Common use of Counter Guarantee Clause in Contracts

Counter Guarantee. On 8 November 2019 (after trading hours), Chairman ▇▇, entered into the Counter Guarantee Agreement with the Company, pursuant to which Chairman ▇▇ agreed to indemnify the Company by means of the Counter Guarantee for any amount payable by the Company or its subsidiaries in connection with the Company Guarantee, including the principal amount of the relevant loan, debenture or corporate bonds, any interest, fees, damages and enforcement expenses for breach of the relevant loan, debenture or corporate bonds. The Board considers that the Counter Guarantee is provided to the Group on normal commercial terms or better for the Group and no security shall be provided over the assets of any member of the Group in relation to such guarantee; therefore, the Counter Guarantee is exempted from reporting, announcement and Independent Shareholders’ approval requirements according to Rule 14A.90 of the Listing Rules. The Counter Guarantee arrangement for the 2019 Framework Agreement is identical in nature as Chairman ▇▇’s counter guarantee arrangement for the 2017 Framework Agreement. REASONS FOR AND BENEFITS OF THE 2019 FRAMEWORK AGREEMENT The 2019 Framework Agreement was entered into by the Company and Tianrui Group Company after taking into account the following factors: (a) It is common commercial practice for lenders in China to require the provision of guarantees as security for provision of loans to a borrower. In particular, privately- owned companies are often required by the PRC banks to provide third-party guarantee before granting a loan. Accordingly, financial institutions in the PRC have implemented tightened risk control measures, which require borrowers to extend or provide additional guarantees before granting loans. (b) The historical utilization of the Tianrui Group Guarantee is greater than that of the Company Guarantee. As at 31 October 2019, the outstanding balance of the Company Guarantee is approximately RMB1,576 million while the Tianrui Group Guarantee is approximately RMB2,461 million. During the term of 2017 Framework Agreement and as at the date of this announcement, there has not been default of any loans guaranteed by either the Tianrui Group Guarantee or the Company Guarantee under the 2017 Framework Agreement. The guaranteed amounts under the Tianrui Group Guarantee and the Company Guarantee as of 31 December 2017, 31 December 2018 and 31 October 2019 are as follows: Company Guarantee 1,710 1,710 1,576 Tianrui Group Guarantee 4,056 3,536 2,461 The highest daily balance of Company Guarantee are RMB1,710million, RMB1,710 million and RMB1,576 million during the year ended 31 December 2017 and 2018, and the ten months ended 31 October 2019 respectively. The highest daily balance of Tianrui Group Guarantee are RMB4,056 million, RMB3,536 million and RMB3,873 million during the year ended 31 December 2017 and 2018, and the ten months ended 31 October 2019 respectively. (c) The Group’s business is capital-intensive. While the Group has continuously sought to diversify its external funding sources, domestic PRC bank loans remain a vital source in satisfying the Group’s financing needs. Consistent with its business strategy, the Group intends to continue to engage in fixed assets investments, business acquisitions, production improvement and by-product expansion so as to benefit from the consolidation trend in China’s cement industry and ensure the sustainable development of the Group’s business in the long term. As a result of the Tianrui Group Guarantee, the Group will not only be able to enhance its ability to obtain bank loans and other borrowings, but it will also have the flexibility to approve and finalize relevant loans and borrowings in a timely manner, which is important to the Group’s implementation of its business expansion and performance improvement. (d) With respect to the Company Guarantee: (i) the Company will have recourse against Tianrui Group Company for the Company’s potential losses. In the event that the relevant loan is to be borrowed by a subsidiary of Tianrui Group Company, Tianrui Group Company shall provide the primary guarantee, whereas the Company is being provided for additional credit support. Furthermore, Tianrui Group Company, by entering into the 2019 Framework Agreement, has agreed to indemnify the Company for any amount payable in such situation, including the principal amount of the relevant loan, any interest, fees, damages and enforcement expenses for breach of the loan; (ii) Chairman ▇▇ also agreed to indemnify the Company for any amount that the Company would have paid to the lenders of Tianrui Group Company in accordance with the terms and conditions of each individual guarantee under the 2019 Framework Agreement; (iii) the Company will not provide a guarantee to any of Tianrui Group Company’s subsidiaries operating in aluminum-related business. The Company is of the view that Tianrui Group Company’s aluminum related business is uncertain and has been affected by the unfavorable market condition in recent years. As such, the Company’s exposure to the credit risk of Tianrui Group Company under the Company Guarantee will be minimized by carving out Tianrui Group Company’s subsidiaries operating in aluminum-related business; and (iv) as at the date of this announcement, Tianrui Group Company confirms that it does not have any repayment default in respect of any loan arrangements with banks. The financial position of Tianrui Group Company is reasonably healthy, certain particulars of which are set out in the section headed ‘‘Financial Information of Tianrui Group Company’’ in this announcement. (e) In order to secure sufficient funds for the operations of the Group, the Board also considered the following measures as alternatives to the Guarantees and the principal reasons for not adopting these measures are set out as follows: (i) Guarantees provided by an independent third party (ii) Individual guarantee relating to each individual loan agreement (f) In line with the 2017 Framework Agreement, the Company has, together with Tianrui Cement as a party to the agreement, formulated the agreement and entered into the 2019 Framework Agreement with Tianrui Group Company. The principal reasons for this are set out as follows: (i) it has become increasingly common for banks in China to arrange cross-border finance such as offshore or onshore financing against domestic or overseas guarantee, which require companies outside of China to become parties in the arrangement. Some banks have proposed this kind of arrangement and requirement to the Company, Tianrui Cement, Tianrui Group Company or its subsidiaries (excluding any of its subsidiaries engaged in aluminum-related business), in order to lower finance cost, enlarge financing scale, manage foreign exchange risk or match cross-border funding needs. (ii) some banks are willing to offer a better finance service package for the groups, including majority shareholders and listed companies, which would require a guarantee from the listed company, since a public company listed on a stock exchange has better transparency and credit premium compared to a private company. In consideration for the benefits received by the Group under the Tianrui Group Guarantee set out above, the Company has, therefore, agreed to provide the Company Guarantee. RISK MANAGEMENT MEASURES UNDER THE 2019 FRAMEWORK AGREEMENT In order to minimize the risk exposure of the Company in relation to the Company Guarantee, the Board shall continue to establish a special committee comprising not less than three Directors and the majority of the committee members shall be independent non-executive Directors. The special committee shall, during the Term: (a) review and approve each Company Guarantee. The special committee has the right to fully understand the business operations and financial position of the borrower before approving each Company Guarantee. It would not constitute a breach of the 2019 Framework Agreement if, after a review of the financial position of the borrower, the special committee considers it inappropriate to approve such guarantee. To facilitate such review process, Tianrui Group Company and its subsidiaries shall promptly provide their financial statements and other relevant information as requested by the special committee. The special committee will take into account the following factors when approving such guarantee: (i) no guarantee should be granted to a borrower with negative consolidated equity attributable to owners; (ii) no guarantee should be granted to a borrower operating in aluminum-related business; and (iii) no guarantee should be granted to a borrower where an event occurs that may constitute an event of default under any of its existing loan agreements; (b) monitor the implementation of each individual guarantee provided by the Company under the 2019 Framework Agreement; (c) consider the suitability of the guaranteed company; (d) periodically review and make sure no material adverse event or litigation issues will substantially affect the financial and operation of Tianrui Group Company and its subsidiaries and to determine the effect to the guarantee, including if they will constitute breach; (e) periodically review the management accounts and relevant financial information, and inspect the assets, books and records of Tianrui Group Company; (f) periodically review and examine any material adverse changes on the business, property, assets or operations of Tianrui Group Company, or its ability to perform any of its obligations under the 2019 Framework Agreement; and (g) periodically review and examine any material adverse change in foreign exchange risk and the policy risk under the 2019 Framework Agreement. The risk management measures for the 2019 Framework Agreement remains the same as that for the 2017 Framework Agreement. The Directors (excluding the independent non-executive Directors whose views will be contained in the circular after considering the advice from the Independent Financial Adviser) are of the view that the terms of the 2019 Framework Agreement are fair and reasonable, have been entered into after arm’s length negotiation between all parties thereto and determined on normal commercial terms or better in the ordinary and usual course of business and are in the interests of the Company and its Shareholders as a whole. BOARD’S APPROVAL Save for Chairman ▇▇, ▇▇▇. ▇▇ (Chairman ▇▇’s spouse) and ▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇, who is the brother of ▇▇▇. ▇▇, all of the Directors have confirmed that none of them has any material interest in the 2019 Framework Agreement; and therefore no Director (except Chairman ▇▇, ▇▇▇. ▇▇ and ▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇) are required to abstain from voting at the meeting of the Board to approve the 2019 Framework Agreement. FINANCIAL INFORMATION OF TIANRUI GROUP COMPANY The following table sets out the selected consolidated financial figures of Tianrui Group Company prepared in accordance with the PRC generally accepted accounting principles for the periods or as of the dates indicated: For the year ended 31 December 2018 RMB’000 (audited) 2017 RMB’000 (audited) Revenue 18,681,473 15,922,878 Profit before tax 2,575,639 1,832,196 Net profit (after tax) 2,021,394 1,406,584 Net cash from operation 4,668,498 3,032,632 As at 31 December 2018 RMB’000 (audited) 2017 RMB’000 (audited) Cash and bank balances 4,681,723 4,163,302 Total assets 70,922,491 68,805,236 Total liabilities 35,313,204 34,916,772 Contingent liabilities — — Banking facilities 11,818,077 11,644,270 INFORMATION ON THE PARTIES Tianrui Group Company is a company established in the PRC with limited liability and held as to 70% by Chairman ▇▇ and 30% by ▇▇▇. ▇▇, who are interested in different businesses such as foundry business, aluminum business, tourism and hotel business. The Group is principally engaged in businesses ranging from excavation of limestone, to production, sale and distribution of clinker and cement. LISTING RULES IMPLICATIONS As at the date of this announcement, Tianrui Group Company is owned as to 70% by Chairman ▇▇ and as to 30% by ▇▇▇. ▇▇ (Chairman ▇▇’s spouse), and Tianrui Group Company also indirectly holds approximately 69.58% shareholding in the Company and is hence the controlling shareholder of the Company. Tianrui Group Company is therefore a connected person of the Company. Therefore, the transactions contemplated under the 2019 Framework Agreement constitute continuing connected transactions of the Company under the Listing Rules. Company Guarantee As one or more of the applicable percentage ratios exceed 25% but all applicable percentage ratios are less than 75%, the Company Guarantee constitutes a major transaction under the Listing Rules and is subject to the reporting, announcement and Independent Shareholders’ approval requirements under the Listing Rules. As the amount of the proposed Annual Caps (the daily maximum balance not exceeding RMB3,000 million for each of the three years ending 31 December 2022) of Company Guarantee exceeds 8% under the assets ratio as defined under Rule 13.13 of the Listing Rules, the grant of Company Guarantee is also subject to the general disclosure obligations under Rule 13.15 of the Listing Rules. Tianrui Group Guarantee The Board considers that the Tianrui Group Guarantee is provided to the Group on normal commercial terms or better for the Group and no security shall be provided over the assets of any member of the Group in relation to such guarantee; therefore, the Tianrui Group Guarantee is exempted from reporting, announcement and Independent Shareholders’ approval requirements according to Rule 14A.90 of the Listing Rules. Counter Guarantee On 8 November 2019 (after trading hours), Chairman ▇▇, the ultimate controlling shareholder of the Tianrui Group Company, entered into the Counter Guarantee Agreement with the Company, pursuant to which Chairman ▇▇ has agreed to indemnify the Company by means of the Counter Guarantee for any amount payable by the Company or its subsidiaries in connection with the Company Guarantee, including the principal amount of the relevant loan, debenture or corporate bonds, any interest, fees, damages and enforcement expenses for breach of the relevant loan, debenture or corporate bonds. The Board considers that the Counter Guarantee is provided to the Group on normal commercial terms or better for the Group and no security shall be provided over the assets of any member of the Group in relation to such guarantee; therefore, the Counter Guarantee is exempted from reporting, announcement and Independent Shareholders’ approval requirements according to Rule 14A.90 of the Listing Rules. The Independent Board Committee comprising all the independent non-executive Directors has been formed to advise the Independent Shareholders as to whether the terms of the 2019 Framework Agreement and the transactions contemplated thereunder, including the Annual Caps, are fair and reasonable and are in the interests of the Company and its Shareholders as a whole, and to advise the Independent Shareholders on how to vote, taking into account the recommendations of the Independent Financial Adviser. DESPATCH OF CIRCULAR AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER CLC International Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in connection with the 2019 Framework Agreement. A circular containing details of the 2019 Framework Agreement, a letter from the Independent Board Committee of the Company and a letter from the Independent Financial Adviser, the circular is expected to be dispatched to the Shareholders on or before 29 November 2019. ▇▇ ▇▇▇ Company Limited (an indirect wholly-owned subsidiary of Tianrui Group Company) shall abstain from voting at EGM on the resolutions relating to the 2019 Framework Agreement and the transactions contemplated thereunder.

Counter Guarantee. On 8 4 November 2019 2022 (after trading hours), Chairman ▇▇. ▇▇, entered into the Counter Guarantee Agreement with the Company, pursuant to which Chairman ▇▇. ▇▇ agreed to indemnify the Company by means of the Counter Guarantee for any amount payable by the Company or its subsidiaries in connection with the Company Guarantee, including the principal amount of the relevant loan, debenture or corporate bonds, any interest, fees, damages and enforcement expenses for breach of the relevant loan, debenture or corporate bonds. The Board considers that the Counter Guarantee is provided to the Group on normal commercial terms or better for the Group and no security shall be provided over the assets of any member of the Group in relation to such guarantee; therefore, the Counter Guarantee is exempted from reporting, announcement and Independent Shareholders’ approval requirements according to Rule 14A.90 of the Listing Rules. The Counter Guarantee arrangement for the 2019 2022 Framework Agreement is identical in nature as Chairman ▇▇’s . ▇▇’▇ counter guarantee arrangement for the 2017 2019 Framework Agreement. REASONS FOR AND BENEFITS OF THE 2019 2022 FRAMEWORK AGREEMENT The 2019 2022 Framework Agreement was entered into by the Company and Tianrui Group Company after taking into account the following factors: (a) It is common commercial practice for lenders in China to require the provision of guarantees as security for provision of loans to a borrower. In particular, privately- privately-owned companies are often required by the PRC banks to provide third-party guarantee before granting a loan. Accordingly, financial institutions in the PRC have implemented tightened risk control measures, which require borrowers to extend or provide additional guarantees before granting loans. (b) The historical utilization of the Tianrui Group Guarantee is greater than that of the Company Guarantee. As at 31 October 201930 September 2022, the outstanding balance of the Company Guarantee is approximately RMB1,576 RMB875.6 million while the Tianrui Group Guarantee is approximately RMB2,461 RMB4,000.5 million. During the term of 2017 2019 Framework Agreement and as at the date of this announcement, there has not been default of any loans guaranteed by either the Tianrui Group Guarantee or the Company Guarantee under the 2017 2019 Framework Agreement. The guaranteed amounts under the Tianrui Group Guarantee and the Company Guarantee as of 31 December 20172020, 31 December 2018 2021 and 31 October 2019 30 September 2022 are as follows: As of Company Guarantee 1,710 1,710 1,576 2,093.5 1,863.6 875.6 Tianrui Group Guarantee 4,056 3,536 2,461 5,080.4 4,377.7 4,000.5 The highest daily balance of Company Guarantee are RMB1,710millionRMB2,093.5 million, RMB1,710 RMB2,562.1 million and RMB1,576 RMB1,863.6 million during the year ended 31 December 2017 2020 and 20182021, and the ten nine months ended 31 October 2019 30 September 2022 respectively. The highest daily balance of Tianrui Group Guarantee are RMB4,056 RMB5,080.4 million, RMB3,536 RMB4,377.7 million and RMB3,873 RMB4,377.7 million during the year ended 31 December 2017 2020 and 20182021, and the ten nine months ended 31 October 2019 30 September 2022 respectively. (c) The Group’s business is capital-intensive. While the Group has continuously sought to diversify its external funding sources, domestic PRC bank loans remain a vital source in satisfying the Group’s financing needs. Consistent with its business strategy, the Group intends to continue to engage in fixed assets investments, business acquisitions, production improvement and by-product expansion so as to benefit from the consolidation trend in China’s cement industry and ensure the sustainable development of the Group’s business in the long term. As a result of the Tianrui Group Guarantee, the Group will not only be able to enhance its ability to obtain bank loans and other borrowings, but it will also have the flexibility to approve and finalize relevant loans and borrowings in a timely manner, which is important to the Group’s implementation of its business expansion and performance improvement. (d) With respect to the Company Guarantee: (i) the Company will have recourse against Tianrui Group Company for the Company’s potential losses. In the event that the relevant loan is to be borrowed by a subsidiary of Tianrui Group Company, Tianrui Group Company shall provide the primary guarantee, whereas the Company Guarantee is being provided for additional credit support. Furthermore, Tianrui Group Company, by entering into the 2019 2022 Framework Agreement, has agreed to indemnify the Company for any amount payable in such situation, including the principal amount of the relevant loan, any interest, fees, damages and enforcement expenses for breach of the loan; (ii) Chairman ▇▇. ▇▇ also agreed to indemnify the Company for any amount that the Company would have paid to the lenders of Tianrui Group Company in accordance with the terms and conditions of each individual guarantee under the 2019 2022 Framework Agreement; (iii) the Company will not provide a guarantee to any of Tianrui Group Company’s subsidiaries operating in aluminum-related business. The Company is of the view that Tianrui Group Company’s aluminum related business is uncertain and has been affected by the unfavorable market condition in recent years. As such, the Company’s exposure to the credit risk of Tianrui Group Company under the Company Guarantee will be minimized by carving out Tianrui Group Company’s subsidiaries operating in aluminum-related business; and (iv) as at the date of this announcement, Tianrui Group Company confirms that it does not have any repayment default in respect of any loan arrangements with banks. The financial position of Tianrui Group Company is reasonably healthy, certain particulars of which are set out in the section headed ‘‘Financial Information of Tianrui Group Company’’ in this announcement. (e) In order to secure sufficient funds for the operations of the Group, the Board also considered the following measures as alternatives to the Guarantees and the principal reasons for not adopting these measures are set out as follows: (i) Guarantees provided by an independent third party (ii) Individual guarantee relating to each individual loan agreement (f) In line with the 2017 2019 Framework Agreement, the Company has, together with Tianrui Cement as a party to the agreement, formulated the agreement and entered into the 2019 2022 Framework Agreement with Tianrui Group Company. The principal reasons for this are set out as follows: (i) it has become increasingly common for banks in China to arrange cross-border finance such as offshore or onshore financing against domestic or overseas guarantee, which require companies outside of China to become parties in the arrangement. Some banks have proposed this kind of arrangement and requirement to the Company, Tianrui Cement, Tianrui Group Company or its subsidiaries (excluding any of its subsidiaries engaged in aluminum-related business), in order to lower finance cost, enlarge financing scale, manage foreign exchange risk or match cross-border funding needs. (ii) some banks are willing to offer a better finance service package for the groupsgroup entities of a listed company, including majority shareholders and listed companies, which would require a guarantee from the listed company, since a public company listed on a stock exchange has better transparency and credit premium compared to a private company. In consideration for the benefits received by the Group under the Tianrui Group Guarantee set out above, the Company has, therefore, agreed to provide the Company Guarantee. RISK MANAGEMENT MEASURES UNDER THE 2019 FRAMEWORK AGREEMENT In order to minimize the risk exposure of the Company in relation to the Company Guarantee, the Board shall continue to establish a special committee comprising not less than three Directors and the majority of the committee members shall be independent non-executive Directors. The special committee shall, during the Term: (a) review and approve each Company Guarantee. The special committee has the right to fully understand the business operations and financial position of the borrower before approving each Company Guarantee. It would not constitute a breach of the 2019 Framework Agreement if, after a review of the financial position of the borrower, the special committee considers it inappropriate to approve such guarantee. To facilitate such review process, Tianrui Group Company and its subsidiaries shall promptly provide their financial statements and other relevant information as requested by the special committee. The special committee will take into account the following factors when approving such guarantee: (i) no guarantee should be granted to a borrower with negative consolidated equity attributable to owners; (ii) no guarantee should be granted to a borrower operating in aluminum-related business; and (iii) no guarantee should be granted to a borrower where an event occurs that may constitute an event of default under any of its existing loan agreements; (b) monitor the implementation of each individual guarantee provided by the Company under the 2019 Framework Agreement; (c) consider the suitability of the guaranteed company; (d) periodically review and make sure no material adverse event or litigation issues will substantially affect the financial and operation of Tianrui Group Company and its subsidiaries and to determine the effect to the guarantee, including if they will constitute breach; (e) periodically review the management accounts and relevant financial information, and inspect the assets, books and records of Tianrui Group Company; (f) periodically review and examine any material adverse changes on the business, property, assets or operations of Tianrui Group Company, or its ability to perform any of its obligations under the 2019 Framework Agreement; and (g) periodically review and examine any material adverse change in foreign exchange risk and the policy risk under the 2019 Framework Agreement. The risk management measures for the 2019 Framework Agreement remains the same as that for the 2017 Framework Agreement. The Directors (excluding the independent non-executive Directors whose views will be contained in the circular after considering the advice from the Independent Financial Adviser) are of the view that the terms of the 2019 Framework Agreement are fair and reasonable, have been entered into after arm’s length negotiation between all parties thereto and determined on normal commercial terms or better in the ordinary and usual course of business and are in the interests of the Company and its Shareholders as a whole. BOARD’S APPROVAL Save for Chairman ▇▇, ▇▇▇. ▇▇ (Chairman ▇▇’s spouse) and ▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇, who is the brother of ▇▇▇. ▇▇, all of the Directors have confirmed that none of them has any material interest in the 2019 Framework Agreement; and therefore no Director (except Chairman ▇▇, ▇▇▇. ▇▇ and ▇▇. ▇▇ ▇▇▇▇▇▇▇▇▇) are required to abstain from voting at the meeting of the Board to approve the 2019 Framework Agreement. FINANCIAL INFORMATION OF TIANRUI GROUP COMPANY The following table sets out the selected consolidated financial figures of Tianrui Group Company prepared in accordance with the PRC generally accepted accounting principles for the periods or as of the dates indicated: For the year ended 31 December 2018 RMB’000 (audited) 2017 RMB’000 (audited) Revenue 18,681,473 15,922,878 Profit before tax 2,575,639 1,832,196 Net profit (after tax) 2,021,394 1,406,584 Net cash from operation 4,668,498 3,032,632 As at 31 December 2018 RMB’000 (audited) 2017 RMB’000 (audited) Cash and bank balances 4,681,723 4,163,302 Total assets 70,922,491 68,805,236 Total liabilities 35,313,204 34,916,772 Contingent liabilities — — Banking facilities 11,818,077 11,644,270 INFORMATION ON THE PARTIES Tianrui Group Company is a company established in the PRC with limited liability and held as to 70% by Chairman ▇▇ and 30% by ▇▇▇. ▇▇, who are interested in different businesses such as foundry business, aluminum business, tourism and hotel business. The Group is principally engaged in businesses ranging from excavation of limestone, to production, sale and distribution of clinker and cement. LISTING RULES IMPLICATIONS As at the date of this announcement, Tianrui Group Company is owned as to 70% by Chairman ▇▇ and as to 30% by ▇▇▇. ▇▇ (Chairman ▇▇’s spouse), and Tianrui Group Company also indirectly holds approximately 69.58% shareholding in the Company and is hence the controlling shareholder of the Company. Tianrui Group Company is therefore a connected person of the Company. Therefore, the transactions contemplated under the 2019 Framework Agreement constitute continuing connected transactions of the Company under the Listing Rules. Company Guarantee As one or more of the applicable percentage ratios exceed 25% but all applicable percentage ratios are less than 75%, the Company Guarantee constitutes a major transaction under the Listing Rules and is subject to the reporting, announcement and Independent Shareholders’ approval requirements under the Listing Rules. As the amount of the proposed Annual Caps (the daily maximum balance not exceeding RMB3,000 million for each of the three years ending 31 December 2022) of Company Guarantee exceeds 8% under the assets ratio as defined under Rule 13.13 of the Listing Rules, the grant of Company Guarantee is also subject to the general disclosure obligations under Rule 13.15 of the Listing Rules. Tianrui Group Guarantee The Board considers that the Tianrui Group Guarantee is provided to the Group on normal commercial terms or better for the Group and no security shall be provided over the assets of any member of the Group in relation to such guarantee; therefore, the Tianrui Group Guarantee is exempted from reporting, announcement and Independent Shareholders’ approval requirements according to Rule 14A.90 of the Listing Rules. Counter Guarantee On 8 November 2019 (after trading hours), Chairman ▇▇, the ultimate controlling shareholder of the Tianrui Group Company, entered into the Counter Guarantee Agreement with the Company, pursuant to which Chairman ▇▇ has agreed to indemnify the Company by means of the Counter Guarantee for any amount payable by the Company or its subsidiaries in connection with the Company Guarantee, including the principal amount of the relevant loan, debenture or corporate bonds, any interest, fees, damages and enforcement expenses for breach of the relevant loan, debenture or corporate bonds. The Board considers that the Counter Guarantee is provided to the Group on normal commercial terms or better for the Group and no security shall be provided over the assets of any member of the Group in relation to such guarantee; therefore, the Counter Guarantee is exempted from reporting, announcement and Independent Shareholders’ approval requirements according to Rule 14A.90 of the Listing Rules. The Independent Board Committee comprising all the independent non-executive Directors has been formed to advise the Independent Shareholders as to whether the terms of the 2019 Framework Agreement and the transactions contemplated thereunder, including the Annual Caps, are fair and reasonable and are in the interests of the Company and its Shareholders as a whole, and to advise the Independent Shareholders on how to vote, taking into account the recommendations of the Independent Financial Adviser. DESPATCH OF CIRCULAR AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER CLC International Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in connection with the 2019 Framework Agreement. A circular containing details of the 2019 Framework Agreement, a letter from the Independent Board Committee of the Company and a letter from the Independent Financial Adviser, the circular is expected to be dispatched to the Shareholders on or before 29 November 2019. ▇▇ ▇▇▇ Company Limited (an indirect wholly-owned subsidiary of Tianrui Group Company) shall abstain from voting at EGM on the resolutions relating to the 2019 Framework Agreement and the transactions contemplated thereunder.