Historical figures The historical amounts of the fees for sales of silver by the Group to Zhaojin Import and Export for the two years ended 31 December 2015 and 31 December 2016 and the eleven months ended 30 November 2017 are set out as follows: For the year ended 31 December 2015 For the year ended 31 December 2016 For the eleven months ended 30 November 2017 RMB’ million RMB’ million RMB’ million (approximately) (approximately) (approximately) Sales of silver by the Group to Zhaojin Import and Export 7 198.70 59.41 The annual cap of the fee for sales of silver by the Group to Xxxxxxxx Xxxxxxx Group for the financial year ending 31 December 2017 under the 2015 Framework Agreement for Sales of Silver was RMB270,000,000 which has not been exceeded as at the date of this announcement and is not expected to be exceeded before 31 December 2017. Annual caps The Company expects the annual caps for the sales of silver (excluding value-added tax) for the three years ending 31 December 2018, 31 December 2019 and 31 December 2020 shall not exceed RMB200 million, RMB240 million and RMB288 million, respectively, which are determined with reference to: (i) the historical sales of silver by the Group; (ii) the market price of silver; and (iii) the possible increase in the price of silver in light of the historical fluctuations in the price of silver. Pricing Policies The prices of silver to be sold to Zhaojin Import and Export will be based on market price, which will be determined on a fair basis with reference to the morning or afternoon spot settlement price of No. 2 Silver quoted on Shanghai Huatong on the date of price determination and taking the highest price quoted by other buyers of silver. The price at which the Group sells silver to Zhaojin Import and Export shall not be lower than the price charged by the Group on independent third parties for the sales of same type of silver. Reasons for and benefits of entering into the Framework Agreement for Sales of Silver Zhaojin Import and Export is a well-established enterprise and a member of Shanghai Huatong. As the Company and Zhaojin Import and Export are both subsidiaries of Xxxxxxxx Xxxxxxx and according to the payment terms of the Framework Agreement for Sales of Silver, the Company is entitled to deliver silver to Zhaojin Import and Export after payment is received by the Company, which can ensure that the payment will not be delayed and minimizes the credit risks involved. Given the aforesaid and after taking into account the terms of the transactions under the Framework Agreement for Sales of Silver, the Directors (including the independent non-executive Directors) consider that the entering into of the Framework Agreement for Sales of Silver is in the interests of the Company and the Shareholders as a whole, and the terms thereof are fair and reasonable, and is entered into on normal commercial terms in the ordinary and usual course of business of the Company. INTERNAL CONTROL MEASURES The Company has established various internal control measures in order to ensure that the transactions contemplated under the Land Lease Agreement, the Digital Mine Construction Technology Services Agreement, the Gold Refinery Agreement and the Framework Agreement for Sales of Silver are in accordance with the pricing policies and the terms of each of the Land Lease Agreement, the Digital Mine Construction Technology Services Agreement, the Gold Refinery Agreement and the Framework Agreement for Sales of Silver and are on normal commercial terms and no less favourable to the Company than terms quoted to independent third parties. Such internal control measures mainly include the following: