily related transactions in a classified and summarized manner;
(3) If the daily related transaction agreement signed between the company and its related parties exceeds three years, the relevant review procedures must be re-implemented every three years.
Article 24 A daily related-party transaction agreement shall at least include major terms such as pricing principles and basis, transaction price, total transaction volume, or a clear and specific method for determining the total volume, time and method of payment, etc.
Article 25 The following related-party transactions concluded between the company and related parties are exempt from review and disclosure as related-party transactions.
(1) One party subscribes in cash for the other party’s publicly issued stocks, corporate bonds or enterprise bonds, convertible corporate bonds or other derivatives;
(2) One party serves as a member of the underwriting syndicate to underwrite the other party’s publicly issued stocks, corporate bonds, corporate bonds, convertible corporate bonds or other derivatives;
(3) One party receives dividends, bonuses or remuneration in accordance with the resolution of the other party’s shareholders’ meeting;
(4) One party participates in the other party’s public bidding or auction, except where it is difficult to reach a fair price through the bidding or auction;
(5) Transactions in which the company obtains unilateral benefits, including receiving cash assets as gifts, obtaining debt relief, accepting guarantees and funding, etc.;
(6) The pricing of related-party transactions is stipulated by the state;
(7) The related party provides funds to the company, and the interest rate is not higher than the benchmark loan interest rate for the same period stipulated by the People's Bank of China, and the company has no corresponding guarantee for this financial assistance;
(8) The company provides products and services to directors and senior managers on the same transaction terms as non-related parties;
(9) Other transactions recognized by the Shanghai Stock Exchange.
Article 26 Documents related to related party transaction decision-making records, resolutions and other documents shall be kept by the secretary of the board of directors for a period of 10 years.
Chapter 6 Supplementary Provisions
Article 27 The term "above" in this system includes the original number; "exceeds", "more than" and "below" do not include the original number of Liaoning Chengda Biological Co., Ltd. Related Transaction Management System.
Article 28 Matters not covered by this system, or that conflict with the mandatory provisions of relevant laws, regulations, normative documents, or the requirements of the Articles of Association shall be governed by the provisions of relevant laws, regulations, normative documents, and the Articles of Association.
Article 29 This system shall be interpreted by the company’s board of directors.
Article 30 This system shall become effective and implemented after being reviewed and approved by the board of directors, and the same shall apply when it is modified.
Board of Directors of Liaoning Chengda Biological Co., Ltd.
January 26, 2026