Stock Codes: 600801, 900933       Stock Abbreviations: Huaxin Cement, Huaxin B Share       Ref: Lin 2010-022

 

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.

The Twentieth Meeting of the Sixth Board of Directors of Huaxin Cement Co., Ltd. (hereinafter called ��the Company��) was convened on November 29, 2010 in circular resolution.  All the 9 Directors have reviewed the proposals of this Meeting.  The Company sent the Meeting Notification to all Directors on November 22, 2010 by personal courier 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:

 

1. Proposal in Respect of Extending the Valid Period of the Company��s A-share Private Placement and Correspondingly Modifying the Scheme on A-share Private Placement (Voting Result: Affirmative: 6; Negative: 0; Abstention: 0);

Related Directors Mr. Ian Thackwray, Mr. Paul O��Callaghan and Mr. Paul Thaler abstained from their voting on this Proposal.

In view of the proposal of current A-share private placement approved by the Second Extraordinary Shareholders�� General Meeting 2009 is now reviewing by CSRC (China Securities Regulatory Commission) and the validity of the resolution of that Shareholders�� Meeting will be expired by December 16, 2010, in order to proceed the application of private placement, the period of validity of the private placement will be extended for 12 months from the expiration of the Second Extraordinary Shareholders�� General Meeting, and correspondingly modifying the lowest issuing price and issuing amount of the A-share private placement. The adjustments are as follows:

1) The validity of the resolution will be extended for 12 months to December 16, 2011 from the expiration of the Second Extraordinary Shareholders�� General Meeting for 2009, which is December 16, 2010;

2) The original 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 Eighth Meeting of the Sixth Board of Directors, whose dividend was excluded on June 7,2010 with the profit distribution plan, which is 20.29 Yuan per share, which will be adjusted to be no lower than 90% of the average trading price during 20 trading days prior to the announcement of resolutions of the Twentieth Meeting of the Sixth Board of Directors, which is 19.02 Yuan per share��

3) According to the adjustment for the lowest issuing price, the issuing amount will be changed from no more than 136.3 million to no more than 102 million.

After the adjustments, they are as follows:

Article 3 in <Proposal in Respect of Modifying the Scheme on the Company��s A-share Private Placement 2009>and < Proposal in Respect of Modifying the Amount of Using the Proceeds from Current A-share Private Placement> approved by the Fifteenth Meeting of the Sixth Board of Directors (convened on July 30) is revised to:

Issuing amount and scale of raised funds: The amount of the placement is no more than 102 million and the scale of raised funds is no more than 1,906 Million Yuan.  The actual amount and scale of raised fund will be decided by the Board of Directors and the sponsor (head underwriter) based on the authorization of the 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;

Article 5 in <Proposal in Respect of Modifying the Scheme on the Company��s A-share Private Placement 2009> is revised to:

Issuing price & the 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 twentieth Meeting of the Sixth Board of Directors, which is 19.02 Yuan per share. 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 ��Implementing Rules of Private Placement of Listed Companies�� after receiving issuance approval. All target investors will subscribe for the shares at the same final issue price.

Article 7 in <Proposal in Respect of Modifying the Scheme on the Company��s A-share Private Placement 2009> is revised to:

Valid period of resolution: Valid period of resolution for this offering extends to December 16, 2011.

Except the adjustment mentioned above, other parts of the <Proposal in Respect of Modifying the Scheme on the Company��s A-share Private Placement 2009> approved by the Eighth Meeting of the Sixth Board of Directors, the Second Extraordinary Shareholders�� General Meeting 2009 and < Proposal in Respect of Modifying the Amount of Using the Proceeds from Current A-share Private Placement> approved by the Fifteenth Meeting of the Sixth Board of Directors remain unchanged.

The related transaction concerned by the Proposal is reviewed by the three Independent Directors of the Company who all agreed to submit it to the Board of Directors for discussion.

After approved by the Board, the Proposal will be then submitted to the Shareholders�� General Meeting for consideration, and will come into force after its approval; the related shareholders shall abstain from their voting on this Proposal.

 

2. Proposal in Respect of Signing the Supplementary Agreement to the Share Subscription Agreement (II) by and between Huaxin Cement Co., Ltd. & Holchin B.V. Subject to Condition Precedent (Voting Result: Affirmative: 6; Negative: 0; Abstention: 0);

Proposal in Respect of Signing the Supplementary Agreement to the Share Subscription Agreement (II) by and between Huaxin Cement Co., Ltd. & Holchin B.V. Subject to Condition Precedent was reviewed and approved by the Board of Directors.  Since the Proposal is related to the biggest shareholder Holchin B. V. subscribing part of shares from the private placement with cash, related Directors Mr. Ian Thackwray, Mr. Paul O��Callaghan and Mr. Paul Thaler abstained from their voting on this Proposal.

The related transaction concerned by the Proposal is reviewed by the three Independent Directors of the Company who all agreed to submit it to the Board of Directors for discussion.

 

3. Proposal in Respect of Extending the Valid Period of the Shareholders�� General Meeting to Fully Authorize the Board of Directors of Matters on A-share Private Placement (Voting Result: Affirmative: 9; Negative: 0; Abstention: 0);

The Company approved the 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 by the Second Extraordinary Shareholders�� General Meeting 2009.  Since the Company is planning to extend the valid period of the private placement and correspondingly modify the lowest issuing price and issuing amount of the private placement, the Board of Directors proposes the Shareholders�� General Meeting to extend the valid period of fully authorizing the Board of Directors to handle all relevant matters concerning the A-share private placement for 12 months to December 16, 2011 from the expiration of the Second Extraordinary Shareholders�� General Meeting 2009. 

 

4. Proposal in Respect of Newly Added External Guarantees Provided by the Company (Voting Result: Affirmative: 9; Negative: 0; Abstention: 0);

(1) The Nineteenth Meeting of the Sixth Board of Directors convened on November 10, 2010 has approved the Company acquiring 70% equity of Fangxian Zuanshi Cement Co., Ltd.  (The equity transfer price shall be determined by the net equity audited on the base date of the transaction �C November 30, 2010.  The Company will timely publish the announcement on major progress of this acquisition once the transaction price is identified. )  As of now, Zuanshi has 160 million Yuan fixed assets loans.  After equity transfer, the name of Fangxian Zuanshi Cement Co., Ltd. shall be changed into Huaxin Cement (Fangxian) Ltd. (hereinafter referred to as Fangxian Company) and the above 160 million Yuan loans shall be borne by it thereafter; in addition, Fangxian Company proposes to apply to the Bank for its 35 million Yuan WHPG fixed assets loan and 65 million Yuan working capital loan.  In order to support the production and operation of Fangxian Company, the Company shall provide guarantee for the aforesaid total 260 million Yuan bank loans of Fangxian Company according to its equity proportion, viz. the guarantee provided by the Company for Fangxian Company amounts to no more than 182 million Yuan.

(2) The Nineteenth Meeting of the Sixth Board of Directors convened on November 10, 2010 has approved the Company acquiring 100% equity of Hubei Jinglan Group Sanyuan Cement Co., Ltd..  As of now, Sanyuan has 150 million Yuan fixed assets loans and 30 million Yuan working capital loan.  After equity transfer, the name of Hubei Jinglan Group Sanyuan Cement Co., Ltd. shall be changed into Huaxin Cement (Changyang) Ltd. (hereinafter referred to as Changyang Company) and the above totaled 180 million Yuan loans shall be borne by it thereafter; in addition, Changyang Company proposes to apply to the Bank for its 30 million Yuan WHPG fixed assets loan and 10 million Yuan newly added working capital loan.  In order to support the production and operation of Changyang Company, the Company shall provide guarantee for the 40 million Yuan working capital loans and 70 million Yuan fixed assets loan of Changyang Company, the rest loans shall be mortgaged against the new company��s assets, viz. the guarantee provided by the Company for Changyang Company amounts to no more than 110 million Yuan.

The Management of the Company hereby asks the Board to approve the Company providing guarantee for the aforesaid loans which totaled 292 million Yuan, and to authorize the Company to sign the relevant guarantee contracts before December 31, 2012.

As of October 31, 2010, the Company has already provided 3287.93 million Yuan and 13.5 million USD external guarantees.  If plus the new 292 million Yuan external guarantee, the total external guarantee amount will exceed 50% of the most recent audited net assets.  According to the provisions stipulated in the Stock Listing Rules of Shanghai Stock Exchange and Articles of Association of the Company, the proposal shall be approved by the Shareholders�� General Meeting.

 

5. Proposal in Respect of Convening the Second Extraordinary Shareholders�� General Meeting 2010 (Voting Result: Affirmative: 9; Negative: 0; Abstention: 0).

 

II. Notice Regarding Convening the Second Extraordinary Shareholders�� General Meeting 2010

 

1. Time of the Meeting: 9:00 am, December 16, 2010 (Thursday)

 

2. Share Registration Date

 

(1) A share registration date: December 7, 2010

(2) B share registration date: December 10, 2010 (the last trading date is December 7)

 

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 Guanggu Avenue, Wuhan City, Hubei, China      

 

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

 

5. Manner of 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. The On-line Voting Procedures for Shareholders is enclosed as Annex I.

 

6. Proposal of the Meeting:

 

(1) Proposal in Respect of Extending the Valid Period of the Company��s A-share Private Placement and Correspondingly Modifying the Scheme on A-share Private Placement;

(2) Proposal in Respect of Signing the Supplementary Agreement to the Share Subscription Agreement (II) by and between Huaxin Cement Co., Ltd. & Holchin B.V. Subject to Condition Precedent;

(3) Proposal in Respect of Extending the Valid Period of the Shareholders�� General Meeting to Fully Authorize the Board of Directors of Matters on A-share Private Placement;

(4) Proposal in Respect of External Guarantees Provided by the Company;

For detailed proposal, please refer to the Announcement on Resolutions of the Nineteenth Meeting of the Sixth Board of Directors published on China Securities Journal, Shanghai Securities News, Hong Kong Commercial Daily and the website of SSE on November 13, 2010.

(5) Proposal in Respect of Newly Added External Guarantees Provided by the Company;

(6) Proposal in Respect of Accepting Mr. Paul O'Callaghan to Resign from the Position of Director;

For detailed proposal, please refer to the Announcement on Resolutions of the Nineteenth Meeting of the Sixth Board of Directors published on China Securities Journal, Shanghai Securities News, Hong Kong Commercial Daily and the website of SSE on November 13, 2010.

(7) Proposal in Respect of Nominating Mr. Roland Kohler as the Director of the Sixth Board of Directors.

For detailed proposal, please refer to the Announcement on Resolutions of the Nineteenth Meeting of the Sixth Board of Directors published on China Securities Journal, Shanghai Securities News, Hong Kong Commercial Daily and the website of SSE on November 13, 2010.

 

 

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 on December 7, 2010, and all B-shareholders registered with China Securities Registration & Clearing Co. Ltd SH Branch at 3 o��clock on December 10, 2010 (December 7 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 as Annex II.

 

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, December 15, 2010;

                     08:00-9:00 am, December 16, 2010.

 

(2) Registration Place: Securities Office, Quarter D on the 5^th floor of the Business Centre of the Company in Wuhan, Building No.5, International Enterprise Centre, Special No.1 Guanggu Avenue, Wuhan City, 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. Any Other Business

 

(1) The 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

November 30, 2010

Annex 1:

 

1. Time of the on-line Voting: 9:30-11:30, 13:00-15:00, December 16, 2010 (Thursady)

The procedure is the same as purchasing shares in SSE.

 

2. During the on-line voting, shareholders can vote on the proposals when declaring a subscription entrustment. Related information of the stock as follows:

Stock Codes: A Share 738801, B Share 938933        Stock Abbreviation: Vote for Huaxin

3. Voting Procedures for Shareholders        

 

(1) During the on-line voting, shareholders shall vote on items in terms of declaring a subscription entrustment        

 

(2) Write down the proposal number of this Extraordinary Shareholders�� General Meeting in the Entrust column, detailed information as follows:

 

Write down the Voting Results in the ��Entrust Shares�� column. The corresponding declared shares according to the Voting Results as follows:

 

 

(3) Affirm the fulfilment of the voting entrust.

 

4. Notes

 

(1) One proposal shall be declared only once by one shareholder, the first declaration shall be view as the only result if there is multi-declaration, all the votes cannot be withdrawn.

 

(2) All the declarations which fell short of the above requirements shall be viewed as nullity, and will not be account into the Voting Statistics.

 

Annex 2:

 

 

Mr. (Ms.)    is now authorized by myself (or our Company) to attend the Second Extraordinary Shareholders�� General Meeting 2010 of Huaxin Cement Co., Ltd., and exercise voting rights to the following proposal on my (or our Company��s) behalf according to the following indications.

 

 

Note: mark the column by ���̡�, (if there are proposals not be indicated specifically, the shareholder proxy can exercise voting right with full authority).

 

Signing of Consigner (common seal):

ID number or number of the business license:

Account of shareholder:

Type and number of shares:

 

Signing of proxy:

ID number:

Date of authorization:

Limit of authorization: from the authorization day to the meeting termination