Tigermed: Related party transaction system
Hangzhou Tigermed Pharmaceutical Technology Co., Ltd.
Related party transaction system
Chapter 1 General Provisions
Article 1 In order to regulate the decision-making, management and information disclosure of related transactions of Hangzhou Tigermed Pharmaceutical Technology Co., Ltd. (hereinafter referred to as the "Company" or the "Company") and ensure that the company's related transactions do not harm 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", "Securities Law of the People's Republic of China", "Shenzhen Stock Exchange GEM Stock Listing Rules" (hereinafter referred to as the "GEM Listing Rules"), "Shenzhen Stock Exchange GEM Listed Companies Self-Regulatory Guidelines No. 2 - - Standardized Operation of GEM Listed Companies" (hereinafter referred to as the "Standardized Operation"), the "Securities Listing Rules of The Stock Exchange of Hong Kong Limited" (hereinafter referred to as the "Hong Kong Listing Rules", the "Stock Exchange of Hong Kong Limited" hereinafter referred to as the "Hong Kong Stock Exchange") and other laws, regulations, normative documents and the relevant provisions of the Articles of Association, and based on the actual situation of the company, this system is formulated.
Article 2 The company’s related transactions, decision-making management, information disclosure and other matters of related transactions shall comply with this system.
The company implements classified management of related transactions and related transactions, identifies the scope of related parties and related persons in accordance with relevant laws and regulations and the provisions of the GEM Listing Rules and the Hong Kong Listing Rules, and performs the approval, information disclosure and other procedures of related transactions and related transactions in accordance with relevant regulations.
When a company conducts transactions, it should consider the specific circumstances in accordance with the GEM Listing Rules and the Hong Kong Listing Rules, and determine whether the parties involved in the transaction are related parties or related persons of the company, whether the relevant transactions constitute related transactions or related transactions, and the applicable decision-making procedures and disclosure requirements, whichever is more stringent.
Article 3 The company shall follow the following principles when handling related party transactions:
(1) The principle of good faith;
(2) The principles of openness, fairness and impartiality;
(3) The principle of judgment based on objective standards;
(4) The principle of substance over form.
Chapter 2 Related Persons and Related Relationships
Section 1 Regulations of Shenzhen Stock Exchange
Article 4 Related parties of a company include related natural persons and related legal persons.
Article 5 A natural person who meets one of the following circumstances is an associated natural person of the company:
(1) Natural persons who directly or indirectly hold more than 5% of the company’s shares;
(2) The company’s directors and senior managers;
(3) Directors, supervisors and senior managers of the legal persons listed in Item (1) of Article 6;
(4) Close family members of the person mentioned in items (1) and (2) of this article, including spouse, parents and spouse’s parents, brothers and sisters and their spouses, children over 18 years old and their spouses, spouse’s brothers and sisters, and parents of the children’s spouse;
(5) Other natural persons identified by the China Securities Regulatory Commission, the Shenzhen Stock Exchange or the Company based on the principle of substance over form as having a special relationship with the Company that may cause the Company to favor its interests.
Article 6 A legal person that meets any of the following circumstances shall be a related legal person of the company:
(1) Legal persons or other organizations that directly or indirectly control the company;
(2) Legal persons or other organizations other than the company and its holding subsidiaries that are directly or indirectly controlled by the aforementioned legal persons and other organizations;
(3) Legal persons or other organizations other than the company and its holding subsidiaries that are directly or indirectly controlled by the related natural persons listed in Article 5, or serve as directors or senior managers;
(4) Legal persons or other organizations holding more than 5% of the company’s shares, and persons acting in concert;
(5) Other legal persons or other organizations that have a special relationship with the company and may cause the company to tilt its interests as determined by the China Securities Regulatory Commission, Shenzhen Stock Exchange or the company based on the principle of substance over form.
Article 7 A legal person or natural person who meets any of the following circumstances shall be deemed to be a related person of the company:
(1) Due to signing an agreement or making an arrangement with the company or its affiliates, one of the circumstances specified in Article 5 or Article 6 occurs after the agreement or arrangement takes effect or within the next 12 months;
(2) In the past 12 months, one of the circumstances specified in Article 5 or Article 6 has occurred.
Article 8 The company's directors, supervisors, senior managers, shareholders holding more than 5% of the shares, and persons acting in concert and actual controllers shall promptly inform the company of the related parties with whom they have related relationships.
The company shall promptly update the list of related parties and file the above-mentioned related party information with the Shenzhen Stock Exchange in a timely manner.
Section 2 Regulations of the Hong Kong Stock Exchange
Article 9 According to the Hong Kong Listing Rules, except for the exceptions stipulated therein, connected persons of a company and its subsidiaries usually include the following parties:
(1) Directors, supervisors, chief executives or major shareholders (as defined in the Hong Kong Listing Rules) of the company or any of its subsidiaries (as defined in the Hong Kong Listing Rules);
(2) Any person who has served as a director of the company or any of its subsidiaries in the past 12 months (together with the persons in item (1) of this article, referred to as "substantially connected persons")
(3) Contact persons of any basic connected persons, including:
- When the basic connected person is an individual:
(1) The individual’s spouse, and the individual’s or his spouse’s children or stepchildren (biological or adopted) under the age of 18 (hereinafter referred to as “immediate family members”);
(2) The trustee of any trust acting in a trustee capacity in whose favor the individual or any of his immediate family members is a beneficiary or, in the case of a discretionary trust, the subject of a discretionary trust (to the best of his knowledge); (3) A 30% controlled company (as defined in the Hong Kong Listing Rules) held directly or indirectly by a substantially connected person, his immediate family members and/or the trustee (individually or jointly), or any subsidiary of such company;
and
(5) If a substantially connected person, his or her immediate family members and/or the trustee jointly hold, directly or indirectly, 30% or more of the contributed capital or assets of any cooperative or contractual joint venture (whether the joint venture is an independent legal person or not) or 30% or more of the profits or other income of the joint venture under the contract (or other percentage applicable to triggering a mandatory public offer or establishing legal or management control over the enterprise under Chinese law), the joint venture partner of the joint venture is an associate of the substantially connected person.
- When the basic connected person is a company (i.e. the major legal person shareholder):
(1) Subsidiaries, holding companies of the major legal person shareholders or subsidiaries of the same group of the holding company (hereinafter referred to as "related companies");
(2) The trustee of any trust acting in a trustee capacity in favor of the principal corporate shareholder or, in the case of a discretionary trust, the subject of a discretionary trust (to the knowledge of the principal corporate shareholder);
(3) 30% of the controlled company directly or indirectly held by the substantially connected person, its related companies and/or trustees (individually or jointly), or any subsidiary of the company; and
(4) If a substantially connected person, its related companies and/or the trustee jointly hold, directly or indirectly, 30% or more of the contributed capital or assets of any cooperative or contractual joint venture (whether the joint venture is an independent legal person or not) or 30% or more of the profits or other income of the joint venture under the contract (or other percentage applicable to triggering a mandatory public offer or establishing legal or management control over the enterprise under Chinese law), the joint venture partner of the joint venture is an associate of the substantially connected person.
(4) A non-wholly-owned subsidiary of the company, and any connected person at the corporate level individually or jointly has the right to exercise or control the exercise of 10% or more of the voting rights at the shareholders’ meeting of the non-wholly-owned subsidiary and the subsidiaries of the non-wholly-owned subsidiary;
(5) Other connected persons as stipulated in the Hong Kong Listing Rules from time to time or as determined by the Hong Kong Stock Exchange.
Chapter 3 Related Transactions and Their Terms and Prices
Section 1 Regulations of Shenzhen Stock Exchange
Article 10 A company's related transactions refer to the transfer of resources or obligations between the company or its controlled subsidiaries and the company's related parties, including the following transactions:
(1) Purchase or sell assets;
(2) External investment (including entrusted financial management, investment in subsidiaries, etc., excluding the establishment or capital increase of wholly-owned subsidiaries);
(3) Provide financial assistance (including entrusted loans);
(4) Providing guarantees (referring to guarantees provided by listed companies for others, including guarantees for controlled subsidiaries);
(5) Lease or lease assets;
(6) Signing management contracts (including entrusted operation, entrusted operation, etc.);
(7) Donating or receiving donated assets;
(8) Creditor's rights or debt restructuring;
(9) Transfer of research and development projects;
(10) Sign a license agreement;
(11) Waiver of rights (including waiving the right of first refusal, the right to first subscribe for capital contribution, etc.)
(12) Purchase raw materials, fuel and power related to daily operations;
(13) Selling products, commodities and other assets related to daily operations;
(14) Other matters that may result in the transfer of resources or obligations through agreement.
Article 11 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 intervening 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 12 Related party transaction prices refer to the transaction prices of goods, services, assets, etc. involved in related party transactions between a company and related parties. The price or charging principle of related-party transactions should be determined fairly and reasonably based on market conditions. No party may use its own advantages or monopoly position to force the other party to accept unreasonable conditions. The pricing of related-party transactions is based on national policies and market conditions. Both parties to the related-party transaction determine the pricing method based on the specific circumstances of the transaction and specify it in the relevant related-party transaction agreement.
Article 13 The management of related party transaction prices shall follow the following principles:
(1) Both parties to the transaction shall pay according to the payment method and payment time agreed in the related transaction agreement;
(2) The company's finance department should track the execution of related transactions and settle payments on time; track changes in market prices and costs, record changes in a timely manner and report them to other relevant departments of the company.
Section 2 Regulations of the Hong Kong Stock Exchange
Article 14 According to the Hong Kong Listing Rules, a connected transaction refers to any transaction between the company or its subsidiaries (as defined in the Hong Kong Listing Rules) and a connected person or a specified type of transaction with a third party (as defined in Chapter 14A of the Hong Kong Listing Rules, which transaction can enable the connected person to obtain benefits through the interest in the entity involved in the transaction), including the following matters:
(1) Purchase or sale of assets, including deemed sales;
(2) (1) Grant, accept, exercise, transfer or terminate an option to purchase or sell assets, or subscribe for securities (if an option is terminated according to the terms of the original agreement, and the company or its controlled subsidiaries have no discretion on the termination, the termination of the option is not a transaction); or (2) Decide not to exercise the option to purchase or sell assets, or subscribe for securities;
(3) Sign or terminate a financial lease or operating lease or sublease;
(4) Make compensation guarantees, or provide or receive financial assistance. Financial assistance includes the granting of credit, the lending of money, or the giving of an indemnity, guarantee or mortgage in connection with a loan;
(5) Entering into an agreement or arrangement to establish any form of joint venture (such as a partnership or a company) or any other form of joint venture arrangement;
(6) Issuance of new securities, including underwriting or sub-underwriting of securities issuances;
(7) Provide, receive or share services; or
(8) Purchase or provide raw materials, semi-finished products and/or finished products.
Connected transactions can be one-time transactions or continuing transactions.
Chapter 4 Decision-making authority for related-party transactions
Section 1 Regulations of Shenzhen Stock Exchange
Article 15 In addition to providing guarantees and providing financial assistance, the company has related transactions with related natural persons with an amount of less than RMB 300,000 (inclusive), and transactions with related legal persons with an amount of less than RMB 3 million (inclusive) or with a transaction amount exceeding RMB 300. Related party transactions worth RMB 10,000, but less than 0.5% (exclusive of 0.5%) of the company’s latest audited net assets absolute value, shall be reviewed and approved by the general manager meeting. Interested parties shall abstain from voting at the general manager meeting. The company shall not provide loans to directors, supervisors, or senior managers directly or through subsidiaries.
Article 16 In addition to providing guarantees and providing financial assistance, related transactions between the company and related natural persons with a transaction amount exceeding RMB 300,000 shall be reviewed and approved by the company's board of directors with the consent of more than half of all independent directors, and shall be disclosed in a timely manner.
In addition to providing guarantees and providing financial assistance, the transaction amount between the company and related legal persons exceeds RMB 3 million, and accounts for more than 0.5% (inclusive of 0.5%) of the absolute value of the company's latest audited net assets, but is less than RMB 30 million (inclusive of 3,000). Related transactions that are less than 5% (excluding 0.5%) of the absolute value of the company's most recent audited net assets shall be reviewed and approved by the company's board of directors with the consent of more than half of all independent directors, and shall be disclosed in a timely manner.
Article 17 In addition to the provision of guarantees, related transactions between the company and related parties (excluding cash assets received by the company and provision of guarantees) with an amount exceeding RMB 30 million and accounting for more than 5% (inclusive) of the absolute value of the company's most recent audited net assets shall be submitted to the shareholders' meeting for review, and an assessment or audit report shall be disclosed. However, if there are provisions in relevant laws, regulations, listing rules or normative documents of the stock exchange where the company's shares are listed, such provisions shall prevail.
A company is exempt from audit or evaluation when a transaction occurs between a company and a related party under any of the following circumstances:
(1) Daily related transactions;
(2) All parties including related parties make capital contributions in cash, and the equity ratio of each party in the invested entity is determined based on the capital contribution ratio;
(3) Other circumstances specified by the stock exchange.
Article 18 If the company provides guarantees to related parties, it shall promptly disclose it after the board of directors has reviewed and approved it, and submit it 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, 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 guarantee matters specified in the preceding paragraph, the parties to the transaction shall take effective measures such as early termination of the guarantee.
If the company provides guarantees for shareholders holding less than 5% of the company's shares, the provisions of the preceding paragraph shall apply, and the relevant shareholders shall abstain from voting at the shareholders' meeting.
Article 19 The company shall not provide financial assistance to related parties stipulated in this system, except when it provides financial assistance to related joint-stock companies (excluding entities controlled by the company's controlling shareholder or actual controller), and other shareholders of the joint-stock company provide financial assistance under the same conditions in proportion to their capital contribution.
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.
The term “affiliated joint-stock companies” as mentioned in this article refers to the related legal persons or other organizations that are shareholders of the company and belong to the company specified in Article 6 of this system.
Article 20 When entrusting financial management between the company and its related parties, the entrusted financial management amount shall be used as the calculation standard, and the relevant provisions of this system shall apply.
Article 21 According to the GEM Listing Rules, the following related party transactions that occur within a company within 12 consecutive months shall be subject to the provisions of Articles 15, 16 and 17 of this system on a cumulative basis:
(1) Transactions with the same related party;
(2) Transactions related to the same transaction subject matter with different related parties.
The above-mentioned same related party includes other related parties that are controlled by the same entity or have equity control relationships with the related party.
Those who have fulfilled relevant obligations in accordance with Articles 15, 16 and 17 of this system will no longer be included in the relevant cumulative calculation scope.
Article 22 The company's related-party transactions that meet the disclosure standards shall be submitted to the board of directors for review and disclosed in a timely manner after approval by more than half of all independent directors.
Article 23 The company's board of directors shall express its opinion on whether major related transactions submitted to the shareholders' meeting for review are beneficial to the company. The board of directors should state the reasons, main assumptions and factors considered when expressing its opinion. The audit committee of the company's board of directors should express its opinion on the fairness of related transactions submitted to the board of directors and shareholders' meeting for review.
Section 2 Regulations of the Hong Kong Stock Exchange
Article 24 According to the Hong Kong Listing Rules, unless it meets the exemption requirements, the company’s connected transactions under the Hong Kong Listing Rules shall comply with the following reporting, announcement and independent shareholders’ approval requirements:
(1) It must first be approved by the company’s board of directors. If an announcement needs to be made, the announcement must be made in a timely manner after obtaining the approval of the board of directors;
(2) If approval from independent shareholders is required, submit the connected transaction to the shareholders’ meeting for review and approval by independent shareholders; and
(3) Disclose in the first annual report after a connected transaction the date of the transaction, the parties to the transaction and the connected relationship between them, the transaction and its purpose, the consideration and main terms, and the nature and extent of the interests of the related parties in the transaction.
If each ratio calculated in accordance with Rule 14.07 of the Hong Kong Listing Rules (other than the profitability ratio) meets the following requirements and is conducted under normal commercial conditions or better, the connected transaction does not need to comply with the aforementioned reporting, announcement and independent shareholders' approval requirements (except for the issuance of new securities by the company):
(1) Each ratio (except profitability ratio) is less than 0.1%;
(2) Each ratio (except the profitability ratio) is less than 1% and the relevant transaction becomes a connected transaction solely because the relevant connected person is related to one or more subsidiaries of the company; or
(3) Each ratio (except the profitability ratio) is less than 5% and the annual transaction consideration (in the case of financial assistance, the total amount of financial assistance together with any monetary benefits paid to connected persons or jointly held entities) is less than HK$3 million.
Unless otherwise provided in the Hong Kong Listing Rules, each ratio (except profitability ratio) stipulated in these Terms and its calculation method are as follows:
(1) Asset ratio - the total value of assets involved in the relevant transaction divided by the total value of the company's assets;
(2) Profit ratio - the revenue attributable to the assets involved in the transaction divided by the company's revenue;
(3) Consideration ratio - the relevant consideration divided by the total market capitalization of the company. The total market capitalization is the average closing price of the company's securities for the five business days preceding the relevant trading date as reported in the Hong Kong Stock Exchange's daily reports; and
(4) Equity ratio - the number of shares issued by the company as consideration, divided by the total number of issued shares of the company before the relevant transaction.
Connected transactions that meet the following requirements do not need to comply with the aforementioned independent shareholder approval requirements and may be approved by the board of directors (except for the issuance of new securities by the company):
(1) If each ratio (except profitability ratio) is calculated in accordance with Rule 14.07 of the Hong Kong Listing Rules;
(1) Each ratio is less than 5%; or
(2) Each ratio is less than 25% and the annual transaction consideration (in the case of financial assistance, the total amount of financial assistance together with any pecuniary benefits paid to connected persons or jointly held entities) is less than HK$10 million; and
(2) Conducted on normal commercial terms or better.
Article 25 According to the Hong Kong Listing Rules, the following types of connected transactions are exempted connected transactions provided that relevant conditions are met:
(1) Financial assistance;
(2) The company or its subsidiaries issue new securities;
(3) Trading of securities on stock exchanges;
(4) The company or its subsidiaries repurchase its own securities;
(5) Director service contract and insurance;
(6) Purchase or sell consumer goods or consumer services;
(7) Shared administrative services;
(8) Transactions with contacts of passive investors;
(9) Transactions with connected persons at the subsidiary level;
(10) Other transactions stipulated in the Hong Kong Listing Rules.
Article 26 According to the Hong Kong Listing Rules, if a series of connected transactions are all completed within 12 months or are related to each other, the Hong Kong Stock Exchange may require the company to consolidate the transactions and treat them as one transaction. In these cases, the company must comply with the relevant requirements of the category to which the aggregated transaction falls. When the Hong Kong Stock Exchange decides whether to consolidate connected transactions, factors it considers include whether the transactions:
(1) Conducted for the company and or its subsidiaries with the same party, or with persons related to each other or with other contacts;
(2) Involving the acquisition or sale of securities or interests of a specific company or group company;
(3) Involving the acquisition or sale of components of an asset; or
(4) In total, the company is heavily involved in a business that was not part of the company's main business in the past.
If the company's proposed transaction has any of the above circumstances with any other transactions entered into by the company within the previous 12 months, the company must provide transaction details to the Hong Kong Stock Exchange for the Hong Kong Stock Exchange to decide whether to aggregate the transaction.
Chapter 5 Decision-making Procedure for Related Party Transactions
Article 27 For related transactions approved by the general manager meeting of the company as stipulated in Article 15 of this system, the relevant functional departments of the company shall report the related transaction status in writing to the general manager of the company. The general manager of the company shall organize a general manager office meeting to review the necessity, rationality and fairness of such related transactions. After the review is passed, the relevant departments shall implement it.
Article 28 Related transactions or related transactions that are subject to review and approval by the board of directors as stipulated in Articles 16 and 24 of this system shall be decided in accordance with the following procedures:
(1) The relevant functional departments of the company shall prepare a detailed written report and related transaction agreement on the related transaction or related transaction, and submit it to the board of directors for review after preliminary review by the general manager;
(2) After receiving the proposal, the chairman of the company or the office of the board of directors shall issue a notice of a board meeting to all directors of the company. The board of directors shall review the necessity, rationality, and fairness of the related transaction or related transaction; for major related transactions or related transactions, the consent of a majority of all independent directors shall be obtained before submission to the board of directors for discussion, and the independent directors shall express independent opinions at the board meeting;
(3) The board of directors will vote on the related transaction or related transaction, and it can only be implemented after passing it.
Article 29 Regardless of whether the company's related transactions or related transactions require the approval of the board of directors, the related directors shall disclose the nature and degree of the related relationship to the board of directors before the transaction occurs.
When the company's board of directors considers related transactions or related transaction matters, related directors may attend the meeting. At the meeting, related directors shall explain their related relationships and abstain from voting. Related directors shall not exercise voting rights on behalf of other directors. The board meeting can be held if more than half of the non-related directors are present, and 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.
The related directors mentioned in the preceding paragraph include the following directors or directors with one of the following circumstances:
(1) Counterparty;
(2) 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;
(3) Having direct or indirect control over the counterparty;
(4) Close family members of the transaction counterparty or its direct or indirect controller (including spouse, parents, spouse’s parents, brothers and sisters and their spouses, children over 18 years old and their spouses, spouse’s brothers and sisters, and children’s spouse’s parents);
(5) Close family members of the counterparty to the transaction or the directors, supervisors and senior managers of its direct or indirect controller (including spouse, parents, spouse’s parents, brothers and sisters and their spouses, children over 18 years old and their spouses, spouse’s brothers and sisters and parents of the children’s spouse);
(6) Persons whose independent business judgment may be affected due to other reasons as determined by the China Securities Regulatory Commission, Shenzhen Stock Exchange, Hong Kong Stock Exchange or the company.
Article 30 Related transactions or related transactions that are subject to review and approval by the company's shareholders' meeting as stipulated in Articles 17 and 24 of this system. If the subject matter of the related transaction or related transaction is the company's equity, the company shall hire an accounting firm with qualifications to perform securities and futures-related business to conduct audits of the transaction subject matter for the most recent year. The financial accounting report shall be audited, and the audit deadline shall not exceed six months from the date of signing the agreement; if the subject of the related transaction is assets other than equity, the company shall also hire an asset appraisal agency qualified to perform securities and futures-related businesses to conduct evaluation, and the base date of evaluation shall not exceed one year from the date of signing the agreement.
Article 31 When the company's shareholders' meeting considers related transactions or related transaction matters, related shareholders shall abstain from voting and shall not exercise voting rights on behalf of other shareholders. When the shareholders' meeting makes a resolution on related transactions or connected transaction matters, it shall be passed by more than one-half or two-thirds of the voting rights held by non-related shareholders attending the shareholders' meeting, depending on the difference between ordinary resolutions and special resolutions. For voting on related transactions or related transaction matters, two representatives of non-related shareholders shall participate in the counting and supervision of votes. The voting results of non-affiliated shareholders should be fully disclosed in the announcement of resolutions of the shareholders' meeting.
The related shareholders mentioned in the preceding paragraph include the following shareholders or shareholders with one of the following circumstances:
(1) Counterparty;
(2) Having direct or indirect control over the counterparty;
(3) Directly or indirectly controlled by the counterparty;
(4) Directly or indirectly controlled by the same legal person or natural person as the counterparty;
(5) Close family members of the transaction counterparty or its direct or indirect controller (including spouse, parents, spouse’s parents, brothers and sisters and their spouses, children over 18 years old and their spouses, spouse’s brothers and sisters, and parents of the children’s spouse);
(6) Working for the counterparty to the transaction, or for a legal entity that can directly or indirectly control the counterparty or a legal entity directly or indirectly controlled by the counterparty (applicable to shareholders who are natural persons);
(7) Its voting rights are restricted and affected due to the existence of an unfulfilled equity transfer agreement or other agreement with the counterparty or its related parties;
(8) Legal persons or natural persons identified by the China Securities Regulatory Commission, Shenzhen Stock Exchange or the Hong Kong Stock Exchange as being likely to cause the Company to favor its interests.
Article 32 When a company and related parties conduct related transactions related to daily operations listed in Items (12) and (13) of Article 10 of this System, they shall disclose and perform corresponding review procedures in accordance with the following provisions:
(1) For daily related transactions that occur for the first time, the company shall enter into a written agreement with the related party and disclose it in a timely manner. According to the transaction amount involved in the agreement, the provisions of Articles 15, 16, and 17 of this system shall be applied respectively and submitted to the general manager office meeting, the board of directors, and the shareholders' meeting for review; if the agreement does not have a specific transaction amount, it shall be submitted to the shareholders' meeting for review.
(2) For daily related transaction agreements that have been reviewed and approved by the company's board of directors or shareholders' meeting and are currently being implemented, if the main terms of the agreement do not change significantly during the implementation process, the company shall disclose the actual performance of the relevant agreement in periodic reports as required, and explain whether it complies with the provisions of the agreement; if the main terms of the agreement change significantly during the implementation process If there is a change or the agreement needs to be renewed upon expiration, the company shall submit the newly revised or renewed daily related-party transaction agreement to the general manager office meeting, the board of directors, and the shareholders' meeting for review according to the transaction amounts involved in the agreement.
(3) If there are a large number of daily related transactions that occur every year, the company can, before disclosing the previous annual report, make a reasonable estimate of the total amount of daily related transactions that will occur in the company that year, and apply the provisions of Articles 15, 16, and 17 of this system respectively based on the estimated amounts and submit them to the general manager office meeting, the board of directors, and the shareholders' meeting for review and disclosure; for daily related transactions within the estimated scope, the company shall disclose them in periodic reports. If the amount of daily related transactions exceeds the estimated total amount during actual execution, the company shall apply the provisions of Articles 15, 16, and 17 of this system respectively based on the excess amount and resubmit it to the general manager's office meeting, the board of directors, and the shareholders' meeting for review and disclosure.
Article 33 The daily related transaction agreement shall at least include the transaction price, pricing principles and basis, total transaction volume or its determination method, payment method and other major terms.
If the daily related party transaction agreement does not determine the specific transaction price but only states the reference market price, when the company performs its disclosure obligations in accordance with Article 32 of this system, it shall simultaneously disclose the actual transaction price, the market price and its determination method, and the reasons for the differences between the two prices.
Article 34 On the premise of meeting the requirements (if any) of the stock exchange where the company's shares are listed, if the company signs daily related transactions or related transaction agreements with related parties or related persons for a period of more than three years, it shall re-perform the review procedures and disclosure obligations in accordance with this system every three years.
Article 35 When a company engages in related transactions between the company and related parties due to public bidding, public auctions, etc., the company may apply to the stock exchange where the company's shares are listed for exemption from performing relevant obligations in accordance with the provisions of this chapter.
Article 36 Related transactions or related transactions occurring in a company's controlled subsidiaries shall be deemed as corporate actions, and the provisions of this system shall apply to its decision-making procedures, disclosure and other matters.
Article 37 According to the relevant business regulations of the Shenzhen Stock Exchange, when a company enters into the following related transactions with related parties, it may be exempted from performing relevant obligations in accordance with the provisions of this system:
(1) One party subscribes in cash for stocks, corporate bonds or enterprise bonds, convertible corporate bonds or other derivatives issued by the other party to unspecified objects;
(2) One party serves as a member of the underwriting syndicate to underwrite stocks, corporate bonds or enterprise bonds, convertible corporate bonds or other derivatives issued by the other party to unspecified objects;
(3) One party receives dividends, bonuses or remuneration in accordance with the resolution of the other party’s shareholders’ meeting;
(4) Other circumstances determined by the Shenzhen Stock Exchange.
Article 38 When a company conducts continuing connected transactions listed in Article 14 of this system with connected persons, it shall make disclosures and perform corresponding review procedures in accordance with the following provisions:
(1) Set an annual cap for each connected transaction;
(2) Sign a written agreement with a connected person for each connected transaction. The content of the agreement should reflect general commercial terms and list the basis for calculating the payment amount. The term of the agreement should be fixed and should not exceed three years. If the term of the agreement must exceed three years due to the nature of the transaction, written confirmation from the independent financial advisor must be obtained, and the review process must be re-implemented in accordance with the provisions of this system;
(3) According to the transaction amount involved in the agreement, the provisions of Article 24 of this system shall be applied and submitted to the board of directors and shareholders' meeting for review.
Chapter 6 Disclosure of Related Party Transactions
Section 1 Regulations of Shenzhen Stock Exchange
Article 39 A company shall truthfully disclose information on related parties, related transactions and other relevant information in accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Accounting Standards for Business Enterprises and other relevant laws and regulations, as well as the listing rules and normative documents of the stock exchange where the company's shares are listed.
Article 40 When a company discloses related party transactions, it shall submit the following documents to the Shenzhen Stock Exchange:
(1) Announcement draft;
(2) Agreement or letter of intent related to the transaction;
(3) Board resolutions, independent directors’ opinions and draft announcement of board resolutions (if applicable);
(4) Government approval documents involved in the transaction (if applicable);
(5) Professional reports issued by intermediaries (if applicable);
(6) Resolutions of special meetings of independent directors;
(7) Opinions of independent directors and sponsors
(8) Other documents required by Shenzhen Stock Exchange.
Article 41 Unless otherwise stipulated by the listing rules of the stock exchange where the company is listed, the announcement of related transactions disclosed by the company shall include the following content:
(1) Overview of the transaction and basic information on the subject matter of the transaction;
(2) The resolutions of the special meeting of independent directors and the independent opinions expressed by independent directors and sponsors;
(3) Voting status of the board of directors (if applicable);
(4) Description of the related relationships between the parties to the transaction and basic information on the related persons;
(5) The pricing policy and pricing basis of the transaction, including the relationship between the transaction price and the book value, appraisal value and clear and fair market price of the transaction object, as well as other specific matters related to pricing that need to be explained due to the special transaction object. If the transaction price is significantly different from the book value, appraised value or market price, the reasons should be explained. If the transaction is unfair, the direction of transfer of interests resulting from the related party transaction should also be disclosed;
(6) The main contents of the transaction agreement, including the transaction price, transaction settlement method, the nature and proportion of the interests of related parties in the transaction, the agreement's effective conditions, effective time, performance period, etc.
(7) The purpose of the transaction and its impact on the company, including the necessity and true intention of conducting this related transaction, the impact on the current and future financial conditions and operating results, etc.;
(8) The total amount of various related transactions that have occurred with the related party from the beginning of the year to the disclosure date;
(9) Other contents stipulated by the listing rules of the place where the company’s shares are listed;
(10) Other content required by the China Securities Regulatory Commission and the stock exchange where the company's shares are listed to help explain the substance of the transaction.
Section 2 Regulations of the Hong Kong Stock Exchange
Article 42 The company’s announcements, circulars and annual reports disclosing connected transactions on the Hong Kong Stock Exchange shall at least include the information required by Articles 14A.68 to 14A.72 of the Hong Kong Listing Rules.
Article 43 Non-exempt one-time connected transactions shall be handled in accordance with the following principles:
(1) Publish an announcement on the Hong Kong Stock Exchange before the market opens on the day after approval by the board of directors or on the first working day thereafter. The principles for handling announcements are as follows: After agreeing on transaction terms, an announcement shall be published on the website of the Hong Kong Stock Exchange and relevant information disclosed in accordance with the requirements of the Hong Kong Listing Rules. The content of the announcement must clearly reflect: (1) whether the directors consider the transaction to be a transaction carried out on normal commercial terms in the ordinary course of business of the listed issuer; (2) the opinions of the independent non-executive directors; and (3) whether any director has a material interest in the transaction and whether they have waived their right to vote at board meetings.
(2) After approval by the board of directors and an announcement, the independent financial adviser must confirm that the connected transaction is fair and reasonable and in the interests of the company and all shareholders, and submit the opinion to the independent board committee for review. The independent board committee must then convene a separate meeting to confirm that the connected transaction is fair and reasonable and in the interests of the company and all shareholders. The above opinions of the independent financial adviser and the independent board committee must be included in the shareholder circular to be issued to shareholders.
(3) After the announcement is made, a draft of the circular must be sent to the Hong Kong Stock Exchange for review, and then a circular that is confirmed by the Hong Kong Stock Exchange to comply with the listing rules will be distributed to shareholders.
(4) Submit the connected transactions to the shareholders' meeting for review. Connected transactions can only be carried out after obtaining the approval of the shareholders' meeting. At the shareholders' meeting, connected persons with material interests must abstain from voting rights. A statement that a connected person with a material interest is required to abstain from voting rights must be included in the shareholder circular to be issued to shareholders. “Independent shareholder” approval must be by way of a vote. The company must publish an announcement announcing the voting results before the market opens on the first working day after the meeting.
(5) Make a declaration. The processing principles are as follows: the date of the transaction, the parties to the transaction and their related relationships, the transaction and its purpose, the consideration and terms, and the nature and extent of the interests of the connected persons in the transaction should be disclosed in the first annual report and accounts after the connected transaction.
Article 44 Non-exempt continuing connected transactions shall comply with the following treatment principles:
(1) Disclosure reports, announcements and independent shareholder approval must be made in accordance with the provisions of the Hong Kong Listing Rules (including disclosure of the basis for calculation of the annual upper limit of continuing connected transactions).
(2) Comply with the relevant provisions of the Hong Kong Listing Rules on annual disclosure of continuing connected transactions.
(3) If the following circumstances occur in a continuing connected transaction, the company must re-comply with the reporting, announcement and independent shareholder approval procedures stipulated in these Measures:
The transaction amount is expected to exceed the disclosed upper limit; or
If the relevant agreement is updated or the terms of the agreement are significantly revised.
Chapter 7 Supplementary Provisions
Article 45 Matters not covered in this system shall be implemented in accordance with the relevant national laws, administrative regulations, normative documents, the listing rules of the stock exchange where the company's stocks are listed, and the Articles of Association and other relevant provisions; this system will not be consistent with the laws, administrative regulations, normative documents promulgated by the country in the future, and the certificates of the place where the company's stocks are listed. If the listing rules of the stock exchange or the "Articles of Association" modified through legal procedures conflict with the company's relevant systems, the laws, administrative regulations, normative documents, the listing rules of the stock exchange where the company's shares are listed, or the "Articles of Association" modified through legal procedures and the company's relevant systems shall prevail.
Article 46 This system shall take effect from the date of review and approval by the company's shareholders' meeting. From the effective date of this system, the company's original "Related Transaction System" will automatically become invalid.
Article 47 The right to interpret this system belongs to the board of directors, and the right to amend it belongs to the shareholders' meeting.
Board of Directors of Hangzhou Tigermed Pharmaceutical Technology Co., Ltd.
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