Modern Innovative Digital Technology Company Limited - Proxy Solicitation & Information Statement 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in DATANG INTERNATIONAL POWER GENERATION CO., LTD. , you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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 disclaims any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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(a sino-foreign joint stock limited company incorporated in the People’s Republic of China) (Stock Code: 00991)

MAJOR TRANSACTION AND

DISCLOSEABLE TRANSACTION AND

CONTINUING CONNECTED TRANSACTIONS AND CONNECTED TRANSACTION

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

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Mizuho Securities Asia Limited

A letter from the Board is set out on pages 4 to 15 of this circular. A letter from the Independent Board Committee is set out on pages 16 to 17 of this circular. A letter from Mizuho Securities Asia Limited containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 18 to 27 of this circular.

The Company will convene the EGM at the function room of 5/F, InterContinental Hotel, No. 11 Financial Street, Xicheng District, Beijing, the PRC on 6 December 2013 (Friday) at 9:00 a.m. The notice convening the EGM has been despatched to the Shareholders on 21 October 2013. Completion and return of the proxy form shall not preclude you from attending and voting in person at the EGM or at any adjourned meetings should you so wish.

5 November 2013

		Page
DEFINITIONS.	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
LETTER FROM	THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
LETTER FROM	THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . . . . . . . . . . . . . 16
LETTER FROM	MIZUHO SECURITIES ASIA LIMITED. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
APPENDIX I	– FINANCIAL INFORMATION OF THE GROUP. . . . . . . . . . . . . . . . . . 28
APPENDIX II	– GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

DEFINITIONS

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

“Agreements” Entrusted Loan Framework Agreement and Financial Services Agreement “Board” the board of Directors

“CBRC” China Banking Regulatory Commission (中國銀行業監督管理委員會)
“CDC” China Datang Corporation, a State-owned enterprise established under the laws of the PRC and is a controlling Shareholder of the Company. CDC, together with its subsidiaries, hold a total of approximately 34.71% of the issued share capital of the Company as at the Latest Practicable Date. For details, please refer to “Information relating to the parties”
“Company” Datang International Power Generation Co., Ltd., a sino-foreign joint stock limited company incorporated in the PRC on 13 December 1994, whose H Shares are listed on the Stock Exchange and the London Stock Exchange and whose A Shares are listed on the Shanghai Stock Exchange. For details, please refer to “Information relating to the parties”
“connected person” has the meaning ascribed to it under the Listing Rules
“connected transaction” has the meaning ascribed to it under the Listing Rules
“Datang Finance” China Datang Finance Co., Ltd. (中國大唐集團財務有限公司), a subsidiary of CDC
“Director(s)” the director(s) of the Company
“Duolun Coal Chemical Company” Datang Inner Mongolia Duolun Coal Chemical Company Limited, which constructs and operates the Duolun Coal Chemical Project

“Duolun Coal Chemical Project” the project located in Duolun County in the Inner Mongolia Autonomous Region which uses the brown coal from the East Unit 2 coal mine of Shengli Coal Mine as raw materials for the production of polypropylene chemical products by employing the pulverised coal gasification technology, the synthetic gas purification technology, large-scale methanol synthesis technology, the methanol-to-propylene technology and the propylene polymerisation technology

DEFINITIONS

“EGM” the extraordinary general meeting of the Company to be held on 6 December 2013 at the function room of 5/F, InterContinental Hotel, No. 11 Financial Street, Xicheng District, Beijing, the PRC, to consider and approve, among others, the deposit services under the Financial Services Agreement and the Entrusted Loan Framework Agreement

“Energy and Chemical Company” Datang Energy and Chemical Company Limited, a wholly-owned subsidiary of the Company
“Entrusted Loan”
the revolving entrusted loan of a total principal amount of not more than RMB6 billion
“Entrusted Loan Arrangement”
the arrangement where Datang Finance is entrusted by the Company to act as a lending agent to release the Entrusted Loan to Duolun Coal Chemical Company pursuant to the Entrusted Loan Framework Agreement
“Entrusted Loan Contracts” the specific entrusted loan contracts entered into by the relevant parties when each tranche of the Entrusted Loan was released, the major terms of which will be consistent with the terms and principles of the Entrusted Loan Framework Agreement
“Entrusted Loan Framework Agreement”
the entrusted loan framework agreement entered into on 15 October 2013 between the Company, Energy and Chemical Company, Datang Finance and Duolun Coal Chemical Company in respect of the Entrusted Loan Arrangement
“Financial Services Agreement”
the financial services agreement entered into between the Company and Datang Finance on 15 October 2013, particulars of which are set out in this circular
“Group”

the Company and its subsidiaries

“Independent Board Committee”
the independent board committee of the Company, comprising five independent non-executive Directors, and each of them does not have any material interest in the Entrusted Loan Framework Agreement and the Financial Services Agreement
“Independent Shareholders”
has the meaning ascribed to it under the Listing Rules
“Latest Practicable Date”
1 November 2013, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

	DEFINITIONS
“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“Mizuho Securities”	Mizuho Securities Asia Limited, the independent financial
	adviser to the Independent Board Committee and the Independent
	Shareholders in respect of the terms of the Entrusted Loan
	Framework Agreement and the deposit services under the
	Financial Services Agreement, which is a licensed corporation
	for types 1 (dealing in securities), 2 (dealing in futures contracts),
	4 (advising on securities), 5 (advising on futures contract),
	6 (advising on corporate finance) and 9 (asset management)
	regulated activities under the SFO
“PBOC”	the People’s Bank of China (中國人民銀行)
“PRC”	the People’s Republic of China
“RMB”	Renminbi, the lawful currency of the PRC
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong)
“Shareholder(s)”	the holder(s) of the Share(s) of the Company
“Stock Exchange”	the Stock Exchange of Hong Kong Limited
“%”	per cent

LETTER FROM THE BOARD

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(a sino-foreign joint stock limited company incorporated in the People’s Republic of China) (Stock Code: 00991)

Executive Directors: Mr. Cao Jingshan Mr. Zhou Gang

Non-executive Directors:

Mr. Chen Jinhang (Chairman) Mr. Hu Shengmu Mr. Fang Qinghai Mr. Liu Haixia Ms. Guan Tiangang Mr. Cao Xin Mr. Cai Shuwen Mr. Li Gengsheng

Office address: No.9 Guangningbo Street Xicheng District Beijing, 100033 the PRC

Principal place of business in Hong Kong: c/o Eversheds 21/F, Gloucester Tower The Landmark 15 Queen’s Road Central Hong Kong

Independent non-executive Directors:

Mr. Dong Heyi Mr. Ye Yansheng Mr. Li Hengyuan Ms. Zhao Jie Mr. Jiang Guohua

5 November 2013

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION AND DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS AND CONNECTED TRANSACTION

BACKGROUND

The Board announces that on 15 October 2013, the Company and Datang Finance entered into the Financial Services Agreement with a term of three years commencing from 1 January 2014 and ending on 31 December 2016, pursuant to which Datang Finance agreed to provide the Group with deposit services, loan services and other financial services subject to the terms and conditions provided therein.

LETTER FROM THE BOARD

The Board further announces that on 15 October 2013, the Company and Energy and Chemical Company entered into the Entrusted Loan Framework Agreement with Datang Finance and Duolun Coal Chemical Company in relation to the provision of the Entrusted Loan by the Company or Energy and Chemical Company to Duolun Coal Chemical Company in the form of revolving loan facility through the Entrusted Loan Arrangement, in which Datang Finance acts as the lending agent.

The purpose of this circular is:

(1) to provide you with further details of the Agreements;
(2) to set out the recommendation of the Independent Board Committee in respect of the Entrusted Loan Framework Agreement and the deposit services under the Financial Services Agreement; and
(3) to set out the letter of advice from Mizuho Securities to the Independent Board Committee and the Independent Shareholders in respect of the Entrusted Loan Framework Agreement and the deposit services under the Financial Services Agreement.

A. FINANCIAL SERVICES AGREEMENT

BACKGROUND

On 28 August 2008, the Company and Datang Finance entered into a financial services agreement with a term commencing from 1 January 2008 to 31 December 2010. On 26 October 2010, the Company and Datang Finance entered into a financial services agreement, with a term of three years commencing from 1 January 2011 and ending on 31 December 2013. In order to further enhance the economies of scale of the capital, accelerate capital turnover, save financing costs and ensure funds security while maintaining stability of the partnership between both parties, the relevant financial services agreement is renewed. On 15 October 2013, the Company and Datang Finance entered into the Financial Services Agreement, with a term commencing from 1 January 2014 and ending on 31 December 2016.

MATERIAL TERMS OF THE FINANCIAL SERVICES AGREEMENT

Date

15 October 2013

Parties

the Company; and
Datang Finance

LETTER FROM THE BOARD

Major Terms

Datang Finance shall provide the Group with the following major services subject to the terms and conditions provided therein:
i. basic services, such as deposit, loans, financial leasing, entrusted loans, bill acceptance and discount, payment and settlement, financial guarantees, financial and financing consultation, and bonds underwriting;
ii. conducting unified settlement services for funds according to the instructions of the Group, and the relevant settlement expenses shall be borne by Datang Finance;
iii. conducting comprehensive credit services, including but not limited to loans, discount, guarantees and other forms of financing, with a comprehensive credit limit of RMB24 billion at an interest rate not higher than those charged by other domestic financial institutions;
iv. consultation and training services in relation to monetary policies, financial market conditions, financing products and cash management;
v. the handling fee of the entrusted loans services shall not exceed 0.0006% of the actual principal amount;
vi. the savings interest rate of the deposit services are settled according to the interest rates of the PBOC (as at the Latest Practicable Date, the prevailing negotiated deposit interest rate is 1.15% per annum, while the prevailing savings interest rate is 0.35% per annum), with a daily maximum balance of deposits of not more than RMB12 billion;
vii. provision of other financial services at the request and according to the instructions of the Company subject to obtaining the relevant approvals from the CBRC.
Deposit cap: the daily maximum balance of the Group’s deposits with Datang Finance for each of the three years ending 31 December 2014, 31 December 2015 and 31 December 2016 is RMB12 billion.
Datang Finance has undertaken to adhere to the principles below in providing the aforementioned financial services to the Group:
i. the interest rates for the Group’s deposits in and for loans to be granted from Datang Finance shall be within the permitted bands around the interest rates for deposits and loans as announced by the PBOC, and with reference to the benchmark interest rates as announced by the PBOC, Datang Finance shall accept deposits at interests rates which are not lower than those offered by other domestic financial institutions, and offer loans and other services at lending interest rates which are not higher than those charged by other domestic financial institutions for the same type of services.

LETTER FROM THE BOARD

ii. Datang Finance should ensure the stable operation of its funds management system to safeguard the funds, and to monitor the credit risk so as to satisfy the payment needs of the Group.
The Group, with information of market rates and in view of its own interests, has the unilateral right to determine whether or not to maintain the business relationship with Datang Finance, and may obtain relevant financial services from other financial institutions in addition to those services provided under the Financial Services Agreement in accordance with the actual situations.
The effective date and the term of the Financial Services Agreement: the Financial Services Agreement shall become effective when it is duly signed by the respective representatives of the parties and sealed with their respective company chops and upon the approval of the internal authority of each of the parties (including obtaining the approval by the Independent Shareholders at the general meeting of the Company). The term of the Financial Services Agreement shall be from 1 January 2014 to 31 December 2016.

Capital Risk Control Measures

Datang Finance will ensure the safe and stable operation of the funds management information system, which has undergone the security test in respect of connection to the interface of online commercial banking and has reached the national security standards for commercial banks. The system is equipped with the mode awarded with CA safety certificate to ensure the security of the funds of the Group.
Datang Finance will ensure that it is in strict compliance with the risk monitoring indicators for financial institutions issued by the CBRC and that its major regulatory indicators such as gearing ratio, interbank borrowing ratio and liquidity ratio will also comply with the requirements of the CBRC.
Any balance in the Group’s deposits (after deducting the amount used for making entrusted loans and the loans made to the Group by Datang Finance) will be redeposited into one or more commercial banks in the PRC as interbank deposits.
A report on the status of the Group’s deposits with Datang Finance will be delivered by Datang Finance to the chief financial officer of the Company before 10 a.m. of each business day to enable the chief financial officer of the Company to monitor and ensure that the daily maximum deposit balance of the Group with Datang Finance does not exceed the cap of RMB12 billion.
A copy of every regulatory report submitted by Datang Finance to the CBRC will be provided to and reviewed by the senior management of the Company, including the relevant executive Director(s).
The financial statements of Datang Finance for each month will be provided to and reviewed by the senior management of the Company, including the relevant executive director(s), on the fifth working day of the following month.

LETTER FROM THE BOARD

PROPOSED CAPS

Deposit Services

Pursuant to the financial services agreement entered into between Datang Finance and the Company on 26 October 2010, the maximum daily balance of the Group’s deposits with Datang Finance amounted to RMB6,630 million, RMB6,300 million and RMB5,480 million for the two years ended 31 December 2010 and 31 December 2011 and for the nine months ended 30 September 2013, respectively.

In view of the Company’s business growth and increase in demand for financial services, the Company estimates that the proposed caps in respect of the daily maximum deposit balance with Datang Finance is RMB12 billion for each of the three years ending 31 December 2014, 31 December 2015 and 31 December 2016 after taking into account of the following:

As the assets of the Group continue to grow, the amount of deposits will also increase.
In order to strengthen the centralised management of funds and monitor the use of funds, the Group will roll out a “funding pool” platform through Datang Finance. Such platform amasses the funds of the Group and enables loans to be granted within the Group by capitalising on the leeway arising from the difference in the time for receipt and payment of funds of the members of the Group, with an aim to support the development of the Group.
In respect of the Group’s funds settlement business at Datang Finance, settlement expenses will be undertaken by Datang Finance.
During the term of the agreement, the issuance of short-term debentures, super short-term debentures and non-public debt financing instruments will also enhance the Company’s daily maximum deposit balance with Datang Finance.
CDC undertakes the following to the CBRC: in the event that Datang Finance is in urgent difficulty in making payment, CDC will raise Datang Finance’s capital accordingly based on the actual need.
The Directors (including the independent non-executive Directors) consider that the above proposed caps in respect of the deposit services are fair and reasonable.

Loan Services

In view of the fact that the loan services to be provided by Datang Finance to the Group are on normal commercial terms which are similar to or even more favourable than those offered by other commercial banks in the PRC, and that no collateral against the assets of the Group will be required in respect of the loan services, the loan services are exempt under Rule 14A.65(4) of the Listing Rules from all reporting, announcement and Independent Shareholders’ approval requirements. As such, no cap has been set for such services. The Directors (including the independent non-executive Directors) consider that the loan services to be provided under the Financial Services Agreement are fair and reasonable and in the interests of the Shareholders as a whole.

LETTER FROM THE BOARD

Other Services

Apart from the deposit services and the loan services, other financial services which may be provided by Datang Finance to the Company mainly include entrusted loans services, finance leasing services, bill acceptance and discount services, and so forth.

The other services to be provided under the Financial Services Agreement will be on normal commercial terms and on terms similar to or even more favourable than those offered by other commercial banks in the PRC. The Directors (including the independent non-executive Directors) consider that the other services provided under the Financial Services Agreement are fair and reasonable and in the interests of the Shareholders as a whole.

The Company expects that each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the total fees payable by the Company to Datang Finance will fall within the de minimis threshold as stipulated under Rule 14A.33(3) of the Listing Rules. The Company will comply with the reporting, announcement and Independent Shareholders’ approval requirements of the Listing Rules if the transaction amounts of the other services to be provided by Datang Finance to the Group under the Financial Services Agreement exceed the relevant threshold.

BENEFITS AND REASONS OF ENTERING INTO THE FINANCIAL SERVICES AGREEMENT

By entering into the Financial Services Agreement with Datang Finance, the Company is able to secure loans and other financing services at interest rates lower than those in the market, which assists in improving the overall standard of fund operation of the Company and enhancing the Group’s bargaining power of external financing. The entering into of the Financial Services Agreement can also enable the Company to secure higher interest rates for deposits than those in the market and enjoy payment and settlement services at zero rate, thereby increasing interest income on deposits and saving e settlement costs. Meanwhile, pursuant to the Financial Services Agreement, the Group can strengthen its funds control and accounts management through the funds management platform of Datang Finance, thereby further improving the efficiency of fund applications, and mitigating and avoiding financial risks.

In view of the above, the Directors (including the independent non-executive Directors) believe that the credit risk control measures under the Financial Services Agreement are adequate enough to cover the risks involved in depositing funds of the Group with Datang Finance and the provision of financial services under the Financial Services Agreement are fair and reasonable and in the best interests of the Company and the Shareholders as a whole.

LETTER FROM THE BOARD

B. ENTRUSTED LOAN FRAMEWORK AGREEMENT

Date and Subject Matter

On 15 October 2013, the third meeting of the eighth session of the Board considered and approved the provision of the Entrusted Loan of not more than RMB6 billion to Duolun Coal Chemical Company. On 15 October 2013, the Company and Energy and Chemical Company entered into the Entrusted Loan Framework Agreement with Datang Finance and Duolun Coal Chemical Company in relation to the provision of the Entrusted Loan by the Company to Duolun Coal Chemical Company in the form of revolving loan facility through the Entrusted Loan Arrangement, in which Datang Finance acts as the lending agent.

Parties

The Company and Energy and Chemical Company, as the lender;
Datang Finance, as the lending agent; and
Duolun Coal Chemical Company, as the borrower.

MAJOR TERMS OF ENTRUSTED FRAMEWORK AGREEMENT

1. Entrusted Loan Arrangement

Pursuant to the Entrusted Loan Framework Agreement, Datang Finance is entrusted by the Company and Energy and Chemical Company to act as a lending agent to provide the Entrusted Loan to Duolun Coal Chemical Company in the form of revolving loan facility, monitor the use as well as the repayment of the Entrusted Loan by Duolun Coal Chemical Company. Separate Entrusted Loan Contracts will be entered into between the parties when each tranche of the Entrusted Loan was released, the terms and conditions of such Entrusted Loan Contracts shall be consistent with the principles and terms of the Entrusted Loan Framework Agreement.

2. Principal amount of the Entrusted Loan

Not exceeding RMB6 billion and in the form of revolving entrusted loan facility.

3. Term

The term for the Entrusted Loan Framework Agreement is 36 months commencing from 15 October 2013 and ending on 14 October 2016.

LETTER FROM THE BOARD

4. Interest rate

At a floating interest rate, being the benchmark interest rate to be charged for the same level of loans in RMB for the same period as announced by the People’s Bank of China on the date when each tranche of borrowing is withdrawn and such interest rate is to be adjusted annually. The adjustment date is 21st December of each year. The adjusted borrowing interest rate will be the benchmark interest rate for the same level of loans in RMB for the same period announced by the People’s Bank of China on the adjustment date.

As at the Latest Practicable Date, the prevailing benchmark interest rate for three-year loans in RMB as announced by the People’s Bank of China is 6.15% per annum.

Such interest rate is arrived at after arm’s length negotiation between the Company and Duolun Coal Chemical Company in consideration of the overall reduction in capital costs to the Group after the accounts of Duolun Coal Chemical Company (being the controlled subsidiary of the Company) are consolidated into the accounts of the Company.

5. Repayment schedule of the principal of the Entrusted Loan

One-off repayment of the principal for each tranche of the Entrusted Loan by Duolun Coal Chemical Company upon maturity of the relevant Entrusted Loan Contracts.

6. Payment schedule of interests of the Entrusted Loan

Interests shall be settled by Duolun Coal Chemical Company on a quarterly basis. The settlement date falls on the twentieth (20th) day of the last month of each quarter.

7. Handling fees

The handling fees shall be charged in tranches on the date of grant of each tranche of the Entrusted Loan. The rate of the handling fees shall be 0.025% of each tranche of the Entrusted Loan.

8. Effective date

The Entrusted Loan Framework Agreement shall become effective when it is duly signed by the legal representatives or authorized agent of both parties and sealed with their respective chops and upon the approval of the internal authority of each of the parties (or the internal approval procedures of each of the parties have been implemented), including obtaining the approval of the Entrusted Loan Framework Agreement by the Independent Shareholders of the Company at the EGM.

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF ENTERING INTO THE ENTRUSTED LOAN FRAMEWORK AGREEMENT

In view of the cooperation history between Datang Finance and the Company and given that the provision of entrusted loan services by Datang Finance is covered under the Financial Services Agreement, Datang Finance has better understanding of the operations of the Company which will allow more expedient and efficient services than those rendered by other PRC commercial banks. Further, the handling fees charged by Datang Finance will not be higher than those charged by other PRC commercial banks. In view of the above considerations, the Company appointed Datang Finance, rather than other PRC commercial banks, as the lending agent.

Further, considering the capital risks control measures under the financial services agreement as set out in the circular of the Company dated 16 November 2010 and the Financial Services Agreement for the service term commencing from 1 January 2014 and ending on 31 December 2016 and the terms under the Entrusted Loan Framework Agreement are normal commercial terms which confer no additional obligations nor risks on the Company when comparing with other entrusted loan agreements in the market, the Company considers that no additional risks will be involved by appointing Datang Finance as the lending agent under the Entrusted Loan Framework Agreement.

In order to ensure the day-to-day cash flow of Duolun Coal Chemical Company, the Company intends to provide the Entrusted Loan of not exceeding RMB6 billion to Duolun Coal Chemical Company. The Company is of the view that the Entrusted Loan will be primarily utilized by Duolun Coal Chemical Company to replace the due entrusted loan between the Company and the Energy and Chemical Company, due borrowings from external commercial banks and supplement its liquidity, and is thus beneficial for the smooth progress of the production and operation activities of Duolun Coal Chemical Company.

Considering the possible higher financial costs for Duolun Coal Chemical Company to obtain the current loan from other commercial banks when comparing with the financial costs incurred by the Company to obtain the funding of the Entrusted Loan, the Company considers that the overall capital costs to the Group will be relatively reduced after the accounts of Duolun Coal Chemical Company (being the subsidiary of the Company) are consolidated into the accounts of the Company. The Directors (including the independent non-executive Directors) are of the view that the terms of the Entrusted Loan Framework Agreement are fair and reasonable, have been entered into after arm’s length negotiation between all parties thereto and determined on normal commercial terms and is in the best interests of the Company and its Shareholders as a whole.

INFORMATION RELATING TO THE PARTIES

1. Information relating to the Company

The Company is principally engaged in the development and operation of power plants, the sale of electricity and thermal power, and the repair, testing and maintenance of power equipment as well as the provision of power-related technical services. The main service areas of the Company are in the PRC.

LETTER FROM THE BOARD

2. Information relating to Energy and Chemical Company

Energy and Chemical Company is a wholly-owned subsidiary of the Company which was duly incorporated on 12 February 2009 with a registered capital of RMB9,189.56 million. Its principal businesses include: energy and chemical technology development, technology transfer, technical consulting, technology services; investment management; engineering design; chemical and electrical equipment maintenance, installation, commissioning; import and export, import and export agent, technology import and export.

3. Information relating to Duolun Coal Chemical Company

Duolun Coal Chemical Company was duly incorporated on 19 August 2009 with a registered capital of RMB4,050 million. Duolun Coal Chemical Company is principally responsible for the construction and operation of the coal-based olefin project with an annual output of 460,000 tonnes. The equity structure of Duolun Coal Chemical Company is as follows: Energy and Chemical Company, a whollyowned subsidiary of the Company, holds 60% equity interests, and CDC holds 40% equity interests. From December 2012 onwards, part of the construction in progress were carried forward to fixed assets.

4. Information relating to Datang Finance

Datang Finance is a non-banking financial institution duly incorporated in the PRC on 10 May 2005. Its registered capital is RMB3 billion. Its principal business includes, among others, the provision of deposit services, loan services, entrusted loan services and entrusted investment services.

5. Information relating to CDC

CDC was established on 9 March 2003 with registered capital of approximately RMB18.109 billion. It is principally engaged in the development, investment, construction, operation and management of power energy, organization of power (thermal) production and sales; manufacturing, repair and maintenance of power equipment; power technology development and consultation; power engineering, contracting and consultation of environmental power engineering; development of new energy as well as development and production of power related coal resources.

LISTING RULES IMPLICATIONS

Entrusted Loan Framework Agreement

As one or more of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the Entrusted Loan under the Entrusted Loan Framework Agreement is more than 5% but less than 25%, the Entrusted Loan Framework Agreement constitutes a discloseable transaction of the Company and is subject to the reporting and announcement requirements under Chapter 14 of the Listing Rules.

LETTER FROM THE BOARD

As at the Latest Practicable Date, CDC together with its subsidiaries holds approximately 34.71% of the issued share capital of the Company. Duolun Coal Chemical Company is owned as to 60% and 40% by Energy and Chemical Company, a wholly-owned subsidiary of the Company, and CDC, respectively. Datang Finance is a subsidiary of CDC which is a controlling Shareholder. Both Duolun Coal Chemical Company and Datang Finance are therefore connected persons of the Company and the transaction under the Entrusted Loan Framework Agreement constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios for the principal amount of the Entrusted Loan under the Entrusted Loan Framework Agreement is more than 5%, the Entrusted Loan Framework Agreement and the Entrusted Loan Arrangement are subject to the requirements of reporting, announcement and approval by the Independent Shareholders of the Company under Chapter 14A of the Listing Rules.

Financial Services Agreement

As the deposit services under the Financial Services Agreement constitute continuing connected transactions of the Company and one or more of the applicable percentage ratios for the provision of deposit services under the Financial Services Agreement is more than 5%, the provision of deposit services under the Financial Services Agreement is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Company will also disclose the relevant details in its next published annual report in accordance with the relevant requirements as set out in Rule 14A.45 of the Listing Rules.

Further, as one of the applicable percentage ratios in relation to the provision of deposit services under the Financial Services Agreement is more than 25% but less than 75%, the transaction constitutes a major transaction of the Company and is subject to the reporting, announcement and the Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The loan services to be provided by Datang Finance to the Group will constitute financial assistance to be provided by a connected person for the benefit of the Group. As such loan services are on normal commercial terms which are similar to or even more favourable than those offered by other commercial banks for comparable services in the PRC, and no security over the assets of the Group will be granted in respect of the loan services, the loan services are exempt under Rule 14A.65(4) of the Listing Rules from all reporting, announcement and Independent Shareholders’ approval requirements.

The Company expects that each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the total fees payable by the Company to Datang Finance in respect of the provision of other financial services under the Financial Services Agreement will fall within the de minimis threshold as stipulated under Rule 14A.33(3) of the Listing Rules. The Company will comply with the reporting, announcement and Independent Shareholders’ approval requirements of the Listing Rules if the transaction amount of other financial services to be provided by Datang Finance to the Group under the Financial Services Agreement exceeds the relevant threshold.

LETTER FROM THE BOARD

BOARD’S APPROVAL

None of the Directors has any material interest in the Agreements. Those connected Directors, including Chen Jinhang, Hu Shengmu and Fang Qinghai, who are the principal management staff of CDC, have abstained from voting at the Board’s meeting for approval of the relevant transactions in accordance with the requirements of the listing rules of the Shanghai Stock Exchange.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular.

EGM

The Company will convene the EGM to, among other things, consider and approve the Entrusted Loan Framework Agreement and the deposit services under the Financial Services Agreement.

Any Shareholder with a material interest in the transactions and its associates shall abstain from voting at the relevant resolutions to approve the deposit services and its annual caps under the Financial Services Agreement and the Entrusted Loan Framework Agreement at the EGM. Therefore, CDC and its associates, which hold approximately 34.71% of the issued share capital of the Company as at the Latest Practicable Date, shall abstain from voting at the EGM in approving the deposit services and its annual caps under the Financial Services Agreement and the Entrusted Loan Framework Agreement.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee as set out on pages 16 to 17 of this circular which contains its recommendation to the Independent Shareholders on the terms of the Agreements. Your attention is also drawn to the letter of advice received from Mizuho Securities, the independent financial adviser to the Independent Board Committee and the Independent Shareholders as set out on pages 18 to 27 of this circular which contains, among others, its advice to the Independent Board Committee and the Independent Shareholders in relation to the terms of the Agreements, the casting of votes for or against the resolutions approving the deposit services under the Financial Services Agreement and the Entrusted Loan Framework Agreement by poll at the EGM as well as the principal factors and reasons considered by it in concluding its advice.

The Directors consider that the terms of the Agreements are fair and reasonable and in the interest of the Shareholders and the Company as a whole and they recommend the Shareholders to vote in favour of the relevant resolutions at the EGM.

Yours faithfully,

By Order of the Board of

Datang International Power Generation Co., Ltd.

Zhou Gang

Secretary to the Board

LETTER FROM INDEPENDENT BOARD COMMITTEE

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(a sino-foreign joint stock limited company incorporated in the People’s Republic of China) (Stock Code: 00991)

Office address No.9 Guangningbo Street Xicheng District Beijing, 100033 The PRC 5 November 2013

To the Independent Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION AND

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS AND CONNECTED TRANSACTION

We refer to the circular issued by the Company to the Shareholders dated 5 November 2013 (the “Circular”) of which this letter forms part. Terms defined in the Circular shall have the same meanings in this letter unless the context otherwise requires.

Under the Listing Rules, the deposit services under the Financial Services Agreement constitute continuing connected transactions and the Entrusted Loan Framework Agreement constitutes connected transaction of the Company, and are subject to the approval of the Independent Shareholders at the EGM.

We have been appointed as the Independent Board Committee to consider the terms of the Agreements and to advise the Independent Shareholders in connection with the Agreements as to whether, in our opinion, their terms are fair and reasonable and whether the Agreements are in the interests of the Company and the Shareholders as a whole. Mizuho Securities has been appointed as the independent financial adviser to advise us in this respect.

We wish to draw your attention to the letter from the Board and the letter from Mizuho Securities as set out in the Circular. Having considered the principal factors and reasons considered by, and the advice of, Mizuho Securities as set out in its letter of advice, we consider that the Agreements are on normal commercial terms, and that the Agreements are in the best interests of the Company and the Shareholders as a whole.

LETTER FROM INDEPENDENT BOARD COMMITTEE

We also consider that the terms of the Agreements (including the annual caps for deposit services contemplated under the Financial Services Agreement) are fair and reasonable. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions to approve the Agreements (including the annual caps for deposit services contemplated under the Financial Services Agreement) at the EGM.

Yours faithfully,

For and on behalf of the Independent Board Committee Dong Heyi, Ye Yansheng, Li Hengyuan, Zhao Jie, Jiang Guohua Independent non-executive Directors Datang International Power Generation Co., Ltd.

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

The following is the text of the letter of advice from Mizuho Securities Asia Limited, the independent financial adviser to the Independent Board Committee and Independent Shareholders, in respect of the deposit services under the Financial Services Agreement and the Entrusted Loan Arrangement which has been prepared for the purpose of inclusion in this circular.

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12th Floor, Chater House, 8 Connaught Road Central, Hong Kong Tel: 2685-2000 Fax: 2685-2410

5 November 2013

To the Independent Board Committee

and the Independent Shareholders

Datang International Power Generation Co., Ltd.

Dear Sirs,

DEPOSIT SERVICES UNDER THE FINANCIAL SERVICES AGREEMENT CONSTITUTING CONTINUING CONNECTED TRANSACTIONS AND

THE ENTRUSTED LOAN ARRANGEMENT CONSTITUTING CONNECTED TRANSACTION

INTRODUCTION

We refer to our engagement as the independent financial adviser to the Independent Board Committee and Independent Shareholders in respect of the deposit services under the Financial Services Agreement, and the Entrusted Loan Arrangement. Further details of the Financial Services Agreement, and the Entrusted Loan Arrangement are set out in the letter from the Board (the “ Letter from the Board ”) in the circular of the Company to its Shareholders dated 5 November 2013 (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 otherwise requires.

On 15 October 2013, the Company entered into the Financial Services Agreement with Datang Finance, pursuant to which Datang Finance agreed to provide the Group with deposit services, loan services and other financial services subject to the terms and conditions provided therein.

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

As the provision of deposit services under the Financial Services Agreement constitutes continuing connected transactions of the Company and one or more of the applicable percentage ratios for the provision of deposit services under the Financial Services Agreement is more than 5%, the provision of deposit services under the Financial Services Agreement is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The Company further announces that on 15 October 2013, the Company and Energy and Chemical Company entered into the Entrusted Loan Framework Agreement with Datang Finance and Duolun Coal Chemical Company in relation to the provision of the Entrusted Loan by the Company or Energy and Chemical Company to Duolun Coal Chemical Company in the form of revolving loan facility through the Entrusted Loan Arrangement, in which Datang Finance acts as the lending agent.

Our scope of work under this engagement is to assess whether the terms of the deposit services under Financial Services Agreement, and the Entrusted Loan Arrangement are fair and reasonable so far as the Independent Shareholders are concerned, and, from that perspective, whether the provision of deposit services under the Financial Services Agreement and whether the Entrusted Loan Arrangement are in the interests of the Company and the Shareholders as a whole. It is not within our scope of work to opine on any other aspects of the Financial Services Agreement, and of the Entrusted Loan Arrangement. In addition, it is not within our terms of reference to comment on the commercial merits of the provision of deposit services and other provisions under Financial Services Agreement, and the Entrusted Loan Arrangement which is the responsibility of the Directors.

BASIS OF OUR OPINION

In arriving at our opinion, we have relied on the information, opinions and facts supplied, and representations made to us, by the Directors, advisers and representatives of the Company (including those contained or referred to in the Circular). We have also assumed that the information and representations contained or referred to in the Circular were true and accurate in all respects at the time they were made and continue to be so at the date of dispatch of the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and senior management of the Company. We have also relied on certain information available to the public and have assumed such information to be accurate and reliable, and we have not independently verified the accuracy of such information. We have been advised by the Directors and believe that no material facts have been omitted from the Circular.

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our opinion. We have not, however, conducted an independent verification of the information nor have we conducted any form of in-depth investigation into the businesses and affairs or other prospects of the Company, Datang Finance, Duolun Coal Chemical Company, Energy and Chemical Company, or any of their respective subsidiaries or associates.

A. DEPOSIT SERVICE UNDER THE FINANCIAL SERVICES AGREEMENT

PRINCIPAL FACTORS AND REASONS CONSIDERED

In forming our opinion, we have considered the following principal factors and reasons:

Background

Datang Finance was established in the PRC in 2005 as a non-banking financial institution. Its registered capital is RMB3 billion. The principal business of Datang Finance includes the provision of, among others, deposit services, loan services, entrusted loan services and entrusted investment services. It is a subsidiary of CDC which is a controlling Shareholder. The Company holds 20% equity interest in Datang Finance.

We note that the Financial Services Agreement is not a new arrangement and represents a renewal of the previous financial services agreements entered into between the Company and Datang Finance for a term of another three years. Having considered the background and benefits of the provision of deposit services under the Financial Services Agreement and other factors described in this letter, we are of the view that the renewal of the provision of deposit services is justified.

Major terms in the Financial Services Agreement relating to deposit services

The daily maximum balance of the Group’s deposits with Datang Finance for each of the three years ending 31 December 2014, 2015 and 2016 is RMB12 billion;
The savings interest rate of the deposit services are settled according to the interest rates of the PBOC (as at the Latest Practicable Date, the prevailing negotiated deposit interest rate is 1.15% per annum, while the prevailing savings interest rate is 0.35% per annum), with a daily maximum balance if deposits of not more than RMB12 billion;

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

Datang Finance has undertaken to adhere to the principles below in providing the aforementioned financial services to the Group:
(i) the interest rates for the Group’s deposits in and for loans to be granted from Datang Finance shall be within the permitted bands around the interest rates for deposits and loans as announced by the PBOC, and with reference to the benchmark interest rates as announced by the PBOC, Datang Finance shall accept deposits at interests rates which are not lower than those offered by other domestic financial institutions, and offer loans and other services at lending interest rates which are not higher than those charged by other domestic financial institutions for the same type of services.
(ii) Datang Finance should ensure the stable operation of its funds management system to safeguard the funds, and to monitor the credit risk so as to satisfy the payment needs of the Group.
The Group, with information of market rates and in view of its own interests, has the unilateral right to determine whether or not to maintain the business relationship with Datang Finance, and may obtain relevant financial services from other financial institutions in addition to those services provided under the Financial Services Agreement in accordance with the actual situations.

We have reviewed the Financial Services Agreement and also the previous financial services agreement entered into by the parties. We note that the key terms in the Financial Services Agreement relating to deposit services are similar to the corresponding terms in the previous financial services agreements entered into by the parties and are considered to be reasonable commercial terms, in view of the cashflow condition of the Group and the benefits of the provision of deposit services from Datang Finance.

Capital risk control measures by Datang Finance

In order to control the capital risks relating to the deposits by the Group to Datang Finance, Datang Finance shall implement the following capital risk control measures:

Datang Finance will ensure the safe and stable operation of the fund management information system, which has undergone the security test in respect of connection to the interface of online commercial banking and has reached the national security standards for commercial banks. The system is equipped with the mode awarded with CA safety certificate to ensure the security of the funds of the Group;
Datang Finance will ensure that it is in strict compliance with the risk monitoring indicators for financial institutions issued by the CBRC and that its major regulatory indicators such as gearing ratio, interbank borrowing ratio and liquidity ratio will also comply with the requirements of the CBRC;
Any balance in the Group’s deposits (after deducting the amount used for making entrusted loans and the loans made to the Group by Datang Finance) will be redeposited into one or more commercial banks in the PRC as interbank deposits;

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

A report on the status of the Group’s deposits with Datang Finance will be delivered by Datang Finance to the chief financial officer of the Company before 10 a.m. of each business day to enable the chief financial officer of the Company to monitor and ensure that the daily maximum deposit balance of the Group with Datang Finance does not exceed the cap of RMB12 billion;
A copy of every regulatory report submitted by Datang Finance to the CBRC will be provided to and reviewed by the senior management of the Company, including the relevant executive Director(s);
The financial statements of Datang Finance for each month will be provided to and reviewed by the senior management of the Company, including the relevant executive director(s), on the fifth working day of the following month.

We understand from the management of the Group that Datang Finance is in compliance with the requirements of CBRC for financial institutions, including the risk monitoring indicators. Furthermore, based on the advice of the Company, a number of major banks in the PRC treated Datang Finance similar to its controlling shareholder, CDC which has a credit rating of AAA in respect of business dealings. This enables Datang Finance to receive certain preferential business policies from those banks. The Directors believe that the credit risk control measures under the Financial Services Agreement are adequate to cover the risks involved in depositing funds of the Group with Datang Finance. Furthermore, CDC undertakes to the CBRC that in the event that Datang Finance is in urgent difficulty in making payment, CDC will raise Datang Finance’s capital accordingly based on actual need.

We note that the above capital risk control measures have been operative since the previous financial services agreement was in place. The Company advised that the capital risk control measures have operated effectively and the Company has not encountered any substantial problems arising from the products and services of Datang Finance. The Company further confirmed that the Company has not encountered any losses regarding the deposit services since the previous financial services agreement was entered into by the Company and Datang Finance and the Company is generally satisfied with the capital risk control measures in place. In view of this, we consider that such measures are appropriate from the risk management perspective of the Company.

Benefits and reasons of entering into the Financial Services Agreement

By entering into the Financial Services Agreement with Datang Finance, the Company is able to secure loans and other financing services at interest rates lower than those in the market, which assists in improving the overall standard of fund operation of the Company and enhancing the Group’s bargaining power of external financing. The entering into of the Financial Services Agreement can also enable the Company to secure higher interest rates for deposits than those in the market and enjoy payment and settlement services at zero rate, thereby increasing interest income on deposits and saving settlement costs. Meanwhile, pursuant to the Financial Services Agreement, the Group can strengthen its funds control and accounts management through the funds management platform of Datang Finance, thereby further improving the efficiency of fund applications, and mitigating and avoiding financial risks.

We consider that the benefits and reasons of entering into the Financial Services Agreement are sound, in view of the substantial operations of the Group and its related companies, and from cashflow and teasury management perspectives.

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

PROPOSED CAP FOR DEPOSIT SERVICES

Historical amounts

Proposed caps

As the assets of the Group continue to grow, the amount of deposits will also increase.
In order to strengthen the centralised management of funds and monitor the use of funds, the Group will roll out a “funding pool” platform through Datang Finance. Such platform amasses the funds of the Group and enables loans to be granted within the Group by capitalising on the leeway arising from the difference in the time for receipt and payment of funds of the members of the Group, with an aim to supporting the development of the Group.
In respect of the Group’s funds settlement business at Datang Finance, settlement expenses will be undertaken by Datang Finance.
During the term of the agreement, the issuance of short-term debentures, super short-term debentures and non-public debt financing instruments will also enhance the Company’s daily maximum deposit balance with Datang Finance.

We have discussed with the management of the Company about the financing plans of the Group with banks and from debt capital markets. We note that the Group recorded operating revenue of over RMB77 billion for the year ended 31 December 2012 and its operating revenue has been in an increasing trend during the past few years. We also note that the Group generated net operating cashflow of over RMB22 billion for the nine months ended 30 September 2013. We understand that the cash balance for short-term and longer term deposit by the Group is expected to increase substantially, considering the business and financing plans of the Group. In this regard, we note that the Company announced on 29 October 2013 that the Directors approved resolutions to issue super short-term debentures in the amount of RMB20 billion, and non-public debt financing instruments in the amount of RMB10 billion. We understand from the Company that such and other forms of financing exercises shall be conducted by the Group from time to time, in order to raise funds for the business needs of the Group. Having considered the business and financing plans of the Group, we are of the view that the rationale for increasing the proposed caps for each of the three years ended 31 December 2014, 2015 and 2016 is reasonable, and the proposed daily maximum deposit balance of RMB12 billion for the Group with Datang Finance is determined under reasonable basis. We note the mechanism for determining deposit interest rates pursuant to the term of the Financial Services Agreement, and also note that the Group is not obliged to deposit

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

up to the maximum balance with Datang Finance and can at its own discretion choose other financial institutions to place any deposits. The Company has confirmed to us that due to risk management and other considerations, the Group does not plan to place all cash available for deposit with Datang Finance, but shall only be depositing a portion of its available funds at any time with Datang Finance.

OPINION

Having considered the principal factors and reasons described above, in particular, the background and benefits of the deposit services under the Financial Services Agreement, the terms and proposed caps which are reasonably determined, and the capital risk control measures in place, we are of the opinion that the terms of the deposit services under the Financial Services Agreement are on normal commercial terms, and are fair and reasonable as far as the interest of the Independent Shareholders are concerned, and, from this perspective, the provision of deposit services under the Financial Services Agreement is in the interests of the Company and its shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve provision of the deposit services under the Financial Services Agreement, including the annual caps for deposit services.

B. ENTRUSTED LOAN ARRANGEMENT

PRINCIPAL FACTORS AND REASONS CONSIDERED

In forming our opinion, we have considered the following principal factors and reasons:

Background

Information relating to the Group

The Group is principally engaged in the development and operation of power plants, the sale of electricity and thermal power, and the repair, testing and maintenance of power equipment as well as the provision of power-related technical services. The main service areas of the Group are in the PRC.

Information relating to Energy and Chemical Company

Energy and Chemical Company is a wholly-owned subsidiary of the Company which was duly incorporated on 12 February 2009 with a registered capital of RMB9,189.56 million. Its principal businesses include energy and chemical technology development, technology transfer, technical consulting, technology services; investment management, engineering design, chemical and electrical equipment maintenance, installation, commissioning, import and export, import and export agent, and technology import and export.

Information relating to Duolun Coal Chemical Company

Duolun Coal Chemical Company was duly incorporated on 19 August 2009 with a registered capital of RMB4,050 million. Duolun Coal Chemical Company is principally responsible for the construction and operation of the coal-based olefin project with estimated annual output of 460,000 tonnes. The equity structure of Duolun Coal Chemical Company is as follows: Energy and Chemical Company, a whollyowned subsidiary of the Company, holds 60% equity interests, and CDC holds 40% equity interests. From December 2012 onwards, part of the construction in progress was carried forward to fixed assets.

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

Information relating to CDC

CDC was established on 9 March 2003 with a registered capital of approximately RMB18.109 billion. It is principally engaged in the development, investment, construction, operation and management of power energy, organization of power (thermal) production and sales, manufacturing, repair and maintenance of power equipment, power technology development and consultation, power engineering, contracting and consultation of environmental power engineering, development of new energy as well as development and production of power related coal resources.

Reasons for and benefits of entering into the Entrusted Loan Framework Agreement

The Company advised that, in view of the cooperation history between Datang Finance Company and the Company and given that the provision of entrusted loan services by Datang Finance Company is covered under the Financial Services Agreement, Datang Finance Company has better understanding of the operations of the Company which will allow more expedient and efficient services than those rendered by other PRC commercial banks. Further, the handling fees charged by Datang Finance Company will not be higher than those charged by other PRC commercial banks. In view of the above considerations, the Company appointed Datang Finance Company, rather than other PRC commercial banks, as the lending agent.

Further, considering the capital risks control measures under the Financial Services Agreement and the terms under the Entrusted Loan Framework Agreement are normal commercial terms which confer no additional obligations nor risks on the Company when comparing with other entrusted loan agreements in the market, the Company considers that no additional risks will be involved by appointing Datang Finance Company as the lending agent under the Entrusted Loan Framework Agreement.

In order to ensure the day-to-day cash flow of Duolun Coal Chemical Company, the Company intends to provide the Entrusted Loan of not exceeding RMB6 billion to Duolun Coal Chemical Company. The Company is of the view that the Entrusted Loan will primarily be utilized by Duolun Coal Chemical Company to replace the due entrusted loan between the Company and the Energy and Chemical Company, due borrowings from external commercial banks and supplement its liquidity, and is thus beneficial for the smooth progress of the production and operation activities of Duolun Coal Chemical Company.

The Company further advised that considering the possible higher financial costs for Duolun Coal Chemical Company to obtain the current loan from other commercial banks when comparing with the financial costs incurred by the Company to obtain the funding of the Entrusted Loan, the Company considers that the overall capital costs to the Group will be relatively reduced after the accounts of Duolun Coal Chemical Company (being a subsidiary of the Company) are consolidated into the accounts of the Company.

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

We have discussed with the management of the Company about the financing needs and plans of Duolun Coal Chemical Company. We understand that the amount of RMB6 billion regarding the Entrusted Trust Loan Arrangement is determined after considering the financing needs and plans of Duolun Coal Chemical Company and was determined with reasonable basis. We concur with the Directors that the Entrusted Loan Arrangement shall enable smooth operation, and address the financing needs, of Duolun Coal Chemcial Company. Having considered the background and status of the project undertaken by Duolun Coal Chemical Company and the fact that it is a subsidiary of the Company, we are of the view that it is in the interest of the Company to continue to provide entrusted revolving facilities to Duolun Coal Chemical Company in the form of the Entrusted Loan Arrangement. We note the reasons for having Datang Finance as the lending agent and agree that it is reasonable to have Datang Finance as the cooperation partner in respect of the Entrusted Loan Arrangement. Datang Finance has also acted as lending agent in previous entrusted loan transactions with Duolun Coal Chemical Company, and based on the management of the Company, the operations regarding the previous entrusted loans were smooth and the services offered by Datang Finance Company have been satisfactory. On the basis of the above, we concur with the Directors about the benefits and needs of the Entrusted Loan Arrangement for financing the funding needs of Duolun Coal Chemical Company.

Major Terms of the Entrusted Loan Framework Agreement

Pursuant to the Entrusted Loan Framework Agreement, Datang Finance Company is entrusted by the Company and Energy and Chemical Company to act as a lending agent to provide the Entrusted Loan to Duolun Coal Chemical Company in the form of revolving loan facility, monitor the use as well as the repayment of the Entrusted Loan by Duolun Coal Chemical Company. Separate Entrusted Loan Contracts will be entered into between the parties when each tranche of the Entrusted Loan was released, the terms and conditions of such Entrusted Loan Contracts shall be consistent with the principles and terms of the Entrusted Loan Framework Agreement.

Principal amount of the Entrusted Loan

Not exceeding RMB6 billion and in the form of revolving entrusted loan facility.

Term

The term for the Entrusted Loan Framework Agreement is 36 months commencing from 15 October 2013 and ending on 14 October 2016.

Interest rate

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

Repayment schedule of the principal of the Entrusted Loan

One-off repayment of the principal for each tranche of the Entrusted Loan by Duolun Coal Chemical Company upon maturity of the relevant Entrusted Loan Contracts.

Payment schedule of interests of the Entrusted Loan

Interests shall be settled by Duolun Coal Chemical Company on a quarterly basis. The settlement date falls on the twentieth (20th) day of the last month of each quarter.

Handling fees

The handling fees shall be charged in tranches on the date of grant of each tranche of the Entrusted Loan. The rate of the handling fees shall be 0.025% of each tranche of the Entrusted Loan.

Discussion of key commercial terms

We have reviewed the Entrusted Loan Framework Agreement, and some of the previous agreements regarding entrusted loans to Duolun Coal Chemical Company. We understand from the Company that the amount of not more than RMB6 billion for the Entrusted Loan Arrangement is based on the existing entrusted loan amounts and the funding needs of Duolun Coal Chemical Company. We note that the principles underlying the key terms for the Entrusted Loan Arrangement are same as that for the last entrusted loan provided by the Company to Duolun Coal Chemical Company, and as such, are considered to be under normal commercial terms. Based on our discussions with the management of the Company regarding the cost of capital of the Company, we consider that the principle for determining the interest rate for the entrusted loans pursuant to the Entrusted Loan Arrangement is not prejudicial to the interest of the Company. The handling fees of 0.025% charged by Datang Finance Company is same as that for previous entrusted loans to Duolun Coal Chemical Company and was determined based on normal commercial terms.

OPINION

Having considered the principal factors and reasons described above, in particular, the funding needs of Duolun Coal Chemical Company, the fact that it is a subsidiary of the Company and the terms of the Entrusted Loan Arrangement as assessed above, we are of the opinion that the terms of the Entrusted Loan Framework Agreement are on normal commercial terms and are fair and reasonable as far as the interests of the Independent Shareholders are concerned, and, from this perspective, the Entrusted Loan Framework Agreement is in the interests of the Company and its Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to approve the Entrusted Loan Framework Agreement at the EGM.

Yours faithfully, For and on behalf of

MIZUHO SECURITIES ASIA LIMITED

Kelvin S. K. Lau

Co-Head

Equity Capital Markets & Corporate Finance

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group (i) for the year ended 31 December 2010 has been disclosed on pages 61 to 185 of the annual report of the Company for the year ended 31 December 2010 published on 29 April 2011; (ii) for the year ended 31 December 2011 has been disclosed on pages 63 to 137 of the annual report of the Company for the year ended 31 December 2011 published on 30 April 2012; (iii) for the year ended 31 December 2012 has been disclosed on pages 75 to 165 of the annual report of the Company for the year ended 31 December 2012 published on 29 April 2013; All the above annual reports of the Company have been published on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (www.dtpower.com).

2. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

In 2013, the Group further optimized its coal-fired power; aggressively expand its hydropower; continuously develop wind power; strategically develop nuclear power; appropriately develop solar energy; select suitable coal operations; steadily develop coal chemical business; speedily develop the high-aluminium pulverized fuel ash integrated utilization projects; and secure a complementary development of railway, port and shipping operations. The Company will seize new opportunities and build new competitive edges to achieve new breakthroughs; continue to emphasise on economic efficiency, it also continued to proactively carry out measures to tackle market changes in order to ensure that the annual business targets will be achieved as planned.

I. Further reinforce the management of production safety – complete the establishment of intrinsically safe enterprises and the achievement of standardization for production safety mechanism as well as strengthen the long-term production safety mechanism that covers every business segment to ensure the “Prevention of Nine Types” of casualties and equipment failures for production safety to boost performance enhancement with safe production.
II. Strive to enhance profitability – strengthen the analysis of profitability and push forward the coordination of the prices of electricity, heat, gas and other products for the purpose of increasing efficiency; seize the favourable timing for power generation and strive to establish the best position in regional power markets to ensure benefits of the principal operations; and step up the management of fixed costs and further implement stringent measures for the control of liabilities to enhance the Group’s profitability.
III. Seize strategic opportunities – step up the exploration of business resources; continue improving the rational industrial deployment; step up efforts to proceed with the preliminary work of key coal-fired power projects; push forward the preliminary work on gas turbine, photovoltaic, chemical and metallurgical projects in line with the value-focused mindset and efficiency- oriented concepts and strategies; focus on strengthening the power generation businesses and further optimize the non-power businesses related to the major power business.

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

IV. Actively push forward capital operation – actively expand financing channels by consolidating the major bank financing channels, stepping up direct financing and exploring a variety of financing methods to ensure the healthy functioning of the capital chain; and effectively enhance the corporate profitability and improve the financial condition, thereby increasing bargaining power for financing and reducing financing costs with a view to maximizing investment returns.
V. Continuously intensify energy conservation and emissions reduction − further enhance the benchmark management of energy consumption; optimise the energy consumption indices; continuously improve the operation rate and overall efficiency of environmental facilities; speed up the progress of desulfurization transformation of coal-fired generating units; and strengthen the management of the operation of environmental facilities for operational generation units, with a view to improving performance in the discharge of pollutants and controlling energy-saving and environmental costs; and
VI. Comprehensively strengthen risk prevention and control – the Company will comprehensively implement the State’s “Basic Standards for Enterprise Internal Control” as well as their guidelines, so as to fully implement comprehensive planning management, comprehensive budget management, comprehensive risk management and comprehensive accountability management with a view to boosting management upgrade.

The discussions as set out below should be perused with reference made to the audited consolidated financial statements and notes to such statements, as well as other sections as stated in the 2012 annual report of the Group, and the unaudited consolidated financial statements and notes to such statements, as well as other sections as stated in the 2013 interim report of the Group.

3. INDEBTEDNESS

As at the close of business on 30 September 2013, the Group had unaudited outstanding interest bearing debts of approximately RMB198,091,566,867.39, comprising borrowings from financial institutions of RMB165,009,919,478.41, and bonds outstanding of RMB22,600,000,000.00, and financial leasing outstanding of RMB10,481,647,388.98.

Save as aforesaid and apart from intra-group liabilities, the Group did not have any mortgages, charges, debentures, loan capital, bank loans and overdrafts, debt securities or other similar indebtedness, finance leases or hire purchase commitments, liabilities under acceptances or acceptances credits, or any guarantees, or any other contingent liabilities outstanding at the close of business on 30 September 2013.

As at the Latest Practicable Date, the Directors are not aware of any material adverse changes in the Group’s indebtedness position and contingent liabilities since the close of business on 30 September 2013.

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. WORKING CAPITAL

The Directors are of the opinion that, after taking into account the present available banking facilities and the internally generated resources of the Group, the Group has sufficient working capital for its requirements with the next 12 months from the date of this circular.

5. EFFECT ON EARNINGS, ASSETS AND LIABILITIES OF THE COMPANY

The Company entered into the Financial Services Agreement with Datang Finance to strengthen management and control of funds and account management through Datang Finance’s funds management platform, to raise loans at lower interest rates and enjoy higher deposit interest rates and payment and settlement services at zero fee rate, which are conducive to further improving the efficiency in the use of funds and improving the overall level of the operation of the Company’s funds, while enhancing the Group’s external financing bargaining power. Nevertheless, the Group does not expect to develop reliance on Datang Finance from the enjoying such services, and the entering into of the Financial Services Agreement will not interfere the Group while considering entering into similar agreements with other financial institutions where it deems necessary.

As comparing with the costs for Duolun Coal Chemical Company to obtain separate financing from financial institutions, the Company, as a financing platform, has costs of capital lower than the external financing costs of Duolun Coal Chemical Company, which can effectively save the financial costs, improve the Company’s profit margins. Meanwhile, internal entrusted loans will effectively utilize part of idle funds so that the efficiency in the use of funds can be improved and reduce the company’s overall asset-liability ratio to a certain degree.

GENERAL INFORMATION

APPENDIX II

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 OF DIRECTORS, SUPERVISORS AND CHIEF EXECUTIVE OF THE COMPANY

(i) As at the Latest Practicable Date, save as and except Mr. Fang Qinghai, being a Director, who held 24,000 A shares of the Company, none of the Directors, supervisors and chief executive of the Company have any interests and short positions in the shares, underlying shares and/or debentures (as the case may be) of the Company or any of its associated corporations (within the meaning of the SFO) which was required 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 any such Director, chief executive or supervisor is taken or deemed to have under such provisions of the SFO) or which was required to be entered into the register required to be kept by the Company under section 352 of the SFO or which was otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers in the Listing Rules.
(ii) As at the Latest Practicable Date, none of the Directors, proposed Directors, supervisors or proposed supervisors of the Company has any direct or indirect interest in any assets which have since 31 December 2012 (being the date to which the latest published audited financial statements of the Company were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

3. SERVICE AGREEMENTS

As at the Latest Practicable Date, none of the Directors, proposed directors, supervisors or proposed supervisors of the Company had any existing or proposed service contract with any member of the Group (excluding contracts expiring or determinable by the Company within one year without payment of compensation (other than statutory compensation)).

4. INTEREST IN CONTRACT

As at the Latest Practicable Date, none of the Directors or supervisors of the Company was materially interested in any contract or arrangement entered into by any member of the Group, and which was significant in relation to the business of the Group.

GENERAL INFORMATION

APPENDIX II

5. MATERIAL CHANGES

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2012, being the date to which the latest published audited financial statements of the Group were made up.

6. COMPETING INTEREST

As at the Latest Practicable Date, none of the Directors of the Company and its subsidiaries, or their respective associates has interests in the businesses which compete or are likely to compete, either directly or indirectly, with the businesses of the Company and its subsidiaries.

7. EXPERT

(a) The following sets out the qualifications of the expert which has given its opinion or advice as contained in this circular:

Name

Qualifications

Mizuho Securities

A licensed corporation to engage in types 1 (dealing in securities), 2 (dealing in futures contracts) 4 (advising on securities), 5 (advising on futures contracts), 6 (advising on corporate finance) and 9 (asset management) regulated activities under the SFO

(b) Mizuho Securities did not have any shareholding, direct or indirect, in any members of the Group or any rights (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any members of the Group as at the Latest Practicable Date.
(c) Mizuho Securities does not have any interest, direct or indirect, in any assets which have been acquired or disposed of by or leased to any members of the Group, or which are proposed to be acquired or disposed of by or leased to any members of the Group since 31 December 2012, the date to which the latest published audited financial statements of the Company were made up.
(d) Mizuho Securities 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 they are included.

8. LITIGATION

No member of the Company and its subsidiaries is at present engaged in any litigation or arbitration of material importance to the Company and its subsidiaries and no litigation or claim of material importance to the Company and its subsidiaries is known to the Directors or the Company to be pending or threatened by or against any member of the Company and its subsidiaries.

GENERAL INFORMATION

APPENDIX II

9. MISCELLANEOUS

(a) The registered office and the office address of the Company is No. 9 Guangningbo Street, Xicheng District, Beijing, the PRC.
(b) The place of business of the Company in Hong Kong is at c/o Eversheds, 21/F, Gloucester Tower, The Landmark, 15 Queen’s Road Central, Hong Kong.
(c) The Hong Kong share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited at 46/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(d) The secretary to the Board of the Company is Mr. Zhou Gang. Mr. Zhou graduated from East China Institute of Water Conservancy (currently known as Hehai University), and is a senior engineer.

10. MATERIAL CONTRACTS

In the two years immediately preceding the date of this circular and up to the Latest Practicable Date, the following contracts, not being contracts entered into the ordinary course of business, were entered into by the Company or any of its subsidiaries which are or may be material:

(1) On 12 October 2011, the Company entered into the Capital Contribution Agreement for Beijing Datang Fuel Company Limited (“Datang Fuel Company”) with CDC Power Fuel Company Limited (“Group Fuel Company”). Pursuant to the agreement, Group Fuel Company, a wholly-owned subsidiary of CDC, agreed to make capital contribution in the sum of approximately RMB557 million to Datang Fuel Company, a wholly-owned subsidiary of the Company, to obtain 49% of the equity interests in Datang Fuel Company. The Company did not participate in this capital contribution. Upon the completion of this Capital Contribution Agreement, the equity interests held by each shareholder of Datang Fuel Company are as follows: the Company holds 51% and Group Fuel Company holds 49%.
(2) On 10 May 2012, the Company entered into the Strategic Cooperation Framework Agreement with Yunnan Energy Investment (Group) Co., Ltd. (“Yunnan Energy Investment Group”). Both parties agreed to carry out various forms of cooperation, by giving full play to their respective advantages in the development of energy resources in Yunnan Province to strengthen their cooperation based on the principles of win-win cooperation and harmonious development, in respect of the development of the large-scale hydropower project, the development of the large-scale coal and electricity integration project, the development of renewable energy project, the development of the distributed energy project and the integration of small and medium-sized hydropower basins, thereby building an all-round strategic partnership.

APPENDIX II

GENERAL INFORMATION

(3) On 5 June 2012, the Company entered into the Cooperation Framework Agreement with the management committee of Ningxia Ningdong Energy-Chemical Base (the “Ningdong Management Committee”). Both parties agreed that the Company shall be responsible for the Integrated Gasification Combined Cycle (IGCC) Project of Ningdong Energy-Chemical Base (“Ningdong Base”) whereas the Ningdong Management Committee shall give full support to the project and give priority to the allocation of resources for it, which are in line with the principles of complementary advantages and joint development.
(4) On 5 July 2012, the Company entered into the entrusted loan framework agreement with Energy and Chemical Company, Datang Finance and Duolun Coal Chemical Company. Pursuant to the agreement, the Company or Energy and Chemical Company, with Datang Finance Company acting as the lending agent, provided Duolun Coal Chemical Company with an entrusted loan of RMB2 billion.
(5) On 31 October 2012, the Company entered into the Entrusted Loan Agreement with Datang Finance and Duolun Coal Chemical Company. Pursuant to the agreement, the Company, with Datang Finance acting as the lending agent, provided Duolun Coal Chemical Company with an entrusted loan of RMB3 billion.
(6) On 29 November 2012, the Company entered into the Capital Contribution Agreement with China Datang Corporation Capital Holding Company Limited (“CDC Capital Holding Company”), China Datang Overseas (Hong Kong) Company Limited (“Datang Overseas (Hong Kong) Company”) and Datang Renewable Power (Hong Kong) Company Limited (“Datang Renewable Power (Hong Kong) Company”), to set up Datang Finance Leasing Co., Limited, for the purpose of conducing finance lease business. Pursuant to the agreement, the initial registered capital of Datang Finance Leasing Co., Limited is RMB1 billion, which will be settled by the Company, CDC Capital Holding Company, Datang Overseas (Hong Kong) Company and Datang Renewable Power (Hong Kong) Company in the proportion of 20% (RMB200 million), 40% (RMB400 million), 20% (RMB200 million) and 20% (RMB200 million), respectively.
(7) On 5 February 2013, Yuneng (Group), Co., Ltd., a wholly-owned subsidiary of the Company, Chongqing Dingtai Power (Group) Company Limited and Chongqing Tuoyuan Industry Co., Ltd. entered into an equity transfer agreement with China National Water Resources & Electric Power Materials & Equipment Co., Ltd. (“China Water Resources”). Under the agreement, China Water Resources agreed to acquire from the transferor 100% equity interest of Chongqing Yuneng Industry (Group) Co., Ltd. at a price of approximately RMB538.5893 million.
(8) On 6 February 2013, the Company entered into a Fuel Purchase Framework Agreement with Beijing Datang Fuel Company, pursuant to which the Company and some of its subsidiaries agreed to purchase coal from Beijing Datang Fuel Company with an aggregate annual transaction cap of approximately RMB35.505 billion in total for one year commencing from 1 January 2013 to 31 December 2013.

GENERAL INFORMATION

APPENDIX II

(9) On 6 February 2013, the Company’s six subsidiaries entered into eight Inner Mongolia Fuel Purchase Framework Agreements with Inner Mongolia Electric Power Fuel Co., Ltd., (“Inner Mongolia Fuel Company”) respectively, pursuant to which the Company’s six subsidiaries agreed to purchase coal from Inner Mongolia Fuel Company, with an annual transaction cap of approximately RMB5.425 billion for one year commencing from 1 January 2013 to 31 December 2013.
(10) On 6 February 2013, Datang International (Hong Kong) Limited (“Hong Kong Company”) entered into a Coal Purchase and Sale Framework Agreement with Beijing Datang Fuel Company, pursuant to which Hong Kong Company agreed to sell coal to Beijing Datang Fuel Company, with an annual transaction cap of approximately USD380 million, equivalent to approximately RMB2.3674 billion, for one year commencing from 1 January 2013 to 31 December 2013.
(11) On 6 February 2013, Hong Kong Company entered into a Coal Purchase and Sale Framework Agreement with the Company, pursuant to which Hong Kong Company agreed to sell coal to Jiangsu Datang Lvsigang International Power Generation Company Limited (“Lvsigang Power Generation Company”) and Guangdong Datang International Chaozhou Power Generation Company Limited (“Chaozhou Power Generation Company”), with an annual transaction cap of approximately USD522 million, equivalent to approximately RMB3.2521 billion, for one year commencing from 1 January 2013 to 31 December 2013.
(12) On 6 February 2013, Jiangsu Datang Shipping Co., Ltd. (“Shipping Company”), a subsidiary of the Company, entered into an Annual Shipping Framework Agreement with Beijing Datang Fuel Company, pursuant to which Shipping Company agreed to provide coal transportation services for Beijing Datang Fuel Company, with an annual transaction cap of approximately RMB385 million, for one year commencing from 1 January 2013 to 31 December 2013.
(13) On 10 April 2013, Yunnan Datang International Lixianjiang Hydropower Development Co., Ltd. (“Lixianjiang Hydropower Company”), a subsidiary of the Company, entered into a financing lease contract with Datang Finance Lease Company (“Datang Lease Company”), pursuant to which Lixianjiang Hydropower Company and Datang Lease Company carried out financing leasing business with a leasing cost of RMB600 million through the leaseback of sold leased assets. The lease term was 120 months.
(14) On 11 April 2013, Liaoning Datang International Fuxin Coal-to-gas Company Limited (“Fuxin Coal-to-gas Company”) entered into a contract for the general contracting of purchase with China Datang Technologies and Engineering Company Limited (“Datang Technology Company”), pursuant to which Datang Technology Company provided Fuxin Coal-to-gas Company with the design and equipment supply for an organic wastewater biochemical treatment plant as well as supervision of installation, debugging and related technical services. The total amount of the contract was RMB108 million.

GENERAL INFORMATION

APPENDIX II

(15) On 25 April 2013, the Company entered into a leasing business cooperation agreement with Datang Finance Lease Company (“Datang Lease Company”), pursuant to which the Company and Datang Leasing would carry out the financial leasing business company with leasing costs of not more than RMB10 billion per annum. The lease term was three years commencing from 1 January 2013 to 31 December 2015.
(16) On 25 April 2013, the Company entered into a transfer agreement with CDC, pursuant to which the Company agreed to transfer the development and construction of the Jinyiyuan (Siheyuan) project (including the relevant land use rights and projects in progress) by the Company to CDC. The transfer price totalled RMB234.3511 million.
(17) On 25 April 2013, Datang International Power Generation Co., Ltd. Zhangjiakou Power Plant (“Zhangjiakou Power Plant”) and Hebei Datang International Qian’an Thermal Power Company Limited (“Qian’an Thermal Power Company”) entered into an agreement for a denitrification renovation project with Datang Technology Co. respectively. The contract price totalled approximately RMB198.52 million.
(18) On 20 May 2013, the Company entered into a production materials purchase framework agreement with China Resources and Power, a wholly-owned subsidiary of CDC, for the centralized purchase of machinery, equipment and materials required by the Company’s technology projects through China Resources and Power. The annual transaction cap of the continuing connected transactions under the production materials purchase framework agreement for the year ending 31 December 2013 amounted to RMB800 million (including the costs and management service fees paid to China Resources and Power for the machinery, equipment and supplies for the supplies purchase for the technology renovation projects).
(19) On 3 June 2013, the Company entered into a materials purchase framework agreement with China Resources and Power, a wholly-owned subsidiary of CDC, for the centralized purchase of machinery, equipment and materials required by the Company’s project construction through China Resources and Power. The annual transaction cap of the continuing connected transactions under the production materials purchase framework agreement for the year ending 31 December 2013 amounted to RMB800 million (including the costs and management service fees paid to China Resources and Power for the machinery, equipment and supplies for the supplies purchase for the project construction).
(20) On 18 June 2013, Hebei Datang International Fengrun Thermal Power Company Limited (“Fengrun Thermal Power Company”) entered into a denitrification renovation project contract with Datang Technology Company for carrying out the general contracting of the denitrification renovation project for Fengrun Thermal Power Company’s generating units 1 and 2. The contract price totalled approximately RMB70.18 million.

GENERAL INFORMATION

APPENDIX II

(21) On 27 June 2013, Datang Fuxin Energy and Chemical Engineering Co., Ltd. (“Fuxin Engineering Company”) entered into a repair and maintenance contract with Duolun Coal Chemical Company for carrying out repair, maintenance and operation assurance of related equipment of Duolun Coal Chemical Company. The contract price totalled approximately RMB35.13 million.
(22) On 12 July 2013, the Company entered into a fuel purchase framework agreement with Inner Mongolia Datang International Xilinhaote Mining Limited (“Xilinhaote Mining Co.”), pursuant to which the Company and certain of its subsidiaries agreed to purchase coal from Xilinhaote Mining Co., with an annual transaction cap totaling approximately RMB882 million yuan, for one year commencing from 1 January 2013 to 31 December 2013..
(23) On 16 July 2013, Shipping Company entered into a framework agreement with Lvsigang Power Company and Chaozhou Power Company, pursuant to which Shipping Company agreed to provide coal transportation services for Lvsigang Power Company and Chaozhou Power Company, with an annual transaction cap of approximately RMB154 million and RMB198 million, respectively. The framework agreement carried a term of one year commencing from 1 January 2013 to 31 December 2013.
(24) On 15 October 2013, the Company entered into a capital contribution agreement with CDC, pursuant to which the parties, agreed to contribute approximately RMB80 million and RMB120 million, respectively for the formation of China Datang Corporation Nuclear Co. Ltd..
(25) The Agreements, details of which were set out in the circular of the Company dated 5 November 2013.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the principal place of business in Hong Kong of the Company at 21/F, Gloucester Tower, The Landmark, 15 Queen’s Road Central, Hong Kong during normal business hours from the date of this circular up to and including 20 November 2013:

(a) the memorandum and articles of association of the Company;
(b) the financial information of the Company as set out in Appendix I of this Circular;
(c) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix;
(d) the Financial Services Agreement;
(e) the Entrusted Loan Framework Agreement;
(f) the consent letter and letter of advice from Mizuho Securities dated 5 November 2013.

AI assistant

Modern Innovative Digital Technology Company Limited — Proxy Solicitation & Information Statement 2013

50521_rns_2013-11-05_41d70dee-dc1e-41fa-b98d-6526a65579b5.pdf

MAJOR TRANSACTION AND

DISCLOSEABLE TRANSACTION AND

CONTINUING CONNECTED TRANSACTIONS AND CONNECTED TRANSACTION

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

Mizuho Securities Asia Limited

CONTENTS

DEFINITIONS

DEFINITIONS

MAJOR TRANSACTION AND DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS AND CONNECTED TRANSACTION

BACKGROUND

LETTER FROM THE BOARD

A. FINANCIAL SERVICES AGREEMENT

BACKGROUND

MATERIAL TERMS OF THE FINANCIAL SERVICES AGREEMENT

Date

Parties

LETTER FROM THE BOARD

Major Terms

LETTER FROM THE BOARD

Capital Risk Control Measures

LETTER FROM THE BOARD

PROPOSED CAPS

Deposit Services

Loan Services

LETTER FROM THE BOARD

Other Services

BENEFITS AND REASONS OF ENTERING INTO THE FINANCIAL SERVICES AGREEMENT

LETTER FROM THE BOARD

B. ENTRUSTED LOAN FRAMEWORK AGREEMENT

Date and Subject Matter

Parties

MAJOR TERMS OF ENTRUSTED FRAMEWORK AGREEMENT

1. Entrusted Loan Arrangement

2. Principal amount of the Entrusted Loan

3. Term

LETTER FROM THE BOARD

4. Interest rate

5. Repayment schedule of the principal of the Entrusted Loan

6. Payment schedule of interests of the Entrusted Loan

7. Handling fees

8. Effective date

REASONS FOR AND BENEFITS OF ENTERING INTO THE ENTRUSTED LOAN FRAMEWORK AGREEMENT

INFORMATION RELATING TO THE PARTIES

1. Information relating to the Company

LETTER FROM THE BOARD

2. Information relating to Energy and Chemical Company

3. Information relating to Duolun Coal Chemical Company

4. Information relating to Datang Finance

5. Information relating to CDC

LISTING RULES IMPLICATIONS

Entrusted Loan Framework Agreement

LETTER FROM THE BOARD

Financial Services Agreement

LETTER FROM THE BOARD

BOARD’S APPROVAL

ADDITIONAL INFORMATION

EGM

RECOMMENDATION

MAJOR TRANSACTION AND

DISCLOSEABLE TRANSACTION AND CONTINUING CONNECTED TRANSACTIONS AND CONNECTED TRANSACTION

LETTER FROM INDEPENDENT BOARD COMMITTEE

Yours faithfully,

5 November 2013

DEPOSIT SERVICES UNDER THE FINANCIAL SERVICES AGREEMENT CONSTITUTING CONTINUING CONNECTED TRANSACTIONS AND

THE ENTRUSTED LOAN ARRANGEMENT CONSTITUTING CONNECTED TRANSACTION

INTRODUCTION

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

BASIS OF OUR OPINION

A. DEPOSIT SERVICE UNDER THE FINANCIAL SERVICES AGREEMENT

PRINCIPAL FACTORS AND REASONS CONSIDERED

Background

Major terms in the Financial Services Agreement relating to deposit services

Capital risk control measures by Datang Finance

LETTER FROM MIZUHO SECURITIES ASIA LIMITED

Benefits and reasons of entering into the Financial Services Agreement

PROPOSED CAP FOR DEPOSIT SERVICES

Historical amounts

Modern Innovative Digital Technology Company Limited Proxy Solicitation & Information Statement 2013