Northeast Electric Development : announcement on proposed adoption of the PRC GAAP and the IFRS for separate preparation of financial statements

The 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.

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

（Stock Code:0042）

ANNOUNCEMENT ON PROPOSED ADOPTION OF

THE PRC GAAP AND THE IFRS FOR SEPARATE PREPARATION OF

FINANCIAL STATEMENTS

I. Overview of proposed adoption of the PRC GAAP and the IFRS for the separate preparation of financial statements

On 11 March 2013, the Amendments to the Articles of Association have been considered and approved at the 2013 first extraordinary general meeting of Northeast Electric Development Company Limited (hereinafter referred to as "NEE" or the "Company"). According to the Consultation Conclusions on Acceptance of Mainland Accounting and Auditing Standards and Appointment of Mainland Audit Firms for Companies Incorporated in Mainland and Listed in Hong Kong published by the Stock Exchange in December 2010 and relevant amendments to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong ("Amended Listing

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Rules"), issuers incorporated in Mainland and listed in Hong Kong are allowed to prepare their financial statements in accordance with the PRC GAAP to meet the requirements on regular financial statements of these Amended Listing Rules. During the fiscal period commencing on or after 1 January 2012, the Company only needs to prepare its financial statements under the PRC GAAP. For details, please refer to the Resolution Announcement of the Board of Directors and Announcement on Preparation of Financial Statements under PRC GAAP and Replacement of the Auditor for 2012 on information disclosure media designated by the Company on 14 January 2013.

To meet the regulatory requirements of Shenzhen Stock Exchange and The Stock Exchange of Hong Kong and the requirements of annual audit of NEE, the Proposal on the Supplement of the Amendments to Articles of Association has been considered and approved at the tenth meeting of the ninth board of directors and the eighth meeting of the ninth supervisory committee of NEE on 6 December 2019, respectively, for proposed supplement of amendments to the applicable provisions on the PRC GAAP and the IFRS, as specified in the Announcement on Supplement of the Amendments to the Articles of Association issued on 6 December 2019. The Company proposed to adopt the PRC GAAP and the IFRS subsequently for the separate preparation of our financial statements. We will separately apply the PRC GAAP and the IFRS for the preparation of our financial statements for 2019 and onward, that is our financial statements for A shares will be prepared under the PRC GAAP while those for H shares will be prepared under the IFRS. The proposal will

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not be effective until and unless it is considered and approved at the general meeting

of the Company on 23 December 2019.

1. Impact of the proposed adoption of the PRC GAAP and the IFRS for the separate preparation of financial statements on the Company

The Company is of the view that the proposed adoption of the PRC GAAP and the IFRS for the preparation of financial statements has no material impact on our financial positions, operating results and cash flows for 2019 and onward.

1. Statements of the board of directors and the supervisory committee on reasonability

The proposed adoption of the PRC GAAP and the IFRS for separate preparation of our financial statements by the Company is a reasonable change pursuant to the regulatory provisions on auditing service under the listing rules of the place where the Company is listed, which is able to give an objective and fair view to the financial position and operating results of the Company, and will have no material impact on our financial position or operating results nor harm the interests of the Company or all of its shareholders.

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By order of the Board

Zhu Jie

Chairman

Haikou, Hainan Province, the PRC

10 December 2019

As at the date of this Announcement, the Board comprises of five executive Directors, namely Mr. Zhu Jie, Mr. Li Rui, Ms. Ma Yun, Mr. Bao Zongbao and Mr. Su Weiguo; and three independent non-executive Directors, namely Mr. Li Ming, Mr. Qian Fengsheng and Mr. Fang Guangrong.

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