On 27 April 2023, the Group entered into the Equipment Leasing Framework Agreement with Huaihai Construction Engineering, pursuant to which, the Group agreed to lease equipment to Huaihai Construction Engineering during the period commencing on the Agreement Effective Date to 31 December 2025. Huaihai Construction Engineering is a subsidiary of Huaibei Construction Investment, a controlling shareholder of the Company. Under Rule 14A.07(4) of the Listing Rules, Huaihai Construction Engineering is an connected person of the Company. As the highest applicable percentage ratio of the annual caps of the transactions contemplated under the Equipment Leasing Framework Agreement exceeds 0.1% but is less than 5%, the transactions contemplated under the EquipmentLeasing Framework Agreement constitute continuing connected transactions of the Company that are subject to the reporting, announcement and annual review requirements, but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules. On 27 April 2023, the group entered into the Equipment Leasing framework Agreement with Huaihai Construction engineering, pursuant to which, the group agreed to lease equipment to HuAIhai Construction Engineering during the period Commencing on the Agreement Effective Date of the Equipment Leasing Framework Agreement to 31 December 2025. The equipment leased by the Group to Huaihai Construction Engineering consists of: (i) excavators; (ii) mine trucks; and (iii) shovel loaders, Pricing policy and payment: The rental charged by the Group for equipment leased to Huaihai Construction Engineering shall be negotiated on an arm's length basis between the contracting parties, taking into account the following factors: (i) The Group will consult with at least two independent third parties by e-mail, fax or telephone the quotations and market transaction prices of the same type of leased equipment with reference to local comparable market prices;
If comparable market prices are not available, it will be negotiated on the basis of depreciation of equipment, management fees, relevant taxes (VAT and surcharges) and reasonable profit. Rental and payments shall be negotiated by the parties in a separate individual lease agreement.