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Central environmental protection acquires the remaining equity of Dejiang Shengyun environmental protection power Co., Ltd. (announcement)

Central Environmental Protection: Announcement on signing major contracts. The company and all members of the board of directors guarantee that the content of information disclosure is true, accurate and complete, without false records, misleading statements or major omissions. Anhui Zhonghuan Environmental Protection Technology Co., Ltd. (hereinafter referred to as "the company" and "Party B") received on November 5, 2018

Zhonghuan environmental protection: Announcement on signing major contracts

the company and all members of the board of directors guarantee that the content of information disclosure is true, accurate and complete, without false records, misleading statements or major omissions

Anhui Zhonghuan Environmental Protection Technology Co., Ltd. (hereinafter referred to as "the company" and "Party B") acquired the remaining equity of Dejiang Shengyun environmental protection power Co., Ltd. (hereinafter referred to as "Dejiang power") on November 5, 2018. After the equity transfer, Dejiang power became a wholly-owned subsidiary of the company. For details, see the progress announcement on the acquisition of the remaining equity and major contracts of Dejiang Shengyun environmental protection power Co., Ltd. (Announcement No.) published by the company on cninfo on November 7, 2018. On December 26th, 2018, the people's Government of Dejiang County, Guizhou Province (hereinafter referred to as "party a") and the company signed the franchise agreement of Dejiang County urban domestic waste incineration power generation project and the domestic waste treatment service agreement of Dejiang County urban domestic waste incineration power generation project

I. contract risk tips

1. Conditions for the effectiveness of the contract

the contract will take effect from the date when both parties formally sign and affix their official seals

2. The performance period of the contract is from the effective date of the contract to the completion of all obligations under the contract. The franchise period of this project is 30 years (excluding the construction period)

3. Major risks of the contract

(1) the performance of the contract of this project will occupy the company's working capital, which does not rule out the risk that the company will bear greater financial pressure in the short term during the progress of the project

(2) there are risks that the contract may be smoothly performed due to force majeure such as natural disasters and social emergencies, as well as changes in national laws, regulations and policies, operational risks, etc

(3) there is a risk that the return period of contract investment is long and the income is less than expected due to changes in the market environment. Please pay attention to investment risks

II. Overview of contract signing

on December 26, 2018, Dejiang County People's Government of Guizhou Province signed the franchise agreement for Dejiang County urban domestic waste incineration power generation project and the domestic waste disposal service agreement for Dejiang County urban domestic waste incineration power generation project after entering the experimental interface with the company

III. introduction of the parties to the contract

1. Purchasing unit: Dejiang County People's Government of Guizhou Province

2. Address: No. 122, Hongqi Road, Dejiang County, Guizhou Province

3. Guizhou Zhongwang actively carries out in-depth cooperation with domestic large automobile and bus manufacturers. Dejiang County People's government has no relationship with the company or project company: no

4 Analysis of performance capacity: Dejiang County People's Government of Guizhou Province is a government organ established and existing in accordance with Chinese law, with strong performance capacity

5. Purchase and sales amount with the company in the last three fiscal years: none

IV. main contents of the contract

1. Contract subject:

Party A: Dejiang County People's Government of Guizhou Province

Party B: Anhui Zhonghuan Environmental Protection Technology Co., Ltd.

2. Project overview:

the total construction scale of Dejiang County urban domestic waste incineration power generation project is 1000 tons/day (the specific construction scale shall be subject to the approval of Guizhou Provincial Development and Reform Commission). Party A grants Party B the franchise right, and both parties sign the franchise right agreement. Party B will implement the project in accordance with this agreement. After the expiration of the franchise period, Party B will hand over all graphene produced by the top-down method within the scope of the project to Party A or the organization designated by party a free of charge, which is very different from its own nature and manufacturing cost

3. Performance period of the contract: the franchise period of the project is 30 years (excluding the construction period)

4. Total investment: about 550 million yuan

5. Source of income: the main sources of income of this project are electricity sales revenue and garbage disposal service fee

6. Breach of contract: the rights and obligations of both parties, breach of contract and compensation, dispute resolution and other aspects have been clearly stipulated in the contract terms

7. Conditions for the effectiveness of the contract: this contract shall take effect from the date when it is signed and sealed by all parties

v. impact of the contract on listed companies

if the contract can be successfully implemented, it will have a positive impact on the company's future business performance and market development. This project will not have a significant impact on the business independence of the company

VI. review procedure of the contract

this contract is a daily business contract of the company, and it does not need to be reviewed and approved by the board of directors and the general meeting of shareholders of the company, nor does it need independent directors to express their opinions

VII. Analysis of the board of directors on the performance capacity of the counterparty

Dejiang County People's Government of Guizhou Province is a government organ established and existing in accordance with Chinese law, and the risk in performance capacity, credit status and payment capacity is small

VIII. Legal opinion

Anhui Tianhe law firm believes that Dejiang County government is a county-level people's government and has the main qualification to sign the franchise agreement for Dejiang County urban domestic waste incineration power generation project and the living waste treatment service agreement for Dejiang County urban domestic waste incineration power generation project; The franchise agreement of Dejiang urban domestic waste incineration power generation project and the domestic waste treatment service agreement of Dejiang urban domestic waste incineration power generation project have been signed by the authorized representatives of both parties and stamped with the official seal of the unit. The contents of the agreement do not violate the mandatory provisions of laws and regulations. The franchise agreement and the waste treatment service agreement are true, legal and effective

IX. verification opinions of the sponsor

Haitong Securities Co., Ltd. (hereinafter referred to as "Haitong Securities") believes after careful verification that central environmental protection, Dejiang County People's Government of Guizhou Province and central environmental protection have the ability to normally implement the franchise agreement of Dejiang County Urban Household waste incineration power generation project and the domestic waste treatment service agreement of Dejiang County urban household waste incineration power generation project

the recommendation institution will urge the company to do a good job in relevant information disclosure, and will continue to pay attention to the performance of major contracts of the company, and urge the company to continue to strengthen project management to protect the interests of all shareholders of the company

X. other relevant instructions

the company will disclose the progress of the contract in the form of interim report in time, and disclose the commitment of the performance of major contracts in the periodic report

Xi. Documents for future reference: new energy vehicle batteries occupy a large space

1, Dejiang County municipal solid waste incineration power generation project franchise agreement

2, Dejiang County municipal solid waste incineration power generation project domestic waste treatment service agreement

3, Haitong Securities Co., Ltd.'s verification opinions on the performance capacity of all parties to the company's daily operation major contract transactions

4 The legal opinion of Anhui Tianhe law firm on the signing of major contracts by Anhui Zhonghuan Environmental Protection Technology Co., Ltd.

is hereby announced

board of directors of Anhui Zhonghuan Environmental Protection Technology Co., Ltd.

December 26, 2018

original title: Zhonghuan environmental protection: Announcement on signing major contracts