China Resources Cement : CONTINUING CONNECTED TRANSACTIONS - FRAMEWORK LOAN AGREEMENTS 2019

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(Stock Code: 1313)

CONTINUING CONNECTED TRANSACTIONS

FRAMEWORK LOAN AGREEMENTS 2019

Reference is made to the announcement of the Company dated 28 December 2016 in relation to the entering of the Framework Loan Agreements 2016. As the Framework Loan Agreements 2016 will expire on 31 December 2019, the Company has entered into new lending arrangements whereby the annual caps are renewed taking into account of the Company's operational scale and cash levels.

As applicable size test percentage ratios exceed 0.1% but are less than 5% in respect of the continuing connected transactions under the Framework Loan Agreements 2019, the transactions are only subject to the reporting, annual review and announcement requirements but are exempted from the independent shareholders' approval requirement of the Listing Rules.

BACKGROUND

Reference is made to the announcement of the Company dated 28 December 2016 in relation to the entering of the Framework Loan Agreements 2016. As the Framework Loan Agreements 2016 will expire on 31 December 2019, the Company has entered into new lending arrangements whereby the annual caps are renewed taking into account of the Company's operational scale and cash levels.

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THE FRAMEWORK LOAN AGREEMENTS 2019

Offshore Framework Loan Agreement 2019

Parties:	CRH and the Company
Date of agreement:	9 December 2019
Date of commencement of	1 January 2020
agreement:
Term of the agreement:	Three years ending 31 December 2022, unless extended for a
	further period
Lenders:	The Company and any of its subsidiaries which has become a
	party to the Offshore Framework Loan Agreement 2019 by
	acceding to its terms, but excluding any entity which is
	established in PRC.
Borrowers:	CRH, any China Resources Group listed company and any of
	their subsidiaries, which has become a party to the Offshore
	Framework Loan Agreement 2019 by acceding to its terms, but
	excluding any entity which is established in PRC and any
	member of the Group. Each borrower may borrow in HKD,
	RMB or United States dollars.
Guarantor(s) for loans made	CRH and, in the case of an advance to a subsidiary of a China
by the Group:	Resources Group listed company, that China Resources Group
	listed company.
Aggregate amounts to be	The maximum aggregate amount outstanding lent by the Group
advanced:	under both of the Framework Loan Agreements 2019 is not
	permitted to exceed the amounts set out under the section below
	headed "Annual lending caps under the Framework Loan
	Agreements 2019".
Repayment date:	The repayment date for an advance made under this agreement
	shall be no later than six months after the date of advance.

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Interest rate in respect of HKD advances:

Interest rate in respect of United States dollar advances:

Interest rate in respect of RMB advances:

Guarantee:

The rate per annum as determined by the relevant lender and the borrower as being the aggregate of (i) the relevant HIBOR for such a HKD advance; and (ii) a margin (which must not be a negative number). The interest rate shall not be less than the higher of (i) the rate at which CRH or a corporate borrower of similar standing is able to borrow HKD in an amount equal to the relevant advance from a bank or a financial institution for the relevant period and (ii) the deposit rate which the lender could have obtained from a bank or a financial institution for such relevant amount and period.

The rate per annum as determined by the relevant lender and the borrower as being the aggregate of (i) the relevant LIBOR for such a United States dollar advance; and (ii) a margin (which must not be a negative number). The interest rate shall not be less than the higher of (i) the rate at which CRH or a corporate borrower of similar standing is able to borrow United States dollars in an amount equal to the relevant advance from a bank or a financial institution for the relevant period and (ii) the deposit rate which the lender could have obtained from a bank or a financial institution for such relevant amount and period.

The rate per annum as determined by the relevant lender and the borrower with respect to an advance (which must not be a negative number). The interest rate shall not be less than the higher of (i) the rate at which CRH or a corporate borrower of similar standing is able to borrow RMB in Hong Kong in an amount equal to the relevant advance from a bank or a financial institution for the relevant period and (ii) the deposit rate in Hong Kong which the lender could have obtained from a bank or a financial institution for such relevant amount and period.

The guarantors will unconditionally and irrevocably guarantee to the relevant lender the due and punctual performance by the borrower (when the guarantor is CRH) or by the borrower which is the guarantor's subsidiary (when the guarantor is a China Resources Group listed company) of the borrower's obligations to that lender in connection with that lender's advance(s) to the borrower made under the Offshore Framework Loan Agreement 2019. For this purpose, each guarantor which is a China Resources Group listed company will enter into a deed of guarantee before its subsidiary is permitted to borrow under the Offshore Framework Loan Agreement 2019.

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Early repayment:	Both a lender and a borrower may by giving ten business days'
	written notice require the repayment or prepayment of the
	advance, as the case may be, together with accrued interest.
Basis of lending:	All advances will be made at the sole discretion of the lender.
	No security over the assets of the borrower will be provided. All
	advances will become immediately repayable on demand upon
	the occurrence of an acceleration event which includes non-
	payment by the borrower; breaches of the agreement by the
	borrower which have not been rectified in the specified period;
	cross-default in a material amount; the enforcement of security;
	insolvency; dissolution; repudiation; CRH ceasing directly or
	indirectly to be the single largest shareholder of the relevant
	borrower; or on the occurrence of a material adverse change as
	stated in the Offshore Framework Loan Agreement 2019 in
	respect of the relevant borrower.
Onshore Framework Loan Agreement 2019
Parties:	CRC and the Company
Date of agreement:	9 December 2019
Date of commencement of	1 January 2020
agreement:
Term of the agreement:	Three years ending 31 December 2022, unless extended for a
	further period
Lenders:	Any PRC established subsidiary of the Company, which has
	become a party to the Onshore Framework Loan Agreement
	2019 by acceding to its terms.
Borrowers:	CRC, and any PRC established subsidiary of CRC or a China
	Resources Group listed company, which has become a party to
	the Onshore Framework Loan Agreement 2019 by acceding to
	its terms, but excluding CR Bank, CR Trust and any subsidiary
	of the Company. Each borrower may borrow in RMB.
Guarantor:	CRC

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Aggregate amounts to be	The maximum aggregate amount outstanding lent by the Group
advanced:	under both of the Framework Loan Agreements 2019 is not
	permitted to exceed the amounts set out under the section below
	headed "Annual lending caps under the Framework Loan
	Agreements 2019".
Repayment date:	The repayment date for an advance made under this agreement
	shall be no later than six months after the date of advance.
Interest rate:	The rate per annum as determined by the relevant lender and the
	borrower. The interest rate shall be no less than the higher of (i)
	the rate at which CRC or a corporate borrower of similar
	standing is able to borrow in RMB in an amount equal to the
	relevant advance from a bank or a financial institution for the
	relevant period and (ii) the deposit rate which the lender could
	have obtained from a bank or a financial institution for such
	relevant amount and period.
Guarantee:	CRC unconditionally and irrevocably guarantees to the relevant
	lenders the due and punctual performance of all borrowers'
	obligations under the Onshore Framework Loan Agreement
	2019.
Best endeavours:	If an advance is to be made pursuant to the Onshore Framework
	Loan Agreement 2019 to a borrower which is a subsidiary of a
	China Resources Group listed company, prior to making that
	advance, such China Resources Group listed company shall sign
	a deed of undertaking and undertake that if CRC makes a
	payment to a lender in connection with the Onshore Framework
	Loan Agreement 2019 due to a breach by the China Resources
	Group listed company's subsidiary borrower, then the China
	Resources Group listed company will use its best endeavours to
	procure that that borrower shall have sufficient funds to, and
	does, promptly reimburse CRC. This may include such China
	Resources Group listed company making payments by way of
	gift or capital contribution or shareholder loan to the borrower
	(to the extent permitted by PRC law).

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Basis of lending:	All advances will be made at the sole discretion of the lender.
	No security over the assets of the borrower will be provided. All
	advances will become immediately repayable on demand upon
	the occurrence of an acceleration event which includes non-
	payment by the borrower; breaches of the agreement by the
	borrower which have not been rectified in the specified period;
	cross-default in a material amount; the enforcement of security;
	insolvency; dissolution; repudiation; CRC ceasing directly or
	indirectly to be the single largest shareholder of the relevant
	borrower; or on the occurrence of a material adverse change as
	stated in the Onshore Framework Loan Agreement 2019 in
	respect of the relevant borrower.

Annual lending caps under the Framework Loan Agreements 2019

The annual lending caps for the maximum aggregate amount which can be lent by the Group on any single day (inclusive of interest received and anticipated to be received) under both of the Framework Loan Agreements 2019 have been determined after assessing the maximum amount of exposure at any time which the Group is prepared to assume under the Framework Loan Agreements 2019 in the context of its estimated temporarily surplus cash resources.

Set out below are the maximum aggregate amounts outstanding on any single day lent by the Group under the Framework Loan Agreements 2016 (inclusive of interest received and receivable) during each of the years ended 31 December 2017 and 2018 and the nine months ended 30 September 2019:

			For the nine
	For the year ended	months ended
	31 December	30 September
	2017	2018	2019
	HK$	HK$	HK$
Maximum daily aggregate amount
outstanding during the year/period	718,214,000	801,316,000	819,110,000

The proposed annual lending caps for the Group on any single day for the term of the Framework Loan Agreements 2019 shall be RMB1,200,000,000 (equivalent to approximately HK$1,332,000,000). The Group's unaudited consolidated cash and bank balances as at 30 September 2019 was HK$7,982,531,000, and the highest of the applicable percentage ratios as defined under Rule 14.07 of the Listing Rules was 2.30%.

Such maximum daily amount is applicable for each day during the relevant year, and such maximum daily amount is calculated on an individual basis as outstanding at the end of each day during the relevant year.

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Financial condition of the guarantors

All advances to any member of the China Resources Group will be guaranteed by (i) CRC; (ii) CRH; or (iii) CRH and a China Resources Group listed company, depending on the relevant Framework Loan Agreements 2019 and the identity of the borrower. Both CRC and CRH are regarded as borrowers of undoubted standing in their own markets. CRC is a bond issuer in PRC and its principal long term credit rating is AAA according to an independent rating agency, China Lianhe Credit Rating Co., Ltd. The summary of the consolidated financial positions of CRC and CRH are as follows:

	CRH	CRC
	2018	2017	2018	2017
	Audited	Audited	Audited	Audited
	HK$ billion	HK$ billion	RMB billion	RMB billion
Total assets	1,523	1,330	1,458	1,234
Cash and bank balances	161	138	157	132
Equity attributable to the	292	275	215	200
shareholders of the company
Profit attributable to the	34	21	23	22
shareholders of the company
Cash flow from operation	94	62	69	40

REASONS FOR AND BENEFITS OF THE TRANSACTIONS

The Framework Loan Agreements 2019 provide the Company with greater flexibility in the management of its surplus cash resources by enabling it to lend a portion of its surplus cash resources and those of its subsidiaries to other China Resources Group companies, including CRC and CRH. The annual lending caps for the maximum aggregate amount which can be lent by the Group on any single day have been determined after assessing the maximum amount of exposure at any time which the Group is prepared to assume under the Framework Loan Agreements 2019 in the context of its estimated temporary surplus cash resources as well as the historical amount lent by the Group as set out on page 6 of this announcement.

All Directors (including independent non-executive Directors) consider the Framework Loan Agreements 2019 were negotiated on an arm's length basis and are on normal commercial terms, and the relevant terms and annual caps are fair and reasonable and in the interests of the Company and its shareholders as a whole.

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IMPLICATIONS UNDER THE LISTING RULES

By virtue of CRC being the controlling shareholder of CRH, which in turn holds a controlling interest in the Company, CRC and CRH are connected persons to the Company as defined under the Listing Rules.

As the applicable size test percentage ratios exceed 0.1% but are less than 5% in respect of the continuing connected transactions under the Framework Loan Agreements 2019, the transactions are only subject to the reporting, annual review and announcement requirements but are exempted from the independent shareholders' approval requirement of the Listing Rules.

Given the senior management roles of Mr. ZHOU Longshan, Mr. CHEN Ying, Mr. WANG Yan, Madam WAN Suet Fei and Mr. JING Shiqing at CRH, as good corporate governance measure, these five Directors absented themselves from the Board meeting when the Framework Loan Agreements 2019 and the transactions contemplated thereunder were discussed, voted and approved. Save as disclosed above, none of the Directors has any material interest in the Framework Loan Agreements 2019 and the transactions contemplated thereunder.

INFORMATION OF CRC, CRH AND THE GROUP

CRC

CRC, a borrower and guarantor under the Onshore Framework Loan Agreement 2019, is an intermediate holding company of CRH.

CRH

CRH, a borrower and guarantor under the Offshore Framework Loan Agreement 2019, is principally engaged in investment holding and property letting.

China Resources Group is principally engaged in five key sectors of businesses, namely, consumer products, healthcare, urban construction and operation, energy services and technology and finance.

The Company and the Group

The Company is a company incorporated in the Cayman Islands with limited liability whose shares are listed and traded on the main board of The Stock Exchange of Hong Kong Limited. The Group is principally engaged in the manufacture and sale of cement, concrete and other related products and services in PRC and Hong Kong.

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DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context requires otherwise:

"China Resources Group"	CRC, CRH and their respective subsidiaries;
"China Resources Group	any company (or companies) in the China Resources Group,
listed company (or	which is (or are) listed on the Main Board of the Stock Exchange
companies)"	as at the date of this announcement, other than the Company;
"Company"	China Resources Cement Holdings Limited, a company
	incorporated in the Cayman Islands with limited liability, the
	shares of which are listed and traded on the main board of the
	Stock Exchange;
"connected person(s)"	has the meaning ascribed thereto under the Listing Rules;
"continuing connected	has the meaning ascribed thereto under the Listing Rules;
transactions"
"controlling shareholder"	has the meaning ascribed thereto under the Listing Rules;
"CR Bank"	China Resources Bank of Zhuhai Co., Ltd. (珠海華潤銀行股份
	有限公司), a municipal bank headquartered in Zhuhai, in which
	CRC holds approximately 75.33% equity interest as at the date of
	this announcement;
"CR Trust"	China Resources SZITIC Trust Co., Ltd. (華潤深國投信託有限
	公司), in which CRC holds a 51% equity interest as at the date of
	this announcement;
"CRC"	China Resources Inc., a joint stock limited liability company
	incorporated in PRC, which is an intermediate holding company
	of CRH and the banking and trust activities in which the China
	Resources Group has an interest;
"CRH"	China Resources (Holdings) Company Limited, a company
	incorporated in Hong Kong with limited liability and the
	intermediate holding company of the China Resources Group in
	Hong Kong, holding all the China Resources Group's material
	interests apart from its banking and trust activities;
"Director(s)"	the director(s) of the Company;

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"Framework Loan	the Offshore Framework Loan Agreement 2016 and the Onshore
Agreements 2016"	Framework Loan Agreement 2016;
"Framework Loan	the Offshore Framework Loan Agreement 2019 and the Onshore
Agreements 2019"	Framework Loan Agreement 2019;
"Group"	the Company and its subsidiaries;
"HIBOR"	the Hong Kong Inter-Bank Offered Rate;
"HK$" or "HKD"	Hong Kong Dollars, the lawful currency of Hong Kong;
"Hong Kong"	the Hong Kong Special Administrative Region of PRC;
"independent shareholders"	shareholders of the Company other than CRH and its associates,
	as defined in the Listing Rules;
"LIBOR"	the London Inter-Bank Offered Rate, or in case the London Inter-
	Bank Offered Rate is not available, a substituted rate generally
	available in the market and generally accepted by market
	participants as a reference lending rate, which rate shall be chosen
	by the parties to replace the London Inter-Bank Offered Rate for
	the purposes of the Offshore Framework Loan Agreement 2019;
"Listing Rules"	the Rules Governing the Listing of Securities on the Stock
	Exchange;
"Offshore Framework Loan	the Framework Loan Agreement and Guarantee for advances in
Agreement 2016"	HKD, RMB and United States Dollar entered into by CRH and
	the Company on 28 December 2016;
"Offshore Framework Loan	the Framework Loan Agreement and Guarantee for advances in
Agreement 2019"	HKD, RMB and United States Dollar entered into by CRH and
	the Company on 9 December 2019;
"Onshore Framework Loan	the Framework Loan Agreement and Guarantee for advances in
Agreement 2016"	RMB entered into by CRC and the Company on 28 December
	2016;
"Onshore Framework Loan	the Framework Loan Agreement and Guarantee for advances in
Agreement 2019"	RMB entered into by CRC and the Company on 9 December
	2019;

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"PRC" or "China"the People's Republic of China, and for the purpose of this announcement, excluding Hong Kong, Macao and Taiwan;

"RMB"

Renminbi, the lawful currency of PRC;

"Stock Exchange"The Stock Exchange of Hong Kong Limited.

By order of the Board

CHINA RESOURCES CEMENT HOLDINGS LIMITED

ZHOU Longshan

Chairman

Hong Kong, 9 December 2019

For the purposes of this announcement and illustration only, conversions of RMB into HK$ are based on the approximate exchange rate of RMB1.00 to HK$1.11 for the date of this announcement. No representation is made that any amount in HK$ or RMB could have been or could be converted at the above rate or at any other rates.

As at the date of this announcement, the executive Directors are Mr. ZHOU Longshan and Mr. JI Youhong; the non-executive Directors are Mr. CHEN Ying, Mr. WANG Yan, Madam WAN Suet Fei and Mr. JING Shiqing; and the independent non-executive Directors are Mr. IP Shu Kwan Stephen, Mr. SHEK Lai Him Abraham, Madam ZENG Xuemin and Mr. LAM Chi Yuen Nelson.

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