CONNECTED TRANSACTIONS: RECEIVING OF ENGINEERING PROJECT DESIGN AND TECHNOLOGY SERVICE AND SCR DENITRATION TECHNOLOGY MODIFICATION SERVICE

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安徽海螺水泥股份有限公司

ANHUI CONCH CEMENT COMPANY LIMITED

(a joint stock limited company incorporated in the People's Republic of China)

(Stock Code: 00914)

CONNECTED TRANSACTIONS:

RECEIVING OF ENGINEERING PROJECT DESIGN AND TECHNOLOGY SERVICE AND SCR DENITRATION TECHNOLOGY

MODIFICATION SERVICE

Engineering Project Design and Technology Service

On 1 March 2021, the Company and Conch Design Institute entered into the Engineering Project Design and Technology Service Contract. According to the such contract, Conch Design Institute shall provide certain subsidiaries of the Company with services including engineering design and/or technology transformation of clinker production lines, cement grinding system, aggregate and commodity concrete projects. The contract price amounted to RMB120.16 million (equivalent to approximately HK$143,935,220 note1).

SCR Denitration Technology Modification Service

On 1 March 2021, the Company and Conch Design Institute entered into the 2021 SCR Denitration Technology Modification EP Contract, pursuant to which Conch Design Institute will provide SCR denitration technology modification services for the three clinker production lines of the Company's three subsidiaries. The contract price amounted to RMB37.5 million (equivalent to approximately HK$44,919,863 note1).

On 13 November 2020, the Company and Conch Design Institute entered into the 2020 SCR Denitration Technology Modification EP Contract, pursuant to which Conch Design Institute agreed to provide SCR denitration technology modification services for the five clinker production lines of another three subsidiaries of the Company. The contract price amounted to RMB67 million (equivalent to approximately HK$78,376,323 note2 at that time).

Listing Rules Implications

Conch Design Institute is a wholly-owned subsidiary of Conch Holdings, the Company'scontrolling shareholder. Accordingly, Conch Design Institute is an associate of Conch Holdings and hence a connected person of the Company. The transactions contemplated under the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract thus constitute connected transactions for the Company under Chapter 14A of the Listing Rules. Pursuant to Rule 14A.81 of the Listing Rules, the transactions contemplated under the abovementioned three contracts shall be aggregated as if they were one transaction as they were all entered into within a 12-month period by the Group with the same party. As certain applicable percentage ratios (other than the profits ratio) calculated pursuant to Chapter 14 of the Listing Rules in connection with the relevant transaction amounts (i.e. the aggregated contract prices of the abovementioned three contracts were RMB224.66 million) are more than 0.1% but each of the applicable percentage ratios is less than 5%, the transactions contemplated under the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract are subject to the annual review and disclosure requirements, and are exempt from the independent shareholders' approval requirement under Rule 14A.76(2) of the Listing Rules.

On 1 March 2021, the Company and Conch Design Institute entered into the Engineering Project Design and Technology Service Contract; on the same date, the Company and Conch Design Institute entered into the 2021 SCR Denitration Technology Modification EP Contract; on 13 November 2020, the Company and Conch Design Institute entered into the 2020 SCR Denitration Technology Modification EP Contract. Details are as follows:

ENGINEERING PROJECT DESIGN AND TECHNOLOGY SERVICE

Engineering Project Design and Technology Service Contract

On 1 March 2021, the Company and Conch Design Institute entered into the Engineering Project Design and Technology Service Contract. According to such contract, Conch Design Institute shall provide certain subsidiaries of the Company with services including engineering design and/or technology transformation of clinker production lines, cement grinding system, aggregate and commodity concrete projects.

Date of the contract:

1 March 2021

Parties to the contract:

(1) The Company

The Group is principally engaged in the production and sale of cement and commodity clinker.

(2) Conch Design Institute

Conch Design Institute is an enterprise established in the PRC, and is principally engaged in the design services for building materials industry and cement technology development. It possesses a Grade A qualification in the relevant industry.

As at the date of this announcement, Conch Holdings, a controlling shareholder of the Company, holds about 36.40% of the total issued shares of the Company, and hence it is a connected person of the Company. Conch Design Institute is a wholly-owned subsidiary of Conch Holdings. Accordingly, Conch Design Institute is an associate of Conch Holdings and hence a connected person of the Company. Conch Holdings is a limited liability company established in the PRC. It is principally engaged in asset operation, investment, financing, property rights transactions, production and sale of construction materials, chemical products (excluding hazardous products), electronic apparatus and instruments and general machinery equipment, etc. Conch Holdings is ultimately beneficially owned as to 51% by the State-owned Assets Supervision and Administration Commission of Anhui Province (through its wholly-owned state-owned company) and 49% by China Conch Venture Holdings Limited, a company listed on the main board of the Stock Exchange (stock code: 586) (through a hierarchy of its direct and indirect wholly-owned subsidiaries).

Basic information of the contract:

The services provided by Conch Design Institute for certain subsidiaries of the Company include engineering design and/ or technology transformation services for certain projects of these subsidiaries (mainly including clinker production lines, cement grinding systems, aggregate and commercial concrete projects etc.). The relevant subsidiaries of the Company shall respectively enter into individual sub-contracts with Conch Design Institute setting out details of the services in relation to their projects. The major terms of these individual sub-contracts shall be in line with those of the Engineering Project Design and Technology Service Contract, and the aggregate amount of service fees payable under these individual sub-contracts shall not exceed the total contract price under the Engineering Project Design and Technology Service Contract.

The respective schedules for the provision of the services will be determined based on the commencement date and work progress of the individual projects and will be agreedbetween the relevant subsidiaries of the Company and Conch Design Institute under the relevant individual sub-contracts.

Effective date of the contract:

The Engineering Project Design and Technology Service Contract was entered into between the Company and Conch Design Institute on 1 March 2021, and was approved by the Board to become effective on the same date.

Contract price and basis for its determination:

The total contract price of the Engineering Project Design and Technology Service Contract is RMB120.16 million (equivalent to approximately HK$143,935,220 note1). The price was determined with reference to the Engineering Survey Design Fee Standard (2002 Revised Version) (《工程勘察設計收費標準》（2002 年修訂本）) jointly promulgated by National Development and Reform Commission of the PRC and the Ministry of Construction of the PRC; and Provisional Provisions on Preparation Works Consultation Charges for Construction Projects (Cost Estimate Paper [1999] No. 1283) (《建設項目前期工作諮詢收 費暫行規定》（計價格[1999]1283 號）) promulgated by National Development and Reform Commission of the PRC, as well as the project scale, investment amount, scope of design, technology indicators, the prevailing market prices for provision of similar services, and agreed between both parties on the basis of equality and mutual benefit.

Under the Engineering Project Design and Technology Service Contract, payment of the contract price will be made by the Group pursuant to the following schedules to be agreed under the individual sub-contracts: (i) 20% to 30% of the contract sum payable under the relevant individual sub-contract will be paid as deposit within 10 days after the individual sub-contract becoming effective; (ii) about 60% to 75% of the contract sum payable under the individual sub-contract will be paid in installments in accordance with the project design progress and the delivery of design documents; and (iii) the remaining contract sum payable under the individual sub-contract will be paid after the inspection of the production line within the scope of the engineering design before commencing production.

SCR DENITRATION TECHNOLOGY MODIFICATION SERVICE

1. 2021 SCR Denitration Technology Modification EP Contract

On 1 March 2021, the Company and Conch Design Institute entered into the 2021 SCR Denitration Technology Modification EP Contract, pursuant to which Conch Design Institute will provide equipment research and development, engineering design and equipment supplyservices for the SCR denitration technology modification projects for the three clinker production lines of the Company's three subsidiaries.

Date of the contract:

1 March 2021

Parties to the contract:

For details of parties to the contract, please refer to the above section "Engineering Project Design and Technology Service Contract - Parties to the contract".

Basic information of the contract:

Conch Design Institute will provide equipment research and development, engineering design and equipment supply services for the SCR denitration technology modification projects of three clinker production lines of three subsidiaries of the Company. The relevant subsidiaries of the Company shall respectively enter into individual sub-contracts with Conch Design Institute setting out details of the services to be received in relation to their projects. The major terms of these individual sub-contracts shall be in line with those of the 2021 SCR Denitration Technology Modification EP Contract, and the aggregate contract amounts under these individual sub-contracts shall not exceed the total contract price under the 2021 SCR Denitration Technology Modification EP Contract.

Effective date of the contract:

The 2021 SCR Denitration Technology Modification EP Contract was entered into between the Company and Conch Design Institute on 1 March 2021, and was approved by the Board to become effective on the same date.

2. 2020 SCR Denitration Technology Modification EP Contract

On 13 November 2020, the Company and Conch Design Institute entered into the 2020 SCR Denitration Technology Modification EP Contract, pursuant to which Conch Design Institute agreed to provide equipment research and development, engineering design and equipment supply services for SCR denitration technology modification projects of five clinker production lines of another three subsidiaries of the Company.

Date of the contract:

13 November 2020

Parties to the contract:

For details of parties to the contract, please refer to the above section "Engineering Project Design and Technology Service Contract - Parties to the contract".

Basic information of the contract:

Conch Design Institute agreed to provide equipment research and development, engineering design and equipment supply services for the SCR denitration technology modification projects of five clinker production lines of another three subsidiaries of the Company. The relevant subsidiaries of the Company shall respectively enter into individual sub-contracts with Conch Design Institute setting out details of the services to be received in relation to their projects. The major terms of these individual sub-contracts shall be in line with those of the 2020 SCR Denitration Technology Modification EP Contract, and the aggregate contract amounts under these individual sub-contracts shall not exceed the total contract price under the 2020 SCR Denitration Technology Modification EP Contract.

Effective date of the contract:

The 2020 SCR Denitration Technology Modification EP Contract was entered into between the Company and Conch Design Institute on 13 November 2020, and was approved by the Board to become effective on the same date.

Contract prices and basis for their determination for 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract:

The contract price for the 2021 SCR Denitration Technology Modification EP Contract amounted to RMB37.5 million (equivalent to approximately HK$44,919,863 note1), and the contract price for the 2020 SCR Denitration Technology Modification EP Contract amounted to RMB67 million (equivalent to approximately HK$78,376,323 note2 at that time). The prices were determined with reference to the Engineering Survey Design Fee Standard (2002 Revised Version) (《工程勘察設計收費標準》（2002 年修訂本）) jointly promulgated by National Development and Reform Commission of the PRC and the Ministry of Construction of the PRC; and Provisional Provisions on Preparation Works Consultation Charges for Construction Projects (Cost Estimate Paper [1999] No. 1283) (《建設項目前期 工作諮詢收費暫行規定》（計價格[1999]1283 號）) promulgated by National Development and Reform Commission of the PRC, as well as the project scale, scope of design, technology indicators, the market prices for SCR denitration technology modification services, and agreed between both parties on the basis of equality and mutual benefits. The Company had also made enquiries and comparisons of prices offered by independent thirdparties and the price offered to the Company by Conch Design Institute has significant price advantage.

According to the 2021 SCR Denitration Technology Modification EP Contract and the 2020 SCR Denitration Technology Modification EP Contract, the contract fees under the contracts will be paid by installments by the relevant subsidiaries of the Company according to the progress of equipment research and development, engineering design and equipment supply of their respective projects and pursuant to the terms of the individual sub-contracts.

REASONS FOR THE TRANSACTIONS

Engineering Project Design and Technology Service: Conch Design Institute has extensive experience and relevant qualification in the design of cement and clinker production line projects and the development of cement technology and has provided related services for clinker production lines, cement grinding systems, aggregates and commodity concrete projects of various subsidiaries of the Company. The Company believes that engaging Conch Design Institute as the provider of such services to the Group is conducive to the smooth advancement of preliminary works of the Group's engineering projects and ensuring the quality of project engineering.

SCR Denitration Technology Modification Service: SCR technology has high denitration efficiency and can effectively reduce nitrogen oxide emission concentration during clinker production process. In order to further enhance the Group's environmental protection management level and reduce the emission of nitrogen oxide, the Company intends to continue to implement SCR denitration technology modification on its other subsidiaries based on the achieved results in the previous pilot implementation of SCR denitration technology modification.

Conch Design Institute has extensive experience in building materials industry design and cement technology development, and possesses Grade A qualification in the relevant industry. It is familiar with the general factory layout, structures and set-up of the Company's subsidiaries and had previously undertaken the design and construction works of most of the Group's environmental protection projects. The SCR denitration technology modification projects undertaken by Conch Design Institute for the Company's subsidiaries, such as Zhongguo Cement Plant Co., Ltd., Jining Conch Cement Co., Ltd. and Baimashan Cement Plant of Anhui Conch Cement Company Limited, have been successfully put into operation, with various operating indicators having outperformed the planned indicators; the projects possess the advantages of low investment cost, low power consumption, less space occupancy and equipment required and low failure rate. The Company believes thatcommissioning Conch Design Institute to undertake the SCR denitration technology modification for the clinker production lines of the Company's subsidiaries is conducive to the coordination and implementation of the projects and hence ensuring that the progress and quality of the projects will be under control.

The Group is principally engaged in the production and sale of cement and commodity clinker. The engineering project design and technology service and SCR denitration technology modification service provided by Conch Design Institute and received by the Group are in the usual and ordinary course of business of the Group. The relevant services provided by Conch Design Institute are in the usual and ordinary course of business of Conch Design Institute as well. The abovementioned transactions will not have significant impact on the financial position and operating results of the Company.

IMPLICATION UNDER THE LISTING RULES

Conch Design Institute is a wholly-owned subsidiary of Conch Holdings, the Company's controlling shareholder. Accordingly, Conch Design Institute is an associate of Conch Holdings and hence a connected person of the Company. The transactions contemplated under the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract thus constitute connected transactions for the Company under Chapter 14A of the Listing Rules. Each of the abovementioned three contracts, if calculated separately as a single transaction by itself, is not subject to annual review and disclosure requirements under Chapter 14A of the Listing Rules. However, pursuant to Rule 14A.81 of the Listing Rules, the transactions contemplated under the abovementioned three contracts shall be aggregated as if they were one transaction as they were all entered into within a 12-month period by the Group with the same party. At the entering of the 2021 SCR Denitration Technology Modification EP Contract and the Engineering Project Design and Technology Service Contract on 1 March 2021, as certain applicable percentage ratios (other than the profits ratio) calculated pursuant to Chapter 14 of the Listing Rules in connection with the relevant transaction amounts (i.e. the aggregated contract prices of the abovementioned three contracts) are more than 0.1% but each of the applicable percentage ratios is less than 5%, the transactions contemplated under the abovementioned three contracts are subject to the annual review and disclosure requirements, and are exempt from the independent shareholders' approval requirement under Rule 14A.76(2) of the Listing Rules.

Reference is also made to the Company's announcements dated 10 March 2020 and 14

September 2020 ("Previous Announcements") in connection with the connected transactions entered into between the Company and Conch Design Institute. The transactions as disclosed in this announcement and the transactions ("Previous Transactions") as disclosed in the Previous Announcements were all entered into within 12 months with the same party (i.e. Conch Design Institute) and constitute a series of transactions pursuant to Rule 14A.81 of the Listing Rules.

Some of the applicable percentage ratios (other than the profits ratio) calculated pursuant to Chapter 14 of the Listing Rules for the aggregated transaction amounts for the Previous Transactions and the transactions contemplated under the abovementioned three contracts are more than 0.1% but each of the applicable percentage ratios is less than 5%. Therefore, the transactions contemplated under the abovementioned three contracts, together with the Previous Transactions, are subject to the annual review and disclosure requirements, and are exempt from the independent shareholders' approval requirement under Rule 14A.76(2) of the Listing Rules.

According to the SSE Listing Rules, Conch Design Institute is a connected party of the Company, and accordingly the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract also constitute connected transactions for the Company. Of which, when signing the 2020 SCR Denitration Technology Modification EP Contract, the Company has fulfilled its information disclosure obligation in accordance with the regulations. When aggregating the Engineering Project Design and Technology Service Contract and 2021 SCR Denitration Technology Modification EP Contract, the aggregate contract amount is less than 0.5% of the Company's latest audited net assets and has not reached the level required for disclosure, hence, the Company is not required to publish a provisional announcement for the abovementioned transactions on the website of the SSE.

DIRECTORS' APPROVAL OF AND OPINIONS

The Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract and the transactions contemplated thereunder were approved unanimously by the Directors (including the independent non-executive Directors). During the Board meeting, Mr Gao Dengbang, Mr Wang Jianchao and Mr Ding Feng (by virtue of their positions as director or senior management of Conch Holdings, which would render them to have deemed connected relationships with Conch Design Institute) abstained from voting in respect of the relevant resolutions. Save as disclosed above, none of the Directors of theCompany has any material interests in the Engineering Project Design and Technology

Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract and the transactions contemplated thereunder, or is required to abstain from voting in respect of the relevant resolution. The

Directors (including the independent non-executive Directors) are of the view that:

(1) the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration

Technology Modification EP Contract and the transactions contemplated thereunder are in the ordinary and usual course of business of the Company and on normal commercial terms or better terms and are in the interests of the Company and its shareholders as a whole;

• (2) the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration

  Technology Modification EP Contract and the transactions contemplated thereunder were in compliance with the Company Law of the PRC, the Listing Rules, SSE Listing Rules and the articles of association of the Company;

• (3) the terms and conditions of the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract and the transactions contemplated thereunder are agreed between the parties on the basis of equality and mutual benefits and are in accordance with the principle of fair and equal consideration, which are fair and reasonable; and

• (4) the basis for the determination of the respective contract price and payment methods of the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology Modification EP Contract and 2020 SCR Denitration

  Technology Modification EP Contract are in compliance with the relevant regulations of the PRC, the connected transaction rules as prescribed under the SSE Listing Rules and the Listing Rules and the applicable legal procedures. They reflect the principles of integrity, fairness and impartiality, and do not constitute any act that will prejudice the interests of the Company and its shareholders as a whole. In addition, the Engineering Project Design and Technology Service Contract, 2021 SCR Denitration Technology

  Modification EP Contract and 2020 SCR Denitration Technology Modification EP Contract and the transactions contemplated thereunder are beneficial to the business development of the parties and are in their mutual benefits.

DEFINITIONS

In this announcement, the following expressions shall, unless the context requires otherwise, have the following meanings:

• 1. Converted at an exchange rate of RMB0.83482: HK$1.

• 2. Converted at an exchange rate of RMB0.85485: HK$1.

Such exchange rates have been used, where applicable, for illustration purposes only and do not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all.

By Order of the Board

Anhui Conch Cement Company Limited

Joint Company Secretary

Yu Shui

Wuhu City, Anhui Province, the PRC

1 March 2021

As at the date of this announcement, the Board comprises (i) Mr Gao Dengbang, Mr Wang Jianchao, Mr Wu Bin and Mr Li Qunfeng as executive Directors; (ii) Mr Ding Feng as non-executive Director; (iii) Mr Leung Tat Kwong Simon, Ms Zhang Yunyan and Mr Zhang Xiaorong as independent non-executive Directors.