Continuing Connected Transactions

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong KongLimited take no responsibility for the contents of this announcement, make norepresentation as to its accuracy or completeness and expressly disclaim anyliability whatsoever for any loss howsoever arising from or in reliance uponthe whole or any part of the contents 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 PRODUCTION MATERIALS On 6 January 2014, the Company entered into the Framework Agreement forProduction Materials with China Water Resources and Power in connection withthe centralised purchase of machinery, equipment and materials required fortechnical transformation projects 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 Resourcesand Power is therefore a connected person of the Company under Chapter 14A ofthe Listing Rules. The transactions contemplated under the Framework Agreementfor Production Materials constitute continuing connected transactions of theCompany. As each of the applicable percentage ratios (as defined in Rule 14.07 of theListing Rules) of the Framework Agreement for Production Materials 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 materials fortechnical transformation projects and to leverage bulk purchase advantages, theCompany and China Water Resources and Power entered into the FrameworkAgreement for Production Materials on 6 January 2014 to centralise the purchaseof machinery, equipment and materials required for technical transformationprojects so as to enhance quality of purchase and lower purchase costs, therebyenhancing the profitability of the Company. FRAMEWORK AGREEMENT FOR PRODUCTION MATERIALS Date 6 January 2014 Parties (i) The Company; and(ii) China Water Resources and Power Subject matter of the Framework Agreement for Production Materials 1. China Water Resources and Power agreed to conduct centralised purchase of machinery, equipment and materials required for technical transformation projects in accordance with the demands of the Company and its subsidiaries for the machinery, equipment and materials of technical transformation projects. The selling prices of such machinery, equipment and materials of technical transformation projects offered by China Water Resources and Power shall not be higher than the prevailing average market prices of such machinery, equipment and materials of technical transformation projects. 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 law 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 such purchase contracts shall be consistent with the terms and principles of the Framework Agreement for Production Materials. Term The term of the Framework Agreement for Production Materials is from 1 January2014 to 31 December 2014. The Company confirms that for the period from 1 January 2013 to the date of theannouncement, no transaction was conducted under the Framework Agreement forProduction Materials. Fee Standard and Calculation During the course of centralised purchase, China Water Resources and Power willbe responsible for the coordination of tenders invitation, contract signing andthe implementation thereafter, transportation, examination of the arrival goodsand claims submission, etc. As such, China Water Resources and Power willcollect a management service fee (the relevant management fee shall be from 3%to 5% of the purchase amount on the purchase contracts). Such managementservice fee is determined after arm's length negotiation between the partiestaking into account the management service fee to be charged for the provisionof similar services by other independent cooperating service providers. Therelevant management service fee to be collected by China Water Resources andPower shall not be higher than the fee to be charged by China Water Resourcesand Power for the provision of similar services to other independent thirdparties and CDC. China Water Resources and Power will issue a value added tax invoice comprisingthe purchase amount and the management service fee to the Company and itssubsidiaries. Annual Cap Taking into account the machinery, equipment and materials of technicaltransformation projects applicable for centralised purchase which are requiredby the Company and its subsidiaries for the year ending 31 December 2014, thecontinuing connected transactions contemplated under the Framework Agreementfor Production Materials are subject to an annual cap of RMB500 million(including the purchase costs for the machinery, equipment and materials oftechnical transformation projects and the management service fees payable toChina Water Resources and Power) for the year ending 31 December 2014. Since the purchase costs for materials required for technical transformationprojects in 2014 are expected to increase when compared to that in 2013, theannual cap in 2014 is expected to have a certain increase when compared to theactual transaction amount in 2013. Historical Transaction Amounts The transaction amount of materials purchase for technical transformationprojects by the Company and its subsidiaries from China Water Resources andPower for the year ended 31 December 2013 was approximately RMB326 million. The transaction amount of materials purchase for technical transformationprojects by the Company and its subsidiaries from China Water Resources andPower for the year ended 31 December 2012 was approximately RMB61.98 million. The transaction amount of materials purchase for technical transformationprojects by the Company and its subsidiaries from China Water Resources andPower for the year ended 31 December 2011 was approximately RMB83.576 million. INFORMATION OF PARTIES RELATING TO THE FRAMEWORK AGREEMENT FOR PRODUCTION MATERIALS 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 business includes 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 FORPRODUCTION MATERIALS After taking into account the necessity for lowering purchase costs andsuccessful completion of the Company's technical transformation projectmaterials purchase tasks during the year, the Company entered into theFramework Agreement for Production Materials to leverage on the role of ChinaWater Resources and Power as a professional institution in sourcing themachinery, equipment and materials of technical transformation projects toleverage the bulk purchase advantage, enhance purchase quality and lowerpurchase costs, thereby enhancing the profitability of the Company. The Directors (including the independent non-executive Directors) are of theview that the continuing connected transaction under the Framework Agreementfor Production Materials are conducted in the ordinary and usual course ofbusiness of the Company, and are fair and reasonable and are in the interestof the 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 ProductionMaterials constitute continuing connected transactions for the Company. As each of the applicable percentage ratios (as defined in Rule 14.07 of theListing Rules) of the Framework Agreement for Production Materials 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. BOARD'S APPROVAL None of the Directors have any material interest in the transactionscontemplated under the Framework Agreement for Production Materials. Thoseconnected Directors, including Chen Jinhang, Hu Shengmu and Fang Qinghai, haveabstained from voting at the Board meeting for approval of the relevanttransaction in accordance with the requirements of the listing rules of theShanghai Stock Exchange. 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 for the framework agreement for centralised Production Materials" purchase of machinery, equipment and materials required for technical transformation projects dated 6 January 2014 entered into between the Company and China Water Resources and Power "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, 6 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