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, certified public accountant or other professional adviser.

If you have sold or transferred all your shares in GCL-Poly Energy Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 3800)

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO NEW COAL PURCHASE FRAMEWORK AGREEMENT AND

WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

in relation to the New Coal Purchase in relation to Framework Agreement the Wafer Products Supply Framework Agreement SOMERLEY CAPITAL LIMITED

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

A letter from the Board is set out on pages 5 to 17 of this circular and the letter from the Independent Board Committee is set out on pages 18 to 19 of this circular.

The letter of advice from First Shanghai Capital containing its advice to the Independent Board Committee and the Independent Shareholders in relation to the New Coal Purchase Framework Agreement is set out on pages 20 to 26 of this circular. The letter of advice from Somerley containing its advice to the Independent Board Committee and the Independent Shareholders in relation to the Wafer Products Supply Framework Agreement is set out on pages 27 to 35 of this circular.

A notice convening the EGM to be held at Centenary Room III, G/F., Marco Polo Hong Kong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong on Thursday, 9 February 2017 at 10:00 a.m. is set out on pages 42 to 44 of this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM should you so wish.

20 January 2017

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Letter from	First Shanghai Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Letter from	Somerley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Appendix	– General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		42

– i –

DEFINITIONS

In this circular, the following expressions have the meanings set out below unless the context requires otherwise:

“associate”
has the meaning ascribed to it under the Listing Rules
“Board” the board of Directors
“Coal Purchase Caps”
the maximum aggregate annual value of coal to be supplied by Suzhou GCL to Jiangsu Zhongneng under the New Coal Purchase Framework Agreement, details of which are set out in the section headed “Coal Purchase Caps” in this circular
“Company”
GCL-Poly Energy Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange
“connected person”
has the meaning ascribed to it under the Listing Rules
“Director(s)”
the director(s) of the Company
“EGM”

an extraordinary general meeting of the Company to be convened and held for the Independent Shareholders to consider and, if thought fit, approve each of (i) the New Coal Purchase Framework Agreement and the transactions contemplated thereunder; (ii) the Coal Purchase Caps; (iii) the Wafer Products Supply Framework Agreement and the transactions contemplated thereunder; and (iv) the Wafer Products Supply Cap

“Existing Coal Purchase Framework Agreement”

the agreement dated 24 May 2016 entered into between Jiangsu Zhongneng and Suzhou GCL in relation to the purchase of coal

“First Shanghai Capital”

First Shanghai Capital Limited, a corporation licensed to carry out type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps

– 1 –

DEFINITIONS

“GCL-Poly Suzhou”
“GCL System Integration”
“Group”
“HK$”
“Hong Kong”
“Independent Board Committee”
“Independent Shareholders”
“Jiangsu Zhongneng”
“Latest Practicable Date”
“Listing Rules”
“New Coal Purchase Framework Agreement”
“PRC”

保利協鑫(蘇州)新能源有限公司 (GCL-Poly (Suzhou) New Energy Co., Ltd.*), a company established in the PRC and a wholly-owned subsidiary of the Company

協鑫集成科技股份有限公司 (GCL System Integration Technology Co., Ltd.), a company established in the PRC with its shares listed on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange (stock code: 2506)
the Company and its subsidiaries
Hong Kong dollar, the lawful currency of Hong Kong
the Hong Kong Special Administrative Region of the People’s Republic of China
a committee of the Board comprising all of the independent non-executive Directors for the purpose of considering (i) the New Coal Purchase Framework Agreement and the transactions contemplated thereunder; (ii) the Coal Purchase Caps; (iii) the Wafer Products Supply Framework Agreement and the transactions contemplated thereunder; and (iv) the Wafer Products Supply Cap
Shareholders other than Mr. Zhu Gongshan and Mr. Zhu Yufeng and their respective associates
江蘇中能硅業科技發展有限公司 (Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.*), a company established in the PRC and a wholly-owned subsidiary of the Company
17 January 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
the Rules Governing the Listing of Securities on the Stock Exchange from time to time
the agreement dated 6 January 2017 entered into between Jiangsu Zhongneng and Suzhou GCL in relation to the purchase of coal
The People’s Republic of China

– 2 –

DEFINITIONS

“RMB”
“SFO”
“Share(s)”
“Shareholder(s)”
“Somerley”
“Stock Exchange”
“Suzhou GCL”
“Wafer Products”
“Wafer Products Supply Cap”
“Wafer Products Supply Framework Agreement”

Renminbi, the lawful currency of the PRC

Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong)
ordinary shares of HK$0.10 each in the share capital of the Company
holder(s) of the Shares
Somerley Capital Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance, the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Wafer Products Supply Framework Agreement, the transactions contemplated thereunder and the Wafer Products Supply Cap
the Stock Exchange of Hong Kong Limited
蘇州協鑫能源科技有限公司 (Suzhou GCL Energy Technology Co., Ltd.*), a company established in the PRC
wafer products, which include multicrystalline and monocrystalline wafer products
the maximum aggregate annual value of the Wafer Products to be supplied by GCL-Poly Suzhou to GCL System Integration under the Wafer Products Supply Framework Agreement, the details of which are set out in the section headed “Wafer Products Supply Cap” in this circular
the agreement dated 6 January 2017 entered into between GCL-Poly Suzhou and GCL System Integration in relation to the supply of the Wafer Products

– 3 –

DEFINITIONS

“Zhu Family Trust”

a trust, under which Mr. Zhu Gongshan (an executive Director and chairman of the Board) and his family (including Mr. Zhu Yufeng, an executive Director and the son of Mr. Zhu Gongshan) are beneficiaries

“%” per cent.

This circular contains translations between Renminbi and Hong Kong dollar amounts at RMB1 = HK$1.13, being the exchange rate prevailing on 6 January 2017. The translations should not be taken as a representation that the Renminbi could actually be converted into Hong Kong dollars at that rate or at all.

For identification only

– 4 –

LETTER FROM THE BOARD

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 3800)

Executive Directors: Mr. Zhu Gongshan (Chairman) Mr. Zhu Zhanjun (Chief Executive Officer) Mr. Ji Jun Mr. Zhu Yufeng Ms. Sun Wei Mr. Yeung Man Chung, Charles (Chief Financial Officer) Mr. Jiang Wenwu Mr. Zheng Xiongjiu

Independent non-executive Directors: Ir. Dr. Ho Chung Tai, Raymond Mr. Yip Tai Him Dr. Shen Wenzhong Mr. Wong Man Chung, Francis

Registered Office: Cricket Square, Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Principal place of business in Hong Kong: Units 1703B–1706, Level 17 International Commerce Centre 1 Austin Road West Kowloon, Hong Kong

20 January 2017

To the Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO NEW COAL PURCHASE FRAMEWORK AGREEMENT AND

WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

INTRODUCTION

Reference is made to the announcement of the Company dated 6 January 2017 in relation to the New Coal Purchase Framework Agreement and the announcement of the Company dated 6 January 2017 in relation to the Wafer Products Supply Framework Agreement.

– 5 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things:

(i) further information in relation to the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps;
(ii) further information in relation to the Wafer Products Supply Framework Agreement, the transactions contemplated thereunder and the Wafer Products Supply Cap;
(iii) the recommendations from the Independent Board Committee;
(iv) the advice from First Shanghai Capital to the Independent Board Committee and Independent Shareholders in relation to the New Coal Purchase Framework Agreement and the Coal Purchase Caps;
(v) the advice from Somerley to the Independent Board Committee and Independent Shareholders in relation to the Wafer Products Supply Framework Agreement and the Wafer Products Supply Cap; and
(vi) the notice of the EGM.

NEW COAL PURCHASE FRAMEWORK AGREEMENT

Due to the surging coal price in the PRC, Jiangsu Zhongneng and Suzhou GCL entered into the New Coal Purchase Framework Agreement on 6 January 2017, the details of which are set out below:

Date

6 January 2017

Parties

(1) Jiangsu Zhongneng, as customer; and
(2) Suzhou GCL, as supplier

Term

The term of the New Coal Purchase Framework Agreement is for a period of three years commencing from 1 January 2017 and ending on 31 December 2019.

Subject matter

Suzhou GCL has agreed to supply, and Jiangsu Zhongneng has agreed to purchase coal on a net calorific value as received basis with a value of Qnet,ar = 4,500–6,000 kcal/kg during the term of the New Coal Purchase Framework Agreement.

– 6 –

LETTER FROM THE BOARD

The New Coal Purchase Framework Agreement serves as a framework agreement between the parties pursuant to which specific purchase orders and delivery requests for coal may be made by Jiangsu Zhongneng during the term of the New Coal Purchase Framework Agreement. The actual volume of the supply of coal is to be determined by both parties based on actual purchase orders made by Jiangsu Zhongneng, although the New Coal Purchase Framework Agreement provides that the anticipated monthly volume of coal to be supplied during the term of the New Coal Purchase Framework Agreement would be approximately 125,000 tonnes.

Consideration and basis of consideration

The price of coal to be supplied by Suzhou GCL to Jiangsu Zhongneng pursuant to the New Coal Purchase Framework Agreement from time to time shall not be higher than the market price of coal of comparable quality as may be obtained through quotations from independent third party coal suppliers (the “ Reference Price ”). The final purchase price will be agreed between the parties under the sale and purchase agreement to be entered into between Suzhou GCL and Jiangsu Zhongneng on a monthly basis.

In order to ensure that the price for the coal to be supplied by Suzhou GCL is determined so that the transactions under the New Coal Purchase Framework Agreement are conducted on normal commercial terms, or on terms no less favourable than terms offered by independent third parties, Jiangsu Zhongneng will collect and compare the Reference Price with the price offered by Suzhou GCL.

Payment for each purchase shall be settled by Jiangsu Zhongneng in arrears within 10 business days after delivery of the invoice in respect of the coal supplied by Suzhou GCL.

The consideration for the coal under the New Coal Purchase Framework Agreement was determined after arm’s length negotiations between the parties taking into account the market prices being a fair and transparent means of ascertaining the price.

Conditions precedent

The effectiveness of the New Coal Purchase Framework Agreement shall be conditional upon the New Coal Purchase Framework Agreement and the transactions contemplated thereunder having been approved by the Independent Shareholders at the EGM. As at the Latest Practicable Date, such condition precedent had not been fulfilled.

Upon the New Coal Purchase Framework Agreement becoming effective, the Existing Coal Purchase Framework Agreement will be terminated and superseded by the New Coal Purchase Framework Agreement.

– 7 –

LETTER FROM THE BOARD

Coal Purchase Caps

The Coal Purchase Caps for the purchase of coal by Jiangsu Zhongneng under the New Coal Purchase Framework Agreement during the term of the New Coal Purchase Framework Agreement are as follows:

		For the period	For the period	For the period
		from 1 January	from 1 January	from 1 January
		2017 to	2018 to	2019 to
		31 December 2017	31 December 2018	31 December 2019
		(RMB)	(RMB)	(RMB)
Annual	caps	1,122,000,000	1,200,000,000	1,200,000,000
		(equivalent to	(equivalent to	(equivalent to
		approximately	approximately	approximately
		HK$1,268,000,000)	HK$1,356,000,000)	HK$1,356,000,000)

The Coal Purchase Caps were calculated after taking into account (i) the amount paid by Jiangsu Zhongneng for the supply of coal during the period from June 2016 to November 2016, being approximately RMB301,000,000 (approximately HK$340,000,000); (ii) the estimated consumption of coal by Jiangsu Zhongneng during the term of the New Coal Purchase Framework Agreement; and (iii) the potential price movement of coal.

Taking into account (i) the growth trend of the historical actual coal procurement unit price of Jiangsu Zhongneng, which increased from approximately RMB374 per tonne in January 2016 to approximately RMB657 per tonne in November 2016, representing a growth of approximately 76% during the eleven-month period; and (ii) the intention of the PRC government to stabilise the recent hike in coal price, the average unit price of coal is estimated to be approximately RMB748 per tonne for the year ending 31 December 2017 and approximately RMB800 per tonne for the years ending 31 December 2018 and 2019.

The estimated procurement volume of coal for the years ending 31 December 2017, 2018 and 2019 is 125,000 tonne per month. In calculating the estimated procurement volume, Jiangsu Zhongneng has taken into account (i) its historical actual coal procurement volume from January 2016 to November 2016, being approximately 95,150 tonne per month, which represents approximately 76% of the estimated procurement volume during the term of the New Coal Purchase Framework Agreement; and (ii) the possible increase in the demand for coal in order to generate more electricity to cope with the potential development and growth of the business of Jiangsu Zhongneng.

– 8 –

LETTER FROM THE BOARD

Reasons for and benefits of the New Coal Purchase Framework Agreement

Coal is required by Jiangsu Zhongneng for the generation of electricity by its captive power plant, which has been in operation since July 2015. The price of coal under the Existing Coal Purchase Framework Agreement is determined with reference to, among other things, the market price of coal as published by Qinhuangdao Haiyun Coal Transaction Market Co., Ltd.* (秦皇島海運煤炭交易市場有限公司), such market price is not used as a factor for determining the price of coal under the New Coal Purchase Framework Agreement as such market price is not in line with the coal price in Xuzhou, the PRC, where Jiangsu Zhongneng is based and where Jiangsu Zhongneng may obtain the Reference Price.

The terms of the New Coal Purchase Framework Agreement were negotiated based on normal commercial terms and the relevant prices were determined following arm’s length negotiations between the parties. The entering into of the New Coal Purchase Framework Agreement enables Jiangsu Zhongneng to procure a supplier of coal with steady supply and quality, and take advantage of bulk purchase discount which may be available to Suzhou GCL as it also procures coal for its own group of power plants.

The Directors (excluding the independent non-executive Directors whose views are set out in the letter from the Independent Board Committee on pages 18 to 19 of this circular) consider that the New Coal Purchase Framework Agreement and the Coal Purchase Caps are on normal commercial terms and entered into in the ordinary and usual course of business of the Company, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

THE WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

Date

6 January 2017

Parties

(1) GCL-Poly Suzhou, as supplier; and
(2) GCL System Integration, as customer

Term

The term of the Wafer Products Supply Framework Agreement is for the period of one year commencing from 1 January 2017 and ending on 31 December 2017.

Subject matter

GCL-Poly Suzhou has agreed to supply (by itself or through its subsidiaries or affiliates), and GCL System Integration has agreed to purchase (by itself or through its subsidiaries) the Wafer Products, being polysilicon and monocrystalline wafers, during the term of the Wafer Products Supply Framework Agreement.

– 9 –

LETTER FROM THE BOARD

The Wafer Products Supply Framework Agreement serves as a framework agreement between the parties pursuant to which delivery notice for the Wafer Products may be agreed between GCL-Poly Suzhou and GCL System Integration during the term of the Wafer Products Supply Framework Agreement. In the event of conflict between the terms of the Wafer Products Supply Framework Agreement and any delivery notice, the terms of the Wafer Products Supply Framework Agreement shall prevail.

Purchase quantity

Under the Wafer Products Supply Framework Agreement, and subject to the Wafer Products Supply Cap, the estimated total quantity of the Wafer Products to be supplied by GCL-Poly Suzhou (or its subsidiaries or affiliates) during the term of the Wafer Products Supply Framework Agreement is 600,000,000 pieces per annum (the “ Estimated Purchase Quantity ”). The Estimated Purchase quantity was determined after arm's length negotiations between the GCL-Poly Suzhou and GCL System Integration taking into account GCL System Integration's demand for, and the capacity of GCL-Poly Suzhou in producing, the Wafer Products.

The actual volume of the Wafer Products to be supplied by GCL-Poly Suzhou from time to time shall be determined by both parties based on the delivery notices agreed between GCL-Poly Suzhou and GCL System Integration, subject to the following:

(i) the maximum monthly purchase quantity shall be 115% of 50,000,000 pieces;
(ii) the maximum total purchase quantity during the term of the Wafer Products Supply Framework Agreement shall be 115% of the Estimated Purchase Quantity; and
(iii) the minimum total purchase quantity during the term of the Wafer Products Supply Framework Agreement shall be 85% of the Estimated Purchase Quantity (the “ Minimum Purchase Quantity ”).

If GCL System Integration fails to purchase the Minimum Purchase Quantity on or before the end of the term of the Wafer Products Supply Framework Agreement (“ Year End Date ”) (other than due to the failure by GCL-Poly Suzhou to deliver the required Wafer Products), GCL System Integration shall within one month after the Year End Date (“ Buyer Grace Period ”) purchase such quantity of Wafer Products as equals to the shortfall between the Minimum Purchase Quantity and the actual quantity purchased by GCL System Integration (“ Buyer Shortfall Quantity ”). GCL System Integration shall state in each delivery notice given during the Buyer Grace Period whether the purchase under such notice shall count towards reducing the Buyer Shortfall Quantity.

If GCL System Integration fails to reduce the Buyer Shortfall Quantity to zero during the Buyer Grace Period, GCL System Integration shall pay GCL-Poly Suzhou a default payment. Such default payment shall be an amount equal to 0.05% of the value (determined based on the average price of the Wafer Products supplied by GCL-Poly Suzhou during the term of the Wafer Products Supply Framework Agreement (the “ Average Price ”)) of the Buyer Shortfall Quantity of Wafer Products as at the end of the

– 10 –

LETTER FROM THE BOARD

Buyer Grace Period, multiplied by the number of days comprised in the Buyer Grace Period. Such default payment is subject to a cap of 10% of the total Average Price of the Buyer Shortfall Quantity.

If GCL System Integration has requested the required quantity of Wafer Products in its delivery notices to meet the Minimum Purchase Quantity but GCL-Poly Suzhou fails to deliver any of the requested Wafer Products, GCL-Poly Suzhou shall within one month after the Year End Date (“ Seller Grace Period ”) deliver such quantity of Wafer Products as equals to the shortfall between the Minimum Purchase Quantity and the actual quantity delivered to GCL System Integration (“ Seller Shortfall Quantity ”). GCL-Poly Suzhou shall state in each delivery notice given during the Seller Grace Period whether the delivery shall count towards reducing the Seller Shortfall Quantity.

If GCL-Poly Suzhou fails to reduce the Seller Shortfall Quantity to zero during the Seller Grace Period, GCL-Poly Suzhou shall pay GCL System Integration a default payment. Such default payment shall be an amount equal to 0.05% of the value (calculated based on the Average Price) of the Seller Shortfall Quantity of Wafer Products as at the end of the Seller Grace Period, multiplied by the number of days comprised in the Seller Grace Period. Such default payment is subject to a cap of 10% of the total Average Price of the Seller Shortfall Quantity.

Deposit

A deposit in the sum of RMB50,000,000 (the “ Deposit ”) shall be payable by GCL System Integration to GCL-Poly Suzhou which shall, subject to the Wafer Products Supply Framework Agreement becoming effective, be payable as follows:

(i) RMB25,000,000 shall be payable within 10 days of the effective date of the Wafer Products Supply Framework Agreement; and
(ii) RMB25,000,000 shall be payable on or before 1 July 2017.

The Deposit may be offset against outstanding sums payable by GCL System Integration to GCL-Poly Suzhou for the purchase of the Wafer Products under the Wafer Products Supply Framework Agreement in the sum of RMB25,000,000 for each month in November 2017 and December 2017, provided that an offset may only be made if GCL System Integration has performed all the terms under the Wafer Products Supply Framework Agreement at the time of the offset.

Any offsetting of sums payable by GCL System Integration against the Deposit as aforesaid shall not affect GCL System Integration’s obligations to pay for the Wafer Products in accordance with the terms of the Wafer Products Supply Framework Agreement. Please refer to the section headed “Consideration and basis of consideration” below for further details in relation to the credit terms for the Wafer Products under the Wafer Products Supply Framework Agreement.

– 11 –

LETTER FROM THE BOARD

Conditions precedent

The effectiveness of the Wafer Products Supply Framework Agreement shall be conditional upon satisfaction of the following conditions precedent:

the Wafer Products Supply Framework Agreement and the transactions contemplated thereunder having been approved by the board of directors of GCL System Integration and the shareholders of GCL System Integration at its general meeting; and
the Wafer Products Supply Framework Agreement, the transactions contemplated thereunder and the Wafer Products Supply Cap having been approved by the Board and the Independent Shareholders at the EGM.

As at the Latest Practicable Date, the Wafer Products Supply Framework Agreement had been approved by the Board and the board of directors of GCL System Integration.

Consideration and basis of consideration

GCL-Poly Suzhou shall determine the price of the Wafer Products to be supplied by it to GCL System Integration pursuant to the Wafer Products Supply Framework Agreement from time to time with reference to the prevailing market supply and demand for the Wafer Products and the prices charged by other wafer product suppliers at the relevant time.

The parties will negotiate the price for the Wafer Products for each calendar month on or before the fifth day of the month. Such price shall be fair, reasonable and on normal commercial terms. In the event that the parties are unable to agree on the price on the fifteenth day of the month then the price shall be determined based on the basic price of the similar categories of products supplied by GCL-Poly Suzhou during that month to its large customers (the “ Third Party Price ”). If GCL System Integration disagrees with the Third Party Price, then the parties shall jointly appoint an audit firm in the PRC for the purpose of ascertaining the price to be charged, which price shall be binding on GCL-Poly Suzhou and GCL System Integration.

Payment for each purchase of the Wafer Products shall be settled in arrears within 15 days after delivery of the products by way of bank remittance or bank draft which may be drawn within no more than 180 days.

In order to ensure that the price for the Wafer Products to be supplied is determined so that the transactions under the Wafer Products Supply Framework Agreement are conducted on normal commercial terms, or on terms no less favourable than terms available to independent third parties, a committee, comprising the chief executive officer of the Company as the chairman and the respective head of the wafer and polysilicon business sectors, will review and determine on a monthly basis the price of the Wafer Products taking into account the prevailing market supply and demand, and the prices charged by other wafer product suppliers.

– 12 –

LETTER FROM THE BOARD

Default and termination right

If GCL System Integration shall fail to take delivery of the Wafer Products in accordance with the agreed delivery notice for reasons other than the default of GCL-Poly Suzhou, then a daily default payment in the sum of 0.05% on the value of the Wafer Products which GCL System Integration had failed to take delivery shall be payable by GCL System Integration, which shall accrue from the tenth date of the agreed delivery date to the date on which GCL System Integration takes full delivery of the Wafer Products in question.

If any payment by GCL System Integration shall become overdue for 10 days or more, a daily overdue payment in the sum of 0.05% on the overdue amount shall be payable by GCL System Integration, which shall accrue from the date on which the overdue occurs until the settlement of the overdue amount. If any payment is overdue for more than 30 days, GCL-Poly Suzhou may at its sole discretion reduce its delivery of the Wafer Products to no more than 10,000,000 pieces. If any payment is overdue for more than 60 days, GCL-Poly Suzhou may cancel all or part of any outstanding orders and/or terminate the Wafer Products Supply Framework Agreement if GCL System Integration shall fail to satisfy the overdue amount within seven business days after the serving of a written notice from GCL-Poly Suzhou demanding for payment. In any event, GCL-Poly Suzhou is entitled to cease any delivery of Wafer Products should GCL System Integration default in payment or in breach any terms of the Wafer Products Supply Framework Agreement.

If GCL-Poly Suzhou shall fail to deliver the Wafer Products in full pursuant to the delivery notice agreed between GCL-Poly Suzhou and GCL System Integration for 10 days or more, a daily default payment in the sum of 0.05% on the value of the Wafer Products in question shall be payable by GCL-Poly Suzhou, which shall accrue from the date on which the delay in delivery commences until the delivery of the relevant Wafer Products in full. If any delivery is overdue for more than 30 days, GCL System Integration may terminate the Wafer Products Supply Framework Agreement if GCL-Poly Suzhou shall fail to deliver the relevant Wafer Products within seven business days after the serving of the written notice from GCL System Integration demanding for delivery.

Wafer Products Supply Cap

The Wafer Products Supply Cap for the supply of the Wafer Products by GCL-Poly Suzhou during the term of and under the Wafer Products Supply Framework Agreement is RMB3,450,000,000 (equivalent to approximately HK$3,899,000,000).

The Wafer Products Supply Cap was calculated after taking into account (i) the estimated maximum quantity of the Wafer Products to be supplied by GCL-Poly Suzhou under the Wafer Products Supply Framework Agreement; (ii) the transaction amount between GCL System Integration and GCL-Poly Suzhou for the Wafer Products during the period from 1 July 2016 to 31 December 2016, being approximately RMB523,000,000 (approximately HK$591,000,000); and (iii) the estimated price trend of the Wafer Products during the term of the Wafer Products Supply Framework Agreement.

– 13 –

LETTER FROM THE BOARD

The Company will re-comply with the requirements under the Listing Rules including without limitation to the reporting, announcement and (if necessary) Independent Shareholders’ approval requirement if the Wafer Products Supply Cap is exceeded. Pursuant to the terms of the Wafer Products Supply Framework Agreement, GCL-Poly Suzhou is entitled to cease the supply of any further Wafer Products without being considered to be in breach of the Wafer Products Supply Framework Agreement if such supply of additional Wafer Products would cause the Wafer Products Supply Cap to be exceeded.

Reasons for and benefits of the Wafer Products Supply Framework Agreement

The establishment of stable customer relationships is important to the development of the Group as a polysilicon and wafer manufacturer, particularly in the highly competitive market in which the Group operates. The manufacturing and sale of polysilicon and wafer products is a core business of the Group. The entering into of the Wafer Products Supply Framework Agreement serves to secure customer demand for the Company in respect of the Wafer Products for the financial year ending 31 December 2017, which is consistent with the Company’s strategy to focus on its core integrated solar business. The sale of the Wafer Products under the Wafer Products Supply Framework Agreement is expected to generate stable demand and income for the Company.

The Directors (excluding the independent non-executive Directors whose views are set out in the letter from the Independent Board Committee on pages 18 to 19 of this circular) consider that the Wafer Products Supply Framework Agreement and the Wafer Products Supply Cap are on normal commercial terms and entered into in the ordinary and usual course of business of the Company, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

INFORMATION ON THE PARTIES

Information on the Company

The Company is an investment company and its subsidiaries are principally engaged in the manufacturing of polysilicon and wafers for the solar industry as well as the development, management and operation of environmentally friendly power plants.

Information on Jiangsu Zhongneng

Jiangsu Zhongneng is a wholly-owned subsidiary of the Company whose principal business is the production and sale of polysilicon.

Information on Suzhou GCL

Suzhou GCL is a company established in the PRC whose principal business is provision of energy technological consultation and sale of coal and power facilities.

– 14 –

LETTER FROM THE BOARD

Information on GCL-Poly Suzhou

GCL-Poly Suzhou is a wholly-owned subsidiary of the Company. The principal activity of GCL-Poly Suzhou is the holding of a majority of the Group’s wafer production plants in the PRC and acting as a financing platform and selling products for the Group’s solar material business sector.

Information on GCL System Integration

GCL System Integration is a company established in the PRC the shares of which are listed on the Small and Medium Enterprise Board of the Shenzhen Stock Exchange. The principal business of GCL System Integration is the research, development, manufacturing and distribution of solar system, including solar materials and solar modules.

LISTING RULES IMPLICATION

As at the date of the New Coal Purchase Framework Agreement, 72% of the equity interest in Suzhou GCL was held by the Zhu Family Trust, under which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries. As Mr. Zhu Gongshan and Mr. Zhu Yufeng are both Directors and therefore connected persons of the Company and Suzhou GCL is an associate of them, Suzhou GCL is a connected person of the Company. Accordingly, the transactions contemplated under the New Coal Purchase Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

As at the date of the Wafer Products Supply Framework Agreement, 22.40% and 28.19% of the issued shares in GCL System Integration was held by the Zhu Family Trust and Mr. Zhu Yufeng, respectively. As GCL System Integration is an associate of Mr. Zhu Gongshan and Mr. Zhu Yufeng, GCL System Integration is a connected person of the Company. Accordingly, the transactions contemplated under the Wafer Products Supply Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

As the applicable percentage ratios in respect of both the Coal Purchase Caps and the Wafer Products Supply Cap exceed 5%, each of the New Coal Purchase Framework Agreement and the transactions contemplated thereunder, the Coal Purchase Caps, the Wafer Products Supply Framework Agreement and the transactions contemplated thereunder and the Wafer Products Supply Cap is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

As Mr. Zhu Gongshan and Mr. Zhu Yufeng have a material interest in the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement, and Ms. Sun Wei is the vice chairman of Golden Concord Holdings Limited, a company controlled by Mr. Zhu Gongshan, they have abstained from voting on the resolutions of the Board in respect of the approval of the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement.

– 15 –

LETTER FROM THE BOARD

EGM

The EGM will be held at Centenary Room III, G/F., Marco Polo Hong Kong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong at 10:00 a.m. on Thursday, 9 February 2017 to consider and, if thought fit, approve the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement and the respective transactions contemplated thereunder, including the Coal Purchase Caps and the Wafer Products Supply Cap.

A notice convening the EGM is set out on pages 42 to 44 of this circular. Whether or not you are able to attend the meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the EGM if you so wish.

In accordance with the Listing Rules, the vote of the Independent Shareholders taken at the EGM to approve the New Coal Purchase Framework Agreement, the Coal Purchase Caps, the Wafer Products Supply Framework Agreement and the Wafer Products Supply Cap will be taken by poll. Any Shareholder with a material interest in New Coal Purchase Framework Agreement and Wafer Products Supply Framework Agreement and their respective associates will abstain from voting at the EGM.

Mr. Zhu Gongshan and Mr. Zhu Yufeng (who were deemed to have interest in 6,370,388,156 Shares, representing approximately 34.27% of the entire issued share capital of the Company as at the Latest Practicable Date) and their respective associates will abstain from voting at the EGM. The result of the vote will be announced after the EGM.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISERS

The Independent Board Committee, comprising all the independent non-executive Directors, has been formed to consider and advise the Independent Shareholders in respect of the fairness and reasonableness of the terms of the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement and the respective transactions contemplated thereunder, including the Coal Purchase Caps and the Wafer Products Supply Cap. Your attention is drawn to the letter from the Independent Board Committee set out on pages 18 to 19 of this circular, which contains its recommendation to the Independent Shareholders as to the voting at the EGM.

First Shanghai Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the fairness and reasonableness of the terms of the New Coal Purchase Framework Agreement and the Coal Purchase Caps. Your attention is drawn to the letter from First Shanghai Capital set out on pages 20 to 26 of this circular.

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LETTER FROM THE BOARD

Somerley has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the fairness and reasonableness of the terms of the Wafer Products Supply Framework Agreement and the Wafer Products Supply Cap. Your attention is drawn to the letter from Somerley set out on pages 27 to 35 of this circular.

RECOMMENDATION

The Directors (excluding the independent non-executive Directors, whose views are set out in the letter from the Independent Board Committee on pages 18 to 19 of this circular) consider that the terms of the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement, including the Coal Purchase Caps and the Wafer Products Supply Cap, are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the New Coal Purchase Framework Agreement, the Wafer Products Supply Framework Agreement, the Coal Purchase Caps and the Wafer Products Supply Cap.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information contained in the appendix to this circular.

By order of the Board GCL-Poly Energy Holdings Limited Mr. Zhu Gongshan Chairman

– 17 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 3800)

To the Independent Shareholders

20 January 2017

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO NEW COAL PURCHASE FRAMEWORK AGREEMENT AND WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

We refer to this circular dated 20 January 2017 issued by the Company to its Shareholders, of which this letter forms part. Unless the context otherwise requires, terms defined in this circular shall have the same meaning when used in this letter.

We have been appointed as the Independent Board Committee to advise the Independent Shareholders as to whether, in our opinion, the terms of the transactions contemplated under the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement, including the Coal Purchase Caps and the Wafer Products Supply Cap, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

First Shanghai Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the fairness and reasonableness of the terms of the New Coal Purchase Framework Agreement and the Coal Purchase Caps.

Somerley has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders on the fairness and reasonableness of the terms of the Wafer Products Supply Framework Agreement and the Wafer Products Supply Cap.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

We wish to draw your attention to (i) the letter of advice from First Shanghai Capital as set out on pages 20 to 26 of this circular; (ii) the letter of advice from Somerley as set out on pages 27 to 35 of this circular; and (iii) the letter from the Board as set out on pages 5 to 17 of this circular, which set out information relating to, and the reasons for and benefits of the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement and the respective transactions contemplated thereunder.

As the Company’s independent non-executive Directors, we have discussed with the management of the Company the reasons for and benefits of the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement, and the basis upon which their terms have been determined. We have considered the factors and reasons considered by, and the opinions and recommendations of, First Shanghai Capital and Somerley, as set out on pages 20 to 26, and pages 27 to 35 of this circular, respectively.

We are of the opinion that the terms of the transactions contemplated under the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement, including the Coal Purchase Caps and the Wafer Products Supply Cap, are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions to approve the transactions contemplated under the New Coal Purchase Framework Agreement and the Wafer Products Supply Framework Agreement, and the Coal Purchase Caps and the Wafer Products Supply Cap, to be proposed at the EGM.

Yours faithfully, For and on behalf of the Independent Board Committee Ho Chung Tai, Yip Tai Him Shen Wenzhong Wong Man Chung, Raymond Francis Independent non-executive Directors

– 19 –

LETTER FROM FIRST SHANGHAI CAPITAL

The following is the text of a letter received from First Shanghai Capital setting out its advice to the Independent Board Committee and the Independent Shareholders in respect of the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps for inclusion in this circular.

==> picture [118 x 51] intentionally omitted <==

FIRST SHANGHAI CAPITAL LIMITED

19th Floor, Wing On House 71 Des Voeux Road Central Hong Kong

20 January 2017

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION NEW COAL PURCHASE FRAMEWORK AGREEMENT

INTRODUCTION

We refer to our engagement to advise the Independent Board Committee and the Independent Shareholders in respect of the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps, details of which are set out in the circular of the Company to the Shareholders dated 20 January 2017 (the “ Circular ”), of which this letter forms part. Unless the context otherwise requires, terms used in this letter shall have the same meanings as those defined in the Circular.

On 6 January 2017, Jiangsu Zhongneng (a wholly owned subsidiary of the Company) and Suzhou GCL entered into the New Coal Purchase Framework Agreement, pursuant to which Suzhou GCL agreed to supply coal to Jiangsu Zhongneng for a period of three years commencing from 1 January 2017 and ending on 31 December 2019. As detailed in the letter from the Board in the Circular, Suzhou GCL is a connected person of the Company and therefore the transactions contemplated under the New Coal Purchase Framework Agreement constitute continuing connected transactions for the Company under the Listing Rules. Accordingly, the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps are subject to, among other requirements, approval by the Independent Shareholders at the EGM.

The Independent Board Committee, which comprises all of the independent non-executive Directors, namely Ir. Dr. Ho Chung Tai, Raymond, Mr. Yip Tai Him, Dr. Shen Wenzhong and Mr. Wong Man Chung, Francis, has been established to advise the Independent Shareholders in respect of the New Coal Purchase Framework Agreement,

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LETTER FROM FIRST SHANGHAI CAPITAL

the transactions contemplated thereunder and the Coal Purchase Caps. We, First Shanghai Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

Apart from the current engagement in respect of the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps, we did not have any business relationship with the Company within the past two years from the Latest Practicable Date. We consider ourselves independent to form our opinion in respect of the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps.

In putting forth our opinion and recommendation, we have relied on the accuracy of the information and representations included in the Circular and provided to us by the management of the Group, and have assumed that all such information and representations made or referred to in the Circular and provided to us by the management of the Group were true at the time they were made and continued to be true up to the Latest Practicable Date. We have also assumed that all statements of belief, opinion and intention made in the Circular were reasonably made after due enquiry. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the management of the Group and have been advised that no material facts have been withheld or omitted from the information provided and referred to in the Circular. We consider that we have reviewed sufficient information to reach an informed view and to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice. We have not, however, conducted any independent verification of the information included in the Circular and provided to us by the management of the Group nor have we conducted any form of investigation into the business, affairs or future prospects of the Group (including Jiangsu Zhongneng) and Suzhou GCL.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating our opinion and recommendation on the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps, we have taken into account the following principal factors and reasons.

1. Background of and reasons for the New Coal Purchase Framework Agreement

Jiangsu Zhongneng (a wholly-owned subsidiary of the Company) has a power plant (the “ Power Plant ”) and the Power Plant requires coal to generate electricity. We are advised by the management of the Group that (i) the Power Plant commenced operation in July 2015; and (ii) the electricity generated by the Power Plant has principally been supplied to Jiangsu Zhongneng for its business operation.

We understand (i) the New Coal Purchase Framework Agreement provides the option, but not the obligation, to Jiangsu Zhongneng to procure coal from Suzhou GCL on

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LETTER FROM FIRST SHANGHAI CAPITAL

terms no less favorable than those with independent third parties; and (ii) the New Coal Purchase Framework Agreement does not prevent Jiangsu Zhongneng from procuring coal from independent third parties, where Jiangsu Zhongneng retains the discretion to select its coal supplier.

Taking into account, in particular, (i) the Power Plant requires coal to generate electricity; (ii) the electricity generated by the Power Plant has principally been supplied to Jiangsu Zhongneng for its business operation; (iii) the New Coal Purchase Framework Agreement does not prevent Jiangsu Zhongneng from procuring coal from independent third parties, where Jiangsu Zhongneng retains the discretion to select its coal supplier; and (iv) the terms of the New Coal Purchase Framework Agreement are fair and reasonable as discussed below, we are of the view that the New Coal Purchase Framework Agreement is in the ordinary and usual course of business of the Group and is in the interest of the Company and the Shareholders as a whole.

2. Principal terms of the New Coal Purchase Framework Agreement

Pursuant to the New Coal Purchase Framework Agreement, Suzhou GCL agreed to supply coal to Jiangsu Zhongneng for a period of three years commencing from 1 January 2017 and ending on 31 December 2019.

The price of the coal to be supplied by Suzhou GCL to Jiangsu Zhongneng pursuant to the New Coal Purchase Framework Agreement from time to time shall not be higher than the market price of coal of comparable quality as may be obtained through quotations from independent third party coal suppliers. Payment for each purchase shall be settled in arrears within 10 business days after delivery of the invoice in respect of the coal supplied by Suzhou GCL.

In respect of the internal control measures for the New Coal Purchase Framework Agreement, we are advised by the management of the Group that the procurement department of Jiangsu Zhongneng will, prior to each procurement of coal pursuant to the New Coal Purchase Framework Agreement or no less frequent than on a monthly basis, (i) obtain and review at least two quotations (inclusive of delivery) from independent third party coal suppliers in respect of coal of comparable quality; and (ii) ensure the terms of coal procurement under the New Coal Purchase Framework Agreement shall be no less favourable than those with the independent third party coal suppliers.

In respect of our work done on the terms of the New Coal Purchase Framework Agreement, we have reviewed sample historical transaction documents related to coal procurement under the New Coal Purchase Framework Agreement recently carried out by Jiangsu Zhongneng. We understand that these reviewed samples have adopted the aforementioned pricing bases. For instance, based on our review and advices by the management of the Group, we understand from the reviewed samples that the unit prices of coal (inclusive of delivery) purchased from Suzhou GCL were no less favourable to the Group than those with the independent third parties.

Moreover, we understand that, pursuant to Chapter 14A of the Listing Rules, (i) the independent non-executive Directors shall, on an annual basis, review the transactions

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LETTER FROM FIRST SHANGHAI CAPITAL

contemplated under the New Coal Purchase Framework Agreement and confirm, among other matter, such transactions are according to the agreement governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole; and (ii) the auditors of the Company shall, on an annual basis, report on the transactions contemplated under the New Coal Purchase Framework Agreement and confirm, among other matter, whether anything has come to their attention that causes them to believe such transactions were not entered into, in all material respects, in accordance with the relevant agreement governing the transactions.

Taking to account, in particular, (i) the Group will review coal procurement terms with independent third parties to ensure the terms of transactions contemplated under the New Coal Purchase Framework Agreement are no less favourable than those with independent third parties; (ii) the annual review by the independent non-executive Directors and the auditors pursuant to Chapter 14A of the Listing Rules; and (iii) the background of and reasons for the New Coal Purchase Framework Agreement previously discussed, we are of the view that the terms of the New Coal Purchase Framework Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

3. The Coal Purchase Caps

The following table sets out (i) the historical actual transaction amounts for the six months ended 31 December 2015 and for the eleven months ended 30 November 2016 as advised by the management of the Group; and (ii) the Coal Purchase Caps for each of the years ending 31 December 2017, 2018 and 2019.

	Historical actual	Historical actual
	transaction	amounts#	Coal Purchase Caps
	For the	For the
	six	eleven
	months	months
	ended 31	ended 30	For	the year ending
	December	November		31 December
	2015	2016	2017	2018	2019
	RMB	RMB	RMB	RMB	RMB
	million	million	million	million	million
New Coal Purchase
Framework Agreement	201	459	1,122	1,200	1,200

#Note: We are advised by the management of the Group that, (i) the transaction amounts covered the total coal procurement from independent party and Suzhou GCL; (ii) Jiangsu Zhongneng has and only procured coal from Suzhou GCL since June 2016; (iii) the transaction amount with Suzhou GCL from June to November 2016 was approximately RMB301 million; and (iv) the transaction amount was nil for the first half of 2015 given the Power Plant commenced operation in July 2015.

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LETTER FROM FIRST SHANGHAI CAPITAL

We have reviewed the calculation of the Coal Purchase Caps, we understand the Coal Purchase Caps are calculated as follows:-

For the year ending 31 December 2017, the Coal Purchase Cap is derived from the assumed unit price of RMB748 per tonne (the “ 2017 Unit Price ”) and the assumed volume of 125,000 tonne per month (the “ Capacity Volume ”); and
For the year ending 31 December 2018 and 2019, the Coal Purchase Caps are derived from the assumed unit price of RMB800 per tonne (the “ 2018 & 2019 Unit Price ”) and the Capacity Volume of 125,000 tonne per month.

We have reviewed the historical trend of monthly average coal procurement price (inclusive of delivery) of Jiangsu Zhongneng for the 12-month period ended 30 November 2016 (the “ Recent 12-month Period ”) as advised by the management of the Group, which is illustrated in the following chart.

==> picture [375 x 246] intentionally omitted <==

----- Start of picture text -----

Coal procurement price Monthly change
700 18.0%
16.6% 657
16.0%
16.0%
600 582
14.0%
499
500 12.9% 12.0%
430
400 373 374 373 383 384 391 401 409 10.0%
8.0%
300
6.0%
200 2.8% 2.1% 5.1% 4.0%
2.5%
1.7%
0.5% 0.3% 2.0%
0.4%
100 -0.4%
0.0%
0 -2.0%
Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov
2015 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016 2016
(RMB per tonne)
----- End of picture text -----

Based on the above chart, we note that the monthly average coal price increased from approximately RMB373 per tonne in December 2015 to approximately RMB657 per tonne in November 2016. The monthly growth rates surged to approximately 16% and 17% in September and October 2016, respectively, and lowered to approximately 13% in November 2016. We have reviewed articles published on the website of the National Development and Reform Commission of the PRC (中國國家發展和改革委員會) (the “ NDRC ”), including but not limited to the article titled “理性看待當前煤炭市場供需形勢堅定不移推進化解過剩產能” dated 23 September 2016. We also note that the NDRC and, among other institutions, the National Energy Administration of the PRC (中國國家能源局) jointly promulgated “關於加強市場監管和公共服務保障煤炭中長期合同履行的意見” in November 2016. Based on our aforesaid review of governmental documents, we understand the PRC government intends to stabilise the recent surge in coal price. Given

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LETTER FROM FIRST SHANGHAI CAPITAL

(i) the monthly growth of the average coal procurement price of Jiangsu Zhongneng slowed down from approximately 17% in October 2016 to approximately 13% in November 2016; (ii) the PRC government intends to stabilise the recent surge in coal price; (iii) the 2017 Unit Price of RMB748 per tonne represents an increase of approximately 14% as compared with the average coal procurement price of Jiangsu Zhongneng in November 2016; and (iv) the 2018 & 2019 Unit Price of RMB800 per tonne represents an increase of approximately 7% as compared with the 2017 Unit Price, we consider the adoption of the 2017 Unit Price and the 2018 & 2019 Unit Price to be acceptable for the purpose of determining the Coal Purchase Caps.

In respect of the Capacity Volume of 125,000 tonne per month, we are advised by the management of the Group that the Capacity Volume represents the relevant maximum coal volume demand of the Power Plant for its intended electricity production capacity. We have also reviewed the relevant coal procurement volume of Jiangsu Zhongneng for the Recent 12-month Period as advised by the management of the Group, where we note that the monthly average of such procurement volume for the period amounted to approximately 95,150 tonne per month, representing approximately 76% of the Capacity Volume. Given (i) the Capacity Volume represents the maximum coal volume demand of the Power Plant for its intended electricity production capacity; (ii) the monthly average coal procurement for the Recent 12-month Period represented approximately 76% of the Capacity Volume; and (iii) the possible increase in coal demand to generate more electricity in order to cope with the potential development and growth of the business of Jiangsu Zhongneng in future, we consider the adoption of the Capacity Volume to be acceptable for the purpose of determining the Coal Purchase Caps.

Based on the aforesaid, in particular, (i) the growth trend of the historical coal price and the adoption of the 2017 Unit Price and the 2018 & 2019 Unit Price as the estimated coal price; and (ii) the historical coal procurement volume and the adoption of the Capacity Volume as the estimated coal procurement volume, the Coal Purchase Caps are higher than the historical coal procurement transaction amount of Jiangsu Zhongneng. Taking into account, in particular, (i) our analysis of the factors for the calculation of the Coal Purchase Caps, including our review of the coal price growth trend and the coal procurement volume for the Recent 12-month Period; and (ii) the Power Plant requires coal to generate electricity, where such electricity has principally been supplied to Jiangsu Zhongneng for its business operation, we are of the view that the Coal Purchase Caps are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM FIRST SHANGHAI CAPITAL

RECOMMENDATION

Having considered the above, we are of the opinion that (i) the entering into of the New Coal Purchase Framework Agreement and the transactions contemplated thereunder is in the ordinary and usual course of business of the Group and is in the interests of the Company and the Shareholders as a whole; and (ii) the terms of the New Coal Purchase Framework Agreement and the transactions contemplated thereunder are on normal commercial terms and, together with the Coal Purchase Caps, are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favour of the resolution(s) to approve the New Coal Purchase Framework Agreement, the transactions contemplated thereunder and the Coal Purchase Caps at the EGM.

		Yours faithfully,
		For and on behalf of
	First	Shanghai Capital Limited
Fanny	Lee	Allen Wang
_Managing _	Director Director

Note: Ms. Fanny Lee and Mr. Allen Wang have been responsible officers of Type 6 (advising on corporate finance) regulated activity under the SFO since 2006 and 2014, respectively. Both of them have participated in the provision of independent financial advisory services for various connected transactions involving companies listed in Hong Kong.

– 26 –

LETTER FROM SOMERLEY

The following is the full text of the letter of advice from Somerley to the Independent Board Committee and the Independent Shareholders prepared for the purpose of inclusion in this circular.

SOMERLEY CAPITAL LIMITED

20th Floor China Building 29 Queen’s Road Central Hong Kong

20 January 2017

To: the Independent Board Committee and the Independent Shareholders of GCL-Poly Energy Holdings Limited

Dear Sirs,

CONTINUING CONNECTED TRANSACTION IN RELATION TO WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

INTRODUCTION

We refer to our appointment to advise the Independent Board Committee and the Independent Shareholders in respect of the supply of the Wafer Products by GCL-Poly Suzhou, a wholly-owned subsidiary of the Company, to GCL System Integration pursuant to the Wafer Products Supply Framework Agreement (the “ Continuing Connected Transaction ”) (including the Wafer Products Supply Cap for the year ending 31 December 2017). Details of the Continuing Connected Transaction (including the Wafer Products Supply Cap) are set out in the letter from the Board contained in the circular of the Company to the Shareholders dated 20 January 2017 (the “ Circular ”), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

As stated in the letter from the Board in the Circular, the Company announced on 6 January 2017 that the Wafer Products Supply Framework Agreement was entered into between GCL-Poly Suzhou and GCL System Integration, pursuant to which GCL-Poly Suzhou agreed to supply the Wafer Products, being multicrystalline and monocrystalline wafer products, to GCL System Integration.

As at the date of the Wafer Products Supply Framework Agreement, 22.40% and 28.19% of the issued shares in GCL System Integration was held by the Zhu Family Trust and Mr. Zhu Yufeng, respectively. As GCL System Integration is an associate of Mr. Zhu Gongshan and Mr. Zhu Yufeng, GCL System Integration is therefore a connected person of the Company. Accordingly, the transactions contemplated under the Wafer Products Supply Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules.

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LETTER FROM SOMERLEY

As the applicable percentage ratios calculated by reference to the Wafer Products Supply Cap are more than 5%, the transactions contemplated under the Wafer Products Supply Framework Agreement constitute non-exempt continuing connected transactions for the Company under Chapter 14A of the Listing Rules and are subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The Independent Board Committee, comprising all of the independent non-executive Directors, namely Ir. Dr. Ho Chung Tai, Raymond, Mr. Yip Tai Him, Dr. Shen Wenzhong and Mr. Wong Man Chung, Francis, has been formed to advise and make recommendation to the Independent Shareholders on the Continuing Connected Transaction (including the Wafer Products Supply Cap). We, Somerley Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in the same regard.

We are not associated with the Company, GCL-Poly Suzhou and GCL System Integration or their respective core connected persons, close associates or associates and accordingly are considered to be eligible to give independent advice on the Continuing Connected Transaction (including the Wafer Products Supply Cap). Apart from normal professional fees payable to us in connection with this or similar appointments, no arrangement exists whereby we will receive any fees or benefits from the Company, GCL-Poly Suzhou and GCL System Integration or their respective core connected persons, close associates or associates.

In formulating our opinion, we have reviewed, amongst other things, the announcement of the Company dated 6 January 2017 in relation to the Wafer Products Supply Framework Agreement, the Wafer Products Supply Framework Agreement, the calculations of the Wafer Products Supply Cap together with the relevant supporting documents, the annual report of the Company for the year ended 31 December 2015 (the “ 2015 Annual Report ”), the interim report of the Company for the six months ended 30 June 2016 (the “ 2016 Interim Report ”) and the information contained in the Circular. We have also discussed with and reviewed information provided by management of the Group regarding the businesses of the Group and the prospects of conducting the Continuing Connected Transaction.

We have relied on the information and facts supplied, and the opinions expressed to us, by the Directors and management of the Group and have assumed that the information and facts provided and opinions expressed to us are true, accurate and complete in all material aspects at the time they were made. We have also sought and received confirmation from the Directors that no material facts have been omitted from the information supplied and opinions expressed to us. We have relied on such information and consider that the information we have received to be sufficient for us to reach an informed view and have no reason to believe that any material information has been withheld, nor doubt the truth or accuracy of the information provided. We have not, however, conducted any independent investigation into the business and affairs of the Group, nor have we carried out any independent verification of the information supplied.

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LETTER FROM SOMERLEY

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our recommendation with regard to the Continuing Connected Transaction (including the Wafer Products Supply Cap), we have taken into account the principal factors and reasons set out below.

1. Information on the Group

The Group is principally engaged in the manufacturing of polysilicon and wafers for the solar industry as well as the development, management and operation of environmentally friendly power plants.

As set out in the 2015 Annual Report and the 2016 Interim Report, the Group is the world’s leading polysilicon producer, the largest wafer supplier globally and a leading green energy enterprise in China. The Group had production capacity of 70,000 metric tonnes as at 30 June 2016. The Group’s wafer production capacity achieved 17 gigawatts (“ GW ”), including 16 GW for multi-crystalline silicon wafer and 1 GW for monocrystalline silicon wafer, as at 30 June 2016. The Group mainly through GCL New Energy Holdings Limited, a listed subsidiary of the Company, operates over 1 GW solar generation projects.

2. Information on the parties

3. Reasons for and benefits of the entering into the Continuing Connected Transaction

As set out in the letter from the Board in the Circular, the establishment of stable customer relationships is important to the development of the Group as a polysilicon and wafer manufacturer, particularly in the highly competitive market in which the Group operates. The manufacturing and sale of polysilicon and wafer products is a core business of the Group. The entering into of the Wafer Products Supply Framework Agreement serves to secure customer demand for the Company in respect of the Wafer Products for the financial year ending 31 December 2017, which is consistent with the Company’s strategy to focus on its core integrated solar business. The sale of the Wafer Products under the Wafer Products Supply Framework Agreement is expected to generate stable demand and income for the Company.

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LETTER FROM SOMERLEY

Having regard to the principal business and operations of the Group and the reasons for and benefits of the entering into the Continuing Connected Transaction above, we concur with the aforesaid Directors’ view that the entering into the Continuing Connected Transaction is in the ordinary and usual course of the business of the Group.

4. Principal terms of the Wafer Products Supply Framework Agreement

On 6 January 2017, GCL-Poly Suzhou and GCL System Integration entered into the Wafer Products Supply Framework Agreement, the details of which are set out below.

Parties

(1) GCL-Poly Suzhou, as supplier
(2) GCL System Integration, as customer

Term

The term of the Wafer Products Supply Framework Agreement is for the period of one year commencing from 1 January 2017 and ending on 31 December 2017 (the “ Term ”).

Subject matter

Under the Wafer Products Supply Framework Agreement, and subject to the Wafer Products Supply Cap, the estimated total quantity of the Wafer Products to be supplied by GCL-Poly Suzhou (or its subsidiaries or affiliates) during the Term is 600.0 million pieces (the “ Estimated Purchase Quantity ”). As disclosed in the letter from the Board in the Circular, the Estimated Purchase Quantity was determined after arm’s length negotiations between the GCL-Poly Suzhou and GCL System Integration taking into account GCL System Integration’s demand for, and the capacity of GCL-Poly Suzhou in producing, the Wafer Products. The actual volume of the Wafer Products to be supplied by GCL-Poly Suzhou from time to time shall be determined by both parties based on the delivery notices agreed between GCL-Poly Suzhou and by GCL System Integration, subject to the following:

(i) the maximum monthly purchase quantity shall be 115% of 50.0 million pieces;

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LETTER FROM SOMERLEY

(ii) the maximum total purchase quantity during the Term shall be 115% of the Estimated Purchase Quantity; and
(iii) the minimum total purchase quantity during the Term shall be 85% of the Estimated Purchase Quantity (the “ Minimum Purchase Quantity ”).

If GCL System Integration fails to purchase the Minimum Purchase Quantity or GCL-Poly Suzhou fails to deliver the Wafer Products that meets the Minimum Purchase Quantity, the defaulting party shall pay the non-defaulting party a daily default payment in an amount equals to 0.05% on the value of the shortfall quantity of the Wafer Products, subject to a cap of 10% of the total average price of the shortfall quantity.

Deposit

A deposit in the sum of RMB50.0 million (the “ Deposit ”) shall be payable by GCL System Integration to GCL-Poly Suzhou in two equal installments. The first installment of RMB25.0 million shall be payable within 10 days of the effective date of the Wafer Products Supply Framework Agreement and the second installment of RMB25.0 million shall be payable on or before 1 July 2017. The Deposit may be offset against outstanding sums payable by GCL System Integration to GCL-Poly Suzhou for the purchase of the Wafer Products under the Wafer Products Supply Framework Agreement in the sum of RMB25.0 million for each month in November 2017 and December 2017.

Conditions precedent

The effectiveness of the Wafer Products Supply Framework Agreement shall be conditional upon satisfaction of the following conditions precedent:

the Wafer Products Supply Framework Agreement and the transactions contemplated thereunder having been approved by the board of directors of GCL System Integration and the shareholders of GCL System Integration at its general meeting; and
the Wafer Products Supply Framework Agreement, the transactions contemplated thereunder and the Wafer Products Supply Cap having been approved by the Board and the Independent Shareholders at the EGM.

As at the Latest Practicable Date, the Wafer Products Supply Framework Agreement had been approved by the Board and the board of directors of GCL System Integration.

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LETTER FROM SOMERLEY

Consideration and basis of consideration

The parties will negotiate the price for the Wafer Products for each calendar month on or before the fifth day of the month. Such price shall be fair, reasonable and on normal commercial terms. In the event that the parties are unable to agree on the price on the fifteenth day of the month then the price shall be determined based on the basic price of the similar categories of products supplied by GCL-Poly Suzhou during that month to its large customer (the “ Third Party Price ”). If GCL System Integration disagrees with the Third Party Price, then the parties shall jointly appoint an audit firm in the PRC for the purpose of ascertaining the price to be charged, which price shall be binding on GCL-Poly Suzhou and GCL System Integration.

Other terms

Further details of the principal terms, including default and termination right, of the Wafer Products Supply Framework Agreement are set out in the letter from the Board in the Circular.

We have reviewed and compared the principal terms of the Wafer Products Supply Framework Agreement with other long-term (from around one year to three years) supply agreements entered into between the Group and a number of independent third party customers (the “ Independent Customers ”) in 2016 in connection with the supply of the Wafer Products by the Group to these third party customers (the “ Independent Customers Supply Agreements ”). The Independent Customers were among the largest customers of the Group for 2016 and the quantity of the Wafer Products to be purchased by them pursuant to the Independent Customers Supply Agreements are generally comparable to that of the Wafer

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LETTER FROM SOMERLEY

Products Supply Framework Agreement. Based on our review, we note that the pricing and other terms to the Group set out in the Wafer Products Supply Framework Agreement, in overall, are no less favourable than those of the Independent Customers Supply Agreements.

5. The Wafer Products Supply Cap

The Wafer Products Supply Cap for the supply of the Wafer Products by GCL-Poly Suzhou under the Wafer Products Supply Framework Agreement is RMB3,450.0 million (equivalent to approximately HK$3,899.0 million) for the year ending 31 December 2017.

As stated in the letter from the Board in the Circular, the Wafer Products Supply Cap was calculated after taking into account (i) the estimated maximum quantity of the Wafer Products to be supplied by GCL-Poly Suzhou under the Wafer Products Supply Framework Agreement; (ii) the transaction amount between GCL System Integration to GCL-Poly Suzhou for the Wafer Products during the period from 1 July 2016 to 31 December 2016, being approximately RMB523.0 million (approximately HK$591.0 million); and (iii) the estimated price trend of the Wafer Products during the Term.

In order to assess the fairness and reasonableness of the Wafer Products Supply Cap, we have reviewed by way of the followings:

(i) The estimated maximum quantity of the Wafer Products to be supplied by GCL-Poly Suzhou under the Wafer Products Supply Framework Agreement

As advised by the management of the Group, the maximum quantity of the Wafer Products to be supplied by GCL-Poly Suzhou is estimated to be 690 million pieces for the purpose of determination of the Wafer Products Supply Cap.

According to the Wafer Products Supply Framework Agreement, the maximum total purchase quantity (the “ Maximum Purchase Quantity ”) by GCL System Integration during the Term shall be 690.0 million pieces, being 115% of the Estimated Purchase Quantity of 600.0 million pieces. The management’s estimate is therefore in line with the Maximum Purchase Quantity pursuant to the Wafer Products Supply Framework Agreement. As disclosed in the letter from the Board in the Circular, the Estimated Purchase Quantity was determined after arm’s length negotiations between the GCL-Poly Suzhou and GCL System Integration taking into account GCL System Integration’s demand for, and the capacity of GCL-Poly Suzhou in producing, the Wafer Products. We have obtained the projected capacity of the Wafer Products of the Group and noted that the Group is able to fulfil the Maximum Purchase Quantity without interrupting the existing production schedule.

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LETTER FROM SOMERLEY

(ii) The estimated price of the Wafer Products

As advised by the management of the Group, the average price of each piece of the Wafer Products to be supplied by GCL-Poly Suzhou to GCL System Integration is estimated to be RMB5 (inclusive of tax) during the entire Term for the purpose of determination of the Wafer Products Supply Cap.

Based on our review of the selling price of the Wafer Products sold by the Group to its top five customers in November 2016, we noted that the average selling price per piece (inclusive of tax) was close to RMB5. Also, we have reviewed the pricing information of the Wafer Products as quoted in PVinsights.com[1] , we note that the market price of the Wafer Products (mainly polysilicon wafers) during 2016 was also near to RMB5. Accordingly, the recent selling prices of the Wafer Products were close to the management’s estimate of RMB5.

We have further reviewed the selling price of the Wafer Products sold by the Group to its customers on a quarterly basis from 2014 to third quarter of 2016 and general market price of the Wafer Products as quoted in PVinsights.com from 2013 to 2016. We noted that, while the selling price of the Wafer Products exhibited a general downward trend in the last few years, there were some price hikes from time to time. For instance, the average selling price of the Wafer Products sold by the Group in the first quarter of 2016 was nearly 10% higher than that in the third quarter of 2015. Moreover, the market price of polysilicon wafers (being the major product of the Wafer Products) in November 2016 had increased by approximately 16% from the prior month based on the pricing information quoted in PVinsights.com. In light of the above, we consider it reasonable that the average price of each piece of the Wafer Products to be supplied by GCL-Poly Suzhou to GCL System Integration, for the purpose of determination of the Wafer Products Supply Cap, is estimated to be RMB5 (inclusive of tax) during the entire Term, as the estimate provides for potential increases in the selling price of the Wafer Products from time to time during the Term.

1 In accordance with its website, PVinsights is a premier international solar photovoltaic (“ PV ”) research firm that helps leading solar PV companies and financial professionals making real time decisions on business strategy, component procurements and investments by consultancy reports, advisory service, and efficient price reports. We further note that PVinsights is widely quoted in PV industry publications and online media sources on the subject of PV.

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LETTER FROM SOMERLEY

OPINION AND RECOMMENDATION

Having taking into account the above principal factors and reasons, we consider that (i) the entering into the Continuing Connected Transaction is in the ordinary and usual course of business of the Group and in the interests of the Company and the Shareholders as a whole; and (ii) the terms of the Continuing Connected Transaction (including the Wafer Products Supply Cap) are on normal commercial terms, fair and reasonable as far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Board Committee to recommend, and we ourselves recommend, the Independent Shareholders to vote in favor of the ordinary resolution to be proposed at the EGM in relation to the Continuing Connected Transaction (including the Wafer Products Supply Cap).

Yours faithfully, for and on behalf of SOMERLEY CAPITAL LIMITED Danny Cheng Director

– 35 –

APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executives’ interests and short positions in shares and underlying shares of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, were as follows:

Long position in the Shares:

Name of Director/ chief executive	Number of Shares held Number of underlying Shares held Total Approximate percentage of issued share capital Beneficiary of a trust Corporate interests Personal interests
Zhu Gongshan Zhu Zhanjun Ji Jun Zhu Yufeng	6,127,721,489 (note 1) – – 242,666,776 (note 1) 6,370,388,156 34.27% – – 3,400,000 2,719,359 (note 2) 6,119,359 0.03% – – – 3,726,529 (note 2) 3,726,529 0.02% 6,127,721,489 (note 1) – – 245,184,592 (note 3) 6,372,906,081 34.29%

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APPENDIX

GENERAL INFORMATION

Name of Director/ chief executive	Number of Shares held Number of underlying Shares held Total Approximate percentage of issued share capital Beneficiary of a trust Corporate interests Personal interests
Sun Wei Yeung Man Chung, Charles Jiang Wenwu Zheng Xiongjiu Ho Chung Tai, Raymond Yip Tai Him	– – 5,723,000 4,733,699 (note 2) 10,456,699 0.06% – – – 1,700,000 (note 2) 1,700,000 0.01% – – 9,600,000 1,712,189 (note 2) 11,312,189 0.06% – – 250,000 2,719,358 (note 2) 2,969,358 0.02% – – – 1,007,170 (note 2) 1,007,170 0.01% – – – 1,007,170 (note 2) 1,007,170 0.01%

Notes:

(1) An aggregate of 6,127,721,489 Shares are collectively held by Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited, which are wholly-owned by Golden Concord Group Limited, which in turn is wholly-owned by Asia Pacific Energy Holdings Limited. Asia Pacific Energy Holdings Limited is in turn wholly-owned by Asia Pacific Energy Fund Limited. Asia Pacific Energy Fund Limited is ultimately held under a discretionary trust with Credit Suisse Trust Limited as trustee for Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng, a Director and the son of Mr. Zhu Gongshan) as beneficiaries. Happy Genius Holdings Limited had lent 312,000,000 shares of the Company to the convertible bond investor’s associate under the shares lending agreement dated 23 November 2013 (as amended by an agreement dated 15 July 2015 and further amended by an agreement dated 25 January 2016), out of which 69,333,333 shares were returned on 29 April 2016. Happy Genius Holdings Limited was thus also interested in a long position of 242,666,667 Shares.
(2) These are share options granted by the Company to the Directors, pursuant to the pre-IPO share option scheme and the share option scheme, both adopted by the shareholders of the Company on 22 October 2007. Such granted share options can be exercised by the Directors at various intervals during the period from 1 April 2009 to 28 March 2026 at an exercise price of HK$4.071, HK$1.324, HK$1.160 or HK$0.586.
(3) The 245,184,592 underlying shares comprises the long position of 242,666,667 Shares held by Happy Genius Holdings Limited under Note (1) and 2,517,925 share options mentioned under Note (2) above.

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APPENDIX

GENERAL INFORMATION

Long position in the shares of the Company’s associated corporation, namely GCL New Energy Holdings Limited (“ GCL New Energy ”), in which the Company indirectly holds approximately 62.28% issued shares:

Name of Director/ chief executive	Number of shares of GCL New Energy held Number of underlying shares held Total Approximate percentage of issued share capital of GCL New Energy Beneficiary of a trust Corporate interests Personal interests
Zhu Yufeng Sun Wei Yeung Man Chung, Charles Zheng Xiongjiu	– – – 3,523,100 3,523,100 0.02% – – – 27,178,200 27,178,200 0.14% – – – 15,099,000 15,099,000 0.08% – – 2,450,000 – 2,450,000 0.01%

Note: These are share options granted by the Company’s subsidiary, namely GCL New Energy Holdings Limited. Such granted share options can be exercised by Mr. Zhu Yufeng at the interval between 24 July 2015 and 23 July 2025 at an exercise price at HK$0.606 per share, and by Ms. Sun Wei and Mr. Yeung Man Chung, Charles at the interval between 24 November 2014 and 23 July 2025 at an exercise price of HK$1.1798 or HK$0.606 per share.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests and short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules.

(b) Other disclosures under the SFO

Mr. Zhu Gongshan and Mr. Zhu Yufeng are members of the Zhu Family Trust which is a controlling shareholder of the Company. Save as disclosed above, as at the Latest Practicable Date, none of the Directors was a director or employee of a company which had, or was deemed to have, an interest or short position in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

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APPENDIX

GENERAL INFORMATION

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with the Company or any member of the Group which is not determinable within one year without payment of compensation other than statutory compensation.

4. DIRECTORS’ INTERESTS IN ASSETS OR CONTRACTS AND OTHER INTERESTS

Save for (i) the transactions contemplated hereunder; (ii) leases of certain properties for staff accommodation from the Zhu Family Trust to the Group which are not required to be disclosed under the Listing Rules; and (iii) the acquisition of coal usage quota from 太倉港協鑫發電有限公司 (Taicang GCL Power Co., Ltd*), a company of which Zhu Family Trust holds 72% equity interest, by Jiangsu Zhongneng at a consideration of RMB40 million on 22 June 2016 as disclosed in the announcement of the Company dated 22 June 2016, as at the Latest Practicable Date, none of the Directors or proposed Directors had, or has had, any direct or indirect interest in any assets which have been acquired, disposed of by or leased to, or which are proposed to be acquired, disposed of by or leased to, any member of the Group since 31 December 2015, being the date to which the latest published and audited consolidated financial statements of the Company were made up.

Save for the transactions contemplated hereunder and transactions which were disclosed pursuant to the Listing Rules, there was no contract or arrangement entered into by any member of the Group subsisting at the Latest Practicable Date of which any Director is materially interested and which is significant in relation to the business of the Group.

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, save as disclosed below, so far as the Directors were aware, none of the Directors or their respective associates had interest in any business which competed or was likely to compete, either directly or indirectly, with the business of the Group.

	Name of company	Principal	Percentage
	in which the	activities of the	interest in
Name of	relevant Director	competing	competing
Director	has interest	company	company
Mr. Zhu Yufeng	錫林郭勒中能硅業	Ingot Plant in the	Mr. Zhu Yufeng,
	有限公司Xilingol	development	through
	Zhongneng	and construction	companies
	Silicon Co.,	stage	controlled by
	Ltd.* (Dormant		him, holds 70%
	and inactive)		interest

– 39 –

APPENDIX

GENERAL INFORMATION

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial position or trading position of the Group since 31 December 2015, being the date to which the latest published and audited financial statements of the Group were made up.

7. EXPERT AND CONSENT

Each of the following experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears:

Qualification

Name Qualification First Shanghai Capital A licensed corporation under the SFO to carry out Type 6 regulated activity Somerley A licensed corporation under the SFO to carry out Type 1 and Type 6 regulated activity

As at the Latest Practicable Date, the above experts did not have any shareholding in any member of the Group nor did they have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, the above expert did not have any interest, direct or indirect, in any assets which have been since 31 December 2015 (being the date to which the latest published audited consolidated accounts of the Group were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

8. GENERAL

The English text of this circular prevails over its Chinese translation in case of discrepancy.

– 40 –

APPENDIX

GENERAL INFORMATION

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at Unit 1703B-1706, Level 17, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong during normal business hours on any weekday (except public holidays) from the date of this circular up to and including 8 February 2017:

(a) the New Coal Purchase Framework Agreement;
(b) the Wafer Products Supply Framework Agreement;
(c) the letter from the Independent Board Committee, the text of which is set out on pages 18 to 19 of this circular;
(d) the letter from First Shanghai Capital, the text of which is set out on pages 20 to 26 of this circular;
(e) the letter from Somerley, the text of which is set out on pages 27 to 35 of this circular; and
(f) the written consents referred to under the section headed “Expert and Consent” in this Appendix.

– 41 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 3800)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (the “ EGM ”) of GCL-Poly Energy Holdings Limited (the “ Company ”) will be held at Centenary Room III, G/F., Marco Polo Hong Kong Hotel, 3 Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong on Thursday, 9 February 2017 at 10:00 a.m. for the purpose of considering and, if thought fit, passing with or without modification the following ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“ THAT
(a) the coal purchase framework agreement (the “ New Coal Purchase Framework Agreement ”) dated 6 January 2017 entered into between 蘇州協鑫能源科技有限公司 (Suzhou GCL Energy Technology Co., Ltd.) as supplier and 江蘇中能硅業科技發展有限公司 (Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.) as customer in relation to the purchase of coal, a copy of which marked “A” has been tabled before the meeting and initiated by the chairman of the meeting for identification purpose, and the transactions contemplated thereunder and the execution of which be and are hereby approved, ratified and confirmed;
(b) the annual caps for the maximum aggregate annual value for the transactions under the New Coal Purchase Framework Agreement as stated in the circular of the Company dated 20 January 2017 for the period from 1 January 2017 to 31 December 2019 be and are hereby approved, ratified and confirmed; and
(c) any one of the directors of the Company be and is hereby authorised to do all such acts and things and to execute all such documents for the purpose of, or in connection with, the implementation of and giving effect to the New Coal Purchase Framework Agreement and the transactions ancillary thereto and of administrative nature which he/she considers necessary, desirable or expedient.”

– 42 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

“ THAT
(a) the wafer products supply framework agreement (the “ Wafer Products Supply Framework Agreement ”) dated 6 January 2017 entered into between 保利協鑫（蘇州）新能源有限公司 (GCL-Poly (Suzhou) New Energy Co., Ltd.*) as supplier and 協鑫集成科技股份有限公司 (GCL System Integration Technology Co., Ltd.) as customer in relation to the supply of wafer products, a copy of which marked “B” has been tabled before the meeting and initiated by the chairman of the meeting for identification purpose, and the transactions contemplated thereunder and the execution of which be and are hereby approved, ratified and confirmed;
(b) the annual cap for the maximum aggregate value for the transactions under the Wafer Products Supply Framework Agreement as stated in the circular of the Company dated 20 January 2017 for the period from 1 January 2017 to 31 December 2017 be and are hereby approved, ratified and confirmed; and
(c) any one of the directors of the Company be and is hereby authorised to do all such acts and things and to execute all such documents for the purpose of, or in connection with, the implementation of and giving effect to the Wafer Products Supply Framework Agreement and the transactions ancillary thereto and of administrative nature which he/she considers necessary, desirable or expedient.”

By order of the Board GCL-Poly Energy Holdings Limited Mr. Zhu Gongshan Chairman

Hong Kong, 20 January 2017

Notes:

(1) Any shareholder of the Company entitled to attend and vote at the EGM is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A shareholder of the Company who is the holder of two or more shares may appoint more than one proxy to attend on the same occasion. A proxy need not be a shareholder of the Company.
(2) In order to be valid, a form of proxy and the power of attorney (if any) or other authority (if any) under which it is signed, or a certified copy of such power or authority, must be deposited with the Company’s Hong Kong share registrar, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time fixed for holding the EGM or any adjournment thereof.
(3) In order to qualify for the right to attend and vote at the EGM, all transfers, accompanied by the relevant share certificates, must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on 8 February 2017.

– 43 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

(4) Delivery of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the EGM convened and in such event, the form of proxy shall be deemed to be revoked.
(5) In the case of joint registered holders of any share, any one of such joint registered holders may vote at the EGM, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint registered holders be present at the EGM, the vote of the senior who tenders a vote either personally or by proxy shall be accepted to the exclusion of the votes of the other joint registered holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

As at the date of this notice, the executive directors of the Company are Mr. Zhu Gongshan (Chairman), Mr. Zhu Zhanjun, Mr. Ji Jun, Mr. Zhu Yufeng, Ms. Sun Wei, Mr. Yeung Man Chung, Charles, Mr. Jiang Wenwu and Mr. Zheng Xiongjiu; and the independent non-executive directors of the Company are Ir. Dr. Ho Chung Tai, Raymond, Mr. Yip Tai Him, Dr. Shen Wenzhong and Mr. Wong Man Chung, Francis.

For identification only

– 44 –

AI assistant

GCL Technology Holdings Limited — Proxy Solicitation & Information Statement 2017

50888_rns_2017-01-19_3e415e07-2198-4d7a-95a5-51b332b2c9bf.pdf

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO NEW COAL PURCHASE FRAMEWORK AGREEMENT AND

WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

DEFINITIONS

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO NEW COAL PURCHASE FRAMEWORK AGREEMENT AND

WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

INTRODUCTION

NEW COAL PURCHASE FRAMEWORK AGREEMENT

Date

Parties

Term

Subject matter

Consideration and basis of consideration

Conditions precedent

Coal Purchase Caps

Reasons for and benefits of the New Coal Purchase Framework Agreement

THE WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

Date

Parties

Term

Subject matter

Purchase quantity

Deposit

Conditions precedent

Consideration and basis of consideration

Default and termination right

Wafer Products Supply Cap

LETTER FROM THE BOARD

Reasons for and benefits of the Wafer Products Supply Framework Agreement

INFORMATION ON THE PARTIES

Information on the Company

Information on Jiangsu Zhongneng

Information on Suzhou GCL

Information on GCL-Poly Suzhou

Information on GCL System Integration

LISTING RULES IMPLICATION

EGM

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISERS

RECOMMENDATION

ADDITIONAL INFORMATION

GCL-POLY ENERGY HOLDINGS LIMITED 保利協鑫能源控股有限公司

CONTINUING CONNECTED TRANSACTIONS IN RELATION TO NEW COAL PURCHASE FRAMEWORK AGREEMENT AND WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

FIRST SHANGHAI CAPITAL LIMITED

CONTINUING CONNECTED TRANSACTION NEW COAL PURCHASE FRAMEWORK AGREEMENT

INTRODUCTION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of and reasons for the New Coal Purchase Framework Agreement

2. Principal terms of the New Coal Purchase Framework Agreement

3. The Coal Purchase Caps

RECOMMENDATION

SOMERLEY CAPITAL LIMITED

CONTINUING CONNECTED TRANSACTION IN RELATION TO WAFER PRODUCTS SUPPLY FRAMEWORK AGREEMENT

INTRODUCTION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Information on the Group

2. Information on the parties

3. Reasons for and benefits of the entering into the Continuing Connected Transaction

4. Principal terms of the Wafer Products Supply Framework Agreement

Parties

Term

Subject matter

Deposit

Conditions precedent

Consideration and basis of consideration

Other terms

5. The Wafer Products Supply Cap

(ii) The estimated price of the Wafer Products

OPINION AND RECOMMENDATION

Yours faithfully, for and on behalf of SOMERLEY CAPITAL LIMITED Danny Cheng Director

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Directors’ and chief executives’ interests and short positions in shares and underlying shares of the Company and its associated corporations

GENERAL INFORMATION

(b) Other disclosures under the SFO

3. DIRECTORS’ SERVICE CONTRACTS

4. DIRECTORS’ INTERESTS IN ASSETS OR CONTRACTS AND OTHER INTERESTS

GCL Technology Holdings Limited Proxy Solicitation & Information Statement 2017