SDIC Power Holdings CO., LTD.
(GDR under the symbol: "SDIC")
NOTICE OF THE 2024 FIRST EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN that the 2024 First Extraordinary General Meeting of SDIC Power Holdings CO., LTD. will be held at Room 207, No.147 Xizhimen Nanxiao Street, Xicheng District, Beijing, the PRC, on Tuesday 23 January 2024 at 14:00 p.m., for the purpose of considering, and if thought fit, passing the following resolution.
ORDINARY RESOLUTION
1. To consider and approve the Proposal on 2024 Estimated Daily Related-Party Transactions
The Board of Directors of SDIC Power Holdings CO., LTD.
December 28, 2023
The resolutions hereunder contain the English translation of the Chinese version of "Meeting materials for the 2024 First Extraordinary General Meeting" as published on the website of the Shanghai Stock Exchange, and are provided for your reference only. In case of discrepancy between the Chinese version and the English version, the Chinese version shall prevail.
Proposal I
SDIC Power Holdings Co., Ltd.
Proposal on 2024 Estimated Daily Related-Party Transactions
Dear shareholders and shareholders' representatives,
As required by production and operation, SDIC Power Holdings Co., Ltd. (hereinafter referred to as the "Company") and its controlled subsidiaries are expected to have daily related-party transactions with the controlling shareholder State Development & Investment Corp., Ltd. (hereinafter referred to as "SDIC") and its controlled subsidiaries in 2024, including deposit and loan transactions, receiving labor services provided by related parties and selling goods to related parties, which are described in detail as follows:
I. Basic Information on Related-Party Transactions
(I) Execution of daily related-party transactions in 2023
| Type of related-party transaction | Related party | Estimated amount in 2023 | Actual amount from January to November 2023 (unaudited) | Reasons for significant difference between the estimated amount and the actual amount |
| Deposit with SDIC Finance, one of the related parties | SDIC Finance Co., Ltd. | Daily average deposit balance not more than RMB 15 billion | Daily average deposit balance of RMB 8.069 billion | The estimate was made on the basis of the Company's business development and fund balancing. |
| Deposit (foreign currency) with the overseas fund management platform of the related party | Rongshi International Treasury Management Co., Ltd. | Daily average deposit balance not more than equivalent USD 100 million | Daily average deposit balance of USD 1.628 million | The estimate was made on the basis of the Company's overseas business development and fund balancing. |
| Loan transaction with the related party | SDIC and its controlled subsidiaries | Not more than RMB 20 billion | RMB 13.044 billion | The estimate was made on the basis of the Company's business development and fund balancing. |
| Loan transaction with the related party (foreign currency) | Rongshi International Treasury Management Co., Ltd. | New loan not more than equivalent USD 800 million | New loan of USD 30 million | The estimate was made on the basis of the Company's overseas business development and fund balancing. |
| Receiving labor services provided by the related party | SDIC Property Management Co., Ltd. | Not more than RMB 800 million | RMB 5.58 million | Not applicable |
| SDIC Human Resources Service Co., Ltd. | RMB 1.9 million | Not applicable | ||
| SDIC Traffic Holding Co., Ltd. | RMB 218.58 million | Not applicable | ||
| SDIC Intelligence Co., Ltd. | RMB 1.98 million | Not applicable | ||
| Beijing Yahua Real Estate Development Co., Ltd. | RMB 10.96 million | Not applicable | ||
| SDIC Inspection and Testing Certification Co., Ltd. | RMB 0.23 million | New | ||
| SDIC Health Industry Investment Co., Ltd. | RMB 1.45 million | New | ||
| Xiamen Meiya Pico Information Co., Ltd. | RMB 0.49 million | Not applicable | ||
| Shandong Tejian Fangyuan Detection Co., Ltd. | RMB 0.11 million | New | ||
| China Electronics Engineering Design Institute Co., Ltd. | RMB 0.36 million | New | ||
| Selling goods to the related party | SDIC Traffic Holding Co., Ltd. | Not more than RMB 400 million | RMB 15.9632 million | Not applicable |
(II) Estimated amounts and types of daily related-party transactions in 2024
| Type of related-party transaction | Related party | Estimated amount in 2024 | Actual amount from January to November 2023 (unaudited) | Reasons for the significant difference between the estimated amount of this year and the actual amount of the previous year |
| Deposit with SDIC Finance, one of the related parties | SDIC Finance Co., Ltd. | Daily maximum deposit balance not more than RMB 15 billion | Daily maximum deposit balance of RMB 10.8 billion | The estimate was made on the basis of the Company's business development and fund balancing. |
| Loan transaction with the related party | SDIC and its controlled subsidiaries | Daily maximum loan limit not more than RMB 15 billion | Daily maximum loan limit of RMB 11.421 billion | The estimate was made on the basis of the Company's business development and fund balancing. |
| Deposit (foreign currency) with the overseas fund management platform of the related party | Rongshi International Treasury Management Co., Ltd. | Daily maximum deposit balance not more than RMB 5 billion | Daily maximum deposit balance of RMB 82 million | The estimate was made on the basis of the Company's overseas business development and fund balancing. |
| Loan transaction with the related party (foreign currency) | Rongshi International Treasury Management Co., Ltd. | Daily maximum loan limit not more than RMB 15 billion | Daily maximum loan limit of RMB 7.865 billion | The estimate was made on the basis of the Company's overseas business development and fund balancing. |
| Receiving labor services provided by the related party (coal storage and transportation, consultation service, software and hardware procurement, etc.) | SDIC and its controlled subsidiaries | Not more than RMB 800 million | RMB 240 million | SDIC Genting Meizhouwan and SDIC Qinzhou are expected to have some coal storage and unloading costs; and some service fees will be incurred with SDIC Human Resources, SDIC Intelligence and other related parties. |
| Selling goods to the related party (sales of electricity, coal unloading service, etc.) | SDIC and its controlled subsidiaries | Not more than RMB 400 million | RMB 16 million | Coordinated development with related parties; considering the influence of changes in the electricity market; and estimates related to carbon emissions permit trading. |
On May 30, 2023, the Company and Rongshi International Treasury Management Co., Ltd. (hereinafter referred to as Rongshi Treasury) signed the Financial Service Agreement which is valid for three years; and on June 21, 2023, the Company and SDIC Finance Co., Ltd. (hereinafter referred to as SDIC Finance) signed the Financial Service Agreement which is valid for three years. In the year of 2024, the Company will continue to comply with the deposit and loan limits agreed in the Financial Service Agreements with its related parties, SDIC Finance and Rongshi Treasury, and it is expected that the daily maximum deposit balance will be no more than RMB 15 billion, and the daily maximum loan limit will be no more than RMB 20 billion in SDIC Finance Co., Ltd., and that the daily maximum deposit balance will be no more than RMB 5 billion, and the daily maximum loan limit will be no more than RMB 15 billion in Rongshi International Treasury Management Co., Ltd.
II. Introduction to and Relationship with Related Parties
(I) Introduction to related parties
1. State Development & Investment Corp., Ltd.
| Company Name | State Development & Investment Corp., Ltd. |
| Nature | Limited liability company (wholly state-owned) |
| Legal Representative | Fu Gangfeng |
| Date of Establishment | April 14, 1995 |
| Registered Capital | RMB 33.8 billion |
| Domicile | International Investment Plaza, 6-6 Fuchengmen North Street, Xicheng District, Beijing |
| Scope of Business | Managing state-owned assets within the scope of authority by the State Council and conducting related investment businesses; investment and investment management in such fields as energy, transportation, chemical fertilizer, high-tech industry, financial service, consulting, guarantee, trade, biomass energy, pension industry, big data, medical treatment and health, as well as inspection and testing; asset management; economic information consulting; technical development and technical services. (The enterprise is allowed to operate items at its own option and perform related business activities in accordance with laws; as for items required to be approved in accordance with laws, business activities shall be performed as approved by relevant authorities; it is not allowed to be engaged in business activities prohibited and restricted by the municipal industrial policies.) |
| Financial Data | As of December 31, 2022, the audited total assets and net assets of State Development & Investment Corp., Ltd. were RMB 795.821 billion and RMB 259.259 billion, respectively, with an asset-liability ratio of 67.42%. It achieved operating revenue of RMB 195.516 billion and net profit of RMB 19.557 billion in 2022. As of September 30, 2023, the unaudited total assets and net assets of State Development & Investment Corp., Ltd. were RMB 882.222 billion and RMB 274.958 billion, respectively, with an asset-liability ratio of 68.83%. It achieved operating revenue of RMB 146.211 billion and net profit of RMB 19.838 billion for the period. |
2. SDIC Finance Co., Ltd.
| Company Name | SDIC Finance Co., Ltd. |
| Nature | Other limited liability company |
| Legal Representative | Cui Hongqin |
| Date of Establishment | February 11, 2009 |
| Registered Capital | RMB 5 billion |
| Domicile | 18/F, No. 2, Fuchengmen Beidajie Street, Xicheng District, Beijing |
| Scope of Business | Providing financial and financing consulting, credit authentication and related consulting and agency services for member companies; assisting member companies in collections and payments; approved insurance brokerage; providing guarantee for member companies; addressing entrusted loans and entrusted investments among member companies; addressing bill acceptance and discounting for member companies; addressing internal transfer settlements and corresponding settlement and clearance plan design for member companies; absorbing deposits of member companies; handling loan and financial leasing for member companies; engaging in inter-bank borrowing; issuing corporate bonds of SDIC Finance as approved; underwriting enterprise bonds of member companies; investing in equities of financial institutions; investing in securities; buyer's credit for products of member companies. (The enterprise is allowed to operate items at its own option and perform related business activities in accordance with laws; as for items required to be approved in accordance with laws, business activities shall be performed as approved by relevant authorities; it is not allowed to be engaged in business activities prohibited and restricted by the municipal industrial policies.) |
3. SDIC Property Management Co., Ltd.
| Company Name | SDIC Property Management Co., Ltd. |
| Nature | Other limited liability company |
| Legal Representative | Yan Xiaojun |
| Date of Establishment | May 16, 2001 |
| Registered Capital | RMB 100 million |
| Domicile | International Investment Plaza, 6-6 Fuchengmen North Street, Xicheng District, Beijing |
| Scope of Business | Property management; renting of office space; public parking services for motor vehicles; vehicle washing service; catering service; food product sales. (The enterprise is allowed to operate items at its own option and perform related business activities in accordance with laws; as for food product sales, catering service and items required to be approved in accordance with laws, business activities shall be performed as approved by relevant authorities; it is not allowed to be engaged in business activities prohibited and restricted by the municipal industrial policies.) |
4. SDIC Human Resources Service Co., Ltd.
| Company Name | SDIC Human Resources Service Co., Ltd. |
| Nature | Limited liability company (sole proprietorship of legal person) |
| Legal Representative | Meng Shuhao |
| Date of Establishment | April 22, 2014 |
| Registered Capital | RMB 100 million |
| Domicile | Room 167 in 1001, 1002 and 1003, 10/F, Building 2, Yard 15, Guanghua Road, Chaoyang District, Beijing |
| Scope of Business | Licensed items: employment intermediary activities; labor dispatch services; foreign labor cooperation; Internet information services; network culture operation; production and operation of radio and television programs; category 2 value-added telecommunications services. (As for items required to be approved in accordance with laws, business activities shall be performed as approved by relevant authorities, and specific operation items shall be subject to approval documents or licenses from relevant authorities) General items: human resource services (excluding employment intermediary activities and labor dispatch services); business training (excluding educational training, vocational skills training and other training that requires a license); corporate management and consultation; educational consulting services (excluding education and training activities involving license approval); social and economic consulting services; tax services; market research (excluding foreign-related investigations); technical services, technical development, technical consulting, technical exchange, technical transfer and technical promotion; conference and exhibition services; organization of cultural and art exchange activities; advertising design and agency; advertising production; advertising publication; leasing of non-residential real estate; software sales. (Except for items subject to approval in accordance with laws, business activities are independently carried out with the business license in accordance with laws) (it is not allowed to be engaged in business activities prohibited and restricted by the national and municipal industrial policies.) |
5. SDIC Intelligence Co., Ltd.
| Company Name | SDIC Intelligence Co., Ltd. |
| Nature | Limited liability company (wholly state-owned) |
| Legal Representative | Zhang Lei |
| Date of Establishment | November 8, 2016 |
| Registered Capital | RMB 2 billion |
| Domicile | A, 36/F, No. 168, Yangshupu Road, Hongkou District, Shanghai |
| Scope of Business | Engaging in technical development, technical consulting, technical service and technical transfer in intelligent technology, IoT technology, computer technology, environmental technology, electronics technology and energy science & technology, and also engaging in network technology, network engineering, e-commerce (excluding financing), enterprise management consulting, communication project construction, project investment, investment management, investment consultation, corporate planning, asset management and telecommunications service. [As for items required to be approved in accordance with laws, business activities shall be performed after obtaining the approval from relevant authorities] |
6. Rongshi International Treasury Management Co., Ltd.
| Company Name | Rongshi International Treasury Management Co., Ltd. |
| Full English Name | RONGSHI INTERNATIONAL TREASURY MANAGEMENT COMPANY LIMITED |
| Nature | Other limited liability company |
| Legal Representative | Cui Hongqin |
| Date of Establishment | November 20, 2018 |
| Registered Capital | USD 50 million |
| Domicile | Room 1701, 17/F, World-Wide House, 19 Des Voeux Road Central, Hong Kong |
| Scope of Business | Treasury management |
7. SDIC Traffic Holding Co., Ltd.
| Company Name | SDIC Traffic Holding Co., Ltd. |
| Nature | Limited liability company (sole proprietorship of legal person) |
| Legal Representative | Wang Wenfa |
| Date of Establishment | October 29, 2013 |
| Registered Capital | RMB 2 billion |
| Domicile | Room 1017, Building A, No. 6 Fuchengmen North Street, Xicheng District, Beijing |
| Scope of Business | Investing in railways, highways (including bridges & culverts, and yards & stations), ports, aviation logistics, pipeline transportation, logistics and related supporting projects as well as their horizontal crossing and comprehensive utilization projects; general contracting, technical transformation and management of the aforementioned projects; selling metallic materials, building materials, chemical and light industry materials (excluding hazardous chemicals), electromechanical equipment, automobiles (excluding sedans) and automobile spare parts, hardware and electrical equipment, timber, computer software and hardware, communication equipment and cultural and office goods (except for items subject to special national provisions); lease of self-owned equipment; technical consulting, technical development, technical transfer and economic information consulting services related to the aforementioned businesses. (The enterprise is allowed to operate items at its own option and perform related business activities in accordance with laws; as for items required to be approved in accordance with laws, business activities shall be performed as approved by relevant authorities; it is not allowed to be engaged in business activities prohibited and restricted by the municipal industrial policies.) |
8. Beijing Yahua Real Estate Development Co., Ltd.
| Company Name | Beijing Yahua Real Estate Development Co., Ltd. |
| Nature | Other limited liability company |
| Legal Representative | Yan Xiaojun |
| Date of Establishment | June 13, 2001 |
| Registered Capital | RMB 3.4 billion |
| Domicile | Room 309, 3/F, No. 6 Fuchengmen North Street, Xicheng District, Beijing |
| Scope of Business | Real estate development and sales; property management for self-owned premises; real estate information consulting (except for intermediary services); furniture rental. (The market entity is allowed to operate items at its own option and perform related business activities in accordance with laws. as for items required to be approved in accordance with laws, business activities shall be performed as approved by relevant authorities; it is not allowed to be engaged in business activities prohibited and restricted by the national and municipal industrial policies.) |
9. Xiamen Meiya Pico Information Co., Ltd.
| Company Name | Xiamen Meiya Pico Information Co., Ltd. |
| Nature | Joint-stock limited company (listed and invested or held by natural person) |
| Legal Representative | Teng Da |
| Date of Establishment | September 22, 1999 |
| Registered Capital | RMB 859,477,310 |
| Domicile | Units 102-402, No. 12, Guanri Road, 2nd Phase of Xiamen Software Park, Xiamen |
| Scope of Business | General items: Information system integration services; software development; information technical consulting service; wholesale of computer software and hardware and auxiliary equipment; retail of computer software and hardware and auxiliary equipment; data processing and storage support services; 5G communication technology services; leasing of computer and communication equipment; sales of radio, film and TV equipment; sales of communication equipment; sales of mobile communication equipment; digital content production services (excluding publishing and distribution); Internet security services; import and export of technologies; import and export of goods; production of commercial password products; sales of commercial password products; sales of security equipment; manufacturing of security equipment; sales of metal chains and other metal products; sales of metal products; manufacturing of lighting fixtures; sales of smart wearable devices; technical services, technical development, technical consulting, technical exchange, technical transfer and technical promotion; manufacturing of computer software and hardware and peripherals; manufacturing of mobile communication equipment; manufacturing of communication equipment; manufacturing of Internet equipment; big data services; AI public data platform; sales of information security equipment; manufacturing of information security equipment; development of network and information security software; sales of intelligent robots; R&D of intelligent robots; computer system services; information system operation and maintenance services; sales of electronic products; cloud computing equipment technology services; general AI application system; sales of intelligent basic manufacturing equipment; manufacturing of intelligent basic manufacturing equipment; educational consulting services (excluding education and training activities involving license approval). (Except for items subject to approval in accordance with laws, business activities are independently carried out with the business license in accordance with laws) Licensed items: Building intelligent system design; Internet information services; publishing of electronic publications; production of electronic publications; retail of publications; wholesale of publications; construction of construction projects; sales of security products for computer information systems; judicial expertise services. (For the items subject to approval according to law, business activities are only allowed upon the approval by relevant authorities, and the specific operating items are subject to the approval documents or licenses of relevant authorities) |
| Financial Data | As of December 31, 2022, the audited total assets and net assets of Xiamen Meiya Pico Information Co., Ltd. were RMB 5.89 billion and RMB 4.308 billion, respectively, with an asset-liability ratio of 26.86%. It achieved operating revenue of RMB 2.28 billion and net profit of RMB 171 million in 2022. As of September 30, 2023, the unaudited total assets and net assets of Xiamen Meiya Pico Information Co., Ltd. were RMB 5.435 billion and RMB 3.853 billion, respectively, with an asset-liability ratio of 29.12%. It achieved operating revenue of RMB 750 million and net profit of RMB -415 million for the period. |
10. SDIC Inspection and Testing Certification Co., Ltd.
| Company Name | SDIC Inspection and Testing Certification Co., Ltd. |
| Nature | Limited Liability Company (sole proprietorship of legal person invested or controlled by non-natural person) |
| Legal Representative | Zhang Yuqi |
| Date of Establishment | April 18, 2018 |
| Registered Capital | RMB 3 billion |
| Domicile | Room 3625W, No. 9, Lane 360, Feihong Road, Hongkou District, Shanghai |
| Scope of Business | Certification service, and engaging in technical development, technical transfer, technical consulting and technical service in special fields of test technology and energy-saving and environmental protection technology, investment management, construction project testing, business consulting, quality inspection technical service, surveying and mapping services, and inspection and appraisal of import and export commodities. [As for items required to be approved in accordance with laws, business activities shall be performed after obtaining the approval from relevant authorities] |
11. SDIC Health Industry Investment Co., Ltd.
| Company Name | SDIC Health Industry Investment Co., Ltd. |
| Nature | Limited Liability Company (sole proprietorship of legal person invested or controlled by non-natural person) |
| Legal Representative | Liu Jian |
| Date of Establishment | November 18, 2016 |
| Registered Capital | RMB 2 billion |
| Domicile | Room 1011, 10/F, No. 6 Fuchengmen North Street, Xicheng District, Beijing |
| Scope of Business | Investment management, health consulting, investment consulting, enterprise management, enterprise management consulting, and providing the elderly with community care, home care and other community care services. [As for items required to be approved in accordance with laws, business activities shall be performed after obtaining the approval from relevant authorities] |
12. Shandong Tejian Fangyuan Detection Co., Ltd.
| Company Name | Shandong Tejian Fangyuan Detection Co., Ltd. |
| Nature | Limited Liability Company (sole proprietorship of legal person invested or controlled by non-natural person) |
| Legal Representative | Ren Yunli |
| Date of Establishment | August 19, 1992 |
| Registered Capital | RMB 50 million |
| Domicile | No. 81 Shanda North Road, Licheng District, Ji'nan City, Shandong |
| Scope of Business | General items: Highway and water transport engineering test and inspection services; environmental protection testing; project management services; electronic measuring instruments sales; sales of special measuring or inspection instruments for railroad; sales of experimental analysis instruments; safety technology training for special operators; information technical consulting service; security consulting services; Internet security services; energy-saving management services; R&D of mechanical equipment; manufacturing of testing machines; sales of test machine sales; software development; standardization services; technical services, technical development, technical consulting, technical exchange, technical transfer and technical promotion; educational consulting services (excluding education and training activities involving license approval); technology intermediary services; unit logistics management services; car leasing; conference and exhibition services; inspection and testing services; construction project quality testing; special equipment inspection and testing services; water conservancy engineering quality testing; fire protection technology services; lightning protection device testing; safety evaluation business. (Except for items subject to approval in accordance with laws, business activities are independently carried out with the business license in accordance with laws) |
13. China Electronics Engineering Design Institute Co., Ltd.
| Company Name | China Electronics Engineering Design Institute Co., Ltd. |
| Nature | Other joint-stock company (non-listed) |
| Legal Representative | Lou Yu |
| Date of Establishment | August 27, 1992 |
| Registered Capital | RMB 924,274,508 |
| Domicile | 317, Area II, 3/F, No. 160 Xisihuan North Road, Haidian District, Beijing |
| Scope of Business | contracting of overseas projects in accordance with its capability, size, and performance; dispatching labors required for implementing the above-mentioned overseas projects; publication of Contamination Control & Air-conditioning Technology (to the extent of those published by the editorial office of journals within the internal organization of the Company, valid until December 31, 2023); pressure piping design GB2 level and GC1(1)(2) level; urban planning; engineering consulting; cost consulting; environmental impact assessment; energy conservation assessment; architectural engineering design of all grades for all industries; engineering decoration; project management; general contracting of housing and building projects; development and sales of computer hardware and electronic instruments and meters; development, production and sales of construction and related engineering equipment and materials; design, publication and agency business of advertisements in the Contamination Control & Air-conditioning Technology journal; import and export business; technological development; technology transfer; technological services; software development; software sales; application software services (except for medical software); basic software service; engineering testing; environmental testing. (The market entity is allowed to operate items at its own option and perform related business activities in accordance with laws. as for items required to be approved in accordance with laws, business activities shall be performed as approved by relevant authorities; it is not allowed to be engaged in business activities prohibited and restricted by the national and municipal industrial policies.) |
(II) Affiliation
SDIC directly holds 51.32% of the Company's shares and is the affiliated legal person of the Company in accordance with Article 6.3.3 of the Rules Governing the Listing of Stocks on Shanghai Stock Exchange (revised in August 2023) (hereinafter referred to as the "Stock Listing Rules").
As the controlled subsidiaries of SDIC, SDIC Finance Co., Ltd., SDIC Property Management Co., Ltd., SDIC Human Resources Service Co., Ltd., SDIC Intelligence Co., Ltd., SDIC Traffic Holding Co., Ltd., Rongshi International Treasury Management Co., Ltd., Beijing Yahua Real Estate Development Co., Ltd., Xiamen Meiya Pico Information Co., Ltd., SDIC Inspection and Testing Certification Co., Ltd., SDIC Health Industry Investment Co., Ltd., Shandong Tejian Fangyuan Detection Co., Ltd. and China Electronics Engineering Design Institute Co., Ltd. are all the Company's affiliated legal persons according to the provisions in Article 6.3.3 of the Stock Listing Rules.
(III) Execution and performance
The Company's related-party transactions are properly executed. SDIC and its controlled subsidiaries mentioned above are all in normal operating and financial status, therefore, there is no performance risk.
III. Main Contents and Pricing Policies of Related-Party Transactions
(I) Deposit and loan transactions
The Company signed the Financial Service Agreements with SDIC Finance and Rongshi Treasury, and has executed the corresponding service charges in accordance with the agreements.
(II) Receiving labor services provided by related parties
This part of related-party transactions mainly includes coal storage and transportation, property costs, entrusted management services, enterprise consultation, recruitment service and software purchase.
The price of a coal storage and transportation contract signed by and between a controlled subsidiary of the Company and a controlled subsidiary of SDIC, the consulting service price, the software purchase price and the price for other labor services or services shall be determined by reference to the market prices through mutual negotiation and not be higher than the market prices.
(III) Selling goods to related parties
This part of related-party transactions mainly includes the sales of electricity by the Company's controlled subsidiaries to affiliate companies in the same region, carbon emissions permit trading, a small amount of coal unloading and other services. With the advances in the system reformation and market-based transaction of electric power, the price of an electricity sales contract between a controlled subsidiary of the Company and a controlled subsidiary of SDIC will be determined by reference to the market-set price and not be lower than the market price.
IV. Purpose of Current Related-Party Transactions and Its Impact on the Company
The newly added daily related-party transactions of the Company are in line with the needs of the Company's production and operation, and the prices of the related-party transactions strictly comply with the Price Law of the People's Republic of China and other relevant laws and regulations, and where there is government pricing, the price is directly applied; where there is no government pricing, the price shall be negotiated by both parties to the transaction on the basis of market price, which ensures the fairness of the related-party transactions and reflects the principles of openness, fairness and impartiality, does not harm the interests of the listed company and other shareholders and not affect the independence of the listed company.
Since its listing in 2002, the Company has been independent of SDIC and other controlled subsidiaries in terms of personnel, finance, organization setting, etc. Electric power generation is the main business of the Company. The Company will not rely on related parties, with related-party transactions accounting for a very small proportion of the Company's total revenue.
The above proposal was deliberated and approved at the 22nd meeting of the 12th Board of Directors and the 12th meeting of the 12th Supervisory Committee on December 28, 2023, and is hereby presented to you for deliberation and approval. According to relevant provisions of the Stock Listing Rules, the above transactions are related-party transactions and the related-party shareholders shall abstain from voting.
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