RoboSense Technology Co., Ltd - Proxy Solicitation & Information Statement 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Luoyang Glass Company Limited (the “Company”) , you should at once hand this circular with the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

==> picture [280 x 136] intentionally omitted <==

＊

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND CONTINUING CONNECTED TRANSACTIONS

Financial Adviser to Luoyang Glass Company Limited

==> picture [189 x 39] intentionally omitted <==

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders of Luoyang Glass Company Limited

==> picture [132 x 30] intentionally omitted <==

A letter from the Independent Board Committee (as defined herein) is set out on page 30 to 31 of this circular. A letter from Goldin Financial, the independent financial adviser to the Independent Board Committee and the Independent Shareholders (as defined herein), containing its advice to the Independent Board Committee and the Independent Shareholders is set out on page 32 to 58 of this circular.

A notice of the second extraordinary general meeting 2014 of the Company (the “ EGM ”) to be held at 9:00 a.m. on 31 December 2014 (Wednesday) at the conference room of the Company on 3rd Floor, No. 9 Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the PRC is published on 14 November 2014. A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s share registrar in Hong Kong, Hong Kong Registrars Limited, at Rooms 17121716, Hopewell Centre, 183 Queen’s Road East, Hong Kong, or to the Company’s registered address at No. 9 Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the PRC as soon as possible and in any event not less than 24 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

15 December 2014

* for identification purposes only

TABLE OF CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Letter from Goldin Financial. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Appendix — General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Notice of the Second Extraordinary General Meeting 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . 63

— i —

DEFINITIONS

In this circular, unless the context requires otherwise, the following expressions have the following meanings:

“1st Shenzhen Kaisheng Project Design and Construction Agreement”
the project design, construction and installation agreement dated 17 April 2014 entered into between Longhao Glass and Shenzhen Kaisheng, pursuant to which Shenzhen Kaisheng agreed to provide project design, construction and installation services, and details of which were set out in the announcement of the Company dated 17 April 2014;
“1st Shenzhen Kaisheng Equipment Supply Agreement”
the equipment supply contracting agreement dated 17 April 2014 entered into between Longhao Glass and Shenzhen Kaisheng, pursuant to which Shenzhen Kaisheng agreed to supply main equipment, both of which are for the purpose of the project in respect of building a residual heat power generation boiler system by using kiln flue gas generated from the glass production lines of Longhao Glass, and details of which were set out in the announcement of the Company dated 17 April 2014;
“2014 Piped Natural Gas Supply Framework Agreement”
a supply framework agreement dated 14 November 2013 entered into between Longhao Glass and Yuantong Energy, pursuant to which Yuantong Energy agreed to supply natural gas to Longhao Glass;
“2014 Piped Natural Gas Supply Supplemental Agreement”
a supplemental agreement to 2014 Piped Natural Gas Supply Framework Agreement dated 14 November 2014 entered into between Longhao Glass and Yuantong Energy, pursuant to which the maximum estimated transaction amount of natural gas supply for the year 2014 has been revised to RMB124,000,000;
“2015 Piped Natural Gas Supply Framework Agreement”
a supply framework agreement dated 14 November 2014 entered into between Longhao Glass and Yuantong Energy, pursuant to which Yuantong Energy agreed to supply natural gas to Longhao Glass;

— ii —

DEFINITIONS

“2nd Shenzhen Kaisheng Project the project design, construction and installation agreement Design and Construction dated 20 May 2014 entered into between Longhao Glass and Agreement” Shenzhen Kaisheng, pursuant to which Shenzhen Kaisheng agreed to provide project design, construction and installation services, and details of which were set out in the announcement of the Company dated 20 May 2014;
“2nd Shenzhen Kaisheng Equipment the equipment supply contracting agreement dated 20 May 2014 Supply Agreement” entered into between Longhao Glass and Shenzhen Kaisheng, pursuant to which Shenzhen Kaisheng agreed to supply whole set of equipment, both of which are for the purpose of the project in respect of building a smoke gas treatment system of the glass production lines of Longhao Glass, and details of which were set out in the announcement of the Company dated 20 May 2014;
“associate(s)” has the same meaning as ascribed to it under the Hong Kong Listing Rules;
“Board” the board of Directors;
“CLFG”
中國洛陽浮法玻璃集團有限責任公司 (China Luoyang Float Glass (Group) Company Limited*), a company incorporated in the PRC with limited liability and the controlling shareholder of the Company holding 31.80% equity interest in the Company;
“CLFG Group” CLFG, its controlling shareholder and their respective controlled companies/entities (the “ Relevant Parties of CLFG ”) and/or the non-wholly owned subsidiaries of the Company in which the Relevant Parties of CLFG has 10% or more voting rights;
“CLFG Raw Materials Sale Framework Agreement”
the raw materials sale framework agreement dated 14 November 2014 entered into between CLFG and the Company, pursuant to which CLFG Group agreed to provide certain raw materials to the Group;
“CNBMG”
China National Building Material Group Corporation, a wholly state-owned enterprise incorporated in the PRC and the ultimate controlling shareholder of the Company;

— iii —

DEFINITIONS

“CNBMG Engineering Equipment the equipment supply framework agreement dated 14 November and Materials Supply Framework 2014 entered into between CNBMG and the Company, pursuant Agreement” to which to CNBMG Group agreed to supply equipment for the float glass production to the Group;
“CNBMG Engineering Technical Services Framework Agreement”
the engineering technical services framework agreement dated 14 November 2014 entered into between CNBMG and the Company, pursuant to which the CNBMG Group agreed to provide certain technical services to the Group;
“CNBMG Financial Services Framework Agreement”
the financial services framework agreement dated 14 November 2014 entered into between CNBMG and the Company, pursuant to which to CNBMG Group agreed to provide certain financial services to the Group;
“CNBMG Group”
CNBMG, its controlling shareholder and their respective controlled companies/entities (the “ Relevant Parties of CNBMG ”) and/or the non-wholly owned subsidiaries of the Company in which the Relevant Parties of CNBMG has 10% or more voting rights;
“Company”
洛陽玻璃股份有限公司 (Luoyang Glass Company Limited*), a joint stock limited company incorporated in the PRC with limited liability, the H Shares of which are listed on the main board of the Stock Exchange (stock code: 1108);
“connected person(s)”
has the same meaning as ascribed to it under the Hong Kong Listing Rules;
“Directors”
the directors of the Company, including the independent nonexecutive directors of the Company;
“EGM”
the extraordinary general meeting 2014 of the Company to be held at the conference room of the Company on 3rd Floor, No. 9 Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the People’s Republic of China (the “ PRC ”) at 9:00 a.m. on 31 December 2014 to consider and, if thought fit, approve, among other things, the New Projects Agreements, the Non-exempt CCT Agreements and their respective New Caps;

— iv —

DEFINITIONS

“EPR Institute”
“Fangxing Science & Technology”
“Goldin Financial”
“Group”
“Hong Kong”
“Hong Kong Listing Rules”
“Huayi Glass”
“Huayi Glass Product Sale Framework Agreement”
“Independent Board Committee”

江蘇中建材環保研究院有限公司 (Jiangsu CNBM Environment Protection Research Institute Limited*);

安徽方興科技股份有限公司 (Anhui Fangxing Science & Technology Company Limited*), a joint stock limited company incorporated in the PRC with limited liability, the shares of which are listed on the Shanghai Stock Exchange (stock code: 600552);
Goldin Financial Limited, a licensed corporation under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) licensed to carry on Type 6 (advising on corporate finance) regulated activity, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders to advise on the New Project Agreements, the Non-exempt CCT Agreements and their respective New Caps;

the Company and its subsidiaries;

the Hong Kong Special Administrative Region of the PRC;

the Rules Governing the Listing of Securities on the Stock Exchange;
安徽省蚌埠華益導電膜玻璃有限公司 (Anhui Province Bangbu Huayi Glass Company Limited*), a limited liability company incorporated in the PRC, a subsidiary of Fangxing Science & Technology and an associate of CNBMG;
the product sale framework agreement dated 18 October 2011 entered into between the Company and Huayi Glass, pursuant to which the Group agreed to sell its ultra-thin float glass to Huayi Glass;
an independent board committee of the Company comprising of all the independent non-executive Directors;

— v —

DEFINITIONS

“Independent Shareholders”
“Longhai Glass”
“Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement”
“Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement”
“Longhai Smoke Gas Treatment Project”
“Longhao Glass”
“Longmen Glass”
“Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement”

Shareholders other than CLFG and their associates;

洛玻集團洛陽龍海電子玻璃有限公司 (CLFG Luoyang Longhai Electronic Glass Company Limited*), a company with limited liability incorporated in the PRC and a wholly-owned subsidiary of the Company;

the project design, construction and installation agreement dated 14 November 2014 entered into between Longhai Glass and EPR Institute, pursuant to which EPR Institute agreed to provide project design, construction and installation services for the purpose of the Longhai Smoke Gas Treatment Project;

the equipment supply contracting agreement dated 14 November 2014 entered into between Longhai Glass and EPR Institute, pursuant to which EPR Institute agreed to supply whole set of equipment for the purpose of the Longhai Smoke Gas Treatment Project;

the project in respect of building a smoke gas dust removal and denitration system for the production lines of Longhai Glass;

洛玻集團洛陽龍昊玻璃有限公司 (CLFG Luoyang Longhao Glass Company Limited*), a company with limited liability incorporated in the PRC and a wholly-owned subsidiary of the Company;

洛玻集團龍門玻璃有限公司 (CLFG Longmen Glass Company Limited*), a limited liability company incorporated in the PRC and a wholly-owned subsidiary of the Company;

the project design, construction and installation agreement dated 14 November 2014 entered into between Longmen Glass and EPR Institute, pursuant to which EPR Institute agreed to provide project design, construction and installation services for the purpose of the Longmen Smoke Gas Treatment Project;

— vi —

DEFINITIONS

“Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement”
the equipment supply agreement dated 14 November 2014 entered into between Longmen Glass and EPR Institute, pursuant to which EPR Institute agreed to supply whole set of equipment for the purpose of the Longmen Smoke Gas Treatment Project;
“Longmen Smoke Gas Treatment Project”
the project in respect of building a smoke gas dust removal and denitration system for the production lines of Longmen Glass;
“New Cap(s)”

the maximum aggregate annual transaction amounts for each of the continuing connected transactions contemplated under the New CCT Agreements for each of the three years ending 31 December 2017;

“New CCT Agreements”

Non-exempt CCT Agreements, the CLFG Raw Materials Sale Framework Agreement, the CNBMG Financial Services Framework Agreement, 2014 Piped Natural Gas Supply Supplemental Agreement and 2015 Piped Natural Gas Supply Framework Agreement;

“New Project Agreements”

the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement, the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement, the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement, and the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement;

“Non-exempt CCT Agreements”
Ultra-thin Float Glass Sale and Purchase Framework Agreement, CNBMG Engineering Equipment and Materials Supply Framework Agreement and CNBMG Engineering Technical Services Framework Agreement;
“Non-exempt Continuing Connected the continuing connected transactions contemplated under Transactions” each of the Non-exempt CCT Agreements (as the context may require), which are subject to reporting, annual review, announcement and independent shareholders’ approval requirements under Chapter 14A of the Hong Kong Listing Rules;

— vii —

DEFINITIONS

“Old CCT Agreements”

The existing agreements entered into between (i) the Company and (ii) CLFG, CNBMG or Huayi Glass on 18 October 2011, the existing agreement entered into between the Company and Fangxing Science & Technology on 20 January 2014 and the 2014 Piped Natural Gas Supply Framework Agreement, all of which shall expire on 31 December 2014 and the transactions contemplated thereunder constituted continuing connected transactions of the Company;
“percentage ratios”

has the same meaning as ascribed to it under the Hong Kong Listing Rules, as applicable to a transaction;

“PRC”

The People’s Republic of China which, for the purpose of this announcement, excludes Hong Kong and the Macau Special Administrative Region of the PRC and Taiwan;
“Previous Project Agreements” 1st Shenzhen Kaisheng Project Design and Construction Agreement, 1st Shenzhen Kaisheng Equipment Supply Agreement; 2nd Shenzhen Kaisheng Project Design and Construction Agreement and 2nd Shenzhen Kaisheng Equipment Supply Agreement;
“Product Sale Agreement”
the product sale agreement dated 20 January 2014 entered into between the Company and Fangxing Science & Technology, pursuant to which the Group agreed to sell its ultra-thin float glass to Fangxing Science & Technology;
“RMB”
Renminbi, the lawful currency of the PRC;
“Shanghai Listing Rules” the Shanghai Stock Exchange Share Listing Rules;
“Shareholder(s)” the shareholders of the Company;
“Stock Exchange” The Stock Exchange of Hong Kong Limited;
“subsidiaries”

has the same meaning as ascribed to it under the Hong Kong Listing Rules;

— viii —

DEFINITIONS

“Ultra-thin Float Glass Sale and a product sale framework agreement dated 14 November 2014 Purchase Framework Agreement” entered into between the Company and Fangxing Science & Technology, pursuant to which the Group agreed to provide ultra-thin float glass to Fangxing Science & Technology and its subsidiaries; “VAT” value-added tax in the PRC; “Yuantong Engery” 洛陽洛玻集團源通能源有限公司 (CLFG Yuantong Engery Co., Ltd.*); “%” per cent.

* Denotes English translation of the name of a Chinese company or entity and is provided for identification purposes only.

— ix —

LETTER FROM THE BOARD

==> picture [280 x 136] intentionally omitted <==

＊

Executive Directors:

Mr. Ma Liyun (Chairman)

Mr. Ni Zhisen (General Manager)

Ms. Sun Lei

Mr. Xie Jun

Registered office:

No. 9 Tang Gong Zhong Lu Xigong District Luoyang Municipal Henan Province The People’s Republic of China

Non-executive Directors:

Mr. Zhang Chong (Vice Chairman)

Mr. Zhang Chengong

Independent non-executive Directors:

Mr. Huang Ping

Mr. Dong Jiachun

Mr. Liu Tianni

Mr. Jin Zhanping

15 December 2014

To the Shareholders,

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

Reference is made to the announcement dated 14 November 2014 issued by the Company in relation to the proposed discloseable and connected transctions and continuing connected transactions.

* for identification purposes only

— 1 —

LETTER FROM THE BOARD

Except for the continuing connected transactions contemplated under (1) the CLFG Raw Materials Sale Framework Agreement which are subject to reporting, annual review, and announcement requirement only under the Hong Kong Listing Rules, and (2) the CNBMG Financial Services Framework Agreement, 2014 Piped Natural Gas Supply Supplemental Agreement and 2015 Piped Natural Gas Supply Framework Agreement which are exempted from reporting, announcement and Independent Shareholders’ approval requirements under the Hong Kong Listing Rules, the connected transaction contemplated under the New Projects Agreements and the continuing connected transactions contemplated under the Non-exempt CCT Agreements and their respective New Caps are subject to reporting, annual review, announcement and Independent Shareholders’ approval requirement under the Hong Kong Listing Rules.

The purpose of this circular is to provide you with, among other things, (i) details of the New Project Agreements, the New CCT Agreements and their respective New Caps, (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders on the New Projects Agreements and the Non-exempt CCT Agreements and their respective New Caps, (iii) a letter of advice from Goldin Financial to the Independent Board Committee and the Independent Shareholders in relation to the New Project Agreements, the Non-exempt CCT Agreements and their respective New Caps, and (iv) a notice of EGM at which ordinary resolutions will be proposed for the Independent Shareholders to consider and, if thought fit, approve the New Project Agreements, the New CCT Agreements and their respective New Caps.

A. DISCLOSEABLE AND CONNECTED TRANSACTIONS

Reference is made to the announcements of the Company dated 17 April 2014 and 20 May 2014, which set out, among other things, the connected transactions of the Company.

— 2 —

LETTER FROM THE BOARD

On 14 November 2014, Longmen Glass, a wholly-owned subsidiary of the Company, entered into the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement and the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement with EPR Institute, pursuant to which EPR Institute agreed to provide project design, construction and installation services for the purpose of the Longmen Smoke Gas Treatment Project at a consideration of RMB1,900,000 and agreed to supply whole set of equipment for the purpose of the Longmen Smoke Gas Treatment Project at a consideration of RMB4,500,000 respectively.

Except for the views of the independent non-executive Directors on the New Project Agreements, which will be expressed after considering the advice from Independent Financial Adviser, the Directors are of the view that the New Project Agreements have been entered into on normal commercial terms and in the ordinary and usual course of business of the Group, the terms of the New Project Agreements are fair and reasonable and in the interests of the Shareholders and the Company as a whole.

Set out below is a summary of the principal terms of the New Project Agreements:

THE LONGHAI GLASS PRODUCTION LINE SMOKE GAS DUST REMOVAL AND DENITRATION PROJECT DESIGN AND INSTALLATION AGREEMENT

Date

14 November 2014

Parties

(1) Longhai Glass; and
(2) EPR Institute

Services to be provided

Pursuant to the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement, EPR Institute agreed to provide Longhai Glass with project design, construction and installation services for the Longhai Smoke Gas Treatment Project, including but not limited to:

project design, construction drawing design and on-site services of the smoke gas dust removal and denitration system, in particular, designs for all the construction, structures, pipelines, and water, electric and gas utilities in the smoke gas denitration system; and

— 3 —

LETTER FROM THE BOARD

all the construction of structures, installation of equipment, trial operation and so forth of the smoke gas dust removal and denitration system and passing the examination and acceptance by the environmental protection department.

Consideration

The consideration under the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement is RMB1,400,000, which shall be payable by Longhai Glass in the following manner:

30% of the consideration, i.e. RMB420,000, shall be paid upon effectiveness of the agreement;
30% of the consideration, i.e. RMB420,000, shall be paid after the main equipment including electrostatic precipitator, etc. being delivered to the site;
30% of the consideration, i.e. RMB420,000, shall be paid after completion of the installation of the equipment and upon satisfaction of trial operation and examination; and
10% of the consideration, i.e. RMB140,000, shall be paid within one month upon the expiry of one year after the normal operation of the smoke gas treatment system from the date of examination and acceptance by the environmental protection department.

Given the specific nature of the above design, construction and installation services, the consideration was determined after arm’s length negotiations between the parties with reference to (i) the similar recent transactions conducted by the Group; (ii) the similar recent transactions between EPR Institute and independent third parties; and (iii) the costs in providing the design and installation services by EPR Institute for the Longhai Glass Smoke Gas Treatment Project, having taken into account the practical situations such as scale, type and equipment condition of the relevant production lines as well as the resulted gas emission volume and the complexity and difficulty of the installation of the relevant projects.

— 4 —

LETTER FROM THE BOARD

THE LONGHAI GLASS PRODUCTION LINE SMOKE GAS DUST REMOVAL AND DENITRATION PROJECT EQUIPMENT AGREEMENT

Date

14 November 2014

Parties

(1) Longhai Glass; and
(2) EPR Institute

Services to be provided

Pursuant to the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement, EPR Institute agreed to supply Longhai Glass with the equipment for the Longhai Smoke Gas Treatment Project.

Consideration

The consideration under the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement is RMB3,800,000 (inclusive of VAT), which shall be payable by Longhai Glass in the following manner:

30% of the consideration, i.e. RMB1,140,000, shall be paid upon effectiveness of the agreement;
30% of the consideration, i.e. RMB1,140,000, shall be paid after the main equipment including electrostatic precipitator, etc. being delivered to the site;
30% of the consideration, i.e. RMB1,140,000, shall be paid after completion of the installation of the equipment and upon satisfaction of trial operation and examination; and
10% of the consideration, i.e. RMB380,000, shall be paid within one month upon the expiry of one year after the normal operation of the smoke gas treatment system from the date of examination and acceptance by the environmental protection department.

— 5 —

LETTER FROM THE BOARD

Given the specific project and equipment requirements, the consideration was determined after arm’s length negotiations between the parties with reference to (i) the similar recent transactions conducted by the Group; (ii) the similar recent transactions between EPR Institute and independent third parties; and (iii) the costs in providing the required equipment and materials by EPR Institute, having taken into account the practical situations such as scale, type and equipment condition of the relevant production lines as well as the resulted gas emission volume and the demands of relevant production lines on the types of equipment.

THE LONGMEN GLASS PRODUCTION LINE SMOKE GAS DUST REMOVAL AND DENITRATION PROJECT DESIGN AND INSTALLATION AGREEMENT

Date

14 November 2014

Parties

(1) Longmen Glass; and
(2) EPR Institute

Services to be provided

Pursuant to the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement, EPR Institute agreed to provide Longmen Glass with project design, construction and installation services for the Longmen Smoke Gas Treatment Project, including but not limited to:

project design, construction drawing design and on-site services of the smoke gas dust removal and denitration system, in particular, designs for all the construction, structures, pipelines, and water, electric and gas utilities in the smoke gas denitration system; and
all the construction of structures, installation of equipment and trial operation and so forth of the smoke gas dust removal and denitration system and passing the examination and acceptance by the environmental protection department.

— 6 —

LETTER FROM THE BOARD

Consideration

The consideration under the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement is RMB1,900,000, which shall be payable by Longmen Glass in the following manner:

30% of the consideration, i.e. RMB570,000, shall be paid upon effectiveness of the agreement;
30% of the consideration, i.e. RMB570,000, shall be paid after the main equipment including electrostatic precipitator, etc. being delivered to the site;
30% of the consideration, i.e. RMB570,000, shall be paid after completion of the installation of the equipment and upon satisfaction of trial operation and examination; and
10% of the consideration, i.e. RMB190,000, shall be paid within one month upon the expiry of one year after the normal operation of the smoke gas treatment system from the date of examination and acceptance by the environmental protection department.

Given the specific nature of the above design, construction and installation services, the consideration was determined after arm’s length negotiations between the parties with reference to (i) the similar recent transactions conducted by the Group; (ii) the similar recent transactions between EPR Institute and independent third parties; and (iii) the costs in providing the design and installation services by EPR Institute for the Longmen Glass Smoke Gas Treatment Project, having taken into account of the practical situations such as scale, type and equipment condition of the relevant production lines as well as the resulted gas emission volume and the complexity and difficulty of the installation of the relevant projects.

THE LONGMEN GLASS PRODUCTION LINE SMOKE GAS DUST REMOVAL AND DENITRATION PROJECT EQUIPMENT AGREEMENT

Date

14 November 2014

— 7 —

LETTER FROM THE BOARD

Parties

(1) Longmen Glass; and
(2) EPR Institute

Services to be provided

Pursuant to the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement, EPR Institute agreed to supply Longmen Glass with the equipment for the Longmen Smoke Gas Treatment Project.

Consideration

The consideration under the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement is RMB4,500,000 (inclusive of VAT), which shall be payable by Longmen Glass in the following manner:

30% of the consideration, i.e. RMB1,350,000, shall be paid upon effectiveness of the agreement;
30% of the consideration, i.e. RMB1,350,000, shall be paid after the main equipment including electrostatic precipitator, etc. being delivered to the site;
30% of the consideration, i.e. RMB1,350,000, shall be paid after completion of the installation of the equipment and upon satisfaction of trial operation and examination; and
10% of the consideration, i.e. RMB450,000, shall be paid within one month upon the expiry of one year after the normal operation of the smoke gas treatment system from the date of examination and acceptance by the environmental protection department.

Given the specific project and equipment requirements, the consideration was determined after arm’s length negotiations between the parties with reference to (i) the similar recent transactions conducted by the Group; (ii) the similar recent transactions between EPR Institute and independent third parties; and (iii) the cost in providing the required equipment and materials by ERP Institute having taken into account the practical situations such as scale, type and equipment condition of the relevant production lines as well as the resulted gas emission volume and the demands of relevant production lines on the types of equipment.

— 8 —

LETTER FROM THE BOARD

REASONS FOR ENTERING INTO THE NEW PROJECT AGREEMENTS

The Group is principally engaged in the production and sale of float sheet glass and ultra-thin electronic glass.

The smoke gas treatment projects herein refers to the smoke gas dust removal and denitration construction projects for the production lines of Longhai Glass and the production lines of Longmen Glass. Through entering into the New Project Agreements, the smoke gas treatment projects could be implemented for Longhai Glass and Longmen Glass, which will have positive effect on energy saving, emission reduction and environment protection, and will comply with the relevant industry policies in the PRC and the relevant environmental protection planing requirements with local government.

INFORMATION ON LONGHAI GLASS, LONGMEN GLASS AND EPR INSTITUTE

Longhai Glass, a wholly-owned subsidiary of the Company incorporated in the PRC with limited liability, is principally engaged in the production of ultra-thin glass.

Longmen Glass, a wholly-owned subsidiary of the Company incorporated in the PRC with limited liability, is principally engaged in the production of ultra-thin and ultra white glass.

EPR Institute, an indirect non wholly-owned subsidiary of CNBMG, is principally engaged in the research on environmental protection technology, construction, supply of equipment and advisory.

HONG KONG LISTING RULES IMPLICATIONS

As mentioned above, EPR Institute is an indirect non wholly-owned subsidiary of CNBMG, which indirectly owns 70.70% equity interest in CLFG, the controlling Shareholder of the Company. Therefore, EPR Institute is an associate of CNBMG and regarded as a connected person of the Company. The transactions contemplated under the New Project Agreements constitute connected transactions of the Company under the Hong Kong Listing Rules.

The transactions contemplated under the New Project Agreements should be aggregated with the transactions under the Previous Project Agreements pursuant to Rule 14A.81 of the Hong Kong Listing Rules. Since the applicable percentage ratios (after aggregation) exceed 5%, the transactions contemplated under the New Project Agreements constitute discloseable and connected transactions of the Company and will be subject to the reporting, annual review, announcement and independent shareholders’ approval requirements under the Hong Kong Listing Rules.

— 9 —

LETTER FROM THE BOARD

CONTINUING CONNECTED TRANSACTIONS

Reference is made to the announcements of the Company dated 18 October 2011 and 20 January 2014 and the circular of the Company dated 8 November 2011, which set out, among other things, the Old CCT Agreements and their respective existing cap amounts.

BACKGROUND AND REASONS FOR THE CONTINUING CONNECTED TRANSACTIONS

The Company is principally engaged in the production and sale of float sheet glass and is one of the large manufacturers and distributors of float glass in the PRC. The Group previously entered into the Old CCT Agreements with members of CLFG Group and CNBMG Group, all of which will expire on 31 December 2014. In order to secure continuous provision of goods and services to and from the Group and the need for the implementation of the Group’s development projects in the coming years, the Group entered into the New CCT Agreements on 14 November 2014 so as to (i) renew the Old CCT Agreements with CLFG, CNBMG, Fangxing Science & Technology and Yuantong Energy for the purchase of raw materials, technical services, equipment and natural gas for the Group as well as for provision of ultra-thin float glass to Fangxing Science & Technical and its subsidiaries; and (ii) enter into new continuing connected transactions with CNBMG for the supply of equipment for the float glass production to the Company under the CNBMG Engineering Equipment and Materials Supply Framework Agreement.

B. CONTINUING CONNECTED TRANSACTIONS SUBJECT TO REPORTING AND ANNOUNCEMENT REQUIREMENTS ONLY

Set out below is a summary of the principal terms of the CLFG Raw Materials Sale Framework Agreement which is subject to reporting and announcement requirements only under the Hong Kong Listing Rules:

THE CLFG RAW MATERIALS SALE FRAMEWORK AGREEMENT

Date: 14 November 2014

Parties: (1) CLFG; and

(2) The Company

Term: 1 January 2015 to 31 December 2017

— 10 —

LETTER FROM THE BOARD

Brief summary of the CLFG Raw Material Sale Framework Agreement:

Pursuant to the CLFG Raw Materials Sale Framework Agreement, CLFG Group agreed to supply raw materials such as silicon powder to the Group at a price to be determined with reference to the prevailing market price at the time of particular transaction. The Group will seek to obtain market price information through various channels, which include (1) reference made to comparable transactions (if any) by independent third parties during the same period; (2) through communication and exchange of price information of relevant materials by various means, including but not limited to telephone conversations, emails and meetings with peers and business partners within the glass production industry. The main factors with which the relevant market prices are determined are the then demand and supply of raw materials including silicon powder in the area around Luoyang, distance between the location of buyers and sellers, as well as the quality of the raw materials including silicon powder. After collecting the market information, the terms including the pricing and payment terms will be used as benchmark for the transactions with CLFG Group. The final terms will then be assessed and approved by the finance department and relevant operations departments with reference to the aforesaid information. The prices offered to the Group by CLFG Group will not be less favourable than those offered to other independent third party(ies) on similar raw materials. In principle, the Group is required to pay for the goods delivered during the month in the following month.

The CLFG Raw Materials Sale Framework Agreement shall take effect upon obtaining approval by Independent Shareholders at the EGM as required by the Shanghai Listing Rules and shall have a term of 3 years from 1 January 2015 up to 31 December 2017.

The table below summarises the existing cap amounts for the three years ending 31 December 2014 for the existing agreement entered into between CLFG and the Company on 18 October 2011:

	Year ended 31	Year ended 31	Year ending 31
	December 2012	December 2013	December 2014
	RMB’000	RMB’000	RMB’000
Existing cap amounts	21,714	25,143	25,512

— 11 —

LETTER FROM THE BOARD

The table below summarises the actual transaction amounts recorded for the two years ended 31 December 2013 and the nine months ended 30 September 2014:

For the For the year ended For the year ended nine months ended 31 December 2012 31 December 2013 30 September 2014 RMB’000 RMB’000 RMB’000 Actual transaction amounts 1,665 1,910 1,502

The Company determined that the proposed New Caps under the CLFG Raw Materials Sale Framework Agreement for the three years ending 31 December 2017 are RMB9,500,000 (inclusive of VAT), RMB9,500,000 (inclusive of VAT) and RMB9,500,000 (inclusive of VAT) respectively. The proposed New Caps were determined based on the estimated demand of the silicon powder after taking into account of (i) the selling prices and consumed amounts of the raw materials in the previous three years; and (ii) the reduction of supply of silicon powder due to the termination of production of a mining subsidiary of the CLFG Group. As compared with the actual transaction amounts for the nine months ended 30 September 2014, the proposed New Caps are higher because of the inclusion of VAT and transportation expenses in the transaction amounts in order to facilitate settlement of the relevant expenses and taxes. Since transportation expenses were high comparing to the cost of raw materials including silicon powder, the historical transaction amounts would have increased significantly if it included the transportation expenses.

HONG KONG LISTING RULES IMPLICATIONS

As the applicable percentage ratios for the CLFG Raw Materials Sale Framework Agreement exceed 0.1% but less than 5%, the transaction contemplated under the CLFG Raw Materials Sale Framework Agreement will be subject to the reporting, annual review and announcement requirements only but exempt from the independent shareholders’ approval requirement under Chapter 14A of the Hong Kong Listing Rules.

Pursuant to the Shanghai Listing Rules, the transactions to be carried out under the CLFG Raw Materials Sale Framework Agreement (including the related proposed annual caps) are required to be approved by the Independent Shareholders.

The Directors are of the view that the CLFG Raw Materials Sale Framework Agreement has been entered into on normal commercial terms and in the ordinary and usual course of business of the Group, the terms of CLFG Raw Materials Sale Framework Agreement and its New Caps are fair and reasonable and in the interests of the Shareholders and the Company as a whole.

— 12 —

LETTER FROM THE BOARD

C. NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Set out below is a summary of the principal terms of each of the Non-exempt CCT Agreements, which are subject to reporting, announcement and independent shareholders’ approval requirements under the Hong Kong Listing Rules:

1. THE ULTRA-THIN FLOAT GLASS SALE AND PURCHASE FRAMEWORK AGREEMENT

Date: 14 November 2014

Parties: (1) Fangxing Science & Technology; and

(2) The Company

Term: 1 January 2015 to 31 December 2017

Brief summary of the Ultra-thin Float Glass Sale and Purchase Framework Agreement:

Pursuant to the Ultra-thin Float Glass Sale and Purchase Framework Agreement, the Group agreed to provide ultra-thin float glass to Fangxing Science & Technology and its subsidiaries at prices to be determined with reference to the prevailing market price at the time of particular transaction. The Group will seek to obtain market price information through various channels, which include (1) reference made to comparable transactions (if any) by independent third parties during the same period; (2) through communication and exchange of price information by various means, including but not limited to telephone conversations, emails and meetings with peers and business partners within the glass production industry; and (3) demand information and pricing information on the internet and other media (such as demand information from the National Bureau of Statistics of China (www.stats.gov.cn), and pricing information from 中國玻璃信息網 (China Glass Information Network*) (www.boli.cn), etc)). The relevant market prices are determined based on the delivery location of the buyers, as well as the type, specification and grade of the glass products. After collecting the market information, the terms including the pricing and payment terms will be used as benchmark for the transactions with Fangzing Science & Technology. The final terms will then be assessed and approved by the finance department and relevant operations departments with reference to the aforesaid information. The prices offered by the Group to Fangxing Science & Technology and its subsidiaries will not be favourable than those offered to other independent third party(ies) on the same or similar products. In principle, the payment shall be made before delivery of ultra-thin float glass to Fangxing Science & Technology and its subsidiaries or in other methods to be agreed by both parties to the Ultra-thin Float Glass Sale and Purchase Framework Agreement.

— 13 —

LETTER FROM THE BOARD

The Ultra-thin Float Glass Sale and Purchase Framework Agreement shall take effect upon obtaining approval by Independent Shareholders at the EGM as required by the Hong Kong Listing Rules and shall have a term of 3 years from 1 January 2015 up to 31 December 2017.

The table below summarises the existing cap amounts for the three years ending 31 December 2014 for the Product Sale Agreement dated 20 January 2014 between Fangxing Science & Technology and the Company and the Huayi Glass Product Sale Framework Agreement dated 18 October 2011 between Huayi Glass and the Company:

	Year ended	Year ended	Year ending
	31 December	31 December	31 December
	2012	2013	2014
	RMB’000	RMB’000	RMB’000
Existing cap amounts	181,511	199,180	237,291
	(Note 1)	(Note 1)	(Note 2)

Notes:

(1) Based on the cap amounts as set out in the Huayi Glass Product Sale Framework Agreement dated 18 October 2011 entered into between the Company as supplier and Huayi Glass as purchaser.
(2) Based on the aggregate cap amounts as set out in the Huayi Glass Product Sale Framework Agreement dated 18 October 2011 entered into between the Company as supplier and Huayi Glass as purchaser and the Product Sale Agreement dated 20 January 2014 entered into between the Company as supplier and Fangxing Science & Technology as purchaser.

The table below summarises the actual transaction amounts recorded for the two years ended 31 December 2013 and the nine months ended 30 September 2014:

			For the
	For the	For the	nine months
	year ended	year ended	ended
	31 December	31 December	30 September
	2012	2013	2014
	RMB’000	RMB’000	RMB’000
Actual transaction amounts	88,559	45,776	27,329
	(Note 1)	(Note 1)	(Note 2)

— 14 —

LETTER FROM THE BOARD

Notes:

(1) Based on the actual transaction amounts between Huayi Glass and the Company.
(2) Based on the aggregate actual transaction amounts between Huayi Glass and the Company and between Fangxing Science & Technology and the Company.

The Company determined that the proposed New Caps under the Ultra-thin Float Glass Sale and Purchase Framework Agreement for the three years ending 31 December 2017 are RMB214,000,000 (inclusive of VAT), RMB224,000,000 (inclusive of VAT) and RMB234,000,000 (inclusive of VAT) respectively. The proposed New Caps are higher than the actual transaction amount for the nine months ended 30 September 2014 because the proposed New Caps were determined based on the management’s internal projection with reference to the information provided by Fangxing Science & Technology on the estimated amount of ultra-thin float flat glass to be sold to Fangxing Science & Technology and its subsidiaries by the Group after taking into account (i) the anticipated increase in demand of Fangxing Science & Technology and its subsidiaries on the ultrathin float glass; (ii) the increase in production capacity of ultra-thin float glass of the Group in the future and (iii) the anticipated change in the selling price of the ultrathin float glass in the PRC with reference to the prevailing market price. The actual transaction amounts for the nine months ended 30 September 2014 was lower than the existing cap amounts because the glass melting furnace of one of the existing production lines entered into later service period and affected the quality of its ultra-thin float glass products, resulting in that part of the products could not satisfy the needs and requirement of Fangxing Science & Technology and its subsidiaries, therefore, the supply of the Company to Fangxing Scrience & Technology was lowered.

2. THE CNBMG ENGINEERING EQUIPMENT AND MATERIALS SUPPLY FRAMEWORK AGREEMENT

Date: 14 November 2014

Parties: (1) CNBMG; and

(2) The Company

Term: 1 January 2015 to 31 December 2017

— 15 —

LETTER FROM THE BOARD

Brief summary of the CNBMG Engineering Equipment and Materials Supply Framework Agreement:

Pursuant to the CNBMG Engineering Equipment and Materials Supply Framework Agreement, CNBMG Group agreed to supply equipment required for engineering projects to the Group at a price to be determined with reference to the prevailing market price at the time of particular transaction. The Group will seek to obtain market price information through various channels, which include (1) reference made to comparable transactions (if any) by independent third parties during the same period; and (2) through communication and exchange of price information by various means, including but not limited to telephone conversations, emails and meetings with peers and business partners within the glass production industry. After collecting the market information, the terms including the pricing and payment terms will be used as benchmark for the transactions with CNBMG Group. The final terms will then be assessed and approved by the finance department and relevant operations departments with reference to the aforesaid information.

Where there are no available prevailing market price or where it is impracticable to obtain such market prices, the Group and CNBMG Group will mutually agree on a price determined with reference to (i) the previous similar transactions conducted by the Group and/or (ii) the similar transactions between CNBMG Group and the independent third parties and/or (iii) the costs in providing the required equipment and materials by CNBMG Group, having taken into account the scale and type of relevant projects and the specific demands of relevant projects on certain types of equipment and materials. The prices offered by CNBMG Group to the Group will not be less favourable than those offered to other independent third party(ies) on the same or similar equipment. In principle, the payment shall be made before delivery of the equipment to the Company or in other methods to be agreed by both parties to the CNBMG Engineering Equipment and Materials Supply Framework Agreement.

The CNBMG Engineering Equipment and Materials Supply Framework Agreement shall take effect upon obtaining approval by Independent Shareholders at the EGM as required by the Hong Kong Listing Rules and have a term of 3 years from 1 January 2015 up to 31 December 2017.

— 16 —

LETTER FROM THE BOARD

The table below summarises the actual transaction amounts recorded for the two years ended 31 December 2013 and the nine months ended 30 September 2014:

	For the	For the	For the nine
	year ended	year ended	months ended
	31 December	31 December	30 September
	2012	2013	2014
	RMB’000	RMB’000	RMB’000
Actual transaction amounts	0	0	22,170
			(Note 1)

Notes:

(1) Based on the actual transaction amounts under the 1st Shenzhen Kaisheng Equipment Supply Agreement and the 2nd Shenzhen Kaisheng Equipment Supply Agreement.

The Company determined that the proposed New Caps under the CNBMG Engineering Equipment and Materials Supply Framework Agreement for the three years ending 31 December 2017 are RMB50,000,000, RMB300,000,000 and RMB300,000,000 respectively. The proposed New Caps were determined based on the estimated value of the equipment required for future engineering projects by the Company after taking into account (i) the implementation of the upgrade and transformation project of the Group and (ii) technologies involved and the complexity in the engineering projects.

As compared with the actual transaction amounts for the nine months ended 30 September 2014, the proposed New Caps for the two years ended 31 December 2017 (i.e. RMB300,000,000) are substantially higher, which is mainly because the Company plans to conduct cold repair and transformation of the production lines of Longhai Glass during the period between 2016 and 2017. In considering when a production line needs to conduct cold repair and transformation, the Group needs to consider the age of the glass melting furnace of the production line and assesses comprehensively the actual operating condition of the production line. If the maintenance of the production line is good and the actual operating condition is satisfactory, the production line may not require cold repair immediately even its usual service period has passed. As a result, the cold repair may take place during the period between 2016 and 2017. For the sake of prudence, each of the proposed New Caps for the two years ended 31 December 2017 reflects the expected cost of equipments required for the cold repair due to the uncertainty on the timetable of the execution of the cold repair.

— 17 —

LETTER FROM THE BOARD

3. THE CNBMG ENGINEERING TECHNICAL SERVICES FRAMEWORK AGREEMENT

Date: 14 November 2014

Parties: (1) CNBMG; and (2) The Company Term: 1 January 2015 to 31 December 2017

Brief summary of the CNBMG Engineering Technical Services Framework Agreement:

Pursuant to the CNBMG Engineering Technical Services Framework Agreement, CNBMG Group (excluding CLFG Group) agreed to provide technical services to the Group including but not limited to project feasibility study reports, project feasibility plans, design, organization and implementation of the project plans, engineering technical consulting, the installation of equipment required by the project, engineering construction and assisting the organization in resuming production in response to accidental operational incidents, etc.

The price for the services to be rendered will be determined with reference to:

a. the applicable state price; or
b. if there is no applicable state price for any such services, the market price shall be used which will be reference to the comparable transactions for providing the same or similar services to independent third parties in Luoyang City or areas near Luoyang City. After collecting the market information, the terms including the pricing and payment terms will be used as benchmark for the transactions with CNBMG Group. The final terms will then be assessed and approved by the finance department and relevant operations departments with reference to the aforesaid information.

Where there are no available prevailing market price or where it is impracticable to obtain such market price, the price will be determined after arm’s length negotiations between the parties with reference to (i) the previous similar transactions conducted by the Group and/or (ii) the similar transactions between CNBMG Group and the independent third parties and/or (iii) the costs in providing the design and implementation services for the relevant projects by CNBMG Group, having taken into account the practical situations such as scale, type and equipment condition of the relevant production lines and the complexity and difficulty of the installation of the relevant projects. The prices offered to the Group will not be less favourable than those offered to other independent third party(ies) for the same or similar services.

— 18 —

LETTER FROM THE BOARD

At the time when the CNBMG Engineering Technical Services Framework Agreement was entered into, there was no relevant PRC government document in relation to the state price for CNBMG Group and the Group to follow. Accordingly, CNBMG Group and the Group will adopt the “market price” as the pricing standard. In the unforeseeable event that if the PRC government decides to set prices of certain services rendered by CNBMG Group, CNBMG Group and the Group will comply with the relevant government regulations and price the services rendered accordingly.

The Group shall pay the price of the services rendered by CNBMG Group during the year within one month upon the receipt of the payment notice in the first month of the following year from CNBMG Group.

The CNBMG Engineering Technical Services Framework Agreement shall take effect upon obtaining approval by Independent Shareholders at the EGM as required by the Hong Kong Listing Rules with a term of 3 years from 1 January 2015 up to 31 December 2017.

The table below summarises the existing cap amounts for the three years ending 31 December 2014 for the agreements entered into between the Company and each of CNBMG and CLFG on 18 October 2011:

	Year ended	Year ended	Year ending
	31 December	31 December	31 December
	2012	2013	2014
	RMB’000	RMB’000	RMB’000
Existing cap amounts	15,300	18,300	18,300

The table below summarises the actual transaction amounts recorded for the two years ended 31 December 2013 and the nine months ended 30 September 2014:

	For the	For the	For the nine
	year ended	year ended	months ended
	31 December	31 December	30 September
	2012	2013	2014
	RMB’000	RMB’000	RMB’000
Actual transaction amounts	395	0	7,730
			(Note 1)

— 19 —

LETTER FROM THE BOARD

Notes:

(1) Based on the actual transaction amounts under the 1st Shenzhen Kaisheng Project Design and Construction Agreement and the 2nd Shenzhen Kaisheng Project Design and Construction Agreement.

The Company determined that the proposed New Caps under the CNBMG Engineering Technical Services Framework Agreement for the three years ending 31 December 2017 are RMB15,000,000, RMB20,000,000 and RMB20,000,000 respectively. The proposed New Caps were determined based on the engineering technical services demand by the expected future engineering projects of the Company after taking into account (i) the implementation of the new development project of the Group; (ii) technologies involved and the complexity and challenge of the technical work; and (iii) the expected price with reference to the prevailing market price for provision of such services. As compared with the actual transaction amounts for the nine months ended 30 September 2014, the proposed New Caps are higher due to (i) the plan to increase production lines as a result of potential new development projects of the Company in the future; (ii) the cold repair and transformation of the production lines of Longhai Glass to be conducted by the Company during the period between 2016 and 2017. As discussed under the section for “CNBMG Engineering Equipment and Materials Supply Framework” above, in deciding when a production line needs to conduct cold repair and transformation, the Group needs to consider the age of the glass melting furnace of the production line and assesses comprehensively the actual operating condition of the production line. If the maintenance of the production line is good and the actual operating condition is satisfactory, the production line may not require cold repair immediately even its usual service period has passed. As a result, the cold repair may take place during the period between 2016 and 2017. For the sake of prudence, each of the proposed New Caps of the two years ended 31 December 2017 reflects the expected cost of technical services for the cold repair due to the uncertainty over the timetable of the execution of the cold repair.

INFORMATION AND RELATIONSHIP OF THE PARTIES TO THE CONTINUING CONNECTED TRANSACTION AGREEMENTS

The Group is principally engaged in the production and sale of float sheet glass and ultra-thin electronic glass.

CLFG, the immediate controlling Shareholder of the Company which holds 31.80% of the equity interest in the Company, is principally engaged in the production and sales of float glass, imports and exports of processing technology of glass and internal business, design and subcontracting of engineering works, labour export and other businesses.

— 20 —

LETTER FROM THE BOARD

CNBMG is the ultimate controlling shareholder of CLFG and the Company. The principal operations of CNBMG include research and development, wholesale and retail of building materials (including steel products and timber, but only limited to procurement and supply directly to the enterprises under its system), auxiliary raw materials and production equipment, supply of small cars under the plan of its system; contraction of design and construction of new-model building material houses, factories and ornament and decoration engineering.

Fangxing Science & Technology is indirectly owned as to 34.60% by CNBMG and is principally engaged in the research and development, production and sale of Indium-Tin Oxide (ITO) electropane, online bi-layer coated glass, vacuum coated glass, processed glass products and new materials, etc.

HONG KONG LISTING RULES IMPLICATIONS

As mentioned above, CLFG is the immediate controlling Shareholder of the Company and CNBMG is the ultimate controlling shareholder of CLFG and the Company. Thus, CLFG, CNBMG and their associates are regarded as connected persons of the Company.

Fangxing Science & Technology is indirectly owned as to 34.60% by CNBMG, which indirectly owns 70.70% equity interest in CLFG, the controlling shareholder of the Company. Pursuant to the Hong Kong Listing Rules, Fangxing Science & Technology is an associate of CNBMG and CLFG and accordingly, is regarded as a connected person of the Company. The transactions contemplated under the Ultra-thin Float Glass Sale and Purchase Framework Agreement constitute continuing connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules.

As the applicable percentage ratios for each of the Non-exempt CCT Agreements exceed 5%, each of the Non-exempt Continuing Connected Transactions will be subject to the reporting, annual review, announcement and independent shareholders’ approval requirements under Chapter 14A of the Hong Kong Listing Rules.

— 21 —

LETTER FROM THE BOARD

D. C O N N E C T E D T R A N S A C T I O N E X E M P T E D F R O M R E P O R T I N G , ANNOUNCEMENT AND INDEPENDENT SHAREHOLDERS’ APPROVAL REQUIREMENTS UNDER THE HONG KONG LISTING RULES

Set out below is a summary of the principal terms of the CNBMG Financial Services Framework Agreement, 2014 Piped Natural Gas Supply Supplemental Agreement and 2015 Piped Natural Gas Supply Framework Agreement, which are exempted from reporting, announcement and independent shareholders’ approval requirements under the Hong Kong Listing Rules.

1. THE CNBMG FINANCIAL SERVICES FRAMEWORK AGREEMENT

Date: 14 November 2014

Parties: (1) CNBMG; and

(2) The Company

Term: 1 January 2015 to 31 December 2017

Brief summary of the CNBMG Financial Services Framework Agreement:

Pursuant to the CNBMG Financial Services Framework Agreement, CNBMG Group agreed to provide the following financial services to the Group including but not limited to:

(1) entrusted loan(s) via financial institution(s) (to be designated by the parties and being independent third party to the Group);
(2) financial guarantee(s) in respect of bank loans of the Group; and
(3) making payments on behalf of the Group for goods supplied by the suppliers to the Group.

— 22 —

LETTER FROM THE BOARD

The financial services fee or loan interest rate will be determined with reference to:

a. the prevailing market fee or rate for providing the same or similar services; or
b. the loan interest rate will be determined with reference to the relevant loan basic interest rates set by PBOC and the permitted range of floating interest rates for financial institutions set by PBOC at the time of providing the loan.

The applicable fee or rate offered to the Group by CNBMG Group shall not be less favourable than that offered to other independent third party(ies) on the same or similar services. In principle, the financial services fee shall be settled at the time of provision of such financial services.

The CNBMG Financial Services Framework Agreement shall take effect upon obtaining the Independent Shareholders’ approval at the EGM as required by the Shanghai Listing Rules and shall have a term of 3 years from 1 January 2015 up to 31 December 2017.

The table below summarises the existing cap amounts for the three years ending 31 December 2014 for the CNBMG Financial Services Framework Agreement:

	Year ended	Year ended	Year ending
	31 December	31 December	31 December
	2012	2013	2014
	RMB’000	RMB’000	RMB’000
Existing cap amounts	20,000	20,000	20,000

The table below summarises the actual transaction amounts recorded for the two years ended 31 December 2013 and the nine months ended 30 September 2014:

	For the	For the	For the nine
	year ended	year ended	months ended
	31 December	31 December	30 September
	2012	2013	2014
	RMB’000	RMB’000	RMB’000
Actual transaction amounts	0	755	196.5

— 23 —

LETTER FROM THE BOARD

The above existing cap amounts and actual transaction amounts refer to the amount of financial services fee or loan interest paid to CNBMG and its subsidiaries.

The Company estimates the proposed New Caps under the CNBMG Financial Services Framework Agreement for the three years ending 31 December 2017 are RMB1,100,000,000, RMB1,100,000,000 and RMB1,100,000,000 respectively, measured by the principal amount of the entrusted loan, financial guarantee and payments paid on behalf of the Group (the “ Principal Amounts ”).

The Principal Amounts actually recorded for the nine months ended 30 September 2014 was RMB636,680,800, accounted for approximately 57.88% of the proposed annual New Caps. As compared with the actual Principal Amounts recorded for the nine months ended 30 September 2014, the proposed New Caps are higher mainly due to the increased demand of the Company on financial support for the planned cool repair of its production lines and the new development of the Company in the future.

The proposed New Caps are determined based on the expected value of the entrusted loan, financial guarantee and payments paid on behalf of the Company after taking into account of (i) the business development of the Company; (ii) the financial status of the Group; and (iii) the prevailing market fee or rate of such financial services.

HONG KONG LISTING RULES IMPLICATIONS

The transaction contemplated under the CNBMG Financial Services Framework Agreement constitutes financial assistance provided for the benefit of the Company on normal commercial terms and is therefore exempted from reporting, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.90 of the Hong Kong Listing Rules.

However, pursuant to the Shanghai Listing Rules, the transactions to be carried out under the CNBMG Financial Services Framework Agreement (including the related proposed annual caps) are required to be approved by the Independent Shareholders.

The Directors are of the view that the CNBMG Financial Services Framework Agreement has been entered into on normal commercial terms and in the ordinary and usual course of business of the Group, the terms of the CNBMG Financial Services Framework Agreement and its New Caps are fair and reasonable and in the interests of the Shareholders and the Company as a whole.

— 24 —

LETTER FROM THE BOARD

2. THE 2014 PIPED NATURAL GAS SUPPLY SUPPLEMENTAL AGREEMENT AND THE 2015 PIPED NATURAL GAS SUPPLY FRAMEWORK AGREEMENT

Date: 14 November 2014

Parties: (1) Yuantong Energy; and

(2) Longhao Glass

Implementation of previous connected transactions:

On 14 November 2013, Longhao Glass entered into the 2014 Piped Natural Gas Supply Framework Agreement with Yuantong Energy, pursuant to which the maximum transaction amount of RMB89,000,000 for the year ending 31 December 2014 has been set. Details of the 2014 Piped Natural Gas Supply Framework Agreement were set out in an announcement in relation to the connected transaction of the Company, which was published on the China Securities Journal ( 中國證券報 ), the Shanghai Securities News ( 上海證券報 ), the Securities Daily ( 證券日報 ) and the website of the Shanghai Stock Exchange (http://www.sse.com.cn) on 14 November 2013. The actual transaction amount was approximately RMB81,454,800 as of 30 September 2014.

Revision to the maximum transaction amount for the connected transactions in ordinary course of business for 2014 and the new maximum transaction amount for the connected transactions in ordinary course of business for 2015

In view of the demand from Longhao Glass for its production operation, Longhao Glass entered into the 2014 Piped Natural Gas Supply Supplemental Agreement with Yuantong Energy on 14 November 2014, pursuant to which the maximum transaction amount of natural gas supply will be revised to RMB124,000,000 for the year ending 31 December 2014. The maximum transaction amount will be increased by RMB35,000,000 and the revision requires approval by the Shareholders at the EGM.

— 25 —

LETTER FROM THE BOARD

Reason for the revision to the maximum transaction amount

In 2014, Longhao Glass has begun to lease a 600t/d production line, resulting in a substantial increase of use of natural gas amount over its initial estimated amount at the time of contract, as a result the maximum transaction amount for the natural gas supply has to be increased.

In view of the demand from Longhao Glass for its transactions and its production operation in 2014, Longhao Glass entered into the 2015 Piped Natural Gas Supply Framework Agreement with Yuantong Energy on 14 November 2014, pursuant to which the maximum transaction amount of natural gas supply shall be RMB212,000,000 (inclusive of VAT) for the year from 1 January 2015 up to 31 December 2015. The maximum transaction amount requires approval by the Shareholders at the EGM.

HONG KONG LISTING RULES IMPLICATIONS

As Yuantong Engery is not deemed as a connected person of the Company under the Hong Kong Listing Rules, the transaction contemplated under the 2014 Piped Natural Gas Supply Supplemental Agreement and 2015 Piped Natural Gas Supply Framework Agreement do not constitute connected transactions under the Hong Kong Listing Rules and are therefore exempted from reporting, announcement and independent shareholders’ approval requirements.

However, pursuant to the Shanghai Listing Rules, the 2014 Piped Natural Gas Supply Supplemental Agreement and the 2015 Piped Natural Gas Supply Framework Agreement are subject to the Independent Shareholders’ approval at the EGM.

The Directors are of the view that the 2014 Piped Natural Gas Supply Supplemental Agreement and 2015 Piped Natural Gas Supply Framework Agreement have been entered into on normal commercial terms and in the ordinary and usual course of business of the Group, the terms of the 2014 Piped Natural Gas Supply Supplemental Agreement and the 2015 Piped Natural Gas Supply Framework Agreement and their respective New Caps are fair and reasonable and in the interests of the Shareholders and the Company as a whole.

— 26 —

LETTER FROM THE BOARD

INFORMATION AND RELATIONSHIP OF THE PARTIES TO THE CNBMG FINANCIAL SERVICES FRAMEWORK AGREEMENT, THE 2014 PIPED NATURAL GAS SUPPLY SUPPLEMENTAL AGREEMENT AND THE 2015 PIPED NATURAL GAS SUPPLY FRAMEWORK AGREEMENT

As mentioned above, CNBMG is the ultimate controlling shareholder of CLFG and the Company. Thus, CNBMG and their associates are regarded as connected persons of the Company.

Yuantong Engery, owned as to 10% by CLFG, is principally engaged in the supply and sale of piped natural gas. Mr. Guo Yimin, a former Director who resigned as a Director on 10 September 2014 is currently a director and the vice chairman of Yuantong Engery.

EGM

The EGM will be held at 9:00am on 31 December 2014 (Wednesday) at the conference room of the Company on 3rd Floor, No.9 Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the PRC for the purposes of, among other things, seeking Independent Shareholders’ approval for each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective proposed New Caps. CLFG and its associates, which have interests in the transactions contemplated under the New Project Agreements and Non-exempt Continuing Connected Transactions, will abstain from voting in the resolutions in respect of each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps at the EGM. At the EGM, votes will be taken by poll.

Mr. Ma Liyun and Mr. Xie Jun, both the executive Directors, Mr. Zhang Chong and Mr. Zhang Chengong, both the non-executive Directors, have abstained from voting to approve the New Project Agreements and New CCT Agreements (except for the 2014 Piped Natural Gas Supply Supplemental Agreement and 2015 Piped Natural Gas Supply Framework Agreement) and their respective New Caps in the Board meeting due to the fact that they are senior management of CLFG or its controlling shareholder and are therefore not regarded as independent to make any recommendation to the Board.

— 27 —

LETTER FROM THE BOARD

A notice of the EGM dated 14 November 2014, which have been despatched together with the form of proxy to the Shareholders, are set out on page 63 to 66 of this circular. Whether or not you are able to attend the EGM in person, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, Hopewell Centre, 183 Queen’s Road East, Hong Kong, or to the Company’s registered address at No.9 Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the PRC as soon as possible and in any event not less than 24 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meetings should you so wish.

An announcement will be made by the Company following conclusion of the EGM to inform the Shareholders of the results of the EGM.

RECOMMENDATION

The Directors are of the view that the New Project Agreements and the New CCT Agreements have been entered into on normal commercial terms and in the ordinary and usual course of business of the Group, the terms of each of the New Project Agreements, each of the New CCT Agreements and their respective New Caps are fair and reasonable and in the interests of the Shareholders and the Company as a whole. Accordingly, the Board recommends the Independent Shareholders to vote in favour of the resolutions with respect to each of the New Project Agreements, each of the New CCT Agreements and their respective New Caps to be proposed at the EGM.

The Independent Board Committee, having taken into account of the advice of Goldin Financial, is of the opinion that the entering into of the New Project Agreements and the Non-exempt CCT Agreements are in the ordinary and usual course of business of the Group and on normal commercial terms, and the New Project Agreements, the Non-exempt CCT Agreements and their respective New Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Therefore, the Independent Board Committee recommends the Independent Shareholders to vote in favour of the resolutions as set out in the notice of EGM to approve the New Project Agreements, the Non-exempt CCT Agreements and their respective New Caps.

— 28 —

LETTER FROM THE BOARD

Your attention is drawn to the letter from the Independent Board Committee as set out on page 30 to 31 of this circular which contains its recommendation to the Independent Shareholders in relation to the New Project Agreements, the Non-exempt CCT Agreements and their respective New Caps. Your attention is also drawn to the letter of advice from Goldin Financial as set out on page 32 to 58 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in relation to the New Project Agreements, the Non-exempt CCT Agreements and their respective New Caps. You are advised to read the said letters from the Independent Board Committee and Goldin Financial before deciding how to vote at the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information as set out in the appendix to this circular and the notice of EGM.

By order of the Board of LUOYANG GLASS COMPANY LIMITED* Ma Liyun Chairman

Luoyang, the PRC

for identification purposes only

— 29 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee setting out its recommendation to the independent Shareholders in relation to the Continuing Connected Transaction:

==> picture [280 x 136] intentionally omitted <==

==> picture [9 x 5] intentionally omitted <==

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

＊
----- End of picture text -----

15 December 2014

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

We refer to the circular dated 15 December 2014 issued by Louyang Glass Company Limited (the “ Circular ”), of which this letter forms part. Terms defined in the Circular shall have the same meanings herein unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to consider the terms of each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps and to advise the Independent Shareholders as to whether, in our opinion, the entering into of each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps are fair and reasonable so far as the Independent Shareholders are concerned. Goldin Financial has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps.

* for identification purposes only

— 30 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

We wish to draw your attention to the (i) “Letter from the Board”; (ii) “Letter from Goldin Financial” to the Independent Board Committee and the Independent Shareholders which contains its advice in respect of the terms of each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps; and (iii) additional information as set out in the appendix of the Circular.

Having considered the terms of each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps, and having taken into account of the opinion of Goldin Financial and, in particular, the factors, reasons and recommendations as set out in the “Letter from Goldin Financial” on page 32 to 58 of the Circular, we consider that the entering into of each of the New Project Agreements and each of the Non-exempt CCT Agreements is in the ordinary and usual course of business of the Group and on normal commercial terms, and each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps are fair and reasonable so far as the Company and the Independent Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions which will be proposed at the EGM to approve each of the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps.

Yours faithfully,

For and on behalf of

Independent Board Committee

Mr. Huang Ping Mr. Dong Jiachun Mr. Liu Tianni Mr. Jin Zhanping Independent non-executive Directors

— 31 —

LETTER FROM GOLDIN FINANCIAL

The following is the full text of the letter from Goldin Financial setting out the advice to the Independent Board Committee and the Independent Shareholders in respect of the New Project Agreements and Non-exempt CCT Agreements, which has been prepared for the purpose of inclusion in this circular.

==> picture [211 x 48] intentionally omitted <==

Goldin Financial Limited

23/F Two International Finance Centre 8 Finance Street Central Hong Kong 15 December 2014

To the Independent Board Committee and the Independent Shareholders of Luoyang Glass Company Limited

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the New Project Agreements entered into between each of Longhai Glass and Longmen Glass, both being wholly-owned subsidiaries of the Company, and ERP Institute, respectively; and the Non-exempt CCT Agreements entered into between the Company with each of Fangxing Science &Technology and CNBMG respectively, details of which are contained in the Announcement and in the letter from the board (“ Letter from the Board ”) of the circular of the Company dated 15 December 2014 (the “ Circular ”) to the Shareholders. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

— 32 —

LETTER FROM GOLDIN FINANCIAL

On 14 November 2014, Longhai Glass, a wholly-owned subsidiary of the Company, entered into the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement and the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement with EPR Institute, pursuant to which EPR Institute agreed to provide project design, construction and installation services for the purpose of the Longhai Smoke Gas Treatment Project at a consideration of RMB1,400,000, and agreed to supply whole set of equipment for the purpose of the Longhai Smoke Gas Treatment Project at a consideration of RMB3,800,000. On the same date, Longmen Glass, another wholly-owned subsidiary of the Company, entered into the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement with EPR Institute, pursuant to which EPR Institute agreed to provide project design, construction and installation services for the purpose of the Longmen Smoke Gas Treatment Project at a consideration of RMB1,900,000 and agreed to supply whole set of equipment for the purpose of the Longmen Smoke Gas Treatment Project at a consideration of RMB4,500,000.

EPR Institute is an indirect non-wholly owned subsidiary of CNBMG, which directly owns 70.70% equity interest in CLFG, the controlling shareholder of the Company. Therefore, EPR Institute is an associate of CNBMG and hence regarded as a connected person of the Company. The transactions contemplated under the New Project Agreements constitute connected transactions of the Company under the Hong Kong Listing Rules.

Pursuant to Rule 14A.81 of the Hong Kong Listing Rules, the transactions contemplated under the New Project Agreements should be aggregated with the transactions under the Previous Project Agreements. Since the post-aggregation applicable percentage ratios exceed 5%, the transactions contemplated under the New Project Agreements constitute the discloseable and connected transactions of the Company, and will be subject to the reporting, annual review, announcement and independent shareholders’ approval requirements under the Hong Kong Listing Rules.

On the other hand, on 14 November 2014, the Group entered into the New CCT Agreements for the purposes of (i) renewing the Old CCT Agreements (all of which will expire on 31 December 2014) so as to ensure continuous provisions of goods and services to and from the Group; and (ii) coping with the operation needs and business development of the Group in light of its expected increase in production capacity of ultra-thin glass production line in the coming years, and the improvement of product quality and stability.

— 33 —

LETTER FROM GOLDIN FINANCIAL

Among the New CCT Agreements, the Ultra-Thin Float Glass Sale and Purchase Framework Agreement was entered between the Company and Fangxing Science & Technology, pursuant to which the Company agreed to supply ultra-thin float glass to Fangxing Science & Technology and its subsidiaries. Furthermore, the Company and CNBMG entered into the CNBMG Engineering Equipment and Materials Supply Framework Agreement, pursuant to which the CNBMG Group will supply equipment for float glass production to the Group. In addition, the Company entered into the CNBMG Engineering Technical Services Framework Agreement, pursuant to which the CNBMG Group will provide various technical services for the new development plans of the Group.

As Fangxing Science & Technology is indirectly owned as to 34.60% by CNBMG, the ultimate controlling shareholder of the Company, it is therefore an associate of CNBMG and both Fangxing Science & Technology and CNBMG are regarded as the connected persons of the Company. The entering into of the Non-exempt CCT Agreements constitutes continuing connected transactions of the Company. Pursuant to Chapter 14A of the Hong Kong Listing Rules, the transactions contemplated under the Non-exempt CCT Agreements constitute continuing connected transactions of the Company. Since the proposed respective New Caps under the Non-exempt CCT Agreements are more than 5% of applicable percentage ratios, each of the Non-exempt CCT Agreements will be subject to the reporting, annual review, announcement and independent shareholders’ approval requirements under Chapter 14A of Hong Kong Listing Rules.

As a result, the EGM will be convened for the purposes of, among other things, seeking Independent Shareholders’ approvals by poll, for the New Project Agreements, each of the Non-exempt CCT Agreements and their respective New Caps. CNBMG, Fangxing Science & Technology and their respective associates will abstain from voting in the resolutions in respect of each of the New Projects Agreements, Non-exempt CCT Agreements and their respective New Caps at the EGM.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising Mr. Huang Ping, Mr. Dong Jiachun, Mr. Liu Tianni and Mr. Jin Zhanping, being the independent non-executive Directors, has been formed to advise the Independent Shareholders in relation to the New Project Agreements and Non-exempt CCT Agreements.

We, Goldin Financial, have been appointed by the Company as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to each of the New Project Agreements and the Non-exempt CCT Agreements, and to make recommendations as to, among others, whether the terms of the New Project Agreements and the Non-exempt CCT Agreements are fair and reasonable so far as the Independent Shareholders are concerned and as to voting in respect of the relevant resolution at the EGM. Our appointment has been approved by the Independent Board Committee.

— 34 —

LETTER FROM GOLDIN FINANCIAL

BASIS OF OUR ADVICE

In formulating our opinion and recommendations, we have reviewed, inter alia, the Announcement, the New Project Agreements, the Non-exempt CCT Agreements and the relevant Old CCT Agreements. We have also reviewed certain information provided by the management of the Company relating to the operations, financial condition and prospects of the Group. We have also (i) considered such other information, analyses and market data which we deemed relevant; and (ii) conducted verbal discussions with the management of the Company regarding the terms of both the New Project Agreements and the Non-exempt CCT Agreements, the businesses and future outlook of the Group. We have assumed that such information and statements, and any representation made to us, are true, accurate and complete in all material respects as of the date hereof and we have relied upon them in formulating our opinion.

All Directors collectively and individually accept full responsibility for the purpose of giving information with regard to the Company in the Circular and, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in the Circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading. We consider that we have been provided with, and we have reviewed, all currently available information and documents which are available under present circumstances to enable us to reach an informed view regarding the terms of, and reasons for entering into, both the New Project Agreements and the Non-exempt CCT Agreements to justify reliance on the accuracy of the information contained in the Circular so as to provide a reasonable basis of our opinion. We have no reasons to suspect that any material information has been withheld by the Directors or management of the Company, or is misleading, untrue or inaccurate. We have not, however, for the purpose of this exercise, conducted any independent detailed investigation or audit into the business or affairs or future prospects of the Group. Our opinion is necessarily based on financial, economic, market and other conditions in effect, and the information made available to us, at the Latest Practicable Date.

This letter is issued for the information for the Independent Board Committee and the Independent Shareholders solely in connection with their considerations of the New Project Agreements and the Non-exempt CCT Agreements, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

— 35 —

LETTER FROM GOLDIN FINANCIAL

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Discloseable and connected transactions

1.1. Background to and reasons for entering into the New Project Agreements

The Group is principally engaged in the production and sale of float sheet glass and ultrathin electronic glass.

On 14 November 2014, Longmen Glass, a wholly-owned subsidiary of the Company, entered into the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement and the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement with EPR Institute, pursuant to which EPR Institute agreed to provide project design, construction and installation services for the purpose of the Longmen Smoke Gas Treatment Project at a consideration of RMB1,900,000 and agreed to supply whole set of equipment for the purpose of the Longmen Smoke Gas Treatment Project at a consideration of RMB4,500,000.

As stated in the Letter from the Board, the smoke gas treatment projects herein refer to the smoke gas treatment system construction projects for the production lines of Longhai Glass and the production lines of Longmen Glass. Through the entering into of the New Project Agreements, the smoke gas treatment systems could be built up for Longhai Glass and Longmen Glass, which will have positive effects on energy saving, emission reduction and environment protection, and will comply with the relevant industry policies in the PRC and the relevant environmental protection planing requirements established by the local government.

— 36 —

LETTER FROM GOLDIN FINANCIAL

On the other hand, we noted that the PRC government has announced guidances and policies to raise the environmental protection concerns among industries. According to both 《大氣污染防治行動計劃》(Air Pollution Prevention and Control Action Plan) and 《節能減排十二五規劃》(the Twelfth Five-year Plan for Energy Saving and Emission Reduction) issued on 12 September 2013 and 6 August 2012 respectively by the State Council, in order to reduce industrial emission and improve the air quality within the PRC region, the PRC government aims to among others, accelerate the desulphurisation and denitration in specific industries including the float glass production industry. Furthermore, the PRC governmental report of《平板玻璃工業十二五發展規劃》 (the Twelfth Five-year Development Plan for Sheet Glass Industry*) states that by 2015, it is expected that the main air pollutant release standard within the domestic sheet glass industry will be met by reducing energy consumption and monitoring the compliance with the air pollutant release standard of the industry. In particular, the PRC government further encouraged the development and application of smoke gas denitration system technology of glass production lines as one of the means in achieving the industrial emission reduction.

In order to comply with the requirements of the industrial policies and standards recently established by the Chinese government, the Company entered into a project design and construction agreement with Shenzhen Kaisheng Science and Technology Engineering Company Limited, an indirect non wholly-owned subsidiary of CNBMG, for the provisions of project design, construction and installation services for the purposes of the projects in respect of building a residual heat power generation boiler system and a smoke gas treatment system for the glass production lines of Longhao Glass, further details of which are set in the announcements of the Company dated 17 April 2014 and 20 May 2014 respectively. Such steps are therefore in line with the Group’s development strategy while aligning with the national policies on energy conservation and environmental protection. Through the entering into of the New Project Agreements, the construction and installation services for the smoke gas treatment system of the production lines of both Longhai Glass and Longmen Glass would commence. Subject to the completion of the construction and installation of the smoke gas treatment systems, the production lines of Longhai Glass, Longmen Glass and Longhao Glass will all become in compliance with the requirements of the above policies and standards

EPR Institute, an indirect non wholly-owned subsidiary of CNBMG, is principally engaged in the research on environmental protection technology, construction, supply of equipment and advisory. CNBMG is a wholly state-owned enterprise incorporated in the PRC and is one of the top 500 corporations worldwide in terms of revenue in 2014 as ranked by Fortune magazine, a business magazine published globally since 1929. As advised by the management of the Company, being the only platform of CNBMG serving

— 37 —

LETTER FROM GOLDIN FINANCIAL

environmental protection industry, EPR Institute owns advanced and reliable technologies in relation to air pollution control, wastewater treatment and solid waste management. With a Class A qualification in atmospheric environmental governance, its independent research and development of “ 玻璃熔窯煙氣脫硫技術 ” (“ Glass Melting Furnace Flue Gas Desulphurisation Technology ”) has won 國家級科技成果獎 (“ the National Science and Technology Achievement Award* ”). Upon the discussion with the management of the Company, the Chinese government has been placing increasingly strict requirements on the industrial emission level and hence, it is essential for the Company to acquire the project design, installation and construction services as well as advanced equipment from a reliable and experienced supplier in order to ensure its compliance with the national policies and maintain its competitiveness within the industry. When selecting the compatible supplier for the provisions of equipment and services for the purposes of Longhai Smoke Gas Treatment Project and Longmen Smoke Gas Treatment Project, the Company has primarily taken technical expertise and previous transaction experience into account. Given that the Group is highly satisfied with the quality of the project design, construction and installation services together with the equipment provided by the CNBMG Group for the purposes of building a residual heat power generation boiler system and a smoke gas treatment system for the glass production lines of Longhao Glass under the project design and construction agreement entered in April and May 2014 respectively, and that the outstanding expertise of EPR Institute accounts for the majority of the provision of the construction and installation services in relation to the smoke gas treatment system for the glass industry in the PRC, the Group has therefore selected ERP Institute to become the supplier. We have therefore conducted a research analysis on the background of EPR Institute, and noted that EPR Institute has competitive advantages over other suppliers within the glass industry in the PRC in various areas such as its long history of establishment and success in environmental protection system development. With over sixty years of establishment, EPR Institute has been involved in a number of leading research projects both domestically and internationally. For instance, the “600t/d 玻璃熔窯煙氣治理工程 ” (600 t/d glass furnace flue gas treatment project) participated by EPR Institute has passed the local examination in May 2014 and is the first project within the PRC glass industry that combines the technologies of high temperature dry sulphurisation, high temperature dust removal and SCR denitration in order to minimise the industrial emission during the glass production process. These achievements can therefore demonstrate the expertise of EPR Institute in providing design, construction and installation services for the environmental protection projects within the glass industry. Based on the long history of establishment of EPR Institute and its successful environmental protection development for the glass industry, we are of the view that it is fair and reasonable for the Company to select EPR Institute to become the supplier.

— 38 —

LETTER FROM GOLDIN FINANCIAL

Having taken into account that (i) it has been the Group’s development strategy to enhance the technology level and product quality while aligning with the national policies on energy conservation; (ii) the entering into of the New Project Agreements would facilitate the construction and installation of the smoke gas treatment system for the Group’s production lines in terms of the compliance with the industrial guidelines and policies; (iii) the satisfactory prior transaction experience with CNBMG Group; and (iv) given the background, long history of establishment and experience of EPR Institute, the smoke gas treatment systems for the Group’s production lines constructed by EPR Institute are expected to pass the Company’s internal examination and meet the national standards as stipulated under the New Project Agreements, we are of the view that the selection criteria for the supplier and the entering into of the New Project Agreements are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

1.2. Principal terms of the New Project Agreements

Pursuant to the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement and the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement with EPR Institute, EPR Institute agreed to provide project design, construction and installation services (“ Longhai Services ”) for the purpose of the Longhai Smoke Gas Treatment Project at a consideration of RMB1,400,000, and agreed to supply whole set of equipment (“ Longhai Equipment ”) for the purpose of the Longhai Smoke Gas Treatment Project at a consideration of RMB3,800,000.

Pursuant to the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement and the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement with EPR Institute, EPR Institute agreed to provide project design, construction and installation services (“ Longmen Services ”, together with Longhai Services, the “ Project Services ”) for the purpose of the Longmen Smoke Gas Treatment Project at a consideration of RMB1,900,000 and agreed to supply whole set of equipment (“ Longmen Equipment ”, together with Longhai Equipment, the “ Project Equipment ”) for the purpose of the Longmen Smoke Gas Treatment Project at a consideration of RMB4,500,000.

Other terms of the New Project Agreements are set out in the section headed “A. Discloseable and connected transactions” in the Board Letter.

— 39 —

LETTER FROM GOLDIN FINANCIAL

In respect of the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement and the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement, we noted that each of the considerations was determined after arm’s length negotiations between the parties with reference to the market prices for providing the above design, construction and installation services (“ Project Services ”).

In respect of the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement and the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement, each of the considerations was determined after arm’s length negotiations between the parties with reference to the market prices for supplying the above equipment (“ Project Equipment ”).

Upon enquiry with the management of the Group, we were given to understand that both the considerations for the Project Services and Project Equipments are based on various factors including but not limited to the production capacity and types of the production lines and the natures and types of raw materials used for glass production through the production lines, resulting in the difference of gas emission volume and therefore the requirements of certain types of equipment and services for the corresponding production lines. We further understood that there was no transaction entered into between the Group and independent third parties supplying equipments similar to the Project Equipment and/or offering similar services to the Project Services, and as advised by the management of the Group, EPR Institute has been providing services and supplying equipment for the majority of the smoke gas denitration systems of glass industry. Nevertheless, we have reviewed the agreement entered into between EPR Institute and an independent third party for the construction and installation of the smoke gas denitration system similar to that under the New Project Agreements, and have noted that the pricing terms are generally based on the production capacity and types of the production lines, the requirements of types of equipment and services for the corresponding production lines, while the payment terms are based on the delivery of the equipment and the project schedule, which are materially the same as the pricing terms and payment terms under the New Project Agreements. As further confirmed with the management of the Group, the terms including the pricing terms and the payment terms of the New Project Agreements offered to the Group are no less favorable than those offered to other independent third party(ies) under normal commercial terms.

— 40 —

LETTER FROM GOLDIN FINANCIAL

Having considered that (i) the terms of the New Project Agreements offered to the Group are no less favorable than those offered to other independent third party(ies); and (ii) each of the considerations of the Project Equipment and Project Services was determined after arm’s length negotiations between the parties, the terms of the New Project Agreements are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

2. Non-exempt CCT Agreements

2.1. Background to and reasons for entering into the agreements

The Group is principally engaged in the production and sale of float sheet glass and ultrathin electronic glass.

CNBMG is the ultimate controlling shareholder of the Company. The principal operations of CNBMG include research and development, wholesale and retail of building materials, auxiliary raw materials and production equipment, supply of small cars under the plan of its system; contraction of design and construction of new-model building material houses, factories and ornament and decoration engineering.

Fangxing Science & Technology is indirectly owned as to 34.6% by CNBMG, the ultimate controlling shareholder of the Company. It is principally engaged in the research and development, production and sale of Indium-Tin Oxide (ITO) electropane, online bi-layer coated glass, vacuum coated glass, processed glass products and new materials etc. In particular, its float glass products have been well recognised as the brand name products in Anhui province as well as cross Mainland China.

In performing its ordinary course of business, the Group has been consistently carrying out transactions pursuant to a number of purchase and sales agreements with its connected persons. Indeed, there have been long term customer relationships between the Group and Fangxing Science & Technology and subsidiaries and CNBMG Group respectively, details of which are set out below.

— 41 —

LETTER FROM GOLDIN FINANCIAL

2.1.1. The Ultra-Thin Float Glass Sale and Purchase Framework Agreement

On 18 October 2011, the Group entered into the Huayi Glass Product Sale Framework Agreement with Huayi Glass, a subsidiary of Fangxing Science & Technology, pursuant to which the Group agreed to supply ultra-thin float glass products to Huayi Glass, with annual caps of RMB181.51 million, RMB199.18 million and RMB237.29 million for each of the years ended 31 December 2012, 2013 and 2014, respectively. Subsequently, on 20 January 2014, the Group entered into the Product Sale Agreement (together with the Huayi Glass Product Sale Framework Agreement, known as the “ Old Non-exempt CCT Agreements ”), pursuant to which the Group agreed to supply ultra-thin float glass to Fangxing Science & Technology, with annual cap of RMB 24 million for the year ending 31 December 2014.

Instead of entering into agreements for each continuing connected transactions between the Group and Fangxing Science & Technology and its subsidiaries in relation to the sales of ultra-thin float glass, on 14 November 2014, the Group entered into the Ultra-Thin Float Glass Sale and Purchase Framework Agreement to set out the framework governing the key terms, conditions and the general pricing principles of the continuing connected transactions between the Group and Fangxing Science & Technology and its subsidiaries. As the sales of ultra-thin float glass is one of the Group’s principal businesses, with such sales to Fangxing Science & Technology and its subsidiaries having been conducted pursuant to the Old Non-exempt CCT Agreements, which serves as a source of sales revenue of the Group, while ultra-thin float glass is one of the major components of the products of Fangxing Science & Technology, we are of the view that the Ultra-Thin Float Glass Sale and Purchase Framework Agreement is in substance an extension of the Huayi Glass Product Sale Framework Agreement, one of the Old Non-exempt CCT Agreements, and that the transactions contemplated under the Ultra-Thin Float Glass Sale and Purchase Framework Agreement have been, and will be conducted in the ordinary and usual course of business of the Group.

— 42 —

LETTER FROM GOLDIN FINANCIAL

2.1.2. The CNBMG Engineering Equipment and Materials Supply Framework Agreement and the CNBMG Engineering Technical Services Framework Agreement

On the other hand, on 18 October 2011, being the same date of the Huayi Glass Product Sale Framework Agreement, the Group also entered into (i) the CNBMG Engineering Technical Services Framework Agreement; and (ii) CLFG Engineering Technical Services Framework Agreement with CNBMG Group (excluding CLFG Group) and CLFG Group respectively, pursuant to which CNBMG Group (excluding CLFG Group) and CLFG Group agreed to provide technical services for the feasibility study, design and construction of the float glass production line of the group, for the three years ending 31 December 2014.

As advised by the management of the Company, the Group is planning to construct an environmental protection system which includes the building of a smoke gas treatment system for its glass production lines, implement engineering projects which can help enhance or improve technology and production equipment, and conduct cold repair to one of its production lines during the next three years. CNBMG Group, being one of the largest building material contractors in China, is well-known for its ownerships of a number of proprietary intellectual property rights and leading position in the glass industry. CNBMG Group has also established fourteen national innovation platforms including the State Key Laboratory for Advanced Technology of Float Glass (“Key Laboratory”), which has passed the authentication of ISO9001:2000 Quality Management System accreditation. The Key Laboratory has expertise in different aspects of glass production, in particular the areas of energy saving, environment protection and emission minimisation. Accordingly, by entering into the CNBMG Engineering Equipment and Materials Supply Framework Agreement and the CNBMG Engineering Technical Services Framework Agreement, the Group would be able to secure a reliable supply of advanced equipment and services for its future engineering projects. Furthermore, based on the fact that the Group is highly satisfied with the quality of services and equipment provided by the CMBMG Group in previous transactions, further details of which are set out in the section headed “1.1 Background to and reasons for entering into the New Projects Agreements” of this letter, it is reasonable for the Group to maintain a sustainable relationship with CNBMG Group in the long run. Nonetheless, the quality and emission level of the production lines of the Group would be enhanced to meet the international standard and national industrial requirement respectively. As such, we are of the view that the transactions contemplated under the CNBMG Engineering Equipment and Materials Supply Framework Agreement and the CNBMG Engineering Technical Services Framework Agreement are an integral part of the

— 43 —

LETTER FROM GOLDIN FINANCIAL

ordinary and usual course of business of the Group, which would facilitate the implementation of the engineering projects of the Group and therefore improve its business performance in the future.

Having considered the background and reasons as discussed above, we are of the view that the entering into of each of the Non-exempt CCT Agreements is in the ordinary and usual course of business of the Group, and is in the interests of the Group and Shareholders as a whole.

2.2. Principal terms of the agreement

2.2.1. The Ultra-Thin Float Glass Sale and Purchase Framework Agreement

Pursuant to the Ultra-Thin Float Glass Sale and Purchase Framework Agreement, the Group has agreed to provide ultra-thin float glass to Fangxing Science & Technology and its subsidiaries at prices to be determined with reference to the prevailing market price at the time of particular transaction. The prices offered by the Group to Fangxing Science & Technology and its subsidiaries will not be less than those offered to the other independent third parties for the same or similar products. In principle, the payment shall be made before delivery of ultra-thin float glass to Fangxing Science & Technology and its subsidiaries or in other methods to be agreed by both parties to the Ultra-Thin Float Glass Sale and Purchase Framework Agreement.

In assessing the terms of the transactions under the Ultra-Thin Float Glass Sale and Purchase Framework Agreement, we were given to understand that the pricing terms of ultra-thin float glass were determined based on the delivery location of the buyer, as well as the grade, thickness, length and width of the glass products. We have therefore randomly selected and reviewed 2 sample invoices issued by the Group to Huayi Glass, a subsidiary of Fangxing Science & Technology, which were governed by the terms under the Huayi Glass Product Sale Framework Agreement, and compared them with the sample sales contracts engaged by the Group and other independent third parties providing the same glass products to the same delivery location within a period of six months from the date of delivery. Despite that the aggregated transaction amounts of these samples represented only approximately 5.97% for the total historical transaction amounts for the nine months ended 30 September 2014, given that (i) the transactions under these samples were transacted in 2014, which are recent and under similar market conditions; and (ii) the transactions under the samples cover different types of products where price comparison of such products with independent third party

— 44 —

LETTER FROM GOLDIN FINANCIAL

customers under the same criteria is available, we consider these samples reviewed for the purpose of assessing the pricing term using the transaction price between the Company and independent third parties are fair and representative. We noted that the prices offered by the Group to Huayi Glass under the Huayi Glass Product Sale Framework Agreement are not less than those offered to the independent third parties. In respect of the payment terms, the payment shall be made before the delivery of ultra-thin float glass to independent third parties, which is materially the same as that of the Huayi Glass Product Sale Framework Agreement. Given that the Ultra-Thin Float Glass Sale and Purchase Framework Agreement is in substance an extension of the Huayi Glass Product Sale Framework Agreement, we have compared the pricing terms and payment terms of both agreements and noted that such terms of the Ultra-Thin Float Glass Sale and Purchase Framework Agreement are materially the same as those of the Huayi Glass Product Sale Framework Agreement, and are not more favourable than those offered to the independent third parties.

Considering that (i) the transaction contemplated under the Ultra-Thin Float Glass Sale and Purchase Framework Agreement has been carried out by the Group in the ordinary and usual course of business; (ii) the terms of the Ultra-Thin Float Glass Sale and Purchase Framework Agreement are materially the same as those of the Huayi Glass Product Sale Framework Agreement; and (iii) the terms offered by the Group to Fangxing Science & Technology and its subsidiaries will not be more favourable than those offered to the independent third parties, we are of the view that the terms of the Ultra-Thin Float Glass Sale and Purchase Framework Agreement are fair and reasonable so far as the Company and the Independent Shareholders are concerned, and that the entering into of the Ultra-Thin Float Glass Sale and Purchase Framework Agreement is in the interests of the Company and Shareholders as a whole.

2.2.2. The CNBMG Engineering Equipment and Materials Supply Framework Agreement

Pursuant to the CNBMG Equipment Purchase Framework Agreement, CNBMG Group has agreed to supply equipment to the Group for its engineering projects at a price to be determined with reference to the prevailing market price at the time of particular transaction. The prices offered to the Group by CNBMG Group will not be less favourable than those offered to the Group by other independent third parties on the same or similar equipment. In principle, the payment shall be made before the delivery of the equipment to the Company or other methods to be agreed by both parties to the CNBMG Engineering Equipment and Materials Supply Agreement.

— 45 —

LETTER FROM GOLDIN FINANCIAL

Upon discussion with the management of the Group, we understood that the equipment to be supplied under the CNBMG Engineering Equipment and Materials Supply Framework Agreement will be used for the future engineering projects of the Group in relation to its production and operating activities, including but not limited to (i) environmental protection projects for the production lines of the Group; and (ii) the cold repair of one of the production lines of the Group, respectively.

When assessing the pricing basis used for charging the equipment for the environmental protection projects, we have been provided with the agreement entered into between EPR Institute, being a subsidiary of CNBMG, and an independent third party in respect of the supply of equipment for the environmental protection projects, further details are set out in the paragraphs under the section headed “1.2 Principal terms of the New Project Agreements”. We were given to understand that the pricing terms of such agreement are generally based on the scale and type of the relevant projects, as well as the specific requirements of types of equipment and material for such relevant projects, which would directly determine the total cost of different types and quantities of project materials and project equipment to be required for such project. Despite there is no predetermined price list given the possibility of numerous combinations of the above criteria for an equipment, the price of the equipment offered to the Company is generally determined by applying a mark-up percentage onto the total cost of different types and quantities of project materials and project equipment to be required for such project, which the mark-up percentage will be subject to the arm’s length negotiations between the Company and the CNBMG Group with reference to the then market practice and no less favourable than those from independent third parties when supplying similar equipment. Due to the unavailability of a predetermined price list, we noted that it is the industrial pricing norm to adopt a price determination policy that takes mark-up percentage into account. We further noted that the Group will seek to obtain market price information through various channels, which include (i) reference made to comparable transactions (if any) by independent third parties during the same period; (ii) through communication and exchange of market information with at least two peers and/or customers within the glass production industry. After collecting the market information, the terms including the pricing and payment terms will then be assessed and approved by the Finance department and relevant operations department. In the event that no such market information for such specific equipment, the Company shall make reference to prices charged for other equipment with similar specifications. Considering that the pricing terms of the equipment are no less favourable than those from independent third parties and will be determined after communication and exchange

— 46 —

LETTER FROM GOLDIN FINANCIAL

of market information among peers and customers within the glass production industry in the PRC, we are of the view that the price determination is conducted in a fair and reasonable manner. In addition, the payment terms are to be determined between the Company and the CNBMG Group after arm’s length negotiations, which, as advised by the management of the Company, are with reference to the delivery of the equipment and the project schedule, we consider that the pricing terms and payment terms are materially the same as those under the CNBMG Engineering Equipment and Materials Supply Framework Agreement and are no less favourable than those offered by CNBMG to other independent third parties.

Regarding the cold repair to one of the production lines of the Group, CNBMG Group is a major contractor in the market which provides equipment required for cold repair of glass production lines and hence, there was no transaction entered into between the Group and independent third parties supplying similar equipement for the cold repair of the production lines. We were given to understand that for each production line, it is an industrial common practice to replace the furnace through cold repair at or near to the end of the production line’s useful life, which on average lasts for approximately eight to ten years. In order to assess the terms charged for providing equipment for conducting cold repair to the production line of the Group, we have reviewed the agreement entered into between the CNBMG Group and the independent third party supplying equipment to the cold repair of glass production lines. We noted that the pricing terms are generally based on the production capacity of the production lines, the requirements of types of equipment for the corresponding production lines and the types of the production lines, while the payment terms are based on the delivery of the equipment and the project schedule, which are materially the same as the pricing terms and payment terms under CNBMG Engineering Equipment and Materials Supply Framework Agreement. As such, we consider that the terms including the pricing terms and payment terms under the CNBMG Engineering Equipment and Materials Supply Framework Agreement in respect of the equipment for the cold repair of the production line are no less favourable than the principal terms offered by CNBMG Group to other independent third parties.

— 47 —

LETTER FROM GOLDIN FINANCIAL

Considering that (i) the transactions contemplated under the CNBMG Engineering Equipment and Materials Supply Framework Agreement will be carried out by the Group in the ordinary and usual course of business; and (ii) the terms including the pricing terms and payment terms under the CNBMG Engineering Equipment and Materials Supply Framework Agreement are no less favourable than those offered by CNBMG to other independent third parties, we are of the view that the terms of the CNBMG Engineering Equipment and Materials Supply Framework Agreement are fair and reasonable so far as the Group and the Independent Shareholders are concerned, and that the entering into of the CNBMG Engineering Equipment and Materials Supply Framework Agreement is in the interests of the Company and Shareholders as a whole.

2.2.3. The CNBMG Engineering Technical Services Framework Agreement

Pursuant to the CNBMG Engineering Technical Services Framework Agreement, CNBMG Group (including CLFG Group) agreed to provide technical services to the Group including but are not limited to project feasibility study reports, project feasibility plans, design, organization and implementation of the project plans, engineering technical consulting, the installation of equipment required by the project, engineering construction and assisting the organisation in resuming production in response to accidental operational incidents, etc. The prices for the services to be rendered will be determined with reference to (i) the applicable State Price; or (ii) the market price, if there is no applicable State Price for any such services. The price for providing the same or similar services to independent third parties in Luoyang City or areas near Luoyang City will be considered when determining the market price. The Group shall pay for the services rendered by CNBMG Group during the year within one month upon the receipt of the payment notice in the first month of the following year from CNBMG Group.

When assessing the pricing basis used for charging the technical services to be rendered with regard to the environmental protection projects, as advised by the management of the Company, we noted that there was no transaction entered into between the Group and independent third parties supplying similar technical services for similar environmental protection projects. Alternatively, we have been provided with an agreement entered into between the CNBMG Group and an independent third party supplying technical services for the environmental protection projects, and noted that the pricing terms are generally based on the production capacity, the types and the locations of the production lines and therefore the required types of technical services and number of technical staff for the corresponding production lines, which are materially the same as the pricing

— 48 —

LETTER FROM GOLDIN FINANCIAL

terms under the CNBMG Engineering Technical Services Framework Agreement. While the payment terms of such agreement which is a one-off project, are based on the delivery of the equipment and the project schedule, we noted that the Group shall pay the price of the services rendered by CNBMG Group during the year within one month upon the receipt of the payment notice in the first month of the following year from CNBMG Group under the CNBMG Engineering Technical Services Framework Agreement. Having considered that the CNBMG Engineering Technical Services Framework Agreement is on a continuous basis for a term of three years and that the payment terms could be amended subject to the entering into of a supplemental contract for each single project and the Company confirmed that the payment terms will not be less favourable than those available to the Group offered by independent third parties we are of the view that the terms including the pricing terms and payment terms of the CNBMG Engineering Technical Services Framework Agreement in respect of the technical services for the environmental protection systems are no less favourable than those offered by CNBMG to other independent third parties.

CNBMG Group owns a number of leading research institutes among the glass industry and subsidiaries which are specialised in the design and contracting of the glass business related projects. These demonstrate the outstanding technological strength, high professional standard and practical experience of CNBMG Group and hence, there was no transaction entered into between the Group and independent third parties supplying similar technical services. In order to assess the terms charged for providing technical services for conducting cold repair to one of the production lines of the Group, we have reviewed the agreement entered into between the CNBMG Group and an independent third party supplying technical services for the cold repair of glass production line, and noted that the pricing terms are generally based on the production capacity, the types and the locations of the production lines and therefore the required types of technical services and number of technical staff for the corresponding production lines, which are materially the same as the pricing terms under the CNBMG Engineering Technical Services Framework Agreement. While the payment terms of such agreement which is a one-off project, are based on the delivery of the equipment and the project schedule, we noted that the the Group shall pay the price of the services rendered by CNBMG Group during the year within one month upon the receipt of the payment notice in the first month of the following year from CNBMG Group. Having considered that the CNBMG Engineering Technical Services Framework Agreement is on a continuous basis for a term of three years, and that the payment terms could be amended subject to the entering into of a supplemental contract for each single project and the Company confirmed that the payment terms will not

— 49 —

LETTER FROM GOLDIN FINANCIAL

be less favourable than those available to the Group offered by independent third parties, we are of the view that the terms including the pricing terms and payment terms under the CNBMG Engineering Technical Services Framework Agreement in respect of the technical services for the cold repair of the production lines are no less favourable than those offered by CNBMG Group to other independent third parties.

Considering that (i) the transactions contemplated under the CNBMG Engineering Technical Services Framework Agreement will be carried out by the Group in the ordinary and usual course of business; and (ii) the terms including the pricing terms and payment terms under the CNBMG Engineering Technical Services Framework Agreement are no less favourable than those offered by CNBMG Group to other independent third parties, we are of the view that the terms of the CNBMG Engineering Technical Services Framework Agreement are fair and reasonable so far as the Group and the Independent Shareholders are concerned, and that the entering into of the CNBMG Engineering Technical Services Framework Agreement is in the interests of the Company and Shareholders as a whole.

2.3. Historical transactions and proposed Annual Caps

2.3.1. The Ultra-Thin Float Glass Sale and Purchase Framework Agreement

The table below summarises (i) the existing cap amounts for each of the three years ended 31 December 2012, 2013 and 2014 respectively; (ii) the actual transaction amounts recorded for the two years ended 31 December 2013 and the nine months ended 30 September 2014; and (iii) the proposed New Caps for each of the three years ending 31 December 2015, 2016 and 2017 respectively, with respect to the transactions contemplated under the Ultra-thin Float Glass Sale and Purchase Framework Agreement:

	Existing annual caps	Existing annual caps	Existing annual caps		New Caps
	For the year ended/ending		31 December	For the	year ending 31	December
RMB’000	2012	2013	2014	2015	2016	2017
Annual cap	181,511	199,180	237,291	214,000	224,000	234,000
	(Note 1)	(Note 1)	(Note 2)
Actual transaction	88,559	45,776	27,329	—	—	—
amount			(For the nine
(Approximate)			months ended
			30 September
			2014)

— 50 —

LETTER FROM GOLDIN FINANCIAL

Notes:

Based on the annual cap amounts as set out in the Huayi Glass Product Sale Framework Agreement dated 18 October 2011 entered into between the Company as supplier and Huayi Glass as purchaser.
Based on the aggregate annual cap amount as set out in (a) the Huayi Glass Product Sale Framework Agreement dated 18 October 2011 entered into between the Company as supplier and Huayi Glass as purchaser; and (b) the Product Sale Agreement dated 20 January 2014 entered into between the Company as supplier and Fangxing Science & Technology as purchaser.

As stated in the Letter from the Board, the proposed New Caps were determined based on the management’s internal projection on the estimated amount of ultra-thin float flat glass to be sold to Fangxing Science & Technology and its subsidiaries by the Group after taking into account (i) the anticipated increase in demand of Fangxing Science & Technology and its subsidiaries on the ultra-thin float glass; (ii) the increase in production capacity of ultra-thin float glass of the Group in the future; and (iii) the anticipated change in the selling price of the ultrathin float glass in the PRC with reference to the prevailing market price.

It is noted that, with respect to the transactions contemplated under the Ultra-thin Float Glass Sale and Purchase Framework Agreement, (i) the actual transaction amounts demonstrate a downward trend, with actual transaction amount decreased from RMB88.56 million for the year ended 31 December 2012 to RMB27.33 million for the nine months ended 30 September 2014; (ii) there are shortfalls between the actual transaction amount and the corresponding existing annual cap for the respective year, with the actual transaction amount for the nine months ended 30 September 2014 representing only approximately 11.52% of the existing annual cap for the year ending 31 December 2014; and (iii) the actual transaction amount for the nine months ended 30 September 2014 only represents approximately 12.77% of the proposed New Cap for the year ending 31 December 2015. On the other hand, the proposed New Caps for the two years ending 31 December 2016 and 31 December 2017 represent modest growths of approximately 4.67% and 4.46% respectively over the corresponding New Cap for the prior year.

— 51 —

LETTER FROM GOLDIN FINANCIAL

We have discussed with the management of the Company with respect to the adoption of the aforesaid factors in determining the New Caps for the Ultra-thin Float Glass Sale and Purchase Framework Agreement, and the contrast between the New Caps and the actual transaction amount as illustrated above. In respect of the shortfall, in particular the actual transaction amount for the nine months ended 30 September 2014 represented only approximately 11.52% of the existing annual cap for the year ending 31 December 2014, we were given to understand that the glass melting furnace of one of the existing production lines entered into later service period which affected the quality of its ultra-thin float glass products, resulting in that part of the products cannot satisfy the needs and requirement of Fangxing Science & Technology and its subsidiaries, therefore, the supply of the Company to Fangxing Scrience & Technology was lowered. Furthermore, we were given to understand that the anticipated increase in demand of Fangxing Science & Technology and its subsidiaries on the ultra-thin float glass, which shall be used as glass substrates for its products, is derived from the expected increasing downstream demand for quality display components, being the primary products of Fangxing Science & Technology, for mobile devices and electronic devices with large panel displays.

Fangxing Science & Technology is principally engaged in the research and development, production and sale of indium-tin oxide (ITO) electropane, as well as online bi-layer coated glass, vacuum coated glass, processed glass products and new materials, etc. Based on our research conducted with the media coverage in the public domain, flat panel display such as liquid-crystal display (LCD) used as the display component of electronic devices, consists of, among other arch types, glass substrate coated with ITO. Such technology can also be found in smartphones, in which the capacitive touchscreen panels are made of insulators such as glass, and coated with transparent conducts including ITO.

We have researched on the information from the public domain with respect to the market of float glass in connection with the downstream market of mobile devices in the PRC. According to a news article published by Sina Tech (www. tech.sina.com.cn) on 14 October 2014, in the speech given by the Head of the School of Physics Sciences of the University of Science and Technology of China, who graduated with a Doctorial degree in physics and has over thirty years of experience in conducting professional research in various areas including the area of LCD, at《中國2014國際顯示產業高峰論壇》(China — Global Display Equipment Industry Summit, 2014*), it is analysed that the market share of the PRC in the flat panel display market is expected to reach 18.6%, and that the domestic production capacity of thin film transistor liquid crystal display (TFT-

— 52 —

LETTER FROM GOLDIN FINANCIAL

LCD) is expected to become the second highest globally by 2015. According to the review of the domestic mobile phone market for 2013 published by the Ministry of Industry and Information Technology of the PRC (www.miit.gov.cn) on 7 March 2014, the number of mobile phones produced in the PRC in 2013 increased by about 24.1% year-on-year to about 579 million units, of which the number of smartphones increased by about 64.1% year-on-year to about 423 million units. Hence, the above figures demonstrate a robust growth in the demand and supply of high-end touchscreen smartphones in the PRC over the last two years, and suggest that the increasing trend will continue in the near future. According to a news article published by《每日經濟新聞》(National Business Daily, www.nbd.com.cn) on 10 November 2014, the domestic market of panel glass, or glass substrate used in the production of display units is dominated as to 90% by foreign manufacturers such as Corning Inc. from the United States and Asahi Glass Co., Ltd. from Japan. Notwithstanding the dominating position of these foreign manufacturers, on 16 October 2014, the National Development and Reform Commission of the PRC and the Ministry of Industry and Information Technology of the PRC jointly issued the 《2014-2016年新型顯示產業創新發展行動計劃》(Development Action Plan for the New Model Display Equipment Industry, 2014 to 2016*), which states that it is part of the country’s plan for 2016 to raise the domestic procurement rate of the production of small and mid-size display units to 60%, and that of the production of large-size LCD and active-matrix organic light-emitting diode (AMOLED) display units to 30%, with the primary objective to boost the development of domestic manufacturers through encouraging domestic procurement of materials and components in the production value chain of display units. On the other hand, it is also mentioned in the same news article that it is probable that the PRC antimonopoly law will be enforced in the market of glass substrate, which has been dominated by a few foreign players. The enforcement of the anti-monopoly law will therefore further open up rooms and opportunities for the development of domestic glass manufacturers.

Based on the above factors, we consider that the downstream demand for domestic display units, being the primary products of Fangxing Science & Technology, is expected to increase, and potentially results in demand by Fangxing Science & Technology and its subsidiaries on the ultra-thin float glass, which is used as glass substrates, an essential component, for its products.

As such, we are of the view that the proposed New Caps under the Ultra-thin Float Glass Sale and Purchase Framework Agreement are fair and reasonable so far as the Independent Shareholders are concerned.

— 53 —

LETTER FROM GOLDIN FINANCIAL

2.3.2. The CNBMG Engineering Equipment and Materials Supply Framework Agreement and The CNBMG Engineering Technical Services Framework Agreement

The table below summarises (i) the actual transaction amounts recorded for the two years ended 30 September 2013 and the nine months ended 30 September 2014; and (ii) the proposed New Caps for the three years ending 31 December 2017, with respect to the transactions contemplated under the CNBMG Engineering Equipment and Materials Supply Framework Agreement:

	Actual transaction amount	Actual transaction amount	Actual transaction amount			New Caps
	For the year ended/ending		31 December		For the	year ending 31	December
RMB’000	2012	2013		2014	2015	2016	2017
Annual cap	—	—		22,170	50,000	300,000	300,000
			(For	the nine
			months ended
			30 September
				2014)
				(Note 1)

Notes:

Based on the actual transaction amounts under the 1st Shenzhen Kaisheng Equipment Supply Agreement and the 2nd Shenzhen Kaisheng Equipment Supply Agreement.

With respect to the CNBMG Engineering Equipment and Materials Supply Framework Agreement, the relevant proposed New Caps were determined based on the estimated value of the equipment required for future engineering projects by the Company after taking into account (i) the implementation of upgrade and transformation projects of the Group and (ii) technologies involved and the complexity in the engineering projects.

With respect to the transactions contemplated under the CNBMG Engineering Equipment and Materials Supply Framework Agreement, it is noted that (i) the actual transaction amounts for the nine months ended 30 September 2014 represents approximately 44.34% of the proposed New Cap for the year ending 31 December 2015; and (ii) the proposed New Cap for the year ending 31 December 2016 is 6 times the proposed New Cap for the year ending 31 December 2015, while the proposed New Caps for each of the two years ending 31 December 2017 are equal.

— 54 —

LETTER FROM GOLDIN FINANCIAL

On the other hand, the table below summarises (i) the existing cap amounts for the three years ending 31 December 2012, 2013 and 2014 respectively; (ii) the actual transaction amounts recorded for the two years ended 31 December 2013 and the nine months ended 30 September 2014 respectively; with respect to transactions contemplated under agreements entered between the Company and each of CNBMG and CLFG on 18 October 2011; and (iii) the proposed New Caps for the three years ending 31 December 2017, with respect to the transactions contemplated under the CNBMG Engineering Technical Services Framework Agreement:

	Existing annual caps	Existing annual caps	Existing annual caps		New Caps
	For the year ended/ending		31 December	For the	year ending 31	December
RMB’000	2012	2013	2014	2015	2016	2017
Annual cap	15,300	18,300	18,300	15,000	20,000	20,000
Actual transaction	395	—	7,730	—	—	—
amount			(For the nine
(Approximate)			months ended
			30 September
			2014)
			(Note 1)

Notes:

Based on the actual transaction amounts under the 1st Shenzhen Kaisheng Project Design and Construction Agreement and the 2nd Shenzhen Kaisheng Project Design and Construction Agreement.

With respect to the CNBMG Engineering Technical Services Framework Agreement, the relevant proposed New Caps were determined based on the engineering technical services demand by the expected future engineering projects of the Company after taking into account (i) the implementation of the new development project of the Group, (ii) technologies involved and the complexity and challenge of the technical work and (iii) the expected price with reference to the prevailing market price for provision of such services.

— 55 —

LETTER FROM GOLDIN FINANCIAL

With respect to the transactions contemplated under the CNBMG Engineering Technical Services Framework Agreement, it is noted that (i) the actual transaction amounts for the nine months ended 30 September 2014 represents approximately 42.24% of the existing annual cap for the year ending 31 December 2014; (ii) the actual transaction amounts for the nine months ended 30 September 2014 represents approximately 51.53% of the proposed New Cap for the year ending 31 December 2015; and (iii) the proposed New Cap for the year ending 31 December 2016 represents a growth rate of approximately 33.33% over the proposed New Cap for the year ending 31 December 2015, while the proposed New Caps for each of the two years ending 31 December 2017 are equal.

We have discussed with the management of the Company with respect to adoption of the aforesaid factors in determining the New Caps for the CNBMG Engineering Equipment and Materials Supply Framework Agreement and the CNBMG Engineering Technical Services Framework Agreement. We were given to understand that the New Cap for the year ending 31 December 2015 for the CNBMG Engineering Equipment and Materials Supply Framework Agreement relates to the expected amount to be incurred for the environmental protection projects for the Group’s other production lines, on top of installations of smoke gas treatment systems provided to the production lines of Longhai Glass and Longmen Glass under the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement and the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement, respectively. Such engineering work to the Group’s production lines is part of the Group’s development strategy to align with the national policies on energy conservation through the environmental protection projects. We were also given to understand that the annual New Caps for each of the two years ending 31 December 2017 relate to the expected costs to be incurred for the cold repair for one of its production lines, with reference to the original production costs of such production line after taking into account the technology augmentations to be effected thereon. Due to the uncertainty over the timetable of the execution of the aforesaid cold repair, the New Caps for each of the two years ending 31 December 2017 represent the full expected costs to be incurred for the cold repair for prudence sake. It is also noted that the New Caps for each of the three years ending 31 December 2017 relate to the expected costs to be incurred for the relevant design, engineering and other technical services required for the transactions contemplated under the CNBMG Engineering Equipment and Materials Supply Framework Agreement.

— 56 —

LETTER FROM GOLDIN FINANCIAL

As such, we are of the view that the proposed New Caps under both the CNBMG Engineering Equipment and Materials Supply Framework Agreement and the CNBMG Engineering Equipment and Materials Supply Framework Agreement are fair and reasonable so far as the Independent Shareholders are concerned.

ANNUAL REVIEW OF THE CONTINUING CONNECTED TRANSACTIONS

The proposed annual caps will be subject to the annual review by the independent non-executive Directors, details of which must be included in the Company’s subsequent published annual report and accounts. In addition, pursuant to the Hong Kong Listing Rules, the auditors of the Company must provide a letter to the Board confirming, among others, that the continuing connected transactions under the Non-exempt CCT Agreements are conducted in accordance with their terms and that the proposed annual caps not being exceeded. Moreover, pursuant to the Hong Kong Listing Rules, the Company shall publish an announcement if it knows or has reason to believe that the independent nonexecutive Directors and/or its auditors will not be able to confirm the terms of such transactions or the relevant annual caps not being exceeded. We are of the view that there are appropriate measures in place to govern the conduct of the transactions under the Non-exempt CCT Agreements and safeguard the interest of the Independent Shareholders.

RECOMMENDATIONS

In formulating our recommendations to the Independent Board Committee and the Independent Shareholders, we have considered the above principal factors and reasons, in particular, the following:

The background to and the reasons for, entering into both the New Project Agreements and the Non-exempt CCT Agreements;
The principal terms of both the New Project Agreements and the Non-exempt CCT Agreements;
The basis of determining the proposed annual caps under the Non-exempt CCT Agreements respectively; and
The commercial justifications for the transactions contemplated under the New Project Agreements and the Non-exempt CCT Agreements.

— 57 —

LETTER FROM GOLDIN FINANCIAL

Taking into consideration of the above mentioned principal factors and reasons, we consider that the New Project Agreements and the Non-exempt CCT Agreements are fair and reasonable, on normal commercial terms so far as the Independent Shareholders are concerned, and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders, as well as the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the resolutions to be proposed at the EGM to approve each of the New Project Agreements, the Non-exempt CCT Agreements and their respective proposed New Caps.

Yours faithfully,

For and on behalf of

Goldin Financial Limited

Billy Tang Director

— 58 —

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement in this circular or this circular misleading.

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors, supervisors and chief executive of the Company

As at the Latest Practicable Date, none of the Directors, supervisors or chief execuive of the Compnay has an interest or short positions in any Shares, underlying Shares or debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which were required to be (i) notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Direcotrs, supervisors or chief executives of the Company was taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, entered in the register kept by the Company; or (iii) notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers.

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective associates were considered to have interest in any business, which competes or may compete with the business of the Company or has any other conflict of interest with the Company which would be required to be disclosed under Rule 8.10 and Rule 14A.59(11) of the Listing Rules.

None of the Directors has any interest, direct or indirect, in any assets which have been acquired or disposed of by, or leased to any member of the Group, or are proposed to be acquired or disposed of by, or leased to any member of the Group since 31 December 2013, the date to which the latest published audited consolidated financial statements of the Group were made up.

None of the Directors is materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries which contract or arrangement is subsisting at the Latest Practicable Date and which is significant in relation to the business of the Group taken as a whole.

— 59 —

GENERAL INFORMATION

APPENDIX

(b) Substantial Shareholders’ and other Shareholders’ interests

As at the Latest Practicable Date, save as disclosed below, so far as is known to the Directors or chief executive of the Company, no other person has an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or were required to be notified to the Company and the Stock Exchange pursuant to section 324 of the SFO, or, who is, directly or indirectly, interested in 10 per cent. (10%) or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any members of the Group.

			Approximate
			percentage of	Approximate
			the total	percentage of
			issued	the total
			domestic	issued share
		Number of	share capital	capital
		domestic	of the	of the
Name of Shareholder	Capacity	Shares held	Company	Company
			(%)	(%)
CLFG	Beneficial owner	159,018,242	63.60	31.80
CNBMG_(Note 1)_	Interest in controlled corporation	159,018,242	63.60	31.80
Kaisheng Technology	Interest in controlled corporation	159,018,242	63.60	31.80
Company* (凱盛科技
公司)(Note 1)

Notes:

These 159,018,242 domestic Shares are registered and owned by CLFG. CNBMG is the beneficial owner of CLFG. CNBMG holds 51.70% and 19.00% (totally holding 70.70%) equity interest in CLFG through wholly-owned subsidiaries, Kaisheng Technology Company* (凱盛科技公司) and Bengbu Glass Industry Design Institute respectively. CNBMG is therefore deemed to be interested in 159,018,242 domestic Shares held by CLFG under the SFO.

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or supervisors of the Company had any existing or proposed service contract with any member of the Group which does not expire or is not determinable by the Company within one year without payment of compensation (other than statutory compensation).

— 60 —

GENERAL INFORMATION

APPENDIX

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2013, the date to which the latest published audited consolidated financial statements of the Group were made up.

5. QUALIFICAITON OF EXPERT

The following is the qualification of the expert whose letter is contained in this circular:

Name

Qualification

Goldin Financial Limited

a licensed corporation under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) licensed to carry on Type 6 (advising on corporate finance) regulated activity.

6. CONSENT OF EXPERT

Goldin Financial Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which they appear.

7. INTERESTS OF EXPERT

As at the Latest Practicable Date, Goldin Financial Limited has no shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group and has no direct or indirect interest in any assets acquired or disposed of by or leased to any member of the Group or is proposed to be acquired or disposed of by or leased to any member of the Group since 31 December 2013, being the date to which the latest published audited consolidated financial statements of the Group were made up.

— 61 —

GENERAL INFORMATION

APPENDIX

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:00 a.m. to 6:00 p.m. on any weekday (except public holidays) at the office of Bridge Partners Capital Limited at Room 3303, 33/F, West Tower Shun Tak Centre, 200 Connaught Road Central, Hong Kong for a period of 14 days from the date of this circular:

(a) the letter from the Independent Board Committee, the text of which is set out in this circular;
(b) the letter from Goldin Financial as set out on pages 32 to 58 of this circular;
(c) the written consent as referred to in the paragraphs headed “Consent of Expert” in this appendix;
(d) the New CCT Agreements; and
(e) the New Project Agreements.

9. MISCELLANEOUS

(a) All references to times and dates in this circular refer to Hong Kong times and dates.
(b) The English text of this circular shall prevail over its Chinese text.

— 62 —

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING 2014

==> picture [280 x 136] intentionally omitted <==

＊

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING 2014

NOTICE IS HEREBY given that the Second Extraordinary General Meeting 2014 (the “ EGM ”) of Luoyang Glass Company Limited (the “ Company ”) will be held at the conference room of the Company on 3rd Floor, No. 9 Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the People’s Republic of China (the “ PRC ”) at 9:00 a.m. on 31 December 2014 (Wednesday) for the purpose of considering and, if thought fit, passing the following resolutions:

Unless otherwise indicated, capitalized terms used herein shall have the same meanings as those defined in the announcement of the Company dated 14 November 2014.

To consider and approve the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement (a copy of which has been produced to the EGM marked “1” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement (a copy of which has been produced to the EGM marked “2” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement (a copy of which has been produced to the EGM marked “3” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, the transaction contemplated thereunder and the implementation thereof.

* for identification purposes only

— 63 —

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING 2014

To consider and approve the Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement (a copy of which has been produced to the EGM marked “4” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the CLFG Raw Materials Sale Framework Agreement (a copy of which has been produced to the EGM marked “5” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, its proposed annual caps, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the Ultra-thin Float Glass Sale and Purchase Framework Agreement (a copy of which has been produced to the EGM marked “6” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, its proposed annual caps, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the CNBMG Engineering Equipment and Materials Supply Framework Agreement (a copy of which has been produced to the EGM marked “7” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, its proposed annual caps, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the CNBMG Engineering Technical Services Framework Agreement (a copy of which has been produced to the EGM marked “8” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, its proposed annual caps, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the CNBMG Financial Services Framework Agreement (a copy of which has been produced to the EGM marked “9” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, its proposed annual caps, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the 2014 Piped Natural Gas Supply Supplemental Agreement (a copy of which has been produced to the EGM marked “10” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, its proposed revised annual caps, the transaction contemplated thereunder and the implementation thereof.
To consider and approve the 2015 Piped Natural Gas Supply Framework Agreement (a copy of which has been produced to the EGM marked “11” and signed by the chairman of the EGM for the purpose of identification), the terms and conditions thereof, its proposed annual caps, the transaction contemplated thereunder and the implementation thereof.

— 64 —

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING 2014

To approve, ratify and confirm any one of the Directors for and on behalf of the Company, among other matters, to sign, execute, perfect, deliver or to authorize signing, executing, perfecting and delivering all such documents and deeds, to do or authorize doing all such acts, matters and things as they may in their discretion consider necessary, expedient or desirable giving effect to and implement the Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement, Longhai Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement, Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Design and Installation Agreement, Longmen Glass Production Line Smoke Gas Dust Removal and Denitration Project Equipment Agreement, CLFG Raw Materials Sale Framework Agreement, Ultra-thin Float Glass Sale and Purchase Framework Agreement, CNBMG Engineering Equipment and Materials Supply Framework Agreement, CNBMG Engineering Technical Services Framework Agreement, CNBMG Financial Services Framework Agreement, 2014 Piped Natural Gas Supply Supplemental Agreement and 2015 Piped Natural Gas Supply Framework Agreement.

(For details of the above resolutions, please see the announcement of the Company dated 14 November 2014.)

By order of the Board of LUOYANG GLASS COMPANY LIMITED* Ma Liyun Chairman

Luoyang, the PRC

14 November 2014

As at the date of this notice, 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.

for identification purposes only

— 65 —

NOTICE OF THE SECOND EXTRAORDINARY GENERAL MEETING 2014

Notes:

Holders of the Company’s H shares, whose names appear on the register of members maintained by Hong Kong Registrars Limited at the close of trading at 4:00 p.m. on 28 November 2014, are entitled to attend and vote at the EGM. The register of members of the Company’s H shares will be closed from 29 November 2014 to 31 December 2014 (both days inclusive), during which period no transfer of H shares will be effected in order to determine the list of holders of H shares eligible to attend the EGM. Holders of H shares of the Company who wish to attend the EGM must lodge all share transfer forms accompanied by the relevant H share certificates with the registrar of the Company’s H shares, namely Hong Kong Registrars Limited, at Rooms 1901-5, Hopewell Centre, 183 Queen’s Road East, Hong Kong by 4:00 p.m. on 28 November 2014.
Any shareholder entitled to attend and vote at the EGM may appoint a proxy or proxies (who need not be a shareholder of the Company) to attend and vote at the EGM on his/her behalf. A proxy of a shareholder who has appointed more than one proxy may only vote on a poll. A proxy needs not be a shareholder.
The principal may appoint a proxy in written form. The proxy form shall be signed by the principal or his attorney as authorised. In case that the proxy form is signed by the attorney of the principal, the power of attorney or other authorisation documents must be notarially certified. To be valid, the proxy form, together with a notarially certified copy of the power of attorney or other authorisation documents must be lodged at the Company’s share registrar in Hong Kong, Hong Kong Registrars Limited, at Rooms 1901-5, Hopewell Centre, 183 Queen’s Road East, Hong Kong or to the Company’s registered address at No. 9 Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province, the PRC not less than 24 hours before the time appointed for holding of the EGM or any adjournment thereof.
Shareholders who intend to attend the EGM in person or by proxy should complete and return the signed reply slip for attending the meeting to the registered address of the Company on or before 10 December 2014 personally or by mail or fax.
Shareholders or their proxies shall produce their proofs of identity when attending the EGM. A proxy who is appointed to attend the EGM shall produce the proxy form at the same time.
The EGM is expected to last for not more than one day. Shareholders and proxies attending the EGM should be responsible for their own travelling and accommodation expenses.
The Company’s registered address is as follows:

No. 9 Tang Gong Zhong Lu, Xigong District Luoyang Municipal, Henan Province The People’s Republic of China Postal Code: 471009 Tel: 86-379-6390 8588 Fax: 86-379-6325 1984

Completion and return of the proxy form will not preclude shareholders of the Company from subsequently attending and voting in person at the EGM or any adjourned meetings should you so wish.

— 66 —

AI assistant

RoboSense Technology Co., Ltd — Proxy Solicitation & Information Statement 2014

50628_rns_2014-12-15_943c223d-9b7a-4bf8-bf2e-50cdbbcf9e9b.pdf

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND CONTINUING CONNECTED TRANSACTIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

A. DISCLOSEABLE AND CONNECTED TRANSACTIONS

THE LONGHAI GLASS PRODUCTION LINE SMOKE GAS DUST REMOVAL AND DENITRATION PROJECT DESIGN AND INSTALLATION AGREEMENT

Date

Parties

Services to be provided

Consideration

Date

Parties

Services to be provided

Consideration

Date

Parties

Services to be provided

Consideration

THE LONGMEN GLASS PRODUCTION LINE SMOKE GAS DUST REMOVAL AND DENITRATION PROJECT EQUIPMENT AGREEMENT

Date

Parties

Services to be provided

Consideration

REASONS FOR ENTERING INTO THE NEW PROJECT AGREEMENTS

INFORMATION ON LONGHAI GLASS, LONGMEN GLASS AND EPR INSTITUTE

HONG KONG LISTING RULES IMPLICATIONS

CONTINUING CONNECTED TRANSACTIONS

BACKGROUND AND REASONS FOR THE CONTINUING CONNECTED TRANSACTIONS

B. CONTINUING CONNECTED TRANSACTIONS SUBJECT TO REPORTING AND ANNOUNCEMENT REQUIREMENTS ONLY

THE CLFG RAW MATERIALS SALE FRAMEWORK AGREEMENT

Brief summary of the CLFG Raw Material Sale Framework Agreement:

HONG KONG LISTING RULES IMPLICATIONS

C. NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

1. THE ULTRA-THIN FLOAT GLASS SALE AND PURCHASE FRAMEWORK AGREEMENT

Brief summary of the Ultra-thin Float Glass Sale and Purchase Framework Agreement:

LETTER FROM THE BOARD

2. THE CNBMG ENGINEERING EQUIPMENT AND MATERIALS SUPPLY FRAMEWORK AGREEMENT

Brief summary of the CNBMG Engineering Equipment and Materials Supply Framework Agreement:

3. THE CNBMG ENGINEERING TECHNICAL SERVICES FRAMEWORK AGREEMENT

Brief summary of the CNBMG Engineering Technical Services Framework Agreement:

INFORMATION AND RELATIONSHIP OF THE PARTIES TO THE CONTINUING CONNECTED TRANSACTION AGREEMENTS

LETTER FROM THE BOARD

HONG KONG LISTING RULES IMPLICATIONS

D. C O N N E C T E D T R A N S A C T I O N E X E M P T E D F R O M R E P O R T I N G , ANNOUNCEMENT AND INDEPENDENT SHAREHOLDERS’ APPROVAL REQUIREMENTS UNDER THE HONG KONG LISTING RULES

1. THE CNBMG FINANCIAL SERVICES FRAMEWORK AGREEMENT

Brief summary of the CNBMG Financial Services Framework Agreement:

HONG KONG LISTING RULES IMPLICATIONS

Implementation of previous connected transactions:

Revision to the maximum transaction amount for the connected transactions in ordinary course of business for 2014 and the new maximum transaction amount for the connected transactions in ordinary course of business for 2015

Reason for the revision to the maximum transaction amount

HONG KONG LISTING RULES IMPLICATIONS

EGM

LETTER FROM THE BOARD

RECOMMENDATION

ADDITIONAL INFORMATION

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Yours faithfully,

Independent Board Committee

Goldin Financial Limited

DISCLOSEABLE AND CONNECTED TRANSACTIONS AND CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

LETTER FROM GOLDIN FINANCIAL

THE INDEPENDENT BOARD COMMITTEE

BASIS OF OUR ADVICE

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Discloseable and connected transactions

1.1. Background to and reasons for entering into the New Project Agreements

1.2. Principal terms of the New Project Agreements

2. Non-exempt CCT Agreements

2.1. Background to and reasons for entering into the agreements

2.1.1. The Ultra-Thin Float Glass Sale and Purchase Framework Agreement

2.2. Principal terms of the agreement

2.2.1. The Ultra-Thin Float Glass Sale and Purchase Framework Agreement

2.2.2. The CNBMG Engineering Equipment and Materials Supply Framework Agreement

RoboSense Technology Co., Ltd Proxy Solicitation & Information Statement 2014