Pricing Policy. The purchase price payable by us to Daoming Company under the Master Purchase Framework Agreement will be determined through a bidding process according to the internal rules and procedures of our Company. Our centralised procurement centre will send bidding documents to suppliers on our relevant approved supplier list and the procurement personnel of our Group will compare the purchase price offered by Daoming Company and other Independent Third Parties as well as accessing our business needs, the relevant qualifications/experience of the bidders in providing such chemical raw materials, and the quality of the chemical raw materials offered. The bidding process is monitored by our centralised procurement centre. The winning bidder and the purchase price for the transactions under the Master Purchase Framework Agreement will be approved by our centralised procurement centre and be valid for no more than one quarter. Where Daoming Company submits a bid but no other suppliers who are Independent Third Parties submit a bid in response to the bidding documents, our centralised procurement centre would compare the purchase price offered by Daoming Company to us and customers who are not connected to Daoming Company and, to the extent available, the prevailing market price of the relevant materials required by our Group. Our centralised procurement centre would then enter into arm’s length negotiations with Daoming Company based on the above information, historical purchase price for the materials under procurement, the types of the materials under procurement, and other factors which the centralised procurement centre considers appropriate. Any final price agreed with Daoming Company will be approved by our centralised procurement centre and be valid for no more than one quarter. The pricing terms under the Master Purchase Framework Agreement will be no less favourable to our Company than the terms offered by Independent Third Parties or the terms offered by Daoming Company to customers who are not connected thereto (as the case may be), and the purchase price will be in line with or lower than market rates and is in the best interests of our Company and our Shareholders as a whole.
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Sources: Master Purchase Framework Agreement, Master Purchase Framework Agreement, Master Purchase Framework Agreement