ANNOUNCEMENT. (1) Proposed Amendments to the Articles (2) Discloseable Transaction in relation to the Formation of the Fund

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement. Zoomlion Heavy Industry Science and Technology Co., Ltd.* 中聯重科股份有限公司 (a joint stock company incorporated in the People s Republic of China with limited liability) (Stock Code: 1157) ANNOUNCEMENT (1) Proposed Amendments to the Articles (2) Discloseable Transaction in relation to the Formation of the Fund I. PROPOSED AMENDMENTS TO THE ARTICLES The Board proposes to make certain amendments to the Articles as follows: Article 13 Original Article According to the registration of the Company, the scope of business of the Company includes: development, manufacturing and sale of concrete machinery, environmental and sanitary machinery, crane machinery and their special chassis, fire engines and their special chassis, other machinery and equipment, metal and non-metal materials and photo-electronic products and the provision of leasing and after-sale services; sale of construction and decoration materials, construction vehicles and metals and chemicals Article after amendment According to the registration of the Company, the scope of business of the Company includes: development, manufacturing and sale of concrete machinery, environmental and sanitary machinery, crane machinery and their special chassis, fire engines and their special chassis, aerial work machinery, other machinery and equipment, metal and non-metal materials and photo-electronic products and the provision of leasing and after-sale services; sale of construction and decoration materials, construction 1

2 Original Article and petrochemical products (except hazardous c hemical products and controlled products); engage in the import and export business of commercial products and technology; investing in properties with its own assets (not permitted to engage in national regulated financial business and fiscal credit business involving acceptance of money deposits, raising and collection of funds, entrusted loans, note issuance, provision of loans, etc.);sale of second-hand cars; and dismantling and recycling of obsolete machinery and equipment. Article after amendment vehicles and metals and chemicals and petrochemical products (except hazardous chemical products and controlled products); engage in the import and export business of commercial products and technology; investing in properties with its own assets (not permitted to engage in national regulated financial business and fiscal credit business involving acceptance of money deposits, raising and collection of funds, entrusted loans, note issuance, provision of loans, etc.); sale of second-hand cars; and dismantling and recycling of obsolete machinery and equipment. Note: Amendments to the Articles were originally drafted in Chinese and the English translation is for reference only. In case of any inconsistencies between the Chinese and the English versions, the Chinese version shall prevail. The proposed amendments to the Articles are subject to the approval of the Shareholders by way of a special resolution at the AGM. II. THE JOINT VENTURE AGREEMENT The Board is pleased to announce that on 6 June 2018, Zoomlion Capital (an indirectly wholly-owned subsidiary of the Company) entered into the Joint Venture Agreement with Junlai Capital (an indirectly non-wholly-owned subsidiary of the Company), in relation to the formation of the Fund. The principal terms of the Joint Venture Agreement are set out below: Date 6 June 2018 Parties 1. Zoomlion Capital; and 2. Junlai Capital. Junlai Capital is an indirectly non-wholly-owned subsidiary of the Company which is held as to 51% by Zoomlion Capital and 49% by Beijing Shunjinghe. To the best of the Directors knowledge, information and belief having made all reasonable enquiries, Beijing Shunjinghe is an Independent Third Party. 2

3 Capital contribution Capital contribution will be made by the Parties in cash as follows: Party Capital contribution (RMB) Percentage of equity interest in the Fund Zoomlion Capital 3 billion 99.67% Junlai Capital 10 million 0.33% The Fund will be an indirectly non-wholly-owned subsidiary of the Company. The amount of capital contribution to be made by the Parties was arrived at after arm s length negotiations between the Parties, having taken into account the expected capital requirements of the Fund. It is contemplated that the capital contribution payable by each of the Parties will be funded by their respective internal resources. Purpose of the Fund The Fund will invest in major strategic businesses and new economic sectors. Form of the Fund The Fund will take the form of a limited partnership, with Zoomlion Capital acting as its limited partner and Junlai Capital acting as its general partner. Term of the Fund The term of the Fund will be seven years, of which the first three-year term is the investment period and the remaining four-year term is the exit period. Exit from investments The Fund will set up an investment committee which may formulate appropriate exit strategies, and implement the same as and when appropriate to realise investment returns for the partnership. The methods of exit and recovering investment include, without limitation, listing, floating on National Equities Exchange and Quotation (NEEQ), equity transfer, disposal of entity, repurchase, share conversion, liquidation and liquidation by investing entity. Accounting and auditing of the Fund The Fund will be audited independently. Financial statements will be regularly prepared according to the relevant accounting standards. Annual audit will be conducted by a third party which will issue an auditors report accordingly. 3

4 Management of the Fund Daily operation and investment of the Fund will be entirely entrusted to and managed by a fund management company. Management fees will be paid by the Fund to the fund management company at 2% per annum of the actual contribution to the Fund for the investment period. If and when the annual yield of the Fund reaches 8% (being the preference yield), the fund management company is entitled to 20% of the income of the Fund as performance bonus. The Fund will set up an investment committee, which will be the investment decision organ, to determine material matters of the Fund, such as investment in or exit from projects. The investment committee will comprise five members, of which three will be nominated by Zoomlion Capital and the remaining two will be nominated by Junlai Capital. The investment committee will be chaired by a member nominated by Zoomlion Capital. All projects to be invested in by the Fund will be approved by such number of members representing more than two-thirds of the total number of members. Reasons For and Benefits of the Formation of the Fund Junlai Capital is a leading fund management team in China. Formation of the Fund will be beneficial to promote the integration and synergies of the Group s existing industrial segment and financial segment, and optimize the layout of its business chain, and this facilitates the business upgrade and transformation, helps to develop new areas of profit growth, and gives full play to its function as a business incubator. The Directors are of the view that the terms of the Joint Venture Agreement are normal commercial terms, fair and reasonable and in the interests of the Shareholders as a whole. Information about the Parties The Company The Company is a joint stock company incorporated in the PRC with limited liability, the shares of which have been listed on the Hong Kong Stock Exchange since 23 December The Group is a leading China-based construction machinery manufacturer providing diversified products, including concrete machinery, crane machinery and environmental and sanitation machinery, with a presence in Asia, Europe and other regions. Zoomlion Capital Zoomlion Capital is a company established in the PRC with limited liability and an indirectly wholly-owned subsidiary of the Company. It is principally engaged in project investment, investment management, assets management, non-securities investment management, consultation and equity investment management. 4

5 Junlai Capital Junlai Capital is a company established in the PRC with limited liability and an indirectly nonwholly-owned subsidiary of the Company. It is principally engaged in project investment, investment management, assets management and equity investment management. Its major areas of investment include advanced manufacturing sector, the Internet of Things, Artificial Intelligence, Big Data, Comprehensive Consumption and other emerging economic sectors, with a view to generating investment returns for investors through integration of its industrial and financial segments, and by adopting stable and diversified investment strategies. Listing Rules Implications As one or more of the applicable percentage ratios is more than 5% but less than 25%, the formation of the Fund constitutes a discloseable transaction of the Company under Chapter 14 of the Listing Rules and is subject to the announcement requirement under Chapter 14 of the Listing Rules. III. AGM The proposed amendments to the Articles will be put forward to the Shareholders for consideration and approval at the forthcoming AGM. The supplemental circular in connection therewith and the supplemental notice of the AGM will be despatched to the Shareholders as soon as practicable in accordance with the Listing Rules. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions have the following meanings: AGM Articles the annual general meeting of the Company to be held at Multifunction Conference Room, Company Office Building, No. 361, Yin Pen South Road, Changsha City, Hunan Province, the PRC at 2:00 p.m. on Friday, 29 June 2018 the articles of association of the Company, as amended from time to time A Share(s) the domestic share(s) of RMB1.00 each in the share capital of the Company which are listed on the Shenzhen Stock Exchange and traded in RMB Beijing Shunjinghe Board (Beijing Shunjinghe Investment Management Company Limited)*, a company established in the PRC with limited liability and an Independent Third Party the board of Directors 5

6 Company Directors Fund (Zoomlion Heavy Industry Science and Technology Co., Ltd.)*, a joint stock company incorporated in the PRC with limited liability the directors of the Company a limited partnership to be established in the PRC under the proposed name of ( ) (Zoomlion Industrial Investment Fund Partnership (Limited Partnership))*, subject to industrial and commercial approval H Share(s) the overseas listed foreign share(s) of RMB1.00 each in the share capital of the Company which are listed on the Hong Kong Stock Exchange and traded in Hong Kong dollars Hong Kong Stock Exchange The Stock Exchange of Hong Kong Limited Independent Third Party(ies) party(ies) which is/are independent of the Group and the connected persons of the Company Joint Venture Agreement Junlai Capital Listing Rules Parties PRC or China RMB Share(s) Shareholder(s) the joint venture agreement dated 6 June 2018 entered into between Zoomlion Capital and Junlai Capital in relation to the formation of the Fund (Beijing Junlai Capital Management Company Limited)*, a company established in the PRC with limited liability and an indirectly non-wholly-owned subsidiary of the Company, which is held as to 51% by Zoomlion Capital and 49% by Beijing Shunjinghe, an Independent Third Party the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited parties to the Joint Venture Agreement, being Zoomlion Capital and Junlai Capital, and Party shall mean any of them the People s Republic of China, for the purpose of this announcement, excluding Taiwan, Hong Kong Special Administrative Region and Macau Special Administrative Region Renminbi, the lawful currency of the PRC A Share(s) and H Share(s), or the context requires, either of them the holder(s) of the Shares 6

7 Shenzhen Stock Exchange the Shenzhen Stock Exchange Zoomlion Capital (Zoomlion Capital Company Limited)*, a company established in the PRC with limited liability and an indirectly wholly-owned subsidiary of the Company Changsha, the PRC, 6 June 2018 By Order of the Board Zoomlion Heavy Industry Science and Technology Co., Ltd.* Zhan Chunxin Chairman As at the date of this announcement, the executive director of the Company is Dr. Zhan Chunxin; the non-executive directors are Mr. Hu Xinbao and Mr. Zhao John Huan; and the independent non-executive directors are Mr. Zhao Songzheng, Mr. Lai Kin Keung, Ms. Liu Guiliang and Mr. Yang Changbo. * For identification purpose only 7