FRANCHISING CONTRACT Clause Samples

FRANCHISING CONTRACT. On 31 October 2012, certain power plants of the Company entered into the Franchising Contract with Datang Environment Company. Pursuant to such contract, each of such certain power plants of the Company authorized Datang Environment Company to carry out franchising in respect of the Desulfurization Assets of the corresponding coal-fired power generating units and operate, maintain and manage the Desulfurization Assets during the franchise period. Datang Environment Company shall enjoy desulfurization tariffs and relevant preferential policies of the PRC and shall reimburse and compensate certain power plants of the company for the costs incurred for desulfurization, including water, electricity and gas, in accordance with the relevant requirements on desulfurization franchising in the State. As at the date of this announcement, CDC is the controlling Shareholder of the Company, which together with its subsidiaries hold approximately 34.71% of the issued share capital of the Company. Datang Environment Company is a wholly-owned subsidiary of CDC. Datang Environment Company is therefore a connected person of the Company and the transaction under the Agreement on Acquisition of Desulfurization Assets constitutes connected transaction of the Company and the transactions under the Franchising Contract constitute continuing connected transactions of the Company. Since all of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of each of (i) the aggregated transaction amount under the Agreement on Acquisition of Desulfurization Assets; and (ii) the aggregated transaction amount under the Franchising Contract are above 0.1% but under 5%, the transactions under the Agreement on Acquisition of Desulfurization Assets and the Franchising Contract are only subject to the reporting and announcement requirements under Chapter 14A the Listing Rules, but are exempt from the approval by the independent Shareholders of the Company under the requirements of Chapter 14A of the Listing Rules.