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

REASONS FOR AND BENEFITS OF ENTERING INTO THE. RAW MATERIALS MASTER SUPPLY AGREEMENT The Group is 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 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 following completion of the Capital Injection. 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 specific agreements to be entered into between the 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 production cost of the respective products, so as to ensure that the transactions will be beneficial to both the Remaining Group and Dongyue Organosilicone. The Directors (including the independent non-executive Directors but excluding the Abstained Directors (as defined below)) consider that the Raw Materials Master Supply Agreement was entered into in the ordinary and usual course of business of the 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.

REASONS FOR AND BENEFITS OF ENTERING INTO THE. RAW MATERIALS MASTER SUPPLY AGREEMENT The Group is 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 monochloromethane from Shandong Dongyue Fluorosilicone Materials Co., Ltd. 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 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 following completion of the Capital InjectionGroup. 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 specific agreements to be entered into between the partiesparties and the same applies to waste treatment. As mentioned above, the pricing for the raw materials to be supplied by the Remaining Group to Dongyue Organosilicone 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 production cost of the respective productsproducts or treatment, so as to ensure that the transactions will be beneficial to both the Remaining Group and Dongyue Organosilicone. Since March 2020, the A shares of Dongyue Organosilicone have been listed on ChiNext of the Shenzhen Stock Exchange (stock code: 300821). In compliance with the applicable regulatory requirements of ChiNext of the Shenzhen Stock Exchange, Dongyue Organosilicone will seek its shareholders’ approval in general meeting on or before 31 March 2021 for the renewal of the Raw Materials Master Supply Agreement on terms to be agreed by the parties. The parties currently expect to renew the Raw Materials Master Supply Agreement on terms to be agreed provided that Dongyue Organosilicone having obtained the said shareholders’ approval. The Company will make the necessary announcement(s) upon the entering into any agreement for such renewal where required under the Listing Rules. The Directors (including the independent non-executive Directors but excluding the Abstained Directors (as defined below)) consider that the Raw Materials Master Supply Agreement was entered into in the ordinary and usual course of business of the 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.

REASONS FOR AND BENEFITS OF ENTERING INTO THE. RAW MATERIALS 2023 MASTER SUPPLY AGREEMENT The Group Reference is principally engaged in six business segments, one of which is made to 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 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 announcement of the Company following completion dated 29 December 2022 in relation to the resumption of operation of the Capital Injectionproduction facilities of Changchun Dahe since mid-December 2022. There is no provision in Since then, the Raw Materials Master Supply Agreement requiring Group’s production and sales volumes have been gradually recovering and the Remaining Group to exclusively supply raw materials to Dongyue Organosilicone or requiring Dongyue Organosilicone to exclusively source raw materials from the Remaining Groupdemand of corn kernels has been increasing accordingly. 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 Prior to the specific 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 to be entered into between the partiesCompany and Nongtou or the Nongtou Subsidiaries. As mentioned aboveWith 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 pricing for Group would like to take advantage of the raw materials 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 supplied by the Remaining Group to Dongyue Organosilicone will be determined by the Remaining Group with reference beneficial to the fair market prices Group as the Nongtou Group has always been able to arrange its source of the respective products offered to Independent Third Parties or the production cost of the respective products, corn kernels internally so as to ensure that offer corn kernels to the transactions will be beneficial Group at a more competitive terms, including better credit terms, as compared to both direct purchase from local farmers which offers no credit period at all, thus alleviating the Remaining Group and Dongyue Organosiliconepressure on the Group’s financial liquidity. The Directors (including excluding the independent non-executive Directors but excluding whose views will be given after taking into account the Abstained Directors (as defined below)advice of the IFA) consider are of the view that the Raw Materials terms and conditions of the 2023 Master Supply Agreement was entered into 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 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 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. RAW MATERIALS MASTER SUPPLY AGREEMENT The Group is 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 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 following completion of the Capital InjectionGroup. 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 specific agreements to be entered into between the 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 production cost of the respective products, so as to ensure that the transactions will be beneficial to both the Remaining Group and Dongyue Organosilicone. The Directors (including the independent non-executive Directors but excluding the Abstained Directors (as defined below)) consider that the Raw Materials Master Supply Agreement was entered into in the ordinary and usual course of business of the 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.