China Foods : CONTINUING CONNECTED TRANSACTIONS RELATING TO THE 2021 FINANCIAL SERVICES AGREEMENT

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, 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 circular.

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Foods Limited, you should at once hand this circular together with the enclosed a form of proxy to the purchaser or transferee, or to the bank, stockbroker or other agent through which the sale or transfer was effected for transmission to the purchaser or transferee.

(Incorporated in Bermuda with limited liability)

(Stock Code: 506)

CONTINUING CONNECTED TRANSACTIONS

RELATING TO THE 2021 FINANCIAL SERVICES AGREEMENT

Independent Financial Adviser to

the Independent Board Committee and the Independent Shareholders

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed ''Definitions'' in this circular.

A letter from the Independent Board Committee with its recommendations to the Independent Shareholders of China Foods Limited (the ''Company'') is set out on page 24 of this circular and a letter from Chanceton Capital containing its advice to the Independent Board Committee and the Independent Shareholders of the Company is set out on pages 25 to 43 of this circular.

A notice convening the SGM of the Company, to be held at Mandarin's Suite, World Trade Centre Club Hong Kong, 38/F., World Trade Centre, 280 Gloucester Road, Causeway Bay, Hong Kong on Tuesday, 1 June 2021 at 4:30 p.m. (or immediately after the conclusion or adjournment of the annual general meeting of the Company to be held on the same day) is set out on pages SGM-1 to SGM-3 of this circular.

Whether or not you are able to attend the SGM (or any adjournment thereof), please complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to Tricor Progressive Limited, the branch share registrar and transfer office of the Company in Hong Kong, at Level 54, Hopewell Centre, 183 Queen's Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the SGM (or any adjournments thereof). Completion and return of the form of proxy will not preclude you from attending and voting at the SGM (or any adjournments thereof) in person should you so wish.

PRECAUTIONARY MEASURES FOR THE SGM

In view of the ongoing epidemic caused by novel coronavirus pneumonia (COVID-19), precautionary measures will be taken to prevent and control the spread of the disease at the SGM, including:

• Compulsory temperature checks
• Compulsory wearing of surgical face masks at all times at the venue of the SGM
• No refreshment will be served and no souvenirs will be distributed

Any person who does not comply with the precautionary measures may be denied entry into the venue of the SGM.

11 May 2021

CONTENTS
	Pages
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . .	24
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . . .	25
APPENDIX I - GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	44
NOTICE OF THE SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	SGM-1

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DEFINITIONS

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

''2018 Announcement''	the announcement of the Company issued on 14 December
	2018 concerning the continuing connected transactions of
	the Company in relation to the 2018 Financial Services
	Agreement
''2018 Financial Services	the financial services agreement in relation to the deposit
Agreement''	services, fund transfer services, entrustment loan services
	and other financial services entered into between the
	Company, Supply Chain (Tianjin) and COFCO Finance on
	14 December 2018
''2021 Financial Services	the financial services agreement in relation to the Deposit
Agreement''	Services, the Fund Transfer Services, the Entrustment
	Loan Services and the Other Financial Services entered
	into between the Company, Supply Chain (Tianjin) and
	COFCO Finance on 21 April 2021
''Board''	the board of Directors of the Company
''Bye-laws''	the bye-laws of the Company, as amended from time to
	time
''CBIRC''	China Banking and Insurance Regulatory Commission（中
	國銀行保險業監督管理委員會）
''China Foods (Holdings)''	China Foods (Holdings) Limited（中國食品（控股）有限公
	司）, a company incorporated in the British Virgin Islands
	with limited liability, and an indirect wholly-owned
	subsidiary of COFCO and a substantial shareholder of the
	Company
''COFCO''	COFCO Corporation（中糧集團有限公司）, a state-owned
	company established in the PRC which is currently under
	the purview of the State-owned Assets Supervision and
	Administration Commission of the State Council of the
	P R C（中國國務院國有資產監督管理委員會）a n d t h e
	ultimate controlling shareholder of the Company

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	DEFINITIONS
''COFCO Coca-Cola''	COFCO Coca-Cola Beverages Limited, a company
	incorporated in Hong Kong with limited liability, in which
	the Company indirectly holds 65% interests
''COFCO Finance''	COFCO Finance Corporation Limited（中糧財務有限責任
	公司）, a limited liability company incorporated in the PRC
	and an indirect wholly-owned subsidiary of COFCO
''Company''	China Foods Limited（中國食品有限公司）, a limited
	liability company incorporated in Bermuda, the Shares of
	which are listed on the main board of the Stock Exchange
''Deposit Services''	the RMB and foreign currency deposit and related services
	to be provided by COFCO Finance to Supply Chain
	(Tianjin) and subsidiaries of the Company under the 2021
	Financial Services Agreement
''Director(s)''	the director(s) of the Company
''Entrustment Loan Services''	COFCO Finance serves as a financial agent for loans
	advanced from certain subsidiaries of the Company to
	Supply Chain (Tianjin) through entrustment loan
	arrangements under the 2021 Financial Services
	Agreement
''Fund Transfer Services''	the fund transfer services provided by COFCO Finance to
	subsidiaries of the Company under the 2021 Financial
	Services Agreement
''Group''	the Company and its subsidiaries from time to time
''Hong Kong''	the Hong Kong Special Administrative Region of the PRC
''Independent Board Committee''	the independent committee of the Board, comprising all
	the independent non-executive Directors, was established
	for the purpose of advising the Independent Shareholders
	on the terms of the Deposit Services and the Proposed
	Daily Deposit Cap

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	DEFINITIONS
''Independent Financial Adviser''	Chanceton Capital Partners Limited, a licenced corporation
or ''Chanceton Capital ''	to carry out Type 6 (advising on corporate finance)
	regulated activity under the SFO, being the independent
	financial adviser appointed to advise the Independent
	Board Committee and the Independent Shareholders in
	respect of the Deposit Services and the Proposed Daily
	Deposit Cap
''Independent Shareholders''	Shareholders other than COFCO, COFCO Finance and
	their respective associates
''Latest Practicable Date''	5 May 2021, the latest practicable date prior to the
	printing of this circular for the purpose of ascertaining
	certain information contained therein
''Listing Rules''	Rules Governing the Listing of Securities on the Stock
	Exchange (as amended from time to time)
''Other Financial Services ''	other financial services to be provided by COFCO Finance
	to Supply Chain (Tianjin) and subsidiaries of the Company
	pursuant to the 2021 Financial Services Agreement apart
	from Deposit Services, Entrustment Loan Services, Fund
	Transfer Services, such as settlement, sale and purchase of
	foreign exchange and relevant advisory services
''PBOC''	the People's Bank of China（中國人民銀行）, the central
	bank of the PRC
''PRC''	the People's Republic of China, which for the purpose of
	this circular shall not include Hong Kong, the Macau
	Special Administrative Region of the People's Republic of
	China and Taiwan
''Proposed Daily Deposit Cap''	the proposed maximum daily outstanding balance of
	deposits (including the corresponding interest accrued
	thereon) placed by the Group with COFCO Finance in the
	amount RMB800 million or its equivalent (including the
	corresponding interest accrued therein) during the Term
	pursuant to the 2021 Financial Services Agreement
''RMB''	Renminbi, the lawful currency of the PRC
''SFO''	Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong)

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