(Incorporated in Hong Kong under the Companies Ordinance with limited liability) (Stock code: 285) Website:

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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. (Incorporated in Hong Kong under the Companies Ordinance with limited liability) (Stock code: 285) Website: ANNOUNCEMENT revision of existing annual caps for CONTINUING CONNECTED TRANSACTIONS AND ENTERING OF CONTINUING CONNECTED TRANSACTIONS SUMMARY Revision of Existing Annual Caps for continuing connected Transactions Reference is made to the announcement of the Company dated, 3 June 2014 and 2012 and the circular of the Company dated 5 February 2013, in respect of the Existing Continuing Connected Transaction Agreements entered into between the Group and BYD Group. However, due to the increased demand from customers and the expansion of the Group s business operations, the Board anticipated that the Existing Annual Caps for the Continuing Connected Transactions for the two years ending 2015 will be exceeded. As such, the Directors propose to revise the Existing Annual Caps for the two years ending 2015 for each of the relevant Continuing Connected Transactions respectively. Pursuant to the Listing Rules, if the Company proposes to revise the annual caps for continuing connected transaction, the Company will be required to re-comply with the provisions of Chapter 14A of the Listing Rules in relation to the relevant connected transaction. As BYD is the controlling Shareholder of the Company indirectly interested in approximately 65.76% of the issued share capital of the Company as at the date of the Supplemental Continuing Connected Transaction Agreements, BYD is a connected person of the Company. Therefore, the transactions contemplated under the Supplemental Continuing Connected Transaction Agreements constitute Continuing Connected Transactions of the Company. 1

2 As the applicable percentage ratios stipulated under Rule of the Listing Rules in respect of the Revised Annual Caps for the Continuing Connected Transactions for the two years ending 2015 contemplated under the Supplemental Continuing Connected Transaction Agreements exceed 0.1% but less than 5%, the Continuing Connected Transactions of the Company and their respective Revised Annual Caps are subject to the reporting, announcement and annual review requirements but are exempt from the independent shareholders approval requirement set out in Chapter 14A of the Listing Rules. entering of CONTINUING CONNECTED TRANSACTIONs On 18 December 2014, BYD Auto and BYD Xi an entered into the Xi an Lease Agreement and the transactions contemplated thereunder constitute continuing connected transactions of the Company, pursuant to which BYD Auto agrees to lease certain factory and premises situated at Gaoxin District, Xi an City to BYD Xi an from 1 December 2014 to 30 November On 18 December 2014, the Company entered into the BE Processing Services Agreement with BYD and the transactions contemplated thereunder constitute continuing connected transactions of the Company, pursuant to which the Group agrees to provide certain processing services and research and development support for certain products of the Group (including on-vehicle multimedia and vehicle-linked handset) to the BYD Group from the date of the BE Processing Services Agreement to As BYD is the controlling Shareholder of the Company indirectly interested in approximately 65.76% of the issued share capital of the Company, and BYD Auto is a 99% directly owned subsidiary of BYD, BYD and BYD Auto are connected persons of the Company. As such, the transactions contemplated under the BE Processing Services Agreement and the Xi an Lease Agreement constitute Continuing Connected Transactions of the Company under Chapter 14A of the Listing Rules. As the applicable percentage ratios stipulated under Rule of the Listing Rules in respect of the proposed annual caps for the transactions under the BE Processing Services Agreement and the Xi an Lease Agreement are more than 0.1% but less than 5%, the transactions under the BE Processing Services Agreement and the Xi an Lease Agreement are subject to the reporting, announcement and annual review requirements but are exempt from the Independent Shareholders approval requirement set out in Chapter 14A of the Listing Rules. I. Introduction Reference is made to the announcement of the Company dated 3 June 2014 and 2012 and the circular of the Company dated 5 February 2013, in respect of the Existing Continuing Connected Transaction Agreements entered into between the Group and BYD Group. However, due to the increased demand from customers and the expansion of the Group s business operations, the Board anticipated that the Existing Annual Caps for the Continuing Connected Transactions for the two years ending 2015 will be exceeded. As such, the Directors propose to revise the Existing Annual Caps for the two years ending 2015 for each of the relevant Continuing Connected Transactions respectively. 2

3 Pursuant to the Listing Rules, if the Company proposes to revise the annual caps for continuing connected transaction, the Company will be required to re-comply with the provisions of Chapter 14A of the Listing Rules in relation to the relevant connected transaction. As BYD is the controlling Shareholder of the Company indirectly interested in approximately 65.76% of the issued share capital of the Company as at the date of the Supplemental Continuing Connected Transaction Agreements, BYD is a connected person of the Company. Therefore, the transactions contemplated under the Supplemental Continuing Connected Transaction Agreements constitute Continuing Connected Transactions of the Company. As certain of the applicable percentage ratios stipulated under Rule of the Listing Rules in respect of the Revised Annual Caps for the Continuing Connected Transactions for the two years ending 2015 contemplated under the Supplemental Supply Continuing Connected Transaction Agreements exceed 0.1% but less than 5%, the Continuing Connected Transactions of the Company and their respective Revised Annual Caps are subject to the reporting, announcement and annual review requirements but are exempt from the independent shareholders approval requirements set out in Chapter 14A of the Listing Rules. II. Revision of Existing Annual Caps On the above basis, the parties thereto agreed to revise the Existing Annual Caps to the Revised Annual Caps as follows: Continuing Connected Transactions Revised Annual Caps RMB RMB (a) Supply of products by the Group to BYD Group 428,510, ,574,000 (b) Provision of utilities connection and/or utilities by BYD Group to the Group 343,297, ,945,000 (c) Provision of processing services by BYD Group to the Group 260,761, ,276,000 A. Supply of products by the Group to BYD Group Agreement: Supplemental Supply Agreement Date: 18 December 2014 Parties: 1. The Company 2. BYD Duration: 18 December 2014 to 2015 Subject: The Group agreed to supply to BYD Group products required for the production of BYD Group s products, such as plastic components, metal parts, chargers, handset and multimedia for use in the automobile and certain other products. 3

4 Price determination: Payment terms: The Group will determine the selling prices with reference to prices charged to its independent third party customers for similar products, which represents the then prevailing market prices. In particular, to ensure that no mark-up will be charged by BYD Group for the handset charger products, the Group is allowed access to the sales orders of the handset charger placed by customers with BYD Group to check the actual selling prices payable by BYD Group s customers. As stipulated in the relevant order forms, which is normally payable within three months after delivery of the products. The table below summarises the Existing Annual Caps for the three years ended 2015 for the Continuing Connected Transaction set out in this sub-section: Existing Annual Caps 240,000, ,236, ,441,000 The table below summarises the actual transaction amounts involved for the two years ended 2013 (audited) and the ten months ended 31 October 2014 (unaudited) for the Continuing Connected Transaction set out in this sub-section: Ten months ended 31 October Actual transaction amount 245,321, ,340, ,067,000 The Company proposes to revise the Existing Annual Caps for the said Continuing Connected Transaction for the two years ending 2015 to be RMB428,510,000 and RMB585,574,000 respectively. The Revised Annual Caps have been prepared by the Company primarily based on the following: (a) (b) the historical transaction amounts and increasing demand of BYD Group; the production and operation capacity of the Group; and (c) the seasonally strong demand in the Q4 of As the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction exceed 0.1% but less than 5%, this Continuing Connected Transaction of the Company and the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction are subject to the reporting, announcement and annual review requirements but are exempt from the independent shareholders approval requirement set out in Chapter 14A of the Listing Rules. 4

5 As the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction are not subject to the approval of the Independent Shareholders, the Supplemental Supply Agreement is unconditional. B. Provision of utility connection and/or utility by BYD Group to the Group Agreement: Supplemental Utility Services Master Agreement Date: 18 December 2014 Parties: 1. The Company 2. BYD Term: 18 December 2014 to 2015 Subject: Price determination: Payment terms: The BYD Group agreed to provide or provide the connection of (as the case may be) certain utilities, including water and electricity, to the Group. On the basis of the usage rate as recorded in the relevant meters with reference to the market price and the Group also shared the maintenance and repairing costs incurred in connection with the utility infrastructure by reference to usage as measured by the relevant meters 90 days from the date of invoice The table below summarises the Existing Annual Caps for the three years ended 2015 for the Continuing Connected Transaction set out in this sub-section: Existing Annual Caps 252,570, ,960, ,180,000 The table below summarises the actual transaction amounts involved for the two years ended 2013 (audited) and the ten months ended 31 October 2014 (unaudited) for the Continuing Connected Transaction set out in this sub-section: Ten months ended 31 October Actual transaction amount 226,631, ,825, ,961,000 The Company proposes to revise the Existing Annual Caps for the said Continuing Connected Transaction for the two years ending 2015 to be RMB343,297,000 and RMB514,945,000 respectively. 5

6 The Revised Annual Caps have been prepared by the Company primarily based on the following: (a) (b) historical transaction amounts and an estimation of a strongly increase in the consumption of utilities as a result of the increase in the production volume of the Group s operation in Huizhou and Xi an, especially the metal components manufacturing business; and the total transaction amount for the said Continuing Connected Transaction for the ten months period from 1 January 2014 to 31 October 2014 was approximately RMB219,961,000, representing approximately 81.18% of the Existing Annual Cap for the year ending 31 December 2014, and the strong demand from new customers. As the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction exceed 0.1% but less than 5%, this Continuing Connected Transaction of the Company and the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction are subject to the reporting, announcement, and annual review requirements, but are exempt from the independent shareholders approval requirement set out in Chapter 14A of the Listing Rules. Since the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction are not subject to the approval of the Independent Shareholders, the Supplemental Utility Services Master Agreement is unconditional. C. Provision of processing services by BYD Group to the Group Agreement: Supplemental Processing Services Agreement Date: 18 December 2014 Parties: 1. The Company 2. BYD Duration: 18 December 2014 to 2015 Subject: Price determination: Payment terms: BYD Group agreed to provide to the Group certain processing services for certain products of the Group (including handset metal parts and components of handsets and chargers) and facilities (including waste water treatment and die casting machine) of the Group whereby some steps in the production process of such facilities are further processed by BYD Group. With reference to the costs of BYD Group in provision of the relevant processing services plus a profit margin to be determined after arm s length negotiation between the Company and BYD 90 days from the date of invoice 6

7 The table below summarises the Existing Annual Caps for the three years ending 2015 for the Continuing Connected Transaction set out in this sub-section: Existing Annual Caps 40,630, ,313, ,456,000 The table below summarises the actual transaction amounts involved for the year ended 31 December 2013 (audited) and the ten months ended 31 October 2014 (unaudited) for the Continuing Connected Transaction set out in this sub-section: Ten months ended 31 October Actual transaction amount 41,792,000 40,025,000 37,853,000 The Company proposes to revise the Existing Annual Caps for the said Continuing Connected Transaction for the two years ending 2015 to be RMB260,761,000 and RMB689,276,000 respectively. The Revised Annual Caps have been prepared by the Company primarily based on the historical transaction amounts of the provision of the said process services and the expectation that the Group s demand for the said processing services will strongly grow from increasing demand of metal parts from new customers for the two years ending As the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction exceed 0.1% but less than 5%, this Continuing Connected Transaction of the Company and the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction are subject to the reporting, announcement requirements and annual review requirements but are exempt from the independent shareholders approval requirement set out in Chapter 14A of the Listing Rules. As the Revised Annual Caps for the two years ending 2015 for this Continuing Connected Transaction are not subject to the approval of Independent Shareholders, the Supplemental Processing Services Agreement is unconditional. 7

8 III. Entering of Continuing Connected Transactions A summary of the proposed annual caps for each of the following Continuing Connected Transactions is set out below: Continuing Connected Transactions Annual Caps RMB RMB (a) Lease of factory and premises by BYD Auto to BYD Xi an (note 1) 35,150,000 (note 1) 68,164,000 (note 1) (b) Provision of processing services by the Group to BYD Group 37,781,000 75,562,000 Note: 1. The annual cap for this transaction has been aggregated with the 2012 Baolong Lease Agreement, the 2012 Huizhou Lease Agreement and the 2012 Beijing Lease Agreement. A. Lease of factory and premises by BYD Auto to BYD Xi an Agreement: Xi an Lease Agreement Date: 18 December 2014 Parties: 1. BYD Auto, a 99% directly owned subsidiary of BYD 2. BYD Xi an, a 100% indirectly owned subsidiary of the Company Duration: 1 December 2014 to 30 November 2015 Subject: Price determination: Payment terms: Pursuant to the Xi an Lease Agreement, BYD Auto has agreed to lease certain factory and premises situated at (2 Yadi Road, Xinxing Industrial Area, Gaoxin District, Xi an City), with an aggregate area of approximately 123,983 square metres, to BYD Xi an, at a monthly rental of RMB20 per square metre. At the then prevailing market price Settled on a monthly basis Due to the increase in the production scale of metal components, the Group requires additional factories and premises for production and operational purposes. By leasing the factories and premises from BYD Auto, the Group can quickly expand capacity for metal components business to meet the strong demand from customer in time, and also maintain flexibility while maximizing stability in securing sufficient production and operational space for the production of metal components. The rental amount of the Xi an Lease Agreement was determined based on arm s length negotiations between BYD Auto and BYD Xi an with reference to the prevailing market price of the leases of comparable factories and premises. 8

9 The Xi an Lease Agreement, together with the 2012 Baolong Lease Agreement, the 2012 Huizhou Lease Agreement and the 2012 Beijing Lease Agreement, in aggregate constitute Continuing Connected Transactions of the Company. The table below summarises the Existing Annual Caps for the three years ending 2015 for the said Continuing Connected Transactions: Existing Annual Cap 31,550,000 31,550,000 31,550,000 The table below summarises the actual transaction amounts involved for the two years ended 2013 (audited) and the ten months ended 31 October 2014 (unaudited) for the Continuing Connected Transaction set out in this sub-section: Ten months ended 31 October 2014 Actual transaction amount 31,546,000 31,546,000 26,288,000 The Company estimates that the transaction amount under the Xi an Lease Agreement, aggregated with that under the 2012 Baolong Lease Agreement, the 2012 Huizhou Lease Agreement and the 2012 Beijing Lease Agreement, for the two years ending 2015, will not exceed RMB35,150,000 and RMB68,164,000 respectively. Such amounts have accordingly been set as the Revised Annual Caps for the two years ending 2015 for the Continuing Connected Transactions under the 2012 Baolong Lease Agreement, the 2012 Huizhou Lease Agreement, the 2012 Beijing Lease Agreement and the Xi an Lease Agreement in aggregate. The Revised Annual Caps have been prepared by the Company primarily based on the following: (a) the monthly rental for each of the 2012 Baolong Lease Agreement, the 2012 Huizhou Lease Agreement, the 2012 Beijing Lease Agreement and the Xi an Lease Agreement; and (b) the total transaction amount for the said Continuing Connected Transaction for the ten months period from 1 January 2014 to 31 October 2014 was approximately RMB26,288,000, representing approximately 83.32% of the Existing Annual Cap for the year ending 31 December As the applicable percentage ratios stipulated under Rule of the Listing Rules in respect of the Revised Annual Caps for the said Continuing Connected Transactions are more than 0.1% but less than 5%, the said Continuing Connected Transactions and the Revised Annual Caps thereof are subject to the reporting and announcement requirements but are exempt from the independent Shareholders approval requirement set out in Chapter 14A of the Listing Rules. As the Revised Annual Caps for the two years ending 2015 for the said Continuing Connected Transaction under the Xi an Lease Agreement are not subject to the approval of Independent Shareholders, the Xi an Lease Agreement is unconditional. 9

10 B. Provision of processing services by the Group to BYD Group Agreement: BE Processing Services Agreement Date: 18 December 2014 Parties: 1. The Company 2. BYD Duration: 18 December 2014 to 2015 Subject: Price determination: Payment terms: Pursuant to the terms of the BE Processing Services Agreement, the Group agrees to provide certain processing services and research and development support for certain products of the Group (including onvehicle multimedia and vehicle-linked handset) to the BYD Group from the date of the BE Processing Services Agreement to 2015 With reference to the costs of the Company in provision of the relevant processing services plus a profit margin to be determined after arm s length negotiation between the Company and BYD 90 days from the date of invoice Due to an increase in demand of on-vehicle multimedia and vehicle-linked handset of the Group, BYD requires additional processing services and research and development support for such products. The provision of such services and support by the Company to BYD can effectively drive the sale of the Group and develop a new business area for the Group. The Company estimates that the service fee payable by BYD to the Company under the BE Processing Services Agreement for the two years ending 2015 will not exceed RMB37,781,000 and RMB75,562,000 respectively, and such amounts have accordingly been set as the proposed annual cap amounts. The proposed annual cap amounts were determined based on arm s length negotiations between the Company and BYD with reference to the costs of the Company in provision of the relevant processing services plus a profit margin to be determined after arm s length negotiation between the Company and BYD. As the applicable percentage ratios stipulated under Rule of the Listing Rules in respect of the proposed annual caps for this Continuing Connected Transaction are more than 0.1% but less than 5%, this Continuing Connected Transaction and the proposed annual caps thereof are subject to the reporting and announcement requirements but are exempt from the independent Shareholders approval requirement set out in Chapter 14A of the Listing Rules. As the annual caps for the two years ending 2015 for the Continuing Connected Transaction under the BE Processing Services Agreement are not subject to the approval of Independent Shareholders, the BE Processing Services Agreement is unconditional. 10

11 IV. Reasons for the Continuing Connected Transactions and reasons for revising the Existing Annual Caps The Group has continuously and actively considered different means to control or minimise its production costs, so as to maintain or enhance its competitiveness. Due to the historical friendly relationship between the Company and BYD and the proximity of the factories and premises of the Group and the BYD Group, the Directors consider it beneficial to the Group to continue to conduct the Continuing Connected Transactions for each of the two years ending 2015 in order to ensure and maximize the operating efficiency and stability of the operations of the Company. To further minimise short-term capital commitment and transaction costs of the Group to engage third parties, and expansion to new business, the Group negotiated with BYD on arm s length basis for the provision of miscellaneous services under the Continuing Connected Transactions by the BYD Group to the Group, and for the provision of certain products and services by the Group to the BYD Group. Due to the increased demand from customers and the expansion of the Group s business operations, the Board anticipated that the Existing Annual Caps for the Continuing Connected Transactions for the two years ending 2015 will be exceeded. As such, the Directors propose to revise the Existing Annual Caps for the two years ending 2015 for each of the relevant Continuing Connected Transactions respectively. The Board considers that the Supplemental Continuing Connected Transaction Agreements and the Revised Annual Caps will facilitate the Group to satisfy the increased demand from customers and sales growth. The Company will continue to carry out adequate supervision over the transaction amounts in respect of the relevant annual caps going forward with a view to ensuring that necessary measures and appropriate actions will be promptly taken in order to comply with the applicable requirements under the Listing Rules. V. Listing Rules implications As BYD is the controlling Shareholder of the Company indirectly interested in approximately 65.76% of the issued share capital of the Company and BYD Auto is a 99% directly owned subsidiary of BYD as at the date of the Supplemental Continuing Connected Transaction Agreements, the Xi an Lease Agreement and the BE Processing Services Agreement, BYD and BYD Auto are connected persons of the Company. Therefore, the transactions contemplated under the Supplemental Continuing Connected Transaction Agreements, the Xi an Lease Agreement and the BE Processing Services Agreement constitute Continuing Connected Transactions of the Group. The Directors have confirmed that the Continuing Connected Transactions have been subject to arm s length negotiation between the Group and the relevant parties, and have been entered into by the Group in the ordinary and usual course of business and either (i) on normal commercial terms or better, or (ii) on terms no less favourable to the Group than those available to or from (as appropriate) independent third parties. The Directors are of the view that the Continuing Connected Transactions, the relevant Revised Annual Caps and the proposed annual caps under the BE Processing Services Agreement, are fair and reasonable and in the interests of the Shareholders as a whole. 11

12 As the applicable percentage ratios stipulated under Rule of the Listing Rules in respect of the Revised Annual Caps for the Continuing Connected Transactions for the two years ending 2015 contemplated under the Supplemental Continuing Connected Transaction Agreements and the proposed annual caps under the Xi an Lease Agreement and the BE Processing Services Agreement exceed 0.1% but less than 5%, the Continuing Connected Transactions of the Company and their respective Revised Annual Caps or the proposed annual caps (as the case may be) are subject to the reporting, announcement and annual review requirements but are exempt from the Independent Shareholders approval requirement set out in Chapter 14A of the Listing Rules. VI. Information of the Group and BYD Group The Group is principally engaged in the business of the manufacture and sales of handset components and modules, the provision of handset design and assembly services, and the provision of parts and assembly services of other electronic products. The BYD Group is principally engaged in the manufacture and sales of rechargeable batteries, electro-mechanical parts for electronic devices and handsets as well as automobiles. Each of Huizhou Electronic and BYD Precision is an indirect wholly-owned subsidiary of the Company. BYD Xi an is a 100% indirectly owned subsidiary of the Company. BYD Beijing is a % direct owned and % indirect owned subsidiary of BYD. BYD Huizhou is a 55% direct owned and 45% indirect owned subsidiary of BYD. BYD Auto is a 99% directly owned subsidiary of BYD. VII. Definitions In this announcement, the following expressions have the meanings set out below unless the context requires otherwise: 2012 Baolong Lease Agreement 2012 Beijing Lease Agreement 2012 Huizhou Lease Agreement Board the lease agreement dated 2012 between BYD and BYD Precision, which is the New Baolong Lease Agreement as defined in the announcement of the Company dated 2012 the lease agreement dated 2012 between BYD Beijing and BYD Precision, which is the New Beijing Lease Agreement as defined in the announcement of the Company dated 2012 the lease agreement dated 2012 between BYD Huizhou and Huizhou Electronic, which is the New Huizhou Lease Agreement as defined in the announcement of the Company dated 2012 the board of Directors 12

13 BE Processing Services Agreement BYD BYD Auto BYD Beijing BYD Group BYD Huizhou BYD Precision BYD Xi an Company connected person(s) Continuing Connected Transaction(s) controlling Shareholder Director(s) the processing services agreement dated 18 December 2014 between the Company and BYD BYD Company Limited ( ), a company incorporated in the PRC whose H shares are listed on the Main Board of the Stock Exchange and A shares are listed on the Small and Medium Enterprise Board of Shenzhen Stock Exchange BYD Automobile Company Limited* ( ), a company established in PRC and a 99% directly owned subsidiary of BYD Beijing BYD Mould Company Limited* ( ), a company established in the PRC and a % direct owned and % indirect owned subsidiary of BYD BYD and its subsidiaries (excluding, except where the context indicates otherwise, the Group) BYD (Huizhou) Company Limited* ( ), a company established in the PRC and a 55% direct owned and 45% indirect owned subsidiary of BYD BYD Precision Manufacture Company Ltd.* ( ), a company established in the PRC and an indirect wholly-owned subsidiary of the Company Xi an BYD Electronic Company Limited* ( ), a company established in PRC and a 100% indirectly owned subsidiary of the Company BYD Electronic (International) Company Limited ( ), a company incorporated under the laws of Hong Kong, whose Shares are listed on the Main Board of the Stock Exchange has the meaning ascribed to it under the Listing Rules the continuing connected transaction(s) of the Group under Chapter 14A of the Listing Rules as set out in the section headed II. Revision of Existing Annual Caps and III. Entering of Continuing Connected Transactions in this announcement has the meaning ascribed to it under the Listing Rules the director(s) of the Company 13

14 Existing Annual Cap(s) Existing Continuing Connected Transaction Agreement(s) Group Hong Kong Huizhou Electronic Independent Shareholders Listing Rules PRC Revised Annual Caps Shares Shareholder(s) Stock Exchange subsidiary(ies) Supplemental Continuing Connected Transaction Agreement(s) Supplemental Processing Services Agreement Supplemental Supply Agreement the existing cap(s) for the Continuing Connected Transactions set out in the section headed II. Revision of Existing Annual Caps in this announcement the agreement(s) between the Group and BYD Group in respect of the existing Continuing Connected Transactions the Company and its subsidiaries the Hong Kong Special Administrative Region of the People s Republic of China BYD (Huizhou) Electronic Company Limited* ( ), a company incorporated in the PRC and is an indirect wholly-owned subsidiary of the Company Shareholders who are not required to abstain from voting at the extraordinary general meeting of the company in respect of the Continuing Connected Transactions the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited the People s Republic of China as defined in the section headed II. Revision of Existing Annual Caps in this announcement the shares of the Company holder(s) of the Shares The Stock Exchange of Hong Kong Limited has the meaning ascribed to it under the Listing Rules the Supplemental Supply Agreement, the Supplemental Utility Services Master Agreement and the Supplemental Processing Services Agreement the second supplemental processing services agreement dated 18 December 2014 between the Company and the BYD the second supplemental supply agreement dated 18 December 2014 between the Company and BYD in relation to the supply of certain products by the Group to the BYD Group 14

15 Supplemental Utility Services Master Agreement RMB Xi an Lease Agreement the supplemental utility services master agreement dated 18 December 2014 between the Company and BYD Renminbi, the lawful currency of the PRC the lease agreement dated 18 December 2014 between BYD Auto and BYD Xi an % per cent. By order of the Board of BYD Electronic (International) Company Limited LI Ke Director Hong Kong, 18 December 2014 As at the date of this announcement, the executive Directors are Ms. LI Ke and Mr. SUN Yi-zao; the non-executive Directors are Mr. WANG Chuan-fu and Mr. WU Jing-sheng; and the independent non-executive Directors are Mr. CHUNG Kwok Mo John, Mr. Antony Francis MAMPILLY and Mr. LIANG Ping. For the purposes of this announcement and illustration only, conversions of RMB into HK$ are based on the approximate exchange rate of RMB1.00 to HK$ No representation is made that any amount in HK$ or RMB could have been or could be converted at the above rate or at any other rates. * English translations of the names are provided for ease of reference only and they are not official English names of the companies and authorities concerned. 15