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(incorporated in the Cayman Islands with limited liability)

(stock code: 6888)

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

The Board is pleased to announce that on 14 May 2021, Tianjin Expressway Maintenance (an indirect non-wholly owned subsidiary of the Company) entered into certain service agreements with the Contract Parties in relation to the Continuing Connected Transactions conducted on a regular and continuing basis.

IMPLICATIONS UNDER THE LISTING RULES

Tianjin Expressway Maintenance is an indirect non-wholly owned subsidiary of the Company. As at the date of this announcement, Tianjin Expressway Maintenance is owned as to 55% and 45% by Freetech Smart Road (an indirect non-wholly owned subsidiary of the Company) and Tianjin Expressway Group respectively. As Tianjin Expressway Group is a substantial shareholder (as defined under the Listing Rules) of Tianjin Expressway Maintenance, the Contract Parties are connected persons of the Company at the subsidiary level. Therefore, the Continuing Connected Transactions between Tianjin Expressway Maintenance and each of the Contract Parties constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As (i) the Contract Parties are connected persons at the subsidiary level of the Company; (ii) the Continuing Connected Transactions are on normal commercial terms; and (iii) the Board (including all the independent non-executive Directors) has approved the Continuing Connected Transactions and confirmed that the terms of the Continuing Connected Transactions are fair and reasonable and are on normal commercial terms and in the interests of the Company and its shareholders as a whole, according to Rule 14A.101 of the Listing Rules, the Continuing Connected Transactions are subject to the reporting, announcement and annual review requirements but are exempt from the circular, independent financial advice and shareholders' approval requirements.

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INTRODUCTION

Reference is made to the announcement of Freetech Road Recycling Technology (Holdings) Limited (the "Company", together with its subsidiaries, the "Group") dated 31 August 2015 in relation to, among others, the continuing connected transactions between the Group and Tianjin Expressway Group Company Limited* (天津高速公路集團有限公司) ("Tianjin Expressway Group"). The board ("Board") of directors ("Directors") of the Company is pleased to announce that on 14 May 2021 , Tianjin Expressway Maintenance Company Limited* ( 天 津 市 高 速 公 路 養 護 有 限 公 司 )("Tianjin Expressway Maintenance") (an indirect non-wholly owned subsidiary of the Company) and each of (1) Tianjin Expressway Group, and (2) Tianjin Xinzan Expressway Co. Ltd.* (天津新展高速公路有限公司) ("Tianjin Xinzan") (an associate of Tianjin Expressway Group) (collectively, the "Contract Parties") entered into certain service agreements in relation to the renewal of the ongoing transactions of the Group conducted on a regular and continuing basis (the "Continuing Connected Transactions"). The details of the Continuing Connected Transactions are set out below:

No.

Transaction

Services

Consideration

Terms

of

the

relevant

service

party

period

amount (RMB)

agreement

1.

Tianjin

17 May 2021 -

157,458,352

Provision

of

daily

maintenance

(i.e.

Expressway

30 April 2022

including

(1)

highway

facilities

Group

temporary

maintenance;

(2)

greenery

maintenance work; and (3) asphalt

pavement and road base temporary

maintenance work etc.) at Pingbao

Expressway*

( 濱 保 高 速 公 路 ) ，

Tangchen

Expressway* ( 塘 承 高 速 公

路), Rongwu Expressway* (榮烏高速公

路), Jingfu

Expressway* (京滬高速公

路 ) etc.

by

Tianjin

Expressway

Maintenance and the consideration shall

be paid in the following manner:

(a)

20%

of

the

consideration

as

prepayment shall be paid upon

commencement of the provision of

the services, and;

(b)

the prepayment shall net off against

the quarterly settlement.

2

No.

Transaction

Services

Consideration

Terms of the relevant service

party

period

amount (RMB)

agreement

2.

Tianjin Xinzan

17 May 2021 -

3,793,939

Provision

of

daily maintenance

at

31 March 2022

Chang Shen Expressway* (長深高速公

路 ), from section K1002+489 to

K1063+159,

by

Tianjin

Expressway

Maintenance. The consideration shall be

paid in the following manner:

(a) 30% of the consideration as

prepayment shall be paid upon

commencement of the provision of the

services;

and

thereafter

quarterly

settlement based on the actual volume;

and

(b) the prepayment shall net off against

the quarterly settlement.

3.

Tianjin Xinzan

17 May 2021 -

1,997,559

Provision

of

daily maintenance

at

31 March 2022

Chang Shen Expressway* (長深高速公

路 ), from section K1020+099 to

K1002+489,

by

Tianjin

Expressway

Maintenance. The consideration shall be

paid in the following manner:

(a) 30% of the consideration as

prepayment shall be paid upon

commencement of the provision of the

services;

and

thereafter

quarterly

settlement based on the actual volume;

and

(b) the prepayment shall net off against the quarterly settlement.

* for identification purpose only

BASIS FOR DETERMINING THE CONSIDERATIONS

The consideration of the Continuing Connected Transactions (including both daily maintenance and renovation maintenance services) was determined with reference to (i) the pricing guidelines issued by the local government of Tianjin, the People's Republic of China (the "PRC"); (ii) the consideration of historical transactions; (iii) the market price of raw materials costs; (iv) similar services rendered by Tianjin Expressway Maintenance, and (v) the duration and location of the projects. Further details relating to the pricing guidelines and the amount of the historical transactions are set out below:

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The Company referred to the supplemental requirement on budget preparation and estimate for highway construction projects (天津市執行交通部《公路基本建設工程概算、預算編制辦法》 的補充規定) issued by Tianjin local government and the budget for highway construction (公路工 程預算定額) issued by the Ministry of Transport of the PRC on 1 December 2018 (with effect from 1 May 2019) (the "Pricing Guidelines"). The Pricing Guidelines apply to all highway construction and maintenance projects in the PRC and provide price reference for highway construction and maintenance contracts, including the range of labour costs per day, the range of the cost per meter for certain raw materials and the range of the cost per machines used. The Pricing Guidelines are for reference purpose only and there is no requirement for Tianjin Expressway Maintenance to strictly follow these Pricing Guidelines. As the price references set out in the Pricing Guidelines are not up- to-date,Tianjin Expressway Maintenance would adjust the labour costs and estimate the raw material costs set out in the Pricing Guidelines upward or downward by comparing them with the prevailing market prices of labour costs and raw material costs and taking into account any recent or anticipated changes in the market based on the Group's knowledge. The prevailing market prices of the raw materials were determined by the purchasing team of Tianjin Expressway Maintenance through conducting market research and obtaining 10 quotes from different raw material suppliers in Tianjin.

The considerations were further determined on a cost-plus basis. Depending on the types of the services provided, certain percentage of the profit margin was determined based on the historical transaction experience of Tianjin Expressway Maintenance. Tianjin Expressway Maintenance has entered into transactions with Tianjin Expressway Group (including its subsidiaries and associated companies) from time to time since August 2015. Tianjin Expressway Maintenance has made reference to the consideration of certain historical transactions for similar services provided to Tianjin Expressway Group (including its subsidiaries and associated companies) as set out below when determining the consideration of the Continuing Connected Transactions. Tianjin Expressway Maintenance used the aggregate consideration, the consideration per kilometres and per square meters as reference point and made appropriate adjustments based on the factors mentioned above, including the prices set out in the Pricing Guidelines, the prevailing market prices of relevant raw materials, the duration and location of the projects.

No

Transaction party

Historical consideration

1

Tianjin Expressway Group

The consideration for the historical transactions which

provided similar types of services (i.e. daily

maintenance including (1) highway facilities temporary

maintenance; (2) greenery maintenance work; and (3)

asphalt pavement and road base temporary maintenance

work) for each of 2016, 2017, 2018, 2019 and 2020

were as follows:

2016: RMB112,748,906 for the period from 1 January

2016 to 31 March 2017

2017: RMB80,447,681 for the period from 1 May 2017

to 31 March 2018

2018: RMB95,592,944 for the period from 1 April 2018

to 1 April 2019

2019: RMB91,885,111 for the period from 8 April 2019

to 1 April 2020

4

2020: RMB100,000,000 for the period from 23 May

2020 to 31 March 2021

2

Tianjin Xinzan

The consideration for the historical transactions which

provided similar types of services (i.e.

daily

maintenance including (1) highway facilities routine

temporary maintenance; (2) greenery maintenance work;

and (3) asphalt pavement and road base temporary

maintenance work) for each of 2015, 2017, 2018 and

2020 were as follows:

2015: RMB1,641,845 for the period from 15 March

2015 to 14 March 2016

2017: two transactions with consideration

of

RMB1,739,147 for the period from 15 March 2016 to 14

March 2017 and RMB1,772,861 for the period from 11

December 2017 to 14 March 2018

2018: RMB1,971,607 for the period from 1 March 2018

to 14 March 2019

2020: RMB2,001,974 for the period from 1 October

2020 to 31 March 2021

The head of renovation maintenance department, the head of daily maintenance department and the head of operation management department of Tianjin Expressway Maintenance jointly determined the relevant considerations of the Continuing Connected Transactions based on the above pricing mechanism and negotiated the considerations with the Contract Parties. Before Tianjin Expressway Maintenance entered into the agreements in relation to the Continuing Connected Transactions with the Contract Parties, the deputy general manager of Tianjin Expressway Maintenance appointed by the Company obtained approval from the Company through the director of Tianjin Expressway Maintenance appointed by the Company ("Tianjin Director"). Tianjin Director has sought final approval from both the Chief Financial Officer of the Company and an executive Director to ensure that the basis for determining the considerations was effectively implemented.

REASONS FOR AND BENEFITS OF THE CONTINUING CONNECTED TRANSACTIONS

The Continuing Connected Transactions between Tianjin Expressway Maintenance and the Contract Parties were entered into in the ordinary and usual course of business of the Group. Taking into account of the long-term and stable business relationship between Tianjin Expressway Maintenance and the Contract Parties, the aforementioned transactions can provide a stable business environment and operating instruments for Tianjin Expressway Maintenance as a whole so as to bring stable contributions to the Company and its shareholders.

The Directors (including independent non-executive Directors) are of the view that the transactions under the aforesaid agreements are on normal commercial terms, in the ordinary and usual course of business of the Group, fair and reasonable and in the interests of the Company and its shareholders as a whole.

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Freetech Road Recycling Technology Holdings Ltd. published this content on 14 May 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 14 May 2021 16:32:09 UTC.