Technovator International : ANNOUNCEMENTNEW 2019 AGREEMENTS IN RELATION TOCERTAIN CONTINUING CONNECTED TRANSACTIONS

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Technovator

TECHNOVATOR INTERNATIONAL LIMITED

同 方 泰 德 國 際 科 技 有 限 公 司*

(incorporated in Singapore with limited liability)

(Stock Code: 1206)

ANNOUNCEMENT

NEW 2019 AGREEMENTS IN RELATION TO

CERTAIN CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

Reference is made to the 2017 Announcement and Circular in relation to, among others, the continuing connected transactions contemplated under the 2017 Agreements and the related annual caps.

As all of the 2017 Agreements will expire on 31 December 2019, the relevant parties to each of the 2017 Agreements have agreed to continue with the arrangements under the relevant 2017 Agreement upon its expiry for a period of three years subject to similar terms and conditions by entering into the relevant 2019 Agreement.

THE 2019 BUSINESS ARRANGEMENTS AGREEMENT

The 2019 Business Arrangements Agreement was entered into on 24 October 2019 between Technovator Beijing, Tongfang Energy Saving and THTF, pursuant to which the parties agreed on the arrangements relating to the Intelligent Rail Transit, Building and Urban Heating Network Businesses for a term of three years from 1 January 2020 to 31 December 2022. For each of the years ending 31 December 2020, 2021 and 2022, the annual caps for the transactions contemplated under the 2019 Business Arrangements Agreement are RMB1,600.0 million for the payments to be transferred by THTF to the Group and RMB1,300.0 million for the payments to be transferred by the Group to THTF.

• For identification purposes only

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THE 2019 SALES AGREEMENT

The 2019 Sales Agreement was entered into on 24 October 2019 between Technovator Beijing and THTF, pursuant to which Technovator Beijing agreed to sell or procure such other parties agreed by THTF, including members of the Group, to sell intelligent energy saving related products, equipment and services to Tongfang Group for a term of three years. The annual caps for the transactions contemplated under the 2019 Sales Agreement are RMB250.0 million, RMB300.0 million and RMB350.0 million for the years ending 31 December 2020, 2021 and 2022, respectively.

THE 2019 PURCHASE AGREEMENT

The 2019 Purchase Agreement was entered into on 24 October 2019 between Technovator Beijing and THTF, pursuant to which THTF agreed to sell or procure such other parties agreed by the Group to sell intelligent energy saving related products, equipment and services to the Group for a term of three years. The annual caps for the transactions contemplated under the 2019 Purchase Agreement are RMB200.0 million, RMB250.0 million and RMB300.0 million for the years ending 31 December 2020, 2021 and 2022, respectively.

THE 2019 MASTER AGREEMENT

The 2019 Master Agreement was entered into on 24 October 2019 between Technovator Beijing and THTF, pursuant to which the Group may provide to or receive from Tongfang Group miscellaneous products and services as may be required to satisfy the operational needs of the Group or Tongfang Group from time to time in the ordinary course of business of the Group during a term of three years. The annual caps for the provision of miscellaneous products and services by the Group to Tongfang Group is RMB30.0 million, RMB40.0 million and RMB50.0 million, and the annual caps for the receipt of miscellaneous products and services by the Group from Tongfang Group are RMB50.0 million, RMB60.0 million and RMB70.0 million, for the years ending 31 December 2020, 2021 and 2022, respectively.

LISTING RULES IMPLICATIONS

As at the date of this announcement, THTF directly and indirectly through Resuccess owns a total of 286,330,142 Shares, representing approximately 36.6% of the issued Shares of the Company. THTF is a controlling Shareholder and is therefore a connected person of the Company under the Listing Rules. Accordingly, the 2019 Agreements and the transactions contemplated under the 2019 Agreements between the Group and Tongfang Group constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules.

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For the transactions contemplated under the 2019 Business Arrangements Agreement, although no consideration will be paid by the Group to THTF in relation to such business arrangements, given that there will be payments between the Group and THTF and consistent with the treatment of the 2017 Business Arrangements Agreement, the Board considers it appropriate to subject such payments to the requirements for continuing connected transactions under Chapter 14A of the Listing Rules, and adopt the stated annual caps as the maximum transaction amounts for these transactions.

As one or more percentage ratios (as defined in Rule 14.07 of the Listing Rules) for the transactions contemplated under each of the 2019 Agreements are greater than 5%, each of the 2019 Agreements and the transactions contemplated under these agreements are subject to the reporting, announcement and Independent Shareholders' approval requirements under Chapter 14A of the Listing Rules.

Resolutions will be put forth to the Independent Shareholders at the EGM for the Independent Shareholders to consider and approve each of the 2019 Agreements and the respective Annual Caps for the years ending 31 December 2020, 2021 and 2022.

INTRODUCTION

Reference is made to the 2017 Announcement and Circular in relation to, among others, the continuing connected transactions contemplated under the 2017 Agreements and the related annual caps.

The Group's acquisition of the Intelligent Rail Transit, Building and Urban Heating Network Businesses pursuant to the Business and Assets Purchase Agreements was completed in October 2015. To facilitate the successful transfer of the Intelligent Rail Transit, Building and Urban Heating Network Businesses from THTF and the future development of these businesses, and in order to seamlessly integrate these businesses into the Group, the Group actively optimized its structure and reorganized the resources of its business to fully tap into the business synergy of the acquired businesses and the business of the Group at the time. With the completion of the optimization and reorganization of the businesses of the Group in 2017, the relevant parties entered into the 2017 Business Arrangements Agreement on 1 November 2017. Pursuant to the 2017 Business Arrangements Agreement:

1. For the Nominee Projects which THTF continues to use its name for entering into such contracts and/or projects of the Intelligent Rail Transit, Building and Urban Heating Network Businesses that the legal rights and obligations of which cannot be directly transferred to the Group, THTF will assign, sub-contract, delegate or in any other way the parties may mutually agree so that the Group will assume these contracts. The Group will be responsible for performing the work required by the Nominee Projects and entitled to the income from the Nominee Projects. To the extent that the legal rights of THTF under the contracts in respect of any Nominee Projects have not been assigned to the Group, or for any other reasons THTF receives any payment from the customers of any Nominee Projects for any income generated, THTF is required to pay such amount to the Group no later than the balance sheet date of the month in which such amount is received without any additional compensation. THTF undertakes to assist the Group to take up the Nominee Projects without any additional compensation, including but not limited to providing any necessary information to the Group and handling the relevant project completion and settlement procedures as necessary;

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1. If debtors of the Nominee Projects settle debts by paying THTF, THTF is required to pay such amount to the Group no later than the balance sheet date of the month in which such amount is received without any additional compensation;
2. THTF will act as the party to supply contracts to procure materials or services from third party suppliers for the Nominee Projects and will procure the necessary materials and services from the relevant third party suppliers for the Group upon instruction by the Group, and the Group is required to reimburse THTF for the amount paid by THTF;
3. THTF agrees that for the debts which are part of the liabilities of the Nominee Projects that have not been assumed by the Group as the consent from the creditors has not been obtained, THTF will continue to satisfy such debts. In the event that THTF is required to settle such debt with the relevant third party creditors, the Group is required to reimburse THTF for such amount no later than the balance sheet date of the month in which such amount is paid by THTF; and
4. THTF will continue to support the Group on the continual development and expansion of the Intelligent Rail Transit, Building and Urban Heating Network Businesses. THTF agrees to provide support and cooperation for the Group for the Intelligent Rail Transit, Building and Urban Heating Network Businesses upon reasonable request from the Group including cooperating with the Group to develop new projects and business opportunities in respect of these businesses, being a party to the relevant agreements to facilitate the Group's conducting of these businesses if necessary, and providing the required information and assistance to complete the relevant projects, in manners similar to the support to be provided by THTF as set out in paragraphs (i) to (iv) above. Such new sales, procurement or project contracts if to be signed by THTF, all of the terms shall be negotiated by the Group.

By virtue of the arrangements as set out above, to the extent that any sales or project contract of the Intelligent Rail Transit, Building and Urban Heating Network Businesses entered into by THTF are not capable to be assigned to the Group, THTF will continue to act as the party to such agreements, and will transfer any payments it receives from the relevant customers of these businesses to the Group without any additional charges. As for new sales or project contracts that it is necessary or desirable for THTF to be a contracting party, THTF may cooperate with the Group in the performance of such contracts for the relevant customers, and transfer any payments it receives from the relevant customers of the Intelligent Rail Transit, Building and Urban Heating Network Businesses to the Group without any additional charges.

To accommodate the business needs of the Group as well as to enable the Group to conduct certain transactions of a miscellaneous nature with Tongfang Group, the relevant parties also entered into the 2017 Sales Agreement, the 2017 Purchase Agreement and the 2017 Master Agreement. A summary of these agreements entered into on 1 November 2017 is set out below:

1. Technovator Beijing and THTF entered into the 2017 Sales Agreement pursuant to which Technovator Beijing agreed to sell or procure such other parties agreed by THTF, including members of the Group, to sell building and municipal infrastructure construction related products, equipment and services, which include control security systems, and fire alarm systems to Tongfang Group for a term of three years from 1 January 2017 to 31 December 2019;

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1. Technovator Beijing and THTF entered into the 2017 Purchase Agreement pursuant to which THTF agreed to sell or procure such other parties agreed by Technovator Beijing, including members of Tongfang Group, to sell wiring, lighting and other products, equipment and systems and services relating to the Group's business of energy management, energy saving and environmental protection to the Group for a term of three years from 1 January 2017 to 31 December 2019; and
2. Technovator Beijing and THTF entered into the 2017 Master Agreement pursuant to which the Group may provide to or receive from Tongfang Group miscellaneous products and services as may be required to satisfy the operational needs of the Group/ Tongfang Group from time to time in the ordinary course of business of the Group in accordance with the terms and conditions of the 2017 Master Agreement for a term of three years from 1 January 2017 to 31 December 2019.

As all of the 2017 Agreements will expire on 31 December 2019, the relevant parties to each of the 2017 Agreements have agreed to continue with the arrangements under the relevant 2017 Agreement upon its expiry for a period of three years under similar terms by entering into the relevant 2019 Agreement.

THE 2019 BUSINESS ARRANGEMENTS AGREEMENT

The 2019 Business Arrangements Agreement was entered into on 24 October 2019 between subsidiaries of the Company, namely, Technovator Beijing and Tongfang Energy Saving, and THTF in relation to the business arrangements for the Intelligent Rail Transit, Building and Urban Heating Network Businesses.

A summary of the principal terms of the 2019 Business Arrangements Agreement is set out below:

Date:	24 October 2019 (after trading hours)
Parties:	(1)	Technovator Beijing, a wholly-owned subsidiary of the
		Company
	(2)	Tongfang Energy Saving, a wholly-owned subsidiary of the
		Company
	(3)	THTF, a controlling Shareholder

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