Common use of REASONS FOR AND BENEFITS OF ENTERING INTO THE Clause in Contracts

REASONS FOR AND BENEFITS OF ENTERING INTO THE. 2023 MASTER SUPPLY AGREEMENT Reference is made to the announcement of the Company dated 29 December 2022 in relation to the resumption of operation of the production facilities of Changchun Dahe since mid-December 2022. Since then, the Group’s production and sales volumes have been gradually recovering and the demand of corn kernels has been increasing accordingly. Prior to the Group’s temporary suspension of all upstream operations since the first quarter of 2020, the Nongtou Group had been providing a stable supply of quality corn kernels to the Group under the previous master supply agreements entered into between the Company and Nongtou or the Nongtou Subsidiaries. With the Nongtou Group being one of the largest corn kernels suppliers in Jilin Province and as the Group gradually resumes the operation of its production facilities, the Group would like to take advantage of the strong and stable relationship between the Nongtou Group and the Group all these years under the previous master supply agreements, by entering into the 2023 Master Supply Agreement to secure a stable supply of quality corn kernels. The management of the Group considers the supply of corn kernels by the Nongtou Group to be beneficial to the Group as the Nongtou Group has always been able to arrange its source of corn kernels internally so as to offer corn kernels to the Group at a more competitive terms, including better credit terms, as compared to direct purchase from local farmers which offers no credit period at all, thus alleviating the pressure on the Group’s financial liquidity. The Directors (excluding the independent non-executive Directors whose views will be given after taking into account the advice of the IFA) are of the view that the terms and conditions of the 2023 Master Supply Agreement and the continuing connected transactions contemplated thereunder are fair and reasonable, on normal commercial terms which are in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole. As Xx. Xxxx Xxxx, an executive Director, is also a director and the general manager of Nongtou, he has abstained from voting in respect of the relevant Board resolutions approving, among others, the transactions contemplated under the 2023 Master Supply Agreement and the proposed annual caps. Save as disclosed, none of the Directors has a material interest in the 2023 Master Supply Agreement and therefore had to abstain from voting on the relevant Board resolutions.

REASONS FOR AND BENEFITS OF ENTERING INTO THE. 2023 RAW MATERIALS MASTER SUPPLY AGREEMENT Reference The Group is made principally engaged in six business segments, one of which is the manufacturing and sale of organic silicone products which is operated exclusively by Dongyue Organosilicone. For the production of its organic silicone products, Dongyue Organosilicone sources raw materials from both the Remaining Group and Independent Third Parties. In particular, Dongyue Organosilicone has been sourcing monochloromethane from Shandong Dongyue Fluorosilicone Materials Co., Ltd.* (山東東岳氟硅材料有限公司), a subsidiary of the Company, for its production of silicone monomers. The supply of raw materials by the Remaining Group to Dongyue Organosilicone has historically been and is expected to continue to be driven by commercial benefits derived from the synergy between Dongyue Organosilicone and the other business segments of the Group. There is no provision in the Raw Materials Master Supply Agreement requiring the Remaining Group to exclusively supply raw materials to Dongyue Organosilicone or requiring Dongyue Organosilicone to exclusively source raw materials from the Remaining Group. The quantities of raw materials to be purchased by Dongyue Organosilicone from the Remaining Group will depend on the actual production needs and capacity of Dongyue Organosilicone subject to the announcement of the Company dated 29 December 2022 in relation specific agreements to the resumption of operation of the production facilities of Changchun Dahe since mid-December 2022. Since then, the Group’s production and sales volumes have been gradually recovering and the demand of corn kernels has been increasing accordingly. Prior to the Group’s temporary suspension of all upstream operations since the first quarter of 2020, the Nongtou Group had been providing a stable supply of quality corn kernels to the Group under the previous master supply agreements be entered into between the Company parties and Nongtou the same applies to waste treatment. As mentioned above, the pricing basis will be determined by the Remaining Group with reference to the fair market prices of the respective products and waste treatment offered to Independent Third Parties or the Nongtou Subsidiaries. With the Nongtou Group being one production cost of the largest corn kernels suppliers in Jilin Province respective products or treatment, so as to ensure that the transactions will be beneficial to both the Remaining Group and as the Group gradually resumes the operation of its production facilitiesDongyue Organosilicone. Since March 2020, the Group would like to take advantage A shares of Dongyue Organosilicone have been listed on ChiNext of the strong and stable relationship between Shenzhen Stock Exchange (stock code: 300821). In compliance with the Nongtou Group and applicable regulatory requirements of ChiNext of the Group all these years under Shenzhen Stock Exchange, Dongyue Organosilicone will seek its shareholders’ approval in general meeting on or before 31 March 2021 for the previous master supply agreements, by entering into renewal of the 2023 Raw Materials Master Supply Agreement on terms to secure a stable supply of quality corn kernelsbe agreed by the parties. The management of parties currently expect to renew the Group considers the supply of corn kernels by the Nongtou Group Raw Materials Master Supply Agreement on terms to be beneficial to agreed provided that Dongyue Organosilicone having obtained the Group as said shareholders’ approval. The Company will make the Nongtou Group has always been able to arrange its source of corn kernels internally so as to offer corn kernels to necessary announcement(s) upon the Group at a more competitive terms, including better credit terms, as compared to direct purchase from local farmers which offers no credit period at all, thus alleviating entering into any agreement for such renewal where required under the pressure on the Group’s financial liquidityListing Rules. The Directors (excluding including the independent non-executive Directors whose views will be given after taking into account but excluding the advice of the IFAAbstained Directors (as defined below)) are of the view consider that the terms and conditions of the 2023 Raw Materials Master Supply Agreement and the continuing connected transactions contemplated thereunder are fair and reasonable, on normal commercial terms which are was entered into in the ordinary and usual course of business of the Group Company, and the terms of the Raw Materials Master Supply Agreement, which were determined after arm’s length negotiations among the parties thereto, are normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. As Xx. Xxxx Xxxx, an executive Director, is also a director and the general manager of Nongtou, he has abstained from voting in respect of the relevant Board resolutions approving, among others, the transactions contemplated under the 2023 Master Supply Agreement and the proposed annual caps. Save as disclosed, none of the Directors has a material interest in the 2023 Master Supply Agreement and therefore had to abstain from voting on the relevant Board resolutions.

REASONS FOR AND BENEFITS OF ENTERING INTO THE. 2023 RAW MATERIALS MASTER SUPPLY AGREEMENT Reference The Group is made principally engaged in six business segments, one of which is the manufacturing and sale of organic silicone products which is operated exclusively by Dongyue Organosilicone. For the production of its organic silicone products, Dongyue Organosilicone sources raw materials from both the Remaining Group and Independent Third Parties. In particular, Dongyue Organosilicone has been sourcing chloromethane from Shandong Dongyue Fluorosilicone Materials Co., Ltd. (山東東岳氟硅材料有限公司), a subsidiary of the Company, for its production of silicone monomers. The supply of raw materials by the Remaining Group to Dongyue Organosilicone has historically been and is expected to continue to be driven by commercial benefits derived from the synergy between Dongyue Organosilicone and the other business segments of the Group. There is no provision in the Raw Materials Master Supply Agreement requiring the Remaining Group to exclusively supply raw materials to Dongyue Organosilicone or requiring Dongyue Organosilicone to exclusively source raw materials from the Remaining Group. The quantities of raw materials to be purchased by Dongyue Organosilicone from the Remaining Group will depend on the actual production needs and capacity of Dongyue Organosilicone subject to the announcement of the Company dated 29 December 2022 in relation specific agreements to the resumption of operation of the production facilities of Changchun Dahe since mid-December 2022. Since then, the Group’s production and sales volumes have been gradually recovering and the demand of corn kernels has been increasing accordingly. Prior to the Group’s temporary suspension of all upstream operations since the first quarter of 2020, the Nongtou Group had been providing a stable supply of quality corn kernels to the Group under the previous master supply agreements be entered into between the Company and Nongtou parties. As mentioned above, the pricing for the raw materials to be supplied by the Remaining Group to Dongyue Organosilicone will be determined by the Remaining Group with reference to the fair market prices of the respective products offered to Independent Third Parties or the Nongtou Subsidiaries. With the Nongtou Group being one production cost of the largest corn kernels suppliers in Jilin Province and respective products, so as to ensure that the Group gradually resumes the operation of its production facilities, the Group would like to take advantage of the strong and stable relationship between the Nongtou Group and the Group all these years under the previous master supply agreements, by entering into the 2023 Master Supply Agreement to secure a stable supply of quality corn kernels. The management of the Group considers the supply of corn kernels by the Nongtou Group to transactions will be beneficial to both the Remaining Group as the Nongtou Group has always been able to arrange its source of corn kernels internally so as to offer corn kernels to the Group at a more competitive terms, including better credit terms, as compared to direct purchase from local farmers which offers no credit period at all, thus alleviating the pressure on the Group’s financial liquidityand Dongyue Organosilicone. The Directors (excluding including the independent non-executive Directors whose views will be given after taking into account but excluding the advice of the IFAAbstained Directors (as defined below)) are of the view consider that the terms and conditions of the 2023 Raw Materials Master Supply Agreement and the continuing connected transactions contemplated thereunder are fair and reasonable, on normal commercial terms which are was entered into in the ordinary and usual course of business of the Group Company, and the terms of the Raw Materials Master Supply Agreement, which were determined after arm’s length negotiations among the parties thereto, are normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. As Xx. Xxxx Xxxx, an executive Director, is also a director and the general manager of Nongtou, he has abstained from voting in respect of the relevant Board resolutions approving, among others, the transactions contemplated under the 2023 Master Supply Agreement and the proposed annual caps. Save as disclosed, none of the Directors has a material interest in the 2023 Master Supply Agreement and therefore had to abstain from voting on the relevant Board resolutions.

REASONS FOR AND BENEFITS OF ENTERING INTO THE. 2023 RAW MATERIALS MASTER SUPPLY AGREEMENT Reference The Group is made principally engaged in six business segments, one of which is the manufacturing and sale of organic silicone products which is operated exclusively by Dongyue Organosilicone. For the production of its organic silicone products, Dongyue Organosilicone sources raw materials from both the Remaining Group and Independent Third Parties. In particular, Dongyue Organosilicone has been sourcing chloromethane from Shandong Dongyue Fluorosilicone Materials Co., Ltd. (山東東岳氟硅材料有限公司), a subsidiary of the Company, for its production of silicone monomers. The supply of raw materials by the Remaining Group to Dongyue Organosilicone has historically been driven by commercial benefits derived from the announcement synergy between Dongyue Organosilicone and the other business segments of the Group since the incorporation of Dongyue Organosilicone as a wholly-owned subsidiary of the Company, and is expected to continue after Dongyue Organosilicone has become a non-wholly owned subsidiary of the Company dated 29 December 2022 following completion of the Capital Injection. There is no provision in relation the Raw Materials Master Supply Agreement requiring the Remaining Group to exclusively supply raw materials to Dongyue Organosilicone or requiring Dongyue Organosilicone to exclusively source raw materials from the Remaining Group. The quantities of raw materials to be purchased by Dongyue Organosilicone from the Remaining Group will depend on the actual production needs and capacity of Dongyue Organosilicone subject to the resumption of operation of the production facilities of Changchun Dahe since mid-December 2022. Since then, the Group’s production and sales volumes have been gradually recovering and the demand of corn kernels has been increasing accordingly. Prior specific agreements to the Group’s temporary suspension of all upstream operations since the first quarter of 2020, the Nongtou Group had been providing a stable supply of quality corn kernels to the Group under the previous master supply agreements be entered into between the Company and Nongtou parties. As mentioned above, the pricing for the raw materials to be supplied by the Remaining Group to Dongyue Organosilicone will be determined by the Remaining Group with reference to the fair market prices of the respective products offered to Independent Third Parties or the Nongtou Subsidiaries. With the Nongtou Group being one production cost of the largest corn kernels suppliers in Jilin Province and respective products, so as to ensure that the Group gradually resumes the operation of its production facilities, the Group would like to take advantage of the strong and stable relationship between the Nongtou Group and the Group all these years under the previous master supply agreements, by entering into the 2023 Master Supply Agreement to secure a stable supply of quality corn kernels. The management of the Group considers the supply of corn kernels by the Nongtou Group to transactions will be beneficial to both the Remaining Group as the Nongtou Group has always been able to arrange its source of corn kernels internally so as to offer corn kernels to the Group at a more competitive terms, including better credit terms, as compared to direct purchase from local farmers which offers no credit period at all, thus alleviating the pressure on the Group’s financial liquidityand Dongyue Organosilicone. The Directors (excluding including the independent non-executive Directors whose views will be given after taking into account but excluding the advice of the IFAAbstained Directors (as defined below)) are of the view consider that the terms and conditions of the 2023 Raw Materials Master Supply Agreement and the continuing connected transactions contemplated thereunder are fair and reasonable, on normal commercial terms which are was entered into in the ordinary and usual course of business of the Group Company, and the terms of the Raw Materials Master Supply Agreement, which were determined after arm’s length negotiations among the parties thereto, are normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. As Xx. Xxxx Xxxx, an executive Director, is also a director and the general manager of Nongtou, he has abstained from voting in respect of the relevant Board resolutions approving, among others, the transactions contemplated under the 2023 Master Supply Agreement and the proposed annual caps. Save as disclosed, none of the Directors has a material interest in the 2023 Master Supply Agreement and therefore had to abstain from voting on the relevant Board resolutions.