CICC's Audit Opinion on Xiangtan Electrochemical Technology Co., Ltd.'s Transfer of Wholly-Owned Subsidiary's 100% Equity and Related Party Transaction
CICC Securities Co., Ltd. (hereinafter referred to as the "Sponsor") acted as the sponsor for Xiangtan Electrochemical Technology Co., Ltd. (hereinafter referred to as the "Company" or "Xiangtan Electrochemical") in its application for issuing convertible corporate bonds to non-specific targets. In accordance with the "Administrative Measures for Securities Issuance and Listing Sponsorship Business," the "Shenzhen Stock Exchange Stock Listing Rules," and the "Shenzhen Stock Exchange Listed Companies Self-Regulatory Supervision Guidelines No. 1 - Normative Operation of Main Board Listed Companies," etc., the Sponsor has conducted a prudent review of the Company's transfer of its wholly-owned subsidiary's 100% equity and related party transaction. The review findings are as follows:
I. Overview of Related Party Transactions
To optimize resource allocation and asset structure, divest non-core assets, and further focus on the main business development, the Company transferred its 70% equity in Xiangtan Electric Machine Engineering Co., Ltd. (hereinafter referred to as "Electric Machine Company") to Xiangtan Economic and Technological Development Zone New Development Group Co., Ltd. (hereinafter referred to as "New Development Group"), and its 30% equity in Electric Machine Company to Xiangtan Electrochemical Group Co., Ltd. (hereinafter referred to as "Electrochemical Group"), with a transfer price of RMB 32.536 million. The Company also transferred its 100% equity in Xiangtan Shunzhong Trading Co., Ltd. (hereinafter referred to as "Trading Company") to New Development Group, with a transfer price of RMB 50.1224 million. The total transfer price is RMB 82.6584 million.
According to the relevant provisions of the "Shenzhen Stock Exchange Stock Listing Rules," the Company's equity transfer constitutes a related party transaction. This related party transaction was reviewed and approved by the independent directors' special meeting and then submitted to the board of directors for deliberation. Related directors Mr. Liu Qianjiang, Mr. Long Shaofei, and Mr. Ding Jianqi abstained from voting on the "Proposal on the Transfer of 100% Equity of Xiangtan Electric Machine Engineering Co., Ltd. and Related Party Transaction." Related director Mr. Liu Qianjiang abstained from voting on the "Proposal on the Transfer of 100% Equity of Xiangtan Shunzhong Trading Co., Ltd. and Related Party Transaction." The cumulative amount of related party transactions between the Company and the same related party within twelve consecutive months did not reach 5% of the Company's latest audited net assets. In accordance with the "Shenzhen Stock Exchange Stock Listing Rules," the "Company Articles of Association," and the Company's "Related Party Transaction Management System," this transaction does not require submission to the Company's shareholders' meeting for deliberation.
This transaction does not constitute a major asset restructuring as defined by the "Measures for the Administration of Major Asset Restructuring of Listed Companies." In accordance with the "Measures for the Supervision of State-owned Assets Transactions," this transaction adopts the method of non-public agreement transfer, where the transferor and the transferee sign an "Equity Transfer Agreement" to complete the transaction.
II. Basic Information of Related Parties
(I) New Development Group