International Engineering Co., Ltd. Chapter I General Provisions Article 1 In order to further strengthen the management of related party transactions of Sinoma International Engineering Co., Ltd. (Hereinafter referred to as the "Company"), clarify the management responsibilities and division of labor, and safeguard the legitimate rights and interests of shareholders and creditors of the Company, Especially the legitimate rights and interests of small and medium-sized investors, to ensure that the related party transaction contracts concluded between the company and the related parties conform to the principles of fairness, impartiality and openness. In accordance with the Company Law of the People's Republic of China, the Securities Law of the People's Republic of China, the Code of Corporate Governance for Listed Companies, the Rules Governing the Listing of Stocks on the Shanghai Stock Exchange, the Guidelines for Self-regulation of Listed Companies on the Shanghai Stock Exchange No.5-Transactions and Related Party Transactions, as well as the China Securities Regulatory Commission, This system is formulated in accordance with the relevant provisions of Shanghai Stock Exchange and the Articles of Association of Sinoma International Engineering Co., Ltd. (Hereinafter referred to as the "Articles of Association") and in combination with the actual situation of the Company. Article 2 This system is applicable to the decision-making and management of affiliated transactions of the company, and is binding on the shareholders and directors of the company. The company must abide by this system when engaging in activities related to this system. Chapter II Affiliated Persons and Affiliated Relationships Article 3 Affiliated persons of the Company include affiliated legal persons (or other organizations) and affiliated natural persons. Article 4 a legal person under any of the following circumstances shall be 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 (or other organizations) other than companies, holding subsidiaries and other subjects controlled by legal persons (or other organizations) directly or indirectly controlled by legal persons (or other organizations) in Item (1) above; (3) Legal persons (or other organizations) directly or indirectly controlled by the related natural persons of the companies listed in Article 5, or where the related natural persons act as directors (excluding independent directors of both parties) or senior managers, except for the companies, holding subsidiaries and other subjects controlled by them; (4) Legal persons (or other organizations) holding more than 5% of the Company's shares and persons acting in concert with them; (5) Other legal persons (or other organizations) identified by the CSRC, the Shanghai Stock Exchange and the Company in accordance with the principle of substance over form as having a special relationship with the Company, which may cause or has caused the Company's interests to tilt towards them. Where the Company and the legal person (or other organization) listed in Item (2) are controlled by the same state-owned assets management institution, which results in the circumstances described in this item, it shall not constitute an affiliated relationship, except that its legal representative, chairman, general manager or more than half of the directors concurrently serve as directors or senior managers of the listed company. Article 5 The related natural persons of the Company refer to: (1) the natural persons who directly or indirectly hold more than 5% of the shares of the Company; (2) the directors and senior managers of the Company; (3) the directors and senior managers of the related legal persons listed in Item (1) of Article 4; (4) Close family members of the persons referred to in Items (1) and (2) of this Article, including spouses, children over the age of 18 and their spouses, parents and parents of their spouses, brothers and sisters and their spouses, brothers and sisters of their spouses, and parents of their children's spouses; (5) Other natural persons identified by the CSRC, the Shanghai Stock Exchange and the Company in accordance with the principle of substance over form as having a special relationship with the Company, which may or has caused the Company's interests to tilt towards them. Article 6 a legal person (or other organization) or natural person under any of the circumstances as described in Article 4 and Article 5 within the past 12 months or within 12 months after the relevant agreement or arrangement comes into effect shall be a related person of the listed company. Article 7 Affiliated relationship mainly refers to the way or path that has the ability to directly or indirectly control or exert significant influence on the company in financial and business decision-making, mainly including the equity relationship, personnel relationship, management relationship and commercial interest relationship between the affiliated person and the company. The affiliated relationship shall be substantially judged from the specific ways, means and extent of the control or influence of the affiliated person on the company. Chapter 3 Content of Related Party Transactions Article 8 Related party transactions of the Company refer to the transfer of resources or obligations between the Company or its controlling subsidiaries and the Company's related parties, including but not limited to the following: (1) purchase or sale of assets; (2) external investment (including entrusted financial management, entrusted loans, etc.); (3) Providing financial assistance (including interest-bearing or interest-free loans, entrusted loans, etc.); (4) Providing guarantees (including guarantees for controlling subsidiaries, etc.); (5) Leasing in or out assets; (6) Entrusting or managing assets and businesses; (7) Donating or receiving donated assets; (8) Restructuring of creditor's rights and debts; (9) Signing a licensing agreement; (10) Transferring or accepting a research project; (11) Waiving rights (including waiving the preemptive right and the preemptive right to subscribe for capital contribution); (12) Purchasing raw materials, fuel and power; (13) Accepting labor services; (14) Selling products and commodities; (15) Providing labor services; (16) Contracting projects; (17) Other transactions related to daily operations. Chapter IV Principles of Related Party Transactions Article 9 The related party transactions of the Company shall comply with the following principles: (1) the principle of good faith; (2) the principle of fairness, openness and impartiality; (3) if the related party has the right to vote in the shareholders' meeting, it shall abstain from voting; Directors who have any interest relationship with the related parties shall abstain from voting on the matter by the board of directors; (5) The board of directors of the Company shall judge whether the related party transaction is beneficial to the Company based on objective standards, and shall engage professional evaluation institutions or independent financial consultants when necessary in accordance with the scope prescribed in the Listing Rules of Shanghai Stock Exchange. Article 10 Pricing Principles The prices of related party transactions shall be fair and, in principle, shall not deviate from the prices or charging standards of independent third parties in the market. The company shall fully disclose the pricing basis of the related party transactions. Article 11 Capital transactions and external guarantees The controlling shareholders, actual controllers and other associated parties shall not occupy the company's funds in the operational capital transactions with the company. The Company shall not directly or indirectly provide funds to the controlling shareholders, actual controllers and other associated parties for use in the following ways: (1) Advance wages, welfare, insurance, advertising and other expenses, bear costs and other expenditures for the controlling shareholders, actual controllers and other associated parties; (2) To lend the company's funds (including entrusted loans) to the controlling shareholders, actual controllers and other related parties for use with or without compensation, except that other shareholders of the company's shareholding company provide funds in the same proportion. The term "joint stock company" as mentioned above does not include the company controlled by the controlling shareholder or actual controller; (3) entrusting the controlling shareholder, actual controller or other associated party to carry out investment activities; (4) Issuing commercial acceptance bills without real transaction background for controlling shareholders, actual controllers and other related parties, and providing funds in the form of purchase funds, asset transfer funds and prepayments without consideration for goods and services or under circumstances obviously contrary to commercial logic; (5) Repaying debts on behalf of controlling shareholders, actual controllers and other related parties; (6) Other methods recognized by the CSRC. The Company shall provide guarantee for the controlling shareholders, actual controllers and their related parties in accordance with the relevant laws and regulations and the relevant systems of the Company. Chapter V Decision-making Authority of Related Party Transactions Article 12 Decision-making Authority of the President's Office Meeting (1) To consider and approve the related party transactions (excluding the provision of guarantees for related parties) between the Company and related natural persons with an amount (including the debts and expenses assumed) of less than 300,000 yuan (excluding 300,000 yuan); To consider and approve that the proportion of the amount of the transactions (excluding the provision of guarantees for related parties) proposed to be conducted between the Company and related legal persons (including the debts and expenses assumed) to the absolute value of the latest audited net assets of the Company is less than 0.5% (excluding 0.5%). Interested parties shall abstain from voting when the above related transactions are considered by the President's Office. Article 13 Decision-making authority of the board of directors (1) To consider and approve the company's proposed transactions with related natural persons (except for the provision of guarantees for related persons) in which the amount (including the debts and expenses assumed) reaches or exceeds 300000 yuan; (2) To consider and approve the amount of transactions (including debts and expenses assumed) between the Company and related legal persons (excluding the provision of guarantees for related persons) accounting for more than 0.5% of the absolute value of the latest audited net assets of the Company (including 0.5%). Consider and approve the related party transactions (excluding the provision of guarantees for related parties) in which the amount (including the debts and expenses assumed) of the company's proposed transactions with related parties is more than 30 million yuan (including 30 million yuan) and accounts for more than 5% (including 5%) of the absolute value of the company's latest audited net assets. As well as related party transactions that should be considered by the shareholders' meeting as required by relevant regulations or the Shanghai Stock Exchange. The subject matter of transactions involved in the related transactions related to the daily operation of the company may not be audited or evaluated. If the Company and the related parties jointly invest to establish the Company, and the amount of capital contribution of the Company reaches the standard for deliberation by the shareholders' meeting, if all the capital contributions are made in cash, and the proportion of equity of each party in the established company is determined according to the proportion of capital contribution, the provisions of submitting to the shareholders' meeting for deliberation may be exempted. Article 15 Where the Company provides guarantee for related parties, it shall be approved by more than half of all non-related directors, and shall also be approved and resolved by more than two-thirds of the non-related directors present at the board meeting, and shall be submitted to the shareholders' meeting for deliberation. Where the Company provides guarantee for the controlling shareholders, actual controllers and their affiliates, the controlling shareholders, actual controllers and their affiliates shall provide counter-guarantee. If the company causes the guaranteed party to become a related party of the company due to the transaction or related party transaction, it shall perform the corresponding review procedures and information disclosure obligations for the existing related party guarantee while implementing the transaction or related party transaction. If the board of directors or the shareholders'meeting fails to consider and approve the related guarantee matters specified in the preceding paragraph, the parties to the transaction shall take effective measures such as terminating the guarantee in advance. Article 16 The Company shall not provide financial assistance to related parties, except for providing financial assistance to a related joint stock company not controlled by the controlling shareholder or actual controller of the Company, and other shareholders of the joint stock company provide financial assistance under the same conditions in proportion to their capital contributions. Where the Company provides financial assistance to an affiliated joint stock company as prescribed in the preceding paragraph, it shall be approved by more than half of all non-affiliated directors, and by more than two-thirds of the non-affiliated directors present at the board meeting, and shall be submitted to the shareholders' meeting for deliberation. Article 17 Where a company and a related party jointly invest to establish a company, the amount of capital contribution of the company shall be taken as the transaction amount, and the provisions of Articles 12 to 14 of the System shall apply. Article 18 Where the Company directly or indirectly waives the preemptive right or the right to subscribe for capital contribution to its controlling subsidiaries or other subjects under its control, resulting in changes in the scope of consolidated statements and related transactions with its related parties, the relevant financial indicators of the subject shall be related to the amount waived, and the provisions of Articles 12 to 14 of the System shall apply. Where the waiver of rights by the Company does not result in any change in the scope of the consolidated financial statements of the Company, but the proportion of the rights and interests of the subject owned by the Company decreases as compared with that of the Company that has not waived its rights, and the transaction results in related transactions with its related parties, the provisions of Articles 12 to 14 of the System shall apply to the amount waived and the relevant financial indicators calculated according to the proportion of changes in rights and interests. Where the company partially waives its rights and causes related transactions with its related parties, the amount and indicators specified in the preceding two paragraphs and the actual amount of transfer or contribution shall also apply to the provisions of Articles 12 to 14 of the System. Article 19 Where the relevant arrangements for the transactions between the Company and the related parties involve the conditional determination of the amount of consideration that may be paid or received in the future, the estimated maximum amount shall be the transaction amount, and the provisions of Articles 12 to 14 of the System shall apply. Article 20 Cumulative Calculation of Related Party Transactions The following related party transactions of the Company within 12 consecutive months shall be subject to the provisions of Articles 12 to 14 of the System respectively in accordance with the principle of cumulative calculation: (1) transactions with the same related party; (2) transactions related to the subject matter of the same transaction category with different related parties. The same related person mentioned above includes other related persons who are controlled by the same subject or have equity control relationship with the related person. Those who have fulfilled the obligation of information disclosure or deliberated by the shareholders'meeting in accordance with the provisions shall no longer be included in the relevant cumulative calculation scope.Article 21 In case of entrusted financial management between the Company and the related parties, if it is difficult to perform the review procedures and disclosure obligations for each investment transaction due to the transaction frequency and time limit requirements, the investment scope, investment amount and time limit may be reasonably estimated, and the amount shall be taken as the calculation standard, and the provisions of Articles 12 to 14 of the System shall apply. The term of use of the relevant limit shall not exceed 12 months, and the transaction amount at any time point during the term (including the relevant amount reinvested by the proceeds of the aforementioned investment) shall not exceed the investment limit.
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