CONTINUING CONNECTED TRANSACTIONS: SALE OF CEMENT PRODUCTS

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.

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)

CONTINUING CONNECTED TRANSACTIONS:

SALE OF CEMENT PRODUCTS

Sale and Purchase of Cement Contract

On 31 December 2019, the Company and Jiangsu Conch Building Materials entered into the Sale and Purchase of Cement Contract under which certain subsidiaries of the Company located in East China will sell cement products to Jiangsu Conch Building Materials. The contract is valid from 1 January 2020 until 31 December 2020. The transaction amount is estimated to be approximately not more than RMB2,500,000,000.

Listing Rules Implications

Jiangsu Conch Building Materials is a non-wholly-owned subsidiary of the Company, which is owned as to 51% by the Company and 49% by Conch Profiles and Science. Conch Profiles and Science is a subsidiary of Conch Holdings, a controlling shareholder of the Company. Accordingly, Conch Profiles and Science is an associate of Conch Holdings and hence a connected person of the Company. Therefore, Jiangsu Conch Building Materials is a connected subsidiary of the Company under 14A.16 of the Listing Rules and thereby a connected person of the Company. The transactions contemplated under the Sale and Purchase Contract of Cement thus constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

Since each of the applicable percentage ratios (excluding profits ratio) calculated pursuant to Chapter 14 of the Listing Rules in connection with the contract price payable under such Contract is more than 0.1% but less than 5%, the transactions contemplated under the Sale and Purchase of Cement 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.

SALE AND PURCHASE OF CEMENT CONTRACT

On 31 December 2019, the Company and Jiangsu Conch Building Materials entered into the Sale and Purchase of Cement Contract under which certain subsidiaries of the Company located in East China will sell cement products to Jiangsu Conch Building Materials.

1

Date of the Contract:

31 December 2019

Parties to the Contract:

(1) The Company (Seller)

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

(2) Jiangsu Conch Building Materials (Buyer)

Jiangsu Conch Building Materials is an enterprise established in the PRC and is principally engaged in the production, processing and sales of cement products, steel structure construction and lightweight building materials; wholesale and retail of plastic profiles, building materials, metal materials, hardware products and coal.

Major terms of the Contract:

Certain subsidiaries of the Company located in East China will sell a total of approximately 6 million tonnes of cement products to Jiangsu Conch Building Materials as stipulated in the Contract. The sales price of the cement products will be determined with reference to the prevailing market price and the factors as detailed in the paragraph headed "Contract Price and Basis for its Determination" below. Jiangsu Conch Building Materials will be responsible for product transportation and will bear all expenses after receipt of the products. Payment will be settled on a monthly basis.

The relevant subsidiaries of the Company will respectively enter into individual sub-contracts with Jiangsu Conch Building Materials regarding the sales of cement products. The major terms of these individual sub-contracts shall be in line with those of the Sale and Purchase of Cement Contract. The aggregate contract price of these individual sub-contracts shall not exceed the contract price stipulated in the Sale and Purchase of Cement Contract.

Validity of the Contract:

The Sale and Purchase of Cement Contract was entered into between the Company and Jiangsu Conch Building Materials on 31 December 2019, and was approved by the Board of the Company to become effective on the same date. It is valid from 1 January 2020 until 31 December 2020.

Contract Price and Basis for its Determination:

Based on the current prevailing market conditions and the expected transaction volume, the

2

aggregate transaction amount within the validity period of the Sale and Purchase of Cement Contract is estimated to be approximately not more than RMB2,500,000,000. Settlement of payment will be made between Jiangsu Conch Building Materials and the relevant subsidiaries of the Company on a monthly basis.

As the price of cement is affected by multiple factors in the market and is subject to frequent fluctuations, the selling price of the cement products to be sold by the Company to Jiangsu Conch Building Materials will be determined with reference to the factory / freight on board prices, the prevailing market price and historical prices. The basis for determination of the selling prices of cement products are as follows:

1. Seasonal factors: seasonal factors have relatively significant impact on the demand for cement, resulting in frequent fluctuations in the market prices. Peak seasons usually fall within the second and the fourth quarters of the year, while low seasons usually fall within the first and the third quarters of the year. When entering into the Sale and Purchase of Cement Contract with Jiangsu Conch Building Materials, the Company has considered the effect of seasonal factors on cement prices;
2. Factory / freight on board prices: these refer to the prices set by the Group and offered to its customers upon completion of production at the Group's factory or when the products are loaded on board, and having taken into consideration factors including the then supply-demand relationship of the products in the region and costs of production;
3. Historical prices: the historical selling prices set by the Group and by other cement sellers for same or similar products in the East China region with reference to the Price List as mentioned below;
4. Market conditions: the then market conditions and factors, which include the demand for cement products in the East China region and the prevailing market prices for same or similar products in the East China region offered by other cement manufacturers/sellers; and
5. Arm's length negotiation: the selling prices to be offered under individual sub-contracts with Jiangsu Conch Building Materials will be approved by the sales department of the Group and to be negotiated and agreed with Jiangsu Conch Building Materials on arm's length basis.

The Group's pricing policies on the selling of cement products are applicable to all of its transactions, whether with independent customers or connected persons.

The Company has formulated internal control measures which regulate the terms (including pricing) and implementation of connected transactions and continuing connected transactions. Under such internal control measures, the Group maintains a historical price list ("Price List") for its products; the Price List is prepared by the sales department of the Company with reference to the internal historical selling prices set by the Group and the prevailing market prices offered by other industry players in separate sales regions from

3

time to time. The Price List will be updated by the sales department of the Company on a monthly basis. The internal control department of the Company will review the compliance of the internal control measures from time to time and will report any irregularities to the senior management, including the review of the Price List and the review and monitoring of the compliance and implementation of sales management policies (including pricing policies) for the Group's transactions by the sales department and sales teams of the Group.

The transactions contemplated under the Sale and Purchase of Cement Contract constitute continuing connected transactions. The Company will comply with the relevant requirements under Rules 14A.55 to 14A.59 of the Listing Rules regarding the annual reporting and review of such continuing connected transactions by its independent non-executive Directors and the auditors.

REASONS FOR THE TRANSACTIONS

Conch Profiles and Science, a shareholder of Jiangsu Conch Building Materials, has relatively good reputation in the building materials industry and relatively strong market competitiveness. Conch Profiles and Science and the Group aim at better leveraging the market competitiveness and sales network of Conch Profiles and Science to develop Jiangsu Conch Building Materials as a comprehensive building materials trading platform in the Jiangsu and Shanghai regions.

To further enhance the market influence of the Conch brand, the Company will centralise the sales of cement products of certain subsidiaries located in East China to Jiangsu Conch Building Materials, which will in turn sell the cement products to end users along the Yangtze River region of East China. This arrangement would allow the Company's subsidiaries to concentrate on production and Jiangsu Conch Building Materials to focus on leveraging its competitive edge in centralised sales, thus greatly enhancing the Company's product supply capacity when compared with the scattered sales arrangement through its individual subsidiaries. Jiangsu Conch Building Materials is expected to benefit from sales management and refinement of its sales network, thereby increasing the Group's aggregate sales volume and market share.

The above transactions between the Company and Jiangsu Conch Building Materials will not have significant impact on the financial position and operating results of the Company.

IMPLICATION UNDER THE LISTING RULES

Jiangsu Conch Building Materials is a non-wholly-owned subsidiary of the Company, which is owned as to 51% by the Company and 49% by Conch Profiles and Science. Conch Profiles and Science is a subsidiary of Conch Holdings, a controlling shareholder of the Company. Accordingly, Conch Profiles and Science is an associate of Conch Holdings and hence a connected person of the Company. Therefore, Jiangsu Conch Building Materials is a connected subsidiary of the Company under 14A.16 of the Listing Rules and thereby a connected person of the Company. The transactions contemplated under the Sale and Purchase of Cement Contract thus constitute continuing connected transactions for the

4

Company under Chapter 14A of the Listing Rules.

As certain applicable percentage ratios (excluding profits ratio) calculated pursuant to Chapter 14 of the Listing Rules in connection with the relevant transaction amounts are more than 0.1% but each of the applicable percentage ratios is less than 5%, the transactions contemplated under the Sale and Purchase of Cement 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.

According to the Rules Governing the Listing of Stocks on Shanghai Stock Exchange ("SSE Listing Rules"), Jiangsu Conch Building Materials is not a connected party of the Group. The abovementioned transactions do not constitute connected transactions under the SSE Listing Rules.

DIRECTORS' APPROVAL OF AND OPINIONS ON THE TRANSACTIONS

The Sale and Purchase of Cement Contract and the transactions as contemplated thereunder were approved unanimously by the Directors (including the independent non-executive Directors). None of the Directors has any material interests in the Sale and Purchase of Cement Contract and the transactions contemplated thereunder or shall abstain from voting in respect of the relevant resolutions. The Directors (including the independent non-executive Directors) are of the view that:

1. the Sale and Purchase of Cement 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 and are in the interests of the Company and its Shareholders as a whole;
2. the procedures for determining and approving the Sale and Purchase of Cement Contract and the transactions contemplated thereunder were in compliance with the Company Law of the PRC, the Listing Rules and the articles of association of the Company; and
3. the terms and conditions of the Sale and Purchase of Cement Contract and the transactions as 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.

DEFINITIONS

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

"associate"

has the meaning ascribed thereto under the Listing Rules

5

"Board"	the board of Directors
"Company"	Anhui Conch Cement Company Limited (安徽海螺水泥股
	份 有 限 公 司 ), a joint stock limited company established in
	the PRC, with its H shares listed on the Stock Exchange and
	its A shares listed on the SSE
"Conch Holdings"	Anhui Conch Holdings Company Limited (安徽海螺集團有
	限責任公司), the controlling shareholder of the Company
"Conch Profiles and	Wuhu Conch Profiles and Science Co., Ltd. (蕪湖海螺型材
Science"	科技股份有限公司), a subsidiary of Conch Holdings and a
	connected person of the Company
"connected person(s)"	has the meaning ascribed thereto under the Listing Rules
"connected subsidiary"	has the meaning ascribed thereto under the Listing Rules
"controlling shareholder"	has the meaning ascribed thereto under the Listing Rules
"Directors"	the directors of the Company
"Group"	the Company and its subsidiaries
"Jiangsu Conch Building	Jiangsu Conch Building Materials Co., Ltd. (江蘇海螺建材
Materials"	有 限 責 任 公 司 ), a non-wholly-owned subsidiary of the
	Company owned as to 51% by the Company and 49% by
	Conch Profiles and Science
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange
"Parties"	the Company and Jiangsu Conch Building Materials
"PRC"	the People's Republic of China, which for the purpose of this
	announcement excludes the Hong Kong Special
	Administrative Region of the PRC, the Macau Special

6

	Administrative Region of the PRC and Taiwan
"RMB"	Renminbi, the lawful currency of the PRC
"Sale and Purchase of	the sale and purchase of cement contract entered into
Cement Contract" or	between the Company and Jiangsu Conch Building Materials
"Contract"	on 31 December 2019
"Shareholder(s)"	registered holder(s) of A shares and/or H shares of the
	Company
"SSE"	Shanghai Stock Exchange
"Stock Exchange"	The Stock Exchange of Hong Kong Limited
"%"	per cent

By Order of the Board

Anhui Conch Cement Company Limited

Joint Company Secretary

Yu Shui

Wuhu City, Anhui Province, the PRC

31 December 2019

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 Yang Mianzhi, Mr Leung Tat Kwong Simon and Ms Zhang Yunyan as independent non-executive Directors.

7