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The Board of Directors of the Company and its members guarantee that there is no false or misleading statement or material omission in this announcement and shall be severally and jointly liable for the truthfulness, accuracy and completeness of its contents.

 

A-share Private Placement (2009) of up to 200 Mio shares and/or CNY 4 Billion which can only be subscribed by no more than 10 specified investors was reviewed and approved by the Thirty Fourth Meeting of the Fifth Board of Directors of Huaxin Cement Co., Ltd. (hereinafter referred to as ¡°the Company¡±) and the Annual Shareholders¡¯ General Meeting for 2008 convened on March 12, 2009 and April 3, 2009 respectively.

 

On June 15, 2009, the Company received a written notice from Holcim, the actual controller of the biggest shareholder of the Company; the Board of Holcim has decided to fully subscribe the Company¡¯s A shares planned private placement (2009) in accordance to the proportion of Holchin B. V. in Huaxin Cement.

 

According to that, the Third Meeting of the Sixth Board of Directors was conveyed on June 25 in circular resolution.  All the 9 directors have reviewed the proposals of this Meeting.  The Company has sent the Meeting Notification to all the directors on June 18, 2009 by personal service or by fax.  The Meeting was in compliance with the provisions contained in relevant laws, rules and regulations and the Articles of Association of the Company, so it was legitimate and valid.

 

I. Through reviewing and voting, this Board Meeting adopted the following important resolutions:

 

(I) Proposal in Respect of the Satisfaction of the Conditions of A-share Private Placement (voting result: Affirmative 9; Negative none; Abstention none);

 

According to the Company Law of the People's Republic of China, Securities Law of the People's Republic of China, Administrative Provisions for Issuance of Securities of Listed Companies and other relevant laws and administrative regulations, after a thorough examination, the Board of Directors considers that the Company is already qualified for A¨Cshare private placement, and has already met all the demands of the Private Placement:

 

(II) Proposal in Respect of Modifying the Scheme on the Company¡¯s A-share Private Placement for 2009

 

Proposal in Respect of Modifying the Scheme on the Company¡¯s A-share Private Placement for 2009 was reviewed item by item and approved by the Board of Directors of the Company, the related directors Mr. Tom Clough, Mr. Paul O'Callaghan and Mr. Paul Thaler avoided voting for all the sub items in this proposal.  This proposal was modified in terms of Issuing Object & Mode of Subscription, Issuing price & Principle of Pricing, Valid period of Resolution; other sub items such as Class of Issuing Shares, Par Value of Issuing shares, Issuing Amount & Scale of Raised Funds, Usage of Raised Funds, and Scheme on Distribution of Accumulated Profits after the Offering remained the same.  The modified proposal in Respect of Private Placement as follows:

 

1. Class of Issuing Shares£ºRMB ordinary shares ( A-share) (voting result: Affirmative 6; Negative none; Abstention none);

 

2. Par Value of Issuing Shares: RMB 1 Yuan (voting result: Affirmative 6; Negative none; Abstention none);

 

3. Issuing Amount & Scale of Raised Funds: The amount of the placement is no more than 200 million and the scale of raised funds is no more than 4,000 million Yuan.  The actual amount and scale of raised fund will be negotiated and determined by the Board of Directors and the sponsor (head underwriter) based on the authorization of Shareholders¡¯ General Meeting.  If the Company¡¯s shares have dividend payments, bonus shares, capitalization of public reserves and other ex-dividend issues during the period between the announcement of Board of Directors¡¯ resolution and the offering date, the number of shares will be adjusted accordingly (voting result: Affirmative 6; Negative none; Abstention none);

 

4. Issuing Object & Mode of Subscription£ºNo more than 10 specified investors including the Company¡¯s largest shareholder Holchin B. V. who conform to the requirements set by the resolution of Shareholders¡¯ General Meeting, among which Holchin B. V. will subscribe the Company¡¯s A shares in accordance to the proportion in Huaxin Cement before this private placement.  The scope of investors besides Holchin B. V. includes legal entities, human beings and other legal investment institutions, such as the top 20 existing shareholders of the Company, securities investment fund management firms, securities firms, insurance company investors, trust investment firms, financial firms and so on.  All investors shall subscribe the Company¡¯s new shares by cash (voting result: Affirmative 6; Negative none; Abstention none);

 

5. Issuing Price & Principle of Pricing: The issuing price for this private placement shall not be lower than 90% of the average trading price during 20 trading days prior to the announcement of resolutions of the Third Meeting of the Sixth Board of Directors, which is 20.39 Yuan per share (the lowest price).  If the Company¡¯s shares have dividend payments, bonus shares, capitalization of public reserves and other ex-dividend issues during the period between the announcement of Board of Directors¡¯ resolution and the offering date, the lowest price will be adjusted accordingly.  The final issuing price will be negotiated and determined by the Company¡¯s Board of Directors and the sponsor (head underwriter) based on the bidding result in accordance with Concrete Rules Guiding Non-public Offerings by Listed Companies after receiving issuance approval.  All objects purchase new shares at the same final issuing price (voting result: Affirmative 6; Negative none; Abstention none);

 

6. Lock-in Period & Listing Place: The Company¡¯s largest shareholder Holchin B. V.  shall not transfer its shares within 36 months since the end date of this private placement.  The shares purchased by other objects shall not be transferable within 12 months since the end date of this private placement.  After the expiration of the lock-in period, the shares of this private placement will apply for listing on Shanghai Stock Exchange (voting result: Affirmative 6; Negative none; Abstention none);

 

7. Valid period of resolution: Valid period of resolution for this offering lasts 12 months since it is approved by the Shareholders¡¯ General Meeting (voting result: Affirmative 6; Negative none; Abstention none);

 

8. Usage of the raised funds (voting result: Affirmative 6; Negative none; Abstention none);

 

Investment projects utilizing the proceeds raised£º

¡¾Note¡¿ 1.   The actual proceeds of the offering not exceeding the planned proceeds to be utilized, the gap will be financed by the Company itself; or the Board of Directors adjusts the proceeds to be utilized in one or more specific projects without changing the investment projects; or adjust the number of projects. 

2.   Before the raised proceeds is acquired, the Company will use its own funds according to the actual conditions of the project progress, and after the raised proceeds is acquired, it will be used to replace the used fund of the Company and for the following project progress.

3.  If the actual used proceeds of the offering are less than the planned proceeds to be utilized, the Board of Directors can use the saved proceeds to supplement the Company¡¯s working capital or to reduce debts of the Company after implementing necessary statutory procedures.

 

9. The scheme on distribution of accumulated profits after the offering: After completion of this offering, the existing and new shareholders may pro rata share the accumulated profits by the date of offering according to the number of shares they hold respectively (voting result: Affirmative 6; Negative none; Abstention none).

 

The three independent directors of the Company have reviewed all the Related Transactions in this proposal and agreed to submit to the Board of Directors for discussion.  The independent directors of the Company all agree to promote the related work according to this proposal in respect of the private placement.

 

(III) Proposal in Respect of Report on Utilization of the Funds Raised from Previous Offering (voting result: Affirmative 9; Negative none; Abstention none).

 

For detailed information, please refer to the Report on Utilization of the Funds Raised from Previous Offering published at the same day on the website of SSE (www.sse.com.cn).

 

(IV) Proposal in Respect of Feasibility Study of Proposed Investment Projects of Funds Raised from A-share Private Placement (voting result: Affirmative 9; Negative none; Abstention none).

 

For detailed information, please refer to the Feasibility Study of Proposed Investment Projects of Funds Raised from A-share Private Placement published at the same day on the website of SSE (www.sse.com.cn).

 

The three independent directors of the Company have reviewed all the Related Transactions in this proposal and agreed to submit to the Board of Directors for discussion.  The independent directors of the Company all agree to promote the related work according to this proposal in respect of the private placement.

 

(V) Proposal in Respect of Signing the Subscription Contract between the Company and Holchin B.V. Subject to Condition Precedent (voting result: Affirmative 6; Negative none; Abstention none).

 

Share Subscription Agreement on Private Placement of A-shares in the Year of 2009 by and between Huaxin Cement Co., Ltd. And Holchin B.V. subject to condition precedent was reviewed and approved by the Board of Directors of the Company.  Since the proposal is related to the Company¡¯s largest shareholder Holchin B. V. subscribing the Company¡¯s A shares planned private placement in cash, related directors Mr. Tom Clough, Mr. Paul O'Callaghan and Mr. Paul Thaler avoided voting on the proposal.

 

The three independent directors of the Company have reviewed all the Related Transactions in this proposal and agreed to submit to the Board of Directors for discussion.  The independent directors of the Company all agree to promote the related work according to this proposal in respect of the private placement.

 

(VI) Proposal in Respect of Requesting the Shareholders¡¯ General Meeting to Fully Authorize the Board of Directors in Respect of Matters on A-share Private Placement (voting result: Affirmative 9; Negative none; Abstention none).

 

It is proposed the Shareholders¡¯ General Meeting to fully authorize the Board of Directors to handle all the relevant matters concerning the A-share private placement, including but not be confined as followed:

 

1. Authorizing the Board of Directors to draw up the issuing plan as well as put it into effect according to the concrete conditions, including issuance timing, issuance size, validity period of issuance, issuance price, subscription methods and other issues in respect of the issuance plan;

 

2. Authorizing the Board of Directors to adjust the specific amount of raised funds as planned for the project(s), or to adjust the Specific project(s), as the actual amount of the raised funds is lower than planned;

 

3. Authorizing the Board of Directors to adjust the concrete arrangement for the investment projects utilizing the raised funds within the scope of the resolutions of the Shareholders¡¯ General Meeting, including but not be confined as the adjustment of the sequence and the allocated sum of the planned investment project.

 

4. Authorizing the Board of Directors to employ intermediary agents who deal with the application of the A-share private placement;

 

5. Authorizing the Board of Directors to sign the contracts, agreements and documents concerning the A-share private placement;

 

6. Authorizing the Board of Directors to revise specific clauses of the Articles of Association, to verify the registered capital as well as to change the registration at the Industrial and Commercial Bureau in accordance with the result of the A-share private placement;

 

7. Authorizing the Board of Directors to deal with the registration and custody of the issuing shares at China Securities Registration and Clearing Institution Co. Ltd. Shanghai branch as well as the listed trading of the shares at Shanghai Stock Exchange after the completion of the A-share private placement;

 

8. Authorizing the Board of Directors to adjust the relevant matters of the A-share private placement when the securities regulatory authority has changed the policy of private placement or the security market has been changed, unless such matters are required to be voted by the Shareholders¡¯ General Meeting in accordance with the relevant laws, administrative regulations and the Articles of Association;

 

9. Authorizing the Board of Directors to deal with all the other relevant matters concerning the A-share private placement;

 

10. Proposing the Shareholders¡¯ General Meeting to authorize the Board of Directors to postpone the execution of the A-share private placement when force majeure occurs and it is hard to be executed; or it is able to be executed, but might bring extremely disadvantageous consequence to the company.

 

11. The validity of the authorization lasts 12 months after it is approved by the Shareholders¡¯ General Meeting.

 

(VII) Proposal in Respect of Providing Guarantees for Bank Loans of Subsidiaries (voting result: Affirmative 9; Negative none; Abstention none).

Full text of the proposal is attached as annex hereto.

 

(VIII) Proposal in Respect of Convening the First Special Shareholders¡¯ Meeting for 2009 (voting result: Affirmative 9; Negative none; Abstention none).

 

II. Notice regarding Convening the First Special Shareholders¡¯ Meeting for 2009

 

1. Time of the on-site Meeting: 9:00 am, July 13, 2009 (Monday)

Time of the on-line Meeting: 9:30-11:30, 13:00-15:00, July 13, 2009 (Monday)

 

2. Share registration date

 

(1) A share registration date: July 3, 2009

 

(2) B share registration date: July 8, 2009 (last trading date is July 3)

 

3. Place of the Meeting: Meeting Room No.1 on the first floor of the Business Centre of the Company in Wuhan, Building No.5, International Enterprise Centre, Special No.1 Guanshan Road 2, Wuhan City, Hubei, China       

 

4. Convenor of the Meeting: Board of Directors of the Company

 

5. Manner of the Voting: on-site voting plus on-line voting. The Company will provide on-line voting platform via the trading system of SSE to all shareholders. The shareholders may exercise voting rights through the aforesaid system during the on-line voting period. The voting right can be exercise either through on-site voting or on-line voting. In case of dual-voting, the result of the first voting shall prevail.

 

6. Proposals of the Meeting:

 

(1) Proposal in Respect of the Satisfaction of the Conditions of A-share Private Placement;

(2) Proposal in Respect of Modifying the Scheme on the Company¡¯s A-share Private Placement for 2009;

(3) Proposal in Respect of Report on Utilization of the Funds Raised from Previous Offering;

(4) Proposal in Respect of Feasibility Study of Proposed Investment Projects of Funds Raised from A-share Private Placement;

(5) Proposal in Respect of Signing the Subscription Contract between the Company and Holchin B. V. Subject to Condition Precedent;

(6) Proposal in Respect of Requesting the Shareholders¡¯ General Meeting to Fully Authorize the Board of Directors in Respect of Matters on A-share Private Placement;

(7) Proposal in Respect of Providing Guarantees for Bank Loans of Subsidiaries;

 

7. Attendees of the Meeting

 

(1) Directors, Supervisors and Senior Management of the Company.

 

(2) Lawyers engaged by the Company.

 

(3) All A-shareholders registered with China Securities Registration & Clearing Co. Ltd SH Branch at 3 o¡¯clock of July 3, 2009, and all B-shareholders registered with China Securities Registration & Clearing Co. Ltd SH Branch at 3 o¡¯clock of July 8, 2009 (July 3 being the last trading day of B-shares).  Presence by proxy is allowed in case presence in person is impossible, subject to the presentation of a Power of Attorney.  The expected format of the Power of Attorney is enclosed.

 

All shareholders have the right to attend this meeting.

 

8. Registration of the Meeting

 

(1) Registration Period: 09:00-11:30 am, 14:00-17:00 pm, July 10, 2009;

                     08:00-9:00 am, July 13.

 

(2) Registration Place: Securities Office, Quarter A on the 5th floor of the Business Centre of the Company in Wuhan, Building No.5, International Enterprise Centre, Special No.1, Guanshan Road 2, Wuhan, Hubei, China.

 

(3) Registration Method: The legal representative of a corporate shareholder shall present his ID, valid document evidencing his capacity as legal representative; the proxy of a corporate shareholder shall present his ID, PoA issued by the legal representative and chopped by the company and shareholding certificate.

 

Individual shareholders shall present their ID cards or other valid documents evidencing their identity, their share account cards; the proxies of individual shareholders shall present their ID cards and PoAs.

 

The shareholders may as well register by mail or fax.

 

9. Others

 

(1) The on-site meeting is expected to last for a half day. The shareholders present at the meting shall pay the accommodation and travelling costs by themselves.

 

(2) Contacts: Ms. Wang Lu, Mr. Peng Puxin

 

TEL: 027-87773898

Fax: 027-87773962

Postal Code: 430073

 

It is herewith announced.

 

Huaxin Cement Co., Ltd.

Board of Directors

 

June 26, 2009