THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in GCL-Poly Energy Holdings Limited, you should at once hand this circular, to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

GCL-POLY ENERGY HOLDINGS LIMITED 保 利 協 鑫 能 源 控 股 有 限 公 司 (Incorporated in the Cayman Islands with limited liability) (Stock code: 3800)

MAJOR AND CONNECTED TRANSACTION — DISPOSAL OF NON-SOLAR POWER BUSINESS INVOLVING VARIATION OF NON-COMPETITION UNDERTAKINGS AND AMENDMENT OF TERMS OF PROPOSED SETTLEMENT RE-ELECTION OF DIRECTOR AND PROPOSED REFRESHMENT OF THE SCHEME LIMIT

Financial Adviser to the Company

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

Capitalised terms used on this cover page shall have the same meanings as those defined in the section headed ‘‘Definitions’’ in this circular. A letter from the Board is set out on pages 9 to 60 of this circular and the letter from the Independent Board Committee is set out on page 61 of this circular. A letter of advice from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholdersissetoutonpages63to88ofthiscircular. A notice convening the EGM to be held at Diamond I, Level 3, The Ritz-Carlton, Hong Kong, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong on Thursday, 26 November 2015 at 10: 30 a.m. is set out on pages 110 to 112 of this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM should you so wish.

11 November 2015 CONTENTS

Page

Definitions ...... 1

Letter from the Board ...... 9

Letter From the Independent Board Committee ...... 61

Letter From the Independent Financial Adviser ...... 63

Appendix I — Financial Information of the Group ...... 89

Appendix II — General Information ...... 97

Notice of EGM ...... 110

–i– DEFINITIONS

Unless the context otherwise requires, the following terms in this circular shall have the meanings set out below:

‘‘14 September the announcement issued by the Company on 14 September 2015 Announcement’’ in relation to, among other things, the Proposed Disposal

‘‘2014 JSQ Valuation’’ a valuation of the fair value of the entire issued share capital of Jinshanqiao Holdco as at 31 May 2014 (excluding the value attributable to Generator No.1 and the 9% equity interest in Dongwu Holdco held by Jinshanqiao Holdco at the date of such valuation) as determined by the Valuer based on the market approach for the purposes of the Original Settlement

‘‘ 2015 JSQ Valuation’’ a valuation of the fair value of the entire issued share capital of Honour Faith as at 31 August 2015 (excluding any value attributable to Generator No.1 and Boilers No.1 and No.2, which have ceased operations) as determined by the Valuer based on the market approach for the purposes of the Revised Settlement

‘‘25 March the announcement of the Company dated 25 March 2015 in Announcement’’ relation to, among other things, the Deed of Settlement

‘‘Affiliate’’ in relation to the Seller means any holding company holding more than 50% of the issued shares in the Seller or any company in which the Seller holds more than 50% of its total issued shares

‘‘Amendment Deed’’ the deed of amendment of terms of settlement dated 8 November 2015 entered into between the Company and the Covenantors to amend the terms of the Deed of Settlement to provide for a cash compensation in the amount of the Settlement Sum to be paid to the Company in lieu of a transfer of all of the issued shares in Honour Faith

‘‘Articles’’ the articles of association of the Company

‘‘Board’’ the board of directors of the Company

‘‘CAGR’’ compound annual growth rate

‘‘Company’’ GCL-Poly Energy Holdings Limited, a company incorporated in the Cayman Islands with limited liability whose shares are listed on the Stock Exchange

‘‘Completion’’ completion of the Proposed Disposal in accordance with the Sale and Purchase Agreement

–1– DEFINITIONS

‘‘Consideration’’ the total purchase price payable by the Purchaser to the Seller under the Sale and Purchase Agreement for the Proposed Disposal, being RMB3.2 billion

‘‘Covenantors’’ Mr. Zhu Gongshan, Mr. Zhu Yufeng and Highexcel Investments Limited

‘‘Deed of Settlement’’ the deed of agreement dated 25 March 2015 entered into between the Company and the Covenantors pursuant to which such parties conditionally agreed to settle the Possible Claims on the terms of such deed

‘‘Definitive Transfer a conditional transfer deed which, under the terms of the Deed of Deed’’ Settlement, is to be negotiated and, if the terms are agreed upon by the relevant parties thereto, entered into between the Company (and/or its designated subsidiary(ies) and Mr. Zhu Gongshan (and/or Mr. Zhu Yufeng, Highexcel and/or their respective associates) setting out the terms and conditions of the Proposed JSQ Acquisition

‘‘Deposit’’ a total amount of RMB160 million, which has been paid by the Purchaser to the Seller on 10 September 2015 as deposit and part paymentoftheConsideration

‘‘Desalted Water the agreement dated 29 September 2015 entered into between Supply Agreement’’ Jinshanqiao Holdco as the supplier and Jiangsu Zhongneng as the customer in relation to the supply of desalted water

‘‘Director(s) ’’ director(s) of the Company

‘‘Disposal Group’’ the Target, its subsidiaries and associated companies after completion of the Reorganisation

‘‘Dongwu Cogeneration a cogeneration plant located in Suzhou, Jiangsu Province, the Plant’’ PRC and wholly-owned by Dongwu Holdco

‘‘Dongwu Holdco’’ 蘇州東吳熱電有限公司 (Dongwu Cogeneration Plant Co. Ltd*), a company incorporated in the PRC and which directly owns the Dongwu Cogeneration Plant

‘‘EGM’’ the extraordinary general meeting to be held at Diamond I, Level 3, The Ritz-Carlton, Hong Kong, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong on Thursday, 26 November 2015 at 10: 30 a.m.

‘‘Enquiry’’ the enquiry made by the Stock Exchange on 22 August 2013 with the Company regarding the Undertakings

–2– DEFINITIONS

‘‘Excluded Business’’ has the meaning ascribed to it in the section headed ‘‘Proposed variation of the Non-competition Deed’’

‘‘Existing Scheme the Scheme Limit as approved by the Shareholders at the Limit’’ extraordinarygeneralmeetingoftheCompanyheldon21April 2011, being 200,000,000 Shares

‘‘Group’’ the Company and its subsidiaries

‘‘GW’’ Gigawatt

‘‘Guarantor’’ or 江蘇協鑫能源有限公司 (Jiangsu Golden Concord Energy Co., ‘‘Jiangsu GCL’’ Ltd.*), a company incorporated in the PRC being the holding company of the Purchaser and Jinshanqiao Holdco before the entire equity interest in Jinshanqiao Holdco was transferred to Honour Faith

‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

‘‘Hong Kong’’ Hong Kong Special Administrative Region of the PRC

‘‘Honour Faith’’ Honour Faith Group Limited, a company incorporated in the British Virgin Islands and indirectly wholly-owned by Mr. Zhu Gongshan. Honour Faith is the indirect beneficial owner of the entire equity interest in Jinshanqiao Holdco

‘‘IFRS’’ International Financial Reporting Standards

‘‘Independent Board a committee of the Board established for the purpose of advising Committee’’ the Independent Shareholders as to the fairness and reasonableness of the Sale and Purchase Agreement and the transactions contemplated thereunder and the Restated NCD, comprising all the independent non-executive Directors who are independent of the said transactions

‘‘Independent Financial Platinum Securities Company Limited, a licensed corporation Adviser’’ under the SFO to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Sale and Purchase Agreement and the transactions contemplated thereunder and the Restated NCD

‘‘Independent Shareholders of the Company other than Mr. Zhu Gongshan, Shareholders’’ Mr. Zhu Yufeng and their respective associates (including Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited)

–3– DEFINITIONS

‘‘Interests’’ the beneficial interests in Jinshanqiao Holdco and Dongwu Holdco acquired by Messrs. Zhu as described under the section headed ‘‘Proposed Amendment of the Settlement Deed’’ of this circular

‘‘Jiangsu GCL SMTD’’ 江蘇協鑫硅材料科技發展有限公司 (Jiangsu GCL Silicon Material Technology Development Co., Ltd.*), a company incorporated in the PRC and a wholly-owned subsidiary of the Company

‘‘Jiangsu Zhongneng’’ 江蘇中能硅業科技發展有限公司 (Jiangsu Zhongneng Polysilicon Technology Development Co., Ltd.*), a wholly-owned subsidiary of the Company

‘‘Jinshanqiao a cogeneration plant located in the Jinshanqiao Development Cogeneration Plant’’ Zone, Xuzhou, the PRC and wholly-owned by Jinshanqiao Holdco

‘‘Jinshanqiao Holdco’’ 徐州金山橋熱電有限公司 (Xuzhou Jinshanqiao Cogeneration Co., Ltd.*), a company incorporated in the PRC, which directly wholly owns the Jinshanqiao Cogeneration Plant

‘‘Latest Practicable 6 November 2015, being the latest practicable date prior to the Date’’ printing of this circular for ascertaining certain information in this circular

‘‘Listing’’ the listing of the Company’s shares on the Stock Exchange on 13 November 2007

‘‘Listing Committee’’ has the meaning ascribed to such term in the Listing Rules

‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

‘‘Long Stop Date’’ 30 November 2015, or such later date as the parties to the Sale and Purchase Agreement may agree

‘‘Messrs. Zhu’’ Mr. Zhu Gongshan and Mr. Zhu Yufeng

‘‘Mpa’’ Megapascal, a unit of pressure equal to one million pascals

‘‘Mr. Zhu Gongshan’’ Mr. Zhu Gongshan, the Chairman, an executive Director and ultimate controlling shareholder of the Company

‘‘Mr. Zhu Yufeng’’ Mr. Zhu Yufeng, an executive Director and the son of Mr. Zhu Gongshan

‘‘MW’’ Megawatt

–4– DEFINITIONS

‘‘NCD-related the announcements issued by the Company on 4 October 2013, Announcements’’ 26 November 2013, 30 March 2014 and 25 March 2015 in relation to, among other things, the Enquiry

‘‘NCD Review’’ the review undertaken by the Company, including by the NCD Review IBC, of the subject matter of the Enquiry

‘‘NCD Review IBC’’ the independent committee of the Board constituted to undertake areviewofthesubjectmatteroftheEnquiry,comprisingallof the independent non-executive Directors holding such positions at the date of establishment of the NCD Review IBC, being Mr. Yip Tai Him, Mr. Qian Zhixin, Dr. Raymond Ho Chung Tai and Mr. Xue Zhongsu as at 13 September 2013 (the date of establishment of the NCD Review IBC) and Mr. Yip Tai Him and Dr. Raymond Ho Chung Tai as at the Latest Practicable Date

‘‘NDRC’’ National Development and Reform Commission of the PRC

‘‘New GCL Agreement’’ the agreement dated 29 September 2015 entered into between Jinshanqiao Holdco as the supplier and Jiangsu GCL SMTD as the customer in relation to the supply of steam

‘‘New JZ Agreement’’ the agreement dated 29 September 2015 entered into between Jinshanqiao Holdco as the supplier and Jiangsu Zhongneng as the customer in relation to the supply of steam

‘‘Newly Granted has the meaning given to it in the section headed ‘‘Proposed Options’’ RefreshmentoftheSchemeLimit’’ofthiscircular

‘‘Non-competition the deed of non-competition dated 27 October 2007 (as amended Deed’’ by a deed of amendment dated 27 March 2014) entered into between the Covenantors and the Company

‘‘Optima Capital’’ Optima Capital Limited, a corporation licensed under the SFO to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the Company’s financial adviser in relation to the NCD Review

‘‘Original Settlement’’ the proposed settlement of the Possible Claims conditionally agreed between the Company and the Covenantors under the Deed of Settlement

–5– DEFINITIONS

‘‘Possible Claims’’ any claim, cause or right of action or proceedings which the Company may have, of whatsoever nature and howsoever arising whether known or unknown to the Company and the Covenantors, before, on or after the date of the Settlement Deed in respect of, relating to, or as a result of any breach or alleged breach of the Non-competition Deed, or of any other duty owed to the Company howsoever arising, by virtue of the acquisition of or investment in, or the enjoyment of any benefits from, any interests in Jinshanqiao Holdco and/or Dongwu Holdco by Mr. Zhu Gongshan and Mr. Zhu Yufeng (whether by Mr. Zhu Gongshan or Mr. Zhu Yufeng himself or through the Zhu Family Trust or any associate)

‘‘PRC’’ or ‘‘China’’ the People’s Republic of China, for the purpose of this circular, excludes Hong Kong, Macau Special Administrative Region and Taiwan

‘‘Pre-IPO Share Option the pre-IPO share option scheme adopted by the Company on 22 Scheme’’ October 2007

‘‘Proposed Disposal’’ the proposed disposal of the Disposal Group by the Seller to the Purchaser as contemplated under the Sale and Purchase Agreement

‘‘Proposed JSQ the proposed acquisition by the Company of all the issued shares Acquisition’’ in Honour Faith (which indirectly owns all the equity interest in Jinshanqiao Holdco) for nil consideration in accordance with the terms of the Deed of Settlement

‘‘Prospectus’’ the prospectus of the Company dated 31 October 2007 issued in connection with the Listing

‘‘Purchaser’’ 上海其辰投資管理有限公司 (Shanghai Qichen Investment Management Co., Ltd.*), a company incorporated in the PRC and which is beneficially owned by the Guarantor

‘‘Refreshed Scheme the Scheme Limit to be refreshed as proposed by the Board in Limit’’ accordance with this circular and subject to the approval by the Shareholders on the EGM, being 200,000,000 Shares

‘‘Relevant Profits’’ the total of all profits derived from the Interests, including in particular all profits of Jinshanqiao Holdco and Dongwu Holdco already paid, accrued or accruing and payable to Messrs. Zhu since their acquisition of the Interests based on Chinese Accounting Standards

–6– DEFINITIONS

‘‘Reorganisation’’ the corporate reorganisation to be undertaken by the Group upon signing of the Sale and Purchase Agreement, such that entities in the Group engaging in the non-solar power generation business will be held by the Target immediately before Completion and entities originally held by the Target not engaging in the non-solar power generation business and 太倉 保利協鑫熱電有限公司 (Taicang Poly Xiexin Thermal Power Co., Ltd.*), an entity formerly engaged in the non-solar power generation business but has ceased operation, will be transferred to the Group

‘‘Reorganisation Cost’’ the cost (including without limitation, any tax, duty, levy or expenses) involved in the Reorganisation as contemplated in the Sale and Purchase Agreement

‘‘Restated NCD’’ the amended and restated deed of non-competition dated 8 November 2015 entered into between the Company and the Restated NCD Covenantors to amend and restate the Non- competition Deed as described in the section headed ‘‘Proposed Variation of the Non-competition Deed’’ of this circular

‘‘Restated NCD Mr. Zhu Gongshan, Mr. Zhu Yufeng, Highexcel Investments Covenantors’’ Limited, Happy Genius Holdings Limited and Get Famous Investments Limited

‘‘Restricted Business’’ has the meaning ascribed to it in the section headed ‘‘Proposed Amendment of the Deed of Settlement’’ of this circular

‘‘Revised Settlement’’ the proposed settlement of the Possible Claims in accordance with the Deed of Settlement, as varied by the Amendment Deed

‘‘RMB’’ Renminbi, the lawful currency of the PRC

‘‘Sale and Purchase the agreement dated 14 September 2015 (as supplemented by the Agreement’’ Supplemental Agreement) entered into between the Seller, the Purchaser and the Guarantor in relation to the Proposed Disposal

‘‘Schemes’’ the Pre-IPO Share Option Scheme and the Share Option Scheme

‘‘Scheme Limit’’ the maximum number of Shares which may be issued pursuant to the exercise of share options to be granted under the Share Option Scheme, the Pre-IPO Share Option Scheme and any other schemes of the Company

‘‘Seller’’ Hank Rich Limited, a company incorporated in Hong Kong whose entire issued share capital is indirectly held by the Company

–7– DEFINITIONS

‘‘Settlement Sum’’ an amount in cash of RMB1.16 billion

‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

‘‘Share(s)’’ theshare(s)oftheCompany

‘‘Share Option Scheme’’ the share option scheme adopted by the Company on 22 October 2007

‘‘Shareholder(s)’’ the shareholder(s) of the Company

‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

‘‘Supplemental the supplemental agreement dated 29 October 2015 entered into Agreement’’ between the Seller, the Purchaser and the Guarantor in relation to the extension of the Long Stop Date from 30 October 2015 to 30 November 2015

‘‘Target’’ 保利協鑫有限公司 (GCL-Poly Limited*), a company incorporated in the PRC and a wholly-owned subsidiary of the Seller

‘‘TWh’’ terawatt hour

‘‘Undertakings’’ the non-competition undertakings given by the Covenantors in favour of the Company in connection with the Listing as set out in the Non-competition Deed

‘‘Valuer’’ Jones Lang LaSalle Corporate Appraisal and Advisory Limited, an independent valuer

‘‘Zhu Family Trust’’ a discretionary trust known as the ‘‘Asia Pacific Energy Fund’’, of which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries, and the indirect ultimate beneficial shareholder of Jinshanqiao Holdco before the entire equity interest in Jinshanqiao Holdco was transferred to Honour Faith

‘‘%’’ per cent

The English names of the PRC entities and departments referred to in this circular are translations from their Chinese names and are for identification purposes only. If there is any inconsistency, the Chinese name shall prevail.

–8– LETTER FROM THE BOARD

GCL-POLY ENERGY HOLDINGS LIMITED 保 利 協 鑫 能 源 控 股 有 限 公 司 (Incorporated in the Cayman Islands with limited liability) (Stock code: 3800)

Executive Directors: Registered office: Mr. Zhu Gongshan Cricket Square (Chairman and Chief Executive Officer) Hutchins Drive, P.O. Box 2681 Mr. Zhu Yufeng Grand Cayman KY1-1111 Mr.JiJun Cayman Islands Mr. Yeung Man Chung, Charles Mr. Zhu Zhanjun Principal place of business in Hong Kong: Unit 1703B–1706, Level 17 Non-executive Director: International Commerce Centre Mr. Shu Hua 1AustinRoadWest Kowloon, Hong Kong Independent Non-executive Directors: Dr. Ho Chung Tai, Raymond Mr.YipTaiHim Dr. Shen Wenzhong

11 November 2015

To the Shareholders

Dear Sir or Madam, MAJOR AND CONNECTED TRANSACTION — DISPOSAL OF NON-SOLAR POWER BUSINESS INVOLVING VARIATION OF NON-COMPETITION UNDERTAKINGS AND AMENDMENT OF TERMS OF PROPOSED SETTLEMENT RE-ELECTION OF DIRECTOR AND PROPOSED REFRESHMENT OF THE SCHEME LIMIT

INTRODUCTION

Reference is made to the 14 September Announcement in relation to, among other things, the entering into of the Sale and Purchase Agreement between the Seller, the Purchaser and the Guarantor in relation to the Proposed Disposal.

–9– LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) further informationinrelationtotheSaleandPurchaseAgreementandthetransactions contemplated thereunder, (ii) the proposed amendment of the Deed of Settlement, (iii) the proposed variation to the Non-competition Deed and the terms of the Restated NCD, (iv) the letter of recommendation from the Independent Board Committee on the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and the Restated NCD, (v) the letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and Independent Shareholders regarding the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and the Restated NCD, and (vi) the notice of EGM.

This circular also contains information relating to (i) the re-election of Dr. Shen Wenzhong as a Director, and (ii) the proposed refreshment of the Scheme Limit on the total number of Shares which may be issued upon the exercise of all options to be granted under all share option schemes of the Company.

THE PROPOSED DISPOSAL

The principle terms of the Sale and Purchase Agreement are as follows:

Date : 14 September 2015

Parties : (i) Hank Rich Limited, an indirectly wholly-owned subsidiary of the Company, as the seller;

(ii) 上海其辰投資管理有限公司 (Shanghai Qichen Investment Management Co., Ltd.*), as the purchaser. The Purchaser is owned by 江蘇協鑫能 源有限公司 (Jiangsu Golden Concord Energy Co., Ltd*), which is ultimately owned by the Zhu Family Trust; and

(iii) 江蘇協鑫能源有限公司 (Jiangsu Golden Concord Energy Co., Ltd.*), as guarantor to the Purchaser

Assets to be sold : 100% equity interest in the Target. For further information relating to the Target and the Disposal Group, please refer to the section headed ‘‘Information of the Target and Disposal Group’’ below.

Consideration : RMB3.2 billion, payable in cash upon Completion.

An amount of RMB160 million, being the Deposit, has been paid to the Seller by the Purchaser on 10 September 2015. The remaining balance (after deducting the relevant PRC withholding tax) will be paid by the Purchaser to the Seller upon Completion.

–10– LETTER FROM THE BOARD

Forfeiture/deduction of : In the event that all the conditions precedent in respect of Deposit the Proposed Disposal are fulfilled (or, if applicable, waived) on or before the Long Stop Date but the Purchaser fails to proceed to Completion where the Seller is ready and willing to do so, (i) the Seller shall forfeit the Deposit; and (ii) to the extent that such forfeited Deposit is not sufficient to cover the Reorganisation Cost and other expenses incurred by the Seller in respect of the Proposed Disposal, the Purchaser shall pay to the Seller such amount which equals the difference between the Reorganisation Cost and the forfeited Deposit and the Seller shall be entitled to claim against the Purchaser for any damages suffered by it as a result of the breach of the Sale and Purchase Agreement by the Purchaser.

In the event that Completion does not occur before the Long Stop Date due to non-satisfaction of any of the conditions precedent in respect of the Proposed Disposal (unless such non-satisfaction is due to fraud, willful default or gross negligence of the Seller), the Seller shall deduct 50% of the Reorganisation Cost from the total Deposit and return the remaining Deposit (if any) to the Purchaser.

Basis of the : The Consideration was determined after arm’s length Consideration negotiations between the parties to the Sale and Purchase Agreement taking into account the following factors:

(i) the historical operating and financial performance of the Disposal Group including the Disposal Group’s historical contribution of profit attributable to owners of the Company for the last five financial years as detailed in the section headed ‘‘Financial and Trading prospect’’ in Appendix I to this circular. The Company derived a starting reference value range for the Disposal Group by using the price earnings multiples, as well as the price to book multiples, of certain selected third party businesses and comparing them with the Disposal Group’s historical results and net assets position, respectively, whereby the result of such comparison provided an important starting reference value for the Company to determine the Consideration;

–11– LETTER FROM THE BOARD

(ii) the reasons for and benefit of the Proposed Disposal, in particular, the strategic rationale for the Proposed Disposal, the timing of the Proposed Disposal by reference to the prevailing market conditions and the potential use for the proceeds of the Proposed Disposal as set out in the section headed ‘‘Reasons for and benefits of the Proposed Disposal’’; and

(iii) an independent valuation of the Disposal Group prepared by the Valuer and commissioned by the Company for reference purpose whereby the Consideration is 14% higher than such independent valuation of the Disposal Group. For further details relating to the valuation, please refer to the section headed ‘‘Reasons for and benefits of the Proposed Disposal — Independent valuation of the Disposal Group’’ on pages 40 to 43 of this circular.

Guarantee : The Guarantor has irrevocably and unconditionally agreed to guarantee the due performance of the obligations under the Sale and Purchase Agreement by the Purchaser.

Conditions precedent : The Proposed Disposal is subject to the fulfilment or (if applicable) waiver of certain conditions precedent, including but not limited to the following, on or before the Long Stop Date:

(i) completion of the Reorganisation;

(ii) the Sale and Purchase Agreement and the transactions contemplated thereunder being approved by the Independent Shareholders as required and in accordance with the Listing Rules;

(iii) the obtaining of all necessary governmental and regulatory consents and approvals by the Target and other relevant parties;

(iv) discharge of certain trading debts, non-trading debts and mutual guarantee(s) between the Disposal Group on the one hand, and the Group (excluding the Disposal Group) on the other hand;

–12– LETTER FROM THE BOARD

(v) the obtaining of all other necessary consents from relevant third parties, (being third parties whose consentsarerequiredtobeobtainedinrespectofthe Proposed Disposal pursuant to existing contractual obligations of any members of the Group, including financial institutions and bondholders), in respect of the Proposed Disposal by the Seller and its affiliates;

(vi) the entering into of the Amendment Deed by the Company and the Covenantors and the due payment of the Settlement Sum to the Company pursuant to the Amendment Deed. The Amendment Deed is conditional upon (i) completion of the Proposed Disposal, and (ii) payment of the Settlement Sum by the Covenantors in accordance with the Amendment Deed;

(vii) the entering into of the Restated NCD by the Company and the Restated NCD Covenantors and the Restated NCD having become unconditional in accordance with its terms. The Restated NCD is conditional upon (i) the approval thereof by the Independent Shareholders, and (ii) completion of the Proposed Disposal; and

(viii) the entering into of the agreements relating to the continuing connected transactions between the Group and the Purchaser’s affiliated companies. For details of the continuing connected transactions please refer to the section headed ‘‘Continuing Connected Transactions’’ below.

As each of the Amendment Deed and the Restated NCD is conditional upon, among other things, completion of the Proposed Disposal, if the Proposed Disposal does not become unconditional and is not proceeded with, each of the Amendment Deed and the Restated NCD will not become unconditional. While the approval of the Proposed Disposal and the Restated NCD is to be voted under two separate resolutions and the Shareholders may vote in favour of one resolution but not the other, due to the inter-conditional nature of the Proposed Disposal, the Restated NCD and the Amendment Deed, each of the agreements will only become unconditional and take full effect if each of the others proceeds. The Amendment Deed and the Restated NCD have been entered into on 8 November 2015.

–13– LETTER FROM THE BOARD

As at the Latest Practicable Date, the conditions set out in paragraph (viii) above have been fulfilled and the Company is in the course of implementing various steps under the Reorganisation and it is expected that the Reorganisation will be completed on or before the Long Stop Date.

Save for the conditions set out in paragraphs (ii) and (iii) above which are incapable of being waived as a wavier of which will give rise to a breach of law or regulation, the conditions set out in paragraphs (i), (iv) to (viii) above which are more commercial in nature may be waived in writing at any time before Completion by the joint agreement of the Seller and the Purchaser. Such arrangement is adopted by the parties to the Sale and Purchase Agreement in order to give efficacy to the Sale and Purchase Agreement and to provide flexibility to allow the transactions to proceed as intended by the parties. If any of the conditions have not been satisfied or is not waived (other than the conditions set out in paragraphs (ii) and (iii) above which are incapable of being waived) on the day falling on the expiry of the Long Stop Date (or such later date as the Seller and the Purchaser may agree), the Sale and Purchase Agreement, other than clauses with respect to the arrangement relating to the Deposit as set out above, shall automatically terminate with immediate effect, and each party’s rights and obligations shall cease immediately on termination except for any rights and obligations of the parties existing before termination.

In the event that the parties sought to waive any of the conditions which would result in a material variation to the terms of the Proposed Disposal not falling within the scope of ordinary resolutions no. 1 and 2 passed (if so passed) at the EGM, further Independent Shareholders’ approval may need to be obtained.

As at the Latest Practicable Date, the Seller and the Purchaser do not have the intention to waive any of the conditions set out in paragraphs (i) and (iv) to (viii).

–14– LETTER FROM THE BOARD

Completion : Completion shall take place on the fifth business day after the last of the conditions precedent (other than the conditions in (vi) and (vii) above which will be satisfied upon Completion) has been satisfied or waived (to the extent that the relevant condition is capable of being waived).

Upon Completion, the Target will cease to be a subsidiary of the Company and the Company will cease to hold any interest in the Target.

Change of name : The Purchaser shall procure that as soon as reasonably practicable and in any event within one year from the date of Completion, the name of any company within the Disposal Group that consists of or includes the words ‘‘GCL-Poly’’ and/or ‘‘保利協鑫’’ is changed to a name which does not include such words or name.

INFORMATION ABOUT THE COMPANY AND THE PURCHASER

The Company

The Company is an investment company and immediately after the completion of the Proposed Disposal, the Company’s business will primarily consist of manufacturing and sale of polysilicon and wafer products and developing, owning and operating downstream solar farms both within the PRC and overseas.

The Purchaser

The Purchaser is an investment holding company indirectly owned by the Zhu Family Trust.

–15– LETTER FROM THE BOARD

INFORMATION OF THE TARGET AND DISPOSAL GROUP

The Target and the Disposal Group

The Target is a company incorporated in the PRC and is principally engaged in investment holding and coal trading. The Target is the holding company of the Disposal Group, whose business will, immediately after the completion of the Reorganisation, primarily consist of (i) owning and operating 18 cogeneration power plants1,two incineration plants and one wind power plant in the PRC with gross installed capacity of 1,594.5MW and attributable installed capacity of 960.8MW, (ii) constructing and developing two cogeneration power plants2 with aggregate installed capacity of 197.2MW and one 36MW incineration power plant in the PRC; and (iii) developing non-solar power pipeline projects.

Note:

1. One of the cogeneration gas turbines owned by 無鍚藍天燃機熱電有限公司 (Wuxi Bluesky Gas Turbine Thermoelectric Co., Ltd.*) which was under construction as at the date of the 14 September Announcement, has commenced operation as at the Latest Practicable Date.

2. In August 2015, 保利協鑫(蘇州)電力投資有限公司 (GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd.*) (a company of the Disposal Group) acquired 19% equity interest in 廣州市超算分布式能源投資有 限公司 (Guangzhou City Supercomputing Distributed Energy Investments Co., Ltd.*), which owns a non- solar power plant under construction. The acquisition was completed and approved on 21 October 2015.

The following table sets forth the 21 operating power plants in the Disposal Group (including subsidiaries and associates) located in the provinces, municipality or autonomous region of Jiangsu, Zhejiang, Beijing and Inner Mongolia:

Capacity (MW) Attributable Power plants Quantity Installed installed

Coal-fired cogeneration plants and resources comprehensive utilisation cogeneration plants 12 399.0 307.2 Gas-fired cogeneration plants 4 1,050.0 508.1 Biomass cogeneration plants 2 60.0 60.0 Solid-waste incineration plants 2 36.0 36.0 Wind power plant 1 49.5 49.5

Total 21 1,594.5 960.8

–16– LETTER FROM THE BOARD

In the meantime, as part of the Reorganisation, entities originally held by the Target not engaging in the non-solar power generation and 太倉保利協鑫熱電有限公司 (Taicang Poly Xiexin Thermal Power Co., Ltd.*), an entity formerly engaged in the non-solar power generation but has ceased operation, will be transferred to the Group before Completion. It is expected that, upon completion of the Reorganisation and immediately before Completion, the Target will, directly or indirectly, hold equity interests in the following companies:

Name of immediate shareholder(s)/ shareholding percentage attributable Name of the companies to immediate shareholder(s)

Companies owning and operating power plants

連雲港鑫能污泥發電有限公司 (Lianyungang 常隆有限公司 (Usual Win Limited) Xinneng Sludge Power Co., Ltd.*) (25%); and Target (75%)

(Installed capacity: 21MW/Attributable capacity: 21MW)

桐鄉濮院協鑫環保熱電有限公司 (Tongxiang 常隆有限公司 (Usual Win Limited) Puyuan Xiexin Environmental Protection Co- (52%); and Target (48%) generation Co., Ltd.*)

(Installed capacity: 36MW/Attributable capacity: 36MW)

豐縣鑫源生物質環保熱電有限公司 (Fengxian Target (51%) Xinyuan Biological Environmental Heat and Power Co-generation Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 15.3MW)

沛縣坑口環保熱電有限公司 (Peixian Mine-site Target (100%) Environmental Cogen-Power Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 30MW)

阜寧協鑫環保熱電有限公司 (Funing Golden Target (60%) Concord Environmental Protection Co- generation Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 18MW)

–17– LETTER FROM THE BOARD

Name of immediate shareholder(s)/ shareholding percentage attributable Name of the companies to immediate shareholder(s)

如東協鑫環保熱電有限公司 (Rudong Golden Target (100%) Concord Environmental Protection Cogen- Power Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 30MW)

湖州協鑫環保熱電有限公司 (Huzhou Golden Target (94.77%) Concord Environmental Protection Cogen- Power Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 28.4MW)

東台蘇中環保熱電有限公司 (Dongtai Suzhong Target (100%) Environmental Protection Co-generation Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 30MW)

海門鑫源環保熱電有限公司 (Haimen Xinyuan Target (51%) Environmental Protection Co-generation Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 15.3MW)

揚州港口污泥發電有限公司 (Yangzhou Harbour Target (51%) Sludge Power Co., Ltd.*)

(Installed capacity: 48MW/Attributable capacity: 24.5MW)

嘉興協鑫環保熱電有限公司 (Jiaxing Golden Target (95%) Concord Environmental Cogeneration Co., Ltd.*)

(Installed capacity: 36MW/Attributable capacity: 34.2MW)

–18– LETTER FROM THE BOARD

Name of immediate shareholder(s)/ shareholding percentage attributable Name of the companies to immediate shareholder(s)

昆山鑫源環保熱電有限公司 (Kunshan Xinyuan Target (51%) Environmental Protection Cogen-Power Co., Ltd.*)

(Installed capacity: 48MW/Attributable capacity: 24.5MW)

太倉協鑫垃圾焚燒發電有限公司 (Taicang 常隆有限公司 (Usual Win Limited) Xiexin Refuse Incineration Power Co., Ltd.*) (25%); and Target (75%)

(Installed capacity: 12MW/Attributable capacity: 12MW)

保利協鑫(徐州)再生能源發電有限公司 (Xuzhou Target (100%) GCL-Poly Renewable Energy Company Ltd.*)

(Installed capacity: 24MW/Attributable capacity: 24MW)

華潤協鑫(北京)熱電有限公司 (China Resources 常隆有限公司 (Usual Win Limited) Golden Concord (Beijing) Co-generation (25%); and Target (24%) Power Co., Ltd.*)

(Installed capacity: 150MW/Attributable capacity: 73.5MW)

蘇州工業園區藍天燃氣熱電有限公司 (Suzhou Target (51%) Industrial Park Blue Sky Gas Cogen-Power Co., Ltd.*)

(Installed capacity: 360MW/Attributable capacity: 183.6MW)

蘇州工業園區北部燃機熱電有限公司 (Suzhou 蘇州工業園區藍天燃氣熱電有限公 Industrial Park Northern Gas Turbine Cogen- 司 (Suzhou Industrial Park Blue Power Co., Ltd.*) Sky Gas Cogen- Power Co., Ltd.*) (73%)

(Installed capacity: 360MW/Attributable capacity: 134MW)

–19– LETTER FROM THE BOARD

Name of immediate shareholder(s)/ shareholding percentage attributable Name of the companies to immediate shareholder(s)

連雲港協鑫生物質發電有限公司 (Lianyungang Target (100%) Xiexin Biomass Electric-Power Generation Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 30MW)

寶應協鑫生物質發電有限公司 (Baoying Xiexin Target (100%) Biomass Electric-Power Generation Co., Ltd.*)

(Installed capacity: 30MW/Attributable capacity: 30MW)

錫林郭勒國泰風力發電有限公司 (Xilingol Target (100%) Guotai Wind Power Generation Co., Ltd.*)

(Installed capacity: 49.5MW/Attributable capacity: 49.5MW)

無錫藍天燃機熱電有限公司 (Wuxi Blue Sky Gas 保利協鑫(蘇州)電力投資有限公司 Turbine Thermoelectric Co., Ltd.*) (GCL-Poly (Suzhou) Electric- (Installed capacity in operation : 180MW/ Power Investments Co., Ltd*) Attributable capacity : 117MW, and installed (65%) capacity of 180MW is under construction)

徐州西區環保熱電有限公司 (Xuzhou Western Target (38.25%) Environmental Protection Co-generation Power Co., Ltd.*)

(Power plant which has ceased operation)

Companies owning non-solar power pipeline assets

廣西協鑫中馬分布式能源有限公司 (Guangxi 保利協鑫(蘇州)電力投資有限公司 Xiexin Zhongma Distributed Energy Co., (GCL-Poly (Suzhou) Electric- Ltd.*) Power Investments Co., Ltd*) (100%)

–20– LETTER FROM THE BOARD

Name of immediate shareholder(s)/ shareholding percentage attributable Name of the companies to immediate shareholder(s)

澠池協鑫清潔能源有限公司 (Mianchi Xiexin 保利協鑫(蘇州)電力投資有限公司 Clean Energy Co., Ltd.*) (GCL-Poly (Suzhou) Electric- Power Investments Co., Ltd*) (100%)

奇台縣協鑫新能源發電有限公司 (Qitaixian 保利協鑫(蘇州)電力投資有限公司 Xiexin New Energy Electric-Power (GCL-Poly (Suzhou) Electric- Generation Co., Ltd.*) Power Investments Co., Ltd*) (100%)

瑪納斯縣協鑫新能源發電有限公司 (Manasixian 保利協鑫(蘇州)電力投資有限公司 Xiexin New Energy Electric-Power (GCL-Poly (Suzhou) Electric- Generation Co., Ltd.*) Power Investments Co., Ltd*) (100%)

昆山協鑫藍天分布式能源有限公司 (Kunshan 保利協鑫(蘇州)電力投資有限公司 Xiexin Blue Sky Distributed Energy Co., (GCL-Poly (Suzhou) Electric- Ltd.*) Power Investments Co., Ltd*) (75%)

蘇州鑫語分布式能源開發有限公司 (Suzhou 保利協鑫(蘇州)電力投資有限公司 Xinyu Distributed Energy Development Co., (GCL-Poly (Suzhou) Electric- Ltd.*) Power Investments Co., Ltd*) (70%)

湖南協鑫電力開發有限公司 (Hunan Xiexin 保利協鑫(蘇州)電力投資有限公司 Electric-Power Development Co., Ltd.*) (GCL-Poly (Suzhou) Electric- Power Investments Co., Ltd*) (100%)

無錫協鑫分布式能源開發有限公司 (Wuxi Xiexin Target (100%) Distributed Energy Development Co., Ltd.*)

阜寧協鑫再生能源發電有限公司 (Funing Xiexin 保利協鑫(蘇州)電力投資有限公司 Renewable Energy Generation Company (GCL-Poly (Suzhou) Electric- Limited*) Power Investments Co., Ltd*) (100%)

協鑫（黃驊）燃氣熱電有限責任公司 (Xiexin 保利協鑫(蘇州)電力投資有限公司 (Huanghua) Natural Gas Cogeneration (GCL-Poly (Suzhou) Electric- Company Limited*) Power Investments Co., Ltd*) (100%)

–21– LETTER FROM THE BOARD

Name of immediate shareholder(s)/ shareholding percentage attributable Name of the companies to immediate shareholder(s)

南京協鑫燃機熱電有限公司 (Nanjing Golden 鑫域有限公司(Gold Pinnacle Concord Gas Turbine Power Co., Ltd.*) Limited) (100%)

內蒙古商都協鑫新能源有限公司 (Inner 保利協鑫(蘇州)電力投資有限公司 Mongolia Shangdu Xiexin New Energy (GCL-Poly (Suzhou) Electric- Company Limited*) Power Investments Co., Ltd*) (100%)

上海申能奉賢熱電有限公司 (Shanghai Shenneng 保利協鑫(蘇州)電力投資有限公司 Fengxian Cogeneration Co., Ltd.*) (GCL-Poly (Suzhou) Electric- Power Investments Co., Ltd*) (20%)

上海嘉定再生能源有限公司 (Shanghai Jiading 保利協鑫(蘇州)電力投資有限公司 Renewable Energy Co., Ltd.*) (Power plant (GCL-Poly (Suzhou) Electric- under construction) Power Investments Co., Ltd*) (20%)

廣州市超算分布式能源投資有限公司 保利協鑫（蘇州）電力投資有限公司 (Guangzhou City Supercomputing (GCL-Poly (Suzhou) Electric- Distributed Energy Investments Co., Ltd.*) Power Investments Co., Ltd.*) (Power plant under construction) (19%)

Other companies

常隆有限公司 (Usual Win Limited) Target (100%)

創惠投資有限公司 (Charmray Investments 常隆有限公司 (Usual Win Limited) Limited) (100%)

榮躍投資有限公司 (Dynamic Glory Investments 常隆有限公司 (Usual Win Limited) Limited) (100%)

Indonesia Representative Office 榮躍投資有限公司 (Dynamic Glory Investments Limited) (100%)

鑫域有限公司 (Gold Pinnacle Limited) 常隆有限公司 (Usual Win Limited) (100%)

–22– LETTER FROM THE BOARD

Name of immediate shareholder(s)/ shareholding percentage attributable Name of the companies to immediate shareholder(s)

協鑫(蘇州)碳資產管理有限公司 (Xiexin 保利協鑫(蘇州)電力投資有限公司 (Suzhou) Carbon Asset Management Co., (GCL-Poly (Suzhou) Electric- Ltd.*) Power Investments Co., Ltd*) (100%)

保利協鑫電力燃料有限公司 (GCL-Poly Power Target (100%) Fuel Co., Ltd.*)

桐鄉市烏鎮協鑫熱力有限公司 (Tongxiang City 湖州協鑫環保熱電有限公司 Wu Town Xiexin Thermal Power Company (Huzhou Golden Concord Limited*) Environmental Protection Cogen- Power Co., Ltd.*) (100%)

豐縣鑫成環保熱電有限公司 (Fengxian Xincheng 豐縣鑫源生物質環保熱電有限公司 Environmental Cogeneration Co., Ltd.*) (Fengxian Xinyuan Biological Environmental Heat and Power Co- generation Co., Ltd.*) (80%)

上海保利協鑫電力運行管理有限公司 (Shanghai 如東協鑫環保熱電有限公司 Rudong GCL-Poly Electricity Operating Management (Golden Concord Environmental Co., Ltd.*) Protection Cogen-Power Co., Ltd.*) (100%)

昆山年輪紙業科技有限公司 (Kunshan Nianlun 昆山鑫源環保熱電有限公司 Paper Science and Technology Co., Ltd.*) (Kunshan Xinyuan Environmental Protection Cogen-Power Co., Ltd.*) (18.03%)

保利協鑫(蘇州)電力投資有限公司 (GCL-Poly 保利協鑫電力燃料有限公司 (GCL- (Suzhou) Electric-Power Investments Co., Poly Power Fuel Co., Ltd.*) (100%) Ltd*)

上海嘉晟實業有限公司 (Shanghai Jiasheng 上海嘉定再生能源有限公司 Industrial Co., Ltd.*) (Shanghai Jiading Renewable Energy Co., Ltd.*) (40%)

內蒙古協鑫能源有限公司 (Inner Mongolia 保利協鑫(蘇州)電力投資有限公司 Xiexin Energy Co., Ltd.*) (GCL-Poly (Suzhou) Electric- Power Investments Co., Ltd*) (100%)

–23– LETTER FROM THE BOARD

Name of immediate shareholder(s)/ shareholding percentage attributable Name of the companies to immediate shareholder(s)

四川匯和集送變電工程設計有限公司 (Sichuan 保利協鑫(蘇州)電力投資有限公司 Huiheji Power Transmission Engineering (GCL-Poly (Suzhou) Electric- Design Company Limited*) Power Investments Co., Ltd*) (70%)

蘇州藍天燃機技術服務有限公司 (Suzhou Blue 蘇州工業園區藍天燃氣熱電有限公 Sky Gas Turbine Technical Services Company 司 (Suzhou Industrial Park Blue Limited*) Sky Gas Cogen- Power Co., Ltd*) (100%)

To the best knowledge, information and belief of the Board and after making all reasonable enquiries, the minority shareholders of each company of the Disposal Group are third parties independent of the Company and connected persons of the Company.

–24– LETTER FROM THE BOARD

The shareholding structure of the Group (including the Disposal Group) immediately before commencement of the Reorganisation:

Company

100%

Seller

Intermediate holding companies 100%

100% 100% Target

100% Solar Business

Companies owning and operating solar business, Companies owning including manufacturing and sale of polysilicon Companies owning non-solar power and wafer products, and developing, owning and non-solar power pipeline pipeline assets, GCL-Poly Power operating downstream solar farms both within Usual Win Ltd. assets and other companies owning and Fuel Co., Ltd. the PRC and overseas. companies operating power plants (See Note 1 ) and other companies (See Note 2)

25% 100% 33.33% 100% China Resources Golden Concord (Beijing) Suzhou GCL-Poly GCL-Poly (Suzhou) 蘇州協鑫工業應用 Co-generation Power Solar Energy Electric-Power 研究院有限公司 Co., Ltd.* Investment Limited* Investments Co., Ltd (See Note 5) (See Note 3) (See Notes 4 and 5)

Companies owning non-solar power pipeline assets and other companies (See Note 6)

Note 1: Please refer to Group A Companies.

Note 2: Please refer to Group B Companies.

Note 3: Target owns 24% interest in China Resources Golden Concord (Beijing) Co-generation Power Co., Ltd. (華潤協鑫(北京)熱電有限公司).

Note 4: Suzhou GCL-Poly Solar Energy Investment Limited* (蘇州保利協鑫光伏電力投資有限公司) owns 10 subsidiaries which own and operate solar power plants.

Note 5: To be transferred to the Group (excluding Disposal Group).

Note 6: Please refer to Group C Companies.

*: English name for identification only

- - - Indirectly owned

Companies of the Disposal Group.

Group A Companies (Note 1):

1. 創惠投資有限公司 (Charmray Investments Limited) 2. 榮躍投資有限公司 (Dynamic Glory Investments Limited) which owns 100% interest in 印尼代表處 (Indonesia Representative Office) 3. 鑫域有限公司 (Gold Pinnacle Limited) which owns 100% interest in 南京協鑫燃機熱電有限公司 (Nanjing Golden Concord Gas Turbine Power Co., Ltd.*)

–25– LETTER FROM THE BOARD

Group B Companies (Note 2):

1. 太倉協鑫垃圾焚燒發電有限公司 (Taicang Xiexin Refuse Incineration Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 75%) 2. 連雲港鑫能污泥發電有限公司 (Lianyungang Xinneng Sludge Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 75%) 3. 桐鄉濮院協鑫環保熱電有限公司 (Tongxiang Puyuan Xiexin Environmental Protection Co- generation Co., Ltd.*) (Intermediate holding company holds 52% and Target holds 48%) 4. 保利協鑫(徐州)再生能源發電有限公司 (Xuzhou GCL-Poly Renewable Energy Company Ltd.*) (Intermediate holding company holds 80% and Target holds 20%) 5. 沛縣坑口環保熱電有限公司 (Peixian Mine-site Environmental Cogen-Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 75%) 6. 阜寧協鑫環保熱電有限公司 (Funing Golden Concord Environmental Protection Co-generation Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 35%) 7. 無錫協鑫分布式能源開發有限公司 (Wuxi Xiexin Distributed Energy Development Co., Ltd.*) (Target holds 100%) 8. 錫林郭勒國泰風力發電有限公司 (Xilingol Guotai Wind Power Generation Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 75%) 9. 海門鑫源環保熱電有限公司 (Haimen Xinyuan Environmental Protection Co-generation Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 26%) 10. 寶應協鑫生物質發電有限公司 (Baoying Xiexin Biomass Electric-Power Generation Co., Ltd.*) (Intermediate holding company holds 75.71% and Target holds 24.29%) 11. 揚州港口污泥發電有限公司 (Yangzhou Harbour Sludge Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 26%) 12. Xuzhou Western Environmental Protection Co-generation Power Co., Ltd.* (徐州西區環保熱電有 限公司) (Intermediate holding company holds 36.75% and Target holds 38.25%) 13. 東台蘇中環保熱電有限公司 (Dongtai Suzhong Environmental Protection Co-generation Co., Ltd.*) (Intermediate holding company holds 50.1% and Target holds 49.9%) 14. 連雲港協鑫生物質發電有限公司 (Lianyungang Xiexin Biomass Electric-Power Generation Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 75%) 15. 嘉興協鑫環保熱電有限公司 (Jiaxing Golden Concord Environmental Cogeneration Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 70%) 16. 昆山鑫源環保熱電有限公司 (Kunshan Xinyuan Environmental Protection Cogen-Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 26%), which owns 18.03% interest in 昆山年輪紙業科技有限公司 (Kunshan Nianlun Paper Science and Technology Co., Ltd.*) 17. 蘇州工業園區藍天燃氣熱電有限公司 (Suzhou Industrial Park Blue Sky Gas Cogen-Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 26%), which owns 73% interest in 蘇州工業園區北部燃機熱電有限公司 (Suzhou Industrial Park Northern Gas Turbine Cogen- Power Co., Ltd.*) and 100% interest in 蘇州藍天燃機技術服務有限公司 (Suzhou Blue Sky Gas Turbine Technical Services Company Limited*) 18. 如東協鑫環保熱電有限公司 (Rudong Golden Concord Environmental Protection Cogen-Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 75%), which owns 100% interest in 上海保利協鑫電力運行管理有限公司 (Shanghai GCL-Poly Electricity Operating Management Co., Ltd.*) 19. 豐縣鑫源生物質環保熱電有限公司 (Fengxian Xinyuan Biological Environmental Heat and Power Co-generation Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 26%), which owns 80% interest in 豐縣鑫成環保熱電有限公司 (Fengxian Xincheng Environmental Cogeneration Co., Ltd.*) 20. 湖州協鑫環保熱電有限公司 (Huzhou Golden Concord Environmental Protection Cogen-Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 69.77%), which owns 100% interest in 桐鄉市烏鎮協鑫熱力有限公司 (Tongxiang City Wu Town Xiexin Thermal Power Company Limited*) 21. 太倉保利協鑫熱電有限公司 (Taicang Poly Xiexin Thermal Power Co., Ltd.*) (Intermediate holding company holds 25% and Target holds 75%), which will be transferred to the Group (excluding Disposal Group).

–26– LETTER FROM THE BOARD

22. 保利協鑫(蘇州)電器成套有限公司 (Target holds 100%), which will be transferred to the Group (excluding Disposal Group). 23. 保利協鑫(蘇州)財務諮詢有限公司 (Target holds 100%), which owns 100% interest in 蘇州鑫能財務 顧問有限公司, and which will be transferred to the Group (excluding Disposal Group).

Group C Companies (Note 6):

1. 內蒙古協鑫能源有限公司 (Inner Mongolia Xiexin Energy Co., Ltd.*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 2. 協鑫(黃驊)燃氣熱電有限責任公司 (Xiexin (Huanghua) Natural Gas Cogeneration Company Limited*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 3. 內蒙古商都協鑫新能源有限公司 (Inner Mongolia Shangdu Xiexin New Energy Company Limited*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 4. 協鑫(蘇州)碳資產管理有限公司 (Xiexin (Suzhou) Carbon Asset Management Co., Ltd.*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 5. 瑪納斯縣協鑫新能源發電有限公司 (Manasixian Xiexin New Energy Electric-Power Generation Co., Ltd.*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 6. 奇台縣協鑫新能源發電有限公司 (Qitaixian Xiexin New Energy Electric-Power Generation Co., Ltd.*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 7. 阜寧協鑫再生能源發電有限公司 (Funing Xiexin Renewable Energy Generation Company Limited*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 8. 廣西協鑫中馬分布式能源有限公司 (Guangxi Xiexin Zhongma Distributed Energy Co., Ltd.*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 9. 澠池協鑫清潔能源有限公司 (Mianchi Xiexin Clean Energy Co., Ltd.*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 10. 湖南協鑫電力開發有限公司 (Hunan Xiexin Electric-Power Development Co., Ltd.*) (100% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 11. 無錫藍天燃機熱電有限公司 (Wuxi Blue Sky Gas Turbine Thermoelectric Co., Ltd.*) (65% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 12. 四川匯和集送變電工程設計有限公司 (Sichuan Huiheji Power Transmission Engineering Design Company Limited*) (70% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 13. 昆山協鑫藍天分布式能源有限公司 (Kunshan Xiexin Blue Sky Distributed Energy Co., Ltd.*) (75% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 14. 蘇州鑫語分布式能源開發有限公司 (Suzhou Xinyu Distributed Energy Development Co., Ltd.*) (70% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 15. 上海申能奉賢熱電有限公司 (Shanghai Shenneng Fengxian Cogeneration Co., Ltd.*) (20% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd) 16. 上海嘉定再生能源有限公司 (Shanghai Jiading Renewable Energy Co., Ltd.*) (20% owned by GCL- Poly (Suzhou) Electric-Power Investments Co., Ltd), which owns 40% interest in 上海嘉晟實業有限 公司 (Shanghai Jiasheng Industrial Co., Ltd.*) 17. 廣州市超算分布式能源投資有限公司 (Guangzhou City Supercomputing Distributed Energy Investments Co., Ltd.*) (19% owned by GCL-Poly (Suzhou) Electric-Power Investments Co., Ltd)

–27– LETTER FROM THE BOARD

The shareholding structure of the Group (including the Disposal Group) immediately upon completion of the Reorganisation:

Company

100%

Intermediate holding companies Solar Business 100% Companies owning and operating solar business, including manufacturing and sale of polysilicon Seller and wafer products, and developing, owning and operating downstream solar farms Intermediate holding both within the PRC and overseas. 100% companies (See Note 5)

Target

36.75% 38.25% 100% 100%

Companies owning and Xuzhou Western operating power plants, Environmental companies owning GCL-Poly Power Protection Usual Win Ltd. non-solar power Fuel Co., Ltd. Co-generation pipeline assets and Power Co., Ltd. other companies (See Note 2)

100% 100%

GCL-Poly (Suzhou) Electric-Power Companies owning Investments Co., Ltd Companies owning and non-solar power pipeline operating power plants assets and other companies (See Note 4) (See Note 1)

Companies owning non-solar power pipeline assets and other companies (See Note 3)

Note 1: Please refer to Group A Companies.

Note 2: Please refer to Group B Companies.

Note 3: Please refer to Group C Companies.

Note 4: Please refer to Group D Companies.

Note 5: Solar business acquired companies transferred from Disposal Group, namely, 蘇州協鑫工業應用研究院有限公司, Suzhou GCL-Poly Solar Energy Investment Limited (蘇州保利協鑫光伏電力投資有限公司), Taicang Poly Xiexin Thermal Power Co., Ltd. (太倉保利協 鑫熱電有限公司), 保利協鑫(蘇州)電器成套有限公司, 保利協鑫(蘇州)財務諮詢有限公司 and 蘇州鑫能財務顧問有限公司.

Companies of the Disposal Group.

–28– LETTER FROM THE BOARD

Group A Companies (Note 1):

1. 創惠投資有限公司 (Charmray Investments Limited) 2. 榮躍投資有限公司 (Dynamic Glory Investments Limited) which owns 100% interest in 印尼代表處 (Indonesia Representative Office) 3. 鑫域有限公司 (Gold Pinnacle Limited) which owns 100% interest in 南京協鑫燃機熱電有限公司 (Nanjing Golden Concord Gas Turbine Power Co., Ltd.*)

Group B Companies (Note 2):

1. 保利協鑫(徐州)再生能源發電有限公司 (Xuzhou GCL-Poly Renewable Energy Company Ltd.*) 2. 沛縣坑口環保熱電有限公司 (Peixian Mine-site Environmental Cogen-Power Co., Ltd.*) 3. 阜寧協鑫環保熱電有限公司 (Funing Golden Concord Environmental Protection Co-generation Co., Ltd.*) 4. 無錫協鑫分布式能源開發有限公司 (Wuxi Xiexin Distributed Energy Development Co., Ltd.*) 5. 錫林郭勒國泰風力發電有限公司 (Xilingol Guotai Wind Power Generation Co., Ltd.*) 6. 海門鑫源環保熱電有限公司 (Haimen Xinyuan Environmental Protection Co-generation Co., Ltd.*) 7. 寶應協鑫生物質發電有限公司 (Baoying Xiexin Biomass Electric-Power Generation Co., Ltd.*) 8. 揚州港口污泥發電有限公司 (Yangzhou Harbour Sludge Power Co., Ltd.*) 9. 東台蘇中環保熱電有限公司 (Dongtai Suzhong Environmental Protection Co-generation Co., Ltd.*) 10. 連雲港協鑫生物質發電有限公司 (Lianyungang Xiexin Biomass Electric-Power Generation Co., Ltd.*) 11. 嘉興協鑫環保熱電有限公司 (Jiaxing Golden Concord Environmental Cogeneration Co., Ltd.*) 12. 昆山鑫源環保熱電有限公司 (Kunshan Xinyuan Environmental Protection Cogen-Power Co., Ltd.*) which owns 18.03% interest in 昆山年輪紙業科技有限公司 (Kunshan Nianlun Paper Science and Technology Co., Ltd.*) 13. 蘇州工業園區藍天燃氣熱電有限公司 (Suzhou Industrial Park Blue Sky Gas Cogen-Power Co., Ltd.*) which owns 73% interest in 蘇州工業園區北部燃機熱電有限公司 (Suzhou Industrial Park Northern Gas Turbine Cogen-Power Co., Ltd.*) and 100% interest in 蘇州藍天燃機技術服務有限公 司 (Suzhou Blue Sky Gas Turbine Technical Services Company Limited*) 14. 如東協鑫環保熱電有限公司 (Rudong Golden Concord Environmental Protection Cogen-Power Co., Ltd.*) which owns 100% interest in 上海保利協鑫電力運行管理有限公司 (Shanghai GCL-Poly Electricity Operating Management Co., Ltd.*) 15. 豐縣鑫源生物質環保熱電有限公司 (Fengxian Xinyuan Biological Environmental Heat and Power Co-generation Co., Ltd.*) which owns 80% interest in 豐縣鑫成環保熱電有限公司 (Fengxian Xincheng Environmental Cogeneration Co., Ltd.*) 16. 湖州協鑫環保熱電有限公司 (Huzhou Golden Concord Environmental Protection Cogen-Power Co., Ltd.*) which owns 100% interest in 桐鄉市烏鎮協鑫熱力有限公司 (Tongxiang City Wu Town Xiexin Thermal Power Company Limited*)

Please refer to pages 16 to 24 of this circular for names of immediate shareholder(s) and shareholding percentage attributable to immediate shareholder(s).

Group C Companies (Note 3):

1. 內蒙古協鑫能源有限公司 (Inner Mongolia Xiexin Energy Co., Ltd.*) 2. 協鑫(黃驊)燃氣熱電有限責任公司 (Xiexin (Huanghua) Natural Gas Cogeneration Company Limited*) 3. 內蒙古商都協鑫新能源有限公司 (Inner Mongolia Shangdu Xiexin New Energy Company Limited*) 4. 協鑫(蘇州)碳資產管理有限公司 (Xiexin (Suzhou) Carbon Asset Management Co., Ltd.*) 5. 瑪納斯縣協鑫新能源發電有限公司 (Manasixian Xiexin New Energy Electric-Power Generation Co., Ltd.*) 6. 奇台縣協鑫新能源發電有限公司 (Qitaixian Xiexin New Energy Electric-Power Generation Co., Ltd.*) 7. 阜寧協鑫再生能源發電有限公司 (Funing Xiexin Renewable Energy Generation Company Limited*)

–29– LETTER FROM THE BOARD

8. 廣西協鑫中馬分布式能源有限公司 (Guangxi Xiexin Zhongma Distributed Energy Co., Ltd.*) 9. 澠池協鑫清潔能源有限公司 (Mianchi Xiexin Clean Energy Co., Ltd.*) 10. 湖南協鑫電力開發有限公司 (Hunan Xiexin Electric-Power Development Co., Ltd.*) 11. 無錫藍天燃機熱電有限公司 (Wuxi Blue Sky Gas Turbine Thermoelectric Co., Ltd.*) 12. 四川匯和集送變電工程設計有限公司 (Sichuan Huiheji Power Transmission Engineering Design Company Limited*) 13. 昆山協鑫藍天分布式能源有限公司 (Kunshan Xiexin Blue Sky Distributed Energy Co., Ltd.*) 14. 蘇州鑫語分布式能源開發有限公司 (Suzhou Xinyu Distributed Energy Development Co., Ltd.*) 15. 上海申能奉賢熱電有限公司 (Shanghai Shenneng Fengxian Cogeneration Co., Ltd.*) 16. 上海嘉定再生能源有限公司 (Shanghai Jiading Renewable Energy Co., Ltd.*) which owns 40% interest in 上海嘉晟實業有限公司 (Shanghai Jiasheng Industrial Co., Ltd.*) 17. 廣州市超算分布式能源投資有限公司 (Guangzhou City Supercomputing Distributed Energy Investments Co., Ltd.*)

Please refer to pages 16 to 24 of this circular for names of immediate shareholder(s) and shareholding percentage attributable to immediate shareholder(s).

Group D Companies (Note 4):

1. 華潤協鑫(北京)熱電有限公司 (China Resources Golden Concord (Beijing) Co-generation Power Co., Ltd.*) 2. 太倉協鑫垃圾焚燒發電有限公司 (Taicang Xiexin Refuse Incineration Power Co., Ltd.*) 3. 連雲港鑫能污泥發電有限公司 (Lianyungang Xinneng Sludge Power Co., Ltd.*) 4. 桐鄉濮院協鑫環保熱電有限公司 (Tongxiang Puyuan Xiexin Environmental Protection Co- generation Co., Ltd.*)

Please refer to pages 16 to 24 of this circular for names of immediate shareholder(s) and shareholding percentage attributable to immediate shareholder(s).

Set out below is the unaudited combined financial information based on aggregation of the IFRS financial statements of the relevant members of the Disposal Group for the financial year ended 31 December 2013 and 2014 and for the six months ended 30 June 2014 and 2015 which include those adjustments made by the Group in relation to purchase price allocation and goodwill recognised at the time of the deemed acquisition of the non-solar power business in 2009 and provision for withholding tax on undistributed profits of the Disposal Group:

For the year ended For the six months ended 31 December 31 December 30 June 30 June (in HK$ million) 2013 2014 2014 2015 (unaudited) (unaudited) (unaudited) (unaudited)

Revenue 6,217 9,823(1) 4,599 4,941(3) Profit before tax 664 710 268 257 Profit after tax 456 440(2) 151 143(4) Profit attributable to owners of the Company 312 278 114 79

–30– LETTER FROM THE BOARD

Notes:

(1) The increase in revenue for the year ended 31 December 2014 was mainly due to the increase in revenue from coal trading business.

(2) The decrease in profit for the year ended 31 December 2014 was mainly due to certain impairment losses made upon the cease of operation of Xuzhou Western Environmental Protection Cogeneration Power Co., Ltd. in June 2014 offset by the decrease in the impairment loss on goodwill.

(3) The increase in revenue for the six months ended 30 June 2015 compared to the same period in 2014 was mainly due to the increase in coal trading revenue and the increase in electricity sales derived from sales of electricity generation right of the gas-fired power plants controlled by the Company to third party coal-fired power plants. However, according to a circular issued by the Jiangsu Provincial Price Bureau in April 2015, the policy for sales of electricity generation right has been suspended and not permitted since April 2015. There was no indication as to whether the suspension is temporary or the relevant authority would subsequently allow the sales of such right again. During the six months ended 30 June 2015, the income from sales of electricity generation right amounted to HK$289 million, representing 5.8% of the total revenue of the Disposal Group. Since the change of the policy, the gas-fired power plants did not derive income from the sales of electricity generation right and all its electricity income was generated from the power sales to the power grid companies.

(4) The decrease in profit for the six months ended 30 June 2015 compared to the same period in 2014 was mainly due to the increase in administrative expenses resulting from the increase of business development activities and in the impairment loss on goodwill.

During the six months ended 30 June 2015, the actual operating profits and cash flows for certain cash generating units (‘‘CGU’’) in the Disposal Group were lower than expected. Accordingly, the management of the Group recognised an impairment loss of HK$20.2 million in relation to goodwill allocated to the Disposal Group. The recoverable amount of such CGU in the Disposal Group is determined based on value in use calculation by management of the Group. That calculation uses cash flow projections based on a five-years financial budget approved by management at a discount rate of 12.02%. Cash flows beyond the five-year period are extrapolated using zero growth rate. Other key assumptions for the value in use calculations relate to the estimation of cash inflows/ outflows include budgeted sales and gross margin. Such estimation is based on past performance of such CGU and management’s expectations for the market development.

Had the Reorganisation been completed on 30 June 2015, based on aggregation of the unaudited IFRS financial statements of the relevant members of the Disposal Group for the six months ended 30 June 2015 which include those adjustments made by the Group in relation to purchase price allocation and goodwill recognised at the time of the deemed acquisition of the non-solar power business in 2009 and the provision for withholding tax on undistributed profits of the Disposal Group, the unaudited combined net assets of the Disposal Group attributable to owners of the Company as at 30 June 2015 would have been HK$3,492 million; and the unaudited combined net debt of the Disposal Group as at 30 June 2015 would have been HK$4,633 million. Net debt is calculated as total indebtedness, including bank and other borrowings, obligations under finance leases, notes payables minus balance of bank balances, cash and pledged and restricted bank deposits.

–31– LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE PROPOSED DISPOSAL

The Target will no longer be a subsidiary of the Company upon completion of the Proposed Disposal.

The actual financial effects from the Proposed Disposal will be computed based on the financial information of the Disposal Group on the date of Completion.

For the six months ended 30 June 2015, the unaudited profit attributable to owners of the Company amounted to approximately HK$826 million and the unaudited profit attributable to owners of the Company of the Disposal Group amounted to approximately HK$79 million. There is an estimated gain after tax of approximately HK$225 million arising from the Proposed Disposal based on the Consideration and the net assets value attributable to owners of the Company of approximately HK$3,492 million as at 30 June 2015, net of estimated taxes and transaction costs of approximately HK$341 million for the Proposed Disposal (including Reorganisation). For the purpose of this indicative calculation only, amounts stated in RMB have been converted into HK$ amounts at RMB1=HK$1.2681, being the exchange rate prevailing on 30 June 2015. No representation is made that RMB amounts have been, could have been or could be converted to HK$, or vice versa, at the applied or at any other rates or at all. The actual gain or loss that the Company can realise will depend on the actual net assets value attributable to owners of the Company on the date of Completion.

It is expected that upon completion of the Proposed Disposal the total assets of the Group will be decreased by approximately HK$7,407 million, the total liabilities of the Group will be decreased by approximately HK$7,994 million, the non-controlling interests of the Group will be decreased by approximately HK$1,108 million and the equity attributable to owners of the Company will be increased by HK$1,695 million as a result of de-consolidation of the Disposal Group, receipt of net proceeds from the Proposed Disposal, discharge of balances between the Group and the Disposal Group and receipt of Settlement Sum, based on the unaudited financial information of the Group and the Disposal Group as at 30 June 2015. And it is expected that completion of the Proposed Disposal would improve the net debt to equity attributable to owners of the Company as a result of the aforesaid estimated gain from the Proposed Disposal, the receipt of net proceeds from the Proposed Disposal and the elimination of the net debt of the Disposal Group.

REASONSFORANDBENEFITSOFTHEPROPOSEDDISPOSAL

In light of the reasons set out below, the Board believes that the Proposed Disposal is a strategic opportunity that would be in the interests of the Group:

Streamlining the Group’s business and focus on the core solar business

The Company has for some time explored ways of maximising and realising the value of its non-solar power business for its Shareholders. In addition, in connection with the Company’s termination of the proposed sale of its wafer production business

–32– LETTER FROM THE BOARD as announced in December 2014, the Company had stated (in particular in its announcements of 19 December 2014 and 6 January 2015) its intention to maintain its position as a leading polysilicon and wafer manufacturer.

Following the Proposed Disposal, the Company will no longer be engaged in the non-solar power business. The Proposed Disposal will allow the Company to focus on its core integrated solar business, including the manufacturing and sale of polysilicon and wafer products, and developing, owning and operating downstream solar farms both within the PRC and overseas. Upon completion of the Proposed Disposal, the Company will become a pure play integrated solar company, reinforcing its position as a leading global player (in terms of annual production capacities based on the rankings published by Bloomberg New Energy Finance) in the rapidly growing photovoltaic industry.

The Proposed Disposal will streamline the Group’s existing business segments and operations, provide investors with greater clarity on the Group’s business model, risk and return profile and growth prospects, and sharpen management’s strategic focus on the Group’s core integrated solar business.

Revenue from external customers and segment profit of the Group’s solar material business for the six months ended 30 June 2015 amounted to approximately HK$11,412 million and HK$992 million, representing decreases of 4.0% and 12.6% from HK$11,888 million and HK$1,135 million for the six months ended 30 June 2014, respectively. The decreases are mainly due to the volatile pricing environment for both polysilicon and wafer, partially offset by the increase in volume of wafer sold from 5,896 MW for the six months ended 30 June 2014 to 7,061 MW for the same period in 2015.

According to the National Energy Administration (‘‘NEA’’), the installed capacity of photovoltaic generation projects in the PRC increased from 4.2GW as at the end of 2012 to 28.1GW as at the end of 2014, representing a CAGR of approximately 159%. More recently, the NEA has increased the target for new photovoltaic power installations for 2015 by 5.3GW in September 2015, with the total 2015 target reaching 23.1GW. Moreover, according to the Energy Development Strategy Plan 2014–2020, the PRC government is targeting to achieve a photovoltaic installed capacity of 100GW by 2020, representing a CAGR of 24% from the end of 2014 level. In light of this and despite the market price volatility of the solar materials, the solar industry in the PRC is expected to achieve rapid growth as demonstrated by the government’s target, leading to more demand and business opportunities for the Group’s solar businesses, and the Group is well positioned to capture such growth.

Ideal timing for the sale of Disposal Group

The Directors consider this year as the ideal timing for the sale of the Disposal Group. While the EBITDA margin(1) of the Company’s non-solar power business (excluding coal trading business) prior to Reorganisation, decreased from 27.0% in 2007 when shares of the Company were first listed on the Stock Exchange, to a historical low level of 17.1% in 2011, it has since recovered and reached a historical

–33– LETTER FROM THE BOARD high level of 28.4% in 2014. However, for the six months ended 30 June 2015, the EBITDA margin of the Company’s non-solar power business (excluding coal trading business) decreased to 21.5%, compared with 24.7% for the same period of 2014.

The following chart sets out the EBITDA margin of the Company’s non-solar power business (excluding coal trading business) for the years ended 31 December 2007 to 2014, as well as the six months ended 30 June 2014 and 2015 respectively.

EBITDA margin of non-solar power business

In addition, the Directors also take into consideration the following industry trends and their impact on the Company’s non-solar power business when considering the Proposed Disposal.

In the first nine months of 2015, the growth of overall power demand in the PRC continued to decelerate, with a sharper decline in the utilisation hours of thermal power, according to statistics published by the China Electricity Council. As of 30 September 2015, the total installed capacity of power plants with capacity of over 6MW totaled 1,390GW, representing a 9.4% growth over the same period of 2014. Meanwhile, China’s total electricity consumption in the first nine months of 2015 recorded 4,134TWh, representing a 0.8% growth over the same period of 2014, which was 3.0 percentage points and 3.0 percentage points lower than the growth rates in the first nine months of 2014 and full year 2014, respectively. Particularly, in September 2015, the monthly electricity consumption in the PRC decreased by 0.2% as compared to the same month last year. According to the China Electricity Council, the deceleration in the growth of China’s total electricity consumption in the first nine months of 2015 was mainly due to the reduction in electricity consumption in the secondary sector, notably that of energy intensive industries such as ferrous metal smelting. In terms of capacity utilisation, according to the China Electricity Council, for the first nine months of 2015, the average utilisation hours of thermal power in the PRC dropped by 265 hours year on year to 3,247 hours. The drop is widened by 83 hours compared to the same period of 2014.

For the six months ended 30 June 2015, the Company’s average utilisation hour of the non-solar power plants (excluding power plants held by Taicang Poly Xiexin Thermal Power Co., Ltd.(2), Xuzhou Western Environmental Protection Cogeneration

–34– LETTER FROM THE BOARD

Power Co., Ltd.(3) and Suzhou Industrial Park Northern Gas Turbine Cogeneration Co., Ltd.(4)) was 2,820 hours, representing a drop of 91 hours as compared to 2,911 hours for the same period in 2014.

Note 1: The following items were excluded in the calculation of earnings before interest expenses, tax, depreciation and amortisation margin (‘‘EBITDA margin’’):i)Impairmentlosseson property, plant and equipment; ii) Impairment of goodwill, iii) Provision for pipelines reinstallation charge; iv) Compensation income, and v) Bargain purchase on business combination. EBITDA margin is a metric that is sometimes used to compare the results of companies by removing the effects of different factors that might otherwise make comparisons inaccurate or inappropriate.

Note 2: Taicang Poly Xiexin Thermal Power Co., Ltd. has ceased operation in July 2015.

Note 3: Xuzhou Western Environmental Protection Cogeneration Power Co., Ltd. has ceased operation in June 2014.

Note 4: Suzhou Industrial Park Northern Gas Turbine Cogeneration Co., Ltd. has not been operating on a normal commercial basis mainly due to the impact of high fuel costs.

With regard to the dark spread, while the coal price continued to soften in the first half of 2015, there have been three tariff cuts of electricity on-grid tariff in the PRC in the past 24 months, with the most recent two times in September 2014 and April 2015, respectively. In addition, the Group’s sale price of steam normally decreases as the coal price declines. The decrease in the electricity tariff and steam price had partially offset the benefits from declining coal price for the Group’s coal-fired cogeneration plants and resources comprehensive utilisation cogeneration plants in the six months ended 30 June 2015.

With regard to the spark spread, the NDRC implemented an increase in the city- gate gas price ceiling from 1 September 2014, and further reformed the natural gas tariff structure from 1 April 2015 through the convergence of the existing gas price and incremental gas price tiers. While the gas-fired tariff remained stable, the recent gas price changes resulted in a higher average unit gas cost for electricity and steam sales by the Group’s gas-fired cogeneration plants in the six months ended 30 June 2015 compared with the same period in 2014, negatively affecting the profitability of the Group’s gas-fired generation activities.

In general the deceleration in the power demand has greater impact on the non- solar power business as compared to the solar power business. The PRC government is committed to providing strong support to the renewable energy sector. As a result of favourable policies, historically, the electricity production by solar power has experienced more robust growth than that of thermal power. According to the China Electricity Council, the 2012–2014 CAGR of the electricity production by solar power was 157% while that of thermal power wasonly3%.Goingforward,according to the National Plan on Climate Change (2014–2020) and the China-US Joint Announcement on Climate Change, the PRC government targets to increase the proportion of non-fossil fuel energy in China’s primary energy consumption to around 15% in 2020 and to around 20% in 2030, from 9.8% in 2013. For solar power in

–35– LETTER FROM THE BOARD particular, NEA’s target for new photovoltaic installed capacity in 2015 was increased from 17.8GW to 23.1GW in September 2015, and the government further targets to achieve photovoltaic installed capacity of 100GW by 2020, according to the Energy Development Strategy Plan 2014–2020. In addition, in the PRC, government regulations dictate that dispatch priority for a power project is determined based on the technology employed and type of fuel used, with priority given to clean and/or renewable energies. Pursuant to regulations issued in 1993 and a provisional State Council measure issued in 2007, non-adjustable renewable power generation units such as solar power generation units receive higher dispatch priority over thermal power generation units in the PRC. According to the China Electricity Council, whilst the average utilisation hours of thermal power decreased in the first nine months of 2015 as compared to the same period in 2014, that of solar power has increased (1).The significant growth in the downstream solar installed capacity is likely to provide robust demand indirectly for the Group’s upstream solar materials business, whilst dispatch priority provides strong support for the Group’s solar farm business.

Should the unfavourable industry trends continue, the profitability of the Company’s non-solar power business may further decrease. The economic growth of the PRC, which is an important driver of the electricity consumption, is slowing down with the government targeting GDP growth of approximately 7% in 2015 compared to the average growth rate of GDP in 2005–2014 of 10.0%. The China Electricity Council forecasts the annual growth of total electricity consumption in the PRC in 2015 full year to be approximately 1.0%. In addition, the installed capacity of renewable energies, which receive higher dispatch priority, is expected to maintain rapid growth driven by the continued support by the government. Based on the government targets set in the Energy Development Strategy Plan 2014–2020, the 2014–2020 CAGR of the installed capacities of solar, wind, hydro and nuclear power are 25%, 13%, 2% and 20% respectively. Under the dispatch priority policy, the rapid expansion of renewable installed capacity will continue to put downward pressure on the utilisation hours of thermal cogeneration plants of the Disposal Group. The aforementioned factors may result in lower profitability of the Company’s non-solar power business. On the other hand, in the event that the unfavourable industry trends do not continue, for example, the overall electricity demand restores itshistoricalhighgrowthdrivenbyastrong recovery of the economic growth in the PRC, and the electricity tariff and/or the average fuel cost move in favour of the Company, the profitability of the Company’s non-solar power business may recover and the Disposal Group may maintain or increase its contribution of profits and cash flow to the Group.

1 Although the specific figure for average utilisation hours of solar power in the first nine months of 2014 is not published, in the first nine months of 2015 solar power generation growth of 74.0% was higher than solar capacity growth of 61.4%, indicating an increase in average utilisation hours of solar power.

–36– LETTER FROM THE BOARD

Reducing the indebtedness and improving the financial liquidity of the Company

The Company intends to use the net proceeds received from the Proposed Disposal and Settlement Sum for the following purposes:

(1) approximately 35% of the gross proceeds from the Proposed Disposal will be used to make a special distribution to the Shareholders of the Company; and

(2) the remaining balance will be mainly used: (a) as to approximately RMB1,485 million to reduce the Company’s indebtedness, which will help improve the Company’s financial liquidity, increase the Company’s financing flexibility and potentially lower the borrowing cost of the Company; and (b) as to approximately RMB1,485 million for working capital and other general corporate purposes, including but not limited to payment of outstanding construction payables, general corporate expenses and purchase of production materials.

As at 30 June 2015, the Group’s current liabilities exceeded its current assets by HK$12,176 million and the Group had cash and cash equivalents of HK$6,421 million against the Group’s bank and other borrowings due within one year of HK$27,291 million and bank and other borrowings due after one year of HK$16,140 million as at that date.

The Company intends to apply the proceeds from the Proposed Disposal and the Settlement Sum to repay certain of its bank borrowings with principal amounts approximate to RMB1.5 billion. They are mainly denominated in RMB and USD and will mature in 2016. RMB bank borrowings carried floating interest rates at rates with reference to the Benchmark Borrowing Rate of the People’s Bank of China, while USD bank borrowings carried interest rates at rates with reference to the London Interbank Offered Rate.

In line with the typical capital structure for power businesses, which is capital intensive and relies heavily on debt financing to fund its business, the leverage ratio of the Disposal Group is relatively high, with the ratio of net debt to equity attributable to owners of the Company of 132.7% as at 30 June 2015. The Proposed Disposal will allow the Group to deconsolidate the net debt of the Disposal Group from the Group’s consolidated balance sheet. In addition, the proceeds that the Company will receive from the Disposal Group, including those from the Consideration as well as the Settlement Sum, can be partially used to reduce the indebtedness and support the negotiation for more favourable financing terms. The ratio of net debt to equity attributable to owners of the Company as at 30 June 2015 would have been decreased by 41.8 percentage points from 157.9% to 116.1% after the Proposed Disposal, after taking into consideration the Settlement Sum, the special dividend distribution and the discharge of balances between the Group and the Disposal Group.

–37– LETTER FROM THE BOARD

Moreover,asat30June2015,theGroup’s current liabilities exceeded its current assets by HK$12.2 billion and out of which, approximately HK$1.6 billion came from the Disposal Group which contributed around 13% to the Group’s net current liabilities position as at that date. It is also expected that the net current liabilities position of the Group will be improved upon the completion of the Proposed Disposal.

A lower financial leverage and/or higher cash balance will provide the Company with more liquidity and higher financing flexibility, reduce the Company’s financial risk, and potentially lower the Group’s borrowing cost. A healthier capital structure, stronger financial position and potentially lower borrowing cost may increase the profitability and value of the Company, and are therefore in the interests of the Company’s shareholders.

Details of the Group’s total borrowings as at 31 August 2015 are set out in the section headed ‘‘Indebtedness of the Group’’ in Appendix I to this circular.

Benefits of the Proposed Disposal outweigh the disadvantages

The Directors have also taken into consideration the following disadvantages of the Proposed Disposal. In the financial year ended 31 December 2014 and for the six months ended 30 June 2015, the profit contribution from the Disposal Group accounted for approximately 14.2% and 9.6% respectively of the profit attributable to the equity holders of the Company. The Disposal Group will no longer contribute revenue and profits after the completion of the Proposed Disposal. In addition, following the Proposed Disposal, the Company will no longer be engaged in the non- solar power business, so the Proposed Disposal will increase the Company’s business concentration on its core integrated solar business.

In evaluating the disadvantages of the Proposed Disposal, the Board took into account the following factors: (i) the profit contribution by the Disposal Group to the Group is relatively limited; (ii) the negative impact to the earnings of the Group due to the foregone profit contribution to the Group as a result of the Proposed Disposal will be, to some extent, offset by the aforementioned estimated gain after tax in the short term, and further offset by the medium-to-long term benefits from the potential lower financial leverage and borrowing costs of the Company as a result of the indebtedness reduction and cash balance increase from the proceeds of the Consideration and Settlement Sum; (iii) there is no strategic synergy between the Disposal Group and the remaining solar business of the Group; (iv) the business concentration on the solar business after the Proposed Disposal is consistent with the Company’s strategy to focus on its core integrated solar business, which will allow the Company and its management team to focus its resources on the business area where it has the most competitive strengths; and (v) the more focused and simplified business model after the Proposed Disposal will likely facilitate investors in assessing the value of the Company.

–38– LETTER FROM THE BOARD

Taking into account the considerations discussed above, the Board is of the view that there are strategic reasons strongly in support of the Proposed Disposal, and that the benefits of the Proposed Disposal outweigh the disadvantages.

Reasons for the sale of the Disposal Group to the Purchaser

In deciding to sell the Disposal Group to the Purchaser, the Company took into account, among other things, the following factors:

(i) in view of Mr. Zhu Gongshan’s extensive experience in the power industry and his knowledge regarding the Disposal Group, due diligence could be completed efficiently with minimal distractiontothemanagementandthus would accelerate the execution timetable for the Proposed Disposal;

(ii) the practical challenges of identifying an alternative third party purchaser to purchase the non-solar power business of the Group as currently held within the Group, and successfully negotiating and concluding definitive sale and purchase documentation on satisfactory terms within a relatively short time frame;

(iii) the Company’s ability to minimise the risks and uncertainty inherent in a longer time frame for completion, including, for example, unexpected changes in market conditions and governmental policies; and

(iv) consequently, the Company’s ability to receive the Consideration in cash as soon as possible to enable it to reduce the indebtedness and improve the financial liquidity of the Group, as described on page 37 of this Circular under the heading ‘‘Reducing the indebtedness and improving the financial liquidity of the Company’’.

As the founder, Chairman and an executive Director of the Group, Mr. Zhu Gongshan is responsible for determining the overall strategy of the Group. Notwithstanding such role, the Directors are of the view that the Company’s proposed sale of the Disposal Group to the Purchaser is consistent with the Company’s strategic objective of focusing on its core integrated solar business and the other reasons for the Proposed Disposal as described on pages 32 to 39 of this circular. In addition, the Board (including the independent non-executive Directors) are of the view that the interests of the Company and the Independent Shareholders under the Proposed Disposal are duly protected by a number of safeguards, including (i) obtaining approval of the Proposed Disposal by the Board where Mr. Zhu Gongshan and Mr. Zhu Yufeng had abstained from voting on the relevant resolutions; (ii) procuring of advice from the Independent Financial Adviser for the benefit of the Independent Board Committee and the Independent Shareholders; (iii) obtaining approval of the NCD Review IBC; and (iv) the seeking of approval by the Independent Shareholders at the EGM where Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited, being companies beneficially held under a discretionary trust of which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries, will abstain from voting.

–39– LETTER FROM THE BOARD

Further, for reasons set out below, the Board is of the view that the entering into of the Revised Settlement and the Restated NCD does not outweigh the advantages of selling the Disposal Group to the Purchaser:

(i) in respect of the Revised Settlement, if the Company sold the Disposal Group to a third party, and proceeded with the Original Settlement, the Company would (assuming the Deed of Settlement is fully implemented) have acquired the Jinshanqiao Cogeneration Plant whilst having exited the non-solar power business. Under such circumstances, the Group would not have been able to derive any direct synergies between the Jinshanqiao Cogeneration Plant and any power generation assets of the Group. In addition, the Group would have been required to deploy additional internal resources to manage and operate the Jinshanqiao Cogeneration Plant, which would not be as cost effective as originally contemplated in the context of the Original Settlement. In contrast, under the Revised Settlement, upon the Amendment Deed becoming unconditional, the Company would receive the Settlement Sum in cash immediately; and

(ii) in respect of the Restated NCD, the Company does not have any immediate plans to re-engage in the Excluded Business.

In light of the above, the Board including the independent non-executive Directors consider that the sale of the Disposal Group to the Purchaser based on the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder would be an effective means to achieving the Company’s goal of exiting the non-solar power business.

The Company understands from the Purchaser that the Purchaser intends to sell all or part of the Disposal Group to a company listed in the PRC, of which Mr. Zhu Gongshan has, or may acquire, a controlling or non-controlling equity interest.

Independent valuation of the Disposal Group

In connection with the Proposed Disposal, the Company obtained an independent valuation of the equity interest in the Target by the Valuer for reference purposes and to provide added comfort to the Directors when assessing a desired ‘‘sale price’’ for the Disposal Group.

The Valuer adopted the market approach in its report, using the price to earnings ratios of a number of companies engaged in the PRC power business which are listed on the Stock Exchange as the basis for comparison, and determined a valuation of Honour Faith at RMB2,807 million as at 31 August 2015. The Company considers that it is appropriate to assess the market value of the Disposal Group by reference to the Hong Kong listed companies with similar businesses which were selected as comparables as the relevant financial informationrelatingtosuchcompaniesis publicly available. In addition, since the market approach is commonly adopted in business valuation, the Company considers it is fair and reasonable to adopt this valuation method.

–40– LETTER FROM THE BOARD

The following adjustments and assumptions, among others, were adopted by the Valuer in its report: (i) adjusting the one-off items (including the loss of discontinued operation and goodwill impairment), and withholding tax provisions by adding them back to the profits attributable to the owners of the Disposal Group, thereby increasing the profits attributable to the owners of the Disposal Group in 2014 as well as the valuation of the Disposal Group by approximately 42.6%; and (ii) computing the market multiple with reference to seven Hong Kong listed companies, which have similar business operations with the Disposal Group, with an average market multiple of 9.23 after excluding the outliers, which have significantly higher market multiples. The effective market multiple used was 8.92 after taking into consideration a discount on lack of marketability1 and control premium2. The Company is of the view that such adjustments and assumptions adopted by the Valuer are fair and reasonable.

As stated on pages 11 and 12 of this Circular, among the factors taken into account by the Directors in determining the Consideration are the historical operating and financial performance of the Disposal Group, including the Disposal Group’s historical contribution of profit attributable to owners of the Company. The Company used such profit values as a basis for comparison, including using price to earnings multiples, with appropriate similar businesses for which information is readily accessible. The result of such comparison provided an important starting reference value for the Company to determine the Consideration, overlaid by a range of other factors, including (but not limited to) the strategic rationale for the Proposed Disposal, the timing of the disposal by reference to prevailing market conditions and the potential use for the proceeds of the Proposed Disposal, and, consequently, the extent to which the Company is able in practice to negotiate the most favourable Consideration for the Disposal Group in all the circumstances.

1 The concept of marketability deals with the liquidity of an ownership interest, that is how quickly and easily it can be converted to cash if the owner chooses to sell. The lack of marketability discount reflects the fact that there is no ready market for shares in privately held companies which are typically not readily marketable compared to similar interest in public companies. Therefore, a share of stock in a privately held company is usually worth less than an otherwise comparable share in a publicly held company.

The discount on lack of marketability (‘‘DLOM’’) of this investment was assessed using put option method. The concept is that when comparing a public share and a private share, holder of a public share has the ability to sell the shares (i.e. a European put option) to the stock market right away. As the time to a liquidity event getting shorter, the degree of the DLOM becomes smaller. For the purposes of the valuation, the Valuer has used the Black Scholes formula and assumed that the spot price and exercise price are equal at 100% equity value of the Disposal Group. The expected option life applied is 1 year; the volatility applied is from comparable companies; and the risk free rate used was based on the Government Bloomberg Fair Value (BVF) Curve.

2 Control premium is an amount by which the pro rata value of a controlling interest exceeds the pro rata value of a non- controlling interest a business enterprise that reflects the power of a control. Both factors recognise that control owners have rights that minority owners do not and that the difference in those rights and, perhaps more importantly, how those rights are exercisable and to what economic benefits, cause a differential in the per-share value of a control ownership block versus a minority ownership block. The control premium adopted in this valuation is 15.8% with reference to a control premium study conducted by Factset Mergerstat.

–41– LETTER FROM THE BOARD

Although the said valuation is one of the matters taken into account by the Company in the process of its determination of the Consideration (in addition to the broader purposes mentioned above), the Company does not regard it is the primary factor in forming the basis for the Consideration as such. In particular, the amount of the Consideration agreed by the Seller and the Purchaser (which is approximately 14% higher than the result of the said valuation) had not been derived directly from such valuation.

In view of the nature of the valuation of the Disposal Group referred to above, the Company has not included a copy of the text of the report in this Circular. Notwithstanding this, the Company believes that this Circular complies with the general disclosure requirements of Rule 2.13 of the Listing Rules for the following reasons:

(a) the Consideration was determined after arm’s length negotiations between the parties taking into account a number of factors. Hence, the independent valuation report was one of the factors taken into consideration as a reference point, not the primary basis for the Company’s determination of the Consideration;

(b) the Valuer had prepared its report for the Company’s internal reference purposes;

(c) unlike valuations in relation to assets such as property interests, assets whose primary significance is its capital value, infrastructure projects or mineral assets, the Listing Rules do not specifically require a valuation of the assets of the type comprised in the Disposal Group;

(d) the valuation report does not constitute a profit forecast within the meaning of Rule 14.61 of the Listing Rules, and is therefore not subject to the reporting requirements under Rule 14.62 of the Listing Rules and inclusion in this circular;

(e) disclosure of certain pertinent details of the valuation (including the valuation amount, the valuation method adopted and certain adjustments and assumptions) has been incorporated in this circular; and

(f) a letter from the Independent Financial Adviser is contained in Appendix II to this circular, setting out the Independent Financial Adviser’s analysis of, and its opinion on, the terms of the Proposed Disposal and its fairness and reasonableness to the Company and the Shareholders as a whole.

–42– LETTER FROM THE BOARD

Taking into account the reasons and benefits set out above, together with the informationsetoutinthesectionheaded‘‘FinancialandTradingProspects’’in Appendix I of this Circular, the Directors, including the independent non-executive Directors are of the view that the Proposed Disposal, including:

(i) the terms of the Sale and Purchase Agreement, in particular, the conditions precedent, the Consideration and the basis of the Consideration;

(ii) the Group’s overall business strategy to focus on the core solar business and the proposed exit of the Group from the non-solar power business comprised in the Disposal Group upon completion of the Proposed Disposal in light of the current industry conditions;

(iii) the Revised Settlement;

(iv) the timing of the Proposed Disposal;

(v) the terms of the Restated NCD; and

(vi) the proposed sale of the Disposal Group to the Purchaser, being a connected person of the Company,

are fair and reasonable and in the interests of the Company and its Shareholders as a whole.

As the Proposed Disposal is subject to the fulfillment of certain conditions precedent and may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the securities of the Company.

PROPOSED AMENDMENT OF THE DEED OF SETTLEMENT

As mentioned above, it is a condition precedent to the completion of the Proposed Disposal that the Company enters into the Amendment Deed with the Covenantors to amend the terms of the Deed of Settlement so that the Covenantors shall agree to pay a cash compensation to the Company in the amount of the Settlement Sum in lieu of a transfer of all of the issued shares in Honour Faith to the Company as originally provided under the Deed of Settlement, and that the Settlement Sum is duly paid to the Company in accordance with the Amendment Deed.

Background to Non-competition Deed

On 27 October 2007, the Company and the Covenantors entered into the Non- competitionDeedinconnectionwiththeListing. The key provisions of the Non- competition Deed were summarised in the Prospectus. On page 176 of the Prospectus, it is stated that, among other things, each of the Covenantors had undertaken to the Company that, save as disclosed in the Prospectus, he/it would not, and would procure that his/its associates (except any members of the Group) would not, during the restricted period set out in the Prospectus, participate or hold interests in or be engaged in or acquire or hold

–43– LETTER FROM THE BOARD any business which is involved in the construction, development, operation or management of power plants or sales of electricity or heat in the PRC (the ‘‘Restricted Business’’). Page 178 of the Prospectus states that, each of the Covenantors had undertaken that he/it would not engage in any business which involves the construction, development, operation or management of cogeneration power plants in the PRC, other than the cogeneration power plants which are disclosed in the Prospectus. The Prospectus also discloses that each Covenantor had undertaken that if he/it or any of his/its affiliates is offered or becomes aware of any new investment or business opportunity which is in competition, directly or indirectly, or may lead to direct or indirect competitionwiththeGroupinconnectionwith the Restricted Business, he/it must first procure that such opportunity be offered to the Company on no less favourable terms, and that such Covenantor would only be allowed to take up the opportunity himself/itself if the Company has declined it (the ‘‘RightofFirst Refusal Arrangement’’). The Prospectus further states, on page 178, that the Right of First Refusal Arrangement shall not apply to any project involving the construction or operation of cogeneration power plants (the ‘‘First Refusal Carve-out’’).

In 2008, Mr. Zhu Yufeng, through two companies controlled by him, and after having first offered the opportunities to the Company and obtained its consent to proceed in accordance with terms of the Non-competition Deed, acquired the following interests (‘‘Interests’’): (i) the entire equity interest in Jinshanqiao Cogeneration Plant; and (ii) a 10% equityinterest(whichwaslaterdilutedto9%equityinterestduetoanincreaseinregistered capital) in Dongwu Cogeneration Plant. The interest in Dongwu Cogeneration Plant and the interest in the Jinshanqiao Cogeneration Plant were respectively transferred to the Zhu Family Trust in 2010 and May 2012, respectively. As Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries under the Zhu Family Trust, Mr. Zhu Gongshan and Mr. Zhu Yufeng were thus interested in the Interests. As part of a restructuring exercise of Mr. Zhu Gongshan’s family businesses, the Company was informed that on 3 December 2014, the entire equity interest in Jinshanqiao Holdco was transferred by the Zhu Family Trust to 徐州順力電力投資有限公司 (Xuzhou Shunli Power Investment Limited Company), a company indirectly owned and controlled by Mr. Zhu Gongshan.

The Enquiry and the NCD Review

On 22 August 2013, the Company received an enquiry from the Stock Exchange relating to Mr. Zhu Yufeng’s acquisition of the Interests in light of the Undertakings given by the Covenantors as described in the Prospectus.

In response to the Enquiry, the Board conducted a review of its records relating to Mr. Zhu Yufeng’s acquisition of the Interests and re-examined the detailed terms of the Non- competitionDeed.Basedonsuchreview,itbecame apparent to the Board that, among other things, there were inconsistencies between the terms of the Non-competition Deed and the Undertakings summarised in the Prospectus. Specifically, the First Refusal Carve-out was not included in the execution version of the Non-competition Deed. Since the Jinshanqiao Cogeneration Plant and the Dongwu Cogeneration Plant are cogeneration plants in the context of the description of the non-competition provisions in the Prospectus, it appeared that on the one hand, Mr. Zhu Yufeng had originally acquired the Interests

–44– LETTER FROM THE BOARD after having first offered the opportunities to the Company and obtained its consent in accordance with the terms of the Non-competition Deed (which is in the form of a contract between the Covenantors and the Company), and on the other hand, these acquisitions appeared to be inconsistent with the manner the non-competition provisions are summarised in the Prospectus.

To facilitate the making of an objective assessment of the subject matter of the Enquiry, on 13 September 2013, the Board resolved to take the following steps:

(i) establish the NCD Review IBC to undertake a full review of the facts relating to Mr. Zhu Yufeng’s and Mr. Zhu Gongshan’s respective interests, and to determine:

(a) whether the governing non-competition provisions are those contained in the Non-competition Deed or the Prospectus;

(b) whether Mr. Zhu Yufeng and/or Mr. Zhu Gongshan (or their associates) had committed a breach of their Undertakings;

(c) the reasons why the Non-competition Deed did not reflect the non- competition statements in the Prospectus;

(d) if there had been breaches of the Prospectus how these should be remedied; and

(e) whether any public statements previously made by the Company, including in announcements, circulars and annual reports (relating to the Interests and/or the Convenantors’ non-compete undertakings) might be required to be re- stated or clarified; and

(ii) engage external counsel to assist with the Company’s review and to advise the Board of the Company’s legal and regulatory obligations.

On 26 November 2013, the Company announced that, based on its review of the relevant factual circumstances, the NCD Review IBC determined (and the Board concurred) that the Company, the Covenantors and the Stock Exchange intended that the non-competition obligations as defined in the Prospectus should apply to the Covenantors. Accordingly, while the Prospectus correctly recorded the parties’ intended non-competition undertakings, the Prospectus mistakenly stated that the Non-competition Deed contained the intended non-competition undertakings.

On 20 March 2014, the Company made a further announcement providing an update of the NCD Review. In such announcement, the Company disclosed, among other things, that the NCD Review IBC had, as at the date of such announcement, determined as follows:

(i) The First Refusal Carve-out was not included in the execution version of the Non- competition Deed most likely by reason of a mistake or oversight.

–45– LETTER FROM THE BOARD

(ii) The Company and the Covenantors intended that the non-competition obligations as defined in the Prospectus should apply to the Covenantors.

(iii) Mr. Zhu Gongshan had been involved in two other proposed cogeneration plant projects in Wuxi and Nanjing but which were preliminary and pre-development and thus not inconsistent with the non-competition undertakings in the Prospectus. The Company, through its subsidiaries, assumed Mr. Zhu Gongshan and his associates’ interests in these two projects in or about October 2013.

(iv) Mr. Zhu Gongshan and Mr. Zhu Yufeng’s interests in the Dongwu Cogeneration Plant and the Jinshanqiao Cogeneration Plant are not consistent with the non- competition undertakings as defined in the Prospectus because of the First Refusal Carve-out.

(v) The Company had appointed Optima Capital to assess and advise the NCD Review IBC as to whether the Company had suffered any economic loss or other damage by reason of the Interests, as well as from the previous potential interests in the Wuxi and Nanjing projects.

The announcement of 20 March 2014 also disclosed that the NCD Review IBC had concluded that certain extracts in the public statements set out in Appendix A to such announcement made in good faith by the Company were inaccurate in view of the NCD Review IBC’s findings set out above, and that those statements should be read in conjunction with, and interpreted in the context of, the matters set out in such announcement.

The Deed of Settlement

As mentioned above, in connection with the NCD Review, the Company engaged Optima Capital to assess and advise whether the Company had suffered any economic loss or other damage by reason of the Interests. The Company also engaged Herbert Smith Freehills as external counsel to advise the Company and the NCD Review IBC in relation to its position under the Non-competition Deed. In addition, the Company engaged the Valuer to assess the market value of the equity interest in Jinshanqiao Holdco (excluding the value of Generator No.1 and the 9% equity interest in Dongwu Holdco which was held by Jinshanqiao Holdco at the date of valuation) for indicative purposes.

The Company received advice from Herbert Smith Freehills, among other things, that, based on the review undertaken by them, the only tangible claim of the Company appeared to be a claim against Mr. Zhu Gongshan and Mr. Zhu Yufeng for an account of the profits derived from their Interests. In its reports, Optima Capital determined that, based on the information available to the Company and provided to Optima Capital, the only readily quantifiable economic loss suffered by the Company by reason of Messrs. Zhu’s acquisition of the Interests is the Relevant Profits which, up to 31 December 2013 (being the date to which the Relevant Profits were calculated for the purposes of Optima Capital’s report) was RMB953,339,000. Pursuant to an accounting re-statement in respect of Jinshanqiao Holdco’s profit for the year ended 31 December 2012 which was brought to Optima

–46– LETTER FROM THE BOARD

Capital’s attention in September 2015, the amount of the Relevant Profits up to 31 December 2013 was re-stated at RMB1,007,589,000. In addition, the Valuer determined the 2014 JSQ Valuation to be RMB1,287,000,000.

During the course of the NCD Review process, the Company engaged in discussions with Mr. Zhu Gongshan and his legal advisers regarding, among other things, the Company’s factual findings and its position under the Non-competition Deed. Mr. Zhu Gongshan, through his legal advisers, did not accept that the Covenantors or any of them should be liable to account to the Company in respect of any of the Relevant Profits. Notwithstanding this, the Covenantors engaged in discussions and negotiations with the Company regarding to a potential settlement on a without prejudice basis, which ultimately resulted in the Deed of Settlement.

The terms of the Deed of Settlement provide, among other things, that the Company and Mr. Zhu Gongshan shall, as soon as practicable after the date of the Deed of Settlement and within a period of three months (extendable by the Company for a further three months), enter into good faith negotiations to settle the terms of, and, if the terms are agreed upon, enter into, the Definitive Transfer Deed to provide for the acquisition by the Company (or its designated subsidiary(ies)) from Mr. Zhu Gongshan of all the issued shares in Honour Faith for nil consideration and in accordance with the terms and conditions set out in the Definitive Transfer Deed. Upon satisfaction of the conditions of the Deed of Settlement, the Covenantors would be fully and finally discharged and released from all and any Possible Claims.

In the Company’s announcement of 25 March 2015, it disclosed the following specific factors considered by the Board in reaching its decision to agree to the Original Settlement:

(a) Ways to resolve the Possible Claims

Having considered the advice from the Company’s legal and financial advisers, the Board, in consultation with the NCD Review IBC, resolved that it would not be in the interests of the Company and its shareholders for the Company to pursue the Possible Claims against Messrs. Zhu in relation to the Interests because of the risks associated with litigation, the resources to be deployed for the purpose of such litigation and the resulting diversion of resources from the Company’s business, as well as the tension to the operation and business of the Company that would arise from a litigation between the Company and its major shareholders and directors. The Board, in consultation with the NCD Review IBC, therefore considered, in conjunction with the other factors set out above and below, that the Original Settlement would be an expedient and cost-effective way to resolve the Possible Claims and would be in the interests of the Company and its shareholders as a whole.

(b) Securing a continued steady supply of steam

The Jinshanqiao Cogeneration Plant is principally engaged in the operation of cogeneration power plant and sale of electricity and steam. Steam is required as energy by Jiangsu Zhongneng as part of its polysilicon production processes and by Jiangsu GCL to provide heat for its plant during the autumn and winter seasons. Jiangsu

–47– LETTER FROM THE BOARD

Zhongneng and Jiangsu GCL purchase steam from Jinshanqiao Cogeneration Plant pursuant to steam supply agreements entered into between Jinshanqiao Holdco and Jiangsu Zhongneng and Jiangsu GCL, respectively. The transaction amount for the year ended 31 December 2014 in relation to the steam supplied by Jinshanqiao Cogeneration Plant to Jiangsu Zhongneng and Jiangsu GCL amounted to approximately RMB882.9 million and RMB6.0 million, respectively. As disclosed in the Company’s announcement on 20 March 2014, the Jinshanqiao Cogeneration Plant had been a critical source of supply of steam to the Company’s polysilicon manufacturing business, the interruption of which supply would have a significant adverse impact on the Company’s business. The Board was of the view that, by reaching the Original Settlement and completing the Proposed JSQ Acquisition (subject to the terms and conditions to which is it subject), the Company would be able to secure a continued steady supply of steam by Jinshanqiao Cogeneration Plant, in order to avoid the adverse impact on the Company’s business which may result from a divestiture of the interests in the Jinshanqiao Cogeneration Plant by Messrs. Zhu to third parties.

(c) The proposed terms of the Proposed JSQ Acquisition

The Original Settlement provided that, subject to entering into the Definitive Transfer Deed, the Covenantors would transfer all of the shares in Honour Faith to the Company for nil consideration.

For the years ended 31 December 2013 and 2014, Jinshanqiao Holdco’s audited net profit was approximately RMB356.5 million and RMB387.3 million, respectively, before taxation, and its audited net profit was approximately RMB273.0 million and RMB290.3 million, respectively, after taxation. The audited net asset value of Jinshanqiao Holdco (including the value attributable to the Generator No. 1 and the 9% equity interest in Dongwu Holdco held by Jinshanqiao Holdco) as at 31 December 2013 and 2014 was approximately RMB637.1million and RMB411.3 million, respectively. The audited figures referred to above are based on Jinshanqiao Holdco’s audited financial statements for the years ended 31 December 2013 and 2014 prepared in accordance with generally accepted accounting principles in the PRC by the PRC statutory auditor of Jinshanqiao Holdco.

The fair value of 100% of the equity interest in Jinshanqiao Holdco based on the 2014 JSQ Valuation was determined at RMB1,287,000,000. It was expected that the 2014 JSQ Valuation would be updated before the entry into of the Definitive Transfer Deed and the Company would disclose any update to the 2014 JSQ Valuation in an announcement to be published if and when the Definitive Transfer Deed is entered into.

Having regard to the Company’s right to the Possible Claims, the Relevant Profits, the 2014 JSQ Valuation, the risks associated with litigation, the material importance of the Jinshanqiao Cogeneration Plant as a key source of steam supply to the polysilicon manufacturing business of the Group and the overall interests of the Company and its shareholders, the Board, in consultation with the NCD Review IBC

–48– LETTER FROM THE BOARD

and the Company’s legal and financial advisers, considered that the proposed terms of the Proposed JSQ Acquisition as contained in the Deed of Settlement to be fair and reasonable and in the interest of the Company and its shareholders as a whole. In addition, a transfer of the Jinshanqiao Cogeneration Plant to the Company would put an end to the continuing issues of inconsistency arising under the Non-competition Deed by virtue of the Covenantors’ interests in the Jinshanqiao Cogeneration Plant.

Revised Settlement and the Amendment Deed

As part of the negotiations of the Sale and Purchase Agreement, the retention of the shares in Honour Faith by entities controlled by Mr. Zhu Gongshan and the payment of a cash compensation (in the amount of the Settlement Sum) in lieu of a transfer of the shares in Honour Faith to the Company, was proposed by the Purchaser in substitution for the Original Settlement. The Revised Settlement terms are set out in the Amendment Deed, the execution and performance of which will be a condition precedent to the Proposed Disposal under the Sale and Purchase Agreement.

Since the Revised Settlement provides for a cash compensation by the Covenantors to the Company instead of a transfer of the shares in Honour Faith, the Company engaged Herbert Smith Freehills and Optima Capital, respectively, to advise the NCD Review IBC on the legal and commercial merits of the proposed departure from the Original Settlement. The Company also engaged the Valuer to provide an updated assessment of the market valuation of the shares in Honour Faith for indicative purposes.

In summary, Herbert Smith Freehills advised that, in their view, the NCD Review IBC and the Board were at liberty to approve the Revised Settlement in lieu of acquiring the shares of Honour Faith under the Deed of Settlement if they consider that doing so would be in the best interests of the Company after taking into account, among other things:

(i) the amount of cash compensation offered under the Revised Settlement as an alternative to the transfer of shares in Honour Faith to the Group;

(ii) the amount which the Company has been advised it would be entitled to claim against Messrs. Zhu, being all profits derived from the Interests since their acquisition by Messrs. Zhu or their associates;

(iii) the time, legal costs, management resource, litigation risks and uncertainties, among other things, involved if the Company were to pursue a civil claim against Messrs. Zhu as mentioned above;

(iv) the 2015 JSQ Valuation;

(v) the advice provided by Optima Capital in relation to the proposed terms of the Revised Settlement (which contains its calculation of the Relevant Profits);

(vi) whether the acquisition of the Jinshanqiao Cogeneration Plant contemplated under the Original Settlement would be in line with the business strategy of the Company if the Proposed Disposal materialises;

–49– LETTER FROM THE BOARD

(vii) the impact on the Proposed Disposal if the Revised Settlement is not accepted and the Amendment Deed is not executed (that is, a condition of the Proposed Disposal is not fulfilled); and

(viii)in the event that the Proposed Disposal does not materialise, the acquisition by the Company of the shares in Honour Faith would remain subject to the terms and conditions and the implementation of the Deed of Settlement.

In considering the proposed Revised Settlement, Optima Capital took into account a number of factors, including the following principal factors, among other things:

(i) the proposal to take over the Jinshanqiao Cogeneration Plant under the Original Settlement would no longer fit into the new business direction of the Group after the Proposed Disposal;

(ii) the Relevant Profits up to 31 July 2015 was RMB1,448,029,000 (‘‘Total Profits Derived’’) and the discount of the Settlement Sum to the Total Profits Derived of 19.9% is acceptable as it is reasonable and commercially justified to allow retention of certain amount of the Total Profits Derived for the ongoing operation and future development of the Jinshanqiao Cogeneration Plant; and

(iii) The Valuer has adopted the market approach and determined the 2015 JSQ Valuation to be RMB1,351,000,000 by making reference to the price to earnings ratios of certain selected comparable companies calculated based on a snapshot of their share prices as at 31 August 2015. As the market price of the shares of these selected companies (which are listed on the Stock Exchange) is subject to daily fluctuation, taking into account the impact of such fluctuation on the fair value of Honour Faith imputed by the underlying valuation methodology, Optima considered the discount of the Settlement Sum to the 2015 JSQ Valuation of approximately 14.1% is considered to be within an acceptable range.

Based on Optima Capital’s analysis, it has endorsed the proposed Revised Settlement.

In light of the advice received from the Company’s legal and financial advisers, in considering the Purchaser’s proposal, the Board duly took into account all relevant factors, including:

(i) the benefits of the Proposed Disposal to the Group as described above in this circular;

(ii) the fact that the Group would no longer be engaged in the non-solar power business upon completion of the Proposed Disposal and that the Group would not pursue or derive any direct synergies between the Jinshanqiao Cogeneration Plant and the Group’s remaining solar power generation assets;

–50– LETTER FROM THE BOARD

(iii) if the Group proceeded with the Proposed JSQ Acquisition, the Group would be required to deploy additional internal resources to manage and operate the Jinshanqiao Cogeneration Plant, as well as the financial and other risks of owning and operating the Jinshanqiao Cogeneration Plant, which would not be as cost effective as originally contemplated;

(iv) since the execution of the Deed of Settlement, a self-owned power generation facility which is an integral part of the Group’s polysilicon manufacturing business has been commissioned and has the capacity to supply steam to the Group, and notwithstanding the above, the supply of steam by the Jinshanqiao Cogeneration Plant to the Group could continue to be maintained pursuant to the new steam supply agreement entered into with Jinshanqiao Holdco on 29 September 2015;

(v) if the Proposed Disposal does not become unconditional and is not proceeded with, the terms of the Amendment Deed will not become unconditional and the Company has preserved its ability to pursue the Proposed JSQ Acquisition with the Covenantors as originally contemplated under the Deed of Settlement; and

(vi) the fact that the Proposed JSQ Acquisition in any event was uncertain since it remains subject to and conditional upon, among other things, completion of legal, financial and business due diligence by the Company in respect of Jinshanqiao Holdco and the entering into of the Definitive Transfer Deed.

In respect of the discount of 19.9% of the Settlement Sum to the Total Profits Derived, the Board (including members of the NCD Review IBC) considers:

(i) the acceptance of the Revised Settlement would remove the uncertainties, the risks of potential protracted litigation and its adverse impact on the share price of the Company, and the negative media coverage, and will minimise the tension between the management and the controlling shareholders and the potential disruption to the business of the Group if the Company were to pursue a civil claim against its controlling shareholders;

(ii) the maximum amount that the Company has been advised it would be entitled to recover from Messrs. Zhu or their associates;

(iii) the benefit of having the certainty of receiving the Settlement Sum upon completion of the Proposed Disposal; and

(iv) the new business strategy and direction of the Group following the Proposed Disposal.

On the basis of the above, the Board (including members of the NCD Review IBC) is of the view that the discount of 19.9% of the Settlement Sum to the Total Profits Derived is acceptable.

–51– LETTER FROM THE BOARD

Reasons for not including the 2014 JSQ Valuation and 2015 JSQ Valuation

For reasons set out below, the 2014 JSQ Valuation and the 2015 JSQ Valuation have not been included in this Circular:

1. the 2014 JSQ Valuation and the 2015 JSQ Valuation were procured to provide an indicative market value of the shares of Jinshanqiao Holdco and Honour Faith, respectively, as a general reference point in assisting the Company in considering the Original Settlement and the Revised Settlement, respectively. Besides the 2014 JSQ Valuation and the 2015 JSQ Valuation, the Company also took into account a variety of factors when entering into the Original Settlement and the Revised Settlement as described above;

2. the subject matter of the Revised Settlement is not the shares in Jinshanqiao Holdco or Honour Faith but the Settlement Sum; and

3. the values of the shares in Jinshanqiao Holdco and Honour Faith as assessed under the 2014 JSQ Valuation and the 2015 JSQ Valuation respectively are not directly comparable against the case value of either the Settlement Sum or the moneys which the Company has been advised it is potentially entitled to claim against Messrs. Zhu under the Claims.

Taking all considerations into account as described above, the Board (including members of the NCD Review IBC), considers that, if the Proposed Disposal proceeds, the proposed amendments to the Deed of Settlement contemplated under the Amendment Deed and the payment of the Settlement Sum (which has been determined by the Company taking into account, among other things, the Relevant Profits and the 2015 JSQ Valuation) to the Company under the Revised Settlement would be an acceptable form of alternative settlement consideration in respect of the Company’s Possible Claims.

PROPOSED VARIATION OF THE NON-COMPETITION DEED

As mentioned above, it is a condition precedent to completion of the Proposed Disposal that the Restated NCD is entered into between the Company and the Restated NCD Covenantors.

At the time of its Listing in 2007, the Company was principally engaged in the construction, development, management, ownership and operation of power plants or sales of electricity or heat in the PRC. Since then, the Company has gradually diversified its business to the manufacturing of polysilicon and wafers products for the solar industry as well as the development, investment, management and operation of environmentally friendly power plants and solar projects.

In October 2007, the Company and the Covenantors entered into the Non-competition Deed in connection with the Listing. Pursuant to the Non-competition Deed, the Covenantors undertook to the Company that, save as disclosed in the Prospectus, he/it would not, and would procure that his/its associates (except any members of the Group) would not, during the restricted period set out in the Prospectus, participate or hold

–52– LETTER FROM THE BOARD interests in or be engaged in or acquire or hold any business which is involved in the Restricted Business, subject to the Right of First Refusal Arrangement. However, the Right of First Refusal Arrangement does not apply to any project involving the construction or operation of cogeneration power plants. Therefore, the Purchaser (which is controlled by Mr. Zhu Gongshan and who is one of the Covenantors) would be prohibited from carrying on the business comprised in the Disposal Group by virtue of the terms of the Non- competition Deed. In addition, the Covenantors would continue to be restricted from being directly or indirectly interested in the business carried on by Jinshanqiao Holdco.

At the date of the Listing, certain power generation businesses in which the Covenantors were interested were excluded from the Group for the reasons disclosed in the Prospectus. Under the Non-competition Deed, the Covenantors have granted the Company options under which the Company has the right (the ‘‘Option Rights’’) to acquire their interests in the said excluded business at the consideration and on the terms as set out in the Non-competition Deed.

As part of the negotiations of the Sale and Purchase Agreement, the Purchaser has proposed that, as a condition of the Proposed Disposal, the Company and the Restated NCD Covenantors shall enter into the Restated NCD. It is proposed that the Restated NCD will amend and restate the terms of the Non-competition Deed to remove all relevant provisions relating to restrictions on the Covenantors from carrying on or being interested in the business comprised in the Disposal Group and Jinshanqiao Holdco, and any business, project or investment relating to the operation of the cogeneration plants solid waste incineration plants and wind power plants, including the Covenantors’ obligations to first offer to the Company opportunities in respect of such business and the Options Rights (the ‘‘Excluded Business’’). Nevertheless, under the Restated NCD, save for the Excluded Business, the Covenantors will still be obliged to not directly or indirectly, carry on or engage or be interested in any business which is or may be in competition with the business carried out by the Company from time to time.

Also, there is no contractual arrangement under the Restated NCD (i) restricting the Company from engaging in the Excluded Business after completion of the Proposed Disposal; and (ii) requiring the Restated NCD Covenantors to take any action or implement any arrangement should the Company decide to re-engage in the Excluded Business. As such, even if the Company re-engages in the Excluded Business, the Restated NCD Covenantors will not be restricted under the Restated NCD from continuing to carry on the Excluded Business. The Restated NCD is conditional upon (i) the approval thereof by the Independent Shareholders, and (ii) completion of the Proposed Disposal.

Factors considered by the Board

In considering these proposals (including the scope the Excluded Business and not requiring the Restated NCD Covenantors to take any action should the company decide to re-engage in the Excluded Business), the Board (including independent non-executive Directors) took into account a number of factors, including: (i) that the Company would no longer be engaged in the non-solar power business upon completion of the Proposed Disposal and the Company currently does not have any immediate plans to re-engage in the

–53– LETTER FROM THE BOARD

Excluded Business; (ii) it would be impractical for the Restated NCD Covenantors to continue to comply with the original scope of the Restricted Business under the Non- competition Deed given that Mr. Zhu Gongshan and Mr. Zhu Yufeng are the ultimate beneficial beneficiaries of the trust which holds the Purchaser and they will be engaged in the non-solar power business comprised in the Disposal Group and Jinshanqiao Holdco upon completion of the Proposed Disposal. If the Non-competition Deed was not amended, itwouldgiverisetoanimmediatebreachbyMr.ZhuGongshanandMr.ZhuYufengof their respective undertakings under the Non-competition Deed for engaging in the business of the Disposal Group once the Proposed Disposal was completed; (iii) the desire of the Purchaser to include ‘‘any business, project or investment relating to the operation of the cogeneration plants, solid waste incineration plants and wind farms’’ in the scope of the Excluded Business is a reasonable expectation of the Purchaser since without such provisions, the Purchaser would be constrained in its ability to further invest and develop the business/assets comprised in the Disposal Group; (iv) the time and cost (which may vary depending on the circumstances and is therefore unquantifiable) required to be incurred by the Company’s management in monitoring compliance with, and periodically reporting on, the non-compete restrictions (including considering any new opportunities referred by the Covenantors pursuant to the Non-competition Deed and conducting semi-annual review of compliance by the independent non-executive Directors) in respect of an area of business no longer engaged in by the Group; and (v) the Company will continue to benefit from the protection provided under the Restated NCD, among which, the Restated NCD Covenantors would still be obliged to not directlyorindirectly,carryonorengageorbe interested in any business which is or may be in competition with the business carried out by the Company from time to time.

In light of the above, subject to Independent Shareholders’ approval and completion of the Proposed Disposal, the Directors consider that the proposed amendments to the Non- competition Deed under the Restated NCD are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

CONTINUING CONNECTED TRANSACTIONS

As mentioned above, it is a condition precedent to the completion of the Proposed Disposal that the agreements relating to the continuing connected transactions between the Group and the Purchaser’s affiliated companies are entered into.

Reference is made to the announcement of the Company dated 29 September 2015. On 29 September 2015, Jiangsu Zhongneng and Jiangsu GCL SMTD entered into the New JZ Agreement and the New GCL Agreement respectively with Jinshanqiao Holdco in relation to the supply of steam by Jinshanqiao Holdco. On the same date, Jiangsu Zhongneng also entered into the Desalted Water Supply Agreement in relation to the supply of desalted water by Jinshanqiao Holdco to Jiangsu Zhongneng.

Pursuant to the New JZ Agreement, Jinshanqiao Holdco agreed to supply, and Jiangsu Zhongneng agreed to purchase steam with pressure of about 0.8Mpa to 3.8 Mpa and temperature at about 220˚C–380˚C for three years, commencing from 1 November 2015 and ending on 31 October 2018. Subject to the relevant annual caps, the agreed steam price

–54– LETTER FROM THE BOARD under the New JZ Agreement for steam with pressure of about 0.8Mpa is RMB165 per tonne and the steam with pressure of about 3.8Mpa is RMB180.7 per tonne, and will be payable monthly in arrears based on the amount of steam utilised by Jiangsu Zhongneng in the relevant month.

Pursuant to the New GCL Agreement, Jinshanqiao Holdco agreed to supply, and Jiangsu GCL SMTD agreed to purchase with pressure of about 0.6-0.8 Mpa and temperature at about 200˚C-260˚C for three years, commencing from 1 November 2015 and ending on 31 October 2018. Subject to the relevant annual caps, the agreed steam price under the New GCL Agreement for such steam is RMB180 per tonne and will be payable monthly in arrears based on the amount of steam utilised by Jiangsu GCL SMTD in the relevant month.

Pursuant to the Desalted Water Supply Agreement, Jinshanqiao Holdco agreed to supply, and Jiangsu Zhongneng agreed to purchase the desalted water for three years, commencing from 1 November 2015 and ending on 31 October 2018. Subject to the relevant annual caps, the agreed desalted water price under the Desalted Water Supply Agreement is RMB12 per tonne and will be payable monthly in arrears based on the amount of desalted water supplied by Jinshanqiao Holdco in the relevant month. If the raw material price or other costs increases or decreases, resulting in the cost for supplying the desalted water increased or decreased by 10% or above, the parties will adjust the price accordingly.

The transactions contemplated under the New JZ Agreement, the New GCL Agreement and the Desalted Water Supply Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules as Jinshanqiao Holdco, as an associate of Mr. Zhu Gongshan (a Director), is a connected person of the Company. For further details, please refer to the announcement of the Company dated 29 September 2015. There will not be any change to the terms of or transactions contemplated under the New JZ Agreement, the New GCL Agreement and the Desalted Water Supply Agreement even if the Proposed Disposal does not proceed.

LISTING RULES IMPLICATIONS IN RESPECT OF THE PROPOSED DISPOSAL

As certain applicable ratios set forth under Rule 14.07 of the Listing Rules in respect of the Proposed Disposal are more than 25% but less than 75%, the Proposed Disposal constitutes a major transaction for the CompanyunderChapter14oftheListingRulesand is therefore subject to the reporting, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

Also, since the Purchaser, as a company indirectly owned by the Zhu Family Trust, is a connected person of the Company, the Proposed Disposal constitutes a connected transaction of the Company under Chapter 14A of the Listing Rules and is therefore subject to the reporting, announcement, annual review and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules.

The EGM will be convened to consider and, if it thought fit, to pass the resolution(s) to approve the Sale and Purchase Agreement and the transactions contemplated thereunder, and the Restated NCD. Given that Mr. Zhu Gongshan and Mr. Zhu Yufeng, both being

–55– LETTER FROM THE BOARD

Directors, are considered to have a material interest in the Sale and Purchase Agreement and the Restated NCD, they have abstained from voting on the relevant board resolutions approving the Sale and Purchase Agreement and the Restated NCD. In addition, Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited, which together are interested in 5,029,843,327 Shares (representing approximately 32.47% of the total issued Shares) as at the Latest Practicable Date are ultimately beneficially held under a discretionary trust of which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries. Accordingly, Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited will abstain from voting at the EGM to approve the Sale and Purchase Agreement and the Restated NCD.

RE-ELECTION OF DIRECTOR

Pursuant to article 86(3) of the Articles, any Director appointed by the Board to fill a casual vacancy shall hold office until the first general meeting of members after his appointment and be subject to re-election at such meeting. Accordingly, Dr. Shen Wenzhong who was appointed as an independent non-executive Director and a member of the Audit Committee and the Strategic Planning Committee on 15 July 2015 will, pursuant to article 86(3) of the Articles, retire at the EGM. Dr Shen Wenzhong, being eligible, offers himself for re-election.

Brief biographical details of the Dr. Shen Wenzhong proposed for re-election at the EGM are set out below.

Dr. Shen Wenzhong, aged 47, has been a Professor and PhD Supervisor in the Department of Physics and Astronomy, Shanghai Jiao Tong University since 1999, as well as a Changjiang Chair Professor of Shanghai Jiao Tong University since 2000. He has become the Director of the Institute of Solar Energy, Shanghai Jiao Tong University, since 2007. Dr. Shen had participated in various science and technology research programs in the PRC, published scientific papers in international journals and books on photovoltaic subject. He graduated from Shanghai Institute of Technical Physics, Chinese Academy of Sciences with a doctorate degree in 1995. During the period from 1996 to 1999, he joined Georgia State University in the U.S. as a postdoctoral fellow. Dr. Shen currently is the executive council member of the China Renewable Energy Society, the Chairman of Shanghai Solar Energy Society, an Advisory Committee Member of the International Photovoltaic Science and Engineering Conference and the Chief Editor of an academic journal ‘‘Solar PV of China’’.

Dr. Shen has entered into a service contract with the Company on 15 July 2015 for an initial term of three years, subject to termination with three months’ prior notice in writing to the other party. Dr. Shen is entitled to an annual remuneration of HK$200,000 which has been determined with reference to his duties and responsibilities with the Company.

Dr. Shen has been an independent non-executive Director since 15 July 2015 in order to fill a casual vacancy and he will retire at the EGM but be eligible for re-election. He has been an independent non-executive director of Shanghai Aerospace Automobile

–56– LETTER FROM THE BOARD

Electromechanical Co., Ltd. (上海航天汽車機電股份有限公司), a company with its shares listed on the Shanghai Stock Exchange, since July 2014. Dr. Shen is not connected with any Directors, senior management, substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Dr. Shen does not have any interest in the shares of the Company within the meaning of Part XV of the SFO.

Save as disclosed above, there is no other information relating to Dr. Shen to be disclosed pursuant to Rule 13.51(2) of the Listing Rules and there is no other matter which needs to be brought to the attention of the Shareholders of the Company as at the Latest Practicable Date.

PROPOSED REFRESHMENT OF THE SCHEME LIMIT

The Schemes

The Schemes were adopted by the Company pursuant to the resolutions passed by the Shareholders of the Company on 22 October 2007. Apart from the Pre-IPO Share Option Scheme and the Share Option Scheme, the Company has no other share option scheme currently in force.

Utilisation of the Existing Scheme Limit

The Scheme Limit was refreshed to 200,000,000 Shares (being the Existing Scheme Limit) pursuant to the approval by the Shareholders at the extraordinary general meeting of the Company held on 21 April 2011. Following the approval of the Existing Scheme Limit on 21 April 2011 and up till the Latest Practicable Date, the Company has granted share options in respect of a total of 230,300,000 Shares to participants under the Share Option Scheme (the ‘‘Newly Granted Options’’), of which share options in respect of a total of 57,650,000 Shares had lapsed and no share options were granted under the Pre-IPO Share Option Scheme or any other schemes of the Company. As such, the total number of Newly Granted Options, after reduction of the total number of Shares which may be issued under the Newly Granted Options that had lapsed, was 172,650,000, which represented approximately 86.33% of the Existing Scheme Limit.

Proposed Refreshment of the Scheme Limit

As almost all of the Existing Scheme Limit have been utilised, the Board proposes to seek Shareholders’ approval at the EGM to refresh the Scheme Limit.

The purpose of the Share Option Scheme is to motivate eligible participants under the Share Option Scheme to optimise their future contributions to the Group and/or to reward them for their past contributions, to attract and retain or otherwise maintain ongoing relationships with such persons who are significant to and/or whose contributions are or will be beneficial to the performance, growth or success of the Group and to attract and retain individuals with experience and ability. The Directors are of the view that a refreshment of the Scheme Limit will allow the Company to continue to utilise the Share Option Scheme to pursue these purposes.

–57– LETTER FROM THE BOARD

Pursuant to the Share Option Scheme and in compliance with Chapter 17 of the Listing Rules, the Company may refresh the Scheme Limit by ordinary resolution of the Shareholders at general meetings provided that the maximum number of Shares which may be issued upon exercise of all options to be granted under the Share Option Scheme and any other schemes of the Company shall not exceed 10% of the Shares in issue as at the date of the EGM. As at the Latest Practicable Date, there were 15,489,637,268 Shares in issue. The Board proposes to refresh the Scheme Limit to 200,000,000 Shares (being the Refreshed Scheme Limit), representing approximately 1.29% of the Shares in issue as at the Latest Practicable Date. Options previously granted under the Schemes (including those outstanding, cancelled, lapsed or exercised in accordance with the terms of the Share Option Scheme or any other schemes of the Company) shall not be counted for the purpose of calculating the Refreshed Scheme Limit.

Notwithstanding the foregoing, in compliance with the applicable requirements under the Listing Rules, the maximum number of Shares which may be issued upon exercise of all outstanding share options granted and yet to be exercised under the Schemes must not in aggregateexceed30%ofthetotalnumberoftheSharesinissuefromtimetotime.No option shall be granted under any scheme(s) of the Company if this will result in the 30% limit being exceeded. As at the Latest Practicable Date, the maximum number of Shares which may be issued upon exercise of all share options that may be granted under the Refreshed Scheme Limit (i.e. 200,000,000 Shares) together with all outstanding share options granted but not yet exercised under the Schemes amounts to an aggregate of 416,688,000 Shares, representing approximately 2.69% of the Company’s issued share capital as at the Latest Practicable Date (being 15,489,637,268 Shares), which does not exceed 30%.

Conditions of the Refreshed Scheme Limit

The refreshment of the Scheme Limit is conditional upon:

1. the passing of an ordinary resolution by the Shareholders at the EGM to approve, among other things, the Refreshed Scheme Limit; and

2. the Listing Committee of the Stock Exchange granting the approval of the listing of, and permission to deal in, the Shares that may be issued pursuant to the exercise of any share options that may be granted under the Share Option Scheme and any other schemes of the Company which number shall not exceed 200,000,000 Shares.

Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Shares that may be issued pursuant to the exercise of the share options that may be granted under the Share Option Scheme subject to the Refreshed Scheme Limit.

–58– LETTER FROM THE BOARD

EGM

A notice convening the EGM to be held at Diamond I, Level 3, The Ritz-Carlton, Hong Kong, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong on Thursday, 26 November 2015 at 10: 30 a.m. at which an ordinary resolutions will be proposed for the approval by (i) the Independent Shareholders of the Sale and Purchase Agreement and the transactions contemplated hereunder and the Restated NCD, and (ii) the Shareholders of the re-election of Dr. Shen Wenzhong and the Refreshed Scheme Limit, is set out on pages 110 and 112 of this circular. In compliance with the Listing Rules, the votes to be taken at the EGM in respect of the ordinary resolutions to approve the Sale and Purchase Agreement, the Restated NCD, the re-election of Dr. Shen Wenzhong and the Refreshed Scheme Limit will be taken by poll, the results of which will be announced after the EGM.

Whether or not you are able to attend the EGM in person, you are requested to complete and return the enclosed proxy form in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited at 22/F, Hopewell Centre, 183 Queen’s Road East, Hong Kong but in any event not later than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. The completion of the enclosed proxy form will not preclude you from attending and voting at the EGM or any adjournment thereof should yousowish.

RECOMMENDATION

The Independent Board Committee, having taken into account the advice of Independent Financial Adviser, considers that the terms of the Sale and Purchase Agreement and the terms of the Restated NCD are fair and reasonable, and the Proposed Disposal and the Restated NCD are in the interests of the Company and the Shareholders as a whole. The Board therefore recommends the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder and the Restated NCD.

The Directors consider that the re-election of Dr. Shen Wenzhong is in the interests of the Company and the Shareholders as a whole and accordingly recommend that the Shareholders vote in favour of the relevant resolution to be proposed at the EGM. No Shareholder is requested to abstain from voting in respect of the relevant resolution to be proposed at the EGM.

The Directors consider that the refreshment of the Scheme Limit is in the interests of the Company and the Shareholders as a whole and the terms of the Refreshed Scheme Limit are fair and reasonable so far as the Shareholders are concerned. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant ordinary resolution to be proposed at the EGM to approve the Refreshed Scheme Limit. No Shareholder is requested toabstainfromvotinginrespectoftherelevantresolutiontobeproposedattheEGM.

–59– LETTER FROM THE BOARD

FURTHER INFORMATION

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

By order of the Board of GCL-Poly Energy Holdings Limited Yeung Man Chung, Charles Executive Director

–60– LETTER FROM THE INDEPENDENT BOARD COMMITTEE

GCL-POLY ENERGY HOLDINGS LIMITED 保 利 協 鑫 能 源 控 股 有 限 公 司 (Incorporated in the Cayman Islands with limited liability) (Stock code: 3800)

11 November 2015

To the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION — DISPOSAL OF NON-SOLAR POWER BUSINESS INVOLVING VARIATION OF NON-COMPETITION UNDERTAKINGS AND AMENDMENT OF TERMS OF PROPOSED SETTLEMENT

We have been appointed as the Independent Board Committee to advise you in connection with the Sale and Purchase Agreement and the transactions contemplated thereunder and the Restated NCD, details of which are set out in the letter from the Board contained in the circular of the Company to the shareholders of the Company dated 11 November 2015 (the ‘‘Circular’’), of which this letter forms part. We wish to draw your attention to the letter from the Independent Financial Adviser as set out on pages 63 to 88 of the Circular. Terms defined in the Circular shall have the same meanings when used herein, unless the context otherwise requires.

Having considered the information set out in the letter from the Board, the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder and the Restated NCD and the advice of the Independent Financial Adviser in relation thereto as set out on pages 63 to 88 of the Circular, we are of the view that the Sale and Purchase Agreement and the Restated NCD are in the interests of the Company and the Shareholders as a whole, and are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

–61– LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder and the Restated NCD.

Yours faithfully, For and on behalf of the Independent Board Committee

Dr. Ho Chung Tai, Raymond Mr. Yip Tai Him Dr. Shen Wenzhong Independent Non-executive Independent Non-executive Independent Non-executive Director Director Director

–62– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders for the purpose of incorporation into this circular.

PLATINUM Securities Company Limited

21/F LHT Tower 31 Queen’s Road Central Hong Kong Telephone (852) 2841 7000 Facsimile (852) 2522 2700 Website www.platinum-asia.com

11 November 2015

To the Independent Board Committee and the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION DISPOSAL OF NON-SOLAR POWER BUSINESS INVOLVING VARIATION OF NON-COMPETITION UNDERTAKINGS AND AMENDMENT OF TERMS OF PROPOSED SETTLEMENT

INTRODUCTION

We refer to our engagement as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Proposed Disposal contemplated under the Sale and Purchase Agreement. Details of the Proposed Disposal are contained in the circular of the Company dated 11 November 2015 (the ‘‘Circular’’). Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

The Board announces that on 14 September 2015 (after trading hours), the Seller, an indirectly wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Purchaser and the Guarantor in relation to the Proposed Disposal, being the disposal of 100% equity interest in the Target by the Seller to the Purchaser.

BASIS OF OUR OPINION

In our capacity as the Independent Financial Adviser, our role is to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of each of (i) the Proposed Disposal contemplated under the Sale and Purchase Agreement; and (ii) the Restated NCD were agreed on normal commercial terms, and are fair and reasonable so far as the Independent Shareholders are concerned, and in the interests of the Company and the Shareholders as a whole; and to give independent advice to the Independent Board Committee and as to whether the Independent Shareholders should vote in favour of the transactions.

–63– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In formulating our opinion, we have relied on the information and facts supplied to us by the Directors and/or management of the Company. We have reviewed all information we consider to be necessary for rendering our opinion including, among other things: (i) the Sale and Purchase Agreement; (ii) the Restated NCD and the Non-competition Deed; (iii) the 14 September Announcement and the NCD-related Announcements; (iv) the unaudited financial information of the Target for the 31 December 2013 and 2014 and for the six months ended 30 June 2014 and 2015; (v) the annual report of the Company for the year ended 31 December 2014 (the ‘‘2014 Annual Report’’); (vi) the interim report of the Company for the six months ended 30 June 2015 (the ‘‘2015 Interim Report’’); (vii) the report of 2015 JSQ Valuation prepared by the Valuer (the ‘‘2015 JSQ Valuation Report’’); and (viii) valuation report of the Disposal Group prepared by the Valuer (the ‘‘Disposal Group Valuation Report’’).

We have assumed that all information, facts, opinions and representations contained in the Circular are true, complete and accurate in all material respects and we have relied on the same. The Directors have confirmed that they take full responsibility for the contents of the Circular and have made all reasonable inquiries that no material facts have been omittedfromtheinformationsuppliedtous.

We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy or completeness of the information of all facts as set out in the Circular and of the information and representations provided to us by the Directors and/or management of the Company. Furthermore, we have no reason to suspect the reasonableness of the opinions and representations expressed by the Directors and/or managementoftheCompanywhichhavebeenprovidedtous.Inlinewithnormalpractice, we have not, however, conducted a verification process of the information supplied to us, nor have we conducted any independent in-depth investigation into the business and affairs of the Company. We consider that we have reviewed sufficient information to enable us to reach an informed view and to provide a reasonable basis for our opinion regarding the Proposed Disposal.

During the past two years, Platinum Securities Company Limited had no past engagement with the Company. We are independent from, and are not associated with the Company or any other party to the Proposed Disposal, or their respective substantial shareholder(s) or connected person(s), as defined under the Listing Rules and accordingly, are considered eligible to give independent advice on the Disposal. We will receive a fee from the Company for our role as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Proposed Disposal. Apart from this normal professional fee payable to us in connection with this appointment, no arrangements exist whereby we will receive any fees or benefits from the Company or any other party to the Proposed Disposal or their respective substantial shareholder(s) or connected person(s), as defined under the Listing Rules.

The Independent Board Committee, comprising all independent non-executive Directors, namely Dr. Raymond Ho Chung Tai, Mr. Yip Tai Him and Dr. Shen Wenzhong, has been established by the Board to advise the Independent Shareholders as to whether the terms of the Proposed Disposal contemplated under the Sale and Purchase

–64– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Agreement and the Restated NCD are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In formulating and giving our independent financial advice to the Independent Board Committee and the Independent Shareholders, we have taken into account the following principal factors:

1. Background of the Proposed Disposal

On 14 September 2015 (after trading hours), the Seller, an indirectly wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Purchaser and the Guarantor in relation to the Proposed Disposal, being the disposal of 100% equity interest in the Target by the Seller to the Purchaser.

The Target is the holding company of the Disposal Group, whose business will, immediately after the completion of the Reorganisation, primarily consist of (i) owning and operating 18 cogeneration power plants, two incineration plants and one wind power plant in the PRC with gross installed capacity of 1,594.5MW and attributable installed capacity of 960.8MW, (ii) constructing and developing two cogeneration power plants with aggregate installed capacity of 197.2MW and one 36MW incineration power plant in the PRC, and (iii) developing non-solar power pipeline projects. Immediately after the completion of the Proposed Disposal, the Group’s business will primarily consist of manufacturing and sale of polysilicon and wafer products and developing, owning and operating downstream solar farms both within the PRC and overseas.

The Proposed Disposal is subject to certain conditions precedent being fulfilled, including (i) the entering into by the Company and the Covenantors of the Amendment Deed pursuant to which such parties will agree to vary the terms of the Deed of Settlement conditional upon completion of the Proposed Disposal; and (ii) the entering into by the Company and the Restated NCD Covenantors of the Restated NCD pursuant to which such parties will agree, conditional upon completion of the Proposed Disposal, to amend and restate the terms of the Non-competition Deed.

2. Information on the Target and the Disposal Group

The Target is a company incorporated in the PRC and is principally engaged in investment holding and coal trading. The Target is the holding company of the Disposal Group, whose business will, immediately after the completion of the Reorganisation, primarily consist of (i) owning and operating 18 cogeneration power plants, two incineration plants and one wind power plant in the PRC with gross installed capacity of 1,594.5MW and attributable installed capacity of 960.8MW, (ii) constructing and developing two cogeneration power plants with aggregate installed capacity of 197.2MW and one 36MW incineration power plant in the PRC; and (iii) developing non-solar power pipeline projects.

–65– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3. Reasons for and benefits of the Proposed Disposal

3.1 Appropriate timing for the sale of the Disposal Group

As disclosed in the letter from the Board in the Circular, the earnings before interest expenses, tax, depreciation and amortisation margin (‘‘EBITDA margin’’) of the Company’s non-solar power business (excluding coal trading business) prior to Reorganisation reached a historical high level of 28.4% for the year ended 31 December 2014 (‘‘FY2014’’) but decreased to 21.5% for the six month ended 30 June 2015 (‘‘1H2015’’).

In the first nine months of 2015, the growth of overall power demand in the PRC continued to decelerate, with a sharper decline in the utilisation hours of thermal power, according to statistics published by the China Electricity Council. As of September 30, 2015, the total installed capacity of power plants with capacity of over 6MW totaled 1,390GW, representing a 9.4% growth over the same period of 2014. Meanwhile, China’s total electricity consumption in the first nine months of 2015 recorded 4,134TWh, representing a 0.8% growth over the same period of 2014, which was 3.0 percentage points and 3.0 percentage points lower than the growth rates in the first nine months of 2014 and full year 2014, respectively. Particularly, in September 2015, the monthly electricity consumption in the PRC decreased by 0.2% as compared to the same month last year. According to the China Electricity Council, the deceleration in the growth of China’s total electricity consumption in the first nine months of 2015 was mainly due to the reduction in electricity consumption in the secondary sector, notably that of energy intensive industries such as ferrous metal smelting. In terms of capacity utilisation, according to the China Electricity Council, for the first nine months of 2015, the average utilisation hours of thermal power in the PRC dropped by 265 hours year on year to 3,247 hours. The drop widened by 83 hours compared to the same period of 2014.

With regard to performance of the Company’s own non-solar power plants, the average utilisation hour of Company’s non-solar power plants (excluding power plants held by Taicang Poly Xiexin Thermal Power Co., Ltd., Xuzhou Western Environmental Protection Cogeneration Power Co., Ltd. and Suzhou Industrial Park Northern Gas Turbine Cogeneration Co., Ltd.) was 2,820 hours for 1H2015, representing a drop of 91 hours as compared to the 2,911 hours for the same period in 2014.

Moreover, the NDRC implemented an increase in the city-gate gas price ceiling from 1 September 2014, and further reformed the natural gas tariff structure from 1 April 2015 through the convergence of the existing gas price and incremental gas price tiers, but the gas-fired tariff remained stable. Therefore, the average unit gas cost for electricity and steam sales by the Group’s gas-fired cogeneration plants would increase as a result of the recent gas price changes, and we concur with the management that this will have an adverse impact on the profitability of the Group’s gas-fired generation activities.

–66– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We noted that the Disposal Group include companies owning pipeline assets, biological environmental heat, sludge power, solid waste incineration plants, coal business etc. Overall speaking, the operational and financial performances of the Disposal Group have been deteriorated for 1H2015 as compared to 2014. The net profit of the Disposal Group attributable to owner of the Company decreased to HK$79 million in 1H2015 as compared to HK$114 million for the same period in 2014. The utilization rate of non-solar plants has dropped by 3.1% in 1H2015 as discussed above. Although the revenue from coal trading business increased in 1H2015, the coal trading business will not have synergy to the solar business and it is suitable to include it in the Disposal Group. We have reviewed the performance of the Company’s non- solar power business on a longer term and noted that its EBITDA margin reached the highest level in 2014 since the listing of the Company in 2007. We consider that this is favourable to the Company in negotiating the terms of the Proposed Disposal. If the Proposed Disposal is conducted in the future when the there may be further deterioration of the PRC’s power industry and the Company’s non-solar power business may be negatively affected as a result, it may not be in the best interests of the Company and the Shareholders to negotiate for favourable commercial terms. We consider that the deceleration in the power demand has greater impact on the non-solar power business as compared to the solar power business, as indicated by the fact that the 2012–2014 CAGR of the electricity production by solar power was 157% while that of thermal power was only 3%, according to the China Electricity Council. Moreover, the PRC government is committed to providing strong support to the renewable energy sector and the PRC government targets to increase the proportion of non-fossil fuel energyinChina’sprimaryenergyconsumptiontoaround15%in2020andtoaround 20% in 2030, from 9.8% in 2013. For solar power in particular, NEA’s target for new photovoltaic installed capacity in 2015 was increased from 17.8GW to 23.1GW in September 2015, and the government further targets to achieve photovoltaic installed capacity of 100GW by 2020, according to the Energy Development Strategy Plan 2014– 2020. In addition, in the PRC, government regulations dictate that dispatch priority for a power project is determined based on the technology employed and type of fuel used, with priority given to clean and/or renewable energies. Pursuant to regulations issued in 1993 and a provisional State Council measure issued in 2007, non-adjustable renewable power generation units such as solar power generation units receive higher dispatch priority over thermal power generation units in the PRC.

We also noted that according to a circular issued by the Jiangsu Provincial Price Bureau in April 2015, in order to adjust the price variance of natural gas in the PRC, the policy for sales of electricity generation right has been suspended and not permitted since April 2015 and thereafter the gas-fired power plants did not derive electricity income from the sales of electricity generation right. There is no indication as to whether the suspension is temporary or permanent. We consider that this poses additional uncertainty in the performance of the Disposal Group in the future. We have enquired the management of the Company and understood that the increase in administrative expenses was resulted from the increase of business development activities and in the impairment loss on goodwill. We are of the view that the financial impacts of the above factors are insignificant to the Disposal Group.

–67– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As such, we are of the view that the market condition of the non-solar power business may further deteriorate and it is an appropriate timing for the sale of the Disposal Group when financial performance and condition of the Disposal Group is still satisfactory.

3.2 Focusing on the core integrated solar business

At the time of its listing in 2007, the Company was principally engaged in the construction, development, management, ownership and operation of power plants in certain provinces of the PRC. Since then, the Company has gradually diversified its business to the manufacturing of polysilicon and wafers products for the solar industry as well as the development, investment, management and operation of environmentally friendly power plants and solar projects.

According to the 2014 Annual Report and the unaudited combined financial information of the Disposal Group, for FY2014, the Disposal Group only contributed 26.4% of the revenue of the Group and 14.2% of the profit attributable to owners of the Company, while approximately 73% of the total revenue of the Group and approximately 84% of the total profit of the Group are generated from core integrated solar business, i.e. manufacture and sales of polysilicon and wafer and development, construction, management, operation and sales of solar farms. Therefore, we consider that the importance of non-solar power business to the Group has decreased significantly as compared to the time at the time of Company’s listing in 2007.

We noted that following the Proposed Disposal, the Company will no longer be engaged in the non-solar power business and become a pure play integrated solar company. We consider that such arrangement allows the Company to focus on its core integrated solar business, which may help reinforce its position as a leading global player in terms of manufacturing capacities of solar polysilicon and wafer (according to Bloomberg Intelligence) in the rapidly growing photovoltaic industry. Moreover, the Proposed Disposal will streamline the Group’s existing business segments and operations, provide investors with greater clarity on the Group’s business model, risk and return profile and growth prospects, and sharpen management’s strategic focus on the Group’s core integrated solar business.

We noted that the revenue from external customers of the Group’s solar material business for 1H2015 amounted to approximately HK$11,412.0 million, representing a slight decrease of 4.0% from HK$11,888.3 million for the six months ended 30 June 2014, which was mainly due to the decrease of average selling price of polysilicon and wafer during the first half of 2015 as compared to the same period in 2014. According to the 2015 Interim Report, the average selling prices of polysilicon and wafer were approximately HK$133.4 (US$17.2) per kilogram and HK$1.51 (US$0.195) per Watt respectively for the six months ended 30 June 2015. The corresponding average selling prices of polysilicon and wafer for the six months ended 30 June 2014 were HK$171.0 (US$22.1) per kilogram and HK$1.75 (US$0.225) per Watt respectively.

–68– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As discussed in the management discussion and analysis section of the 2015 Interim Report, although there is a seasonal slowdown in 1H2015, with weaker players suffering from the seasonal swing and exiting the industry, solar product selling prices may remain stable in the long run. Furthermore, as import of polysilicon from the United States into China will likely reduce significantly in the second half of 2015 with the stringent control on trade-processing loophole by China’s Ministry of Commerce, the average selling price of solar products may remain resilient in the second half 2015. Despite the market price volatility of the solar materials, the solar industry in the PRC is expected to achieve a rapid growth as demonstrated by the government’s target, leading to more demand and business opportunities for the Group’s solar businesses. According to the National Energy Administration (‘‘NEA’’), the installed capacity of photovoltaic generation projects in the PRC increased from 4.2GW as at the end of 2012 to 28.1GW as at the end of 2014, representing a CAGR of approximately 159%. More recently, the NEA has increased the target for new photovoltaic power installations for 2015 by 5.3GW in September 2015, with the total 2015 target reaching 23.1GW. Moreover, according to the Energy Development Strategy Plan 2014–2020, the PRC government targets to achieve photovoltaic installed capacity of 100GW by 2020, representing a CAGR of 24% from end of 2014 level. As a result, we consider that although revenue of Group’s solar material business drop slightly in 1H2015, the industry and the average selling price of solar material may recover in the long run, therefore it is in the interests of the Company and the Shareholders that the Group remain its focus in the solar material business.

We have also considered the potential adverse impact of the Proposed Disposal on the Company, such as loss of stable profits and business concentration risks. Based on the unaudited combined financial information of the Disposal Group and 2015 Interim Report, for 1H2015, contribution from the Disposal Group only accounts for 9.6% (FY2014: 14.2%) of profit attributable to owners of the Company. We are of the view that the Group is relying less on the profits from the Disposal Group. Moreover, the Group will use part of the net proceeds to repay debts which in turn will reduce finance expenses of the Group, offsetting the loss of profits from the Disposal Group. Upon Completion, the Group will focus on solar business, including (i) solar material business — mainly manufacture and sales of polysilicon and wafer; (ii) solar farm business — development, construction, management, operation and sales of solar farms; and (iii) new energy business — GCL New Energy, which is principally engaged in the development, construction, operation and management of solar farms, as well as manufacturing and selling of printed circuit boards. The solar material business is in the upstream of the solar supply chain while the solar farm business and new energy business are in the downstream. We consider that upon Completion, the Group will be involved in various business sectors in the value chain of the solar industry, indicating diversification of risk through the value chain. There is no strategic synergy between the Disposal Group and the remaining solar business of the Group. Furthermore, we consider there is trade-off between the risk of concentration and the benefit of focusing on core solar business where the Group has the most competitive strengths. As a result, we consider that the concentration risk is acceptable. Moreover, the Company’s business subsequent to the Proposed Disposal would not be heavily relied on GCL New Energy as (i) revenue from GCL New Energy only accounted approximately 2.8%

–69– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

of the total revenue of the Group for FY2014; and (ii) there is minimal sales from the Group’s upstream solar business to GCL New Energy and there is no long-term supply agreements between the Group’s upstream solar business and GCL New Energy.

Therefore, we concur with the management of the Company that the Proposed Disposal would allow the Company to dispose its noncore business and consolidate its financial and managerial resources to focus on its core integrated solar business. We consider that such focused strategy could reinforce the Company’s position as the leading global player in the rapidly growing photovoltaic industry, which is in the interests of the Company and the Shareholders as a whole.

3.3 Improving the Company’s capital structure

According to the 2015 Interim Report, as at 30 June 2015, the net current liabilities of the Group was approximately HK$12,176 million and the gearing ratio of the Group (calculated by total bank and other borrowings divided by total equity) was approximately 194%.

We are advised by the management of the Company that after making a special distribution of approximately 35% of the gross proceeds from the Proposed Disposal, the remaining balance of the net proceeds from the Proposed Disposal and the Settlement Sum will be mainly used to reduce the Company’s indebtedness and for working capital and other general corporate purpose, including but not limited to payment of outstanding construction payables, general corporate expenses and purchase of production materials. As a result, we consider both the Company’s working capital position and gearing ratiowillbeimproveduponcompletionofthe Proposed Disposal. Therefore, we are of the view that the Proposed Disposal is in the interests of the Company and the Shareholders as a whole.

3.4 Expediting the transaction process

Mr. Zhu Gongshan has extensive experience in the power industry in the PRC and has been in the industry for more than 25 years. We also understand from the management of the Company that Mr. Zhu Gongshan has been responsible for the management and operation of the power generation plants of the Disposal Group for many years therefore has sound knowledge regarding the Disposal Group. As a result, we concur with the management of the Company that the due diligence is expected to be completed efficiently with minimal distraction to the management. Therefore, we consider that the transaction process could be expedited through the disposal of the Target to the Purchaser given Mr. Zhu Gongshan’s experience in the power industry and his familiarity with the Disposal Group.

In light of the above, we are of the view that the reasons for and benefits of the Proposed Disposal are in the interests of the Company and the Shareholders as a whole.

–70– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Principal terms of the Proposed Disposal

Set out below are the principal terms of the Sale and Purchase Agreement:

THE SALE AND PURCHASE AGREEMENT

(A) Date

14 September 2015

(B) Parties

(i) Hank Rich Limited, an indirectly wholly-owned subsidiary of the Company, as the seller

(ii) 上海其辰投資管理有限公司 (Shanghai Qichen Investment Management Co., Ltd.*), as the purchaser. The Purchaser is owned by 江蘇協鑫能源有限公司 (Jiangsu Golden Concord Energy Co., Ltd*), which is ultimately owned by Asia Pacific Energy Fund being a trust of which Mr. Zhu Gongshan and his family members (including Mr. Zhu Yufeng) are beneficiaries; and

(iii) 江蘇協鑫能源有限公司 (Jiangsu Golden Concord Energy Co., Ltd.*), as guarantor to the Purchaser

(C) Assets to be sold

100% equity interest in the Target. For further information relating to the Target and the Disposal Group, please refer to the section headed ‘‘Information of the Target and Disposal Group’’ in the letter from the Board in the Circular.

(D) Consideration and payment terms

RMB3.2 billion, payable in cash upon Completion.

An amount of RMB160 million, being the Deposit, has been paid to the Seller by the Purchaser on 10 September 2015. The remaining balance (after deducting the relevant PRC withholding tax) will be paid by the Purchaser to the Seller upon Completion.

In the event that all the conditions precedent in respect of the Proposed Disposal are fulfilled (or, if applicable, waived) on or before the Long Stop Date but the Purchaser fails to proceed to Completion where the Seller is ready and willing to do so, (i) the Seller shall forfeit the Deposit; and (ii) to the extent that such forfeited Deposit is not sufficient to cover the Reorganisation Cost and other expenses incurred by the Seller in respect of the Proposed Disposal, the Purchaser shall pay to the Seller such amount which equals the difference between the Reorganisation Cost and the forfeited Deposit and the Seller shall be entitled to claim against the Purchaser for any damages suffered by it as a result of the breach of the Sale and Purchase Agreement by the Purchaser.

–71– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In the event that Completion does not occur before the Long Stop Date due to non-satisfaction of any of the conditions precedent in respect of the Proposed Disposal (unless such non-satisfaction is due to fraud, wilful default or gross negligence of the Seller), the Seller shall deduct 50% of the Reorganisation Cost from the total Deposit and return the remaining Deposit (if any) to the Purchaser.

The Consideration was determined after arm’s length negotiations between the parties to the Sale and Purchase Agreement taking into account, (i) the historical operating and financial performance of the Disposal Group, including the Disposal Group’s historical contribution of profit attributable to owners of the Company for the last five financial years as detailed in the section headed ‘‘Financial and Trading prospect’’ in Appendix I to the Circular. The Company derived a starting reference value range for the Disposal Group by using the price earnings multiples, as well as the price to book multiples, of certain selected third party businesses and comparing them with the Disposal Group’s historical results and net assets position, respectively, whereby the result of such comparison provided an important starting reference value for the Company to determine the Consideration; (ii) the reasons for and benefit of the Proposed Disposal, in particular, the strategic rationale for the Proposed Disposal, the timing of the Proposed Disposal by reference to the prevailing market conditions, the potential use for the proceeds of the Proposed Disposal, the nature and identity of the transaction counterparty (i.e. the Purchaser) and, consequently, the extent to which the Company is able in practice to negotiate the most favourable Consideration for the Disposal Group in all the circumstances as set out in the section headed ‘‘Reasons for and benefits of the Proposed Disposal’’; and (iii) an independent valuation of the Disposal Group prepared by the Valuer and commissioned by the Company for reference purpose whereby the Consideration is 14% higher than the independent valuation of the Disposal Group.

(E) Guarantee

The Guarantor has irrevocably and unconditionally agreed to guarantee the due performance of the obligations under the Sale and Purchase Agreement by the Purchaser.

(F) Conditions precedent

The Proposed Disposal is subject to the fulfilment or (if applicable) waiver of certain conditions precedent, including but not limited to the following, on or before the Long Stop Date:

(i) completion of the Reorganisation;

(ii) the Sale and Purchase Agreement and the transactions contemplated thereunder being approved by the Independent Shareholders as required andinaccordancewiththeListingRules;

(iii) the obtaining of all necessary governmental and regulatory consents and approvals by the Target and other relevant parties;

–72– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iv) discharge of certain trading debts, non-trading debts and mutual guarantee(s) between the Disposal Group on the one hand, and the Group (excluding the Disposal Group) on the other hand;

(v) the obtaining of all other necessary consents from relevant third parties, including financial institutions and bondholders in respect of the Proposed Disposal by the Seller and its affiliates;

(vi) the entering into of the Amendment Deed by the Company and the Covenantors and the due payment of the Settlement Sum to the Company pursuant to the Amendment Deed. The Amendment Deed is conditional upon (i) completion of the Proposed Disposal, and (ii) payment of the Settlement Sum by the Covenantors in accordance with the Amendment Deed;

(vii) the entering into of the Restated NCD by the Company and the Restated NCD Covenantors and the Restated NCD having become unconditional in accordance with its terms. The Restated NCD is conditional upon (i) the approval thereof by the Independent Shareholders, and (ii) completion of the Proposed Disposal; and

(viii) the entering into of the agreements relating to the continuing connected transactions between the Group and the Purchaser’s affiliated companies.

(G) Completion

Completion shall take place on the fifth business day after the last of the conditions precedent (other than the conditions in (vi) and (vii) above which will be satisfied upon Completion) has been satisfied or waived.

Upon Completion, the Target will cease to be a subsidiary of the Company.

(H) Change of name

The Purchaser shall procure that as soon as reasonably practicable and in any event within one year from the date of Completion, the name of any company within the Disposal Group that consists of or includes the words ‘‘GCL-Poly’’ and/or ‘‘保利協 鑫’’ is changed to a name which does not include such words or name.

Basis in determining the Consideration

As disclosed above, the Consideration was determined after arm’s length negotiations between the parties to the Sale and Purchase Agreement taking into account, (i) the historical operating and financial performance of the Disposal Group, including the Disposal Group’s historical contribution of profit attributable to owners of the Company for the last five financial years as detailed in the section headed ‘‘Financial and Trading prospect’’ in Appendix I to the Circular; (ii) the reasons for and benefit of the Proposed Disposal, in particular, the ideal timing for such disposal

–73– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER as set out in the section headed ‘‘Reasons for and benefits of the Proposed Disposal’’; and (iii) an independent valuation of the Disposal Group prepared by the valuer and commissioned by the Company for reference purpose whereby the Consideration is 14% higher than the independent valuation of the Disposal Group. We have reviewed the fairness, reasonableness and completeness of any assumptions made by the Valuer in the Disposal Group Valuation Report. Without limiting the generality of the aforesaid, in relation to the Valuer providing an opinion or valuation of the Disposal Group, we (i) have reviewed the assumptions and valuation methodology adopted by the Valuer; (ii) market multiple of a list of comparable companies; and (iii) have discussed with the Valuer in relation to its expertise and any current or prior relationships with the Company.

In our discussion with the Valuer, we understand that the valuation was carried out on a market value basis. The Valuer adopted the market approach which considers prices recently paid for similar assets, with adjustments made to market prices to reflect condition and utility of the appraised assets relative to the market comparative. The Valuer also considered that the suitable multiple in this valuation is the price-to- earnings ratio. We are of the view that the market approach and price-to-earnings ratio are commonly used in valuing companies involved in the power industry, and it is fair and reasonable to valuer the Disposal Group with such methodology. In addition, we have also reviewed the assumptions and the list of market comparable companies used in the Disposal Group Valuation Report, which are selected according to criteria such as deriving most of revenues from the traditional power provision business in the PRC and publicly listed in Hong Kong. The resulted market comparable companies in the Disposal Group Valuation Report have an average P/E ratio of 9.23 times after excluding the outliers and the Disposal Group is valued at RMB2,807 million using the effective P/E ratio of 8.92 times after taking into consideration of the discount on lack of marketability (‘‘DLOM’’) and control premium. We consider the market comparable companies selected by the Valuer are suitable and similar to the Comparable Companies as discussed in the section below headed ‘‘Comparison with comparable companies’’. Therefore the Consideration of RMB3.2 billion represents a premium of approximately 14.0% to the valuation of the Disposal Group in the Disposal Group Valuation Report.

We have discussed with the Valuer in relation to the fairness and reasonableness of DLOM and control premium. We note that the Valuer has assessed DLOM using put option method, which the rationale is that when comparing a public share and a private share, holder of a public share has the ability to sell the share (i.e. a put option) to the stock market right away and as the time to liquidity event getting shorter, the degree of the DLOM becomes smaller. We consider such method of valuing DLOM is fair and reasonable and commonly used. We have also cross-checked various parameters adopted in the put option method and consider them reasonable. Control premium is the amount by which the pro rata value of a controlling interest exceeds the pro rata value of a non-controlling interest a business enterprise that reflects the power of a control. We note that the Valuer adopted 15.8% s per a Control Premium Study conducted by Factset Mergerstat which we consider a reputable source and therefore fair and reasonable.

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Besides, we have discussed with the Valuer in relation to their experiences and understood that Simon M.K. Chan, the regional director of the Valuer, has more than 10 years of experience in valuation and corporate advisory business. He has provided a wide range of valuation services to numerous listed and private companies in different industries in Mainland China, Hong Kong, Singapore and the United States, including infrastructure companies like power plant companies and toll road companies. Given Simon M.K. Chan has plenty of practical experience in the valuation of power plant companies as stated above, we are of the view that he is qualified to provide a reliable valuation of the Disposal Group. In addition, we understand, from our discussion, that the Valuer per visually been engaged by the Company to conduct certain valuations but only for financial reporting purpose, and hence, we are of the view that the Value’s independence was impaired in conducting such valuations. Lastly, we have reviewed the terms of engagement (having particular regard to the scope of work, and whether there are any limitations on the scope of work which might adversely impact on the degree of assurance given by the Valuer, opinion or statement) and we are of the view that such terms of engagement is consistent with market practice and appropriate to give the opinion.

Payment terms

We note that an amount of RMB160 million, being the Deposit, has been paid to the Seller by the Purchaser on 10 September 2015. The remaining balance of the Consideration (after deducting the relevant PRC withholding tax) will be paid by the Purchaser to the Seller upon Completion. In the event that all the conditions precedent in respect of the Proposed Disposal are fulfilled (or, if applicable, waived) on or before the Long Stop Date but the Purchaser fails to proceed to Completion where the Seller is ready and willing to do so, (i) the Seller shall forfeit the Deposit; and (ii) to the extent that such forfeited Deposit is not sufficient to cover the Reorganisation Cost and other expenses incurred by the Seller in respect of the Proposed Disposal, the Purchaser shall pay to the Seller such amount which equals the difference between the Reorganisation Cost and the forfeited Deposit and the Seller shall be entitled to claim against the Purchaser for any damages suffered by it as a result of the breach of the Sale and Purchase Agreement by the Purchaser. In the event that Completion does not occur before the Long Stop Date due to non-satisfaction of any of the conditions precedent in respect of the Proposed Disposal (unless such non-satisfaction is due to fraud, wilful default or gross negligence of the Seller), the Seller shall deduct 50% of the Reorganisation Cost from the total Deposit and return the remaining Deposit (if any) to the Purchaser. We consider that these are normal commercial payment terms and they are fair and reasonable to the Company and the Shareholders.

Future continuing connected transactions

With reference to the announcement of the Company dated 29 September 2015, on 29 September 2015, Jiangsu Zhongneng and Jiangsu GCL SMTD have entered into the New JZ Agreement and the New GCL Agreement, respectively, with Jinshanqiao Holdco to renew the respective terms of the Existing JZ Steam Supply Agreement and the Existing GCL Steam Supply Agreement for three years commencing from 1

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November 2015 and ending on 31 October 2018, subject to the terms and conditions provided therein. On 29 September 2015, Jiangsu Zhongneng and Jinshanqiao Holdco entered into the Desalted Water Supply Agreement in relation to the supply of desalted water by Jinshanqiao Holdco to Jiangsu Zhongneng. We consider that entering into such agreements is in the ordinary and usualcourseofbusinessoftheCompany.The relevant steam supply price was determined by arm’s length negotiations between the parties with reference to the price prescribed by the Xuzhou Price Bureau who will publish steam reference price to the industry from time to time. We consider that such basis of consideration with reference to government prescribed price is fair and reasonable. The desalted water supply price was determined by arm’s length negotiations between the parties with reference to the supplying and production costs of the desalted water. We consider that the cost basis of consideration is air and reasonable.

5. Comparison with comparable companies

In our assessment, we have considered price-to-earnings ratio (the ‘‘P/E’’) and price-to- book ratio (the ‘‘P/B’’), which are commonly used benchmarks in valuing a company engaged in power generation business.

The Disposal Group is principally engaged in the business of owning and operating cogeneration power plants, incineration plants and one wind power plant in the PRC. In order to assess the fairness and reasonableness of the Consideration, we have attempted to identify comparable companies (the ‘‘Comparable Companies’’) that (i) are currently listed on the Main Board of the Stock Exchange; and (ii) are engaged in and generated majority, which accounted for over 50% of the revenue from the business of operating cogeneration power plants, incineration plants or wind power plants in the PRC. The Comparable Companies have been selected exhaustively based on the above criteria, which have been identified, to the best of our endeavours, in our research through public information.

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The following table sets out the details of the Comparable Companies:

Table 4 — Comparable Companies analysis on P/E and P/B

Market Company name Ticker capitalisation P/E P/B (HK$ million) (times) (times) (Note 1) (Note 2) (Note 3) Beijing Jingneng Clean Energy Co., Limited 579 HK 19,237 13.1 1.2 China Power New Energy Development Company Limited 735 HK 6,289 18.8 0.7 China Resources Power Holdings Company Limited 836 HK 80,354 8.7 1.1 Huaneng Power International, Inc 902 HK 118,680 9.1 1.3 China Longyuan Power Group Corporation Limited 916 HK 58,585 18.8 1.4 Datang International Power Generation Co., Ltd. 991 HK 37,401 17.4 0.7 Huadian Power International Corporation Limited 1071 HK 56,120 7.7 1.4 China Power International Development Limited 2380 HK 34,716 10.3 1.0 Maximum 18.8 1.4 Minimum 7.7 0.7 Average 13.0 1.1 Disposal Group (Note 4) 14.0 1.1

Source: Stock Exchange website and annual reports and interim results of the Comparable Companies

Notes:

1. The market capitalisations of the Comparable Companies are calculated based on their respective closing prices as the Latest Practicable Date and the total number of issued shares (including domestic shares or A shares).

2. The P/Es of the Comparable Companies are calculated by dividing the market capitalisation of the respective Comparable Companies as at the Latest Practicable Date by the profit attributable to owners of the respective Comparable Companies as extracted from their respective latest published annual reports.

3. The P/Bs of the Comparable Companies are calculated by dividing the market capitalisation of the respective Comparable Companies as at the Latest Practicable Date by the net asset attributable to owners of the respective Comparable Companies as extracted from their respective latest published annual reports or interim results.

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4. The implied P/E of the Disposal Group calculated by dividing the Consideration (RMB3.2 billion, equivalent to approximately HK$3,888 million) by unaudited profit attributable to owners of the Disposal Group for FY2014 (HK$278 million), and the implied P/B of the Disposal Group calculated by dividing the Consideration (RMB3.2 billion, equivalent to approximately HK$3,888 million) by unaudited combined net assets attributable to owners of the Disposal Group as at 30 June 2015 (HK$3,492 million).

As illustrated in Table 4 above, the P/Es of the Comparable Companies range from approximately 7.7 times to approximately 18.8 times (the ‘‘P/E Range’’), with an average of approximately 13.0 times (the ‘‘Average P/E’’). We note that the implied P/E of the Disposal Group is 14.0 times which is within the P/E Range and higher than the Average P/E. As a result, we consider the Consideration is fair and reasonable and in favour of the Company and the Shareholders in this regard.

In addition, the P/Bs of the Comparable Companies range from approximately 0.7 times to approximately 1.4 times (the ‘‘P/B Range’’), with an average of approximately 1.1 times (the ‘‘Average P/B’’). We note that the implied P/B of the Disposal Group is 1.1 times which is in line with the Average P/E. As a result, we consider the Consideration is fair and reasonable and in favour of the Company and the Shareholders in this regard.

In light of the above, we are of the opinion that the Consideration is fair and reasonable to the Company and the Shareholders as compared to the Comparable Companies.

6. Disposal to the Purchaser

The Purchaser is owned by 江蘇協鑫能源有限公司 (Jiangsu Golden Concord Energy Co., Ltd*), which is ultimately owned by Asia PacificEnergyFundbeingatrustofwhich Mr. Zhu Gongshan and his family members (including Mr. Zhu Yufeng) are beneficiaries. The Company understands from the Purchaser that the Purchaser intends to sell all or part of the Disposal Group to a company listed in the PRC, of which Mr. Zhu Gongshan has, or may acquire, a controlling or non-controlling equity interest.

Mr. Zhu Gongshan has extensive experience in the power industry in the PRC. He is currently the co-chairman of Asian Photovoltaic Industry Association, the vice chairman of China Fortune Foundation Limited, the vice chairman of the Cogeneration Professional Committee of the Chinese Society for Electrical Engineering (中國電機工程學會熱電專業委 員會), the vice president of Chinese Renewable Energy Industries Association and a member of American Council on Renewable Energy. He has been in the power industry in China for more than 25 years. We also understand from the management of the Company that Mr. Zhu Gongshan has been responsible for the management and operation of the power generation plants of the Disposal Group for many years therefore has sound knowledge regarding the Disposal Group. As a result, we concur with the management of the Company that the sale of the Disposal Group to the Purchaser could lead to minimal distraction to the management and thus accelerating the timetable for the Proposed Disposal as the due diligence is expected to be completed efficiently.

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As discussed with the management of the Company, we note that the management of the Company has considered other potential means of realising the value of its non-solar power business but considered the Proposed Disposal to the Purchaser to be the most appropriate based on the underlying proposed normal commercial terms and, in particular, Mr. Zhu Gongshan has extensive experience in the power industry in the PRC and has deep understanding in managing the Disposal Group. We are of the view that the Proposed Disposal is preferred because it requires less time and costs.

Therefore, we consider the Proposed Disposal to the Purchaser could expedite the transaction process as other parties may require more detailed and substantial due diligence process such as visiting the various plant sites, interviewing the suppliers and customers of the Disposal Group and enquiring the management of both the Disposal Group and the Company. Thus, the Proposed Disposal to the Purchaser would distract the management less from the normal business operation as compared to disposal to other parties. On the other hand, a prolonged transaction timetable may increase the uncertainty due to various factors out of the Company’s control, including but not limited to any unexpected changes of market environment, government policies, as well as post-closing conditions and performance of the non-solar power business. Third party buyers may require rights to receive compensation for any negative impact as the result of the aforementioned changes taking place within a certain period after completion, whereas Mr. Zhu Gongshan did not request for such protective rights. Moreover, as there are 20 projects of different fuel types, locations and financial performances, investors may selectively pick the best assets, and refuse to acquire the less attractive assets. Mr. Zhu Gongshan is willing to acquire all projects under the Disposal Group as a bundle, which minimizes the uncertainty of the transaction. In this regard, we consider it is in the interests of the Company and the Shareholders to dispose the Disposal Group to the Purchaser.

Although the Company understands from Mr. Zhu Gongshan that the Purchaser intends to sell all or part of the Disposal Group to a company listed in the PRC in which Mr. Zhu has or may acquire a controlling or non-controlling interest, the Company has not had any discussions with such potential purchaser, and it is not aware of any other third party potential purchasers for the Disposal Group in the market. We consider that such potential market would not affect our view that it is in the interests of the Company and the Shareholders to dispose the Disposal Group to the Purchase given the abovementioned reasons and the Consideration is fair and reasonable as discussed in the section headed ‘‘Comparison with comparable companies’’.

We understand that Mr. Zhu Gongshan, as the founder and Chairman of the Group, is responsible for determining the overall strategy of the Group. As discussed with the management of the Company, we note that it is the Company’s strategy to maintain its position as a leading polysilicon and wafer manufacturer and the Company has been exploring ways to realise value for the business comprised in the Disposal Group and to enhance the Company’s value as a pure player in the solar industry. We consider that the strategy to dispose the Disposal Group was in line with the Group’s overall strategy and determined in the interests of the Shareholders as a whole instead of Mr. Zhu Gongshan alone.

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In light of the above, together with that the Consideration is fair and reasonable as compared to the Comparable Companies as discussed above, we are of the view that it is fair and reasonable to dispose the Disposal Group to the Purchaser.

7. Financial impacts of the Proposed Disposal

7.1 Effect on the net asset value (‘‘NAV’’)

Upon the completion of the Proposed Disposal, the Disposal Group will no longer be subsidiaries of the Company, and their financial results will cease to be consolidated with the accounts of the Company. It is estimated that there is an estimated gain after tax of approximately HK$225 million arising from the Proposed Disposal based on the Consideration and the net assets value attributable to owners of the Company of approximately HK$3,492 million as at 30 June 2015, net of estimated taxes and transaction costs of approximately HK$341 million for the Proposed Disposal (including Reorganisation). We regard that the Proposed Disposal will increase NAV of the Group accordingly.

Therefore, we consider the Disposal will have a positive effect on NAV of the Group.

7.2 Effect on the earnings

As disclosed in the 2015 Interim Report, the unaudited profit attributable to the Shareholders for the six months ended 30 June 2015 was approximately HK$825.7 million, of which approximately HK$79 million was contributed by the Disposal Group. Taking into account the fact that the profit from the Disposal Group only represents approximately 9.6% to the total earnings of the Group for the six months ended 30 June 2015, we consider that the negative impact of the Proposed Disposal on the earnings of the Group will be limited.

On the other hand, it is estimated that there is an estimated gain after tax of approximately HK$225 million arising from the Proposed Disposal. As discussed with the management of the Company, such estimated gain after tax of approximately HK$225 million has included the Reorganisation Cost.

Furthermore, the Company intends to use part of the net proceeds from the Proposed Disposal and the Settlement Sum to reduce the Company’s indebtedness and for working capital and other general corporate purposes, including but not limited to payment of outstanding construction payables, general corporate expenses and purchase of production materials. We consider the interest expenses of the Group could be reduced and the Company will be more focused on core integrated solar business.

In view of (i) limited impact after the Proposed Disposal on the future earnings of the Group as the Disposal Group only contributed approximately 9.6% to the total earnings of the Group for the six months ended 30 June 2015; and (ii) expected gain on Proposed Disposal of HK$225 million; and (iii) stronger earnings prospect of the

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Group after reducing future interest expenses and becoming focused on core integrated solar business, we consider that the Proposed Disposal will have a potential positive effect to the earnings of the Group.

7.3 Effect on the cash and working capital

As disclosed in the 2015 Interim Report, the Group had net current liabilities of approximately HK$12,176 million (including bank balances and cash of approximately HK$6,421 million) as at 30 June 2015. We noted that a condition precedent to the completion of the Proposed Disposal that the Company enters into the Amendment Deed with the Covenantors to amend the terms of the Deed of Settlement so that the Covenantors shall agree to pay a cash compensation to the Company in the amount of the Settlement Sum in lieu of a transfer of all of the issued shares in Honour Faith to the Company as originally provided under the Deed of Settlement would result in a RMB1.16 billion cash as the Settlement Sum. Upon completion of the Proposed Disposal, since the Company intends to apply the net proceeds from the Proposed Disposal partly for working capital purpose, the cash position and working capital of the Company will be strengthened upon completion of the Proposed Disposal.

We noted that the Company need to discharge some certain trading debts, non- trading debts and mutual guarantee(s) between the Disposal Group on the one hand, and the Group (excluding the Disposal Group) on the other hand. As at 30 June 2015, the Group’s total amounts due to Disposal Group amounted to approximately HK$949 million. We consider the Group will need to settle such amount and the cash and working capital of the Group will decrease accordingly. However, such amount is less than the net proceeds of the Proposed Disposal, among which approximately RMB1,485 million for working capital and other general corporate purposes, including but not limited to payment of outstanding construction payables, general corporate expenses and purchase of production materials.

Overall, we consider the Proposed Disposal will have a positive effect on the cash position and the working capital of the Group.

7.4 Effect on the gearing

According to the unaudited financial information of the Disposal Group, as at 30 June 2015, the Disposal Group had a net debt balance of approximately HK$4,633 million. Upon completion of the Proposed Disposal, the Disposal Group will cease to be a subsidiary of the Company and therefore the net debt balance of the Group will reduce by HK$4,633 million. Furthermore, as disclosed in the letter from the Board, the Proposed Disposal is expected to received the Settlement Sum of RMB1.16 billion and generate a gain of HK$225 million, part of which will be used to reduce the Company’s indebtedness.

Therefore, we consider the Proposed Disposal will have a positive effect on the gearing of the Group.

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In light of:

(a) the positive effect on NAV of the Group;

(b) the potential positive effect on the earnings of the Group;

(c) the positive effect on the cash position and the working capital of the Group; and

(d) the positive effect on the gearing of the Group,

we are of the view that the Proposed Disposal will have a positive financial effect on the Group and are in the interests of the Company and the Shareholders as a whole.

8. Proposed Special Distribution and use of proceeds

As stated in the letter from the Board in the Circular, The Company intends to use the net proceeds received from the Proposed Disposal and the Settlement Sum for the following purposes:

(1) approximately 35% of the gross proceeds from the Proposed Disposal will be used to make a special distribution to the shareholders of the Company (the ‘‘Proposed Special Distribution’’); and

(2) the remaining balance will be mainly used: (a) as to approximately RMB1,485 million to reduce the Company’s indebtedness, which will help improve the Company’s financial liquidity, increase the Company’s financing flexibility and potentially lower the borrowing cost of the Company; and (b) as to approximately RMB1,485 million for working capital and other general corporate purposes, including but not limited to payment of outstanding construction payables, general corporate expenses and purchase of production materials.

We are of the view that the Proposed Special Distribution will provide immediate cash return to the Shareholders, in addition to the future return when the Group focuses on its core integrated solar business. As such, we consider that the Proposed Special Distribution is fair and reasonable and is in the interests of the Company and the Shareholders as a whole.

The remaining balance will be mainly used to reduce the Company’s indebtedness and for working capital and other general corporate purposes, including but not limited to payment of outstanding construction payables, general corporate expenses and purchase of production materials. We consider reducing the Company’s indebtedness would effectively improve the Company’s financial liquidity, increase the Company’s financing flexibility and potentially lower the borrowing cost of the Company as discussed in the section headed ‘‘Improving the Company’s capital structure’’, which is in the interests of the Company and the Shareholders as a whole.

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In light of the above, we are of the view that the Proposed Special Distribution and use of proceeds are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

9. Proposed variation of the Non-competition Deed

It is a condition precedent to completion of the Proposed Disposal that the Restated NCD is entered into between the Company and the Restated NCD Covenantors. At the time of its listing in 2007, the Company was principally engaged in the construction, development, management, ownership and operation of power plants in certain provinces of the PRC. Since then, the Company has gradually diversified its business to the manufacturing of polysilicon and wafers products for the solar industry as well as the development, investment, management and operation of environmentally friendly power plants and solar projects. The Covenantors entered into the Non-competition Deed in favour of the Company prior to the Company’s listing in 2007. Pursuant to the Non- competition Deed, subject to certain exemptions or procedures thereunder, the Covenantors have undertaken not to directly or indirectly, carry on or engage or be interested in any business which is or may be in competition with the business carried out by the Company from time to time, including the construction, development and operation of power plants or the sale of electricity or heat in the PRC’’ (collectively, the ‘‘Restricted Business’’). The Non-competition Deed provides for a procedure (as described in the Company’s announcement dated 4 October 2013, 26 November 2013 and 20 March 2014) by which the Covenantors may be permitted to engage in business opportunities which constitute Restricted Business if, among other things, the opportunities are first offered to the Company and duly declined by it. Such a procedure does not apply to any project involving the construction or operation of cogeneration power plants. Therefore, the Purchaser (which is ultimately owned by the Zhu Family Trust and would therefore constitute an associate (as defined in the Listing Rules) of the Covenantors) would be prohibited from carrying on the business comprised in the Disposal Group by virtue of the terms of the Non- competition Deed. In addition, the Covenantors would continue to be restricted from being directly or indirectly interested in the business carried on by Jinshanqiao Holdco.

Upon completion of the Proposed Disposal, the Group will no longer carry on any non-solar power generation business. Amendments to the terms of the Non-Competition Deed to remove all relevant provisions relating to restrictions on the Covenantors from carrying on or being interested in the business comprised in the Disposal Group and Jinshanqiao Holdco, and any business, project or investment relating to the operation of the cogeneration plants and solid waste incineration plants, including the Covenantors’ obligations to first offer to the Company opportunities in respect of such business is fair and reasonable and, in our opinion, it would not reduce the protection of Independent Shareholders from direct competition of the Covenantors since under the Restated NCD, save for the Excluded Business, the Covenantors will still be obliged to not directly or indirectly, carry on or engage or be interested in any business which is or may be in competition with the business carried out by the Company from time to time. The Restated NCD is conditional upon (i) the approval thereof by the Independent Shareholders, and (ii) completion of the Proposed Disposal. For business comprised in the Disposal Group and Jinshanqiao Holdco and any business, project or investment relating to the operation of the

–83– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER cogeneration plants and solid waste incineration plants, including the Covenantors’ obligations to first offer to the Company opportunities in respect of such business and the Option Rights (the ‘‘Excluded Business’’), there is no contractual arrangement under the Restated NCD (i) restricting the Company from engaging in the Excluded Business; and (ii) requiring the Covenantors to take any action should the Company decided to re-engage in the Excluded Business. We consider that the proposed removal of the relevant provisions relating to restrictions on the Covenantors from the Excluded Business is fair and reasonable since (i) it would not reduce the protection of Independent Shareholders from direct competition of the Covenantors in the solar business which the Company regards as core business; (ii) it would give rise to an immediate breach by Mr. Zhu Gongshan and Mr. Zhu Yufeng of their respective undertakings under the Non-competition Deed for engaging in the business of the Disposal Group once the Proposed Disposal was completed; and (iii) without such removal, the Purchaser will be constrained in its ability to further invest and develop the business of the Disposal Group. We note that even if the Company re-engaged in the Excluded Business, the Restated NCD Covenantors would not be restricted under the Restated NCD from continuing to carry on the Excluded Business. Taking into account (i) the benefit of entering into the Proposed Disposal as stated above in the section headed ‘‘Reasons for and benefits of the Proposed Disposal’’ (ii) a condition precedent to completion of the Proposed Disposal that the Restated NCD is entered into between the Company and the Restated NCD Covenantors; and (iii) the Group’s strategy to focus on its core solar business, we are of the view that there will not be significant future uncertainties to the Group and it is in the interest of the Company and the Shareholders that the Restated NCD is entered into between the Company and the Restated NCD Covenantors.

Since Mr. Zhu Gongshan and Mr. Zhu Yufeng are the ultimate beneficial beneficiaries of the trust which holds the Purchaser and they will be engaged in the non-solar power business comprised in the Disposal Group and Jinshanqiao Holdco upon completion of the Proposed Disposal, it would also be impractical for the Restated NCD Covenantors to continue to comply with the original scope of the Restricted Business under the Non- Competition Deed. If the Non-competition Deed was not amended, it would give rise to an immediate breach by Mr. Zhu Gongshan and Mr. Zhu Yufeng of their respective undertakings under the Non-competition Deed for engaging in the business of the Disposal Group once the Proposed Disposal was completed. We consider that it is reasonable that entering into the Restated NCD as a condition of the Proposed Disposal from the Purchaser’s perspective, and it is fair and reasonable for the Company to amend the scope of Restricted Business so that Restated NCD Covenantors could be in compliance with the Restated NCD.

In addition, certain procedures are carried out by the management of the Company to monitor that the Non-Competition Deed are being observed, such as (i) organising semi- annual working meetings with Mr. Zhu Gongshan and Mr. Zhu Yufeng to review their business portfolios and to enable the Company to consider whether there is any opportunities to operate Restricted Business which shall be offered to the Company; (ii) the company secretary department will receive notice from Mr. Zhu Gongshan and Mr. Zhu Yufeng regarding investment opportunities in non-solar power generation business and the strategic investment department will review and evaluate the investment opportunities and report to the independent board committee who will then decide whether to accept such

–84– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER investment opportunities; (iii) every half year, the management of the Company, together with the independent board committee, will review the business portfolios of Mr. Zhu Gongshan and Mr. Zhu Yufeng, in relation to, among others, the financial and operational performance of the non-solar power generation companies that Mr. Zhu Gongshan and Mr. Zhu Yufeng own; and (iv) the independent board committee of the Company may appoint an independent financial adviser to provide advice in the exercise/non-exercise of option/ first right of refusals under the Non-Competition Deed. According to the 2014 Annual Report, Mr. Zhu Gongshan and Mr. Zhu Yufeng had interests in 28 companies which are mainly operated in the non-solar power business and are deemed to compete or likely to compete, either directly or indirectly, with the non-solar power business of the Group. As the business portfolios of Mr. Zhu Gongshan and Mr. Zhu Yufeng may grow in the future, we consider that the review process of new investment opportunities and their business portfolio may be costly and time-consuming. We consider that the monitoring of non-solar power generation business carried out by the Restated NCD Covenantors involves various departments and the independent board committee of the Company as discussed above. After adopting the Restated NCD, time and cost could be saved for monitoring the non- solar power generation business carried out by the Restated NCD Covenantors.

Last but not least, the Company and the Independent Shareholders will continue to enjoy the protection provided under the Restated NCD, among which, the Restated NCD Covenantors will still be obliged to not to directly or indirectly, carry on or engage or be interested in any business which is or may be in competition with the business carried out by the Company from time to time, in particular, the core integrated solar business currently.

Therefore, we consider that the entering into the Restated NCD is fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

10. Proposed amendment of the Deed of Settlement

As part of the negotiations of the Sale and Purchase Agreement, the retention of the shares in Honour Faith by entities controlled by Mr. Zhu Gongshan and the payment of a cash compensation (in the amount of the Settlement Sum) in lieu of a transfer of the shares in Honour Faith to the Company, was proposed by the Purchaser in substitution for the Original Settlement. It is a condition precedent to the completion of the Proposed Disposal that the Company enters into the Amendment Deed with the Covenantors to vary the terms of the Deed of Settlement so that the Covenantors shall agree to pay a cash compensation to the Company in the amount of the Settlement Sum in lieu of a transfer of all of the issued shares in Honour Faith Group Limited (which indirectly owns the entire equity interest in Jinshanqiao Holdco) to the Company as originally provided under the Deed of Settlement, and to that the Settlement Sum is duly paid to the Company in accordance with the Amendment Deed. The Settlement Sum has been determined by the Company taking into account, among other things, the historical profits derived from the Jinshanqiao Cogeneration Plant and the fair value of the shares of Honour Faith Group Limited as appraised by an independent valuer appointed by the Company. The Amendment Deed will be conditional upon the Sale and Purchase Agreement becoming unconditional and the payment of the Settlement Sum to the Company on the date of completion of the Sale and

–85– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Purchase Agreement. The Company has also engaged Herbert Smith Freehills and Optima Capital, respectively, to advise the NCD Review IBC on the legal and commercial merits of the proposed departure from the Original Settlement.

Further details of considerations taken into account by the Board in deciding to enter into the Revised Settlement are also set out in the Circular. In particular, we note that the Board had considered, among other things, the following: (i) the fact that the Group would no longer be engaged in the non-solar power business upon completion of the Proposed Disposal and that the Group would not pursue or derive any direct synergies between the Jinshanqiao Cogeneration Plant and the Group’s remaining solar power generation assets; (ii) if the Group proceeded with the Proposed JSQ Acquisition, the Group would be required to deploy additional internal resources to manage and operate the Jinshanqiao Cogeneration Plant, as well as the financial and other risks of owning and operating the Jinshanqiao Cogeneration Plant, which would not be as cost effective as originally contemplated; (iii) since the execution of the Deed of Settlement, a self-owned power generation facility which is an integral part of the Group’s polysilicon manufacturing business has been commissioned and has the capacity to supply steam to the Group, and notwithstanding the above, the supply of steam by the Jinshanqiao Cogeneration Plant to the Group could continue to be maintained pursuant to the New Steam Supply Agreement; (iv) if the Proposed Disposal does not become unconditional and is not proceeded with, the terms of the Amendment Deed will not become unconditional and the Company has preserved its ability to pursue the Proposed JSQ Acquisition with the Covenantors as originally contemplated under the Deed of Settlement; (v) the fact that the Proposed JSQ Acquisition in any event was uncertain; and (vi) the Settlement Sum to the Total Profits Derived of 19.9% is acceptable.

We have discussed with the management of the Company in relation to the discount of 19.9% of the Settlement Sum to the Total Profit Derived. We noted that the management of the Company has considered the advice and recommendations from its legal adviser and financial adviser, in particular: (i) the acceptance of the Revised Settlement would remove the uncertainties, the risks of potential protracted litigation and its adverse impact on the share price of the Company, and the negative media coverage, and will minimise the tension between the management and the controlling Shareholders and the potential disruption to the business of the Group if the Company were to pursue a civil claim against its controlling Shareholders; (ii) the maximum amount that the Company has been advised it would be entitled to recover from Messrs Zhu; (iii) the benefit of having the certainty of receiving the Settlement Sum upon completion of the Proposed Disposal; and (iv) the new business strategy and direction of the Company following the Proposed Disposal. Therefore, we concur with the management of the Company that it is reasonable to provide such discount of the Settlement Sum to the Total Profits Derived.

We have reviewed the fairness, reasonableness and completeness of any assumptions made by the Valuer in the 2015 JSQ Valuation Report. Without limiting the generality of the aforesaid, in relation to the Valuer providing an opinion or valuation of the Honour Faith, we (i) have reviewed the assumptions and valuation methodology adopted by the Valuer; (ii) market multiple of a list of comparable companies; and (ii) have discussed with the Valuer in relation to its expertise and any current or prior relationships with the

–86– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Company. We consider that the assumptions and valuation methodology in the 2015 JSQ Valuation Report is reasonable and as discussed above, the Valuer has is qualified to provide a valuation of the Honour Faith. In light of the above, we consider the terms of the proposed amendments to the Deed of Settlement contemplated under the Amendment Deed and the payment of the Settlement Sum (which has been determined by the Company taking into account, among other things, the Relevant Profits and the 2015 JSQ Valuation) to the Company under the Revised Settlement would be an acceptable form of alternative settlement consideration in respect of the Company’s Possible Claims.

RECOMMENDATION

We have considered the above principal factors and reasons and, in particular, having taken into account the following in arriving at our opinion:

(a) the reasons and benefits of the Proposed Disposal, in particular, enabling the Company to focus on its core integrated solar business, are in the interests of the Company and the Shareholders as a whole;

(b) principal terms of the Sale and Purchase Agreement, including basis in determining the Consideration and payment terms, are fair and reasonable to the Company and the Shareholders;

(c) the Consideration is fair and reasonable and are in the interests of the Company and the Shareholders as a whole;

(d) it is reasonable to dispose of the Disposal Group to the Purchaser;

(e) the Proposed Disposal will have a positive financial effect on the Group and are in the interests of the Company and the Shareholders as a whole;

(f) the Proposed Special Distribution and use of proceeds is fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole; and

(g) the entering into Non-competition Deed is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

–87– LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered the above, we are of the view that the terms of the Proposed Disposal contemplated under the Sale and Purchase Agreement are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. In addition, we are of the view that the terms of the Restated NCD are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend, and we ourselves recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM to approve the Proposed Disposal contemplated under the Sale and Purchase Agreement and the Restated NCD.

Yours faithfully, For and on behalf of Platinum Securities Company Limited Li Lan Director and Co-head of Corporate Finance

Mr. Li Lan is a licensed person registered with the Securities and Futures Commission and as a responsible officer of Platinum Securities Company Limited to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO and has over nine years of experience in corporate finance industry.

–88– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

1. WORKING CAPITAL STATEMENT

The Directors are of the opinion that, after taking into account the net proceeds from the Proposed Disposal, the present financial resources available to the Group, including internally generated cash flows and existing credit facilities available, the Group will have sufficient working capital to satisfy the requirements for at least the next twelve months following the date of this circular in the absence of unforeseen circumstances.

In assessing the aforesaid working capital sufficiency of the Group, the Directors have evaluated the Group’s current undrawn banking facilities and renewable bank borrowings. In order to improve liquidity, the Group has negotiated and confirmed with certain banks for revolving banking facilities to ensure the Group’s bank borrowings can be renewed on an on-going basis.

The Directors have also evaluated the following measures of GCL New Energy Holdings Limited (‘‘GCL New Energy’’), a non-wholly owned subsidiary of the Company whose shares are listed on the Stock Exchange (together with its subsidiaries hereinafter collectively referred to as ‘‘GCL New Energy Group’’).

. GCL New Energy Group has been actively negotiating with the PRC creditor banks for renewal of its current borrowings as necessary when they fall due in the coming twelve months following the date of this circular; and, if needed, to obtain waiver from the relevant lenders from complying with the covenant requirements. Based on the past experience, GCL New Energy Group did not encounter significant difficulties in renewing the borrowings and the Directors expect that all borrowings can be renewed and the waiver, if needed, can be obtained upon GCL New Energy Group’s application when necessary;

. GCL New Energy Group is actively negotiating with several banks in both Hong Kong and the PRC for additional financing. It has received detailed proposals from certain banks for total banking facilities with repayment periods from one to five years. GCL New Energy Group also received letters of intent from certain other banks which indicated that these banks tentatively might offer banking facilities to GCL New Energy Group;

. GCL New Energy Group is actively negotiating with other private investors for additional financing in the form of equity or debt or a combination of both. During 2015 and up to the date of this circular, GCL New Energy Group completed the issuance of convertible bonds to non-banking financial institutions and the issuance of bonds to certain private investors, and entered into a trust scheme arrangement with certain financial institutions to secure a 3-year loan facility; and

. GCL New Energy Group has completed the construction of 21 solar farms with approval for on-grid connection up to the date of this circular. GCL New Energy Group also has additional 23 solar farms under construction targeting to achieve on-grid connection within the coming twelve months from the date of this circular. The abovementioned solar farms have an aggregate installed capacity of approximately 2,128MW and are expected to generate operating cash inflows to GCL New Energy Group.

–89– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS OF THE GROUP

As at the close of business on 31 August 2015, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had borrowings amounting to approximately HK$54,177 million, details of which are as follows:

Borrowings

The following table illustrates the Group’s bank and other borrowings and other indebtedness as at 31 August 2015:

HK$’million

Carrying amount of bank and other borrowings 43,071 Carrying amount of obligations under finance leases 3,274 Principal amount of notes 4,670 Principal amount of bonds 437 Principal amount of convertible bonds 2,719 Carrying amount of loan from a related company 6

54,177

Analysed by:

Total secured and Secured Unsecured unsecured Notes HK$’ million HK$’ million HK$’ million

Carryingamountofbankand other borrowings (1) 29,886 13,185 43,071 Carrying amount of obligations under finance leases (2) 3,274 — 3,274 Principal amount of notes — 4,670 4,670 Principal amount of bonds — 437 437 Principal amount of convertible bonds — 2,719 2,719 Carrying amount of loan from a related company — 6 6

33,160 21,017 54,177

Notes:

(1) At 31 August 2015, the Group has pledged certain buildings, prepaid lease payments, plant and machinery and bank deposits, and equity shares of a subsidiary to secure bank and other borrowings of HK$29,886 million and banking and other facilities granted to the Group.

–90– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

(2) At 31 August 2015, the Group has pledged certain buildings, plant and machineries and prepaid lease payments, aircraft and solar farms to secure obligations under finance leases of HK$3,274 million.

In addition, certain bank deposits are restricted to secure bills payable, and short- term letters of credit for trade purposes. The above bank and other borrowings and other indebtedness are not secured by any guarantees.

Contingencies

Financial guarantees contracts

At 31 August 2015, the Group provided total guarantees of HK$121.3 million to certain banks in respect of banking facilities of an associate which had been fully utilised by the associate.

At 31 August 2015, the Group has authorised but unissued debt securities of approximately HK$5,034 million.

Save as aforesaid or as otherwise disclosed herein and apart from intra-group liabilities, the Group did not have any loan capital issued and outstanding or agreed to be issued, any banking overdrafts and liabilities under acceptances or other similar indebtedness, debentures, mortgages, charges or loans or acceptance credits or hire purchase commitments, guarantees or other material contingent liabilities as at the close of business on 31 August 2015.

3. FINANCIAL AND TRADING PROSPECTS

Prior to completion of the Proposal Disposal, the Group is principally engaged in (1) the manufacturing of polysilicon and wafers for the solar industry; (2) the development, investment, management and operation of environmental friendly power plants and solar projects; and (3) trading of coal.

Historical financial performance of the Group (excluding the Disposal Group) and the Disposal Group

For the year ended 31 December 2014, the Group’s audited net profit amounted to approximately HK$2,155 million. For the six months period ended 30 June 2015, the unaudited net profit of the Group amounted to approximately HK$998 million. The unaudited combined net profit based on aggregation of the IFRS financial statements of the relevant members of the Disposal Group for the financial year ended 31 December 2014 and for the six months ended 30 June 2015 which include those adjustments made by the Group in relation to purchase price allocation and goodwill recognised at the time of the deemed acquisition of the non-solar power business in 2009 and provision for withholding tax on undistributed profits of the Disposal Group amounted to approximately HK$440 million and HK$143 million, respectively.

–91– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

Set out below is a comparison of the historical financial performance of the Disposal Group and the Group (excluding the Disposal Group) from the year ended 31 December 2010 to the year ended 31 December 2014 and for the six months ended 30 June 2015:

Table 1

For the six months ended For the year ended 31 December 30 June Unit: % 2010 2011 2012 2013 2014 2015

Disposal Group Revenue contribution 22.0% 18.3% 24.1% 24.4% 26.4% 27.5% Contribution to profit attributable to owners of the Company 4.2% 0.5% Note 3 Note 3 14.2% 9.6% Gross profit margin 13.5% 11.4% 15.8% 17.9% 13.0% 11.7% Net profit margin2 6.2% 2.1% 5.7% 7.3% 4.5% 2.9%

The Group (excluding the Disposal Group)1 Revenue contribution 78.0% 81.7% 75.9% 75.6% 73.6% 72.5% Contribution to profit attributable to owners of the Company 95.8% 99.5% Note 3 Note 3 85.8% 90.4% Gross profit margin 43.5% 38.1% 5.3% 10.0% 23.3% 25.5% Net profit margin2 28.7% 21.5% –21.8% –4.7% 6.3% 6.6%

The Group Gross profit margin 36.9% 33.2% 7.8% 11.9% 20.6% 21.7% Net profit margin 23.8% 17.9% –15.1% –1.7% 5.8% 5.6%

Notes:

(1) The Group (excluding the Disposal Group) includes the solar material business, solar farm business and new energy business and other unallocated income/expenses (details of such unallocated income/expenses are disclosed in the segment information in the annual reports and interim report of the Company.

(2) For simplicity, the impact of those unallocated income/expenses and the inter-segment sales have been included in the Group (excluding the Disposal Group) for such comparison purpose.

–92– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

(3) The contribution ratio of profit attributable to owners of the Company is not applicable for the years ended 31 December 2012 and 2013 as the Group was loss making in the years ended 31 December 2012 and 2013, while the Disposal Group had recorded net profits of HK$305 million in the year ended 31 December 2012 and HK$456 million in the year ended 31 December 2013.

Table 2

The following table sets out the historical operating performance of the solar material business from the year ended 31 December 2010 to the year ended 31 December 2014, for the six months ended 30 June 2015 and the last twelve months ended 30 June 2015:

For the six months ended For the year ended 31 December 30 June Unit 2010 2011 2012 2013 2014 2015

Production capacity Polysilicon MT 21,000 65,000 65,000 65,000 65,000 70,000 Wafer MW 3,500 8,000 8,000 10,000 13,000 14,000

For the For the six last twelve months months ended ended For the year ended 31 December 30 June 30 June 2010 2011 2012 2013 2014 2015 2015

Production volume Polysilicon MT 17,853 29,414 37,055 50,440 66,876 36,768 71,303 Wafer* MW 1,412 4,488 5,622 8,827 13,098 7,102 14,158

Average selling price (VAT excluded) Polysilicon per KG USD 52.1 47.7 20.8 17.4 21.7 17.2 n/a Wafer per W** USD 0.82 0.54 0.25 0.21 0.215 0.195 n/a

Notes:

* The figures of production and shipment volume included processing with supplied materials.

** Excluding average selling price of wafers processed with supplied materials.

As shown in the table 1 above, the revenue of the Disposal Group accounted for less than 30% of the total revenue of the Group for each of the five financial years ended 31 December 2014 and for the six months ended 30 June 2015. For the last five

–93– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

financial years, other than the years ended 31 December 2012 and 2013 which the Company recorded losses, the profit attributable to owners of the Company by the Disposal Group was less than 15%, being 4.2%, 0.5% and 14.2%, whilst the Group (excluding the Disposal Group) accounted for the remaining 95.8%, 99.5% and 85.8%, for the year ended 31 December 2010, 2011 and 2014 respectively. For the six months ended 30 June 2015, the profit attributable to owners of the Company for the Disposal Group dropped to 9.6% whilst the Group (excluding the Disposal Group) accounted for 90.4%.

Other than the years ended 31 December 2012 and 2013 for which the Company recorded losses, as shown in table 1, the Group (excluding the Disposal Group) has out-performed the Disposal Group in both the gross profit margin and the net profit margin. For the last financial year, the gross profit margin of the Disposal Group was 13.0% whilst the Group (excluding the Disposal Group) was 23.3%; and the net profit margin of the Disposal Group was 4.5% whilst the Group (excluding the Disposal Group) was 6.3%. The same trend continued for the six months ended 30 June 2015 whereby the Gross profit margin of the Disposal Group recorded was 11.7% whilst the Group (excluding the Disposal Group) was 25.5%; and the net profit margin of the Disposal Group was 2.9% whilst the Group (excluding the Disposal Group) was 6.6%.

Trading prospects of the Group after completion of the Proposed Disposal

After Completion, the Group will have disposed of the Disposal Group and no longer be engaged in the non-solar power business. The Group’s remaining solar business after the Proposed Disposal comprises the following business segments:

Solar Material Business

The Group supplies polysilicon and wafer to companies operating in the solar industry. Polysilicon is the primary raw material used in the solar wafer production. In addition, the Group also supplies wafer manufactured using polysilicon produced by the Group. In the solar industry supply chain, wafers are further processed by midstream manufacturers to produce solar cells and modules.

With further technical improvement during the first half of 2015, our annual polysilicon production capacity has reached 70,000MT. The Group’s annual wafer production capacity has increased to 14GW as at 30 June 2015.

Solar Farm Business

As at 30 June 2015, the solar farm business consists of 371 MW of grid connected solar farms, of which 18 MW is located in the United States and 353 MW is located in the PRC.

–94– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

New Energy Business

The Group’s new energy business represents the business operations of GCL New Energy, which is principally engaged in the development, construction, operation and management of solar farms, as well as manufacturing and selling of printed circuit boards.

As at 30 June 2015, GCL New Energy’s aggregate installed capacity and grid- connected capacity were 772.5 MW and 645.3 MW respectively (including the solar farms of joint ventures). GCL New Energy has a pipeline of more than 776.0 MW of solar farms under development or construction.

Looking ahead, the Group will focus on its core integrated solar business, including the manufacturing and sale of polysilicon and wafer products, and developing, owning and operating downstream solar farms both within the PRC and overseas, to reinforce its position as a leading global player in the rapidly growing photovoltaic industry.

The Directors are aware that the Group (excluding the Disposal Group) made a loss in the two financial years of 2012 and 2013. The loss recorded in both years was mainly due to a worldwide oversupply of both polysilicon and wafer and the negative impact of anti-dumping and countervailing investigations initiated by the US and European Union which triggered a significant drop in the average selling price per unit of polysilicon and wafer. However, such downward trend in solar products pricing slowed down and the average selling price started to pick up in the second half of 2013 and has stabilised since then. The Directors believe that the downturn in solar market bottomed out since the second half of 2013 and the Company experienced a strong growth and recovery in demand in 2014. The sales volume of wafer increased by 36.8% in 2014 compared to 2013 and such increase continued in the first six months in 2015. The Company recorded a further increase of 19.8% in wafer sales volume in the first six months in 2015 as compared to the first six months in 2014. The Directors are of the view that the demand for solar materials is surging particularly in the PRC solar market from 2015. Also, the demand in the United States of America, United Kingdom and India is expected to continue to grow.

As disclosed above in table 2, the annual production capacity of polysilicon and wafer of the Company reached 70,000 MT and 14,000MW. Since last year, the Company has been operating at its full capacity. Such economies of scale is one of the reasons to sustain the Group’s efficient cost structure. The Group’s polysilicon manufacturing cost has been further driven down as the captive cogeneration power plant commenced to supply electricity directly to Jiangsu Zhongneng. With the Group’s continued effort in raising the wafer conversion efficiency, the Group’s wafer products remain highly competitive in the solar market. As weak and inefficient solar players continue to exit the industry, the Directors believe that the selling prices of solar products will remain stable in a long run. Domestically, as import of polysilicon from the United States into China has been reduced as a result of a more stringent control on trade-processing imposed by the Ministry of Commerce in China, the

–95– APPENDIX I FINANCIAL INFORMATION OF THE GROUP

Directors also expect that the average selling price of solar products will remain resilient in the PRC market. As the demand landscape has shifted to China, being able to maintain a high utilisation rate with a competitive cost structure, the Directors are of the view that the Company is well positioned to capture the rapid growth in demand for solar materials in the PRC and worldwide.

With regard to the solar material business, the Company will continue to reinforce its position as a leading global supplier of polysilicon and wafer through the implementation of its strategies including technological innovation, continuous cost reduction, capacity expansion and market share increase.

With regard to the downstream solar farm businesses, the Group plans to continue developing, owning and operating solar farms both within the PRC and globally, mainly through its downstream solar business platform GCL New Energy. it is expected that GCL New Energy will continue to construct its existing pipeline products and develop or acquire new projects, targeting to add additional installed solar capacity of 2GW and 2.5GW in 2015 and 2016 respectively.

The Company and GCL New Energy plan to fund their respective capital expenditure through a combination of internal cash resources, cash flow generated from the solar farm operations, as well as potential funds from various external financing channels, such as bank loans, debt capital market, and equity capital market.

The Company’s solar material business belongs to the upstream of the solar supply chain which provides the materials used for solar equipment manufacturing, while the Company’s solar farm business and new energy business (through GCL New Energy) both belong to the downstream of solar industry value chain. The business model and portfolio of the Company’s solar farm business and those of GCL New Energy are similar in nature. The existing projects of the solar farm business were constructed or acquired by the Group prior to obtaining a controlling stake in GCL New Energy. It is expected that future development of solar farms will be conducted solely by GCL New Energy.

–96– APPENDIX II GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the securities of the Company and its associated corporations

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

Long position in the Shares

Number of Approximate Shares/ percentage of underlying issued share Name of Director Nature of interests Shares held capital

Zhu Gongshan Beneficiary of a trust1 5,029,843,327 32.47% Ji Jun Beneficial Interest 3,700,000 0.02% Shu Hua Beneficial Interest 5,900,000 0.04% Zhu Yufeng Beneficiary of a trust/ 5,032,343,327 32.49% Beneficial Interest1 Yip Tai Him Beneficial Interest 1,000,000 0.006% Ho Chung Tai, Beneficial Interest 1,000,000 0.006% Raymond Zhu Zhanjun Beneficial Interest 6,100,000 0.04%

Note 1: 5,029,843,327 Shares out of the interests of Mr. Zhu Gongshan and Mr. Zhu Yufeng are held by Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited, all of these companies are indirectly wholly-owned by Golden Concord Group Limited, which in turn is wholly-owned by Asia Pacific Energy Holdings Limited. Asia Pacific Energy Holdings Limited is in turn wholly-owned by Asia Pacific

–97– APPENDIX II GENERAL INFORMATION

Energy Fund Limited. Asia Pacific Energy Fund Limited is ultimately held under a discretionary trust by Credit Suisse Trust Limited as trustee with Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng, a Director and the son of Mr. Zhu Gongshan) as beneficiaries.

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

Approximate percentage of Number of issued share Shares/ capital of underlying GCL New Name of Director Nature of interests Shares held Energy

Zhu Yufeng Beneficial Interest 3,500,000 0.025% Yeung Man Chung, Beneficial Interest 15,000,000 0.11% Charles

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

(b) Directors’ interests in assets, contracts or arrangement of the Group

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

Save for the transactions contemplated hereunder and the acquisition and leases of certain properties for staff accommodation from Zhu Family Trust to the Group which are not required to be disclosed under the Listing Rules, as at the Latest Practicable Date, none of the Directors or proposed Directors had, or has had, any direct or indirect interest in any assets which have been acquired, disposed of by or leased to, or which are proposed to be acquired, disposed of by or leased to, any member of the Group since 31 December 2014, the date of which the latest published and audited consolidated financial statements of the Company were made up.

–98– APPENDIX II GENERAL INFORMATION

(c) Service contract

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

(d) Other disclosures under the SFO

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

3. LITIGATION

As at the Latest Practicable Date, to the best knowledge of the Directors, no member of the Group was engaged in any litigation or arbitration of material importance and no litigation or claim of material importance was known to the Directors to be pending or threatened against any member of the Group.

4. MATERIAL CONTRACTS

Within the two years immediately preceding the date of this circular, the following agreements, being contracts not entered into in the ordinary course of business, have been entered into by members of the Group and is or may be material:

(a) the Sale and Purchase Agreement;

(b) the Deed of Settlement;

(c) the Restated NCD;

(d) the Amendment Deed;

(e) a trust scheme agreement dated 9 September 2015 entered into between, amongst others, GCL New Energy Investment (China) Co., Ltd.* (協鑫新能源投資(中國)有 限公司)(‘‘GNE’’) and Ping An Trust Company Limited* (平安信託有限責任公司) (‘‘Ping An Trustee’’), pursuant to which Ping An Trustee has conditionally agreed to establish a trust scheme to raise funds of up to RMB1.2 billion for the purpose of providing a loan facility in the same amount to Nanjing GCL New Energy Development Co., Ltd.* (南京協鑫新能源發展有限公司)(‘‘Nanjing GCL New Energy’’);

–99– APPENDIX II GENERAL INFORMATION

(f) an EPC agreement dated 8 September 2015 entered into between Yulin Longyuan Solar Power Company Limited* (榆林隆源光伏電力有限公司)(‘‘Yulin Longyuan’’) and Shanghai Electric Power Construction Co., Ltd.* (上海電力建設有限責任公 司)(‘‘Shanghai Electric Construction’’) in relation to the grid connection of the 200 MW photovoltaic power station project at Yuyang District of Yulin City of Shaanxi Province for a total consideration of RMB1,247,980,000;

(g) an EPC agreement dated 8 September 2015 between Yulin Longyuan and Shanghai Electrical Power Erection No. 1 Company* (上海電力安裝第一工程公 司) in relation to the 330 KV and 110 KV Yulin Longyuan photovoltaic transformer substation project at Yuyang District of Yulin City of Shaanxi Province and the 330 KV Yulin Longyuan photovoltaic power station transmission project at Yuyang District of Yulin City of Shaanxi Province for an aggregate consideration of RMB194,178,000;

(h) an EPC agreement dated 26 June 2015 entered into between Shanghai Electric Construction and Shandong Wanhai Electric Company Limited* (山東萬海電力有 限公司) in relation to a 35 MW Shandong Shouguang photovoltaic power station in Shandong Shouguang for a total consideration of RMB240,007,500;

(i) a subscription agreement dated 15 July 2015 entered into between PA International Opportunity III Limited (‘‘PA International’’)asinvestorandthe Company, pursuant to which PA International agreed to subscribe and pay for the convertible bonds to be issued by the Company in an aggregate principal amount of US$225 million and due on 22 July 2019 with an annual interest rate at 0.75%. The convertible bonds are convertible (subject to terms and conditions) into ordinary shares of HK$0.10 each in the issued share capital of the Company at an initial conversion price of HK$2.60 per Share.

(j) the partnership agreement dated 29 May 2015 entered into between GCL New Energy, Nanjing GCL New Energy and Suzhou GCL New Energy Investment Limited* (蘇州協鑫新能源投資有限公司)(‘‘Suzhou GCL New Energy’’), Galaxy Capital Asset Management Company Ltd.* (銀河資本資產管理有限公司)andJIC Capital Management (Tianjin) Ltd.* (中建投資本管理(天津)有限公司) in respect of the establishment of Jiali (Tianjin) Asset Management Enterprise (Limited Partnership)* (嘉立（天津）資產管理合夥企業（有限合夥）), an investment fund with an initial capital commitment of RMB1,251,000,000. Nanjing GCL New Energy and Suzhou GCL New Energy are both indirect subsidiaries of the Company;

(k) a conditional subscription agreement dated 29 April 2015 entered into between GCL New Energy Holdings Limited and Talent Legend Holdings Ltd., pursuant to which Talent Legend Holdings Ltd. has conditionally agreed to subscribe for convertible bonds in the principal amount of HK$775,100,000;

–100– APPENDIX II GENERAL INFORMATION

(l) a conditional subscription agreement dated 29 April 2015 entered into between GCL New Energy Holdings Limited and Ivyrock China Focus Master Fund (‘‘Ivyrock’’), pursuant to which Ivyrock has conditionally agreed to subscribe for convertible bonds in the principal amount of HK$200,000,000 (as amended and restated on 14 July 2015);

(m) the placing agreement dated 29 April 2015 entered into between GCL New Energy and Essence International Securities (Hong Kong) Limited in respect of the private placement of the convertible bonds in the principal amount of HK$975,100,000;

(n) a conditional subscription agreement dated 24 April 2015 entered into between GCL Yield Holding Company Limited (as issuer), GCL New Energy Holdings Limited (as guarantor to the issuer) and Goldman Sachs Investment Holdings (Asia) Limited (as subscriber) in relation to the issuance of the convertible bonds to be issued in two tranches in an aggregate principal amount of US$100,000,000;

(o) a subscription agreement dated 13 February 2014 entered into between the Company as subscriber and Same Time Holdings Limited (Renamed as GCL New Energy Holdings Limited) and Same Time International (B.V.I.) Limited, pursuant to which the Company has conditionally agreed to subscribe in cash for 360,000,000 new shares of Same Time Holdings Limited at the subscription price of HK$4.00 per the new share (as amended on 30 April 2014);

(p) a subscription agreement dated 15 November 2013 entered into between the Company and PA International, pursuant to which PA International has conditionally agreed to subscribe and pay for the convertible bonds issued by the Company in an aggregate principal amount of US$200 million;

(q) a placing agreement dated 30 October 2013 entered into between Same Time Holdings Limited (Renamed as GCL New Energy Holdings Limited) and Fortune (HK) Securities Limited in respect of the placing of up to 20,000,000 shares of Same Time Holdings Limited and convertible redeemable bonds which are convertible into shares of Same Time Holdings Limited to independent third parties (as amended and restated on 28 February 2014);

(r) a placing agreement dated 8 October 2014 entered into between GCL New Energy, Elite Time Global Limited (‘‘Elite Time’’) and Sun Hung Kai Investment Services Limited (as placing agent) in respect of placing of up to 291,000,000 shares of GCL New Energy to independent third parties at the placing price of HK$2.55 per top-up placing share; and

(s) the subscription agreement dated 8 October 2014 entered into between GCL New Energy and Elite Time in respect of subscription of up to 291,000,000 new shares of GCL New Energy by Elite Time at a consideration of HK$742,050,000.

–101– APPENDIX II GENERAL INFORMATION

5. COMPETING INTERESTS OF DIRECTORS

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

Name of company Approved in which the Installed Principal activities Names of the relevant Director capacity of the competing % interest in Company’s Directors has interest (MW) company competing company

(i) Mr. Zhu Gongshan Golden Concord 4x300 Operation of a 72% interest is held Electric-Power power plant in by a discretionary Generation Co., Taicang, Jiangsu, trust, of which Mr. Ltd.* the PRC Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Nanjing Xiexin 2x48 Operation of a 100% interest is held Domestic Sludge cogeneration plant by a discretionary Power Co., Ltd.* in Nanjing, the PRC trust, of which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Guohua Taicang 2x600 Operation of a an effective interest of Power Plant* power plant in 36% is held by a Taicang, Jiangsu discretionary trust, of which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Lanxi Xiexin 1x15 Operation of the 100% interest is held Environmental 1x6 cogeneration power by a discretionary Cogeneration Co., plant in Lanxi, trust, of which Mr. Ltd.* Zhejiang Province, Zhu Gongshan and the PRC his family (including Mr. Zhu Yufeng) are beneficiaries

Xuzhou 1x15 Operation of a 100% interest is held Jinshanqiao 2x15 cogeneration power by a company Cogeneration Co., plant in Xuzhou, controlled by Mr. Ltd.* Jiangsu Province, Zhu Gongshan the PRC

–102– APPENDIX II GENERAL INFORMATION

Name of company Approved in which the Installed Principal activities Names of the relevant Director capacity of the competing % interest in Company’s Directors has interest (MW) company competing company

Guangzhou GCL 2x180 The cogeneration 92% interest is held Blue Sky Gas power plant, located by a discretionary Turbine in Guangzhou, the trust, of which Mr. Cogeneration Co., PRC, is in operation Zhu Gongshan and Ltd.* his family (including Mr. Zhu Yufeng) are beneficiaries

Lianyungang — Operation of steam Mr. Zhu Gongshan Baoxin Biomass generation beneficially owns Cogeneration Co., 100% interest Ltd.*

Kailuan GCL 2x300 Operation of the An effective interest Power Generation coal fired power of 36% is held by a Co. Ltd.* plant in Tangshan discretionary trust, of City, Hebei, the which Mr. Zhu PRC Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Shanxi GCL 3x1,000 The coal fired power An effective interest (Luan) Electric project in Zhangzhi of 57.62% interest is Co., Ltd.* City, Shanxi, the held by a PRC. The project is discretionary trust, of in the pre- which Mr. Zhu development and Gongshan and his pre-construction family (including Mr. stage Zhu Yufeng) are beneficiaries

CPI Xiexin Binhai 2x1,000 Development of a An effective interest Power Co., Ltd* coal fired power of 35.29% is held by a project in Binhai, discretionary trust, of Jiangsu, the PRC. It which Mr. Zhu is in the Gongshan and his construction stage family (including Mr. Zhu Yufeng) are beneficiaries

–103– APPENDIX II GENERAL INFORMATION

Name of company Approved in which the Installed Principal activities Names of the relevant Director capacity of the competing % interest in Company’s Directors has interest (MW) company competing company

Xinjiang Guoxin 2x660 The coal fired power An effective interest Coal Power project in Changji of 36% interest is Energy Co., Ltd.* Zhou, Xinjiang, the held by a PRC, is in the discretionary trust, of construction stage which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Datang Quanzhou 50 The wind power An effective interest New Energy Co., project in Guilin, of 57.62% is held by a Ltd.* Guangxi, the PRC, trust, of which Mr. is in the pre- Zhu Gongshan and construction stage his family (including Mr. Zhu Yufeng) are beneficiaries

Datang Yongzhou 49.9 The wind power An effective interest New Energy Co., project in of 57.62% is held by a Ltd* Yongzhou, Hunan, trust, of which Mr. the PRC, is in the Zhu Gongshan and construction stage his family (including Mr. Zhu Yufeng) are beneficiaries

Inner Mongolia 49.5 The wind power 61.217% interest is Fuqiang Wind project in Inner held by a Power Co., Ltd.* Mongolia, the PRC, discretionary trust, of is in the which Mr. Zhu construction stage Gongshan and his family (including Mr. Zhu Yufeng are beneficiaries)

Guizhou Xiexin 2x660 The coal-fired 72.02% interest is Panjiang Power power project in held by a Co., Ltd.* Guizhou, the PRC, discretionary trust, of is in the pre- which Mr. Zhu construction stage Gongshan and his family (including Mr. Zhu Yufeng are beneficiaries)

–104– APPENDIX II GENERAL INFORMATION

Name of company Approved in which the Installed Principal activities Names of the relevant Director capacity of the competing % interest in Company’s Directors has interest (MW) company competing company

Shanxi Northern 250 The wind power 72% interest is held Electric project in Shanxi, by a discretionary Construction the PRC, is in the trust, of which Mr. Holding Co., Ltd.* pre-construction Zhu Gongshan and stage his family (including Mr. Zhu Yufeng are beneficiaries)

(ii) Mr. Zhu Yufeng Golden Concord 4x300 Operation of a 72% interest is held Electric-Power power plant in by a discretionary Generation Co., Taicang, Jiangsu, trust, of which Mr. Ltd.* the PRC Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Nanjing Xiexin 2x48 Operation of a 100% interest is held Domestic Sludge cogeneration plant by a discretionary Power Co., Ltd.* in Nanjing, the PRC trust, of which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Guohua Taicang 2x600 Operation of a an effective interest of Power Plant* power plant in 36% is held by a Taicang, Jiangsu discretionary trust, of which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Lanxi Xiexin 1x15 Operation of the 100% interest is held Environmental 1x6 cogeneration power by a discretionary Cogeneration Co., plant in Lanxi, trust, of which Mr. Ltd.* Zhejiang Province, Zhu Gongshan and the PRC his family (including Mr. Zhu Yufeng) are beneficiaries

Guangzhou GCL 2x180 The cogeneration 92% interest is held Blue Sky Gas power plant, located by a discretionary Turbine in Guangzhou, the trust, of which Mr. Cogeneration Co., PRC, is in operation Zhu Gongshan and Ltd.* his family (including Mr. Zhu Yufeng) are beneficiaries

–105– APPENDIX II GENERAL INFORMATION

Name of company Approved in which the Installed Principal activities Names of the relevant Director capacity of the competing % interest in Company’s Directors has interest (MW) company competing company

Lianyungang — Operation of steam Mr. Zhu Gongshan Baoxin Biomass generation beneficially owns Cogeneration Co., 100% interest Ltd.

Kailuan GCL 2x300 Operation of the An effective interest Power Generation coal fired power of 36% is held by a Co. Ltd.* plant in Tangshan discretionary trust, of City, Hebei, the which Mr. Zhu PRC Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Shanxi GCL 3x1,000 The coal fired power An effective interest (Luan) Electric project in Zhangzhi of 57.62% interest is Co., Ltd.* City, Shanxi, the held by a PRC. The project is discretionary trust, of in the pre- which Mr. Zhu development and Gongshan and his pre-construction family (including Mr. stage Zhu Yufeng) are beneficiaries

CPI Xiexin Binhai 2x1,000 Development of a An effective interest Power Co Ltd* coal fired power of 35.29% held by a project in Binhai, discretionary trust, of Jiangsu, the PRC. It which Mr. Zhu is in the Gongshan and his construction stage family (including Mr. Zhu Yufeng) are beneficiaries

Xilingol — Ingot Plant is in the Mr. Zhu Yufeng, Zhongneng Silicon construction stage through companies Co., Ltd* controlled by him, holds 70% interest

Xiaojinxian Jitai 2x8 Operation of the Mr. Zhu Yufeng, Power Investment 1x4 hydro-power station through companies Co., Ltd.* in Sichuan, the PRC controlled by him, holds 49% interest

–106– APPENDIX II GENERAL INFORMATION

Name of company Approved in which the Installed Principal activities Names of the relevant Director capacity of the competing % interest in Company’s Directors has interest (MW) company competing company

Xinjiang Guoxin 2x660 The coal fired power An effective interest Coal Power project in Changji of 36% interest is Energy Co., Ltd.* Zhou, Xinjiang, the held by a PRC, is in the discretionary trust, of construction stage which Mr. Zhu Gongshan and his family (including Mr. Zhu Yufeng) are beneficiaries

Datang Quanzhou 50 The wind power An effective interest New Energy Co., project in Guilin, of 57.62% is held by a Ltd.* Guangxi, the PRC, trust, of which Mr. is in the pre- Zhu Gongshan and construction stage his family (including Mr. Zhu Yufeng) are beneficiaries

Datang Yongzhou 49.9 The wind power An effective interest New Energy Co., project in of 57.62% is held by a Ltd.* Yongzhou, Hunan, trust, of which Mr. the PRC, is in the Zhu Gongshan and construction stage his family (including Mr. Zhu Yufeng) are beneficiaries

Inner Mongolia 49.5 The wind power 61.217% interest is Fuqiang Wind project in Inner held by a Power Co., Ltd. * Mongolia, the PRC, discretionary trust, of is in the which Mr. Zhu construction stage Gongshan and his family (including Mr. Zhu Yufeng are beneficiaries)

Guizhou Xiexin 2x660 The coal-fired 72.02% interest is Panjiang Power power project in held by a Co., Ltd.* Guizhou, the PRC, discretionary trust, of is in the pre- which Mr. Zhu construction stage Gongshan and his family (including Mr. Zhu Yufeng are beneficiaries)

–107– APPENDIX II GENERAL INFORMATION

Name of company Approved in which the Installed Principal activities Names of the relevant Director capacity of the competing % interest in Company’s Directors has interest (MW) company competing company

Shanxi Northern 250 The wind power 72% interest is held Electric project in Shanxi, by a discretionary Construction the PRC, is in the trust, of which Mr. Holding Co., Ltd.* pre-construction Zhu Gongshan and stage his family (including Mr. Zhu Yufeng are beneficiaries)

6. MATERIAL ADVERSE CHANGE

Save for the potential impact of the decrease in RMB against the relevant foreign currencies on the profit and equity attributable to owners of the Company as disclosed in the interim results announcement of the Company dated 28 August 2015, the Directors confirm that, as at the Latest Practicable Date, there were no material adverse changes in the financial or trading positions of the Company since 31 December 2014, the date to which the latest published audited financial statements of the Company were made up.

7. EXPERT’S CONSENT AND QUALIFICATIONS

The following is the name and the qualifications of the professional adviser who has givenopinionoradvicewhichiscontainedorreferredtointhiscircular:

Name Qualification

Platinum Securities Company a licensed corporation under the SFO licensed Limited to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

As at the Latest Practicable Date, Platinum Securities Company Limited does not have any beneficial interest in the share capital of any member of the Group nor did it have any right,whetherlegallyenforceableornot,tosubscribeforortonominatepersonsto subscribe for securities in any member of the Group or have any interest, either directly or indirectly, in any assets which have been, since 31 December 2014, being the date to which the latest published audited consolidated accounts of the Company were made up, acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

Platinum Securities Company Limited has given and has not withdrawn its written letter of consent to the issue of this circular with its expert statements dated 11 November 2015 (as set out on pages 63 to 88 of and made for incorporation in this circular) and name included in the form and context in which they appear.

–108– APPENDIX II GENERAL INFORMATION

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the principal place of business of the Company in Hong Kong, which is situated at Unit 1703B–1706, Level 17, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong, for a period of 14 days from the date of this circular:

(a) the memorandum and articles of associations of the Company;

(b) the annual reports of the Company for each of the two financial years ended 31 December 2013 and 2014;

(c) the written consent referred to under the section headed ‘‘Expert’s Consent and Qualifications’’ in this appendix;

(d) the material contracts referred to in the paragraph headed ‘‘Material Contracts’’ in this appendix;

(e) the letter from the Independent Financial Advisor, the text of which is set out in this circular; and

(f) this circular.

9. MISCELLANEOUS

(a) The registered office of the Company is situated at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

(b) The principal place of business of the Company in Hong Kong is situated at Unit 1703B–1706, Level 17, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong.

(c) The company secretary of the Company is Chan Yuk Chun, who is an associate member of The Hong Kong Institute of Chartered Secretaries.

10. LANGUAGE

In the event of inconsistency, the English text of this circular will prevail over the Chinese text.

–109– NOTICE OF EGM

GCL-POLY ENERGY HOLDINGS LIMITED 保 利 協 鑫 能 源 控 股 有 限 公 司 (Incorporated in the Cayman Islands with limited liability) (Stock code: 3800)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of GCL-Poly Energy Holdings Limited (the ‘‘Company’’)willbeheldatDiamondI,Level3,TheRitz- Carlton, Hong Kong, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong on Thursday, 26 November 2015 at 10: 30 a.m. (the ‘‘EGM’’) for the purpose of considering and, if thought fit, passing with or without amendment the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

1. ‘‘THAT

(a) the conditional sale and purchase agreement dated 14 September 2015 (the ‘‘Sale and Purchase Agreement’’) entered into between Hank Rich Limited, 上 海其辰投資管理有限公司 (Shanghai Qichen Investment Management Co., Ltd.*), and 江蘇協鑫能源有限公司 (Jiangsu Golden Concord Energy Co., Ltd.*), in relation to the acquisition of the entire equity interests in 保利協鑫 有限公司 (GCL-Poly Limited*) (a copy of which is marked ‘‘A’’ and produced to the EGM and signed by the chairman of the EGM for identification purpose) be and is hereby approved; and

(b) any one or more of the directors (the ‘‘Directors’’) of the Company be and is/ are hereby authorised to do all such acts and things and to execute all such documents for the purpose of, or in connection with, the implementation of and giving effect to the Sale and Purchase Agreement and the transactions ancillary thereto and of administrative nature which he/she/they consider necessary, desirable or expedient.’’

2. ‘‘THAT

(a) the terms of the amended and restated non-competition deed dated 8 November 2015 (the ‘‘Restated NCD’’) (a copy of which is marked ‘‘B’’ and produced to the EGM and signed by the chairman of the EGM for identification purpose) entered into between the Company and Mr. Zhu Gongshan, Mr. Zhu Yufeng, Highexcel Investments Limited, Happy Genius Holdings Limited and Get Famous Investments Limited, to amend and

–110– NOTICE OF EGM

restate the deed of non-competition dated 27 October 2007 (as amended by thedeedofamendmentdated27March2014)enteredintobetweenMr.Zhu Gongshan, Mr. Zhu Yufeng, Highexcel Investments Limited and the Company be and is hereby approved; and

(b) any one or more of the directors (the ‘‘Directors’’) of the Company be and is/ are hereby authorised to do all such acts and things and to execute all such documents for the purpose of, or in connection with, the implementation of and giving effect to the Restated NCD and the transactions ancillary thereto and of administrative nature which he/she/they consider necessary, desirable or expedient.’’

3. ‘‘THAT the re-election of Dr. Shen Wenzhong as an independent non-executive Director of the Company be and is hereby approved.’’

4. ‘‘THAT subject to and conditional upon the Listing Committee of The Stock Exchange of Hong Kong Limited granting approval of the listing of, and permission to deal in, the shares of the Company to be issued pursuant to the exercise of any share options that may be granted under the Share Option Scheme (as defined below) of the Company subject to the Refreshed Scheme Limit (as defined below), the refreshment of the existing limit in respect of the grant of share options to subscribe for shares of the Company under the existing share option scheme adopted by the Company on 22 October 2007 (the ‘‘Share Option Scheme’’) be and is hereby approved provided that the aggregate number of shares of the Company which may be allotted and issued pursuant to the exercise of options granted under the Share Option Scheme and any other share option scheme(s) of the Company (excluding options previously granted, outstanding, cancelled, lapsed or exercised under the Share Option Scheme or any other share option scheme(s) of the Company) shall not exceed 200,000,000 Shares of the Company (the ‘‘Refreshed Scheme Limit’’) and the Directors be and are hereby authorised to grant share options under the Share Option Scheme up to the Refreshed Scheme Limit, to exercise all powers of the Company to allot, issue and deal with shares of the Company issued pursuant to the exercise of such share options and to do such acts and execute such documents for or incidental to such purpose.’’

–111– NOTICE OF EGM

Notes:

(1) Any shareholder of the Company entitled to attend and vote at the EGM is entitled to appoint another person as his/her proxy to attend and vote instead of him/her. A shareholder of the Company who is the holder of two or more shares may appoint more than one proxy to attend on the same occasion. A proxy need not be a shareholder of the Company.

(2) In order to be valid, a form of proxy and the power of attorney (if any) or other authority (if any) under which it is signed, or a certified copy of such power or authority, must be deposited with the Company’s Hong Kong share registrar, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time fixed for holding the EGM or any adjournment thereof.

(3) In order to qualify for the right to attend and vote at the EGM, all transfers, accompanied by the relevant share certificates, must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4: 30 p.m. on 25 November 2015.

(4) Delivery of the form of proxy will not preclude a shareholder of the Company from attendingandvotinginpersonattheEGMconvenedandinsuchevent,theformof proxy shall be deemed to be revoked.

(5) In the case of joint registered holders of any share, any one of such joint registered holders may vote at the EGM, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint registered holders be present at the EGM, the vote of the senior who tenders a vote either personally or by proxy shall be accepted to the exclusion of the votes of the other joint registered holders and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

By order of the Board of GCL-Poly Energy Holdings Limited Yeung Man Chung, Charles Executive Director

11 November 2015

As at the date of this notice, the executive Directors are Mr. Zhu Gongshan, Mr. Ji Jun, Mr. Zhu Yufeng, Mr. Yeung Man Chung, Charles and Mr. Zhu Zhanjun; the non-executive Director is Mr. Shu Hua; and the independent non-executive Directors are Dr. Ho Chung Tai, Raymond, Mr. Yip Tai Him and Dr. Shen Wenzhong.

–112–