Common use of SHAREHOLDING STRUCTURE Clause in Contracts

SHAREHOLDING STRUCTURE. As at the date of this announcement, the Company has 2,177,122,772 Shares in issue. The shareholding structure of the Company (i) as at the date of announcement; and (ii) immediately after the issue of the Option Shares and/or the Conversion Shares upon full exercise of the conversion rights attached to the Convertible Bonds are as follows. As at the date of this announcement ▇▇. ▇▇▇▇ 101,250,000 4.65% 406,047,188 16.36% Public Shareholders 2,075,872,772 953.35% 2,075,872,772 83.64% 2,177,122,772 100.00% 2,481,919,960 100.00% IMPLICATION UNDER THE LISTING RULES Pursuant to Rule 15.02(1) of the Listing Rules, the Option Shares and/or the Conversion Shares which may be issued pursuant to the exercise of the Call Option must not, when aggregated with all other equity securities remain to be issued upon exercise of any other subscription rights of the Company and assuming that such rights were immediately exercised (whether or not such exercise is permissible) exceed 20% of the issued Shares (options granted under the employee or executive share option schemes which comply with Chapter 17 of the Listing Rules are excluded for the purpose of this limit) as at the Completion Date when the Call Option is granted. As at the date of this announcement, the Company has (i) 2,177,122,772 Shares in issue; and (ii) unlisted warrants which entitle the holder thereof to subscribe for a total 113,866,396 new Shares, representing 5.2% of the issued Shares as at the date of this announcement. As such, the maximum number of the Option Shares and/or the Conversion Shares issuable under the Call Option which represents 14% of the total Shares as at the Completion Date is in compliance with Rule 15.02(1) of the Listing Rules. Since the Credit Facility Provider is a company wholly-owned by ▇▇. ▇▇▇▇, an executive Director, the entering into of the Equity Credit Facility Agreement and the transactions contemplated under the Credit Facility Agreement will constitute a connected transactions on part of the Company under Chapter 14A of the Listing Rules and will be subject to reporting, announcement and the independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. Accordingly, the Equity Credit Facility Agreement and the transactions contemplated thereunder including the issue of the Option Shares and/or the Convertible Bonds (as the case may be) pursuant to the exercise of the Call Option or the Put Option, as well as the issue of the Conversion Shares upon exercise of the conversion rights attaching to the Convertible Bonds, will be subject to the specific mandate to be approved by the independent shareholders of the Company at the EGM. FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS The Company has conducted the following equity fund raising exercise in the past twelve months immediately preceding the date of this announcement. Date of announcement Event Net proceeds raised Intended use of proceeds Actual use of proceeds 2014 16 September Rights Issue HK$96 million 80% of the net proceeds for the Group’s investments identified and/or to be identified and the remaining 20% for general working capital purpose Used as intended 9 October Issue of Convertible Bonds HK$83.7 million General working capital, reduction of debts and future investment Used as intended 2015 29 March Placing of new Shares HK$41 million General working capital, reduction of debt and future investment

SHAREHOLDING STRUCTURE. As at the date of this announcement, the Company has 2,177,122,772 Shares in issue. The shareholding structure of the Company immediately prior to the signing of the Principal Agreement and the Call Option Agreements, immediately after closing of the Offer and immediately after the exercise of all options under the Call Option Agreements was and will be as follows: IMMEDIATELY PRIOR TO SIGNING OF THE PRINCIPAL AGREEMENT AND THE CALL OPTION AGREEMENTS (iPRINCIPAL AGREEMENT AND THE CALL OPTION AGREEMENTS CHART) as at (The Chart shows the date shareholding in the Company immediately prior to signing of announcementthe Principal Agreement and the Call Option Agreements of the Foundation, the Management Directors, the Remaining Director and the Public. This shareholding, for: (1) the Foundation is 1,446,121,500 Shares, representing 39.446%; (2) the Management Directors is 126,185,000 Shares*, representing 3.442%; (3) the Remaining Director is 2,800,000 Shares, representing 0.076%; and (ii4) the Public is 2,090,946,400 Shares, representing 57.036%.) * Please refer to paragraph 2 of Appendix II to this document for particulars of Shares held by each Management Director. IMMEDIATELY AFTER CLOSING OF THE OFFER (Note) (CLOSING OF THE OFFER CHART) (The Chart shows the shareholding in the Company immediately after closing of the Offer of Huachen, the Management Directors, the Remaining Director and the Public. This shareholding, for: (1) Huachen is 1,446,121,500 Shares, representing 39.446%; (2) the Management Directors is 126,185,000 Shares*, representing 3.442%; (3) the Remaining Director is 2,800,000 Shares, representing 0.076%; and (4) the Public is 2,090,946,400 Shares, representing 57.036%.) Note: Assuming that the Condition is not satisfied and the Offer lapses and assuming that none of the Employee Options is exercised. * Please refer to paragraph 2 of Appendix II to this document for particulars of Shares to be held by each Management Director. -------------------------------------------------------------------------------- LETTER FROM CLSA ECM -------------------------------------------------------------------------------- IMMEDIATELY AFTER THE EXERCISE OF ALL THE OPTIONS UNDER THE CALL OPTION AGREEMENTS AND ASSUMING THAT NONE OF THE EMPLOYEE OPTIONS IS EXERCISED (CALL OPTION AGREEMENTS CHART) (The Chart shows the shareholding in the Company immediately after the issue of the Option Shares and/or the Conversion Shares upon full exercise of the conversion rights attached all of the options under the Call Option Agreements and assuming that none of the Employee Options is exercised. This shareholding, for: (1) Huachen is 1,099,815,870 Shares, representing 30%; (2) the Management Directors is 472,490,630 Shares*, representing 12.888%; (3) the Remaining Director is 2,800,000 Shares, representing 0.076%; and (4) the Public is 2,090,946,400 Shares, representing 57.036%.) * Please refer to paragraph 2 of Appendix II to this document for particulars of Shares to be held by each Management Director. INFORMATION ON THE OFFERORS HUACHEN Huachen is a PRC state-owned limited liability company which was established under the Convertible Bonds laws of the PRC on 16 September, 2002 and is wholly beneficially owned by the Liaoning Provincial Government of the PRC. The directors of Huachen are as follows. As at the date of this announcement Mr. Yang Bao Shan, Mr. Zhao Chang Yi, Mr. Zhu Xue Dong and Mr. ▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇ci▇▇▇ 101,250,000 4.65% 406,047,188 16.36% Public Shareholders 2,075,872,772 953.35% 2,075,872,772 83.64% 2,177,122,772 100.00% 2,481,919,960 100.00% IMPLICATION UNDER THE LISTING RULES Pursuant to Rule 15.02(1) of the Listing Rules▇▇▇▇e ▇▇ ▇▇▇▇ne▇▇ ▇▇ ▇o▇▇▇▇▇ ▇▇ 26 Kunsh▇▇▇▇▇▇ Road, the Option Shares and/or the Conversion Shares which may be issued pursuant to the exercise of the Call Option must notHuanggu District, when aggregated with all other equity securities remain to be issued upon exercise of any other subscription rights of the Company and assuming that such rights were immediately exercised (whether or not such exercise is permissible) exceed 20% of the issued Shares (options granted under the employee or executive share option schemes which comply with Chapter 17 of the Listing Rules are excluded for the purpose of this limit) as at the Completion Date when the Call Option is granted. As at the date of this announcementShenyang City, the Company has (i) 2,177,122,772 Shares in issue; and (ii) unlisted warrants which entitle the holder thereof to subscribe for a total 113,866,396 new SharesLiaoning ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, representing 5.2% of the issued Shares as at the date of this announcement. As such, the maximum number of the Option Shares and/or the Conversion Shares issuable under the Call Option which represents 14% of the total Shares as at the Completion Date is in compliance with Rule 15.02(1) of the Listing Rules. Since the Credit Facility Provider is a company wholly-owned by ▇▇▇. ▇▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇-r▇▇▇▇▇▇ companies in the PRC. Huachen has a registered capital of RMB200,000,000. As at the Latest Practicable Date, an Huachen was wholly-owned by the Liaoning Provincial Government of the PRC. Immediately following completion of the Principal Agreement, Huachen's shareholding interest in the Company was as detailed ▇▇▇▇▇: APPROXIMATE SHAREHOLDING NUMBER OF SHARES PERCENTAGE 1,446,121,500 Ordinary Shares 39.446% If all the options under the Call Option Agreements were fully exercised, Huachen's shareholding interest in the Company would be as det▇▇▇▇▇ ▇elow: APPROXIMATE SHAREHOLDING NUMBER OF SHARES PERCENTAGE 1,099,815,870 Ordinary Shares 30% - 13 - -------------------------------------------------------------------------------- LETTER FROM CLSA ECM -------------------------------------------------------------------------------- THE MANAGEMENT DIRECTORS The Management Directors are members of the board of Directors, which comprises of 5 executive Directors and 3 independent non-executive Directors. Huachen does not have any intention of changing the compositio▇ ▇▇ ▇▇e board of Directors. It is intended that all of the Directors will continue to remain in office. Save for the Management Directors, brief particulars of whom are set out below, and the Remaining Director, who is the entering into holder of outstanding Employee Options in respect of 2,338,000 Ordinary Shares, none of the Equity Credit Facility Agreement other Directors is a party to any of the matters disclosed in this document. Mr. Wu, aged 40, has been Chairman of the board of Directors s▇▇▇▇ ▇une 2002 and the transactions contemplated under the Credit Facility Agreement will constitute a connected transactions on part Director and Executive Vice President of the Company under Chapter 14A since 1993. He is responsible for the overall management and strategy of the Listing Rules and will be subject to reporting, announcement Company. Mr. Wu was the Vice Chairman and the independent shareholders’ approval requirements under Chapter 14A Chief Financial Officer o▇ ▇▇▇ Company from 1993 to June 2002. He is also a director of Shenyang Automotive. Mr. Wu holds a Bachelor of Arts degree from the Beijing Foreig▇ ▇▇▇▇uages Institute and a Master of Business Administration degree from Fordham University in New York. He has served from 1988 to 1993 as Deputy Manager of the Listing RulesBank of China, New York Branch. AccordinglyMr. Hong, aged 39, has been the Equity Credit Facility Agreement and the transactions contemplated thereunder including the issue of the Option Shares and/or the Convertible Bonds (as the case may be) pursuant to the exercise of the Call Option or the Put Option, as well as the issue of the Conversion Shares upon exercise of the conversion rights attaching to the Convertible Bonds, will be subject to the specific mandate to be approved by the independent shareholders Vice Chairman of the Company s▇▇▇▇ ▇▇▇e 2002, and a Director and Executive Vice President of the Company since 1993. Mr. Hong also serves currently as Company Secretary. Mr. Hong ▇▇ ▇▇▇▇ a director of Shenyang Automotive. He receive▇ ▇ ▇▇▇▇elor of Arts degree from the Beijing Foreign Languages Institute in 1984. He also received a Doctor of Jurisprudence degree from the Columbia University School of Law in New York and is a member of the Bar of the State of New York. From 1985 to 1986, Mr. Hong worked as an attache in the Ministry of Foreign Affai▇▇ ▇▇ ▇▇ina. From 1986 to 1990, Mr. Hong was an international civil servant at the EGM. FUND RAISING ACTIVITIES OF THE COMPANY IN THE PAST TWELVE MONTHS The Company has conducted the following equity fund raising exercise United Nati▇▇▇ ▇▇▇▇quarters in the past twelve months immediately preceding the date of this announcement. Date of announcement Event Net proceeds raised Intended use of proceeds Actual use of proceeds 2014 16 September Rights Issue HK$96 million 80% of the net proceeds for the Group’s investments identified and/or to be identified and the remaining 20% for general working capital purpose Used as intended 9 October Issue of Convertible Bonds HK$83.7 million General working capital, reduction of debts and future investment Used as intended 2015 29 March Placing of new Shares HK$41 million General working capital, reduction of debt and future investmentNew York.