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

REASONS FOR AND BENEFITS OF THE TRANSACTIONS. Xxxxxxx Xxxxxxxxx requires coal for the generation of electricity by its captive power plant. Having a steady supply of quality coal is essential for the operations of Xxxxxxx Xxxxxxxxx and therefore, Xxxxxxx Xxxxxxxxx maintains a pool of coal suppliers (including Suzhou GCL and independent third party coal suppliers) and sources quality coal supply from them from time to time. During the period from June 2022 to November 2022, Xxxxxxx Xxxxxxxxx purchased coal from Suzhou GCL pursuant to the Previously Disclosed Coal Supply Agreements and the Fifth Coal Supply Agreement. As it is expected that in addition to the coal expected to be sourced from independent third party coal suppliers, Xxxxxxx Xxxxxxxxx will continue to purchase coal from Suzhou GCL from time to time on a recurring basis, (i) Xxxxxxx Xxxxxxxxx can purchase coal from Suzhou GCL under the Sixth Coal Supply Agreement for satisfying its short-term operation needs; and (ii) in the long run, the Coal Supply Framework Agreement can further serve as a framework agreement between the parties, thereby enabling Xxxxxxx Xxxxxxxxx to procure and secure a supplier of coal with steady supply and quality, and take advantage of any bulk purchase discount which may be offered by Suzhou GCL. In addition, given the historical transactions between Xxxxxxx Xxxxxxxxx and Suzhou GCL, the parties have developed mutual understanding of each other’s business practice. The terms of the Coal Supply Framework Agreement were negotiated based on normal commercial terms and the Annual Caps were determined following arm’s length negotiations between the parties. Based on the above reasons and having considered all relevant factors, the Directors (including the independent non-executive Directors) are of the view that the Fifth Coal Supply Agreement, the Sixth Coal Supply Agreement and the Coal Supply Framework Agreement and the Annual Caps are on normal commercial terms and entered into in the ordinary and usual course of business of the Group, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS. Xxxxxxx Xxxxxxxxx requires coal for As subsidiaries of Communications Group, Jiaogong Maintenance and Zhejiang Shunchang fully understand the generation of electricity by its captive power plant. Having a steady supply of Group’s business and operating needs, and maintains effective communication to provide more quality coal is essential for the operations of Xxxxxxx Xxxxxxxxx and therefore, Xxxxxxx Xxxxxxxxx maintains a pool of coal suppliers (including Suzhou GCL and independent third party coal suppliers) and sources quality coal supply from them from time to time. During the period from June 2022 to November 2022, Xxxxxxx Xxxxxxxxx purchased coal from Suzhou GCL pursuant services to the Previously Disclosed Coal Supply Agreements Group. Each of Jiaogong Maintenance and Zhejiang Shunchang has the Fifth Coal Supply Agreement. As it is expected that in addition relevant qualifications and experience to provide the Maintenance Services to the coal expected to be sourced from independent third party coal suppliers, Xxxxxxx Xxxxxxxxx will continue to purchase coal from Suzhou GCL from time to time on a recurring basis, (i) Xxxxxxx Xxxxxxxxx can purchase coal from Suzhou GCL under the Sixth Coal Supply Agreement for satisfying its short-term operation needs; and (ii) in the long run, the Coal Supply Framework Agreement can further serve as a framework agreement between the parties, thereby enabling Xxxxxxx Xxxxxxxxx to procure and secure a supplier of coal with steady supply and quality, and take advantage of any bulk purchase discount which may be offered by Suzhou GCLGroup. In addition, given the historical transactions between Xxxxxxx Xxxxxxxxx Company went through a tender process and Suzhou GCL, obtained the parties have developed mutual understanding relevant quotations from other independent service providers to select the service provider of each other’s business practicethe Maintenance Services. Jiaogong Maintenance and Zhejiang Shunchang finally won the respective tenders. The terms transactions contemplated under the Agreements are and will be conducted in the ordinary and usual course of business of the Coal Supply Framework Agreement were negotiated based on normal commercial terms Group, and the Annual Caps were determined following arm’s length negotiations between consideration paid by the partiesGroup to Jiaogong Maintenance and Zhejiang Shunchang, respectively, will not be higher than the average market price and will not be less favourable than those provided by other independent service providers to the Group for similar services. Based on Given the above reasons and having considered all relevant factorsabove, the Directors (including the independent non-executive Directors) are of the view that the Fifth Coal Supply Agreement, terms of the Sixth Coal Supply Agreement and the Coal Supply Framework Agreement and the Annual Caps Agreements are on normal commercial terms and entered into terms, in the ordinary and usual course of business of the Group, Group and are fair and reasonable and in the interests of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS As at the date of this announcement, Communications Group holds approximately 67% of the issued share capital of the Company. By virtue of this shareholding interest, Communications Group is a controlling shareholder (as defined under the Listing Rules) of the Company. As at the date of this announcement, each of Jiaogong Maintenance and Zhejiang Shunchang is an indirect subsidiary of Communications Group. Therefore, each of Jiaogong Maintenance and Zhejiang Shunchang is a connected person of the Company and as a result, the respective transactions contemplated under the Agreements constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Pursuant to Rule 14A.81 to Rule 14A.83 of the Listing Rules, the respective transactions contemplated under the Agreements are required to be aggregated with the respective transactions contemplated under the Previous Daily Road Maintenance Agreements which were continuing connected transactions entered into with the same connected persons. As the applicable percentage ratios in respect of the aggregated annual cap for transactions contemplated under the Agreements and the Previous Daily Road Maintenance Agreements are more than 0.1% but less than 5%, the transactions contemplated under the Agreements and the Previous Daily Road Maintenance Agreements will be subject to the reporting, announcement and annual review requirements but exempt from the independent Shareholders’ approval requirement under Chapter 14A of the Listing Rules. Xx. Xx Xxxxxxx, Xx. Xxx Xxxxxxx, Xx. Xxxx Xxxxxxx and Mr. Xxx Xx, being Directors, are deemed to have material interests in the Agreements as they are currently also employed by the Group and have abstained from voting on the relevant Board resolutions. Other than those Directors mentioned above, none of the Directors have a material interest in the transactions contemplated under the Agreements, and none are required to abstain from voting on the relevant resolutions of the Board.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS. Xxxxxxx Xxxxxxxxx requires coal UNDER THE SILAGE PURCHASE AGREEMENT Since the completion of the expansion project for processing 600 tons of liquid milk per day of the generation of electricity by its captive power plant. Having a steady supply of quality coal is essential for the operations of Xxxxxxx Xxxxxxxxx and therefore, Xxxxxxx Xxxxxxxxx maintains a pool of coal suppliers (including Suzhou GCL and independent third party coal suppliers) and sources quality coal supply from them from time to time. During the period from June 2022 to November 2022, Xxxxxxx Xxxxxxxxx purchased coal from Suzhou GCL Company pursuant to the Previously Disclosed Coal Supply Agreements Company’s announcement dated 15 May 2020, the production capacity of the Group’s milk products has increased and the Fifth Coal Supply Agreement. As it demand for silage, which is expected that in addition to one of the coal expected to be sourced from independent third party coal suppliers, Xxxxxxx Xxxxxxxxx will continue to purchase coal from Suzhou GCL from time to time on a recurring basis, Group’s main raw materials (ii.e. feeds for its dairy cows) Xxxxxxx Xxxxxxxxx can purchase coal from Suzhou GCL under the Sixth Coal Supply Agreement for satisfying its short-term operation needs; and (ii) used in the long runGroup’s production, the Coal Supply Framework Agreement can further serve as a framework agreement between the parties, thereby enabling Xxxxxxx Xxxxxxxxx to procure and secure a supplier of coal with steady supply and quality, and take advantage of any bulk purchase discount which may be offered by Suzhou GCLhas increased accordingly. In addition, given pursuant to one of the historical transactions between Xxxxxxx Xxxxxxxxx overall arrangements made by Gansu Nongken Group which intended to consolidate the operations of dairy farms for higher efficiency, transportation distance of corn silage and Suzhou GCLalfalfa and other forage grass should be shortened, effectively reducing the parties have developed mutual understanding breeding cost, improve the large-scale breeding efficiency, and promote the high-quality development of each other’s business practicegreen and circular agricultural industry. The terms transactions contemplated under the Silage Purchase Agreement will contribute to the business of the Coal Supply Framework Agreement were negotiated Group by providing a stable and relatively nearby source of silage required in the production process and operations of the Group. The Company considers that the purchase of silage from Nongken Jinchang by the Group are conducted in the Group’s ordinary and usual course of business based on normal the commercial terms and needs of the Annual Caps were determined following arm’s length negotiations between the partiesGroup. Based on the above reasons and having considered all relevant factorsabove, the Directors consider that the entering into of the Silage Purchase Agreement together with the transactions contemplated thereunder (including the independent non-executive DirectorsAnnual Purchase Cap) are of the view that the Fifth Coal Supply Agreement, the Sixth Coal Supply Agreement and the Coal Supply Framework Agreement and the Annual Caps are on normal commercial terms and entered into in the ordinary and usual course of business of the GroupGroup and the terms are on normal commercial terms which have been arrived at after arm’s length negotiations between the parties thereto, and that the terms thereof and the Annual Purchase Cap are fair and reasonable reasonable, and that the entering into of the Silage Purchase Agreement is in the interests of the Company and the independent Shareholders as a whole.. INTERNAL CONTROL The Company will supervise the continuing connected transactions in accordance with the procedures set forth in the following internal control measures to ensure that the transactions contemplated under the Silage Purchase Agreement are conducted on normal commercial terms which are no less favourable than those offered by other Independent Third Parties:

REASONS FOR AND BENEFITS OF THE TRANSACTIONS. Xxxxxxx Xxxxxxxxx requires coal The New Heat Supply Contracts have been entered into for the generation purpose of electricity by obtaining heat for the Group’s production process and for its captive power plantfacilities. Having Regarding contract numbers 1 and 2 in the table above, Khakass Utility Systems LLC is a steady monopolist in the territory of Sayanogorsk in the supply of quality coal thermal energy and the rates are regulated by the State Committee on tariffs and energy of the Republic of Khakassia, therefore the relevant New Heat Supply Contracts were entered into. Regarding contract number 3 in the table above, Baikal Energy Company LLC is essential the only entity that produces thermal energy in hot water in the Irkutsk region and the rates are regulated by the tariff service of the Irkutsk region, therefore the relevant New Heat Supply Contract was entered into. Regarding contract numbers 4 to 7 in the table above, JSC “Baikalenergo” is a monopolist in the transport of heat in Taishet and the territory of Sayanogorsk, and the rates are regulated by the tariff service of the Irkutsk region and the State Committee on tariffs and energy of the Republic of Khakassia, therefore the relevant New Heat Supply Contracts were entered into. The Company considers that the transactions contemplated under the New Heat Supply Contracts are for the operations benefit of Xxxxxxx Xxxxxxxxx and therefore, Xxxxxxx Xxxxxxxxx maintains a pool of coal suppliers (including Suzhou GCL and independent third party coal suppliers) and sources quality coal supply from them from time to time. During the period from June 2022 to November 2022, Xxxxxxx Xxxxxxxxx purchased coal from Suzhou GCL pursuant to the Previously Disclosed Coal Supply Agreements and the Fifth Coal Supply Agreement. As it Company as there is expected that in addition to the coal expected to be sourced from independent third party coal suppliers, Xxxxxxx Xxxxxxxxx will continue to purchase coal from Suzhou GCL from time to time on a recurring basis, (i) Xxxxxxx Xxxxxxxxx can purchase coal from Suzhou GCL under the Sixth Coal Supply Agreement for satisfying its short-term operation needs; and (ii) no alternative supplier available in the long run, the Coal Supply Framework Agreement can further serve as a framework agreement between the parties, thereby enabling Xxxxxxx Xxxxxxxxx to procure and secure a supplier of coal with steady supply and quality, and take advantage of any bulk purchase discount which may be offered by Suzhou GCL. In addition, given the historical transactions between Xxxxxxx Xxxxxxxxx and Suzhou GCL, the parties have developed mutual understanding of each other’s business practicerespective region. The terms of the Coal Supply Framework Agreement were negotiated based on normal commercial terms and the Annual Caps were determined following arm’s length negotiations between the parties. Based on the above reasons and having considered all relevant factors, the Directors (including the independent non-executive Directors) are of the view consider that the Fifth Coal New Heat Supply Agreement, the Sixth Coal Supply Agreement and the Coal Supply Framework Agreement and the Annual Caps Contracts are on normal commercial terms which are fair and entered into reasonable and the transactions contemplated under the New Heat Supply Contracts are in the ordinary and usual course of business of the Group, are fair and reasonable Group and in the interests of the Company and the Shareholders its shareholders as a whole. None of the Directors has a material interest in the transactions contemplated under the New Heat Supply Contracts, save for Xx. Xxxxxxxxxx Xxxxxxx, who is the chief operating officer of International limited liability company En+ Holding, a company which is owned by En+, and deputy CEO — executive officer of Moscow Branch of International limited liability company En+ Holding, and Mr. Xxxxxxxx Xxxxxxxxxx, who is the first deputy chief executive officer for technical policy and executive officer of International limited liability company En+ Holding, and deputy CEO — executive officer of En+, being the holding company of each of Khakass Utility Systems LLC, Baikal Energy Company LLC and JSC “Baikalenergo”. Mr. Xxxxxxxx Xxxxxxxxxx is also the head of technical supervision of JSC EuroSibEnergo, a company which is owned by En+. Accordingly, Xx. Xxxxxxxxxx Xxxxxxx and Mr. Xxxxxxxx Xxxxxxxxxx did not vote on the Board resolution approving the New Heat Supply Contracts. LISTING RULES IMPLICATIONS The ultimate beneficial owner of each of Khakass Utility Systems LLC, Baikal Energy Company LLC and JSC “Baikalenergo” is En+, which holds more than 90% of the issued share capital of each entity. Each of Khakass Utility Systems LLC, Baikal Energy Company LLC and JSC “Baikalenergo” is an indirect subsidiary of En+, and is therefore the associate of En+, which in turn is a substantial shareholder of the Company. Accordingly, each of Khakass Utility Systems LLC, Baikal Energy Company LLC and JSC “Baikalenergo” is a connected person of the Company under the Listing Rules. Regarding the contract numbers 1-6 in the table above, when they were entered into, the applicable percentage ratios for the estimated annual aggregate transaction amount of the continuing connected transactions under such contracts and the Previously Disclosed Heat Supply Contracts for the financial year ending 31 December 2022 were less than 0.1% and hence were de minimis under the Listing Rules and were fully exempted. After the entering into of the contract number 7 in the table above, the applicable percentage ratios for the estimated annual aggregate transaction amount of the continuing connected transactions under the New Heat Supply Contracts and the Previously Disclosed Heat Supply Contracts for the financial year ending 31 December 2022 are expected to be more than 0.1% but less than 5%. Accordingly, pursuant to Rule 14A.76 of the Listing Rules, the transactions contemplated under these contracts are subject to the announcement requirements set out in Rules 14A.35 and 14A.68, the annual review requirements set out in Rules 14A.49, 14A.55 to 14A.59, 14A.71 and 14A.72 and the requirements set out in Rules 14A.34 and 14A.50 to 14A.54 of the Listing Rules and these transactions are exempt from the circular and the independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. Details of the New Heat Supply Contracts and Previously Disclosed Heat Supply Contracts will be included in the relevant annual report and accounts of the Company in accordance with Rule 14A.71 of the Listing Rules where appropriate.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS. Xxxxxxx Xxxxxxxxx requires coal The Entrustment Guarantee Agreement The issuance of guarantee for each project is costly and administratively burdensome for the generation of electricity Group, as security deposit will be required and fees will be charged by its captive power plant. Having a steady supply of quality coal is essential the bank for the operations of Xxxxxxx Xxxxxxxxx each such issue and therefore, Xxxxxxx Xxxxxxxxx maintains a pool of coal suppliers (including Suzhou GCL and independent third party coal suppliers) and sources quality coal supply from them from time to time. During the period from June 2022 to November 2022, Xxxxxxx Xxxxxxxxx purchased coal from Suzhou GCL pursuant to the Previously Disclosed Coal Supply Agreements and the Fifth Coal Supply Agreement. As it is expected that in addition time-consuming to repeatedly apply for their issuance. The provision of the coal expected Guarantee by Xxxxx Holding can help reduce such administrative expenses and facilitate Xxxxx Engineering to be sourced obtain the relevant engineering, procurement and site services contracts from independent third party coal suppliers, Xxxxxxx Xxxxxxxxx will continue to purchase coal from Suzhou GCL from time to time on a recurring basis, (i) Xxxxxxx Xxxxxxxxx can purchase coal from Suzhou GCL under the Sixth Coal Supply Agreement for satisfying its short-term operation needs; and (ii) in the long run, the Coal Supply Framework Agreement can further serve as a framework agreement between the parties, thereby enabling Xxxxxxx Xxxxxxxxx to procure and secure a supplier of coal with steady supply and quality, and take advantage of any bulk purchase discount which may be offered by Suzhou GCLZapsibneftekhim LLC. In addition, given the historical transactions between Xxxxxxx Xxxxxxxxx dispensation of payment of Guarantee and Suzhou GCL, security deposits will also allow the parties have developed mutual understanding of each other’s business practiceGroup to put its cash to more efficient use and to lower its receivables. The terms 2023 Property Leasing Framework Agreement Xxxxx Engineering is the legal owner of the Coal Supply Xxxxx Complex. The Group occupies certain premises at the Xxxxx Complex as its offices. For the premises that are not occupied by the Group, Xxxxx Engineering would put them for lease in the market so as to better utilise the Group’s assets and to generate returns for the Group. The Directors consider that entering into the 2023 Property Leasing Framework Agreement were negotiated based on normal commercial terms will ensure consistent treatment for different Xxxxx Holding Entities leasing premises at the Xxxxx Complex, and also provide flexibility to the Company and Xxxxx Holding when adjustments to the floor space occupied by different parties are required. The 2023 Service Agreement One of the Group’s businesses is the provision of engineering, procurement and construction management services. Xxxxx Group has an information technology team and a legal and compliance team where the Group has in the past utilized some of their services in a small scale. In view of (i) the expertise of the Group in the provision of the services contemplated under the 2023 Service Agreement and its familiarity with the businesses of Xxxxx Group; (ii) the efficiency and economies of scale which can be derived by the Group by utilizing the information technology services and legal and compliance services of Xxxxx Group given its familiarity with the internal information technology set up of the Group and the Annual Caps were determined following Group’s legal and compliance requirements; and (iii) the fees receivable by the Group from Xxxxx Group and the fees payable by the Group to Xxxxx Group under the 2023 Service Agreement are negotiated after arm’s length negotiations between discussions and reflect normal commercial terms, the partiesCompany considers it desirable to enter into the 2023 Service Agreement in its ordinary course of business. Based Directors’ View As Xx. Xxx Xxxxxxx is a director and president of Xxxxx Holding, Xx. Xxx Xxxxxxx have abstained from voting on the above reasons and having considered all relevant factorsBoard resolutions approving the Entrustment Guarantee Agreement, the 2023 Property Leasing Framework Agreement and the 2023 Service Agreement, as well as their respective proposed annual caps. The Directors (including the independent non-executive DirectorsDirectors but excluding Xx. Xxx Xxxxxxx who have abstained from voting) are of the view that the Fifth Coal Supply Entrustment Guarantee Agreement, the Sixth Coal Supply Agreement and the Coal Supply 2023 Property Leasing Framework Agreement and the Annual Caps are on normal commercial terms and 2023 Service Agreement were entered into in the ordinary and usual course of business of the GroupGroup after arm’s length negotiation between the parties, reflect normal commercial terms and the terms of the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders its shareholders as a whole. GENERAL INFORMATION OF THE PARTIES The Company is an investment holding company. The principal activity of the Group is the provision of chemical engineering, procurement and construction management, or EPC, services. The Group provides a broad range of integrated services spanning the project life cycle from technical appraisal, early project planning, feasibility studies, consulting services, provision of proprietary technologies, design, engineering, raw materials and equipment procurement and construction management to maintenance and after-sale technical support. Xxxxx Engineering is the principal operating subsidiary of the Company. Xxxxx Holding is the Company’s holding company and is an investment holding company. It is directly wholly-owned by Xx. Xxx Xxxxxxxx. Xx. Xxx Xxxxxxxx’s principal business activity is the control of the business operations of Xxxxx Group. The principal activity of Xxxxx Group is the provision of engineering services, offshore and marine engineering and new chemical materials. The business of Xxxxx Group covers storage and utilization of resources such as coal, oil and natural gas, onshore energy engineering services, manufacture of marine engineering equipment and development of new downstream chemical materials. LISTING RULES IMPLICATIONS Xxxxx Holding is a controlling shareholder of the Company which is indirectly interested in approximately 75.82% of the total issued share capital of the Company as at the date of this announcement. Hence, Xxxxx Holding is a connected person of the Company. As each of the Xxxxx Holding Entities is an associate of Xxxxx Holding, each of them is also a connected person of the Company. Accordingly, (i) the financial assistance provided to Xxxxx Engineering by Xxxxx Holding by virtue of the provision of the Guarantee and the payment of the guarantee fee to Xxxxx Holding by Xxxxx Engineering under the Entrustment Guarantee Agreement constitute connected transactions of the Company under Chapter 14A of the Listing Rules; and (ii) the transactions contemplated under the 2023 Property Leasing Framework Agreement and the 2023 Service Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules. As the Guarantee provided by Xxxxx Holding is conducted on normal commercial terms and is not secured by any assets of the Group, the Guarantee is fully exempted from the reporting, announcement and independent shareholders’ approval requirements set out in the Listing Rules in accordance with Rule 14A.90 of the Listing Rules. Since one or more of the applicable percentage ratios set out in Rule 14.07 of the Listing Rules in respect of (i) the estimated maximum guarantee fee payable by Xxxxx Engineering under the Entrustment Guarantee Agreement, (ii) the highest annual cap for the amounts payable by the Xxxxx Holding Entities to the Group under the 2023 Property Leasing Framework Agreement, (iii) the highest annual cap for the amounts payable by the Group under the 2023 Service Agreement to Xxxxx Group, and (iv) the highest annual cap for the amounts receivable by the Group under the 2023 Service Agreement from Xxxxx Group, in each case is expected to be above 0.1% but below 5%, the transactions contemplated thereunder are only subject to the reporting, annual review and announcement requirements set out in the Listing Rules but are exempt from the independent shareholders’ approval requirement under the Listing Rules.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS. Xxxxxxx Xxxxxxxxx requires coal for Prior to the generation entering into of electricity the Master Lease Agreement, the Group has been leasing and/or licensing certain commercial premises and ancillary facilities including but not limited to offices and car parking spaces beneficially owned by its captive power plantthe Lessor Group under the Existing Leases. Having Based on the total rent payable annually under the Existing Leases, the Existing Leases constitute a steady supply de minimis transaction under Rule 14A.76 of quality coal is essential for the operations Listing Rules. The Group anticipates that based on the administrative, operational, marketing, promotional and sales needs, it will have to continue the Existing Leases and may have to renew such Existing Leases when they expire, and may further enter into new Leases to satisfy the future business needs of Xxxxxxx Xxxxxxxxx and therefore, Xxxxxxx Xxxxxxxxx maintains a pool of coal suppliers (including Suzhou GCL and independent third party coal suppliers) and sources quality coal supply from them the Group from time to time. During Accordingly, the period from June 2022 to November 2022, Xxxxxxx Xxxxxxxxx purchased coal from Suzhou GCL pursuant to the Previously Disclosed Coal Supply Agreements Company and the Fifth Coal Supply Agreement. As it is expected that in addition Lessor have entered into the Master Lease Agreement to agree on the coal expected Annual Caps and set out a framework of the terms for the Leases to be sourced made or renewed. In view of the above and that (i) compared with leasing from independent third party coal suppliersparties, Xxxxxxx Xxxxxxxxx will continue to purchase coal from Suzhou GCL from time to time on the Lessor has a recurring basis, (i) Xxxxxxx Xxxxxxxxx can purchase coal from Suzhou GCL under better understanding of the Sixth Coal Supply Agreement Group’s requirements in terms of premises required for satisfying its short-term operation needsusual course of business; and (ii) in the long run, amount payable by the Coal Supply Framework Agreement can further serve as a framework agreement between relevant Group Companies pursuant to the parties, thereby enabling Xxxxxxx Xxxxxxxxx Existing Leases were not above the market rent and the Lessor agreed that the amount payable under the Leases to procure and secure a supplier of coal with steady supply and quality, and take advantage of any bulk purchase discount which may be offered by Suzhou GCL. In addition, given the historical transactions between Xxxxxxx Xxxxxxxxx and Suzhou GCL, the parties have developed mutual understanding of each other’s business practice. The terms of the Coal Supply Framework Agreement were negotiated entered into will be determined based on normal commercial terms and will not be exceeding the Annual Caps were determined following arm’s length negotiations between the parties. Based on the above reasons and having considered all relevant factorsmarket rent, the Directors (including the independent non-executive Directors) are of the view consider that the Fifth Coal Supply Agreement, Leases contemplated under the Sixth Coal Supply Master Lease Agreement and the Coal Supply Framework Agreement and the Annual Caps are on normal commercial terms and would be entered into in the ordinary and usual course of business of the Group and the Master Lease Agreement (together with the Annual Caps) has been entered into on normal commercial terms (or better to the Group) after arm’s length negotiations between the parties, and the terms of the Leases contemplated under the Master Lease Agreement (together with the Annual Caps) are fair and reasonable and in the interests of the Company and the its Shareholders as a whole. As Xx. Xxx Che-xxx, Xx. Xxxxxxx Xxx Xxx Xxxx, Xx. Xxxxx Xxxx Xxx Xxx Xx and Xx. Xxxxxxxxx Xxx Xxx Xxx, being all the executive Directors of the Company, are the beneficiaries of the Lui’s Family Trust which has 100% indirect shareholding interest in the Lessor, each of them is considered to have material interests in the Master Lease Agreement and has abstained from voting on the resolutions of the Board approving the Master Lease Agreement and the transactions contemplated thereunder. LISTING RULES IMPLICATIONS The Lessor is a connected person of the Company within the meaning of the Listing Rules by virtue of its being a wholly-owned subsidiary of CWL, which is a substantial shareholder of the Company holding approximately 59.29% of the issued share capital of the Company and is the trustee of Lui’s Family Trust. Accordingly, each Lessor Company is an associate of a substantial shareholder of the Company and is regarded as a connected person of the Company within the meaning of the Listing Rules. Hence, the entering into of the Master Lease Agreement constitutes continuing connected transactions of the Company under Chapter 14A of the Listing Rules. Since the applicable percentage ratios are more than 0.1% but less than 5%, the Master Lease Agreement and the transactions contemplated thereunder are subject to the announcement, reporting and annual review requirements, but are exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.

REASONS FOR AND BENEFITS OF THE TRANSACTIONS. Xxxxxxx Xxxxxxxxx requires coal The entering into of the 2017 Master Lease Agreement is for the generation continuing administrative, operational, marketing, promotional and sales needs of electricity by its captive power plantthe Group. Having a steady supply Following the expiry of quality coal is essential for the operations 2014 Master Lease Agreement, the Group may have to renew some of Xxxxxxx Xxxxxxxxx the Existing Leases when their respective terms expire, and therefore, Xxxxxxx Xxxxxxxxx maintains a pool may further enter into new Leases to satisfy the future business needs of coal suppliers (including Suzhou GCL and independent third party coal suppliers) and sources quality coal supply from them the Group from time to time. During Accordingly, the period Company and the Lessor entered into the 2017 Master Lease Agreement to agree on the Annual Caps and set out a framework of the terms for the Leases to be made or renewed within the duration of the Term. In view of the above and that (i) compared with leasing from June 2022 to November 2022independent third parties, Xxxxxxx Xxxxxxxxx purchased coal from Suzhou GCL the Lessor has a better understanding of the Group’s requirements in terms of premises required for its usual course of business; (ii) the amount of rent payable by the relevant Group Companies pursuant to the Previously Disclosed Coal Supply Agreements Existing Leases and the Fifth Coal Supply Agreement. As it is expected that in addition to the coal expected to be sourced from independent third party coal suppliers, Xxxxxxx Xxxxxxxxx will continue to purchase coal from Suzhou GCL from time to time on a recurring basis, (i) Xxxxxxx Xxxxxxxxx can purchase coal from Suzhou GCL other expired leases entered into under the Sixth Coal Supply 2014 Master Lease Agreement for satisfying its short-term operation needswere not above the market rent; and (iiiii) in the long run, Lessor agreed that the Coal Supply Framework Agreement can further serve as a framework agreement between amount of rent payable under the parties, thereby enabling Xxxxxxx Xxxxxxxxx Leases to procure and secure a supplier of coal with steady supply and quality, and take advantage of any bulk purchase discount which may be offered by Suzhou GCL. In addition, given the historical transactions between Xxxxxxx Xxxxxxxxx and Suzhou GCL, the parties have developed mutual understanding of each other’s business practice. The terms of the Coal Supply Framework Agreement were negotiated entered into will be determined based on normal commercial terms and will not be exceeding the Annual Caps were determined following arm’s length negotiations between the parties. Based on the above reasons and having considered all relevant factorsmarket rent, the Directors (including the independent non-executive Directors) are of the view considered that the Fifth Coal Supply AgreementLeases contemplated under the 2017 Master Lease Agreement would be entered into, the Sixth Coal Supply Agreement and the Coal Supply Framework Agreement and the Annual Caps are on normal commercial terms and entered into in the ordinary and usual course of business of the Group and that the 2017 Master Lease Agreement (together with the Annual Caps) was entered into on normal commercial terms (or better to the Group) after arm’s length negotiations between the parties, and the terms of the Leases contemplated under the 2017 Master Lease Agreement (together with the Annual Caps) are fair and reasonable and in the interests of the Company and the its Shareholders as a whole. As Xx. Xxx Che-xxx, Xx. Xxxxxxx Xxx Xxx Xxxx, Xx. Xxxxx Xxxx Xxx Xxx Xx and Xx. Xxxxxxxxx Xxx Xxx Xxx, being all the executive Directors of the Company, are the discretionary beneficiaries of the Lui’s Family Trust which has 100% indirect shareholding interest in the Lessor, each of them is considered to have material interests in the 2017 Master Lease Agreement and has abstained from voting on the resolutions of the Board approving the 2017 Master Lease Agreement and the transactions contemplated thereunder. LISTING RULES IMPLICATIONS The Lessor is a connected person of the Company within the meaning of the Listing Rules by virtue of its being a wholly-owned subsidiary of CWL, which is a substantial shareholder of the Company holding approximately 51.23% of the issued share capital of the Company and is the trustee of Lui’s Family Trust. Accordingly, each Lessor Company is an associate of a substantial shareholder of the Company and is regarded as a connected person of the Company within the meaning of the Listing Rules. Hence, the entering into of the 2017 Master Lease Agreement constitutes continuing connected transactions of the Company under Chapter 14A of the Listing Rules. Since the applicable percentage ratios are more than 0.1% but less than 5%, the 2017 Master Lease Agreement and the transactions contemplated thereunder are subject to the announcement, reporting and annual review requirements, but are exempt from the independent shareholders’ approval requirement under Chapter 14A of the Listing Rules.