Zhejiang Expressway : (1) DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO DI...

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.

(A joint stock limited company incorporated in the People's Republic of China with limited liability)

1. DISCLOSEABLE AND CONNECTED TRANSACTION IN RELATION TO DISPOSAL OF 100% EQUITY INTEREST IN DEVELOPMENT CO AND
2. PROPOSED ISSUE OF H SHARE CONVERTIBLE BONDS UNDER GENERAL MANDATE AND
3. INTERIM DIVIDEND FOR THE SIX MONTHS ENDED 30 JUNE 2016 AND
4. PROPOSED APPOINTMENT OF SUPERVISOR AND
5. PROPOSED AMENDMENT TO ARTICLES OF ASSOCIATION AND
6. NOTICE OF THE EXTRAORDINARY GENERAL MEETING

A letter from the Board is set out on pages 5 to 17 of this circular.

A letter from the Independent Board Committee is set out on page 18 of this circular.

A letter from TC Capital International Limited, the Independent Financial Adviser, containing its recommendations to the Independent Board Committee and the Independent Shareholders in relation to the Disposal is set out on pages 19 to 31 of this circular.

A notice for convening the extraordinary general meeting (the "EGM") of the Company to be held at 10 a.m. on 28 December 2016 at 5/F, No. 2 Mingzhu International Business Center, 199 Wuxing Road, Hangzhou City, Zhejiang Province, the People's Republic of China is set out on pages 90 to 92 of this circular.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon. In case of H Shares, the proxy form shall be lodged with the Company's H Shares Registrar, Hong Kong Registrars Limited, Room 1712-1716, 17/F, Hopewell Centre, 183 Queen's Road East, Hong Kong, not less than 24 hours before the time for holding the EGM (or any adjournment thereof). Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

9 November 2016

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In this circular, unless the context specifies otherwise, the following expressions shall have the meanings stated below:

"Advertising Co" 浙江高速廣告有限責任公司(Zhejiang Expressway Advertising Co., Ltd.) is a company incorporated in the PRC and a 70% owned subsidiary of Development Co

"Articles of Association" the articles of association of the Company

"associate" has the meaning ascribed to it under the Listing Rules

"Board" the Board of Directors

"Business Day" any day other than a Saturday or Sunday or a public holiday in the PRC, on which banks are generally open for business in the PRC

"Communications Group" 浙江省交通投資集團有限公司( Zhejiang Communications

Investment Group Co., Ltd.*), a wholly State-owned enterprise established in the PRC, and the controlling shareholder of the Company

"Company" Zhejiang Expressway Co., Ltd. (浙江滬杭甬高速公路股份有限公 司), a joint stock limited company incorporated in the PRC with limited liability, whose shares are listed on the main board of the Stock Exchange

"Completion" completion of the Disposal pursuant to the Share Purchase Agreement

"connected person(s)" has the meaning ascribed to it under the Listing Rules "controlling shareholder" has the meaning ascribed to it under the Listing Rules "Conversion Shares" H Shares which fall to be allotted and issue upon exercise of the

conversion rights attached to the H Share Convertible Bonds

"CSRC" China Securities Regulatory Commission (中國證券監督管理委 員會) of the PRC

"Deloitte" Deloitte Touche Tohmatsu, the auditors of the Company "Development Co" 浙江高速投資發展有限公司(Zhejiang Expressway Investment

Development Co., Ltd.*), a company incorporated in the PRC and

a wholly-owned subsidiary of the Company

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"Director(s)" the director(s) of the Company

"Disposal" the disposal of 100% equity interest in Development Co by the Company in accordance with the Share Purchase Agreement

"EGM" the extraordinary general meeting of the Shareholders of the Company to be convened for the purposes of, among other things, the approval by the Independent Shareholders of the Share Purchase Agreement and of the special resolution regarding the proposed issue of H Share Convertible Bonds, the notice of which is set out on pages 90 to 92 of this circular

"General Mandate" the general mandate granted to the Directors by the Shareholders

pursuant to an ordinary resolution passed at the annual general meeting of the Company held on 6 May 2016 to allot, issue and/ or deal with additional H Shares representing up to the limit of 20% of H Shares in issue on the date of the passing of the relevant resolution

"Group" the Company and its subsidiaries

"H Shares" overseas listed foreign shares in the share capital of the Company with a nominal value of RMB1 per share, which are listed on the main board of the Stock Exchange

"H Share Convertible Bonds" the convertible bonds with an aggregate principal amount of up to

USD400 million proposed to be issued by the Company, which are convertible into H Shares.

"Hong Kong" the Hong Kong Special Administrative Region of the PRC

"HK$" Hong Kong dollars, the lawful currency of Hong Kong "Independent Board Committee" an independent committee of the Board comprising all

independent non-executive Directors, namely, Mr. Zhou Jun, Mr.

Pei Ker-Wei and Ms. Lee Wai Tsang Rosa

"Independent Financial Adviser" TC Capital International Limited, a licensed corporation licensed

to conduct type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Share Purchase Agreement

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