Continuing Connected Transactions

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take noresponsibility for the contents of this announcement, make no representation as to itsaccuracy or completeness and expressly disclaim any liability whatsoever for any losshowsoever arising from or in reliance upon the whole or any part of the contents of thisannouncement. 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 ENGINEERING MATERIALS PURCHASE On 6 January 2015, the Company entered into the Framework Agreement for Engineering MaterialsPurchase with China Water Resources and Power, a wholly-owned subsidiary of CDC, inconnection with the centralised purchase of machinery, equipment and materials required forproject construction through China Water Resources and Power. LISTING RULES IMPLICATIONS As at the date of this announcement, CDC and its subsidiaries hold a total of approximately34.71% of the issued share capital of the Company. As China Water Resources and Power is awholly-owned subsidiary of CDC, China Water Resources and Power is therefore a connectedperson of the Company under Chapter 14A of the Listing Rules. The transactions contemplatedunder the Framework Agreement for Engineering Materials Purchase constitute continuingconnected transactions of the Company. As each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules)of the Framework Agreement for Engineering Materials Purchase is more than 0.1% but less than5%, the relevant continuing connected transactions are only subject to the annual review,reporting and announcement 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 and toleverage bulk purchase advantages, the Company and China Water Resources and Power, asubsidiary of CDC, entered into the Framework Agreement for Engineering Materials Purchaseon 6 January 2015 to centralise the purchase of machinery, equipment and materials requiredfor project construction through China Water Resources and Power so as to enhance quality ofpurchase and lower purchase costs, thereby enhancing the profitability of the Company. FRAMEWORK AGREEMENT FOR ENGINEERING MATERIALS PURCHASE Date 6 January 2015 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 machinery, equipment and materials required for project construction in accordance with the demands of the Company and its subsidiaries for project construction machinery, equipment and materials. The selling prices of such project construction machinery, equipment and materials 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 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 Power and such purchase contracts shall be bound by the terms and principles of the Framework Agreement for Engineering Materials Purchase. Term The term of the Framework Agreement for Engineering Materials Purchase is from 1 January 2015to 31 December 2015. The Company confirms that no transactions under the Framework Agreement for EngineeringMaterials Purchase were conducted for the period from 1 January 2015 to the date of thisannouncement. Fee Standard and Calculation During the course of centralised purchase, China Water Resources and Power will beresponsible for the coordination of tenders invitation, contract signing and theimplementation thereafter, delivery, check-and-acceptance and claims submission, etc. Assuch, China Water Resources and Power will charge a management service fee (which shall befrom 6% of the purchase amount on the purchase contracts). Such management service fee isdetermined after arm's length negotiation between the parties taking into account themanagement service fee to be charged for the provision of similar services by otherindependent cooperating service providers. The relevant management service fee to be chargedby China Water Resources and Power shall not be higher than the fee to be charged by ChinaWater Resources and Power for the provision of similar services to other independent thirdparties and other companies of CDC. Before entering into specific purchase contracts, the relevant departments and subsidiariesof the Company will consult and confirm with China Water Resources to ensure the relevantmanagement service fee shall not be higher than the fee to be charged by China WaterResources and Power for the provision of similar services to other independent third partiesand CDC. China Water Resources and Power will issue a value added-tax invoice comprising the purchaseamount and the management service fee to the Company and its subsidiaries. Annual Cap Taking into account the requirement of project construction machinery, equipment andmaterials applicable for centralised purchase which are used in the construction ofinfrastructure projects of the Company and its subsidiaries for the year ending 31 December2015, the continuing connected transactions contemplated under the Framework Agreement forEngineering Materials Purchase are subject to an annual cap of RMB1,000 million (includingthe purchase costs for the project construction machinery, equipment and materials and themanagement service fees payable to China Water Resources and Power) for the year ending 31December 2015. The prices of construction machinery, equipment and materials under the Framework Agreementfor Engineering Materials Purchase was determined by way of public tender carried out byChina Water Resources and Power. According to the demand of engineering machinery, equipment and materials for infrastructureprojects of the Company and its subsidiaries as well as the result of negotiation between theparties, the annual cap in 2015 is expected to be substantially higher when compared to thehistorical transaction amount in 2014. Historical Figures For the year ended 31 December 2014, the transaction amount of engineering materials purchaseby the Company and its subsidiaries from China Water Resources and Power was approximatelyRMB340 million. For the year ended 31 December 2013, the transaction amount of engineering materials purchaseby the Company and its subsidiaries from China Water Resources and Power was approximatelyRMB782 million. For the year ended 31 December 2012, the transaction amount of engineering materials purchaseby the Company and its subsidiaries from China Water Resources and Power was approximatelyRMB106.299 million. INFORMATION OF PARTIES RELATING TO THE FRAMEWORK AGREEMENT FOR ENGINEERING MATERIALS 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 RMB18.009 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 ENGINEERING MATERIALSPURCHASE After taking into account the necessity for lowering purchase costs and successful completionof the Company's infrastructure project materials purchase tasks during the year, the Companyentered into the Framework Agreement for Engineering Materials Purchase to leverage on therole of China Water Resources and Power as a professional institution in sourcingconstruction project machinery, equipment and materials, and to leverage on the advantage ofbulk purchasing, in order to enhance purchase quality, lower purchase costs, and increase theprofitability of the Company. The Directors (including the independent non-executive Directors) are of the view that thecontinuing connected transactions under the Framework Agreement for Engineering MaterialsPurchase are conducted in the ordinary and usual course of business of the Company, and arefair and reasonable and are in the interest of 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 of approximately34.71% of the issued share capital of the Company. China Water Resources and Power is awholly-owned subsidiary of CDC and accordingly is a connected person of the Company underChapter 14A of the Listing Rules. The transactions contemplated under the Framework Agreementfor Engineering Materials Purchase constitute continuing connected transactions for theCompany. As each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules)of the Framework Agreement for Engineering Materials Purchase is more than 0.1% but less than5%, such transactions are only subject to the annual review, reporting and announcementrequirements, but do not require the approval by the independent shareholders of the Companyunder Chapter 14A of the Listing Rules. BOARD'S APPROVAL None of the Directors have any material interest in the transaction. Those connectedDirectors, including Liu Shunda, Hu Shengmu and Liang Yongpang, who are, or have been, theprincipal management staff of CDC, have abstained from voting at the Board meeting forapproval of the relevant transaction in accordance with the requirements of the listing rulesof the Shanghai Stock Exchange. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions havethe 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 Engineering the framework agreement for materials purchase of Materials Purchase" project construction machinery, equipment and materials entered into between the Company and China Water Resources and Power dated 6 January 2015 "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 2015 As at the date of this announcement, the directors of the Company are:Chen Jinhang, Hu Shengmu, Wu Jing, Liang Yongpan, Zhou Gang, Cao Xin, Cai Shuwen, Liu Haixia,Guan Tiangang, Yang Wenchun, Dong Heyi*, Ye Yansheng*, Zhao Jie*, Jiang Guohua*, Feng Genfu* * Independent non-executive Directors