27 January 2015

LEYSHON ENERGY LIMITED (AIM: LEN) (THE "COMPANY")

PROPOSED CASH DISTRIBUTION OF APPROXIMATELY US$15.4 MILLION

Further to the Company's announcement of 13 January 2015, the Company has received some queries regarding the tax treatment of the proposed cash distribution in the hands of UK resident shareholders. Your Board has therefore decided to provide a brief summary of the expected tax position of UK resident shareholders upon receipt of the cash distribution.

Please note that the following summary is only intended as a general guide, is not definitive and is

applicable to UK resident shareholders only. If you are in any doubt about your tax position with regards to the cash distribution, you should consult your own professional advisers.

The cash distribution will be made pursuant to section 57 of the BVI Business Companies Act 2004 and article 21.1 of the memorandum and articles of association of the Company which permits the Board to declare a resolution in respect of a dividend payment. Accordingly, we expect that thecash distribution shall be considered by UK HMRC to constitute dividend income in the hands of recipient shareholders.
Individual Shareholders who are UK resident may be entitled to a tax credit of one ninth of the amount of the cash distribution received from the Company and will be taxed on the aggregate of the cash distribution and the tax credit (the "Gross Dividend"). The Gross Dividend will be treated as the top slice of your income and taxed as such.
For basic rate income taxpayers the Gross Dividend will be taxed at a rate of 10%. For higher rate income tax payers that rate will be 32.5% and for additional rate income taxpayers it will be 37.5%. The credit may then be available for set-off against that tax liability, with the consequence that the total liability for the taxpayer will be the following percentage as a proportion of the dividend:

 0% for basic rate income taxpayers;

 25% for higher rate income taxpayers; and

 30.56% for additional income rate taxpayers.

UK resident corporate shareholders and pension funds will not normally be liable to UK taxation on any dividend income and are not entitled to payment in cash of the related tax credit.
Under current UK and BVI legislation, no tax is withheld from dividend payments by the Company. Therefore, the Company will not assume any obligation to withhold tax at source from the payment
of the cash distribution to shareholders.

L E Y S H O N ENERGY L I M I T E D

2104B Ping An International Financial Centre, 3 Xinyuan South Road Beijing 100027, China

As mentioned earlier, if you are in any doubt about your tax position with regards to the cash distribution, and in particular if you are non-UK resident for tax purposes, then it is recommended that you consult your own professional advisers.
Shareholders are reminded that it is expected that the cash distribution will be finally determined by the Directors shortly after the forthcoming General Meeting (assuming the resolutions are passed) and paid, as soon as practicable, to Shareholders on the Company's register of members as at the date of cancellation of the admission of the Company's shares to trading on AIM, for which the preferred cancellation date is 10 February 2015.
For further information please contact:

Leyshon Energy Limited

Peter Niu, Company Secretary Tel: + 86 10 8444 2882 [email protected]

Cantor Fitzgerald Europe

David Porter/Sarah Wharry (Nominated Adviser) Richard Redmayne (Corporate broking)

Tel: +44 207 894 7000

 ENDS 

L E Y S H O N ENERGY L I M I T E D

2104B Ping An International Financial Centre, 3 Xinyuan South Road Beijing 100027, China