RoboSense Technology Co., Ltd - Capital/Financing Update 2014

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.

This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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MAJOR AND CONNECTED TRANSACTIONS, APPLICATION FORWHITEWASH WAIVER, PROPOSED ISSUANCE AND PLACING OF A SHARES, APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER AND RESUMPTION OF TRADING

Financial adviser to the Company

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THE REORGANISATION

On 31 December 2014, the Company entered into the Framework Agreement with CLFG, pursuant to which (i) the Company has conditionally agreed to transfer its Sale Interests in the Outgoing Entities and the amounts due from the Outgoing Entities to the Company, to CLFG at a total consideration of RMB492,907,157; (ii) CLFG has conditionally agreed to transfer 100.00% equity interest in the Incoming Entity held by CLFG to the Company at a consideration of RMB670,153,965; and (iii) the Company has conditionally agreed to allot and issue a total of 29,541,135 Consideration Shares at the issue price of RMB6.00 per Consideration Share, which amounts to RMB177,246,808 in aggregate, to CLFG as settlement of the difference in the considerations of the Disposal and the Acquisition.

As part of the Framework Agreement, the Company plans to undertake the proposed placing of not more than 33,390,830 new A Shares based on the issue price of not less than RMB6.69 per A Share to not more than 10 independent specific investors subsequent to the completion of the Disposal, the Acquisition and the issue of the Consideration Shares. The exact issue price will be determined after obtaining the approval of the CSRC for the Proposed A Share Placing with reference to bid prices offered by target subscribers.

In accordance with the applicable PRC laws and regulation, issuance of A Shares is subject to Shareholders’ approval, regardless whether a general mandate has been granted at the general meeting of the Company. As such, the issue of the Consideration Shares and the Proposed A Share Placing will be subject to the approval by the Independent Shareholders at the EGM, the A Shares Class Meeting and the H Shares Class Meeting.

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LISTING RULES IMPLICATIONS

The Reorganisation involves, inter alia, the execution of the Framework Agreement which involves the Disposal, the Acquisition and the issue of the Consideration Shares. As (i) one or more of the applicable percentage ratios calculated pursuant to Chapter 14 of the Listing Rules in respect of the Disposal are more than 25% but less than 75%; and (ii) CLFG (as the controlling Shareholder) is a connected person of the Company, the Disposal constitutes a major disposal and connected transaction of the Company. As (i) one or more of the applicable percentage ratios calculated pursuant to Chapter 14 of the Listing Rules in respect of the Acquisition are more than 25% but less than 100%; and (ii) CLFG (as the controlling Shareholder) is a connected person of the Company, the Acquisition constitutes a major acquisition and connected transaction of the Company.

Accordingly, the Framework Agreement or the Formal Agreement (as the case may be), comprising the Disposal, the Acquisition and the issue of the Consideration Shares, is subject to the notification, publication, reporting and independent shareholders’ approval requirements of the Listing Rules.

TAKEOVERS CODE IMPLICATIONS AND APPLICATION FOR WHITEWASH WAIVER

As at the date of this announcement, CLFG is the controlling Shareholder which holds 159,018,242 Shares, representing approximately 31.80% of the issued share capital of the Company and, after completion of the issue of the Consideration Shares but before the Proposed A Share Placing and the transfer of the Transfer Shares, CLFG will hold 188,559,377 Shares, representing approximately 35.61% of the issued share capital of the Company as enlarged by the issue of the Consideration Shares. In the absence of the Whitewash Waiver, CLFG and parties acting in concert with it would be obligated to make a mandatory general offer for all the Shares not already owned or agreed to be acquired by it and parties acting in concert with it pursuant to the Takeovers Code as a result of the issue of the Consideration Shares.

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An application to the Executive for the Whitewash Waiver will be made by CLFG pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code. The Whitewash Waiver, if granted, would be subject to, among other things, the approval of the Independent Shareholders taken by way of a poll at the EGM. As at the date of this announcement, CLFG is interested in 159,018,242 Shares, representing approximately 31.80% of the issued share capital of the Company. Since CLFG is the controlling Shareholder of the Company, CLFG and parties acting in concert with it and Shareholders who are interested in or involved in the Framework Agreement and the Formal Agreement, the transactions contemplated thereunder and the Whitewash Waiver will abstain from voting on the relevant resolution(s) to approve the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver at the EGM and the Class Meetings. Save for CLFG, there is no other Shareholder who is interested or involved in the Framework Agreement and the Formal Agreement, the transactions contemplated thereunder and the Whitewash Waiver.

INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising all the independent non-executive Directors has been established by the Company to advise the Independent Shareholders on the terms of the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver. According to Rule 2.8 of the Takeovers Code, members of an independent committee of the Company should comprise all nonexecutive Directors. However, Mr. Zhang Chengong and Mr. Zhang Chong, being all the non-executive Directors, are senior management of the controlled entities of CNBMG and are therefore considered to have conflicts of interests in the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver. Therefore none of the non-executive Directors is eligible to be a member of the Independent Board Committee.

APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

Goldin has been appointed, with the approval of the Independent Board Committee, as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver are fair and reasonable and make recommendation on voting.

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EGM AND CLASS MEETINGS

The EGM and the Class Meetings will be held to consider and, if thought fit, pass the resolutions to approve (i) the Formal Agreement and the transactions contemplated thereunder; (ii) the grant of the specific mandate for the issue of the Consideration Shares; (iii) the grant of the specific mandate for the issue of the new A Shares under the Proposed A Share Placing; and (iv) the Whitewash Waiver. The voting in relation to the Formal Agreement, the specific mandates and the Whitewash Waiver at the EGM and the Class Meetings will be conducted by way of poll. CLFG and parties acting in concert with it and Shareholders who are interested in or involved in the Framework Agreement and the Formal Agreement, the transactions contemplated thereunder and the Whitewash Waiver will abstain from voting on the relevant resolutions to be proposed at the EGM and the Class Meetings for approving the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver.

GENERAL

A circular containing, among other things, (i) details of the Reorganisation, the Framework Agreement and the Formal Agreement, the transactions contemplated thereunder, the specific mandates, the Whitewash Waiver and the Proposed A Share Placing; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders on the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver; (iii) a letter of advice from an independent financial adviser to the Independent Board Committee and the Independent Shareholders on the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver, is required to be despatched to the Shareholders within 15 business days from the date of this announcement pursuant to Rule 14A.68 of the Listing Rules or 21 days from the date of this announcement pursuant to Rule 8.2 of the Takeovers Code, whichever is the earlier. As the time of approval or filing (as the case may be) of valuation of the values of the Outgoing Entities and the Incoming Entity by the SASAC as well as the time of execution of the Formal Agreement is uncertain as at the date of this announcement, the expected date of the Formal Agreement and therefore the date of the circular in relation to the Formal Agreement is uncertain. The Company will apply to the Executive for an extension for the despatch of the circular. Further announcement(s) will be made by the Company as appropriate.

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SUSPENSION AND RESUMPTION OF TRADING

The trading in the H Shares on the Stock Exchange has been suspended with effect from 9:00 a.m. on 30 June 2014 pending the release of this announcement. Application has been made to the Stock Exchange for the resumption of trading in the H Shares with effect from 9:00 a.m. on 2 January 2015.

Completion of the Disposal, the Acquisition, the issue of the Consideration Shares and the Proposed A Share Placing is subject to the satisfaction and/or waiver of the conditions precedent for the Framework Agreement and/or the Formal Agreement and therefore, may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

INTRODUCTION

References are made to the announcements of the Company dated 23 December 2014, 18 December 2014, 16 December 2014, 12 December 2014, 5 December 2014, 28 November 2014, 21 November 2014, 14 November 2014, 11 November 2014, 4 November 2014, 28 October 2014, 21 October 2014, 14 October 2014, 10 October 2014, 26 September 2014, 19 September 2014, 12 September 2014, 9 September 2014, 2 September 2014, 26 August 2014, 19 August 2014, 12 August 2014, 8 August 2014, 1 August 2014, 25 July 2014 and 18 July 2014 regarding the significant asset restructuring. On 31 December 2014, the Company entered into the Framework Agreement with CLFG, pursuant to which (i) the Company has conditionally agreed to transfer its Sale Interests in the Outgoing Entities and the amounts due from the Outgoing Entities to the Company, to CLFG at a total consideration of RMB492,907,157; (ii) CLFG has conditionally agreed to transfer 100.00% equity interest in the Incoming Entity held by CLFG to the Company for a consideration of RMB670,153,965; and (iii) the Company has conditionally agreed to allot and issue the Consideration Shares at the issue price of RMB6.00 per Consideration Share, which amounts to RMB177,246,808 in aggregate, to CLFG as settlement of the difference between the considerations of the Disposal and the Acquisition. As part of the Framework Agreement, the Company plans to undertake the proposed placing of not more than 33,390,830 new A Shares based on the issue price of not less than RMB6.69 per A Share to not more than 10 independent specific investors subsequent to the completion of the Disposal, the Acquisition and the issue of the Consideration Shares. The exact issue price will be determined after obtaining the approval of the CSRC for the Proposed A Share Placing with reference to bid prices offered by target subscribers.

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THE REORGANISATION

The Framework Agreement

Date: 31 December 2014

Parties:

(a) The Company; and
(b) CLFG.

CLFG is the controlling Shareholder of the Company and therefore is a connected person of the Company under Chapter 14A of the Listing Rules.

The Disposal

Pursuant to the Framework Agreement, the Company has conditionally agreed to transfer its Sale Interests in the Outgoing Entities and the amounts due from the Outgoing Entities to the Company, to CLFG.

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The estimated aggregate consideration for the Disposal is RMB492, 907,157, which was determined on arm’s length negotiations with reference to (i) the initial valuation of the net assets/(liabilities) of the Outgoing Entities as at 31 October 2014. If the fair value of the net assets of any of the Outgoing Entities is negative, the consideration for the disposal of that entity shall then be RMB1.00. For those Outgoing Entities with a positive fair value of net assets, the consideration is calculated based on the fair value of the net assets multiplied by the Company’s proportionate equity interest in the respective Outgoing Entities; and (ii) the initial valuation of the amounts due from the Outgoing Entities to the Company as at 31 October 2014 as appraised by the Valuer based on the cost method. The consideration is subject to adjustment with reference to the final valuation of the net asset value of the Outgoing Entities and the amounts due from the Outgoing Entities to the Company that is approved by or filed with the SASAC. The valuation report on (i) the net assets/(liabilities) of the Outgoing Entities as at 31 October 2014; and (ii) the amounts due from the Outgoing Entities to the Company as at 31 October 2014 will be finalised upon approval or filing (as the case may be) of valuation of the values of the Outgoing Entities and the Incoming Entity by the SASAC and be disclosed in the announcement to be published in relation to, among other things, the Formal Agreement when the Formal Agreement is entered into by the Company and CLFG.

The Acquisition

Pursuant to the Framework Agreement, CLFG has conditionally agreed to transfer 100.00% equity interest in the Incoming Entity held by CLFG to the Company.

The estimated consideration for the Acquisition is RMB670,153,965, which was determined on arm’s length negotiations with reference to the initial valuation of the net asset value of the Incoming Entity as at 31 October 2014 as appraised by the Valuer based on the cost method. The consideration is subject to adjustment with reference to the final valuation of the net asset value of the Incoming Entity that is approved by or filed with the SASAC. The valuation report on the net asset value of the Incoming Entity as at 31 October 2014 will be finalised upon approval or filing (as the case may be) of valuation of the values of the Outgoing Entities and the Incoming Entity by the SASAC and be disclosed in the announcement to be published in relation to, among other things, the Formal Agreement when the Formal Agreement is entered into by the Company and CLFG.

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The Consideration Shares

Pursuant to the Framework Agreement, both parties have agreed that the difference between the considerations of the Disposal and the Acquisition will be settled by the allotment and issue of the Consideration Shares by the Company to CLFG.

The issue price of the Consideration Shares is RMB6.00 (equivalent to approximately HK$7.50) per Consideration Share, which was determined with reference to the 90% of the ratio of the total turnover over the total volume of the A Shares for the last 60 trading days as quoted on the SSE prior to the date of first board meeting in relation to the Reorganisation. As trading in the Shares has been suspended since 30 June 2014 pending the release of this announcement, the issue price of the Consideration Shares was determined based on 90% of the ratio of the total turnover over the total volume of the A Shares for the last 60 trading days prior to 30 June 2014. Such issue price represents:

(a) a premium of approximately 97.37% over the closing price of HK$3.80 per H Share as quoted on the Stock Exchange on the Last Trading Day;
(b) a premium of approximately 90.16% over the average closing price of approximately HK$3.94 per H Share as quoted on the Stock Exchange for the last five trading days up to and including the Last Trading Day;
(c) a premium of approximately 94.30% over the average closing price of approximately HK$3.86 per H Share as quoted on the Stock Exchange for the last ten trading days up to and including the Last Trading Day;
(d) a premium of approximately 150.36% over the average closing price of approximately HK$3.00 per H Share as quoted on the Stock Exchange for the last thirty trading days up to and including the Last Trading Day;
(e) a discount of approximately 17.13% to the closing price of RMB7.24 (equivalent to approximately HK$9.05) per A Share as quoted on the SSE on the Last Trading Day; and

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(f) a premium of approximately 7,400.00% over the unaudited net assets attributable to the Shareholders per Share of approximately RMB0.08 (equivalent to approximately HK$0.10), calculated based on the Company’s unaudited net assets attributable to the Shareholders of approximately RMB40.65 million as at 30 September 2014 (as quoted from the third quarterly report of the Company for the nine months ended 30 September 2014 published on 28 October 2014).

Based on the difference of the considerations between the Disposal and the Acquisition of RMB177,246,808 and the issue price of RMB6.00 per Consideration Share, the aggregate number of Consideration Shares to be issued by the Company is 29,541,135 new A Shares, which represent approximately 5.91% of the issued share capital of the Company as at the date of this announcement and approximately 5.58% of the issued share capital of the Company as enlarged by the issue of such Consideration Shares. The total number of Consideration Shares to be issued is subject to adjustment with reference to the final fair value of the net assets/(liabilities) of the Outgoing Entities and the amounts due from the Outgoing Entities to the Company and the final fair value of the net assets of the Incoming Entity as appraised by the Valuer that is approved by or filed with the SASAC and approval from the CSRC. Further details of the issue of the Consideration Shares will be announced in the announcement to be published in relation to, among other things, the Formal Agreement when the Formal Agreement is entered into by the Company and CLFG.

The Consideration Shares shall rank pari passu among themselves and with the A Shares in issue. The issue of the Consideration Shares will be subject to the approval by the Independent Shareholders at the EGM, the A Shares Class Meeting and the H Shares Class Meeting.

The Consideration Shares to be issued to CLFG for settlement of the difference between the considerations of the Disposal and the Acquisition cannot be transferred within 36 months after completion of the issue of the Consideration Shares (the “ Lock-up Period ”). CLFG undertakes that, if the closing prices of the A Shares for 20 consecutive trading days are below the issue price of the Consideration Shares within the 6-month period from the issue date of the Consideration Shares or the closing price of the A Shares is below the issue price of the Consideration Shares as at the end of the 6-month period after completion of the issue of the Consideration Shares, the Lock-up Period of the Consideration Shares will be automatically extended for at least 6 months.

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The Proposed A Share Placing

The Company plans to undertake a proposed placing of not more than 33,390,830 new A Shares based on the minimum issue price of RMB6.69 per A Share to not more than 10 independent specific investors which according to the requirements of the CSRC include securities investment fund management companies, insurance institutional investors, trust investment companies, finance companies, securities companies, qualified foreign institutional investors (QFII), natural persons and other qualified investors under statutory requirements to be procured by the independent financial adviser of the Company in the PRC. The Proposed A Share Placing is non-legally binding and is conditional on the Disposal, the Acquisition and the issue of the Consideration Shares. In accordance with the applicable PRC laws and regulation, the Proposed A Share Placing will be subject to the approval by the Independent Shareholders at the EGM, the A Shares Class Meeting and the H Shares Class Meeting.

The terms of the Proposed A Share Placing are as follows:

Type of shares and : A Shares, with a nominal value of RMB1.00 each. nominal value Method of issue : Non-public issuance. Target subscribers : The Company will issue the new A Shares to not more than 10 independent specific investors which according to the requirements of the CSRC include securities investment fund management companies, insurance institutional investors, trust investment companies, finance companies, securities companies, qualified foreign institutional investors (QFII), natural persons and other qualified investors under statutory requirements to be procured by the independent financial adviser of the Company in the PRC. Such specified investors shall not include connected persons of the Company as defined under the Listing Rules and persons acting in concert with the controlling Shareholder as defined under the Takeovers Code. The Company will determine the target subscribers to ensure that no specific investor will become connected persons of the Company after the Proposed A Share Placing.

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To the best knowledge, information and belief of the Directors, as at the date of this announcement, the Company is not aware of any potential investors or any of their respective ultimate beneficial owners who are connected persons of the Company. The Company will comply with the relevant requirements of the Listing Rules should there be any changes or if otherwise necessary.

Lock-up period

: The A Shares subscribed by the target subscribers are not transferable for a period of 12 months from the date of completion of the issue of the new A Shares under the Proposed A Share Placing.
Subscription method : All target subscribers will subscribe for the A Shares under the Proposed A Share Placing in cash.
Pricing base date and price of the issue
: The pricing base date of the Proposed A Share Placing is the date of announcement of the resolution of the first board meeting in relation to the Reorganisation (i.e. 31 December 2014). The issue price per A Share will not be less than 90% of the average trading price of the A Shares in the 20 trading days immediately preceding the pricing base date, i.e. not less than RMB6.69 per A Share. The exact issue price will be determined after obtaining the approval of the CSRC according to the relevant regulations of the CSRC for the Proposed A Share Placing with reference to bid prices offered by target subscribers. The issue price of the Proposed A Share Placement will be adjusted correspondingly in case of ex-rights or ex-dividend during the period from the pricing base date to the issue date.

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Amount of gross proceeds : The maximum amount of gross funds to be raised through raised and number of A the Proposed A Share Placing will not exceed 25% of Shares to be issued the transaction amount under the Reorganisation (being the sum of the initial valuation of the net assets of the Incoming Entity and the gross funds to be raised under the Proposed A Share Placing). Accordingly, the gross amount of funds raised under the Proposed A Share Placing will not exceed RMB223,384,654.

Based on the minimum issue price of RMB6.69 per A Share under the Proposed A Share Placing, the number of new A Shares to be issued will not be more than 33,390,830 A Shares.

The final number of new A Shares to be issued under the Proposed A Share Placing will be determined by the Board based on the final issue price and the result of price bidding as authorised in the Shareholders’ general meeting of the Company.

Place of listing : The A Shares to be issued pursuant to the Proposed A Share Placing will be listed and traded on the SSE.
Use of proceeds : The proceeds to be raised will not exceed RMB223,384,654 through the Proposed A Share Placing. After deduction of the relevant expenses, the net proceeds will be used for general working capital of the Company.

Arrangements with regard : to the undistributed cumulated profits

The new Shareholders after completion of the Proposed A Share Placing and existing Shareholders will share the undistributed profits cumulated prior to the Proposed A Share Placing.

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Period of validity of : 12 months from the date of the resolution(s) of the the resolution(s) in Proposed A Share Placing passed at the Shareholders’ relation to the Proposed general meeting of the Company. If the Company has A Share Placing obtained the approval from the CSRC in relation to the Proposed A Share Placing within this 12-month period, the period of validity will be automatically extended until the date of completion of the Proposed A Share Placing.

Conditions precedent

The Framework Agreement shall become effective after satisfaction of, among other things, the conditions set forth below. If any of the conditions precedent below remains not satisfied, the Framework Agreement shall not become effective and no party shall have any claim against or liability or obligation to the other party save in respect of any deliberate or serious defect (including but not limited to any breach of mandatory requirements under any applicable laws and regulations) causing any of the conditions set out below unable to be fulfilled.

(a) the approval of the transactions contemplated under the Framework Agreement by the board of directors of CLFG;
(b) the approval of the transactions contemplated under the Framework Agreement by the Board;
(c) the approval of the transactions contemplated under the Framework Agreement by the Non-connected Shareholders at the EGM and the A Shares Class Meeting;
(d) the approval of the waiver from the obligation of CLFG to make a mandatory general offer by the Non-connected Shareholders at the EGM;
(e) the approval of the transactions contemplated under the Framework Agreement by the Independent Shareholders at the EGM and the H Shares Class Meeting;
(f) the approval of the Whitewash Waiver by the Independent Shareholders at the EGM;
(g) the approval or filing of valuation of the values of the Outgoing Entities and the Incoming Entity by the SASAC;

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(h) the pre-approval of the transactions contemplated under the Framework Agreement by the SASAC;
(i) the approval of the transactions contemplated under the Framework Agreement by the SASAC;
(j) the approval of the transactions contemplated under the Framework Agreement by the CSRC;
(k) the granting of the Whitewash Waiver by the Executive.

In the event that any of the conditions precedent for the Framework Agreement to become effective cannot be fulfilled or satisfied within the period agreed or expected by the parties, the parties shall negotiate amendments, modification, supplements or improvements for the Framework Agreement with the aim of enhancing the Company’s quality of assets, financial position and profitability and safeguarding minority Shareholders’ interests.

If the conditions precedent for the Framework Agreement have not been fulfilled on or before the long stop date under the Framework Agreement (i.e. 31 December 2015), the Framework Agreement shall become void and of no further effect from the long stop date and, save in respect of any antecedent breaches, all liabilities and obligations of the parties to the Framework Agreement shall cease and determine provided that such termination shall be without prejudice to any rights or remedies of the parties to the Framework Agreement which shall have accrued prior to such termination.

If the Whitewash Waiver as mentioned in item (k) above is not granted, which is conditional on the approval by the Independent Shareholders at the EGM, by the Executive, the Framework Agreement will be void and invalid and the Reorganisation will not proceed.

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Completion of the transactions contemplated under the Framework Agreement

Upon (i) finalisation of the valuation of the net assets/(liabilities) of the Outgoing Entities; (ii) finalisation of the valuation of the amounts due from the Outgoing Entities to the Company; (iii) finalisation of the valuation of the net asset value of the Incoming Entity; (iv) completion of the audit work for the Outgoing Entities and the Incoming Entity; and (v) approval or filing (as the case may be) of valuation of the values of the Outgoing Entities and the Incoming Entity by the SASAC, the Company and CLFG will, based on arm’s length negotiations, enter into the Formal Agreement which will supersede the Framework Agreement. Save for the relevant figures (such as the valuation amounts, the audited figures, the considerations of the Disposal and the Acquisition and the number of Consideration Shares to be issued by the Company), the terms of the Formal Agreement is expected to be identical to those of the Framework Agreement. The Framework Agreement is legally binding before the execution of the Formal Agreement. The Formal Agreement shall become effective after satisfaction of the conditions set forth therein. Completion of the transactions contemplated under the Formal Agreement shall take place after all the conditions precedent for the Formal Agreement to become effective have been fulfilled. The Acquisition and the Disposal shall take place simultaneously and are inter-conditional with each other. The Proposed A Share Placing shall take place subsequent to the Disposal, the Acquisition and the issue of the Consideration Shares and whether the Proposed A Share Placing is implemented or fully subscribed or not will not affect the implementation of the Disposal, the Acquisition and the issue of the Consideration Shares.

Profit and loss in respect of the Outgoing Entities and the Incoming Entity

CLFG and the Company agreed that, upon completion of the Disposal and the Acquisition, all the profit or loss in relation to the Outgoing Entities arising from or incurred during the period commencing from 31 October 2014 to the completion date of the Disposal and the Acquisition shall belong to or be borne by the Company.

CLFG and the Company also agreed that, upon completion of the Disposal and the Acquisition, all the profit in relation to the Incoming Entity arising from or incurred during the period commencing from 31 October 2014 to the completion date of the Disposal and the Acquisition shall belong to the Company and all the loss in relation to the Incoming Entity arising from or incurred during the period commencing from 31 October 2014 to the completion date of the Disposal and the Acquisition shall be compensated by CLFG in cash.

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SHAREHOLDING STRUCTURE

Based upon the shares in issue for each of the companies identified below, the simplified shareholding structure of the relevant companies as at the date of this announcement and after completion of the Reorganisation will be as follows:

As at the date of this announcement (Before completion of the Reorganisation, the transfer of 67.00% equity interest in Dengfeng Silicon Company from Longhai Company to the Company under the Equity Interest Transfer Agreement III and the transfer of the Transfer Shares from CLFG to Bengbu Institute under the Equity Interest Transfer Agreement II)

The following chart reflects the simplified shareholding structure of the relevant companies as at the date of this announcement.

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----- Start of picture text -----

CLFG
31.80% 100.00%
Bengbu
Company
Company
100.00% 100.00% 100.00% 63.98% 52.00% 100.00% 40.29% 59.71%
Mineral
Longhai Longmen Longhao Longfei Yinan Furuida Products
Company Company Company Company Huasheng Commerce Company
67.00% 100.00% 63.51%
Dengfeng
Silicon Longxiang Xinan Transport
Company Company
55.12%
Dengfeng
Hongzhai
Silicon
----- End of picture text -----

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After completion of the Reorganisation (but not taking into account the transfer of the Transfer Shares under the Equity Interest Transfer Agreement II)

The following chart reflects the simplified shareholding structure of the relevant companies upon completion of the Reorganisation but not taking into account the transfer of the Transfer Shares.

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----- Start of picture text -----

CLFG
33.49% 67.00% 100.00% 63.98% 52.00% 100.00%
Company DengfengSilicon Longhao Longfei Yinan ProductsMineral
Company Company Company Huasheng Company
55.12% 100.00% 63.51%
DengfengHongzhai Longxiang Xinan
Silicon Company Transport
100.00% 100.00% 100.00% 100.00%
Bengbu Longhai Longmen Furuida
Company Company Company Commerce
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EFFECT OF THE REORGANISATION, THE PROPOSED A SHARE PLACING AND THE TRANSFER OF THE TRANSFER SHARES ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

The following sets out the shareholding structure of the Company (i) as at the date of this announcement; (ii) immediately after completion of the Reorganisation (but not taking into account the Proposed A Share Placing and the transfer of the Transfer Shares); (iii) immediately after completion of the Reorganisation and the Proposed A Share Placing (but not taking into account the transfer of the Transfer Shares); and (iv) immediately after completion of the Reorganisation, the Proposed A Share Placing and the transfer of the Transfer Shares:

Shareholders A Shares CLFG Bengbu Institute_(note 1) CLFG and parties acting in concert with it Other A Shareholders Sub-total H Shares HKSCC (Nominees) Limited(note 2)_ Public H Shareholders Sub-total Total	As at the date of this announcement Number of Shares Shareholding percentage of the total issued Shares (million) % 159.0 31.80% — 0.00% 159.0 31.80% 91.0 18.20% 250.0 50.00% 247.8 49.57% 2.2 0.43% 250.0 50.00% 500.0 100.00%	Immediately after completion of the Reorganisation (but not taking into account the Proposed A Share Placing and the transfer of the Transfer Shares) Number of Shares Shareholding percentage of the total issued Shares (million) % 188.6 35.61 % — 0.00% 188.6 35.61% 91.0 17. 18% 279.6 52.79% 247.8 46.80% 2.2 0.41% 250.0 47.21% 529.6 100.00%	Immediately after completion of the Reorganisation and the Proposed A Share Placing (but not taking into account the transfer of the Transfer Shares) Number of Shares Shareholding percentage of the total issued Shares (million) % 188.6 33.49% — 0.00% 188.6 33.49% 124.4 22.10% 313.0 55.59% 247.8 44.03% 2.2 0.38% 250.0 44.41% 563.0 100.00%	Immediately after completion of the Reorganisation, the Proposed A Share Placing and the transfer of *the Transfer Shares(note 3)* Number of Shares Shareholding percentage of the total issued Shares** (million) % 119.6 21.24% 69.0 12.25% 188.6 33.49% 124.4 22.10% 313.0 55.59% 247.8 44.03% 2.2 0.38% 250.0 44.41% 563.0 100.00%	Immediately after completion of the Reorganisation, the Proposed A Share Placing and the transfer of *the Transfer Shares(note 3)* Number of Shares Shareholding percentage of the total issued Shares** (million) % 119.6 21.24% 69.0 12.25% 188.6 33.49% 124.4 22.10% 313.0 55.59% 247.8 44.03% 2.2 0.38% 250.0 44.41% 563.0 100.00%
					22.10%
					55.59% 44.03% 0.38%
					44.41%
					100.00%

— 19 —

Note 1: Bengbu Institute directly holds 19.00% equity interest in CLFG. Bengbu Institute in turn is an indirect wholly-owned subsidiary of CNBMG. CNBMG, through another wholly-owned subsidiary of it, indirectly holds approximately 51.70% interest in CLFG.
Note 2: To the best knowledge of the Company, HKSCC (Nominees) Limited is holding the H Shares as nominee of public H Shareholders.
Note 3: The Equity Interest Transfer Agreement II is conditional on the approval of the transfer of the Transfer Shares by the SASAC. The transfer of the Transfer Shares is expected to take place subsequent to the completion of the Formal Agreement.

INFORMATION ON THE COMPANY

The Company is principally engaged in the production and sale of ordinary float glass and ultra-thin glass substrate.

INFORMATION ON CLFG

CLFG is principally engaged in the production and sale of float glass, imports, exports and the domestic sale of processing technology of glass, design and subcontracting of engineering works, labour export and other businesses.

INFORMATION OF THE OUTGOING ENTITIES

Longhao Company

Longhao Company is a company established under the laws of the PRC with limited liability. As at the date of this announcement, Longhao Company is a wholly-owned subsidiary of the Company. Upon completion of the Reorganisation, Longhao Company will cease to be a subsidiary of the Company.

— 20 —

Longhao Company is mainly engaged in manufacturing and sales of float glass. Set out below is the financial information of Longhao Company prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2013 and the ten months ended 31 October 2014:

			For the ten
	For the year ended 31 December		months ended
	2012	2013	31 October 2014
	RMB’000	RMB’000	RMB’000
	(audited)	(audited)	(unaudited)
Revenue	58,061	56,781	196,215
Loss before taxation	(59,502)	(34,735)	(115,584)
Net loss after taxation	(59,502)	(34,735)	(115,584)

The unaudited net liabilities value of Longhao Company was approximately RMB241,247,612 as at 31 October 2014. The unaudited book value of the amount due from Longhao Company to the Company, which includes accounts and other receivable and entrusted loan due from Longhao Company, was approximately RMB369,621,301 as at 31 October 2014.

Longfei Company

Longfei Company is a company established under the laws of the PRC with limited liability. As at the date of this announcement, Longfei Company is a non-wholly owned subsidiary (63.98%) of the Company and is interested in the entire equity interest in Longxiang Company. Upon completion of the Reorganisation, Longfei Company and its subsidiary will cease to be subsidiaries of the Company.

Longfei Company is mainly engaged in manufacturing and sales of float sheet glass for construction and automobile uses. Longxiang Company is also engaged in the manufacturing and sales of float sheet glass.

— 21 —

Set out below is the consolidated financial information of Longfei Company and its subsidiary prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2013 and the ten months ended 31 October 2014:

			For the ten
	For the year ended 31 December		months ended
	2012	2013	31 October 2014
	RMB’000	RMB’000	RMB’000
	(audited)	(audited)	(unaudited)
Revenue	33,944	1,111	102
Loss before taxation	(36,089)	(32,954)	(22,595)
Net loss after taxation	(36,089)	(32,954)	(22,595)

The unaudited net liabilities value of Longfei Company was approximately RMB202,107,242 as at 31 October 2014. The unaudited book value of the amounts due from Longfei Company to the Company, which includes accounts and other receivable and entrusted loan due from Longfei Company, was approximately RMB230,287,167 as at 31 October 2014.

Dengfeng Silicon Company

Dengfeng Silicon Company is a company established under the law of the PRC with limited liability. It is an indirect non-wholly owned (67.00%) subsidiary of the Company and is interested in 55.12% equity interests in Dengfeng Hongzhai Silicon as at the date of this announcement. Upon completion of the Reorganisation, Dengfeng Silicon Company and its subsidiary will cease to be subsidiaries of the Company.

Dengfeng Silicon Company is mainly engaged in the sales of silica sands. Dengfeng Hongzhai Silicon is mainly engaged in the sales of silica sands and the mining, processing and sales of quartzite.

— 22 —

Set out below is the consolidated financial information of Dengfeng Silicon Company and its subsidiary prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2013 and the ten months ended 31 October 2014:

			For the ten
	For the year ended 31 December		months ended
	2012	2013	31 October 2014
	RMB’000	RMB’000	RMB’000
	(audited)	(audited)	(unaudited)
Revenue	—	—	—
Loss before taxation	(1,396)	(1,279)	(1,771)
Net loss after taxation	(1,396)	(1,280)	(1,771)

The unaudited net asset value of Dengfeng Silicon Company was approximately RMB10,055,540 as at 31 October 2014.

On 31 December 2014, Longhai Company entered into the Equity Interest Transfer Agreement III with the Company pursuant to which Longhai Company agreed to sell and the Company agreed to purchase 67.00% equity interest in Dengfeng Silicon Company at a consideration of approximately RMB7,094,453. Prior to the date of signing the Equity Interest Transfer Agreement III, Dengfeng Silicon Company was owned as to 67.00% by Longhai Company which is a wholly-owned subsidiary of the Company. Upon completion of the Equity Interest Transfer Agreement III, the Dengfeng Silicon Group will be owned by the Company.

The consideration of approximately RMB7,094,453 was determined after arm’s length negotiations between Longhai Company and the Company with reference to the audited net assets value of Dengfeng Silicon Company as at 31 December 2013.

— 23 —

Yinan Huasheng

Yinan Huasheng is a company established under the law of the PRC with limited liability. It is a 52.00% owned subsidiary of the Company as at the date of this announcement. Upon completion of the Reorganisation, Yinan Huasheng will cease to be a subsidiary of the Company.

Yinan Huasheng is mainly engaged in manufacturing, selling and distribution services of silicon powder. Set out below is the financial information of Yinan Huasheng prepared in accordance with PRC generally accepted accounting principles for the two years ended 31 December 2013 and the ten months ended 31 October 2014:

			For the ten
	For the year ended 31 December		months ended
	2012	2013	31 October 2014
	RMB’000	RMB’000	RMB’000
	(audited)	(audited)	(unaudited)
Revenue	36,664	37,107	26,471
Profit before taxation	1,033	1,255	305
Net profit after taxation	1,033	1,092	139

The unaudited net asset value of Yinan Huasheng was approximately RMB9,029,348 as at 31 October 2014. The unaudited book value of the amounts due from Yinan Huasheng to the Company, which includes other receivable due from Yinan Huasheng, was approximately RMB21,111,144 as at 31 October 2014.

Mineral Products Company

Mineral Products Company is a company established under the laws of the PRC with limited liability. It is an associate (40.29%) of the Company and is interested in the 63.51% equity interest in Xinan Transport as at the date of this announcement. Upon the completion of the Reorganisation, Mineral Products Company and its subsidiary will cease to be associates of the Company.

Mineral Products Company is mainly engaged in the mining of clay and other soil, sand and stone. Xinan Transport is mainly engaged in the provision of goods transportation services and is in the process of de-registration.

— 24 —

Set out below are the consolidated financial information of Mineral Products Company prepared in accordance with PRC generally accepted accounting principles and its subsidiary for the two years ended 31 December 2013 and the ten months ended 31 October 2014:

			For the ten
	For the year ended 31 December		months ended
	2012	2013	31 October 2014
	RMB’000	RMB’000	RMB’000
	(audited)	(audited)	(unaudited)
Revenue	11,621	2,884	4,032
Loss before taxation	(2,856)	(3,107)	(7,806)
Net loss after taxation	(2,862)	(3,107)	(7,806)

The unaudited net liabilities value of Mineral Products Company was approximately RMB31,544,781 as at 31 October 2014. The unaudited book value of the amounts due from Mineral Products Company and its subsidiary to the Company was approximately RMB1,341,990 as at 31 October 2014.

INFORMATION ON THE INCOMING ENTITY

Bengbu Company

Bengbu Company is a company established under the laws of the PRC with limited liability on 29 September 2013. As at the date of this announcement, Bengbu Company is a whollyowned subsidiary of CLFG. Upon completion of the Reorganisation, Bengbu Company will become a wholly-owned subsidiary of the Company.

Bengbu Company is mainly engaged in the research and development, production and sales of ultra-thin (1.1mm, 0.7mm, 0.55mm, 0.4mm and 0.33mm and etc) glass substrates. Compared with ordinary plate glass which is commonly used in the construction market, ultra-thin glass substrate is a new type of glass with different physical properties, chemical composition and production technology as compared to traditional glass and is widely used in various areas including (a) flat panel display like liquid-crystal display, plasma display panel, organic light-emitting diode displays; (b) touch panel displays; (c) instruments, meters and cameras; (d) microscope and pharmaceutical uses.

— 25 —

Bengbu Company currently operates a 150t/d electronic information display ultra-thin glass substrates production line which started business operation in October 2013 and commenced mass production since August 2014 and is one of the few PRC manufacturers equipped with production technology of 0.55mm and 0.33mm ultra-thin glass substrates in the PRC.

Set out below is the financial information of Bengbu Company prepared in accordance with PRC generally accepted accounting principles for the period from 29 September 2013 (date of incorporation) to 31 December 2013 and the ten months ended 31 October 2014:

	From 29 September
	2013 (date of	For the ten
	incorporation) to	months ended
	31 December 2013	31 October 2014
	RMB’000	RMB’000
	(audited)	(unaudited)
Revenue	—	29,152
Profit before taxation	10	3,952
Net profit after taxation	8	2,962

The consolidated unaudited net asset value of Bengbu Company was approximately RMB665,486,742 as at 31 October 2014.

On 27 October 2014, CLFG entered into the Equity Interest Transfer Agreement I with Bengbu Institute pursuant to which Bengbu Institute agreed to sell and CLFG agreed to purchase 93.68% equity interest in Bengbu Company at a consideration of approximately RMB628.7 million. As at the date of the Equity Interest Transfer Agreement I, Bengbu Company was owned as to 93.68% by Bengbu Institute and 6.32% by CLFG. Completion of the Equity Interest Transfer Agreement I has taken place as at the date of this announcement and Bengbu Company has become a wholly-owned subsidiary of CLFG.

On 31 December 2014, CLFG entered into the Equity Interest Transfer Agreement II with Bengbu Institute pursuant to which both parties agreed that RMB434.7 million among the consideration of approximately RMB628.7 million under the Equity Interest Transfer Agreement I will be satisfied by the transfer of the 69,000,000 Transfer Shares from CLFG to Bengbu Institute. The transfer price of the Transfer Shares represents RMB6.30 per Transfer Share.

— 26 —

The parties to the Equity Interest Transfer Agreement I shall further discuss and agree on the settlement of the remaining balance of approximately RMB194.0 million of the consideration under the Equity Interest Transfer Agreement I.

The transfer of the Transfer Shares is expected to take place subsequent to the completion of the Formal Agreement. The Equity Interest Transfer Agreement II is conditional on the approval of the transfer of the Transfer Shares by the SASAC.

The unaudited net profit or loss before and after taxation of the Outgoing Entities and the Incoming Entity for the ten months ended 31 October 2014 constitute a profit forecast under the Takeovers Code and the Listing Rules. The forecast has been reported on in accordance with the Takeovers Code and the Listing Rules and the reports from WUYIGE Certified Public Accountants LLP and TC Capital Asia Limited have been lodged with the Executive and the Stock Exchange.

REASONS FOR AND BENEFITS OF THE REORGANISATION

In recent years, the current structural excess supply in light of the slowing demand and intense competition in the ordinary float glass market in the PRC has an adverse impact on the ordinary float glass business of the Group which has dragged down the economic efficiency and profitability of the Company. The Company expects that such situation will not improve significantly in the near future due to the deteriorating industry trend in the ordinary float glass industry. On 30 December 2011, the State Council of the PRC published the “About Industrial Restructuring the Upgrading Plan (2011-2015)” (《關於工業轉型升級規劃（2011-2015）》) which emphasises the development of ultra-thin glass substrate, photovoltaic solar cells with ultra-white glass, transparent conductive oxide (TCO) glass and encourage the development and application of low-emissivity (Low-E) coated glass, hollow glass vacuum and other energy-saving glass.

— 27 —

Prior to the Reorganisation, the major products of the Company include ordinary float glass and ultra-thin glass substrate. In order to sustain the continuous development and growth, and enhance the competitiveness and profitability of the Company and hence maximisethe interest of the Shareholders, the Company decided to undertake the Reorganisation through (i) the injection of more profitable ultra-thin glass substrate assets from the Incoming Entity to the Company; and (ii) the disposal of assets in the ordinary float glass and related segments with the aim to focus the Group in the production and sale of ultra-thin glass substrate products. After the Reorganisation, the Company will no longer produce ordinary float glass products and will concentrate on the production and sale of ultra-thin glass substrate products. The shift in major products of the Group towards the ultra-thin glass substrate business provides better opportunities for the Company’s growth.

Accordingly, the Directors (excluding the independent non-executive Directors whose views will be rendered upon having received the advice of the independent financial adviser) are of the view that the terms of the Framework Agreement and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

FINANCIAL EFFECT OF THE DISPOSAL AND THE USE OF THE CONSIDERATION FOR THE DISPOSAL

Based on the preliminary assessment, the Company expects to recognise a net gain of approximately RMB162.7 million upon completion of the Disposal, which is calculated with reference to the difference between the consideration of the Disposal of approximately RMB492.9 million and the sum of the proportionate interests in the unaudited net asset value of the Outgoing Entities and the book value of the amounts due from the Outgoing Entities to the Company as at 31 October 2014, which amounts to approximately RMB330.2 million in aggregate. The amount of the actual gain arising from the Disposal will be determined and confirmed by the auditors of the Company subsequent to completion of the Disposal depending on, among other things, any adjustment of the consideration (if necessary) (which will be available only upon execution of the Formal Agreement) and the actual net asset value of the Outgoing Entities and the amounts due from the Outgoing Entities to the Company (which can only be determined upon completion of the Disposal) and therefore may be different from the amount mentioned above.

The consideration to be received by the Company from the Disposal will be fully used to net off the consideration for the Acquisition payable by the Company.

— 28 —

REASONS FOR AND BENEFITS OF THE PROPOSED A SHARE PLACING

The Directors (including the independent non-executive Directors) consider that the Proposed A Share Placing represents an opportunity to raise additional capital for the Group to enhance its general working capital base for the business operation of the Group, which is in the interests of the Group.

The proceeds to be raised from the Proposed A Share Placing is intended to be used as general working capital of the Group.

The Directors (including the independent non-executive Directors) consider that the terms of the Proposed A Share Placing, including the issue price, are on normal commercial terms and are fair and reasonable based on the current market conditions and in the interests of the Company and the Shareholders as a whole.

FUND RAISING IN THE PAST TWELVE MONTHS

The Company has not conducted any fund raising activities involving the issue of equity shares within the 12 months immediately prior to the date of this announcement.

LISTING RULES IMPLICATIONS

— 29 —

TAKEOVERS CODE IMPLICATIONS AND APPLICATION FOR WHITEWASH WAIVER

As at the date of this announcement, save as disclosed herein,

(a) there is no holding of voting rights in the Company or rights over any Share which is owned or controlled or directed by any person acting in concert with CLFG;
(b) none of CLFG or parties acting in concert with it has received any irrevocable commitment in relation to voting of the resolutions in respect of the Framework Agreement or the Formal Agreement (as the case may be) and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver;
(c) there is no outstanding derivative in respect of the securities of the Company which has been entered into by any of CLFG and parties acting in concert with it;
(d) CLFG and parties acting in concert with it do not hold any outstanding options, warrants, derivatives or any securities that are convertible into Shares or any derivatives in respect of securities in the Company;
(e) there is no arrangement (whether by way of option, indemnity or otherwise) in relation to the shares of any of CLFG and parties acting in concert with it or the Company and which might be material to the Framework Agreement or the Formal Agreement (as the case may be) and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver;

— 30 —

(f) there is no agreement or arrangement to which any of CLFG and parties acting in concert with it is a party which relates to circumstances in which it may or may not invoke or seek to invoke a pre-condition or a condition to the Framework Agreement or the Formal Agreement (as the case may be) and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver; and
(g) none of CLFG or parties acting in concert with it has borrowed or lent any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company.

The Executive may or may not grant the Whitewash Waiver. If the Whitewash Waiver is granted by the Executive and approved by the Independent Shareholders, CLFG and parties acting in concert with it will not be required to make a mandatory general offer which would otherwise be required as a result of the acquisition of the Consideration Shares. If the Whitewash Waiver is not granted by the Executive or the resolutions in respect of the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver are not approved by the Independent Shareholders, the Framework Agreement and/or the Formal Agreement will be void and invalid and the Reorganisation will not proceed.

— 31 —

INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising all the independent non-executive Directors has been established by the Company to advise the Independent Shareholders on the terms of the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver. According to Rule 2.8 of the Takeovers Code, members of an independent committee of the Company should comprise all nonexecutive Directors. However, Mr. Zhang Chengong and Mr. Zhang Chong, being all the non-executive Directors, are senior management of the controlled entities of CNBMG and are therefore considered to have conflicts of interests in the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver. Therefore, none of the non-executive Directors is eligible to be a member of the Independent Board Committee.

APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

Goldin has been appointed as the independent financial adviser with the approval of the Independent Board Committee to advise the Independent Board Committee and the Independent Shareholders as to whether the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver are fair and reasonable and make recommendation on voting.

EGM AND CLASS MEETINGS

— 32 —

GENERAL

SUSPENSION AND RESUMPTION OF TRADING

— 33 —

DEFINITIONS

In this announcement, unless the context otherwise requires, the following terms and expressions shall have the following meanings when used herein:

“Acquisition”

the transfer by CLFG of the Incoming Entity to the Company pursuant to the terms and conditions of the Framework Agreement

“A Share(s)” domestic ordinary share(s) with a par value of RMB1.00 each in the share capital of the Company which are listed on the SSE and traded in RMB
“A Shareholder(s)” holder(s) of the A Share(s)
“A Shares Class Meeting” the class meeting of the A Shareholders to be held to consider and, if thought fit, approve, among other things, the Formal Agreement and the transactions contemplated thereunder and the specific mandates
“associate(s)” has the meaning ascribed to it under the Listing Rules
“Bengbu Company”
Bengbu China Building Information Display Materials Co. Ltd.* ( 蚌埠中建材信息顯示材料有限公司 ), a company established in the PRC with limited liability and a wholly-owned subsidiary of CLFG
“Bengbu Institute”
Bengbu Glass Industry Design Institute* ( 蚌埠玻璃工業設計研究院 ), an indirect wholly-owned subsidiary of CNBMG and a 19.0% shareholder of CLFG
“Board” the board of Directors

“Class Meetings” the A Shares Class Meeting and the H Shares Class Meeting

— 34 —

“CLFG”

“CNBMG”
“CSRC”
“Company”
“connected person(s)”
“Consideration Share(s)”
“Dengfeng Hongzhai Silicon”
“Dengfeng Silicon Company”
“Dengfeng Silicon Group”
“Director(s)”

China Luoyang Float Glass (Group) Company Limited* ( 中國洛陽浮法玻璃集團有限責任公司 ), a company established in the PRC with limited liability and the controlling Shareholder of the Company under the Listing Rules

China National Building Material Group Corporation* ( 中國建築材料集團有限公司 ), a wholly state-owned enterprise incorporated in the PRC and the ultimate controlling Shareholder of the Company
the China Securities Regulatory Commission
Luoyang Glass Company Limited, a joint stock company incorporated in the PRC with limited liability and the Shares are listed on the Main Board of the Stock Exchange and the SSE
has the meaning ascribed to it under the Listing Rules
a total of 29,541,135 new A Shares to be allotted and issued by the Company to CLFG pursuant to the Framework Agreement as the settlement of the difference in the considerations of the Disposal and the Acquisition
Dengfeng Hongzhai Silicon Co. Ltd.* ( 登封紅寨硅砂有限公司 ), a company established in the PRC with limited liability and is owned as to 55.12% by Dengfeng Silicon Company
Dengfeng CLFG Silicon Co. Ltd.*( 登封洛玻硅砂有限公司 ), a company established in the PRC with limited liability and is owned as to 67.00% by Longhai Company
Dengfeng Silicon Company and Dengfeng Hongzhai Silicon
the director(s) of the Company

— 35 —

“Disposal” the transfer by the Company of the Sale Interests in the Outgoing Entities and the amounts due from the Outgoing Entities to the Company, to CLFG pursuant to the terms and conditions of the Framework Agreement

“EGM”

the extraordinary general meeting to be convened and held by the Company to consider and approve, among other things, the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver
“Equity Interest Transfer Agreement I”
the equity interest transfer agreement dated 27 October 2014 entered into between CLFG and the Bengbu Institute in relation to the sale and purchase of 93.68% equity interests in Bengbu Company
“Equity Interest Transfer Agreement II”
the equity interest transfer agreement dated 31 December 2014 entered into between CLFG and Bengbu Institute in relation to the transfer of the Transfer Shares from CLFG to Bengbu Institute
“Equity Interest
Transfer Agreement III”
the equity interest transfer agreement dated 31 December 2014 entered into between Longhai Company and the Company in relation to the sale and purchase of 67.00% equity interests in Dengfeng Silicon Company
“Executive”
the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director
“Formal Agreement”
the formal agreement to be entered into between CLFG and the Company in relation to the Disposal, the Acquisition, the issue of the Consideration Shares and the Proposed A Share Placing
“Framework Agreement”
the initial framework agreement dated 31 December 2014 entered into between CLFG and the Company in relation to the Disposal, the Acquisition, the issue of the Consideration Shares and the Proposed A Share Placing

— 36 —

“Goldin”

Goldin Financial Limited, a licensed corporation to carry out type 6 regulated activity (advising on corporate finance) under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver
“Group” the Company and its subsidiaries
“HK$” Hong Kong dollars, the lawful currency of Hong Kong
“H Share(s)” overseas listed foreign share(s) with a par value of RMB1.00 each in the share capital of the Company, listed on the Main Board of the Stock Exchange and traded in Hong Kong dollars
“H Shareholder(s)” holder(s) of the H Share(s) “H Shares Class Meeting” the class meeting of the H Shareholders to be held to consider and, if thought fit, approve, among other things, the Formal Agreement and the transactions contemplated thereunder and the specific mandates
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Incoming Entity” the entity owned by CLFG as at the date of this announcement as more particularly described in the section headed “Information on the Incoming Entity” of this announcement

— 37 —

“Independent Board Committee”

an independent board committee comprising all the independent non-executive Directors, namely Mr. Huang Ping, Mr. Dong Jiachun, Mr. Liu Tianni and Mr. Jin Zhanping, established by the Company to advise the Independent Shareholders on, inter alia, the Formal Agreement and the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver
“Independent Shareholders”
“Last Trading Day”
“Listing Rules”
“Longfei Company”
“Longhai Company”
“Longhao Company”
“Longxiang Company”
Shareholders other than (i) CLFG; (ii) parties acting in concert with CLFG; and (iii) all other parties (if any) who are interested or involved in the Framework Agreement and the Formal Agreement, the transactions contemplated thereunder, the specific mandates and the Whitewash Waiver
27 June 2014
the Rules Governing the Listing of Securities on the Stock Exchange
CLFG Longfei Glass Co. Ltd.* ( 洛玻集團龍飛玻璃有限公司 ), a company established in the PRC with limited liability and is owned as to 63.98% by the Company
CLFG Longhai Electronic Glass Limited* ( 洛玻集團洛陽龍海電子玻璃有限公司 ), a company established in the PRC with limited liability and a wholly-owned subsidiary of the Company
CLFG Longhao Glass Co. Ltd.* ( 洛玻集團洛陽龍昊玻璃有限公司 ), a company incorporated in the PRC with limited liability and a wholly-owned subsidiary of the Company
CLFG Longxiang Glass Co. Ltd* ( 洛玻集團龍翔玻璃有限公司 ), a company incorporated in the PRC with limited liability and is a wholly-owned subsidiary of Longfei Company

— 38 —

“Mineral Products Company”

CLFG Mineral Products Company Limited* ( 中國洛陽浮法玻璃集團礦產有限公司 ), a company incorporated in the PRC with limited liability and is owned as to 40.29% by the Company
“Non-connected Shareholders”
Shareholders other than the connected shareholders (has the meaning ascribed to it under rule 10.2.2 of the listing rules of the SSE)
“Outgoing Entities”
the entities owned by the Company as at the date of this announcement as more particularly described in the section headed “Information on the Outgoing Entities” of this announcement
“Proposed A Share Placing” the proposed placing of not more than 33,390,830 new A Shares by the Company based on the minimum issue price of RMB6.69 per A Share to not more than 10 independent specific investors
“PRC” the People’s Republic of China, which for the purpose of this announcement excludes Hong Kong, Macau Special Administrative Region and Taiwan
“Reorganisation” the transactions contemplated under the Framework Agreement and the Equity Interest Transfer Agreements I and III
“RMB” Renminbi, the lawful currency of the PRC
“SASAC” State-owned Assets Supervision and Administration Commission of the State Council

“Sale Interests” 100.00% equity interest in Longhao Company, 63.98% equity interest in Longfei Company, 67.00% equity interest in Dengfeng Silicon Company, 52.00% equity interest in Yinan Huasheng and 40.29% equity interest in Mineral Products Company

— 39 —

“Share(s)”

“Shareholder(s)”
“SFC”
“SSE”
“Stock Exchange”
“Takeovers Code”
“Transfer Share(s)”
“Valuer”
“Whitewash Waiver”
“Xinan Transport”

ordinary share(s) of RMB1.00 each in the share capital of the Company, including A Share(s) and H Share(s)

holder(s) of the Share(s)

the Securities and Futures Commission of Hong Kong
the Shanghai Stock Exchange
The Stock Exchange of Hong Kong Limited
the Hong Kong Code on Takeovers and Mergers
69,000,000 A Shares owned by CLFG, representing approximately 13.80% of the existing total issued share capital of the Company
China United Assets Appraisal Group Limited* 中聯資產評估集團有限公司 , an independent professional valuer engaged by the Company and CLFG
a waiver from the Executive pursuant to Note 1 on the dispensations from Rule 26 of the Takeovers Code in respect of the obligations of CLFG and parties acting in concert with it to make a mandatory general offer under Rule 26 of the Takeovers Code for all the securities not already owned or agreed to be acquired by CLFG and parties acting in concert with it as a result of the issue of the Consideration Shares

Xinan Province Mineral Transport Co. Ltd.* ( 新安縣礦產運輸有限公司 ), a company established in the PRC with limited liability and is owned as to 63.51% by Mineral Products Company

— 40 —

“Yinan Huasheng”

Yinan Huasheng Mineral Products Industry Co. Ltd.*( 沂南華盛礦產實業有限公司 ), a company established in the PRC with limited liability and is owned as to 52.00% by the Company

“%”

per cent

“mm”

millimeter(s)

“t/d”

tons per day

By order of the Board Luoyang Glass Company Limited* Ma Liyun Chairman

Luoyang, the PRC 31 December 2014

As at the date of this announcement, the Board comprises four executive Directors: Mr. Ma Liyun, Mr. Ni Zhisen, Ms. Sun Lei and Mr. Xie Jun; two non-executive Directors: Mr. Zhang Chengong and Mr. Zhang Chong; and four independent non-executive Directors: Mr. Huang Ping, Mr. Dong Jiachun, Mr. Liu Tianni and Mr. Jin Zhanping.

— 41 —

For the purpose of this announcement, all amounts denominated in RMB have been translated (for information only) into HK$ using the exchange rate of RMB1:HK$1.25. No representation is made that any amounts in RMB or HK$ can be or could have been converted at the relevant dates at the above rate or any other rates at all.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than those relating to CLFG) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.

The directors of CLFG jointly and severally accept full responsibility for the accuracy of the information contained in this announcement (other than those relating to the Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading.

for identification purpose only

— 42 —

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RoboSense Technology Co., Ltd — Capital/Financing Update 2014

50628_rns_2014-12-31_e6dd2ca3-504a-46f0-b92c-6a594d8d62c0.pdf

Financial adviser to the Company

THE REORGANISATION

LISTING RULES IMPLICATIONS

TAKEOVERS CODE IMPLICATIONS AND APPLICATION FOR WHITEWASH WAIVER

INDEPENDENT BOARD COMMITTEE

APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

EGM AND CLASS MEETINGS

GENERAL

SUSPENSION AND RESUMPTION OF TRADING

INTRODUCTION

THE REORGANISATION

The Framework Agreement

Parties:

The Disposal

The Acquisition

The Consideration Shares

The Proposed A Share Placing

Conditions precedent

Completion of the transactions contemplated under the Framework Agreement

Profit and loss in respect of the Outgoing Entities and the Incoming Entity

SHAREHOLDING STRUCTURE

EFFECT OF THE REORGANISATION, THE PROPOSED A SHARE PLACING AND THE TRANSFER OF THE TRANSFER SHARES ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

INFORMATION ON THE COMPANY

INFORMATION ON CLFG

INFORMATION OF THE OUTGOING ENTITIES

Longhao Company

Longfei Company

Dengfeng Silicon Company

Yinan Huasheng

Mineral Products Company

INFORMATION ON THE INCOMING ENTITY

Bengbu Company

REASONS FOR AND BENEFITS OF THE REORGANISATION

FINANCIAL EFFECT OF THE DISPOSAL AND THE USE OF THE CONSIDERATION FOR THE DISPOSAL

REASONS FOR AND BENEFITS OF THE PROPOSED A SHARE PLACING

FUND RAISING IN THE PAST TWELVE MONTHS

LISTING RULES IMPLICATIONS

TAKEOVERS CODE IMPLICATIONS AND APPLICATION FOR WHITEWASH WAIVER

INDEPENDENT BOARD COMMITTEE

APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

EGM AND CLASS MEETINGS

GENERAL

SUSPENSION AND RESUMPTION OF TRADING

DEFINITIONS

“CLFG”

“EGM”

“Goldin”

“Share(s)”

“Yinan Huasheng”

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RoboSense Technology Co., Ltd Capital/Financing Update 2014