Beijing Enterprises Clean Energy : EXEMPTED CONNECTED TRANSACTIONS FOR THE FORMATION OF JOINT VENTURE COMPANY (in PDF)

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 01250) EXEMPTED CONNECTED TRANSACTIONS FOR THE FORMATION OF JOINT VENTURE COMPANY FORMATION OF THE JV COMPANY

On 8 August 2017, the Parties entered into the Agreement in respect of the formation of the JV Company in the PRC. The registered capital of the JV Company is RMB720,000,000. The JV Company will be set up for the investment, development and operation of clean energy power-related projects, including wind power generation.

IMPLICATIONS UNDER THE LISTING RULES

Mr. Hu Xiaoyong, an executive Director, is a connected person of the Company. He indirectly owns the entire issued share capital of Party B, and therefore Party B is an associate of a connected person of the Company. Party B's Investment constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As certain applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of Party B's Investment exceed 0.1% but all of them are less than 5%, Party B's Investment is subject to the reporting and disclosure requirements but exempted from the independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

Mr. Huang Weihua, an executive Director, is a connected person of the Company. He directly owns 81% equity interest in Party C, and therefore Party C is an associate of a connected person of the Company. Party C's Investment constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As certain applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of Party C's Investment exceed 0.1% but all of them are less than 5%, Party C's Investment is subject to the reporting and disclosure requirements but exempted from the independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

FORMATION OF THE JV COMPANY

On 8 August 2017, the Parties entered into the Agreement in respect of the formation of the JV Company in the PRC. The major terms of the Agreement are set out as follows:

Capital contribution: The registered capital of the JV Company is RMB720,000,000. The capital contribution to be made by each of the Parties in cash is set out as follows:

Parties Capital contribution Approximate equity interest in the JV Company

(RMB) (%)

Party A 360,000,000 50.00

Party B 60,000,000 8.33

Party C 30,000,000 4.17

Party D 30,000,000 4.17

The Other Parties 240,000,000 33.33

Total 720,000,000 100.00

Term of the JV Company: 50 years

Scope of Business: The scope of business of the JV Company covers the

investment, development and operation of clean energy power- related projects, including wind power generation

Board Composition: The board of directors of the JV Company is the highest

authority of the JV Company and consists of three directors, two of whom will be appointed by Party A and the remaining one will be jointly appointed by Party B, Party C, Party D and the Other Parties

Profit Sharing: The Parties are to share the profits of the JV Company available

for distribution in proportion to their respective capital contribution of the registered capital of the JV Company

The capital requirement of the JV Company was determined by arm's length negotiations among the Parties taking into account the funding requirement of the clean energy power- related projects to be invested by the JV Company in the near term.

The Group intends to finance its capital commitment in the JV Company using the internal financial resources and/or bank borrowings.

FINANCIAL INFORMATION OF THE JV COMPANY

As at the date of this announcement, the JV Company has not been established and does not have any historical financial results. The JV Company will be accounted for as a subsidiary of the Company upon its establishment.

REASONS FOR AND BENEFITS OF THE FORMATION OF THE JV COMPANY

Clean energy businesses are the core development focus of the Group. The incorporation of the JV Company will provide the Group with an additional source of funding and bring in strategic partners to enable the Group to strengthen its business development in the wind power-related businesses.

Furthermore, the participation of Mr. Hu Xiaoyong and Mr. Huang Weihua, executive Directors, through their controlled entities, provides unambiguous positive message and confidence to the Shareholders of their support and commitment towards the Group and its development.

The Board (including the independent non-executive Directors and excluding Mr. Hu Xiaoyong and Mr. Huang Weihua) is of the view that the terms of the Agreement and the transactions contemplated thereunder are fair and reasonable, on normal commercial terms, and are in the interests of the Company and the Shareholders as a whole. Save for Mr. Hu Xiaoyong and Mr. Huang Weihua, none of the Directors has any material interest in the Agreement and the transactions contemplated thereunder or is required to abstain from voting on the relevant resolutions of the Board.

IMPLICATIONS UNDER THE LISTING RULES

Mr. Hu Xiaoyong, an executive Director, is a connected person of the Company. He indirectly owns the entire issued share capital of Party B, and therefore Party B is an associate of a connected person of the Company. Party B's Investment constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As certain applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of Party B's Investment exceed 0.1% but all of them are less than 5%, Party B's Investment is subject to the reporting and disclosure requirements but exempted from the independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.

Mr. Huang Weihua, an executive Director, is a connected person of the Company. He directly owns 81% equity interest in Party C, and therefore Party C is an associate of a connected person of the Company. Party C's Investment constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules. As certain applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of Party C's Investment exceed 0.1% but all of them are less than 5%, Party C's Investment is subject to the reporting and disclosure requirements but exempted from the independent Shareholders' approval requirement under Chapter 14A of the Listing Rules.