Common use of INTERNAL CONTROL MEASURES Clause in Contracts

INTERNAL CONTROL MEASURES. The Company has a comprehensive internal control system in place to ensure that the continuing connected transactions under the Commodity Purchase and Sale Framework Agreement are fair and reasonable and conducted in the ordinary course of business of the Company in accordance with relevant transaction agreements and on normal commercial terms or better, and in the interests of the Company and its shareholders as a whole. The relevant internal control measures include the following: 1. After determining the pricing method in accordance with the pricing policy of the Commodity Purchase and Sale Framework Agreement, the Company will take the following measures to ensure that the specific transactions are in compliance with the terms of the Commodity Purchase and Sale Framework Agreement before entering into the specific agreements. The Directors (including the independent non-executive Directors) consider that the following methods and procedures will ensure that the transactions contemplated under the Commodity Purchase and Sale Framework Agreement will be conducted on normal commercial terms and will not be detrimental to the interests of the Company and its minority shareholders: a. Government pricing or government-guided prices: determining the prices based on government pricing or government-guided prices (as the case may be) in accordance with applicable laws and regulations, and the Group will monitor the government pricing regulations or government-guided prices of the Relevant Commodities on a real-time basis; b. Market prices: The Group will actively seek to obtain market prices through various channels, for example, by comparing the terms and quoted prices of specific agreements with those of at least two third parties in the vicinity providing the same or similar services to ensure that the terms and quoted prices offered by Chengdu Communications Investment Group to the Group are fair and reasonable and that such prices are on normal commercial terms and on terms and conditions no less favourable than those on which the third parties purchase or sell (as the case may be) the Relevant Commodities from/to the Group, in order to determine whether to accept the quoted prices offered by Chengdu Communications Investment Group. If the Group considers that the quoted prices offered by Chengdu Communications Investment Group are not fair and reasonable or are not in the best interests of the Company and its shareholders as a whole, it will decide not to purchase or sell the Relevant Commodities from/to Chengdu Communications Investment Group; c. Agreed prices: the prices agreed between the parties for the Relevant Commodities purchased and sold by them, based on the reasonable cost plus a reasonable profit (normally not exceeding 15% of the cost) as disclosed by the Group, or by Chengdu Communications Investment Group to the Group in good faith; and d. Tendering: the prices shall be determined through tendering procedures in strict accordance with applicable laws and regulations. 2. The Company has completed the approval procedures for the Commodity Purchase and Sale Framework Agreement in accordance with the management rules for connected transactions and relevant internal control system; 3. The Company’s audit and compliance department, together with the finance management department, will regularly review the actual transaction amounts incurred to ensure that such amounts will not exceed relevant annual caps; 4. The Company’s management team will regularly organize and conduct internal control inspection to assess the completeness and effectiveness of internal control measures related to continuing connected transactions; 5. The audit and risk management committee under the Board will review the annual financial statements and express an opinion on the continuing connected transactions for the year, including whether the terms of the continuing connected transactions are fair and reasonable and whether the transaction amounts are within relevant annual caps; 6. The Board will review the implementation of the Commodity Purchase and Sale Framework Agreement on an annual basis. The review mainly covers whether the Company and the connected persons have fulfilled the terms of the said agreements in the relevant years and whether the actual transaction amounts incurred between the Company and the connected persons are within the annual caps; 7. The independent non-executive Directors will review the continuing connected transactions on an annual basis and provide annual confirmation in the Company’s annual report as to whether the continuing connected transactions are conducted (a) in the ordinary and usual course of business of the Group; (b) on normal commercial terms or better; and (c) according to the agreement governing them on terms that are fair and reasonable and in the interests of the Company and the shareholders as a whole; and 8. In order to assist the Company in complying with the applicable rules as set out in Chapter 14A of the Listing Rules, the Company’s auditor will perform relevant work annually to confirm and issue a letter as to whether the transactions have been approved by the Board, whether the transactions have been conducted in accordance with relevant transaction agreements in material respects and whether the caps have been exceeded.

INTERNAL CONTROL MEASURES. The Company has a comprehensive internal control system in place to ensure that the continuing connected transactions under the Commodity Purchase and Sale Framework Agreement are fair and reasonable and conducted in the ordinary course of business of the Company in accordance with relevant transaction agreements and on normal commercial terms or better, and in the interests of the Company and its shareholders as a whole. The relevant internal control measures include the following: 1. After determining the pricing method in accordance with the pricing policy of the Commodity Purchase and Sale Framework Agreement, the Company will take the following measures to ensure that the specific transactions are in compliance with the terms of the Commodity Purchase and Sale Framework Agreement before entering into the specific agreements. The Directors (including the independent non-executive Directors) consider that the following methods and procedures will ensure that the transactions contemplated under the Commodity Purchase and Sale Framework Agreement will be conducted on normal commercial terms and will not be detrimental to the interests of the Company and its minority shareholders: a. Government pricing or government-guided prices: determining the prices based on government pricing or government-guided prices (as the case may be) in accordance with applicable laws and regulations, and the Group will monitor the government pricing regulations or government-guided prices of the Relevant Commodities on a real-time basis; b. Market prices: The Group will actively seek to obtain market prices through various channels, for example, by comparing the terms and quoted prices of specific agreements with those of at least two third parties in the vicinity providing the same or similar services to ensure that the terms and quoted prices offered by Chengdu Communications Investment Group to the Group are fair and reasonable and that such prices are on normal commercial terms and on terms and conditions no less favourable than those on which the third parties purchase or sell (as the case may be) the Relevant Commodities from/to the Group, in In order to determine whether to accept the quoted prices offered by Chengdu Communications Investment Group. If the Group considers that the quoted prices offered by Chengdu Communications Investment Group are not fair and reasonable or are not in the best interests of the Company and its shareholders as a whole, it will decide not to purchase or sell the Relevant Commodities from/to Chengdu Communications Investment Group; c. Agreed prices: the prices agreed between the parties for the Relevant Commodities purchased and sold by them, based on the reasonable cost plus a reasonable profit (normally not exceeding 15% of the cost) as disclosed by the Group, or by Chengdu Communications Investment Group to the Group in good faith; and d. Tendering: the prices shall be determined through tendering procedures in strict accordance with applicable laws and regulations. 2. The Company has completed the approval procedures for the Commodity Purchase and Sale Framework Agreement in accordance with the management rules for connected transactions and relevant internal control system; 3. The Company’s audit and compliance department, together with the finance management department, will regularly review the actual transaction amounts incurred to ensure that such amounts will not exceed relevant annual caps; 4. The Company’s management team will regularly organize and conduct internal control inspection to assess the completeness and effectiveness of internal control measures related to continuing connected transactions; 5. The audit and risk management committee under the Board will review the annual financial statements and express an opinion on the continuing connected transactions for the year, including whether the terms of the continuing connected transactions are fair and reasonable and whether the transaction amounts are within relevant annual caps; 6. The Board will review the implementation of the Commodity Purchase and Sale Framework Agreement on an annual basis. The review mainly covers whether the Company and the connected persons have fulfilled the terms of the said agreements in the relevant years and whether the actual transaction amounts incurred between the Company and the connected persons are within the annual caps; 7. The independent non-executive Directors will review the continuing connected transactions on an annual basis and provide annual confirmation in the Company’s annual report as to whether the continuing connected transactions are conducted (a) in the ordinary and usual course of business of the Group; (b) on normal commercial terms or better; and (c) according to the agreement governing them on terms that are fair and reasonable and in safeguard the interests of the Company and the shareholders Shareholders as a whole; and 8, the Company has adopted certain measures in monitoring the transactions under the Purchase Framework Agreement. In order addition to assist 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 complying accordance with the applicable 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 regularly review and compare the 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 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 of the Company, and in case that an amendment to the Annual Cap is required, report particulars to the Board and hold a Board meeting for considering the matters thereabout to ensure compliance of the requirements under the Listing Rules. The Company also arranges compliance trainings for the Directors, senior management and staff from the relevant departments of the Company and its subsidiaries, primarily focusing on the rules as set out in relating to connected transactions under Chapter 14A of the Listing Rules, the Company’s auditor will perform relevant work annually to confirm and issue a letter as to whether the transactions have been approved by the Board, whether the transactions have been conducted in accordance with relevant transaction agreements in material respects and whether the caps have been exceeded.

INTERNAL CONTROL MEASURES. The Company has a comprehensive internal control system in place pricing policy for all the continuing connected transactions of the Group will be supervised and monitored by the relevant personnel and management of the Group to ensure that the relevant continuing connected transactions under the Commodity Purchase and Sale Framework Agreement are fair and reasonable and transaction is conducted in the ordinary course of business of the Company in accordance with relevant transaction agreements and on normal commercial terms or better, and in will not be prejudicial to the interests of the Company and its shareholders as a whole. The relevant internal control measures include personnel and management of the following: 1Group will review and 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. After determining Regular checks will be conducted to review and assess whether the pricing method relevant continuing connected transactions are conducted in accordance with the pricing policy of the Commodity Purchase and Sale Framework Agreement, the Company will take the following measures to ensure that the specific transactions are in compliance with the terms of the Commodity Purchase related Specific Agreements and Sale Framework Agreement before entering into the price charged for a specific agreementstransaction 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 Directors (including the independent non-executive Directors) 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 following methods and procedures will internal control mechanism is effective to ensure that the transactions contemplated under the Commodity Purchase and Sale New Framework Agreement have been and will be conducted on normal commercial terms and will not be detrimental prejudicial to the interests of the Company and its minority shareholders: a. Government pricing or government-guided prices: determining the prices based on government pricing or government-guided prices (as the case may be) in accordance with applicable laws and regulations, and the Group will monitor the government pricing regulations or government-guided prices of the Relevant Commodities on a real-time basis; b. Market prices: The Group will actively seek to obtain market prices through various channels, for example, by comparing the terms and quoted prices of specific agreements with those of at least two third parties in the vicinity providing the same or similar services to ensure that the terms and quoted prices offered by Chengdu Communications Investment Group to the Group are fair and reasonable and that such prices are on normal commercial terms and on terms and conditions no less favourable than those on which the third parties purchase or sell (as the case may be) the Relevant Commodities from/to the Group, in order to determine whether to accept the quoted prices offered by Chengdu Communications Investment Group. If the Group considers that the quoted prices offered by Chengdu Communications Investment Group are not fair and reasonable or are not in the best interests of the Company and its shareholders as a whole, it will decide not to purchase or sell the Relevant Commodities from/to Chengdu Communications Investment Group; c. Agreed prices: the prices agreed between the parties for the Relevant Commodities purchased and sold by them, based on the reasonable cost plus a reasonable profit (normally not exceeding 15% of the cost) as disclosed by the Group, or by Chengdu Communications Investment Group to the Group in good faith; and d. Tendering: the prices shall be determined through tendering procedures in strict accordance with applicable laws and regulations. 2. The Company has completed the approval procedures for the Commodity Purchase and Sale Framework Agreement in accordance with the management rules for connected transactions and relevant internal control system; 3. The Company’s audit and compliance department, together with the finance management department, will regularly review the actual transaction amounts incurred to ensure that such amounts will not exceed relevant annual caps; 4. The Company’s management team will regularly organize and conduct internal control inspection to assess the completeness and effectiveness of internal control measures related to continuing connected transactions; 5. The audit and risk management committee under the Board will review the annual financial statements and express an opinion on the continuing connected transactions for the year, including whether the terms of the continuing connected transactions are fair and reasonable and whether the transaction amounts are within relevant annual caps; 6. The Board will review the implementation of the Commodity Purchase and Sale Framework Agreement on an annual basis. The review mainly covers whether the Company and the connected persons have fulfilled the terms of the said agreements in the relevant years and whether the actual transaction amounts incurred between the Company and the connected persons are within the annual caps; 7. The independent non-executive Directors will review the continuing connected transactions on an annual basis and provide annual confirmation in the Company’s annual report as to whether the continuing connected transactions are conducted (a) in the ordinary and usual course of business of the Group; (b) on normal commercial terms or better; and (c) according to the agreement governing them on terms that are fair and reasonable and in the interests of the Company and the shareholders as a whole; and 8. In order to assist the Company in complying with the applicable rules as set out in Chapter 14A of the Listing Rules, the Company’s auditor will perform relevant work annually to confirm and issue a letter as to whether the transactions have been approved by the Board, whether the transactions have been conducted in accordance with relevant transaction agreements in material respects and whether the caps have been exceeded.

INTERNAL CONTROL MEASURES. The Company has a comprehensive internal control system in place All pricing policies for the continuing connected transactions of the Group will be supervised and monitored by the management and relevant personnel of the Group to ensure that the relevant continuing connected transactions under the Commodity Purchase and Sale Framework Agreement are fair and reasonable and transaction is conducted in the ordinary course of business of the Company in accordance with relevant transaction agreements and on normal commercial terms or better, and in will not be prejudicial to the interests of the Company and its shareholders Shareholders as a whole. The Before 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 internal control measures include personnel of the following: 1Group 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. After determining Regular checks will be conducted by the pricing method 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 Commodity Purchase Group will monitor the changes in the pricing factors and Sale Framework Agreement, the Company will take the following measures to ensure that the specific transactions are in compliance with the terms of the Commodity Purchase make adjustments as and Sale Framework Agreement before entering into the specific agreementswhen necessary. The Directors (including the independent non-executive Directors) Directors will continue to review the transactions contemplated under the New Property Leasing Framework Agreement, and the auditors of the Company 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 following methods and procedures will internal control mechanism is effective to ensure that the transactions contemplated under the Commodity Purchase and Sale New Property Leasing Framework Agreement will be conducted on normal commercial terms and will not be detrimental prejudicial to the interests of the Company and its minority shareholders: a. Government pricing or government-guided prices: determining the prices based on government pricing or government-guided prices (as the case may be) in accordance with applicable laws and regulations, and the Group will monitor the government pricing regulations or government-guided prices of the Relevant Commodities on a real-time basis; b. Market prices: The Group will actively seek to obtain market prices through various channels, for example, by comparing the terms and quoted prices of specific agreements with those of at least two third parties in the vicinity providing the same or similar services to ensure that the terms and quoted prices offered by Chengdu Communications Investment Group to the Group are fair and reasonable and that such prices are on normal commercial terms and on terms and conditions no less favourable than those on which the third parties purchase or sell (as the case may be) the Relevant Commodities from/to the Group, in order to determine whether to accept the quoted prices offered by Chengdu Communications Investment Group. If the Group considers that the quoted prices offered by Chengdu Communications Investment Group are not fair and reasonable or are not in the best interests of the Company and its shareholders Shareholders as a whole, it will decide not to purchase or sell the Relevant Commodities from/to Chengdu Communications Investment Group; c. Agreed prices: the prices agreed between the parties for the Relevant Commodities purchased and sold by them, based on the reasonable cost plus a reasonable profit (normally not exceeding 15% of the cost) as disclosed by the Group, or by Chengdu Communications Investment Group to the Group in good faith; and d. Tendering: the prices shall be determined through tendering procedures in strict accordance with applicable laws and regulations. 2. The Company has completed the approval procedures for the Commodity Purchase and Sale Framework Agreement in accordance with the management rules for connected transactions and relevant internal control system; 3. The Company’s audit and compliance department, together with the finance management department, will regularly review the actual transaction amounts incurred to ensure that such amounts will not exceed relevant annual caps; 4. The Company’s management team will regularly organize and conduct internal control inspection to assess the completeness and effectiveness of internal control measures related to continuing connected transactions; 5. The audit and risk management committee under the Board will review the annual financial statements and express an opinion on the continuing connected transactions for the year, including whether the terms of the continuing connected transactions are fair and reasonable and whether the transaction amounts are within relevant annual caps; 6. The Board will review the implementation of the Commodity Purchase and Sale Framework Agreement on an annual basis. The review mainly covers whether the Company and the connected persons have fulfilled the terms of the said agreements in the relevant years and whether the actual transaction amounts incurred between the Company and the connected persons are within the annual caps; 7. The independent non-executive Directors will review the continuing connected transactions on an annual basis and provide annual confirmation in the Company’s annual report as to whether the continuing connected transactions are conducted (a) in the ordinary and usual course of business of the Group; (b) on normal commercial terms or better; and (c) according to the agreement governing them on terms that are fair and reasonable and in the interests of the Company and the shareholders as a whole; and 8. In order to assist the Company in complying with the applicable rules as set out in Chapter 14A of the Listing Rules, the Company’s auditor will perform relevant work annually to confirm and issue a letter as to whether the transactions have been approved by the Board, whether the transactions have been conducted in accordance with relevant transaction agreements in material respects and whether the caps have been exceeded.