Common use of INTERNAL CONTROL MEASURES Clause in Contracts

INTERNAL CONTROL MEASURES. To protect the interests of the Group, the Group will adopt the following internal control measures: 1. Pursuant to the connected transaction management rules of the Company, the relevant personnel of the Group will closely monitor the transactions of the Group under the Framework Agreement to ensure that the transaction amounts do not exceed the annual caps set for the transactions under the Framework Agreement; 2. Pursuant to the Framework Agreement, the Group and Xxxxxx Xxxxxxxx Group may from time to time enter into separate specific business contracts for each specific transaction under the Framework Agreement as necessary. Meanwhile, pursuant to the connected transaction management rules of the Company, each transaction to be actually entered into by the Group shall be subject to the appropriate approval of the relevant departments of the Company to ensure that each transaction is in line with the pricing policy and principal terms of the Framework Agreement; 3. The auditors of the Company shall conduct annual reviews on pricing and annual caps of such continuing connected transactions to ensure that the transaction amounts are within the annual caps and that the transactions in all material aspects are conducted on the terms in the relevant agreement of such transactions; and 4. The independent non-executive Directors shall conduct annual reviews on the continuing connected transactions contemplated under the Framework Agreement to ensure that such transactions are conducted on normal commercial terms or better and are in the ordinary and usual course of business of the Group, and the terms thereof are fair and reasonable and are in the interests of the Company and its Shareholders as a whole, and make a confirmation in the Company’s annual report. In addition, the Group will endeavour to fully monitor the total transaction amount under the Framework Agreement with respect to the relevant annual cap, and the information on the connected transactions (including the quarterly transaction amount and the cumulative amount) will be reviewed on a quarterly basis, and if necessary, the Group will follow the relevant procedures to conduct approval procedures to increase the annual cap of connected transactions in a timely manner, prepare relevant announcement(s) and/or obtain independent Shareholders’ approvals (if necessary) to ensure compliance with the requirements under the Hong Kong Listing Rules.

INTERNAL CONTROL MEASURES. To protect the interests In order to ensure that all continuing connected transactions of the GroupGroup comply with the Listing Rules, the Company has formulated and continuously improved the management measures for connected transactions which sets forth the procedures for approval of connected transaction contracts and management of continuing connected transactions. Before entering into the Value-Added Services Framework Agreement in its ordinary and usual course of business, the Group will adopt has conducted research study on the following market price fairness by obtaining and comparing the prevailing price quotations and pricing terms of the same or similar transactions from other independent suppliers in the vicinity according to its internal control measures: 1. Pursuant approval and monitoring procedures for continuing connected transactions, in order to select suppliers upon comprehensive consideration of various assessment criteria (including but not limited to the connected transaction management rules prices, the level and quality of tailor-made services, suitability, payment terms, and time required for the provision of goods or services) and determine the relevant procurement terms through negotiations based on the business needs of the Companyproject, the types and scale of the procurement. Such quotes, together with the offer from the connected person, and the Value-Added Services Framework Agreement shall be reviewed by the management, finance personnel and legal personnel of the Company according to the Group’s internal approval and monitoring procedures. Afterwards, the Value-Added Services Framework Agreement, the continuing connected transactions contemplated thereunder and the annual caps would be submitted to the Board for consideration and approval. The finance department of the relevant personnel members of the Group will closely monitor be responsible for the transactions monthly reporting of the Group under the Framework Agreement to ensure that the transaction amounts do not exceed the annual caps set for the transactions under the Framework Agreement; 2. Pursuant to the Framework Agreement, the Group and Xxxxxx Xxxxxxxx Group may from time to time enter into separate specific business contracts for each specific transaction under the Framework Agreement as necessary. Meanwhile, pursuant to the connected transaction management rules amount of the Company, each transaction to be actually entered into by the Group shall be subject to the appropriate approval of the relevant departments of the Company to ensure that each transaction is in line with the pricing policy and principal terms of the Framework Agreement; 3. The auditors of the Company shall conduct annual reviews on pricing and annual caps of such continuing connected transactions to ensure that the transaction amounts are within finance department of the Company for monitoring the annual caps and that the transactions in all material aspects are conducted on the terms in of the relevant agreement transactions every month and issuing warning to the Board, relevant departments and business units of the Group when the utilization rate of annual cap reaches 80%, which will facilitate the Board to consider implementation of relevant response measures such transactions; and 4as the revision of annual cap. The continuing connected transactions shall also be subject to review and audit by independent non-executive Directors and auditors respectively every year pursuant to Chapter 14A of the Listing Rules. Among which, the independent auditor shall conduct annual reviews on sample check, among other things, the continuing connected transactions contemplated compliance of such pricing terms with the pricing policies or mechanisms under the Value-Added Services Framework Agreement to ensure that such transactions are conducted on normal commercial terms or better and are in the ordinary and usual course of business of the Group, and the terms thereof are fair and reasonable and are in the interests of the Company and its Shareholders as a whole, and make a confirmation in the Company’s annual report. In addition, the Group will endeavour to fully monitor the total transaction amount under the Framework Agreement with respect to the relevant annual cap, and the information on the connected transactions (including the quarterly transaction amount and the cumulative amount) will be reviewed on a quarterly basis, and if necessary, the Group will follow the relevant procedures to conduct approval procedures to increase the annual cap of connected transactions in a timely manner, prepare relevant announcement(s) and/or obtain independent Shareholders’ approvals (if necessary) to ensure compliance with the requirements under the Hong Kong Listing RulesAgreement.

INTERNAL CONTROL MEASURES. To protect In addition to the interests annual review by the auditors and independent non-executive Directors pursuant to the requirements of Chapter 14A of the GroupListing Rules, the Group Company has implemented or will adopt implement the following internal control measures: 1. Pursuant to a) The compliance department and other departments responsible for the connected transaction management rules of the Company, the relevant personnel of the Group will closely monitor the transactions of the Group Company will assess the terms of proposed connected transactions, such as pricing, with reference to its expected costs, price level of the independent third parties and profit margin of similar services in the market. The compliance department of the Company will review and monitor the total transaction amount under the Framework Agency Agreement to ensure that the aggregate transaction amounts do amount will not exceed the annual caps set for cap of the transactions under Agency Agreement. Such compliance department will be monitored by company secretary of the Framework Agreement;Company. 2. Pursuant b) All departments must report and consult to the Framework Agreement, the Group and Xxxxxx Xxxxxxxx Group may from time to time enter into separate specific business contracts for each specific transaction under the Framework Agreement as necessary. Meanwhile, pursuant compliance department in advance in relation to the connected transaction agreements that occur in the company’s daily operations. c) The management rules of the Company, each transaction to be actually entered into by the Group shall be subject to the appropriate approval of the relevant departments of the Company to ensure that will determine the procedures for disclosure of each transaction is connected transactions in line accordance with the pricing policy Listing Rules and principal terms of immediately organizes the Framework Agreement; 3. The auditors of the Company shall conduct annual reviews on pricing implementation and annual caps of such continuing connected transactions to ensure that the transaction amounts are within the annual caps and that the transactions in all material aspects are conducted on the terms in the relevant agreement of such transactions; anddepartment including financial department shall assist in providing all the information required for disclosure. 4. d) The independent non-executive Directors shall will conduct annual reviews independent review on the above control measures and the transactions to ensure that the transactions are entered into through arm’s length negotiations and on normal commercial terms, are fair and reasonable, and are carried out pursuant to the terms of the transactions; and e) The auditors of the Company would also conduct an annual review on the pricing basis and the annual cap under the Agency Agreement. The Company will facilitate the provision of necessary information to its independent non-executive Directors and auditors for the purpose of such review. The Board is of the view that the above measures and procedures can ensure that the pricing and other contract terms for the continuing connected transactions contemplated under of the Framework Agreement to ensure that such transactions Group are conducted on normal commercial terms or better and are in the ordinary and usual course of business of the Groupterms, and the terms thereof are fair and reasonable and are in the interests of the Company and its the Shareholders as a whole, whole and make a confirmation in that the Company’s annual report. In addition, the Group will endeavour to fully monitor the total transaction amount continuing connected transactions are conducted as agreed under the Framework Agency Agreement with respect to the relevant annual cap, and the information on the connected transactions (including the quarterly transaction amount and the cumulative amount) will be reviewed on a quarterly basis, and if necessary, the Group will follow the relevant procedures to conduct approval procedures to increase the annual cap of connected transactions in a timely manner, prepare relevant announcement(s) and/or obtain independent Shareholders’ approvals (if necessary) to ensure compliance with Chapter 14A of the requirements under the Hong Kong Listing Rules.

INTERNAL CONTROL MEASURES. To protect In order to safeguard the interests of the GroupCompany and the Shareholders as a whole and to ensure that the pricing policies and the annual caps are complied with, the Group will adopt Company has adopted the following internal control measures: 1: • The Group maintains price lists and a database containing historical transaction records and relevant terms and conditions. Pursuant to The information in the connected transaction management rules database is obtained in the course of the CompanyGroup’s operations, including information in respect of transactions entered into by different divisions/departments of the relevant Group. The Company will continue to develop and maintain the database so as to include pricing information in relation to materials sold by the Group in the future. Designated personnel of the Group will closely monitor are responsible for the transactions maintenance of the database, and the database is generally updated as soon as practicable after the materialization or consummation of a sales/provision of service transaction. A management personnel of the Group is designated to monitor and supervise the maintenance of the database to ensure that up-to-date records are properly kept. The Company will also conduct random checks on the database so as to ensure that effective and sound internal control measures are in place so that continuing connected transactions with the Kelun Group will be conducted on a fair and reasonable basis. • The relevant business units and departments of Group will regularly monitor and review the prices/ fees of and terms under which continuing connected transactions are conducted with the Framework Agreement Kelun Group in order to ensure that such continuing connected transactions are conducted on normal commercial terms, in accordance with the annual caps set by the Company, and the terms are no less favourable to the Group than those available to/from independent third parties. The Company will designate specific personnel from the compliance/internal control department to monitor the continuing connected transactions with the Kelun Group and any irregularities will be reported to the senior management of the Group in a timely manner. • The Group will conduct regular internal checks to ensure that the transaction amounts do not exceed the annual caps set for the transactions under the Framework Agreement; 2. Pursuant to the Framework Agreement, the Group and Xxxxxx Xxxxxxxx Group may from time to time enter into separate specific business contracts for each specific transaction under the Framework Agreement as necessary. Meanwhile, pursuant to the connected transaction management rules internal control measures in respect of the Company, each transaction to be actually entered into by the Group shall be subject to the appropriate approval of the relevant departments of the Company to ensure that each transaction is in line with the pricing policy and principal terms of the Framework Agreement; 3. The auditors of the Company shall conduct annual reviews on pricing and annual caps of such continuing connected transactions with the Kelun Group remain intact and effective. • The Company’s external auditors will annually review the relevant continuing connected transactions with the Kelun Group subject to ensure that annual view requirement to check and confirm (amongst others) whether the transaction amounts are within pricing policies have been adhered to, whether the continuing connected transactions were conducted in accordance with the agreements governing them and whether the relevant annual caps and that the transactions in all material aspects are conducted on the terms in the relevant agreement of such transactions; and 4have been exceeded. • The independent non-executive Directors shall conduct annual reviews on will annually review the relevant continuing connected transactions contemplated under with the Framework Agreement Kelun Group to ensure that check and confirm whether such transactions are have been conducted on normal commercial terms or better and are in the ordinary and usual course of business of the GroupCompany, and on normal commercial terms, in accordance with the agreements governing them, on terms thereof that are fair and reasonable and are in the interests of the Company and its Shareholders as a whole, and make a confirmation whether the internal control procedures put in place by the Company’s annual report. In addition, Company are adequate and effective to ensure that such continuing connected transactions with the Kelun Group are conducted in accordance with the pricing policies adopted by the Group will endeavour to fully monitor and the total transaction amount under the Framework Agreement with respect annual caps pursuant to the relevant annual cap, and the information on the connected transactions (including the quarterly transaction amount and the cumulative amount) will be reviewed on a quarterly basis, and if necessary, the Group will follow the relevant procedures to conduct approval procedures to increase the annual cap of connected transactions in a timely manner, prepare relevant announcement(s) and/or obtain independent Shareholders’ approvals (if necessary) to ensure compliance with the requirements under the Hong Kong Listing Rules.

INTERNAL CONTROL MEASURES. To protect In order to safeguard the interests of the GroupCompany and the Shareholders as a whole, the Company has adopted certain measures in monitoring the transactions under the Purchase Framework Agreement. In addition to our compliance with the requirements on annual review by external auditors and independent non-executive Directors under the Listing Rules in respect of continuing connected transactions, the internal compliance review department of the Company is responsible for the review of individual orders on a regular basis to ensure that the terms thereunder are made in accordance with the terms and conditions of the Purchase Framework Agreement. To ensure that transaction prices under the Purchase Framework Agreement will be fair and reasonable and on normal commercial terms, on top of the mechanism and procedures as detailed in the paragraph headed “THE PURCHASE FRAMEWORK AGREEMENT — Principal terms and price determination” in this announcement, the business department of the Group will adopt regularly review and compare the following internal control measures: 1. Pursuant purchase prices incurred and/or to be incurred thereunder with those under the same type of transactions of the Company entered into with third parties who may or may not be connected to the Company for the purchase of the Products with same or similar specifications. To ensure the transactions contemplated under the Purchase Framework Agreement do not exceed the Annual Cap, the business department of the Group shall fill in and submit statistical charts for the continuing connected transaction transactions at least quarterly. In the event that the amount of the transactions incurred and/or to be incurred under the Purchase Framework Agreement for a financial year is expected to reach the relevant Annual Cap, the business department will follow up forthwith by reporting and proposing a response to the management rules of the Company, and in case that an amendment to the relevant personnel Annual Cap is required, report particulars to the Board and hold a Board meeting for considering the matters thereabout to ensure compliance of the Group will closely monitor the transactions of the Group requirements under the Framework Agreement to ensure that the transaction amounts do not exceed the annual caps set Listing Rules. The Company also arranges compliance trainings for the transactions under the Framework Agreement; 2. Pursuant to the Framework AgreementDirectors, the Group senior management and Xxxxxx Xxxxxxxx Group may staff from time to time enter into separate specific business contracts for each specific transaction under the Framework Agreement as necessary. Meanwhile, pursuant to the connected transaction management rules of the Company, each transaction to be actually entered into by the Group shall be subject to the appropriate approval of the relevant departments of the Company and its subsidiaries, primarily focusing on the rules relating to ensure that each transaction is in line with the pricing policy and principal terms connected transactions under Chapter 14A of the Framework Agreement; 3. The auditors of the Company shall conduct annual reviews on pricing and annual caps of such continuing connected transactions to ensure that the transaction amounts are within the annual caps and that the transactions in all material aspects are conducted on the terms in the relevant agreement of such transactions; and 4. The independent non-executive Directors shall conduct annual reviews on the continuing connected transactions contemplated under the Framework Agreement to ensure that such transactions are conducted on normal commercial terms or better and are in the ordinary and usual course of business of the Group, and the terms thereof are fair and reasonable and are in the interests of the Company and its Shareholders as a whole, and make a confirmation in the Company’s annual report. In addition, the Group will endeavour to fully monitor the total transaction amount under the Framework Agreement with respect to the relevant annual cap, and the information on the connected transactions (including the quarterly transaction amount and the cumulative amount) will be reviewed on a quarterly basis, and if necessary, the Group will follow the relevant procedures to conduct approval procedures to increase the annual cap of connected transactions in a timely manner, prepare relevant announcement(s) and/or obtain independent Shareholders’ approvals (if necessary) to ensure compliance with the requirements under the Hong Kong Listing Rules.

INTERNAL CONTROL MEASURES. To protect The Company has established internal control measures to ensure that (i) terms of the 2024 Hilong Energy CCT Agreements are on normal commercial terms, fair and reasonable, and in the interests of the GroupCompany and the Shareholders as a whole; and (ii) the transactions and the pricing policy are conducted in accordance with the terms of the 2024 Hilong Energy CCT Agreements. The Company has adopted and implemented a management system on connected transactions (“Management System”). Under the Management System, an internal control review committee (“CCT IC Committee”) is established and comprises the heads of the financial department, the Group marketing department, the procurement department and the audit department. The CCT IC Committee will adopt the following internal control measures: 1. Pursuant report to the Board for all significant matters related to the continuing connected transaction management rules transactions of the CompanyGroup. Before entering into the transactions under the Coating Services and Hardbanding Services Agreement as supplemented and amended by the 2024 Supplemental Coating Services and Hardbanding Services Agreement, the relevant personnel staff of the marketing department will obtain at least two quotations from Independent Third Party service providers selected from a list of pre-approved coating services and hardbanding service providers maintained by the Group from time to time (“Pre-approved Supplier List”). The criteria of the Pre-approved Supplier List include, among others, production capabilities and quality, qualifications, reputation, experience and location. The Pre-approved Supplier List is then approved by both the heads of the marketing department and procurement department and is subject to review annually. The selection basis of the two Independent Third Party service providers for quotation include their performance in recent completed projects, current service capacity, delivery timeline and competitiveness of pricing terms offered. The quotations together with the relevant supporting documents will then be reviewed by the financial department and then approved by the CCT IC Committee, to ensure that the pricing and terms of the coating services and hardbanding services provided by Hilong Pipeline Group will be no less favorable to the Group as compared to other quotations received from Independent Third Party service providers. Before entering into the transactions under the 2024 Welding Wire Supply Agreement, the marketing department will closely monitor the prices of the welding wires offered to Hilong Pipeline by evaluating the average price of the welding wires offered to the Independent Third Parties of the Group and the market prices of similar products under similar sales terms and conditions. For the evaluation mentioned above, the marketing department of the Group will closely monitor first collect market price information available in the transactions public domain. The CCT IC Committee will then discuss and review the prices and conditions of the Group under welding wires offered to Hilong Pipeline (taking into account various factors such as costs, transaction volume, sales channel and market competition). In the Framework Agreement to ensure that the transaction amounts do not exceed the annual caps set for the transactions under the Framework Agreement; 2. Pursuant to the Framework Agreementevent of market fluctuations, the Group and Xxxxxx Xxxxxxxx Group may from CCT IC Committee will also convene meetings on an urgent basis. If at any time to time enter into separate specific business contracts for each specific transaction under the Framework Agreement as necessary. Meanwhile, pursuant to the connected transaction management rules of the Company, each transaction to be actually entered into by the Group shall be subject to the appropriate approval of the relevant departments of the Company Group become aware that the price of welding wires offered to Hilong Pipeline is lower than that offered by the Group to Independent Third Parties and/or the terms of welding wires offered to Hilong Pipeline Group are more favorable than those offered by the Group to Independent Third Parties, such findings shall be reported to the CCT IC Committee immediately. The CCT IC Committee shall then discuss with the Board to adjust the price offered to Hilong Pipeline Group and/or amend the relevant terms. Hilong Energy Group will only supply welding wires to Hilong Pipeline Group when the sales prices and conditions offered to Hilong Pipeline Group are no more favorable than those being offered to Independent Third Party and to ensure that each transaction is in line all transactions with Hilong Pipeline Group will comply with the pricing policy and principal terms of the Framework 2024 Welding Wire Supply Agreement; 3. The auditors To ensure the transactions contemplated under the 2024 Hilong Energy CCT Agreements do not exceed the respective proposed annual caps, the financial department of the Company shall conduct will regularly monitor the actual transaction amount under the 2024 Hilong Energy CCT Agreements on a monthly basis and submit monthly reports to the CCT IC Committee to evaluate and review the implementation progress of the continuing connected transactions. If the financial department notices that the transactions under the 2024 Hilong Energy CCT Agreements will have the possibility of exceeding the respective proposed annual reviews on pricing caps, it will notify the business and annual caps legal departments of such the Group at once, as well as the CCT IC Committee to take next steps to ensure compliance with the relevant Listing Rules. The audit department of the Company will review the continuing connected transactions under the Coating Services and Hardbanding Services Agreement as supplemented and amended by the 2024 Supplemental Coating Services and Hardbanding Services Agreement and the 2024 Welding Wire Supply Agreement annually to ensure check and confirm (among others) the fairness of the pricing terms, the implementation of continuing connected transactions, and the compliance of contract approval, ensuring that the transaction amounts internal control processes and operational procedures are within complied in accordance with the requirements of the Management System and the Listing Rules. The Company’s external auditors will review the continuing connected transactions under each of the 2024 Hilong Energy CCT Agreements annually to check and confirm (among others) whether the pricing terms have been adhered to and whether the relevant annual caps have been exceeded. Hilong Pipeline Group has agreed to allow the Company and that its external auditors to access the transactions in all material aspects are conducted on the terms in the relevant agreement of such transactions; and 4. The independent non-executive Directors shall conduct annual reviews information necessary to report on the continuing connected transactions contemplated under the Framework Agreement 2024 Hilong Energy CCT Agreements. The independent non-executive Directors will review the continuing connected transactions under the 2024 Hilong Energy CCT Agreements annually to ensure that check and confirm whether such continuing connected transactions are have been conducted on normal commercial terms or better and are in the ordinary and usual course of business of the Group, and on normal commercial terms or better, in accordance with the relevant agreements governing them on terms thereof that are fair and reasonable and are in the interests of the Company and its the Shareholders as a whole, and make a confirmation whether the internal control procedures put in place by the Company’s annual report. In addition, the Group will endeavour Company are adequate and effective to fully monitor the total transaction amount under the Framework Agreement with respect to the relevant annual cap, and the information on the ensure that such continuing connected transactions (including the quarterly transaction amount and the cumulative amount) will be reviewed on a quarterly basis, and if necessary, the Group will follow the relevant procedures to conduct approval procedures to increase the annual cap of connected transactions are conducted in a timely manner, prepare relevant announcement(s) and/or obtain independent Shareholders’ approvals (if necessary) to ensure compliance accordance with the requirements under the Hong Kong Listing Rulespricing policies set out in such relevant agreements.