09:42 CHIAHSIN CEMENT<00699> - Announcement(1) The Stock Exchange of Hong Kong Limited takes no responsibility for the contents of this announcement, makes no representation as to its accuracy or completeness and expressly disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. Chia Hsin Cement Greater China Holding Corporation (Incorporated in the Cayman Islands with limited liability) (Stock code: 699) CONTINUING CONNECTED TRANSACTIONS The Board announces that on 20 January 2005, JCC, an indirect wholly owned subsidiary of the Company, entered into the Supply Agreement with CHC pursuant to which, CHC agrees to purchase from JCC an average of approximately 60,000 to 100,000 metric tons per month certain type of cement in bulk for a term commencing from 1 February 2005 to 31 December 2005 automatically renewable annually until 31 December 2007. As at the date of this announcement, each of CHC and Tong Yang Chia Hsin International Corporation (a subsidiary of CHC which is owned as to 87.18% of the equity interests by CHC) is interested in approximately 19.33% and 20.18% of the equity interests in International Chia Hsin Corp., which in turn is interested in approximately 0.49% equity interests in the Company. In addition, CHC is interested in approximately 69.73% of the equity interests in CHPL which in turn is interested in approximately 71.22% of the equity interests in the Company. In this connection, CHC is deemed to be interested in a total of approximately 71.71% of the equity interests in the Company and is regarded as a substantial Shareholder and a connected person of the Company under the Listing Rules. The Transactions will therefore constitute continuing connected transactions of the Company under the Listing Rules. It is estimated by the Directors that the annual aggregate amount payable by CHC to JCC under the Transactions will not exceed US$35,123,000 (equivalent to approximately HK$273,959,400), US$38,316,000 (equivalent to approximately HK$298,864,800) and US$38,316,000 (equivalent to approximately HK$298,864,800) for the three financial years ending 31 December 2005, 31 December 2006 and 31 December 2007 respectively. As the annual amounts payable under the Supply Agreement will exceed the 2.5% threshold under the Percentage Ratios, the Transactions are therefore subject to the reporting, disclosure and independent shareholders' approval requirements under rules 14A.35 and 14A.45 to 14A.48 of the Listing Rules. CHC and its associates shall abstain from voting on the Supply Agreement at the EGM pursuant to rule 14A.18 of the Listing Rules. The Independent Board Committee will be established to consider and advise the Independent Shareholders in respect of the fairness and reasonableness of the terms of the Supply Agreement and the Transactions including the Proposed Caps and an independent financial adviser will be appointed to advise the Independent Board Committee and the Independent Shareholders on the terms of the Supply Agreement and the Transactions including the Proposed Caps. A circular containing, among others, details of the Supply Agreement, the Transactions and the Proposed Caps, a letter from the Independent Board Committee to the Independent Shareholders, a letter of advice from the independent financial adviser to the Independent Board Committee and the Independent Shareholders and the notice of the EGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules. The Transactions will also be subject to annual review and requirements under rules 14A.37 to 14A.40, and the reporting requirements under rule 14A.45 and 14A.46 of the Listing Rules under which the Transactions are required to be included in the Company's next and subsequent published annual report and accounts. I. THE SUPPLY AGREEMENT Date 20 January 2005 Parties JCC, a wholly foreign owned enterprise established in the PRC which is wholly and indirectly owned by the Company CHC, a company incorporated in Taiwan which is interested in approximately 69.73% of the equity interests in CHPL which in turn is interested in approximately 71.22% of the equity interests in the Company. In addition, each of CHC and Tong Yang Chia Hsin International Corporation (a subsidiary of CHC which is owned as to 87.18% of the equity interests by CHC) is interested in approximately 19.33% and 20.18% of the equity interests in International Chia Hsin Corp. which in turn is interested in approximately 0.49% of the equity interests in the Company. CHC is therefore deemed to be interested in approximately 71.71% of the equity interests in the Company. Particulars of the Supply Agreement