RoboSense Technology Co., Ltd — Regulatory Filings 2018

Jan 24, 2018

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

==> picture [373 x 149] intentionally omitted <==

＊

CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

References are made to the circulars of the Company dated 15 December 2014 and 30 March 2016 and the announcement of the Company dated 28 April 2016 in relation to, among other things, the 2014 CCT Agreements, the Supply Agreement and the Wooden Boxes Supply Agreement respectively, which constituted continuing connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules and expired on 31 December 2017.

CONTINUING CONNECTED TRANSACTIONS

On 24 January 2018, the Company entered into the 2018 CCT Agreements for the purposes of (i) renewing the 2014 CCT Agreements, the Supply Agreement and the Wooden Boxes Supply Agreement, so as to ensure continuous provision of goods and services to and by the Group; (ii) coping with the operation needs and business development of the Group with an expected increase in production capacity and project development and an expected growth in the new specialised functional glass product sector in the coming years; and (iii) ensuring adequacy of capital to be required in different stages of various projects and business development of the Group.

– 1 –

Among the 2018 CCT Agreements, the Company entered into the Sale and Purchase of Spare Parts Framework Agreement with CNBMG, pursuant to which the CNBMG Group agreed to supply certain equipment and spare parts to the Group. The Company also entered into the Sale and Purchase of Products Framework Agreement with Triumph, pursuant to which Triumph Group agreed to supply float glass and wooden packaging boxes to the Group. Furthermore, the Company entered into the Supply of Electricity Framework Agreement with CNBMG, pursuant to which the CNBMG Group agreed to supply photovoltaic electricity to the Group.

HONG KONG LISTING RULES IMPLICATIONS

CNBMG is deemed to be interested in 174,018,242 A Shares, representing approximately 33.04% of the total issued share capital of the Company as at the date of this announcement, and Triumph is a direct wholly-owned subsidiary of CNBMG. Therefore, each of CNBMG and Triumph is regarded as a connected person of the Company.

As the applicable percentage ratios for each of the Non-exempt 2018 CCT Agreements exceed 5%, the transactions contemplated thereunder will be subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Hong Kong Listing Rules.

As the applicable percentage ratios for the Supply of Electricity Framework Agreement exceed 0.1% but less than 5%, the transactions contemplated thereunder will be subject to the reporting and announcement requirements only but exempt from the independent shareholders’ approval requirement under Chapter 14A of the Hong Kong Listing Rules.

The transactions contemplated under the Financial Services Framework Agreement constitute financial assistance provided for the benefit of the Company on normal commercial terms or better where no security over assets of the Group is granted in respect of such financial assistance and are therefore exempted from the reporting, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.90 of the Hong Kong Listing Rules.

Mr. Zhang Chong, the executive Director, and Mr. Xie Jun, the non-executive Director, have abstained from voting in respect of the 2018 CCT Agreements in the Board meeting due to the fact that they are connected with CNBMG and are not regarded as independent to make any recommendation to the Board.

SHANGHAI LISTING RULES IMPLICATIONS

As the A Shares of the Company are listed on the Shanghai Stock Exchange, the Company is also required to comply with the relevant requirements of the Shanghai Listing Rules. Pursuant to the Shanghai Listing Rules, the Proposed Annual Caps of all the 2018 CCT Agreements should be aggregated and are subject to the Independent Shareholders’ approval at the EGM.

– 2 –

EGM

An EGM will be convened by the Company for the purposes of, among other things, seeking Independent Shareholders’ approval for each of the 2018 CCT Agreements and their respective Proposed Annual Caps. CNBMG and its associates, which have interests in the transactions contemplated under the 2018 CCT Agreements, will abstain from voting on the resolutions in respect of each of the 2018 CCT Agreements and their respective Proposed Annual Caps at the EGM. At the EGM, votes will be taken by poll.

GENERAL INFORMATION

The Independent Board Committee comprising all independent non-executive Directors has been formed by the Company in accordance with the Hong Kong Listing Rules to advise the Independent Shareholders on the Non-exempt 2018 CCT Agreements. The Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders as to whether the terms and conditions of the Non-exempt 2018 CCT Agreements, the transactions contemplated thereunder and their respective Proposed Annual Caps are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

A circular containing, among other things, (i) further details of the 2018 CCT Agreements and their respective Proposed Annual Caps; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Non-exempt 2018 CCT Agreements and their respective Proposed Annual Caps; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Non-exempt 2018 CCT Agreements and their respective Proposed Annual Caps; and (iv) a notice of the EGM, is expected to be despatched to the Shareholders on or before 1 March 2018, which is more than 15 business days after publication of this announcement, as additional time is required for the Company to prepare the relevant information for inclusion in the circular.

– 3 –

INTRODUCTION

References are made to the circulars of the Company dated 15 December 2014 and 30 March 2016 and the announcement of the Company dated 28 April 2016 in relation to, among other things, the 2014 CCT Agreements, the Supply Agreement and the Wooden Boxes Supply Agreement respectively, which constituted continuing connected transactions of the Company under Chapter 14A of the Hong Kong Listing Rules and expired on 31 December 2017.

BACKGROUND OF AND REASONS FOR ENTERING INTO THE 2018 CCT AGREEMENTS

The Company is principally engaged in the production and sales of ultra-thin electronic glass. The Company entered into the 2014 CCT Agreements with CLFG, CNBMG and Triumph Science & Technology respectively and the Supply Agreement with Triumph, and Bengbu Company entered into the Wooden Boxes Supply Agreement with Bengbu Chemical, all of which expired on 31 December 2017. In addition, after the completion of the Acquisition by the Company of 100% equity interest in Hefei New Energy, 100% equity interest in Tongcheng New Energy and 70.99% equity interest in Yixing New Energy which are expected to complete in March 2018, the Company will expand its business development in the new energy glass sector in the glass related business. The Company expects that the Acquisition will allow the Group to leverage its experience in operation and management and its leading position established within the glass industry, expand its footprint within the glass related business and enrich the Group’s product structure relating to the new specialised functional glass sector, thereby enhancing the Company’s competitiveness. The Company entered into the 2018 CCT Agreements on 24 January 2018 for the purposes of (i) renewing the 2014 CCT Agreements, the Supply Agreement and the Wooden Boxes Supply Agreement (all of which expired on 31 December 2017) so as to ensure continuous provision of goods and services to and by the Group; (ii) coping with the operation needs and business development of the Group with an expected increase in production capacity and project development and an expected growth in the new specialised functional glass product sector in the coming years; and (iii) ensuring adequacy of capital to be required in different stages of various projects and business development of the Group.

Except for the views of the independent non-executive Directors on the Non-exempt 2018 CCT Agreements and their respective Proposed Annual Caps, which will be expressed after considering the advice from the Independent Financial Adviser, the Directors are of the view that the 2018 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 the 2018 CCT Agreements and their respective Proposed Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Shareholders and the Company as a whole.

– 4 –

A. NON-EXEMPT CONTINUING CONNECTED TRANSACTIONS

Set out below is a summary of the principal terms of each of the Non-exempt 2018 CCT Agreements, which are subject to the reporting, announcement and independent shareholders’ approval requirements under the Hong Kong Listing Rules:

1. TECHNICAL SERVICES FRAMEWORK AGREEMENT

On 24 January 2018, the Company and CNBMG entered into the Technical Services Framework Agreement.

Date: 24 January 2018

Parties: (1) CNBMG; and

(2) the Company.

Term: The Technical Services Framework Agreement shall take effect upon signing with company seals by the authorised representatives of both parties and approval by the Independent Shareholders at the extraordinary general meeting of the Company, and shall be valid until 31 December 2020.

Nature of transaction:

Pursuant to the Technical Services Framework Agreement, the CNBMG Group agreed to provide technical services to the Group including but not limited to: (1) preparation of engineering project feasibility plans and feasibility study reports; (2) project design and project consultation; (3) implementation of the projects; (4) design, organisation and implementation of plans for environmental protection facilities; (5) substantial maintenance, organisation and implementation of the kiln and main equipment; (6) development, application and services of the project softwares; and (7) assistance to the organisation in resuming production in response to material incidents of operational accident.

Pricing terms

Pursuant to the Technical Services Framework Agreement, as a general principle, the technical service fee under the Technical Services Framework Agreement shall be determined in the ordinary course of business on normal commercial terms and negotiated on arm’s length basis by both parties under the principle of justice, fairness and openness. The technical service fee charged by the CNBMG Group on the Group shall not be higher than that charged by them on independent third parties for provision of the same type of or the same technical services.

– 5 –

Pricing standards

The technical service fee under the Technical Services Framework Agreement will be determined with reference to:

• (1) the applicable state price;

• (2) if there is no applicable state price for such services, the fair prices of the same or similar technical services provided by independent third parties in the location of the Company or the nearby area, and the prevailing market price of the transaction. The Group will obtain relevant market price information through various channels, which include (i) considering comparable transactions (if any) conducted by independent third parties during the same period; and (ii) communication and exchange of price information by various means, including telephone conversations, emails and meetings, with peers and business partners within the glass production industry; or

• (3) where there are no available prevailing market prices or where it is impracticable to obtain the relevant market price information, the Group and the CNBMG Group will determine the price after arm’s length negotiations with reference to (i) the previous similar transactions concluded by the Group with independent third parties; and/or (ii) previous similar transactions concluded by the CNBMG Group with independent third parties; and/or (iii) the costs of equipment and materials required by the CNBMG Group for provision of the relevant technical services, manpower involved, complexity of the technical plans, level of technology advancement and duration of the construction.

Proposed Annual Caps for the Technical Services Framework Agreement

The below summarises the annual cap amounts for the three years ended 31 December 2017 under the CNBMG Engineering Technical Services Framework Agreement:

	For the year	For the year	For the year
	ended	ended	ended
	31 December	31 December	31 December
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Annual cap amounts	15,000	20,000	20,000

– 6 –

The table below summarises the historical transaction amounts for the two years ended 31 December 2016 and the eleven months ended 30 November 2017 under the CNBMG Engineering Technical Services Framework Agreement:

	For the year	For the year	For the period
	ended	ended	from 1 January
	31 December	31 December	to 30 November
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Historical transaction amounts	14,360	0	11,700

The Proposed Annual Caps under the Technical Services Framework Agreement for each of the three years ending 31 December 2020 are set out below:

	For the year	For the year	For the year
	ending	ending	ending
	31 December	31 December	31 December
	2018	2019	2020
	RMB’000	RMB’000	RMB’000
Proposed Annual Caps	24,000	24,000	20,000

The Proposed Annual Caps under the Technical Services Framework Agreement are determined based on the estimated need for the technical services to be expected by the Company in the future after taking into account (i) the implementation of the new development projects and transformation projects of the Group; (ii) technologies involved and the complexity of the technical work for improving the production capacity and level of production technology of the Group; (iii) the implementation of the projects of the Target Companies under the Acquisition; (iv) the expected price with reference to the prevailing market price for the provision of such services; and (v) the decrease in the number of engineering projects in 2020.

Internal control on pricing

The Company will adopt the below internal control procedures in relation to its utilisation of the technical services provided by the CNBMG Group:

The technical services and their respective fees shall be reported in accordance with the relevant requirements of the Group’s internal control policy to the management of the Group and will be implemented only upon approval of the management of the Group. Significant and important technical services shall be implemented upon approval by the general manager of the Group.

– 7 –

The written contract in relation to technical services shall be executed upon approval by the secretariat of the Board, chief financial controller and general manager of the Company after joint review by the legal consultant, internal control management department, financial department and secretariat of the Board of the Company.

2. SALE AND PURCHASE OF GLASS PRODUCTS FRAMEWORK AGREEMENT

On 24 January 2018, the Company and CNBMG entered into the Sale and Purchase of Glass Products Framework Agreement.

Date: 24 January 2018 Parties: (1) the Company; and (2) CNBMG.

Term: The Sale and Purchase of Glass Products Framework Agreement shall take effect upon signing with company seals by the authorised representatives of both parties and approval by the Independent Shareholders at the extraordinary general meeting of the Company, and shall be valid until 31 December 2020.

Nature of transaction:

Pursuant to the Sale and Purchase of Glass Products Framework Agreement, the Group agreed to supply glass products including but not limited to ultra-thin glass, photovoltaic glass and further processed glass products to the CNBMG Group.

Pricing terms

Pursuant to the Sale and Purchase of Glass Products Framework Agreement, as a general principle, the price of glass products under the Sale and Purchase of Glass Products Framework Agreement shall be determined in the ordinary course of business on normal commercial terms, negotiated on arm’s length basis by both parties under the principle of justice, fairness and openness, and based on the prevailing market prices of the transaction. The price of glass products offered by the Group to the CNBMG Group shall not be less than that offered by the Group to independent third parties for provision of the same or similar glass products.

– 8 –

Pricing standards

The price of glass products under the Sale and Purchase of Glass Products Framework Agreement will be determined with reference to:

• (i) comparable transactions (if any) conducted by the Group with independent third parties during the same period; and/or

• (ii) communication and exchange of price information by various means, including telephone conversations, emails and meetings with peers and business partners within the glass production industry; and/or

• (iii) Sales staff will communicate and query with the customers, suppliers or trade partners through site visits to obtain the prices of comparable transactions in the same period and the prevailing market price at the time of a particular transaction; and/or

• (iv) supply and demand information and price information in the PRC market obtained from China National Bureau of Statistics (www.stats.gov.cn) and the glass network/the official website of China glass industry (www.glass.org.cn/) respectively. Relevant market price data will be used as the basis for the transactions with the CNBMG Group by the sales department.

The final price will be implemented after the approval of the general manager or the deputy general manager of the Company’s subsidiaries with reference to (i) to (iii) above. For products with unified prices set by the Company, the selling prices for relevant products shall not be lower than the floor prices issued by the Company.

Proposed Annual Caps for the Sale and Purchase of Glass Products Framework Agreement

The below summarises the annual cap amounts for the three years ended 31 December 2017 under the Ultra-thin Float Glass Sale and Purchase Framework Agreement:

	For the year	For the year	For the year
	ended	ended	ended
	31 December	31 December	31 December
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Annual cap amounts
(inclusive of VAT)	214,000	224,000	234,000

– 9 –

The table below summarises the historical transaction amounts for the two years ended 31 December 2016 and the eleven months ended 30 November 2017 under the Ultra-thin Float Glass Sale and Purchase Framework Agreement:

	For the year	For the year	For the period
	ended	ended	from 1 January
	31 December	31 December	to 30 November
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Historical transaction amounts
(inclusive of VAT)	6,410	102,320	17,420

The Proposed Annual Caps under the Sale and Purchase of Glass Products Framework Agreement for each of the three years ending 31 December 2020 are set out below:

	For the year	For the year	For the year
	ending	ending	ending
	31 December	31 December	31 December
	2018	2019	2020
	RMB’000	RMB’000	RMB’000
Proposed Annual Caps
(inclusive of VAT)	363,620	452,570	490,690

The Proposed Annual Caps under the Sale and Purchase of Glass Products Framework Agreement are determined based on the Group’s internal projection on the estimated amount of ultra-thin glass, photovoltaic glass and further processed glass products to be sold to the CNBMG Group by the Group after taking into account (i) the historical transaction amounts between the Target Companies under the Acquisition and CNBMG; (ii) the anticipated increase in demand of the CNBMG Group for the glass products; and (iii) the production capacity and the product type of the glass products of the Group including the Target Companies under the Acquisition.

Internal control on pricing

The Company will adopt the below internal control measures in relation to the sales of the glass products to the CNBMG Group:

• (i) the marketing department of the Company will be responsible for collecting the market information including the supply and demand and the price fluctuation of each of the glass products on a monthly basis from China National Bureau of Statistics (www.stats.gov.cn) and the glass network/the official website of China glass industry (www.glass.org.cn/) respectively;

– 10 –

• (ii) the marketing department of the Company will also communicate and query with the customers, suppliers or trade partners through telephone conversations, emails and site visits to obtain the prices of comparable transactions in the same period and the prevailing market price at the time of a particular transaction for verification of the prevailing market price implemented by the sales department;

• (iii) the marketing department of the Company will set up the floor price to the subsidiaries for each of the glass products for internal measure after approval by the management of the Company according to the market price provided by the marketing department and the selling price offered to the CNBMG Group will not be less than the floor price; and

• (iv) the marketing department will review the sales of the glass products of the Company’s subsidiaries based on the floor price and report to the management of the Company on a monthly basis.

3. SALE OF RAW MATERIALS FRAMEWORK AGREEMENT

On 24 January 2018, the Company and CNBMG entered into the Sale of Raw Materials Framework Agreement.

Date: 24 January 2018 Parties: (1) CNBMG; and (2) the Company.

Term: The Sale of Raw Materials Framework Agreement shall take effect upon signing with company seals by the authorised representatives of both parties and approval by the Independent Shareholders at the extraordinary general meeting of the Company, and shall be valid until 31 December 2020.

Nature of transaction:

Pursuant to the Sale of Raw Materials Framework Agreement, the CNBMG Group agreed to supply raw materials such as silicon powder and sodium carbonate to the Group.

Pricing terms

Pursuant to the Sale of Raw Materials Framework Agreement, as a general principle, the price of the raw materials under the Sale of Raw Materials Framework Agreement shall be determined in the ordinary course of business on normal commercial terms, negotiated on arm’s length basis by both parties under the principle of justice, fairness and openness, and based on the prevailing market price of the transaction. The price of the raw materials offered by the CNBMG Group to the Group shall not be higher than that offered by the CNBMG Group to independent third parties for provision of the same or similar raw materials.

– 11 –

Pricing standards

Silicon powder

The price of silicon powder under the Sale of Raw Materials Framework Agreement will be determined with reference to the prevailing market price at the time of particular transaction.

The Company will obtain market price information through various channels, which include (i) reference made to comparable transactions (if any) conducted with independent third parties during the same period; (ii) regular visit to silicon powder manufacturers (including independent third parties) to understand production, sales and price information on-site; and (iii) the procurement price obtained by the way of open tender or invitation for bid. The major factors in relation to determination of market price are the supply and demand of silicon powder and other raw materials in the areas where the Group’s glass production lines are located, distance between the purchasers and vendors, and quality of silicon powder. Upon collection of market information, the relevant terms (including pricing and payment terms) will be used as the basis for the transactions with the CNBMG Group. The price offered by the CNBMG Group to the Group shall not be less favourable than those offered by other independent third parties for similar raw materials.

Sodium carbonate

The procurement of sodium carbonate by the Group is conducted via the centralised procurement platform adopted by the Triumph Group. In order to give play to the benefit of large scale procurement and further reduce the procurement costs of its glass manufacturers, the Triumph Group has built a centralised procurement platform of sodium carbonate, and prepared relevant management measures and implementation plan. The centralised procurement of sodium carbonate shall be conducted by means of unified tender by the Triumph Group for unified procurement from and unified payment to sodium carbonate suppliers. The price of sodium carbonate between the Group and the Triumph Group shall be the procurement price of the Triumph Group plus the capital occupation costs (surcharge of 1% for 1-month contracts). The marketing department of the Company also collected market price information on a monthly basis. The deputy general manager in charge of centralised procurement of the Company approved the transaction price with Triumph Group to be lower than the market price with the reference to the quotations from different sodium carbonate manufacturers and China’s bulk commodity service providers such as www.chem365.net.

– 12 –

Proposed Annual Caps for the Sale of Raw Materials Framework Agreement

The below summarises the annual cap amounts for the three years ended 31 December 2017 under the CLFG Raw Materials Sale Framework Agreement:

	For the year	For the year	For the year
	ended	ended	ended
	31 December	31 December	31 December
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Annual cap amounts
(inclusive of VAT)	9,500	9,500	9,500

The table below summarises the historical transaction amounts for the two years ended 31 December 2016 and the eleven months ended 30 November 2017 under the CLFG Raw Materials Sale Framework Agreement:

	For the year	For the year	For the period
	ended	ended	from 1 January
	31 December	31 December	to 30 November
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Historical transaction amounts
(inclusive of VAT)	5,780	3,600	900

The below summarises the annual cap amounts for the two years ended 31 December 2017 under the Supply Agreement:

	For the year	For the year
	ended	ended
	31 December	31 December
	2016	2017
	RMB’000	RMB’000
Annual cap amounts
(inclusive of VAT)	43,000	43,000

– 13 –

The table below summarises the historical transaction amounts for the year ended 31 December 2016 and the eleven months ended 30 November 2017 under the Supply Agreement:

	For the year	For the period
	ended	from 1 January
	31 December	to 30 November
	2016	2017
	RMB’000	RMB’000
Historical transaction amounts
(inclusive of VAT)	17,820	19,670

The Proposed Annual Caps under the Sale of Raw Materials Framework Agreement for each of the three years ending 31 December 2020 are set out below:

	For the year	For the year	For the year
	ending	ending	ending
	31 December	31 December	31 December
	2018	2019	2020
	RMB’000	RMB’000	RMB’000
Proposed Annual Caps
(inclusive of VAT)	347,370	571,370	580,230

The Proposed Annual Caps under the Sale of Raw Materials Framework Agreement are determined based on the estimated demand of silicon powder and sodium carbonate after taking into account (i) the historical transaction amounts between the Target Companies under the Acquisition and CNBMG; (ii) the selling prices and consumed amounts of the raw materials and transportation fees in the previous three years; (iii) the need of higher quality of silicon powder and sodium carbonate for the new product development and production in the future; and (iv) the expected consumption of the raw materials for the new production lines.

– 14 –

Internal control on pricing

The Group will adopt the below internal control procedures in relation to the procurement of the raw materials from the CNBMG Group:

• (i) The procurement departments of the Group’s subsidiaries shall conduct open tender or invitation for bid involving at least three independent suppliers at least on a yearly basis, and determine the silicon powder supplier and silicon powder procurement price based on the tender results.

• (ii) For centralised procurement of sodium carbonate, the Company will appoint a deputy general manager in charge of marketing to directly participate in the centralised tender, bid negotiation and pricing for sodium carbonate of the Triumph Group. A centralised tender for sodium carbonate shall be performed once a month or every two months depending on the market situation, and the tender is open for domestic major sodium carbonate manufacturers in the market.

The marketing department of the Company will be responsible for collection of information on supply and demand and price fluctuation of silicon powder and sodium carbonate on a monthly basis from different sodium carbonate manufacturers and China’s bulk commodity service providers such as www.chem365.net. Relevant personnel of the business department will communicate and query with the silicon powder and sodium carbonate manufacturers or trade partners through telephone conversations, emails and site visits to obtain the prices of comparable transactions by independent suppliers in the same period and the prevailing market price at the time of a particular transaction; and

• (iii) The deputy general manager in charge of marketing of the Company or the management of its subsidiaries will assess and determine the terms and pricing for procurement of raw materials with the CNBMG Group based on the market information collected with the abovementioned method or from the abovementioned channel in order to ensure that the prices offered by the CNBMG Group shall not be less favourable than those offered by other independent third parties for similar raw materials.

– 15 –

4. ENGINEERING EQUIPMENT PROCUREMENT AND INSTALLATION FRAMEWORK AGREEMENT

On 24 January 2018, the Company and CNBMG entered into the Engineering Equipment Procurement and Installation Framework Agreement.

Date: 24 January 2018

Parties: (1) CNBMG; and

• (2) the Company.

Term: The Engineering Equipment Procurement and Installation Framework Agreement shall take effect upon signing with company seals by the authorised representatives of both parties and approval by the Independent Shareholders at the extraordinary general meeting of the Company, and shall be valid until 31 December 2020.

Nature of transaction:

Pursuant to the Engineering Equipment Procurement and Installation Framework Agreement, the CNBMG Group agreed to supply equipment materials, construction and installation services, etc. required for engineering projects to the Group.

Pricing terms

Pursuant to the Engineering Equipment Procurement and Installation Framework Agreement, as a general principle, the price of equipment materials, construction fee and installation fee under the Engineering Equipment Procurement and Installation Framework Agreement shall be determined in the ordinary course of business on normal commercial terms, negotiated on arm’s length basis by both parties under the principle of justice, fairness and openness, and based on the prevailing market price of the transaction. The price of equipment materials, construction fee and installation fee charged by the CNBMG Group on the Group shall not be higher than that charged by the CNBMG Group on independent third parties for the same type of or the same equipment materials, construction and installation services.

– 16 –

Pricing standards

The pricing or consideration under the Engineering Equipment Procurement and Installation Framework Agreement will be determined with reference to:

• (i) prices offered to other independent third party(ies) on the same or similar engineering projects by CNBMG;

• (ii) the comparable transactions (if any) with independent third parties by the Group during the same period; and

• (iii) communication and exchange of price information by various means, including telephone conversations, emails and meetings with peers and business partners within the glass production industry.

Upon collection of market information of (i) to (iii) above, relevant terms (including pricing and payment terms) will be used as the basis for the transaction with the CNBMG Group. The written contract in relation to the engineering equipment procurement shall be executed with the approval of the secretary to the Board, chief financial controller and general manager of the Company after joint review by the company legal consultant, internal control management department, financial department and secretariat of the Board of the Company.

Where there are no available prevailing market prices or where it is impracticable to obtain such market prices, the Group and the CNBMG Group will determine the price through arm’s length negotiation with reference to (i) the previous similar transactions concluded by the Group and independent third parties; and/ or (ii) similar transactions concluded by the CNBMG Group and third parties; and/or (iii) the costs of equipment and materials provided by the CNBMG Group for engineering projects and technical requirements on installation, manpower involved, complexity of technical plan, technology advancement and duration of the installation. The price offered by the CNBMG Group to the Group shall not be less favourable than those offered by the CNBMG Group to other independent third parties for provision of the same or similar services.

– 17 –

Proposed Annual Caps for the Engineering Equipment Procurement and Installation Framework Agreement

The below summarises the annual cap amounts for the three years ended 31 December 2017 under the CNBMG Engineering Equipment and Materials Supply Framework Agreement:

	For the year	For the year	For the year
	ended	ended	ended
	31 December	31 December	31 December
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Annual cap amounts
(inclusive of VAT)	50,000	300,000	300,000

The table below summarises the historical transaction amounts for the two years ended 31 December 2016 and the eleven months ended 30 November 2017 under the CNBMG Engineering Equipment and Materials Supply Framework Agreement:

	For the year	For the year	For the period
	ended	ended	from 1 January
	31 December	31 December	to 30 November
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Historical transaction amounts
(inclusive of VAT)	32,540	0	5,000

The Proposed Annual Caps under the Engineering Equipment Procurement and Installation Framework Agreement for each of the three years ending 31 December 2020 are set out below:

	For the year	For the year	For the year
	ending	ending	ending
	31 December	31 December	31 December
	2018	2019	2020
	RMB’000	RMB’000	RMB’000
Proposed Annual Caps
(inclusive of VAT)	1,137,000	1,105,000	685,000

– 18 –

The Proposed Annual Caps under the Engineering Equipment Procurement and Installation Framework Agreement are determined based on the estimated value of the equipment material, construction and installation services to be required for future engineering projects after taking into account (i) the historical transaction amounts between the Group and the Target Companies under the Acquisition and CNBMG; (ii) the projected schedule of construction projects proposed to be implemented by the Group in 2018, 2019 and 2020; (iii) the complexity of the construction work and installation work for future projects; and (iv) the decrease in the numbers and amounts of construction projects in 2020.

Internal control on pricing

The Company will adopt the below internal control procedures in relation to the procurement of the equipment materials, construction services and installation services provided by the CNBMG Group:

The Group implements project leader system for new, reconstruction and extension, relocation and construction, technical transformation projects. The project leader shall be assigned by the management of the Company and select professional technicians from production management department, financial department and project implementation unit of the Group to constitute a project team.

The project team shall review the offer price from the CNBMG Group and propose terms, pricing basis and plan on relevant equipment materials, construction fee and installation fees based on the design plan, amount of investment, quantity of buildings and advancement of technologies adopted, and submit the same to the meeting of general manager of the Group for discussion.

The written contract in relation to the transaction shall be executed with the approval of the secretary to the Board, chief financial controller and general manager of the Company after joint review by the company legal consultant, internal control management department, financial department and secretariat of the Board of the Company.

– 19 –

5. SALE AND PURCHASE OF SPARE PARTS FRAMEWORK AGREEMENT

On 24 January 2018, the Company and CNBMG entered into the Sale and Purchase of Spare Parts Framework Agreement.

Date: 24 January 2018 Parties: (1) CNBMG; and

(2) the Company.

Term: The Sale and Purchase of Spare Parts Framework Agreement shall take effect upon signing with company seals by the authorised representatives of both parties and approval by the Independent Shareholders at the extraordinary general meeting of the Company, and shall be valid until 31 December 2020.

Nature of transaction:

Pursuant to the Sale and Purchase of Spare Parts Framework Agreement, the CNBMG Group agreed to supply the equipment and spare parts including large equipment, robot arms, crucible containers, trays, glass shelves, various hardware fittings, angle bead, pressure plate, column board, etc. to the Group.

Pricing terms

Pursuant to the Sale and Purchase of Spare Parts Framework Agreement, as a general principle, the price of the equipment and spare parts under the Sale and Purchase of Spare Parts Framework Agreement shall be determined in the ordinary course of business on normal commercial terms, negotiated on arm’s length basis by both parties under the principle of justice, fairness and openness, and based on the prevailing market price of the transaction. The price of equipment and spare parts offered by the CNBMG Group to the Group shall not be higher than that offered by the CNBMG Group to independent third parties for provision of the same or similar equipment and spare parts.

Pricing standards

The price of the equipment and spare parts under the Sale and Purchase of Spare Parts Framework Agreement will be determined with reference to the prevailing market price at the time of particular transaction and not be less favourable than those offered by other independent third party(ies) on the same or similar products. Procurement Department of the Company’s subsidiary will make reference price by inquiring at least three suppliers to determine the price offered by the CNBMG Group.

– 20 –

Proposed Annual Caps for the Sale and Purchase of Spare Parts Framework Agreement

The Proposed Annual Caps under the Sale and Purchase of Spare Parts Framework Agreement for each of the three years ending 31 December 2020 are set out below:

	For the year	For the year	For the year
	ending	ending	ending
	31 December	31 December	31 December
	2018	2019	2020
	RMB’000	RMB’000	RMB’000
Proposed Annual Caps
(inclusive of VAT)	22,000	25,290	22,730

The Proposed Annual Caps under the Sale and Purchase of Spare Parts Framework Agreement are determined based on the expected future consumption on the production equipment and spare parts after taking into account (i) the historical selling prices and consumed amounts of the production equipment and spare parts; (ii) the increasing scale of the future project; (iii) the need for the repair and maintenance on existing production capacity; (iv) the expected increase in the proportion of procurement of spare parts that are able to adopt to the technological upgrade of the Group; and (v) the expected repairment schedule on the equipment till 2020.

Internal control on pricing

The Company will adopt the below internal control procedures in relation to the purchase of the equipment and spare parts from the CNBMG Group:

• (i) the internal audit department will regularly supervise and evaluate the product orders or contract approval procedures in respect of their compliance with internal control requirements;

• (ii) the business departments of the Company’s subsidiaries will be responsible for collection of information on market information and price changes of relevant products, and report the same to the deputy general manager of subsidiaries; and

• (iii) the deputy general manager in charge of business is responsible for verification of the pricing and payment terms for procurement of products. The final contract terms and pricing shall be subject to approval by the general managers of subsidiaries.

– 21 –

6. SALE AND PURCHASE OF PRODUCTS FRAMEWORK AGREEMENT

On 24 January 2018, the Company and Triumph entered into the Sale and Purchase of Products Framework Agreement.

Date: 24 January 2018 Parties: (1) Triumph; and (2) the Company.

Term: The Sale and Purchase of Products Framework Agreement shall take effect upon signing with company seals by the authorised representatives of both parties and approval by the Independent Shareholders at the extraordinary general meeting of the Company, and shall be valid until 31 December 2020.

Nature of transaction:

Pursuant to the Sale and Purchase of Products Framework Agreement, the Triumph Group agreed to supply float glass and wooden packaging boxes to the Group.

Pricing terms

Pursuant to the Sale and Purchase of Products Framework Agreement, as a general principle, the price of the products under the Sale and Purchase of Products Framework Agreement shall be determined in the ordinary course of business on normal commercial terms, negotiated on arm’s length basis by both parties under the principle of justice, fairness and openness, and based on the prevailing market price of the transaction. The price of products offered by the Triumph Group to the Group shall not be higher than that offered by the Triumph Group to independent third parties for provision of the same or similar products.

Pricing standards

Glass products

The price of glass products under the Sale and Purchase of Products Framework Agreement will be determined with reference to:

• (i) comparable transactions (if any) conducted by the Group with independent third parties during the same period; and/or

• (ii) communication and exchange of price information by various means, including telephone conversations, emails and meetings with peers and business partners within the glass production industry; and/or

– 22 –

• (iii) supply and demand information and price information in the PRC market from China National Bureau of Statistics (www.stats.gov.cn) for the demand information and the glass network/the official website of China glass industry (www.glass.org.cn/) for price information. Relevant market price data will be used as the basis for the transactions with the CNBMG Group by the sales department.

The final price will be implemented after the approval of the general manager or the deputy general manager of the Company’s subsidiaries with reference to (i) to (iii) above. For products with unified prices set by the Company, the selling prices for relevant products shall not be lower than the floor prices issued by the Group.

Wooden packaging boxes

The Company will determine the market price thereof by inquiring no less than three suppliers or through invitation for bid. The Company will also require the CNBMG Group to provide the sale and purchase contracts for wooden boxes between the CNBMG Group and the independent third parties for the same period to ensure that the transaction price thereof shall not be higher than that offered by the CNBMG Group to independent third parties for provision of the same or similar products.

Proposed Annual Caps for the Sale and Purchase of Products Framework Agreement

The below summarises the annual cap amounts for the two years ended 31 December 2017 under the Wooden Boxes Supply Agreement:

	For the year	For the year
	ended	ended
	31 December	31 December
	2016	2017
	RMB’000	RMB’000
Annual cap amounts
(inclusive of VAT)	6,000	6,000

The table below summarises the historical transaction amounts for the year ended 31 December 2016 and the eleven months ended 30 November 2017 under the Wooden Boxes Supply Agreement:

For the year	For the period
ended	from 1 January
31 December	to 30 November
2016	2017
RMB’000	RMB’000

Historical transaction amounts (inclusive of VAT)

4,660 3,920

– 23 –

The Proposed Annual Caps under the Sale and Purchase of Products Framework Agreement for each of the three years ending 31 December 2020 are set out below:

	For the year	For the year	For the year
	ending	ending	ending
	31 December	31 December	31 December
	2018	2019	2020
	RMB’000	RMB’000	RMB’000
Proposed Annual Caps
(inclusive of VAT)	28,820	36,420	36,420

The Proposed Annual Caps under the Sale and Purchase of Products Framework Agreement are determined based on the expected future consumption on the float glass and wooden packaging boxes after taking into account (i) the historical transaction amounts between the Group （including the Target Companies under the Acquisition）and the Triumph Group; (ii) the anticipated increase in demand of the Group on the float glass; and (iii) the expected need for wooden packaging boxes for glass and wooden products due to the increase in production capacity of glass products of the Group including the Target Companies under the Acquisition in the future.

Internal control on pricing

The Company will adopt the below internal control procedures in relation to the purchase of the float glass and wooden products from the Triumph Group:

• (i) the internal audit department will regularly supervise and evaluate the product orders or contract approval procedures in respect of their compliance with internal control requirements;

• (ii) the business departments of the Company’s subsidiaries will be responsible for collection of information on market information and price changes of relevant products, and report the same to the deputy general manger of subsidiaries; and

• (iii) the deputy general manager in charge of business is responsible for verification of the pricing and payment terms for procurement of products. The final contract terms and pricing shall be subject to approval by the general managers of subsidiaries.

– 24 –

B. CONTINUING CONNECTED TRANSACTION SUBJECT TO THE REPORTING AND ANNOUNCEMENT REQUIREMENTS ONLY

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

SUPPLY OF ELECTRICITY FRAMEWORK AGREEMENT

On 24 January 2018, the Company and CNBMG entered into the Supply of Electricity Framework Agreement.

Date: 24 January 2018 Parties: (1) CNBMG; and (2) the Company.

Term: The Supply of Electricity Framework Agreement shall take effect upon signing with company seals by the authorised representatives of both parties and approval by the Independent Shareholders at the extraordinary general meeting of the Company, and shall be valid until 31 December 2020.

Nature of transaction:

Pursuant to the Supply of Electricity Framework Agreement, the CNBMG Group agreed to supply photovoltaic electricity to the Group.

Pricing terms

Pursuant to the Supply of Electricity Framework Agreement, as a general principle, the electricity fee under the Supply of Electricity Framework Agreement shall be determined in the ordinary course of business on normal commercial terms, negotiated on arm’s length basis by both parties under the principle of justice, fairness and openness, and based on the prevailing market price of the transaction. The electricity fee charged by the CNBMG Group on the Group shall not be higher than that charged by the CNBMG Group on independent third parties for provision of the same type of or the same services.

Pricing standards

The electricity fee under the Supply of Electricity Framework Agreement will be determined with reference to the electricity price of local state grid with a discount rate determined by the service life of the photovoltaic power generation system.

– 25 –

Proposed Annual Caps for the Supply of Electricity Framework Agreement

The Proposed Annual Caps under the Supply of Electricity Framework Agreement for each of the three years ending 31 December 2020 are set out below:

	For the year	For the year	For the year
	ending	ending	ending
	31 December	31 December	31 December
	2018	2019	2020
	RMB’000	RMB’000	RMB’000
Proposed Annual Caps
(inclusive of VAT)	3,600	6,480	6,480

The Proposed Annual Caps under the Supply of Electricity Framework Agreement are determined based on the expected future demand after taking into account (i) the electricity fee and amount of the electricity consumed by the operation lines in the previous three years; (ii) the production capacity of electricity of the completed photovoltaic plants and the photovoltaic plants under construction of the CNBMG Group; and (iii) the number of production units of the Group entered into the electricity supply arrangement with the CNBMG Group.

Internal control on pricing

The Company will adopt the below internal control procedures in relation to the procurement of the electricity from the CNBMG Group:

• (i) the financial department of the Group will review the electricity price of local state grid on a monthly basis, and the electricity fee under the Supply of Electricity Framework Agreement will be adjusted accordingly. The pricing preferential margin of photovoltaic electricity will remain unchanged during the contract term; and

• (ii) the expiry date of the written contract entered into with the CNBMG Group will be on or before 31 December 2020 and the written contract shall be executed with the approval by the secretariat of the Board, chief financial controller and general manager of the Company after joint review by the legal consultant, internal control management department, financial department and secretariat of the Board of the Company.

– 26 –

C. CONTINUING CONNECTED TRANSACTION EXEMPTED FROM T H E R E P O R T I N G , A N N O U N C E M E N T A N D I N D E P E N D E N T SHAREHOLDERS’ APPROVAL REQUIREMENTS UNDER THE HONG KONG LISTING RULES

Set out below is a summary of the principal terms of the Financial Services Framework Agreement which is exempted from the reporting, announcement and independent shareholders’ approval requirements under the Hong Kong Listing Rules:

FINANCIAL SERVICES FRAMEWORK AGREEMENT

On 24 January 2018, the Company and CNBMG entered into the Financial Services Framework Agreement.

Date: 24 January 2018

Parties: (1) CNBMG; and

• (2) the Company.

Term: The Financial Services Framework Agreement shall take effect upon signing with company seals by the authorised representatives of both parties and approval by the Independent Shareholders at the extraordinary general meeting of the Company, and shall be valid until 31 December 2020.

Services:

Pursuant to the Financial Services Framework Agreement, the CNBMG Group has agreed to provide financial services to the Group including:

• (1) entrusted loan, where the CNBMG Group, the Group and the financial institution will enter into a contract, and the CNBMG Group will deposit its internal funds into the financial institution and entrust the financial institution to provide loan to the Group for the purpose of lending or lending projects under the contract;

• (2) financing guarantee, where the CNBMG Group agreed to provide guarantee to the Group in respect of the financing activities of the Group, including but not limited to loans and financial leases; and

• (3) payment by the CNBMG Group on behalf of the Group, where the CNBMG Group agreed to provide support in respect of the payment for order of goods and the settlement for goods of the Group with the suppliers by paying the payable price of goods first on behalf of the Group.

– 27 –

Pricing terms

Pursuant to the Financial Services Framework Agreement, as a general principle, the financial services fee under the Financial Services Framework Agreement shall be determined in the ordinary course of business on normal commercial terms and negotiated on arm’s length basis by both parties under the principle of justice, fairness and openness, and based on the prevailing market price of the transaction. The Group will not provide any pledge or counter guarantee to the CNBMG Group for the financial services provided by the CNBMG Group under the Financial Services Framework Agreement. The financial services fee charged by the CNBMG Group on the Group shall not be higher than that charged by the CNBMG Group on independent third parties for provision of the same type of or the similar financial services.

Pricing standards

The pricing standards of the financial services provided by the CNBMG Group are as follows:

Entrusted loan

The interests of the entrusted loan provided by the CNBMG Group to the Group will not be higher than the interest rates for loans of same nature and under same terms set by the PBOC.

Financing guarantee

The fees charged by the CNBMG Group for the provision of financing guarantee to the Group will not be higher than the prevailing market price or rate for providing the same or similar financing guarantee, and the price and rate provided by the CNBMG Group will be determined by inquiring at least three commercial banks.

Making payments on behalf of the Group for goods supplied by the Group’s suppliers

The interests of payments made by the CNBMG Group to the Group’s suppliers on behalf of the Group will not be higher than the interest rates for loans of same nature and under same terms charged on the Group by the PBOC.

The applicable fee or rate charged on the Group by the CNBMG Group shall not be less favourable than that charged on other independent third party(ies) on the same nature and under same terms.

– 28 –

Proposed Annual Caps for the Financial Services Framework Agreement

The below summarises the annual cap amounts, measured by the principal amount of the entrusted loan, financing guarantee and payments paid on behalf of the Group, for the three years ended 31 December 2017 under the CNBMG Financial Services Framework Agreement:

	For the year	For the year	For the year
	ended	ended	ended
	31 December	31 December	31 December
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Annual cap amounts	1,100,000	1,100,000	1,100,000

The table below summarises the historical transaction amounts, measured by the principal amount of the entrusted loan, financing guarantee and payments paid on behalf of the Group, for the two years ended 31 December 2016 and the eleven months ended 30 November 2017 under the CNBMG Financial Services Framework Agreement:

	For the year	For the year	For the period
	ended	ended	from 1 January
	31 December	31 December	to 30 November
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Historical transaction amounts	1,086,900	942,790	1,008,140

The Proposed Annual Caps under the Financial Services Framework Agreement, measured by the principal amount of the entrusted loan, financing guarantee and payments paid on behalf of the Group, for each of the three years ending 31 December 2020 are set out below:

	For the year	For the year	For the year
	ending	ending	ending
	31 December	31 December	31 December
	2018	2019	2020
	RMB’000	RMB’000	RMB’000
Proposed Annual Caps	3,456,360	5,509,830	5,387,610

– 29 –

The Proposed Annual Caps under the Financial Services Framework Agreement are determined based on the expected value of the entrusted loan, financing guarantee and payments paid on behalf of the Group after taking into account of (i) the business plans and capital requirements of the Group including the Target Companies under the Acquisition; (ii) the financial status of the Group including the Target Companies under the Acquisition; (iii) the duration and capital requirement in different stage of the projects; and (iv) the historical transaction amounts of the financial services provided by the CNBMG Group.

Internal control on pricing

The Company will adopt the below internal control procedures in relation to the financial services provided by the CNBMG Group:

• (i) the head of the finance department of the Group will review the interest and fee charged by the CNBMG Group to ensure that the interests and the fees charged by the CNBMG Group will be determined on a fair and reasonable basis before entering into any contract;

• (ii) the finance department will check and make reference to the benchmark interest rate stipulated by the PBOC for loans with the same maturity period as those provided by the CNBMG Group. The finance department regularly checks and inquires the interest rates at least once a month to ensure the fairness and reasonableness of the interest rates;

• (iii) the finance department will also check and make reference to the benchmark interest rate and guarantee fee published by other commercial banks which mainly include Bank of China, Bank of Communications, China Construction Bank, Bank of Luoyang, China CITIC Bank and Huishang Bank. The finance department regularly checks and inquires the interest rates and guarantee fee published by other commercial banks at least once a month to ensure the fairness and reasonableness of the interest rates and guarantee fee; and

• (iv) interest and fee payable by the Group arising from its acceptance of borrowing will be reviewed and compared with the lending provided by the CNBMG Group to independent third parties on the interest and fee charged at least once a month.

– 30 –

INFORMATION ON AND RELATIONSHIP OF THE PARTIES TO THE 2018 CCT AGREEMENTS

The Company is principally engaged in the production and sales of ultra-thin electronic glass.

CNBMG, a wholly state-owned enterprise incorporated in the PRC and the ultimate controlling shareholder of the Company, is a comprehensive building materials industry group. It is deemed to be interested in 174,018,242 A Shares, representing approximately 33.04% of the total issued share capital of the Company as at the date of this announcement.

Triumph, a company incorporated in the PRC with limited liability, an indirect controlling shareholder of the Company and a direct wholly-owned subsidiary of CNBMG, is principally engaged in glass sector, new materials sector, new energy sector, new equipment sector and project management sector.

HONG KONG LISTING RULES IMPLICATIONS

CNBMG is deemed to be interested in 174,018,242 A Shares, representing approximately 33.04% of the total issued share capital of the Company as at the date of this announcement, and Triumph is a direct wholly-owned subsidiary of CNBMG. Therefore, each of CNBMG and Triumph is regarded as a connected person of the Company.

As the applicable percentage ratios for each of the Non-exempt 2018 CCT Agreements exceed 5%, the transactions contemplated thereunder will be subject to the reporting, announcement and independent shareholders’ approval requirements under Chapter 14A of the Hong Kong Listing Rules.

As the applicable percentage ratios for the Supply of Electricity Framework Agreement exceed 0.1% but less than 5%, the transactions contemplated thereunder will be subject to the reporting and announcement requirements only but exempt from the independent shareholders’ approval requirement under Chapter 14A of the Hong Kong Listing Rules.

The transactions contemplated under the Financial Services Framework Agreement constitute financial assistance provided for the benefit of the Company on normal commercial terms or better where no security over assets of the Group is granted in respect of such financial assistance, and are therefore exempted from the reporting, announcement and independent shareholders’ approval requirements pursuant to Rule 14A.90 of the Hong Kong Listing Rules.

Mr. Zhang Chong, the executive Director, and Mr. Xie Jun, the non-executive Director, have abstained from voting in respect of the 2018 CCT Agreements in the Board meeting due to the fact that they are connected with CNBMG and are not regarded as independent to make any recommendation to the Board.

– 31 –

SHANGHAI LISTING RULES IMPLICATIONS

As the A Shares of the Company are listed on the Shanghai Stock Exchange, the Company is also required to comply with the relevant requirements of the Shanghai Listing Rules. Pursuant to the Shanghai Listing Rules, the Proposed Annual Caps of all the 2018 CCT Agreements should be aggregated and are subject to the Independent Shareholders’ approval at the EGM.

EGM

An EGM will be convened by the Company for the purposes of, among other things, seeking Independent Shareholders’ approval for each of the 2018 CCT Agreements and their respective Proposed Annual Caps. CNBMG and its associates, which have interests in the transactions contemplated under the 2018 CCT Agreements, will abstain from voting in the resolutions in respect of each of the 2018 CCT Agreements and their respective Proposed Annual Caps at the EGM. At the EGM, votes will be taken by poll.

GENERAL INFORMATION

The Independent Board Committee comprising all independent non-executive Directors has been formed by the Company in accordance with the Hong Kong Listing Rules to advise the Independent Shareholders on the Non-exempt 2018 CCT Agreements. The Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders as to whether the terms and conditions of the Non-exempt 2018 CCT Agreements, the transactions contemplated thereunder and their respective Proposed Annual Caps are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole.

A circular containing, among other things, (i) further details of the 2018 CCT Agreements and their respective Proposed Annual Caps; (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Non-exempt 2018 CCT Agreements and their respective Proposed Annual Caps; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Non-exempt 2018 CCT Agreements and their respective Proposed Annual Caps; and (iv) a notice of the EGM, is expected to be despatched to the Shareholders on or before 1 March 2018, which is more than 15 business days after publication of this announcement, as additional time is required for the Company to prepare the relevant information for inclusion in the circular.

– 32 –

DEFINITIONS

In this announcement, the following expressions shall have the following meanings unless the context requires otherwise.

• “2014 CCT Agreements”

• the CNBMG Engineering Technical Services Framework Agreement, the Ultra-thin Float Glass Sale and Purchase Framework Agreement, the CLFG Raw Materials Sale Framework Agreement, the CNBMG Engineering Equipment and Materials Supply Framework Agreement and the CNBMG Financial Services Framework Agreement

• “2018 CCT Agreements”

• the Non-exempt 2018 CCT Agreements, the Supply of Electricity Framework Agreement and the Financial Services Framework Agreement

• “A Share(s)” the domestic ordinary share(s) of RMB1.00 each in the share capital of the Company, which are listed on the Shanghai Stock Exchange and subscribed for and traded in RMB

• “Acquisition” the proposed acquisition of 100% equity interest in Hefei New Energy, 100% equity interest in Tongcheng New Energy and 70.99% equity interest in Yixing New Energy by the Company, details of which were set out in the circular of the Company dated 11 October 2017

• “associate(s)”

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

• “Bengbu Chemical”

• Bengbu Chemical Machinery Manufacturing Co., Ltd.* ( 蚌埠化工機械製造有限公司 ), a limited liability company incorporated in the PRC and an indirect wholly-owned subsidiary of CNBMG

• “Bengbu Company”

• Bengbu China Building Information Display Materials Co. Ltd.* ( 蚌埠中建材信息顯示材料有限公司 ), a limited liability company incorporated in the PRC and a wholly-owned subsidiary of the Company

• “Board”

the board of Directors

– 33 –

• “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 19.94% equity interest in the Company

• “CLFG Group”

• CLFG, its controlling shareholder(s) 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 the CLFG Group agreed to provide certain raw materials to the Group

• “CNBMG”

• 中國建材集團有限公司 (China National Building Material Group Co.,Ltd.*), a wholly state-owned enterprise incorporated in the PRC and the ultimate controlling shareholder of the Company

• “CNBMG Engineering Equipment and Materials Supply Framework Agreement”

• the equipment supply framework agreement dated 14 November 2014 entered into between CNBMG and the Company, pursuant to which the 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 the financial services framework agreement dated 14 Framework Agreement” November 2014 entered into between CNBMG and the Company, pursuant to which the CNBMG Group agreed to provide certain financial services to the Group

• “CNBMG Group”

CNBMG and its subsidiaries

– 34 –

“Company”

• “connected person(s)”

• “Directors”

• “EGM”

• “Engineering Equipment Procurement and Installation Framework Agreement”

• “Financial Services Framework Agreement”

• “Group”

• “H Share(s)”

• “Hefei New Energy”

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 and A Shares of which are listed on the main board of the Stock Exchange (stock code: 1108) and the Shanghai Stock Exchange (stock code: 600876) respectively

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

• the directors of the Company, including the independent non-executive directors of the Company

• the extraordinary general meeting of the Company to be convened and held at 9:00 a.m. on 16 March 2018 (or any adjourned meeting thereof) for the Independent Shareholders to consider and, if thought fit, approve, among other things, the 2018 CCT Agreements and their respective Proposed Annual Caps

• the engineering equipment procurement and installation framework agreement dated 24 January 2018 entered into between the Company and CNBMG, pursuant to which the CNBMG Group agreed to supply equipment materials, construction and installation services required for engineering projects to the Group

• the financial services framework agreement dated 24 January 2018 entered into between CNBMG and the Company, pursuant to which the CNBMG Group agreed to provide certain financial services to the Group

• the Company and its subsidiaries

• overseas listed foreign share(s) of RMB1.00 each in the share capital of the Company, listed on the main board of the Stock Exchange and traded in Hong Kong dollars

• 中建材（合肥）新能源有限公司 (CNBM (Hefei) New Energy Company Limited*), a company incorporated in the PRC with limited liability in 2011, which is principally engaged in the research and development, production and sales of solar photovoltaic glass and further processed glass

– 35 –

“Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “Hong Kong Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Independent Board the independent board committee of the Company Committee” comprising all of the independent non-executive Directors

• “Independent Financial Adviser” or “Goldin”

• Goldin Financial Limited, a corporation licensed to carry out type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance, being the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of each of the Nonexempt 2018 CCT Agreements and their respective Proposed Annual Caps

• “Independent Shareholders” Shareholders other than CNBMG and its associates

• “Non-exempt 2018 CCT Agreements”

• the Technical Services Framework Agreement, the Sale and Purchase of Glass Products Framework Agreement, the Sale of Raw Materials Framework Agreement, the Engineering Equipment Procurement and Installation Framework Agreement, the Sale and Purchase of Spare Parts Framework Agreement and the Sale and Purchase of Products Framework Agreement

• “PBOC”

• the People’s Bank of China

• “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

• “Proposed Annual Caps”

• the maximum aggregate annual transaction amounts for each of the continuing connected transactions contemplated under the 2018 CCT Agreements for each of the three years ending 31 December 2020

– 36 –

“RMB”

• “Sale and Purchase of Glass Products Framework Agreement”

• “Sale and Purchase of Products Framework Agreement”

• “Sale and Purchase of Spare Parts Framework Agreement”

• “Sale of Raw Materials Framework Agreement”

• “Shanghai Listing Rules”

• “Shareholder(s)”

• “Stock Exchange”

• “Supply Agreement”

• “Supply of Electricity Framework Agreement”

Renminbi, the lawful currency of the PRC

• the sale and purchase of glass products framework agreement dated 24 January 2018 entered into between the Company and CNBMG, pursuant to which the Group agreed to supply certain glass products to the CNBMG Group

• the sale and purchase of products framework agreement dated 24 January 2018 entered into between Triumph and the Company, pursuant to which the Triumph Group agreed to supply float glass and wooden packaging boxes to the Group

• the sale and purchase of spare parts framework agreement dated 24 January 2018 entered into between CNBMG and the Company, pursuant to which the CNBMG Group agreed to supply certain equipment and spare parts to the Group

• the sale of raw materials framework agreement dated 24 January 2018 entered into between CNBMG and the Company, pursuant to which the CNBMG Group agreed to supply certain raw materials to the Group

• Rules Governing the Listing of Stocks on Shanghai Stock Exchange

the shareholder(s) of the Company

• The Stock Exchange of Hong Kong Limited

the sodium carbonate supply framework agreement dated 26 February 2016 entered into between the Company and Triumph, pursuant to which Triumph agreed to supply to the Company sodium carbonate procured from certain suppliers during the period from 26 February 2016 to 31 December 2017

• the supply of electricity framework agreement dated 24 January 2018 entered into between CNBMG and the Company, pursuant to which the CNBMG Group agreed to supply photovoltaic electricity to the Group

– 37 –

• “Target Companies under the Acquisition”

• “Technical Services Framework Agreement”

• “Tongcheng New Energy”

• “Triumph”

• “Triumph Group”

• “Triumph Science & Technology”

• “Ultra-thin Float Glass Sale and Purchase Framework Agreement”

• “VAT”

• “Wooden Boxes Supply Agreement”

• Hefei New Energy, Tongcheng New Energy and Yixing New Energy

• the technical services framework agreement dated 24 January 2018 entered into between CNBMG and the Company, pursuant to which the CNBMG Group agreed to provide certain technical services to the Group

• 中國建材桐城新能源材料有限公司 (CNBM (Tongcheng) New Energy Materials Company Limited*), a company incorporated in the PRC with limited liability in 2010, which is principally engaged in the research and development, production and sales of solar photovoltaic glass and further processed glass

• 凱盛科技集團有限公司 (Triumph Technology Group Company Limited*), a company incorporated in the PRC with limited liability and an indirect controlling shareholder of the Company

• Triumph and its subsidiaries

• 凱盛科技股份有限公司 (Triumph Science & Technology Co Ltd) (formerly known as 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)

• the product sale framework agreement dated 14 November 2014 entered into between the Company and Triumph Science & Technology, pursuant to which the Group agreed to provide ultra-thin float glass to Triumph Science & Technology and its subsidiaries

• value-added tax in the PRC

• the wooden boxes supply framework agreement dated 28 April 2016 entered into between Bengbu Company and Bengbu Chemical, pursuant to which Bengbu Chemical agreed to supply to Bengbu Company wooden boxes and their accessories from 28 April 2016 to 31 December 2017

– 38 –

“Yixing New Energy”

中建材（宜興）新能源有限公司 (CNBM (Yixing) New Energy Company Limited*), a company incorporated in the PRC with limited liability in 2016, which is principally engaged in the research and development, production and sales of solar photovoltaic glass and further processed glass

“%”

per cent

By order of the Board Luoyang Glass Company Limited* Zhang Chong Chairman

Luoyang, the PRC 24 January 2018

As at the date of this announcement, the Board comprises four executive Directors: Mr. Zhang Chong, Mr. Ni Zhisen, Mr. Wang Guoqiang and Mr. Ma Yan; one nonexecutive Director: Mr. Xie Jun; and four independent non-executive Directors: Mr. Jin Zhanping, Mr. Liu Tianni, Mr. Ye Shuhua and Mr. He Baofeng.

• for identification purposes only

– 39 –