10:07 ANHUI CONCH<00914> - 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. ANHUI CONCH CEMENT COMPANY LIMITED (a joint stock limited company incorporated in the People's Republic of China) (Stock code: 0914) CONNECTED TRANSACTIONS The Directors wish to announce that on 28 April 2005, the Company and Conch Holdings entered into an agreement regarding the transfer of 95% equity interests in Conch Jianan and increase in the registered capital of Conch Jianan. Pursuant to the Equity Transfer and Capital Increase Agreement, the Company will acquire the aforementioned 95% equity interests in Conch Jianan for a cash consideration of RMB5.7 million (equivalent to approximately HK$5,377,000) and, together with Conch Holdings, increase the registered capital of Conch Jianan by injecting RMB3.8 million (equivalent to approximately HK$3,585,000), which is in proportion to its shareholding (i.e. 95%), into Conch Jianan. After the completion of the Capital Increase, the registered capital of Conch Jianan will increase from RMB6 million to RMB10 million. Conch Holdings is the Controlling Shareholder of the Company. Accordingly, Conch Holdings is a Connected Person of the Company, and the transactions between the Company and Conch Holdings constitute connected transactions under Chapter 14A of the Listing Rules. Under Rules 14A.32 of the Listing Rules, the Connected Transactions are only subject to the reporting and announcement requirements under Rules 14A.45 to 14A.47 of the Listing Rules, and no Independent Shareholders' approval is required. Details of the Connected Transactions will be published in the Company's annual report and financial statements for the year ending 31 December 2005. I. DETAILS OF THE CONNECTED TRANSACTIONS Equity Transfer and Capital Increase Agreement Date 28 April 2005 Parties (i) the Company; and (ii) Conch Holdings. The Equity Transfer and Capital Increase Pursuant to the Equity Transfer and Capital Increase Agreement, both parties agreed that: i) Conch Holdings would transfer its 95% equity interests in Conch Jianan to the Company for a consideration of RMB5.7 million (equivalent to approximately HK$5,377,000). After the completion of the Equity Transfer, the Company and Conch Holdings would hold 95% equity interests and 5% equity interests in Conch Jianan respectively. Conch Jianan would become a subsidiary of the Company; and ii) The Company and Conch Holdings would increase the capital of Conch Jianan in proportion to their respective shareholdings (i.e. 95% and 5%) following the Equity Transfer. The total amount of the capital increase is RMB4 million, RMB3.8 million (equivalent to approximately HK$3,585,000) of which will be injected by the Company and RMB200,000 by Conch Holdings. Upon the completion of the Capital Increase, the registered capital of Conch Jianan will increase from RMB6 million to RMB10 million. The respective shareholding of the Company and Conch Holdings will remain at 95% and 5%. Both parties will enjoy the relevant rights and bear the relevant responsibilities under the Companies Law of the PRC according to the proportion of their respective shareholding. Method of payment and basis for price determination The entire amount of the consideration for the Equity Transfer and for the capital injection by the Company will be financed by the Company's working capital and will be paid in cash within the month after the signing of the Equity Transfer and Capital Increase Agreement for the purpose of completing the relevant procedures such as the verification of the increased registered capital.