In 2020, the Company formed a joint venture, Xinyang JV, with Xinyang Co for the production and sale of coke, electricity and heat energy. Xinyang JV is owned as to 70% by the Group and 30% by Xinyang Co. After the formation of such joint venture, the Group has been supplying coke to Xinyang Co Group since March 2022.

As Xinyang Co is a substantial shareholder of Xinyang JV, it is a connected person of the Company. Accordingly, the sale of coke and heat energy by the Group to the Xinyang Co Group constitutes continuing connected transactions of the Company. The term of the Existing Framework Agreement is due to expire on 31 December 2022, and the Company proposed to renew the continuing connected transactions with the Xinyang Co Group.

For such purposes, on 8 November 2022, the Company entered into the New Framework Agreement with Xinyang Co Group. Date: 8 November 2022 Parties: (1) The Company (2) Xinyang Co Term: 1 January 2023 to 31 December 2025 Pursuant to the New Framework Agreement, the Group agrees to provide coke and heat energy to the Xinyang Co Group during the three years from 1 January 2023 to 31 December 2025. The Xinyang Co Group will from time to time place purchase orders with the Group, specifying the amount of coke and/or heat energy required by the Xinyang Co Group, the requisite product specifications, as well as the expected delivery schedule; and following the Group's acceptance of the orders, the Group will sell the coke and/or heat energy at a prevailing market price and complete the delivery of the products according to the agreed delivery schedule.

The costs of transportation of coke from the Group's production facilities to the depot designated by the Xinyang Co Group will be borne by the Xinyang Co Group. The payment to the Group in respect of the sale of coke and/or heat energy is to be settled on a monthly basis by the Xinyang Co Group. The price of coke will be determined according to the following mechanism: (i) the Group's sales department will regularly monitor the movements and trends of the futures price of coke and determine the prevailing price range of coke after considering the prices and market inventory levels of coke published by specialised online information platforms (including MySteel and Steelhome) as well as the factory gate prices recommended by the China Coking Industry Association together with other associations in principal coke production regions; (ii) based on the prevailing price range of coke, the Group will convene weekly internal price analysis meetings to determine the factory gate price of its coke after considering the above factors; (iii) the Group will then having taking into account the relevant transportation costs (if applicable), determine the final sale price after arm's length negotiations with the Xinyang Co Group; and (iv) with respect to coke with special specifications requested by the Xinyang Co Group, the Group will also take into account the relevant product specifications, the extra production costs as well as the historical prices of coke with similar specifications when determining its factory gate price.

The price of heat energy will be determined according to the following mechanism: (i) the Group's sales department will regularly monitor the movements and trends of heat energy price and determine the prevailing price range of heat energy after taking into account the relevant prices of heat energy published by specialised online information platforms as well as government policy on pricing adjustment; and (ii) the Group will then, having taken into account heat energy specification and heat energy generation costs, determine the final sale price after arm' s length negotiations with the Xinyang Co Group.