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

(Stock code: 0576) CONTINUING CONNECTED TRANSACTIONS IN RELATION TO FINANCIAL SERVICES AGREEMENT WITH ZHEJIANG COMMUNICATIONS INVESTMENT GROUP FINANCE CO., LTD. FINANCIAL SERVICES AGREEMENT

On 18 July 2013, the Company and Zhejiang Communications Finance entered into the Financial Services Agreement, pursuant to which Zhejiang Communications Finance agreed to provide the Company with the Deposit Services, the Loan and Financial Leasing Services, the Clearing Services and the Other Financial Services subject to the terms and conditions provided therein. The Financial Services Agreement has been entered into on normal commercial terms and has a term of three years.

LISTING RULES IMPLICATIONS

As at the date of this announcement, Communications Group holds approximately
67% of the issued share capital of the Company. By virtue of this shareholding interest, Communications Group is a substantial shareholder (as defined under the Listing Rules) of the Company. As at the date of this announcement, the Company, Communications Group, Ningbo Expressway Co. and Taizhou Expressway Co. beneficially own 35%, 40%, 15.625% and 9.375% of the issued share capital of Zhejiang Communications Finance, respectively. Therefore, Zhejiang Communications Finance is a connected person of the Company and as a result, each of the Deposit Services, the Loan and Financial Leasing Services, the Clearing Services and the Other Financial Services contemplated under the Financial Services Agreement constitutes a continuing connected transaction for the Company under Chapter 14A of the Listing Rules.
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As each of the applicable percentage ratios in respect of the Deposit Services under the Financial Services Agreement is more than 0.1% but less than 5%, the Deposit Services will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules subject to the reporting, announcement and annual review requirements under Rule 14A.34(1) of the Listing Rules, but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
The Loan and Financial Leasing Services proposed to be provided by Zhejiang Communications Finance to the Company under the Financial Services Agreement will constitute financial assistance provided by a connected person for the benefit of the Company on normal commercial terms where no security over the assets of the Company is granted in respect of such loan services. As a result, the Loan and Financial Leasing Services are exempt from the reporting, announcement, annual review and independent shareholders' approval requirements under Rule 14A.65(4) of the Listing Rules.
The Company expects that each of the applicable percentage ratios (as defined in Rule 14.07 of Listing Rules) of the total fees payable by the Company to Zhejiang Communications Finance under the Clearing Services and the Other financial Services will fall within the de minimis threshold as stipulated under Rule 14A.33(3) of the Listing Rules. The Company will comply with the reporting, announcement and independent shareholders' approval requirements of the Listing Rules in the event that the transaction amount of the Clearing Services and the Other Financial Services to be provided by Zhejiang Communications Finance to the Company under the Financial Services Agreement is expected to exceed the relevant threshold.

FINANCIAL SERVICES AGREEMENT

On 18 July 2013, the Company and Zhejiang Communications Finance entered into the Financial Services Agreement, pursuant to which Zhejiang Communications Finance agreed to provide the Company with the Deposit Services, the Loan and Financial Leasing Services, the Clearing Services and the Other Financial Services subject to the terms and conditions provided therein, with a term of three years. The principal terms of the Financial Services Agreement are set out below:

Date

18 July 2013

Parties

(i) the Company; and
(ii) Zhejiang Communications Finance.
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Principal services to be provided

• Pursuant to the Financial Services Agreement, the services to be provided by
Zhejiang Communications Finance to the Company include the Deposit Services, the Loan and Financial Leasing Services, the Clearing Services and the Other Financial Services. The financial services will be provided under the Financial Services Agreement on a non-exclusive basis and the Company is entitled to determine whether to accept the financial services provided by Zhejiang Communications Finance or decide to accept the financial services provided by other financial institutions. The Company is not obliged to accept any financial services provided by Zhejiang Communications Finance under the Financial Services Agreement.
• In respect of the provision of the Deposit Services under the Financial Services Agreement, Zhejiang Communications Finance may provide current deposit, time deposit, call deposit or agreement deposit services to the Company. The Company agrees to open a deposit account with Zhejiang Communications Finance and will choose the deposit service to be provided.
• In respect of the provision of the Loan and Financial Leasing Services under
the Financial Services Agreement, Zhejiang Communications Finance will grant integrated credit facilities to the Company.
• In respect of the provision of the Clearing Services under the Financial Services
Agreement, Zhejiang Communications Finance will provide clearing services to the Company in connection with the making and receiving of payments and related ancillary services.
• In respect of the provision of the Other Financial Services under the Financial Services Agreement, the services to be provided by Zhejiang Communications Finance include, but is not limited to: financial consulting service, letters of credit and related consulting services, insurance agency, entrusted loans, and acceptance and discount of bills, provided that the services to be provided shall be within the permitted business scope of Zhejiang Communications Finance as approved by CBRC.
• The parties to the Financial Services Agreement further agree to enter into separate agreements for the relevant financial services actually provided under the Financial Services Agreement and the terms of such agreements shall be based on the Financial Services Agreement and shall be in compliance with the terms stipulated
therein in all material aspects.
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Basis of consideration

• Deposit Services
The interest rate to be paid by Zhejiang Communications Finance for the Company's deposits with Zhejiang Communications Finance shall be determined based on the prevailing deposit interest rate promulgated by the People's Bank of China for the same period and should not be lower than the deposit interest rates offered by major commercial banks in the PRC for comparable deposits of comparable periods.
• Loan and Financial Leasing Services
The interest rate to be charged by Zhejiang Communications Finance for loans granted to the Company by Zhejiang Communications Finance shall be based on the prevailing bank lending interest rate promulgated by the People's Bank of China for the same period and should not be higher than the interest rates charged by major commercial banks in the PRC for comparable loans of comparable periods.
• Clearing Services
The service fee to be charged by Zhejiang Communications Finance for the Clearing Services to be provided by Zhejiang Communications Finance to the Company shall be agreed between the parties and should not be higher than the service fees charged by other financial institutions (being independent third parties) for comparable services in the PRC.
• Other Financial Services
The service fee to be charged by Zhejiang Communications Finance for the Other Financial Services to be provided by Zhejiang Communications Finance to the Company shall be agreed between the parties and should not be higher than the service fees charged by other financial institutions (being independent third parties) for comparable services in the PRC.

Annual caps and basis of annual caps

• Deposit Services
The maximum amount of the daily deposit balance (including any interest accrued thereon) for the Company's deposits with Zhejiang Communications Finance shall not be more than RMB700,000,000 during the term of the Financial Services Agreement.
Such cap was determined after taking into account of the size of the total assets of the Company and the anticipated daily outstanding balances of deposits of the Company.
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• Loan and Financial Leasing Services
As the Loan and Financial Leasing Services to be provided by Zhejiang Communications Finance to the Company will be on normal commercial terms and that no security over the assets of the Company will be granted in respect of such loan services, the Loan and Financial Leasing services are exempt from the reporting, announcement, annual review and independent shareholders' approval requirements under Chapter 14A of the Listing Rules and therefore no cap has been set for such services.
• Clearing Services
The Company expects that each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the total fees payable by the Company to Zhejiang Communications Finance under the Clearing Services will fall within the de minimis threshold as stipulated under Rule 14A.33(3) of the Listing Rules and therefore no cap has been set for such services. The Company will comply with the reporting, announcement and independent shareholders' approval requirements of the Listing Rules in the event that the transaction amount of the Clearing Services to be provided by Zhejiang Communications Finance to the Company under the Financial Services Agreement is expected to exceed the relevant threshold.
• Other Financial Services
The Company expects that each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) of the total fees payable by the Company to Zhejiang Communications Finance under the Other financial Services will fall within the de minimis threshold as stipulated under Rule 14A.33(3) of the Listing Rules and therefore no cap has been set for such services. The Company will comply with the reporting, announcement and independent shareholders' approval requirements of the Listing Rules in the event that the transaction amount of the Other Financial Services to be provided by Zhejiang Communications Finance to the Company under the Financial Services Agreement is expected to exceed the relevant threshold. The Company confirms that there will be no provision of financial assistance by the Company to Zhejiang Communications Finance under the Financial Services Agreement.

Effective date

The Financial Services Agreement becomes effective upon execution by the Company and Zhejiang Communications Finance.
The Company expects to utilise the services to be provided by Zhejiang Communications Finance under the Financial Services Agreement after the Financial Services Agreement becomes effective and when the need arises.
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Term

The term of the Financial Services Agreement is for three years from its effective date. Subject to the parties' agreement and compliance with requirements of relevant laws and the Listing Rules, the parties may renew the Financial Services Agreement at the end of its term.

Governing law

The laws of the PRC.

REASONS FOR AND BENEFITS OF THE FINANCIAL SERVICES AGREEMENT

As disclosed in the announcement of the Company dated 30 March 2013, the Company has contributed an amount of RMB280,000,000, by way of cash, into the equity capital of Zhejiang Communications Finance. Following the completion of the Capital Contribution, Zhejiang Communications Finance has become an associate of the Company. With the Financial Services Agreement, the Company expects to derive synergy from utilising services provided by Zhejiang Communications Finance through the ordinary and usual course of business of both companies.
The Directors, including all of the independent non-executive Directors, consider that the transactions contemplated under the Financial Services Agreement are fair and reasonable, on normal commercial terms and are in the interests of the Company and the Shareholders as a whole.
As Mr. Zhan Xiaozhang, Mr. Li Zongsheng, Mr. Wang Weili and Mr. Wang Dongjie are both Directors of the Company and employees of the Communications Group, they have abstained from voting at the board meeting at which the Financial Services Agreement was considered and approved.

INFORMATION ON ZHEJIANG COMMUNICATIONS FINANCE

Zhejiang Communications Finance is a limited liability company incorporated in the PRC on 9 November 2012 and approved by CBRC as a non-banking financial institution on 17 October 2012 with a registered capital of RMB500 million. As at the date of this announcement, Zhejiang Communications Finance is owned as to 35%, 40%, 15.625% and 9.375% by the Company, Communications Group, Ningbo Expressway Co. and Taizhou Expressway Co. respectively.
Zhejiang Communications Finance is principally engaged in the business of providing financial services to the subsidiaries of Communications Group, including but not limited to advising the subsidiaries of the Communications Group in relation to financing, letters of credit and other agency services; authorised insurance businesses; providing guarantees, accepting and discounting commercial notes, arranging for loans and financial leases, and receiving deposits from the subsidiaries of the Communications Group.
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INFORMATION ON THE COMPANY

The Company is a joint stock limited company established under the laws of the PRC with limited liability on 1 March 1997, the H Shares of which are listed on the Main Board of the Stock Exchange. It is principally engaged in investing in, developing and operating high-grade roads in the PRC. The Group also carries on certain other businesses such as automobile servicing, operation of gas stations and billboard advertising along expressways, as well as securities related business.

LISTING RULES IMPLICATIONS

As at the date of this announcement, the Communications Group holds approximately
67% of the issued share capital of the Company. By virtue of this shareholding interest, Communications Group is a substantial shareholder (as defined under the Listing Rules) of the Company. As at the date of this announcement, the Company, Communications Group, Ningbo Expressway Co. and Taizhou Expressway Co. beneficially own 35%,
40%, 15.625% and 9.375% of the issued share capital of Zhejiang Communications Finance, respectively. Therefore, Zhejiang Communications Finance is a connected person of the Company and as a result, each of the Deposit Services, the Loan and Financial Leasing Services, the Clearing Services and the Other Financial Services contemplated under the Financial Services Agreement constitutes a continuing connected transaction for the Company under Chapter 14A of the Listing Rules.
As each of the applicable percentage ratios in respect of the Deposit Services under the Financial Services Agreement is more than 0.1% but less than 5%, the Deposit Services will constitute continuing connected transactions of the Company under Chapter 14A of the Listing Rules subject to the reporting, announcement and annual review requirements under Rule 14A.34(1) of the Listing Rules, but are exempt from the independent shareholders' approval requirement under Chapter 14A of the Listing Rules.
The Loan and Financial Leasing Services proposed to be provided by Zhejiang Communications Finance to the Company under the Financial Services Agreement will constitute financial assistance provided by a connected person for the benefit of the Company on normal commercial terms where no security over the assets of the Company is granted in respect of such loan services. As a result the Loan and Financial Leasing Services are exempt from the reporting, announcement, annual review and independent shareholders' approval requirements under Rule 14A.65(4) of the Listing Rules.
The Company expects that each of the applicable percentage ratios (as defined in Rule 14.07 of Listing Rules) of the total fees payable by the Company to Zhejiang Communications Finance under the Clearing Services and the Other financial Services will fall within the de minimis threshold as stipulated under Rule 14A.33(3) of the Listing Rules. The Company will comply with the reporting, announcement and independent shareholders' approval requirements of the Listing Rules in the event that the transaction amount of the Clearing Services or the Other Financial Services to be provided by Zhejiang Communications Finance to the Company under the Financial Services Agreement is expected to exceed the relevant threshold.
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DEFINITIONS

"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;
"Capital Contribution" the capital contribution by the Company in the amount of RMB280,000,000, by way of cash, into the equity capital of Zhejiang Communications Finance pursuant to a capital contribution agreement dated 30 March
2013 entered into between the Company, Zhejiang Communications Finance, Communications Group, Ningbo Expressway Co. and Taizhou Expressway Co., the details of which are contained in the announcement of the Company dated 30 March 2013;
"CBRC" China Banking Regulatory Commission (