Continuing Connected Transactions

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limitedtake no responsibility for the contents of this announcement, make no representationas to its accuracy or completeness and expressly disclaim any liability whatsoeverfor any loss howsoever arising from or in reliance upon the whole or any part of thecontents of this announcement. Datang International Power Generation Co., Ltd. (a sino-foreign joint stock limited company incorporated in the People's Republic of China) (Stock Code: 00991) ANNOUNCEMENT CONTINUING CONNECTED TRANSACTIONS FRAMEWORK AGREEMENT FOR CONSTRUCTION MATERIALS PURCHASE On 8 January 2014, the Company entered into the Framework Agreement for ConstructionMaterials Purchase with China Water Resources and Power in connection with thecentralised purchase of machinery, equipment and materials required for projectconstruction through China Water Resources and Power. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC and its subsidiaries hold a total ofapproximately 34.71% of the issued share capital of the Company. As China WaterResources and Power is a wholly-owned subsidiary of CDC, China Water Resources andPower is therefore a connected person of the Company under Chapter 14A of theListing Rules. The transactions contemplated under the Framework Agreement forConstruction Materials Purchase constitute continuing connected transactions of theCompany. As each of the applicable percentage ratios (as defined in Rule 14.07 of the ListingRules) of the Framework Agreement for Construction Materials Purchase is more than0.1% but less than 5%, such transactions are only subject to the reporting andannouncement requirements, but do not require the approval by the independentshareholders of the Company under Chapter 14A of the Listing Rules. BACKGROUND In order to regulate and enhance the management of purchase of project materials andto leverage bulk purchase advantages, the Company and China Water Resources andPower entered into the Framework Agreement for Construction Materials Purchase on8 January 2014 to centralise the purchase of machinery, equipment and materialsrequired for project construction so as to enhance quality of purchase and lowerpurchase costs, thereby enhancing the profitability of the Company. FRAMEWORK AGREEMENT FOR CONSTRUCTION MATERIALS PURCHASE Date 8 January 2014 Parties (i) The Company; and(ii) China Water Resources and Power Subject Matter 1. China Water Resources and Power agreed to conduct centralised purchase of project construction machinery, equipment and materials required for project construction in accordance with the demands ofthe Company and its subsidiaries for project construction machinery,equipment and materials. The selling prices of such project construction machinery, equipment and materials offered by China Water Resources and Power shall not be higher than the prevailing average market prices of such project construction machinery, equipment and materials. 2. According to the actual demands of the Company and its subsidiaries,China Water Resources and Power will conduct tender of materials purchase in accordance with relevant laws and regulations of the State. The process of purchase tender conducted by China Water Resources and Power will be under the supervision of the Company. 3. Pursuant to the tender results, the Company and its subsidiaries will enter into specific purchase contracts with China Water Resources and Power and such purchase contracts shall be consistent with the terms and principles of the Framework Agreement for Materials Purchase. Term The term of the Framework Agreement for Construction Materials Purchase is from 1January 2014 to 31 December 2014. The Company confirms that no transaction under the Framework Agreement forConstruction Materials Purchase was conducted for the period from 1 January 2014 tothe date of this announcement. Fee Standard and Calculation During the course of centralised purchase, China Water Resources and Powerwill be responsible for the coordination of tenders invitation, contract signing andthe implementation thereafter, transportation, examination of arrival goods andclaims submission, etc. As such, China Water Resources and Power will chargea management service fee (the relevant management fee shall not be higher than6% of the purchase amount). Such management service fee is determined afterarm's length negotiation between the parties taking into account the managementservice fee to be charged for the provision of similar services by other independentcooperating service providers. The relevant management service fee to becharged by China Water Resources and Power shall not be higher than the fee tobe charged by China Water Resources and Power for the provision of similarservices to other independent third parties and CDC. China Water Resources and Power will issue a value-added tax invoicecomprising the purchase amount and the management service fee to the Companyand its subsidiaries. Annual Cap Taking into account the requirement of project construction machinery, equipmentand materials applicable for centralised purchase which are used in theconstruction of infrastructure projects of the Company and its subsidiaries for theyear ending 31 December 2014, the continuing connected transactions contemplatedunder the Framework Agreement for Construction Materials Purchase are subject to anannual cap of RMB700 million (including the purchase costs for the projectconstruction machinery, equipment and materials and the management service feespayable to China Water Resources and Power) for the year ending 31 December 2014. Historical Figures The transaction amount of materials for project construction purchased by theCompany and its subsidiaries from China Water Resources and Power for the year ended31 December 2013 was approximately RMB782 million. The transaction amount of materials for project construction purchased by theCompany and its subsidiaries from China Water Resources and Power for the year ended 31 December 2012 was approximately RMB106.299 million. The Company did not carry out any similar transactions with China Water Resourcesand Power in the year ended 31 December 2011. INFORMATION OF PARTIES RELATING TO THE FRAMEWORK AGREEMENT FOR CONSTRUCTIONMATERIALS PURCHASE 1. The Company was established in December 1994 and is principally engaged in the construction and operation of power plants, the sale of electricity and thermal power, the repair and maintenance of power equipment and power related technical services. The Group�s main service areas are in the PRC. 2. CDC was established on 9 March 2003 with registered capital of RMB18.109 billion. It is principally engaged in the development, investment, construction, operation and management of power energy, organisation of power (thermal) production and sales; manufacturing, repair and maintenance of power equipment; power technology development and consultation; power engineering, contracting and consultation of environmental power engineering; development of new energy as well as development and production of power related coal resources. 3. China Water Resources and Power is a wholly-owned subsidiary of CDC which was established on 6 March 1989. Its core businesses include acting as agent for tenders invitation and import, pipe supplies, project consultation, spare parts, equipment supervision, management of project materials resources, CDM, safety evaluation, and so forth. REASONS FOR AND BENEFITS OF ENTERING INTO THE FRAMEWORK AGREEMENT FOR CONSTRUCTIONMATERIALS PURCHASE After taking into account the necessity for lowering purchase costs and successfulcompletion of the Company's infrastructure project materials purchase tasks duringthe year, the Company entered into the Framework Agreement for ConstructionMaterials Purchase to leverage on the role of China Water Resources and Poweras a professional institution in sourcing construction project machinery, equipmentand materials, and to leverage on the advantage of bulk purchasing, in order toenhance purchase quality, lower purchase costs, and increase the profitability ofthe Company. The Directors (including the independent non-executive Directors) are of the viewthat the continuing connected transactions under the Framework Agreement forConstruction Materials Purchase are conducted in the ordinary and usual courseof business of the Company, and are fair and reasonable and are in the interest ofthe Company and the shareholders as a whole. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC and its subsidiaries hold a total ofapproximately 34.71% of the issued share capital of the Company. China WaterResources and Power is a wholly-owned subsidiary of CDC and accordingly is aconnected person of the Company under Chapter 14A of the Listing Rules. Thetransactions contemplated under the Framework Agreement for ConstructionMaterials Purchase constitute continuing connected transactions for the Company. As each of the applicable percentage ratios (as defined in Rule 14.07 of the ListingRules) of the Framework Agreement for Construction Materials Purchase is morethan 0.1% but less than 5%, such transactions are only subject to the reportingand announcement requirements, but do not require the approval by theindependent shareholders of the Company under Chapter 14A of the Listing Rules. BOARD'S APPROVAL None of the Directors have any material interest in the transactions under theFramework Agreement for Construction Materials Purchase. Those connectedDirectors, including Chen Jinhang, Hu Shengmu and Fang Qinghai, have abstained from voting at the Board meeting for approval of the relevant transaction inaccordance with the requirements of the listing rules of the Shanghai StockExchange. DEFINITIONS In this announcement, unless the context otherwise requires, the followingexpressions have the following meanings: "Board" the board of Directors "CDC" China Datang Corporation, a State-owned enterprise established under the laws of the PRC and is a controlling shareholder of the Company pursuant to the Listing Rules which, together with its subsidiaries, hold approximately 34.71% of the issued share capital of the Company as at the date of this announcement "China Water Resources and Power" China National Water Resources & Electric Power Materials & Equipment Corporation "Company" Datang International Power Generation Co., Ltd., a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, whose H Shares are listed on the Stock Exchange and the London Stock Exchange and whose A Shares are listed on the Shanghai Stock Exchange "Director(s)" the director(s) of the Company "Framework Agreement forConstruction Materials Purchase" the framework agreement for centralised purchase of project construction machinery, equipment and materials entered into between the Company and China Water Resources and Power dated 8 January 2014 "Listing Rules" The Rules Governing the Listing of Securities on the Stock Exchange "PRC" the People's Republic of China "RMB" Renminbi, the lawful currency of the PRC "Stock Exchange" The Stock Exchange of Hong Kong Limited By Order of the Board Zhou Gang Secretary to the Board Beijing, the PRC, 8 January 2014 As at the date of this announcement, the directors of the Company are:Chen Jinhang, Hu Shengmu, Cao Jingshan, Fang Qinghai, Zhou Gang, Li Gengsheng,Cao Xin, Cai Shuwen, Liu Haixia, Guan Tiangang, Dong Heyi*, Ye Yansheng*,Li Hengyuan*, Zhao Jie*, Jiang Guohua* *Independent non-executive directors