Common use of INTERNAL CONTROL MEASURES Clause in Contracts

INTERNAL CONTROL MEASURES. Procurement Procedures Xxxxxxx Xxxxx’s procurement department will seek quotations from at least two independent third parties offering the same or comparable products and the head of procurement department will evaluate the fairness and reasonableness of the price offered by Xxxxxxxxxxxx and to decide if the price offered by Xxxxxxxxxxxx is comparable to or more favourable than those offered by such independent third parties for the same or comparable products based on the quotations received. After the head of procurement department chooses the supplier, the procurement department will contact the chosen supplier and will enter into purchase order(s) with the supplier. The procurement department will then apply internally for the necessary funding and will arrange the payment of the transaction amounts to the supplier. After receiving the silver ingots from the supplier, the procurement department will settle the outstanding balance of the transaction amounts (if any). Other Internal Control Measures The Company will report transactions under the New Framework Purchase Agreement with Longtianyong to the audit committee of the Company for its review (if necessary). Further, the independent non-executive Directors will review the transactions under the New Framework Purchase Agreement annually to check and confirm whether such transactions have been conducted in the ordinary and usual course of business of the Group, on normal commercial terms or better, in accordance with the New Framework Purchase Agreement, and on terms that are fair and reasonable and in the interests of the Shareholders as a whole, and will review and confirm whether such transactions have been entered into within the relevant annual caps. The Company will also engage its auditor to review such transactions annually pursuant to Rule 14A.56 of the Listing Rules. As part of the general corporate governance measures adopted by the Company, the Board will monitor the internal control procedures put in place by the Company to ensure that they are adequate and effective and that the aforesaid transactions are conducted in accordance with the terms of the New Framework Purchase Agreement and the requirements under the Listing Rules.

INTERNAL CONTROL MEASURES. Procurement Procedures Xxxxxxx Xxxxx’s procurement department The pricing policy for all the continuing connected transactions of Group will seek quotations from at least two independent third parties offering be supervised and monitored by the same or comparable products relevant personnel and the head of procurement department will evaluate the fairness and reasonableness management of the price offered by Xxxxxxxxxxxx and Group in charge to decide if ensure the price offered by Xxxxxxxxxxxx is comparable to or more favourable than those offered by such independent third parties for the same or comparable products based relevant continuing connected transactions are conducted on the quotations received. After the head of procurement department chooses the supplier, the procurement department will contact the chosen supplier normal commercial terms and will enter into purchase order(s) with the supplier. The procurement department will then apply internally for the necessary funding and will arrange the payment of the transaction amounts not be prejudicial to the supplier. After receiving the silver ingots from the supplier, the procurement department will settle the outstanding balance of the transaction amounts (if any). Other Internal Control Measures The Company will report transactions under the New Framework Purchase Agreement with Longtianyong to the audit committee interests of the Company and its Shareholders as a whole. The relevant personnel and management of Shanghai Macalline will review and assess the terms before entering into the specific agreements to ensure they are consistent with the principal terms and provisions set out in the relevant New Framework Agreements. Regular checks will be conducted on a quarterly basis to review and assess whether the transactions contemplated under the relevant continuing connected transactions are conducted in accordance with the terms of their respective agreements and the price charged for its review (if necessary)a specific transaction is fair and reasonable and in accordance with the aforesaid pricing policy. Further, the The independent non-executive Directors will review the transactions contemplated under the New Framework Purchase Agreement annually to check Agreements, and confirm whether such transactions have been conducted in the ordinary and usual course of business auditors of the Company will also report on the Group’s continuing connected transactions (including the transactions contemplated under the New Framework Agreements) in accordance with Hong Kong Standard on Assurance Engagements 3000 (Revised) “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” and with reference to Practice Note 740 “Auditor’s Letter on Continuing Connected Transactions under the Hong Kong Listing Rules” issued by the Hong Kong Institute of Certified Public Accountants. Accordingly, the Directors consider that the internal control mechanism is effective to ensure that the transactions contemplated under the New Framework Agreements will be conducted on normal commercial terms or better, and not prejudicial to the interests of the Company and the Shareholders as a whole. REASONS FOR AND BENEFITS OF ENTERING INTO THE NEW FRAMEWORK AGREEMENTS Shanghai Macalline and Xingyue Property have been providing the Red Star Macalline Group with property management services since 2021. The Board believes that the continuation of the provision of the property management services to the Red Star Macalline Group would allow the Shanghai Macalline Group to make use of its existing strength and experience in accordance with shopping malls property management to generate stable business revenue. It is expected that the continuous cooperation between the Shanghai Macalline Group and the Red Star Macalline Group could result in satisfactory synergy effect and further promote the business growth of the Shanghai Macalline Group. The Longzhihui Shanghai Group specializes in professional cleaning and has been providing cleaning services to the Shanghai Macalline and Xingyue Property since 2021. The Board believes that the continued engagement of the Longzhihui Shanghai Group by the Shanghai Macalline Group for the provision of cleaning services on normal commercial terms would enable the Shanghai Macalline Group to ensure the quality of cleaning services provided to the projects under the management the Shanghai Macalline Group in an efficient manner and is therefore beneficial to the Shanghai Macalline Group. The Directors (including the independent non-executive Directors) consider that the terms of each of the New Framework Purchase Agreement, and on terms that Agreements are fair and reasonable reasonable, and the transactions contemplated thereunder are on normal commercial terms and in the interests of the Company and the Shareholders as a whole, and will review and confirm whether such transactions have been entered into within the relevant annual caps. The Company will also engage its auditor to review such transactions annually pursuant to Rule 14A.56 of the Listing Rules. As part of the general corporate governance measures adopted by the Company, the Board will monitor the internal control procedures put in place by the Company to ensure that they are adequate and effective and that the aforesaid transactions are conducted in accordance with the terms of the New Framework Purchase Agreement and the requirements under the Listing Rules.

INTERNAL CONTROL MEASURES. Procurement Procedures Xxxxxxx Xxxxx’s procurement department will seek quotations from at least two independent third parties offering The pricing policy for all the same or comparable products and the head of procurement department will evaluate the fairness and reasonableness continuing connected transactions of the price offered Group will be supervised and monitored by Xxxxxxxxxxxx the relevant personnel and to decide if the price offered by Xxxxxxxxxxxx is comparable to or more favourable than those offered by such independent third parties for the same or comparable products based on the quotations received. After the head of procurement department chooses the supplier, the procurement department will contact the chosen supplier and will enter into purchase order(s) with the supplier. The procurement department will then apply internally for the necessary funding and will arrange the payment management of the Group to ensure that the relevant continuing connected transaction amounts to the supplier. After receiving the silver ingots from the supplier, the procurement department will settle the outstanding balance of the transaction amounts (if any). Other Internal Control Measures The Company will report transactions under the New Framework Purchase Agreement with Longtianyong to the audit committee of the Company for its review (if necessary). Further, the independent non-executive Directors will review the transactions under the New Framework Purchase Agreement annually to check and confirm whether such transactions have been is conducted in the ordinary and usual course of business of the Group, on normal commercial terms or better, in accordance with the New Framework Purchase Agreement, and on terms that are fair and reasonable and in will not be prejudicial to the interests of the Shareholders Company and its shareholders as a whole, . The relevant personnel and management of the Group will review and confirm assess the terms before entering into a Specific Agreement to ensure they are consistent with the principles and provisions set out in the New Framework Agreement. Regular checks will be conducted to review and assess whether such transactions have been entered into within the relevant annual caps. The Company will also engage its auditor to review such transactions annually pursuant to Rule 14A.56 of the Listing Rules. As part of the general corporate governance measures adopted by the Company, the Board will monitor the internal control procedures put in place by the Company to ensure that they are adequate and effective and that the aforesaid continuing connected transactions are conducted in accordance with the terms of the New Framework Purchase Agreement related Specific Agreements and the price charged for a specific transaction is fair and reasonable and in accordance with the aforesaid pricing policy. In addition, review reports containing details such as the latest utilisation rate of the relevant New Caps and the updated list of relevant continuing connected transactions, will be prepared by the relevant personnel of the Group on a half-year basis. In the event that the utilisation rate of the relevant New Cap reaches 80%, the Board will be informed for considering if the relevant New Cap shall be revised and, if so, the Company will further comply with relevant requirements under the Listing Rules. The independent non-executive Directors and the independent auditor of the Company will also conduct an annual review on the pricing terms and the New Caps thereof. Accordingly, the Directors consider that the internal control mechanism is effective to ensure that the transactions contemplated under the New Framework Agreement have been and will be conducted on normal commercial terms and not prejudicial to the interests of the Company and its shareholders as a whole.

INTERNAL CONTROL MEASURES. Procurement Procedures Xxxxxxx Xxxxx’s procurement department will seek quotations from at least two independent third parties offering All pricing policies for the same or comparable products and the head of procurement department will evaluate the fairness and reasonableness continuing connected transactions of the price offered Group will be supervised and monitored by Xxxxxxxxxxxx the management and relevant personnel of the Group to decide if ensure that the price offered by Xxxxxxxxxxxx relevant continuing connected transaction is comparable to or more favourable than those offered by such independent third parties for the same or comparable products based conducted on the quotations received. After the head of procurement department chooses the supplier, the procurement department will contact the chosen supplier normal commercial terms and will enter into purchase order(s) with the supplier. The procurement department will then apply internally for the necessary funding and will arrange the payment of the transaction amounts not be prejudicial to the supplier. After receiving the silver ingots from the supplier, the procurement department will settle the outstanding balance of the transaction amounts (if any). Other Internal Control Measures The Company will report transactions under the New Framework Purchase Agreement with Longtianyong to the audit committee interests of the Company for and its review (if necessary)Shareholders as a whole. FurtherBefore entering into any Individual Agreement in connection with the New Property Leasing Framework Agreement, the Group will obtain market information through various channels, review the quotes for properties with similar conditions in the vicinity of the Properties and compare them with the quotes offered by the Sunac Group, so as to ensure that the property rentals charged by the Sunac Group from the Group are fair and reasonable. In addition, the management and relevant personnel of the Group will review and assess the terms of the Individual Agreements to ensure that they are consistent with the principles and provisions set out in the New Property Leasing Framework Agreement, and are determined on normal commercial terms or terms no less favourable to the Group than the terms available to the Group from the Independent Third Parties. Regular checks will be conducted by the Group on a quarterly basis to review and assess whether the price charged for an individual transaction is fair and reasonable and in accordance with the relevant pricing policy as described above. The management and relevant personnel of the Group will monitor the changes in the pricing factors and make adjustments as and when necessary. The independent non-executive Directors will continue to review the transactions contemplated under the New Property Leasing Framework Purchase Agreement annually to check Agreement, and confirm whether such transactions have been conducted in the ordinary and usual course of business auditors of the GroupCompany will also conduct an annual review on the pricing terms and annual caps under the New Property Leasing Framework Agreement. In view of the foregoing, the Directors consider that the internal control mechanism is effective to ensure that the transactions contemplated under the New Property Leasing Framework Agreement will be conducted on normal commercial terms or better, in accordance with the New Framework Purchase Agreement, and on terms that are fair and reasonable and in not prejudicial to the interests of the Company and the Shareholders as a whole, and will review and confirm whether such transactions have been entered into within the relevant annual caps. The Company will also engage its auditor to review such transactions annually pursuant to Rule 14A.56 of the Listing Rules. As part of the general corporate governance measures adopted by the Company, the Board will monitor the internal control procedures put in place by the Company to ensure that they are adequate and effective and that the aforesaid transactions are conducted in accordance with the terms of the New Framework Purchase Agreement and the requirements under the Listing Rules.