BBMG Corporation — AGM Information 2018

Mar 29, 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, 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 notice.

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(a joint stock company incorporated in the People’s Republic of China with limited liability) (Stock Code: 2009)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting for the year 2017 (the “ 2017 Annual General Meeting ”) of BBMG Corporation (the “ Company ”) will be held at Conference Room 6, 22nd Floor, Tower D, Global Trade Center, No. 36, North Third Ring East Road, Dongcheng District, Beijing 100013, the People’s Republic of China (the “ PRC* ”) on Thursday, 24 May 2018 at 2:00 p.m. (or at any adjournment thereof) to consider and, if thought fit, to approve the following resolutions:

ORDINARY RESOLUTIONS

1. To consider and, if thought fit, to approve the report of the board of directors of the Company (the “ Board ”) for the year ended 31 December 2017.

2. To consider and, if thought fit, to approve the report of the supervisory board of the Company for the year ended 31 December 2017.

3. To consider and, if thought fit, to approve the audited accounts of the Company for the year ended 31 December 2017.

4. To consider and, if thought fit, to approve the following proposal for profit distribution:

“ THAT

the following proposal on profit distribution for the year ended 31 December 2017 be approved:

Proposed profit distribution: cash dividend of RMB0.48 for every 10 shares (before tax) based on the Company’s total share capital of 10,677,771,134 shares as at 31 December 2017 (the “ Final Dividend ”).

• For identification purposes only

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The Board shall be authorized to deal with matters relating to the Final Dividend for the year ended 31 December 2017.”

1. To consider and, if thought fit, to approve (1) the audit fee of the Company for the year ended 31 December 2017 in an amount of RMB4,710,000; and (2) the appointment of Ernst & Young Hua Ming Certified Public Accountants as the independent auditor of the Company for the year ending 31 December 2018 for a term ending on the date of the annual general meeting of the Company for the year of 2018 (the “ 2018 Annual General Meeting ”), and to authorize the Board to implement this resolution.

2. To consider and, if thought fit, to approve the remuneration plan of the executive directors of the Company for the year ended 31 December 2017.

3. To consider and, if thought fit, to approve the following resolution on authorization of the guarantee plan to be provided by the Company to its subsidiaries in 2018, in order to meet the capital requirements for ordinary production, operation and project construction of certain subsidiaries and joint ventures. In 2018, the Company proposed to provide internal financing guarantees of RMB34,896.21 million and USD390.0 million.

“ THAT

the major contents of the guarantee contract(s) be determined by mutual agreement between the guarantor(s), the guaranteed party/parties and the financial institution(s). The above guarantees shall be valid for all financial institutions, and the chairman of the Board or authorized person(s) shall be authorized to determine the specific amount, method, scope and terms of guarantee(s), subject to the guarantee contract(s) to be entered into by the Company and the financial institution(s).

Within the total amount of guarantees, uncertainties may arise when each of the guaranteed parties (including but not limited to subsidiaries that have been established already or to be newly included in the scope of consolidation) apply for credit from financial institutions. As such, the use of credit within the guaranteed amount may be adjusted and the guarantor(s) may also be adjusted based on business requirements.

Validity period of the guarantee plan:

The validity period of the above guarantee plan shall commence from the date of consideration and approval of this matter at the 2017 Annual General Meeting until the date on which the 2018 Annual General Meeting is held.”

SPECIAL RESOLUTIONS

1. To consider and, if thought fit, to approve the granting of a general mandate (the “ General Mandate ”) to the Board to issue, allot and otherwise deal with (1) additional A shares of the Company (the “ A Shares ”) not exceeding 20% of the A Shares in issue; and (2) additional H

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shares of the Company (the “ H Shares ”, together with the A Shares, the “ Shares ”) not exceeding 20% of the H Shares in issue, and to authorize the Board to make such corresponding amendments to the articles of association of the Company (the “ Articles of Association ”) as it thinks fit so as to reflect the new capital structure upon the allotment and issue of such new shares:

“ THAT

• (1) subject to the approvals of China Securities Regulatory Commission and the relevant authorities of the PRC being given and in accordance with the relevant requirements of the Rules Governing the Listing of Securities on The Stock Change of Hong Kong Limited (the “ Listing Rules ”), the Articles of Association and the applicable laws and regulations of the PRC, an unconditional General Mandate be and is hereby granted to the Board to exercise during the Relevant Period all the powers of the Company to allot, issue and deal with, either separately or concurrently, additional A Shares and H Shares on such terms and conditions as the Board may determine and that, in the exercise of their powers to allot, issue and deal with Shares, the mandate granted to the Board shall include (without limitation):

• (i) to formulate and implement the detailed issue proposal which includes, without limitation, the class of new shares to be issued, the pricing mechanism and/or the issue price (including the price range), the number of shares to be issued, the target subscribers and the use of proceeds; to determine the timing of the issue and the issue period, and to decide whether to place to existing shareholders of the Company (the “ Shareholders ”);

• (ii) to consider and approve and execute on behalf of the Company agreements relating to the issue, including but not limited to placing and underwriting agreements, engagement agreements with intermediaries;

• (iii) to consider and approve and execute statutory documents relating to the proposed issue on behalf of the Company which shall be submitted to the relevant regulatory authorities;

• (iv) to fulfill the relevant approval procedures in accordance with the requirements of the regulatory authorities and at the locality where the Company is listed;

• (v) to make necessary amendments to the relevant agreements and statutory documents mentioned in (ii) and (iii) of above in accordance with the requirements of domestic and foreign regulatory authorities;

• (vi) to affix the seal of the Company on the agreements and statutory documents relating to the proposed issue;

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• (vii) to engage intermediaries in connection with the proposed issue and to approve and execute all actions, deeds, documents and such other matters that are necessary, appropriate, commendable or relevant to the issue; and

• (viii) to approve the increase of the registered capital of the Company, make relevant amendments to the Articles of Association relating to the total capital and shareholding structure, and fulfill the relevant registration and filing procedures pursuant to the domestic and foreign legal requirements, after the issue of the new shares.

• (2) the exercise of the powers referred to in paragraph (1) above shall be within the Relevant Period, except that the Board may enter into or grant offers, agreements, or options in relation to the issue of A Shares and/or H Shares during the Relevant Period, which may require further action or implementation after the end of the Relevant Period; and

• (3) for the purposes of this resolution:

“A Shares” means domestic shares in the ordinary share capital of the Company with a nominal value of RMB1.00 each, listed on the Shanghai Stock Exchange.

“H Shares” means overseas listed foreign shares in the ordinary share capital of the Company, with a nominal value of RMB1.00 each, listed on the Main Board of The Stock Exchange of Hong Kong Limited.

“Relevant Period” means the period from the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the 12-month period following the passing of this resolution; and

• (iii) the revocation or variation of the authority given to the Board under this resolution by passing of a special resolution of the Company in a general meeting.”

• To consider and, if thought fit, to approve the proposed amendments to the Articles of Association (as set out in the announcement of the Company dated 29 March 2018), and the Board be and is hereby authorized to deal with on behalf of the Company the relevant filing and amendment (where necessary) procedures and other related issues arising from the amendments to the Articles of Association.

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ORDINARY RESOLUTION

1. To consider and, if thought fit, to approve resolution on applying of the remaining balance of the proceeds from the 2015 Proposed Placing to permanently replenish the working capital of the Company.

By order of the Board BBMG Corporation* Jiang Deyi Chairman

Beijing, the PRC, 29 March 2018

Notes:

1. Additional Information for Ordinary Resolution No. 6

According to the relevant regulations in relation to the management of remuneration of the Company and completion of the results for the year ended 31 December 2017, the Company proposes the remuneration of the executive directors for the year ended 31 December 2017 as follows:

				Unit: RMB
Name of			Performance	Total
the director	Designation	Basic salary	remuneration	Remuneration
Jiang Deyi	Executive Director and Chairman	0	0	0
Zeng Jin	Executive Director (appointed on	220,400	306,233	526,633
	15 August 2017) and General
	Manager
Wu Dong	Executive Director	178,798	271,208	450,006
Zheng Baojin	Executive Director (appointed on	190,398	304,948	495,346
	15 August 2017)
Zang Feng	Executive Director(i)	28,400	144,760	173,160

• (i) Zang Feng resigned as an Executive Director of the Company on 27 June 2017 due to his reaching the age of retirement.

• Additional Information for Special Resolution No. 8

At the last annual general meeting of the Company held on 17 May 2017, a general mandate was given to the directors of the Company to exercise all powers of the Company to allot, issue and otherwise deal with the ordinary shares in the capital of the Company not exceeding the sum of 20% of the aggregate nominal amount of the issued share capital of the Company on 17 May 2017. This General Mandate will expire at the conclusion of the 2017 Annual General Meeting.

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A special resolution will be proposed at the 2017 Annual General Meeting to grant the general mandate to the Board to allot, issue and otherwise deal with A shares and H shares of the Company up to the limit of 20% of each of the aggregate number of the A shares and H shares of the Company, respectively, in issue on the date of passing such resolution in order to ensure flexibility and discretion to the Board to issue new shares when it becomes appropriate.

As at 29 March 2018, the issued share capital of the Company comprised 8,339,006,264 A Shares and 2,338,764,870 H Shares. Subject to the approval of the grant of the General Mandate and on the basis that no further shares will be issued before the 2017 Annual General Meeting, the Board will have the power to issue up to 1,667,801,252 A Shares and 467,752,974 H Shares.

The General Mandate shall be effective until the earliest of: (i) the conclusion of the next annual general meeting of the Company; (ii) the expiration of the 12-month period following the passing of the resolution; or (iii) the revocation or variation of the authority given under this resolution by passing of a special resolution of the Company at a general meeting.

Any exercise of the power by the Board under the General Mandate shall comply with the relevant requirements of the Listing Rules, the Articles of Association and the applicable laws and regulations of the PRC. According to the relevant PRC laws and regulations, the Company will need to seek approval of the Shareholders at a general meeting for any issue of A Shares even if the General Mandate is granted, but will not be required to seek the approval of the Shareholders at class meetings of A Shares and H Shares.

1. For details of the proposed amendments to the Articles of Association in the Special Resolution No.9, please refer to the announcement of the Company dated 29 March 2018.

2. Additional information for Ordinary Resolution No. 10:

On 26 March 2015, the Board resolved and proposed to place A shares of the Company to no more than 10 target subscribers, raising total proceeds of no more than RMB5 billion (the “ 2015 Proposed Placing ”) to fund the Group’s projects on residential and commercial property development in Beijing, Nanjing and Tianjing and to supplement the working capital of the Group. The net proceeds from 2015 Proposed Placing of RMB4,637,875,039.84, after deduction of the fee of 2015 Proposed Placing with interest inclusive, were remitted to the fund-raising account opened with the approval of the Board on 30 November 2015.

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Closure of fund-raising projects and balance of the proceeds

• I. Land project for class II residence, primary and middle school and kindergarten on B01, B02, B03 lots in Chaoyang North Road, Chaoyang District (former Star Building Materials Product Factory)

1. Project closure and proceeds balance

The project funded by the proceeds shall be closed since it has completed the filing of completion and handover for use. As of 15 March 2018, the use of funds and balance of the proceeds for this project were as follows:

Unit: RMB million

No.	No.					Whether completed or not	Whether completed or not
	No.	Project	Funds raised for investment	Accumulated amount of investment	Balance of the proceeds	Whether completed or not
	1	Land project for class II residence, primary and middle school and kindergarten on B01, B02, B03 lots in Chaoyang North Road, Chaoyang District (former Star Building Materials Product Factory)	837.875	460.1442	377.7308	Yes
Total	Total		837.875	460.1442	377.7308	–

2. Reasons for proceeds balance after closure of the project

During the construction of the project, the Company utilized the funds strictly in accordance with relevant provisions on the use of proceeds. Due to the early establishment of the project, more funds at the disposal of the Company were invested, but the amount of proceeds for replacement was the amount invested after the date of resolution for non-public issuance of shares at the 17th meeting of the third session of the Board, which resulted in the balance of proceeds for the project.

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II. Land project of class II residence and primary school in Dandian Village, Dongba Township, Chaoyang District

1. Project closure and proceeds balance

The last phase of the project funded by the proceeds shall be closed since it has completed the filing of completion and handover for use. As of 15 March 2018, the use of funds and balance of the proceeds for this project were as follows:

Unit: RMB million

No.	No.					Whether completed or not	Whether completed or not
	No.	Project	Funds raised for investment	Accumulated amount of investment	Balance of the proceeds	Whether completed or not
	1	Land project of class II residence and primary school in Dandian Village, Dongba Township, Chaoyang District	1,700.0	756.669	943.331	Yes
	Total		1,700.0	756.669	943.331	–

2. Reasons for proceeds balance after closure of the project

During the construction of the project, the Company used the proceeds strictly in accordance with relevant provisions on the use of proceeds. Due to the early establishment of the project, more funds at the disposal of the Company were invested, but the amount of proceeds for replacement was the amount invested after the date of resolution for non-public issuance of shares at the 17th meeting of the third session of the Board, which results in the balance of proceeds investing the project. In addition, with the optimization of the scheme design during the construction, the reduction of estimated market price of building materials such as reinforced concrete, and the repayment of interest-bearing liabilities ahead of schedule by funds at the disposal of the Company not been used after the proceeds were put into use, the construction cost was saved. In view of the above, there was balance of proceeds for the project.

III. Residential project of BBMG in Zhongbei Town

1. Project closure and balance of proceeds

The project funded by the proceeds shall be closed since it has completed the filing of completion and handover for use. As of 15 March 2018, the use of funds and balance of the proceeds for this project were as follows:

Unit: RMB million

No.	No.					Whether completed or not	Whether completed or not
	No.	Project	Funds raised for investment	Accumulated amount of investment	Proceeds balance	Whether completed or not
	1	Residential project of BBMG in Zhongbei Town	500.0	459.9791	40.0209	Yes
Total	Total		500.0	459.9791	40.0209	–

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2. Reasons for proceeds balance after closure of the project

Due to the early establishment of the project, more funds at the disposal of the Company were invested, but the amount of proceeds for replacement was the amount invested after the date of resolution for non-public issuance of shares at the 17th meeting of the third session of the Board, which resulted in the balance of proceeds for the project.

Plan for use of proceeds balance

Given the construction of above projects of the Company has been completed, in order to maximize the effectiveness of the proceeds, improve the efficiency of the use of funds, enhance the financial position of the Company, reduce its financial expenses and short-term debt service pressure and improve its profitability, the Company intends to utilize the balance of the proceeds from the completed fund-raising investment projects of RMB 1,361,082,700 in aggregate to permanently replenish its working capital.

1. Pursuant to Rule 13.39(4) of the Listing Rules, votes of the Shareholders at the 2017 Annual General Meeting shall be taken by poll except where the chairman of the 2017 Annual General Meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted by a show of hands.

2. Any Shareholder entitled to attend and vote at the 2017 Annual General Meeting is entitled to appoint one or more than one proxy to attend and vote on his behalf. A proxy need not be a member of the Company.

3. To be valid, the form of proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such authority, must be deposited at the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for holders of H Shares as soon as possible and in any event not less than 24 hours before the time for holding of the meeting or any adjournment thereof or appointed time for voting.

4. Shareholders or their proxies shall present proofs of identities when attending the 2017 Annual General Meeting.

5. The holders of A Shares and H Shares will vote as one class of Shareholders. The register of members for H Shares will be closed from 25 April 2018 (Wednesday) to 24 May 2018 (Thursday) (both days inclusive), during which no transfer of Shares will be effected. Shareholders whose names appear on the register of members of the Company on 24 May 2018 (Thursday) will be entitled to attend and vote at the 2017 Annual General Meeting. In order to attend and vote at the 2017 Annual General Meeting, all transfers accompanied by relevant share certificates must be lodged with the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 4:30 p.m. on 24 April 2018 (Tuesday).

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7. In accordance with Article 66 of the Articles of Association, Shareholders entitled to attend the 2017 Annual General Meeting are requested to deliver the reply slip for attendance to the headquarters of the Company at Room 2220, 22nd Floor, Tower D, Global Trade Center, No. 36, North Third Ring East Road, Dongcheng District, Beijing 100013, the People’s Republic of China, by hand, by post or by fax (the Company’s fax no.: (86) 10 6641 0889) not later than 20 days before the date of the 2017 Annual General Meeting, i.e. no later than 4 May 2018 (Friday).

8. If Ordinary Resolution No. 4 regarding the proposal on profit distribution for the year ended 31 December 2017 is approved by the Shareholders at the 2017 Annual General Meeting, the Final Dividend is expected to be paid on or before 24 July 2018 (Tuesday) to H shareholders whose names appear on the Company’s H share register of members on 7 June 2018 (Saturday). The H share register of members of the Company will be closed from 2 June 2018 (Thursday) to 7 June 2018 (Saturday) (both days inclusive), to determine qualifications of H shareholders to receive the Final Dividend. In order to qualify for the Final Dividend, all transfers accompanied by relevant share certificates must be lodged with the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong by 4:30 p.m. on 1 June 2018 (Friday).

9. Shareholders or their proxies attending the 2017 Annual General Meeting are responsible for their own transportation and accommodation expenses.

10. As at the date hereof, the executive directors of the Company are Jiang Deyi, Zeng Jin, Wu Dong and Zheng Baojin; the non-executive directors of the Company are Guo Yanming and Yu Zhongfu; and the independent non-executive directors of the Company are Wang Guangjin, Tian Lihui, Tang Jun and Ngai Wai Fung.

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