Haitian Plastics Machinery has entered into the Machinery Equipment Purchase Agreement with Haitian Precision to purchase automatic processing line, CNC turning machines, machining centres and related equipment manufactured by Haitian Precision. Such processing line, machines and equipment will be used for the processing of parts and components for the manufacture of plastic injection moulding machines by the Group. The total consideration for the purchase of the processing line, machines and equipment is approximately RMB 154.67 million (equivalent to approximately HKD 190.95 million), to be paid by installments for individual orders under the Machinery Equipment Purchase Agreement.

The payment term is by installment payments as follows: 30% of the purchase price of each order will be paid within 7 days after the relevant purchase order (on terms consistent with the Machinery Equipment Purchase Agreement) is agreed; 60% of the purchase price of each order will be paid within 7 days before delivery of the relevant equipment; and 10% of the purchase price of each order will be paid within one year of delivery and subsequent inspection of the respective equipment. The consideration for the purchase of the processing line, machines and equipment was based on the fair market value of such processing line, machines and equipment and was determined on the basis of normal commercial terms following arm's length negotiations between the Group and Haitian Precision. The consideration for the purchase of the processing line, machines and equipment shall be paid out of the internal resources of the Group.

The Group had purchased automatic processing line, CNC turning machines and machining centres from Haitian Precision in the past for processing of parts and components for the manufacture of plastic injection moulding machines by the Group. To upgrade the capacity of the Group to process parts and components, the Group would require new automatic processing line, CNC turning machines, machining centres and related equipment. The Company considers that the automatic processing line, CNC turning machines, machining centres and related equipment produced by Haitian Precision are competitive in terms of both technology and price-performance-ratio when compared with similar products in the market from both domestic and overseas suppliers and the products of Haitian Precision have consistently been able to meet the requirements of the Group.