China Resources Power : CONTINUING CONNECTED TRANSACTIONS — POWER SUPPLY FRAMEWORK AGREEMENT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in Hong Kong with limited liability under the Companies Ordinance)

On 1 November 2017, the Company and CR Cement entered into the Power Supply Framework Agreement to govern the supply and purchase of electricity for a term of three years from 1 January 2018 to 31 December 2020.

As at the date of this announcement, CRH, which is interested in approximately 62.94% of the total issued capital of the Company and is the controlling shareholder of the Company, is also the controlling shareholder of CR Cement by virtue of being interested in approximately 73.35% of the issued share capital of CR Cement. CR Cement is therefore an associate of CRH and a connected person of the Company under the Listing Rules. Accordingly, the transactions under the Power Supply Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the annual cap for the transactions contemplated under the Power Supply Framework Agreement exceed 0.1% but are less than 5%, the transactions contemplated under the Power Supply Framework Agreement are subject to the reporting and announcement requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

On 1 November 2017, the Company and CR Cement entered into the Power Supply Framework Agreement to govern the supply and purchase of electricity for a term of three years from 1 January 2018 to 31 December 2020.

The principal terms of the Power Supply Framework Agreement are set out below. Date: 1 November 2017

Parties: (i) The Company as supplier; and

(ii) CR Cement as purchaser

Term: 1 January 2018 to 31 December 2020

Subject matter: The Group shall supply electricity to CR Cement, its

subsidiaries or associates, including but not limited to through direct power supply (where the Group generates the electricity to be supplied) and agency power supply (where the Group purchases the electricity to be supplied). The volume of electricity to be supplied shall be determined by the Company and CR Cement.

It is contemplated under the Power Supply Framework Agreement that individual contracts will be entered into between relevant members of the Group and CR Cement, its subsidiaries and associates for a term ending not later than 31 December 2020 to govern the specific terms of power supply in relation to each relevant production base, which shall be on normal commercial terms or better and arrived at upon arm's length negotiation, with reference to market practice, industry standards and in accordance with the relevant national or local rules and regulations.

Price and basis of pricing:

The electricity fees payable shall be determined after arm's length negotiation based on the relevant national and provincial power supply system reform policies and with reference to prices in the open market, which shall be no less favourable than the price for similar transactions with independent third parties. Payment terms shall be negotiated on arm's length basis and on normal commercial terms or better under the individual contracts.

1. Historical Transaction Amounts

   The aggregate amounts paid by CR Cement, its subsidiaries and associates to the Group in relation to power supply by the Group for the six months ended 30 June 2017 amounted to RMB244 million (equivalent to approximately HK$275 million). The aggregate amounts paid by CR Cement, its subsidiaries and associates to the Group in relation to power supplied by the Group for the year ended 31 December 2016 amounted to RMB163 million (equivalent to approximately HK$190 million). No power supply transactions had been conducted between the Group and CR Cement, its subsidiaries and associates before 1 January 2016.

2. Proposed Annual Caps

The proposed annual cap for the transactions under the Power Supply Framework Agreement from 1 January 2018 to 31 December 2020 is expected to be RMB1,490 million per year (equivalent to approximately HK$1,728 million).

The proposed annual caps for the transactions under the Power Supply Framework Agreement have been determined after arm's length negotiation with reference to (i) the historical transaction amounts; (ii) the maximum prevailing unit price of electricity to be supplied by the Group under the Power Supply Framework Agreement; and (iii) the maximum amount of electricity to be supplied by the Group under the Power Supply Framework Agreement.

The Directors consider that the transactions contemplated under the Power Supply Framework Agreement will enable the Group to increase the power generation hours and utilization rate of its power plants, which will in turn maximize the plants' turnover and enhance profitability and help improve the plants' operating efficiency. The Directors are of the view that such transactions will benefit the operating results and financial position of the Group as a whole.

Having considered the foregoing, all Directors of the Company (including the independent non-executive Directors) consider that the transactions under the Power Supply Framework Agreement are on normal commercial terms or better and in the ordinary and usual course of business of the Group, and the terms of the Power Supply Framework Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole.

The Company was incorporated in Hong Kong with limited liability and the shares of the Company have been listed on the Stock Exchange since 12 November 2003. The Group is principally engaged in the investment, development, operation and management of power plants and coal mines in the PRC.

CR Cement is principally engaged in the production and sale of cement, clinker and concrete in the PRC and Hong Kong.

As at the date of this announcement, CRH, which is interested in approximately 62.94% of the total issued capital of the Company and is the controlling shareholder of the Company, is also the controlling shareholder of CR Cement by virtue of being interested in approximately 73.35% of the issued share capital of CR Cement. CR Cement is therefore an associate of CRH and therefore a connected person of the Company under the Listing Rules. Accordingly, the transactions under the Power Supply Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios calculated under Rule 14.07 of the Listing Rules in respect of the annual cap for the transactions contemplated under the Power Supply Framework Agreement exceed 0.1% but are less than 5%, the transactions contemplated under the Power Supply Framework Agreement are subject to the reporting and announcement requirements but exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.

None of the Directors is considered to have material interest in the Power Supply Framework Agreement. As good corporate governance measure, Mr. Chen Ying and Mr. Wang Yan abstained from voting on the relevant board resolutions for considering and approving the Power Supply Framework Agreement in view of their senior management roles at CRH.