WAIVERS FROM STRICT COMPLIANCE WITH THE HONG KONG LISTING RULES

Transcription

1 We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted to us, the following waivers from strict compliance with the Hong Kong Listing Rules. MANAGEMENT PRESENCE Rule 8.12 of the Hong Kong Listing Rules provides that a listing applicant applying for a primary listing on the Hong Kong Stock Exchange must have sufficient management presence in Hong Kong, and this normally means that at least two of such listing applicant s executive directors must be ordinarily resident in Hong Kong. Rule 19A.15 of the Hong Kong Listing Rules provides that the requirement under Rule 8.12 of the Hong Kong Listing Rules may be waived by the Hong Kong Stock Exchange at its discretion. It states that in exercising such discretion, the Hong Kong Stock Exchange will have regard to, among other considerations, the listing applicant s arrangements for maintaining regular communication with the Hong Kong Stock Exchange. Currently, the head office of the Company and the business operations of the Company and its major subsidiaries are based, managed and conducted in the PRC and other jurisdictions other than Hong Kong and all Directors including the independent non-executive Directors reside in the PRC. The Company does not, and for the foreseeable future, will not, have executive Directors who are ordinarily resident in Hong Kong as required under Rules 8.12 and 19A.15 of the Hong Kong Listing Rules, Accordingly, the Company has applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Rules 8.12 and 19A.15 of the Hong Kong Listing Rules based on the following arrangements to maintain effective communication between the Hong Kong Stock Exchange and the Company: Both of the Company s authorised representatives, Mr. Mai Boliang, a Director and the president of the Company, and Mr. Yu Yuqun ( Mr. Yu ), the secretary to the Board and the proposed company secretary of the Company, will act as our principal channel of communication with the Hong Kong Stock Exchange. The Company has also appointed Mr. Cheong Siu Fai ( Mr. Cheong ), a Hong Kong resident and the assistant company secretary of the Company, as its alternative authorised representative. Although Mr. Mai Boliang and Mr. Yu normally reside in the PRC, both of them hold Hong Kong identity cards and are able to travel to Hong Kong freely. Accordingly, the authorised representatives and the alternative authorised representative of the Company will be able to meet with the relevant members of the Hong Kong Stock Exchange within a reasonable period of time. The two authorised representatives and the alternative authorised representative of the Company will also be readily available by telephone, and facsimile to promptly address the enquiries from the Hong Kong Stock Exchange. Both the two authorised representatives and the alternative authorised representative of the Company have means of contacting all Directors (including our independent non-executive Directors) promptly at all times and when the Hong Kong Stock Exchange wishes to contact a Director for any reason. Each of the Directors (including our independent non-executive Directors) has provided his mobile phone numbers, office phone numbers, addresses and fax numbers to each of the authorised representatives and the alternative authorised representative of the Company and the Hong Kong Stock Exchange, and in the event that any Director (including any independent non-executive Director) expects to travel or otherwise be out of office, he will provide the contact details and his place of accommodation to the two authorised representatives and the alternative authorised representative of the Company. 52

2 (e) (f) (g) Each of the Directors (including the independent non-executive Directors) who does not ordinarily resident in Hong Kong possesses valid travel documents to visit Hong Kong and are able to renew such travel documents when they expire and will be able to meet with the relevant members of the Hong Kong Stock Exchange within a reasonable period of time. Each of the Directors (including the independent non-executive Directors) will be readily contactable by telephone, facsimile and , and is authorised to communicate on behalf of the Company with the Hong Kong Stock Exchange. Mr. Cheong, the alternative authorised representative and the assistant company secretary of the Company, who is a Hong Kong resident, will, among other things, act as a channel of communication of the Company with the Hong Kong Stock Exchange and be available to answer enquiries from the Hong Kong Stock Exchange. The Company has appointed a compliance adviser pursuant to Rule 3A.19 of the Hong Kong Listing Rules who will have access at all times to the two authorised representatives and the alternative authorised representative of the Company, the Directors (including independent non-executive Directors) and other senior management of the Company, and will act as an additional channel of communication between the Company and the Hong Kong Stock Exchange. The compliance adviser will be appointed for a period commencing from the Listing Date and ending on the date on which the Company distributes its annual report for the first full financial year pursuant to Rule of the Hong Kong Listing Rules. Meetings between the Hong Kong Stock Exchange and the Directors (including the independent non-executive Directors) could be arranged through the authorised representatives, the alternative authorised representative or the compliance adviser of the Company or directly with the Directors (including the independent non-executive Directors) within a reasonable time frame. The Company will inform the Hong Kong Stock Exchange promptly in respect of any change in its authorised representatives, the alternative authorised representative and/or the compliance adviser. INDEPENDENT NON-EXECUTIVE DIRECTORS Rule 19A.18(1) of the Hong Kong Listing Rules provides, among others, that at least one of the independent non-executive directors must be ordinarily resident in Hong Kong. Currently, all Directors including the independent non-executive Directors reside in the PRC. Our Company does not, and for the period commencing from the Listing Date to the Company s forthcoming 2012 annual general meeting to be held in April 2013, will not, have independent non-executive Directors who are ordinarily resident in Hong Kong as required under Rule 19A.18(1) of the Hong Kong Listing Rules. Accordingly, the Company has applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Rule 19A.18(1) of the Hong Kong Listing Rules based on the following grounds: There might be practical difficulties for the Company to appoint an additional independent non-executive Director who ordinarily resides in Hong Kong upon the Listing based on the facts that: (i) The Company needs a certain period of time to find a suitable candidate to act as an additional independent non-executive Director and it also needs a significant amount of time to complete its internal approval and appointment process, including but not limited to convening a meeting for the Board of Directors. 53

3 (ii) (iii) (iv) According to the Company s Articles of Association, the Company needs to convene an extraordinary general meeting for the appointment of a Director. The Company needs to notify its shareholders 15 days in advance before such general meeting and the Company needs to fulfill relevant procedures and prepare relevant documents as required under the Shenzhen Listing Rules and other applicable laws and rules. According to the Company s Articles of Association, the Company needs to have eight directors including three independent non-executive Directors. As the Company currently has eight directors (including three independent non-executive Directors), appointment of an additional independent non-executive Director who ordinarily resides in Hong Kong may result in the amendment to the Company s Articles of Association for which the Company needs to fulfill relevant procedures and prepare relevant documents as required under the Shenzhen Listing Rules and other applicable laws and rules in addition to the requirement of convening an extraordinary general meeting as described under sub-section (ii) immediately above. The candidate for the independent non-executive Director needs to comply with certain requirements before the nomination, such as attending a training course for four or five days, passing an examination for independent non-executive directors and obtaining a certificate to act as an independent non-executive director. Further, the Shenzhen Stock Exchange needs to evaluate the candidate for the role as independent non-executive director before the proposed appointment. The whole process normally needs to be completed before the proposed appointment, and it will take significant additional time which will substantially delay the proposed listing timetable. Accordingly, the appointment of an additional independent non-executive Director who ordinarily resides in Hong Kong upon the Listing will incur significant additional time and costs and will substantially delay the proposed listing timetable, which is not in line with the interest of the Company and the Shareholders as a whole. The term of office of this session of the Board of Directors (including the independent non-executive Directors) will expire in April Accordingly, in support of this waiver application, the Company undertakes that it will appoint a resident who ordinarily resides in Hong Kong as independent non-executive Director at its forthcoming 2012 annual general meeting which is expected to be held in April 2013 to fully comply with Rule 19A.18(1) of the Hong Kong Listing Rules. During the period from the Listing Date to the Company s 2012 annual general meeting to be held in April 2013, the Company will adopt the following arrangements to ensure a communication channel between the Hong Kong Stock Exchange and the Directors (including the independent non-executive Directors): (i) Mr. Cheong, the alternative authorised representative of the Company, who is a Hong Kong resident, will, among other things, act as a channel of communication of the Company and the Directors with the Hong Kong Stock Exchange. Both Mr. Cheong and the two authorised representatives of the Company have means of contacting all Directors (including the independent non-executive Directors) promptly at all times and when the Hong Kong Stock Exchange wishes to contact a Director (including an independent non-executive Director) for any reason. 54

4 (ii) (iii) (iv) As there is no independent non-executive Director ordinarily resident in Hong Kong upon the Listing, the Company will appoint certain professionals who are familiar with relevant legal, regulatory and business issues or environment in Hong Kong, such as a compliance adviser which will act as an additional channel of communication between the Hong Kong Stock Exchange and the Company and have means of contacting all Directors (including the independent non-executive Directors) promptly at all times and when the Hong Kong Stock Exchange wishes to contact a Director (including an independent non-executive Director) for any reason, together with the appointment of a legal adviser as to Hong Kong laws for the Company s compliance matters upon the Listing. The compliance adviser will be appointed for a period commencing from the Listing Date and ending on the date on which the Company distributes its annual report for the first full financial year pursuant to Rule of the Hong Kong Listing Rules. The legal adviser as to Hong Kong laws will be appointed for a consecutive period commencing from the Listing Date so long as the Company is listed on the Hong Kong Stock Exchange. Each of the Directors (including the independent non-executive Directors) has provided his mobile phone numbers, office phone numbers, addresses and fax numbers to the Hong Kong Stock Exchange and will be readily contactable by mobile phone, office phone, facsimile and by the Hong Kong Stock Exchange. In addition, each of the Directors (including the independent non-executive Directors) who does not ordinarily reside in Hong Kong possesses valid travel documents to visit Hong Kong and are able to renew such travel documents when they expire and will be able to meet with the relevant members of the Hong Kong Stock Exchange within a reasonable period of time. Meetings between the Hong Kong Stock Exchange and the Directors (including the independent non-executive Directors) could be arranged through the authorised representatives, the alternative authorised representative or the compliance adviser of the Company or directly with the Directors (including the independent non-executive Directors) within a reasonable time frame. Accordingly, the Company will not appoint an additional independent non-executive Director who ordinarily resides in Hong Kong upon completion of the Listing. Alternatively, the Company undertakes to comply with Rule 19A.18(1) of the Hong Kong Listing Rules and appoint an independent non-executive Director who ordinarily resides in Hong Kong at its forthcoming 2012 annual general meeting to be held in April

5 COMPANY SECRETARY Rule 8.17 of the Hong Kong Listing Rules provides that a listing applicant must appoint a company secretary who satisfies Rule 3.28 of the Hong Kong Listing Rules. Rule 3.28 of the Hong Kong Listing Rules provides that the company secretary of a listing applicant must be a person who, by virtue of his academic or professional qualifications or relevant experience, is, in the opinion of the Hong Kong Stock Exchange, capable of discharging the functions of company secretary. The Hong Kong Stock Exchange considers the following academic or professional qualifications to be acceptable: a Member of The Hong Kong Institute of Chartered Secretaries; a solicitor or barrister (as defined in the Legal Practitioners Ordinance); and a certified public accountant (as defined in the Professional Accountants Ordinance). In assessing relevant experience, the Hong Kong Stock Exchange will consider the individual s: length of employment with the listing applicant and other listed issuers and the roles he played; familiarity with the Hong Kong Listing Rules and other relevant laws and regulations including the Securities and Futures Ordinance, Companies Ordinance and the Takeovers Code; relevant training taken and/or to be taken in addition to the minimum requirement under Rule 3.29 of the Hong Kong Listing Rules; and professional qualifications in other jurisdictions. The Company has appointed Mr. Yu, the secretary to the Board, as the company secretary of the Company. For the relevant experiences and qualifications of Mr. Yu, please refer to the relevant disclosure in respect of Mr. Yu s biographical information under the section headed Directors, Supervisors and Senior Management in this listing document. However, Mr. Yu does not possess requisite qualifications as stipulated under Rule 3.28 of the Hong Kong Listing Rules and may not be able to fulfill the requirements under Rule 3.28 of the Hong Kong Listing Rules. As such, the Company has appointed Mr. Cheong as an assistant company secretary of the Company to assist Mr. Yu in the compliance matters for the Listing as well as other Hong Kong regulatory requirements for a period of three years commencing from the Listing Date. Mr. Cheong is ordinarily resident in Hong Kong and fulfills the qualification requirements under Rule 3.28 of the Hong Kong Listing Rules. Over a period of three years from the Listing Date, our Company proposes to implement the following measures to assist Mr. Yu to become a company secretary with the requisite qualifications as stipulated under Rule 3.28 of the Hong Kong Listing Rules: Mr. Cheong, the assistant company secretary who meets the requirements under Rule 3.28 of the Hong Kong Listing Rules, will assist Mr. Yu so as to enable him to acquire the relevant knowledge and experience (as required under Rule 3.28 of the Hong Kong Listing Rules) in order to discharge his duties and responsibilities as a company secretary of the Company. Based on Mr. Cheong s relevant experience as a company secretary of a Hong Kong listed company, he will be able to explain and advise both Mr. Yu and the Company on the relevant requirements of the Hong Kong Listing Rules as well as other applicable Hong Kong laws and regulations. 56

6 (e) Mr. Yu, the company secretary of the Company, will be assisted by Mr. Cheong for a period of three years commencing from the Listing Date, a period which should be sufficient for him to acquire the relevant knowledge and experience required by the Hong Kong Listing Rules. The Company will ensure that Mr. Yu has access to the relevant training and support to enable him to familiarize himself with the Hong Kong Listing Rules and the duties required of a company secretary of a Hong Kong listed company. Mr. Yu will endeavour to attend relevant training courses including briefing on the latest changes to the applicable Hong Kong laws and regulations and the Hong Kong Listing Rules to be organised by the Company s legal advisers as to Hong Kong laws and seminars organised by the Hong Kong Stock Exchange for listed companies from time to time. Mr. Yu will communicate regularly with Mr. Cheong on matters relating to corporate governance, the Hong Kong Listing Rules as well as other applicable Hong Kong laws and regulations which are relevant to the operations and affairs of the Company. Mr. Cheong will work closely with, and provide assistance to Mr. Yu in order to discharge his duties and responsibilities as a company secretary, including organizing the Company s board meetings and shareholders meeting. Pursuant to Rule 3.29 of the Hong Kong Listing Rules, Mr. Yu and Mr. Cheong will also attend in each financial year no less than 15 hours of relevant professional training courses to familiarise themselves with the requirements of the Hong Kong Listing Rules and Hong Kong regulatory requirements. Both Mr. Yu and Mr. Cheong will be advised by the Company s legal adviser as to Hong Kong laws and its compliance adviser as and when required. The Company has applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with the requirements of Rules 3.28 and 8.17 of the Hong Kong Listing Rules. The waiver is valid for an initial period of three years from the Listing Date. Upon the expiry of the three-year period, our Company will evaluate the qualifications and experiences of Mr. Yu. Upon the determination of our Company that no on-going assistance is necessary, our Company will demonstrate to the Hong Kong Stock Exchange that, with the assistance of Mr. Cheong over such three-year period, Mr. Yu has acquired the relevant knowledge and experience as stipulated under Rules 3.28 and 8.17 of the Hong Kong Listing Rules. The Hong Kong Stock Exchange will then determine whether any further waiver would be necessary. FINANCIAL INFORMATION AND ACCOUNTING ISSUES Accountants report for past three financial years Rule 4.01 of the Hong Kong Listing Rules and paragraph 37 of Appendix 1A to the Hong Kong Listing Rules provide that a new listing applicant is required to prepare an accountants report in accordance with Chapter 4 of the Hong Kong Listing Rules and to disclose all the specified details concerning the financial information in the accountants report as set out in Appendix 16 to the Hong Kong Listing Rules. 57

7 The Company has applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Rule 4.01 of the Hong Kong Listing Rules and paragraph 37 of Appendix 1A to the Hong Kong Listing Rules such that the Company will reproduce in this listing document its previously published audited consolidated financial statements of the Group for the past three financial years ended 31 December 2009, 2010 and 2011, which were prepared in accordance with CASBE and the relevant disclosure requirements of the CSRC for public companies based on the following grounds: (e) The previously published financial information of the Group for the past three financial years ended 31 December 2009, 2010 and 2011 were prepared in accordance with CASBE, an accounting standard acceptable to the Hong Kong Stock Exchange under Rule 4.11 of the Hong Kong Listing Rules and relevant disclosure requirements of the CSRC for public companies. The Listing is to be conducted by way of introduction, which means that there will be no offering of shares and no new investors becoming shareholders of the Company at the time of Listing. There will be no fund raising activities under the Listing. At the time of the Listing, part or all the existing B Shareholders (including Broad Ride) will become H Shareholders. All H Shareholders upon the Listing have already been provided with historical financial information about the Company through the previously published financial information of the Group for the three financial years ended 31 December 2009, 2010 and The Company has over 280 subsidiaries all over the world such that it may be unduly burdensome and unnecessary to require the Company s auditors to prepare the accountants report instead of having the previously published financial information reproduced in this listing document. It is expected that significant additional time and cost will be required for the preparation of the accountants report, and such accountants report will not provide any additional material information to the Shareholders. The Company has included the following statement in the paragraph headed Information about this Listing Document and the Listing Directors Responsibility for the Contents of this Listing Document in this listing document: This listing document, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Hong Kong Listing Rules for the purpose of giving information to the public with regard to our Company. Our Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief that all material information has been included in this listing document and the information contained in this listing document is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this listing document misleading. As a public company listed in Shenzhen, the consolidated financial information for each of the three financial years of our Group were filed with the Shenzhen Stock Exchange and must strictly comply with the Shenzhen Listing Rules and the relevant PRC securities laws. Our Company and the Sole Sponsor believe that the previously published consolidated financial statements for each of the past three financial years provide adequate and sufficient historical financial information to our Company s existing A and B Shareholders as well as H Shareholders. 58

8 Accordingly, our Company is not required to prepare the accountant s report for the three financial years ended 31 December 2009, 2010 and Alternatively, the Company has reproduced in this listing document its previously published audited consolidated financial statements of the Group for the past three financial years ended 31 December 2009, 2010 and 2011, which were prepared in accordance with CASBE and the relevant disclosure requirements of the CSRC for public companies. The latest financial period should be no more than six months before the date of listing document Rule 8.06 of the Hong Kong Listing Rules provides that, in the case of a new listing applicant, the latest audited financial information contained in the accountants report (as provided in Chapter 4 of the Hong Kong Listing Rules) must not have ended more than six months before the date of the listing document. The Company has published its unaudited consolidated interim financial information for the six months ended 30 June 2012 on 25 August 2012 and its unaudited condensed consolidated interim financial information for the nine months ended 30 September 2012 on 30 October 2012 (collectively, the Interim Financial Information ) in accordance with relevant PRC laws, regulations and listing rules. The Company has reproduced the Interim Financial Information in this listing document and has applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Rule 8.06 of the Hong Kong Listing Rules based on the following grounds: The Interim Financial Information has been prepared in accordance with CASBE, an accounting standard acceptable to the Hong Kong Stock Exchange under Rule 4.11 of the Hong Kong Listing Rules and the relevant disclosure requirements of the CSRC for public companies. The publication of the Interim Financial Information has provided the latest financial information of the Group to the investors on the Shenzhen Stock Exchange. The reproduction of such Interim Financial Information in the listing document will also provide the same financial information of the Group to potential investors after the Listing. The Interim Financial Information is not required to be audited or reviewed for the purpose of its publication on the Shenzhen Stock Exchange. Given that the Listing is to be conducted by way of introduction and there is no offering of shares or fund raising from any new investor, the audit and review is not necessary for the purpose of the Listing. The Company is already listed on the Shenzhen Stock Exchange and has already complied with, and will continue to comply with, the stringent regulatory requirements in the PRC with respect to the disclosure of its financial information. In addition, under the current regulatory and supervisory regime applicable to our Company, the CSRC is the regulatory entity with the authority to supervise our Company s auditors and reporting accountant and it is a member of IOSCO and has signed arrangements with the SFC for mutual assistance. As required by the Shenzhen Listing Rules and relevant PRC laws and regulations, the Company is required to make an announcement where there is any material change (over 50%) in expectations to its financial position and prospects. 59

9 (e) It is expected that the Company s reporting accountant, PwC Zhongtian, will be able to provide a comfort letter to the Company with respect to the Interim Financial Information based on certain agreed upon factual finding procedures in accordance with China Standards on Related Services 4101, Engagements to Perform Agreed-Upon Procedures Regarding Financial Information, a comparable standard to that required by the Hong Kong Institute of Certified Public Accountants or International Federation of Accountants. Such agreed upon procedures are set out as follows: (i) (ii) (iii) (iv) Compare the unaudited consolidated interim financial information of the Company for the six months ended 30 June 2012 set out in Appendix IV in this listing document with that included in the interim report of the Company for the six months ended 30 June 2012 published on the Shenzhen Stock Exchange; Compare the unaudited condensed consolidated interim financial information of the Company for the nine months ended 30 September 2012 set out in Appendix V in this listing document with that included in the quarterly report of the Company for the nine months ended 30 September 2012 published on the Shenzhen Stock Exchange; Check the mathematical accuracy of the consolidated balance sheets as of 30 June 2012 and 30 September 2012, and consolidated income statements, consolidated statements of changes in equity, consolidated statements of cash flow of the Company for the six months ended 30 June 2011 and 30 June 2012, respectively and the nine months ended 30 September 2011 and 30 September 2012, respectively; and Agree the consolidated balance sheets as of 30 June 2012 and 30 September 2012, and consolidated income statements for the six months ended 30 June 2012 and nine months ended 30 September 2012 to the consolidation spreadsheets for the six months ended 30 June 2012 and the nine months ended 30 September 2012 (the Consolidation Spreadsheets ) prepared by the officials of the Company having responsibility for financial and accounting matters with the Company s accounting records. The reporting accountant of the Company have neither audited nor reviewed the Consolidation Spreadsheets or performed any other procedures with respect thereto and that the reporting accountant of the Company do not express any opinion or any other form of assurance on them. Accordingly, the Company is not required to have its consolidated interim financial information for the six months ended 30 June 2012 and its condensed consolidated interim financial information for the nine months ended 30 September 2012 audited or reviewed for the purpose of inclusion in the listing document. Alternatively, the Company has reproduced in this listing document its previously published unaudited consolidated interim financial information of the Group for the six months ended 30 June 2012 and the unaudited condensed consolidated interim financial information of the Group for the nine months ended 30 September 2012 which were prepared in accordance with CASBE. Business or subsidiary acquired after the Track Record Period Rules 4.04(2) and 4.04(4) of the Hong Kong Listing Rules require that the accountants report to be included in a listing document must include the results and balance sheet, respectively, of any business or subsidiary acquired, agreed to be acquired or proposed to be acquired since the date to which the latest audited accounts of the listing applicant have been made up, in respect of each of the three financial years immediately preceding the issue of the listing document (the Target Financial Information ). 60

10 Since 31 December 2011, the Group has acquired, respectively, the following business or subsidiary: 100% equity interests of Nanjing Yangzi Petrochemical Design Engineering Company Ltd., which is principally engaged in consulting and engineering service in connection with petrochemical engineering projects, at a consideration of RMB165,000,000 in January 2012; 70% equity interests of Xinfa Airport Equipment Ltd., which is principally engaged in sales of the airport vehicles and provision of related technical services, at a consideration of RMB18,900,000 in January 2012; 14.99% equity interests of Pteris Global Limited, which is principally engaged in airport baggage handling system, logistics management system and airline catering handling system, at a consideration of approximately RMB54,254,000 in August 2012; certain assets of Ziemann Ludwigsburg GmbH, Ziemann Services GmbH and Ziemann + Bauer GmbH and certain equity interests of Ziemann Consulting Pty. Ltd., Ziemann Australia & Oceania Pty. Ltd., Ziemann USA Inc., Ziemann Asia-Holding Co. Ltd. and Ziemann Asia-Pacific Co. Ltd. (collectively, the Ziemann Group ), which is principally engaged in providing comprehensive equipment and services for the brewing and beverage industry, at an aggregate consideration of approximately RMB205,727,075 in August 2012; and (e) 60% equity interests of Yangjiang Shangdong Furi Property Development Co., Ltd., which is principally engaged in property development business, at a consideration of RMB36,000,000 in January Accordingly, the aggregate consideration for the above acquisitions of business or subsidiary (the Acquisitions ) is approximately RMB479,881,000. The Company has applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Rules 4.04(2) and 4.04(4) of the Hong Kong Listing Rules based on the following grounds: Lack of Target Financial Information: The Group had conducted these Acquisitions in its ordinary and usual course of business from Independent Third Parties. The Acquisitions were priced on fair values, taking into account factors such as location and customer flow. The Company also had genuine difficulties in obtaining the historical financial information from the previous owner and/or management for each of the Acquisitions as they were acquired from Independent Third Parties. Immateriality: Applying the relevant size tests under Rule of the Hong Kong Listing Rules, the Acquisitions in aggregate represent only 1.83% of the Group s total assets, 0.82% of the Group s total revenue and 0.61% of the Group s profits before tax, and 1.79% of the Company s market capitalisation. Accordingly, the Acquisitions would not trigger the discloseable transaction requirement under Chapter 14 of the Hong Kong Listing Rules (requiring a 5% threshold). Further, the Acquisitions were not significant enough to require the Company to prepare pro-forma accounts under Rule 4.28 of the Hong Kong Listing Rules. The Company therefore considers that the Acquisitions as immaterial and does not expect them to have any material effect on its business, financial conditions and operations. 61

11 Irrelevance: Given the immaterial nature of the Acquisitions, the Target Financial Information would not be relevant for investors considering an investment in the Company s shares, and such financial information would not likely affect potential investors investment decision. Alternative Disclosure: The Company has provided in this listing document alternative information in connection with the Acquisitions which relates to acquisitions of equity interests in companies in order to compensate for the non-inclusion of the Target Financial Information. Please see the paragraph headed Financial Information Recent Acquisitions of this listing document for more details. Such alternative disclosure of the Acquisitions which relates to acquisitions of equity interests in companies would include the following: (i) (ii) (iii) (iv) (v) (vi) a general description of the scope of business; the value of the consideration; the basis on which the consideration was determined; the total assets or net assets (if applicable); the net profits for the two financial years prior to each of the Acquisitions; and reasons for entering into each of the Acquisitions. Accordingly, the Company will not include in its listing document the results and balance sheet of certain business or subsidiary acquired after the Track Record Period. Alternatively, the Company has disclosed in this listing document alternative information in connection with the acquisition of certain business or subsidiary acquired after the Track Record Period. DEALINGS IN SHARES PRIOR TO LISTING Rule 9.09 of the Hong Kong Listing Rules provides that there must be no dealing in the securities of a new listing applicant for which listing is sought by any connected person of the listing applicant from four clear business days before the expected hearing date until listing is granted. In the context of a listing by way of introduction of a widely held, publicly traded company, the Company has no control over the investment decision of its Shareholders. The Company does not contemplate that it is within its control to satisfy the strict requirement under Rule 9.09 of the Hong Kong Listing Rules. Accordingly, the Company has applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Rule 9.09 of the Hong Kong Listing Rules such that the restrictions on dealings in the Shares under Rule 9.09 of the Hong Kong Listing Rules shall not apply to the future Substantial Shareholders over whom the Company has no control in relation to their investment decisions. 62

12 In support of this waiver application, the Company has either confirmed or undertaken to the following: (e) (f) (g) Each of the Company and its senior management has no control over the investment decisions of the Shareholders (including potential new Substantial Shareholders) and their respective associates and their investing public, nor is each of them in a position to be fully aware of the dealing of the Shares by the Shareholders (save as disclosed in below). The Company confirms that the waiver is only applicable to the future Substantial Shareholders and their respective associates whose investment decisions it does not have control over and they have not, or will not be involved in the Listing and the Group s management and operations prior to the Listing. The Company confirms that the Directors, Supervisors, its senior management and its Substantial Shareholders, namely China Merchants (CIMC), COSCO Container and its associated company, Long Honour Investments Limited (together with their respective associates), will not deal in the Shares from four clear business days before the hearing date until listing is granted. Each of the Substantial Shareholders of the Company, namely China Merchants (CIMC), COSCO Container and its associated company, Long Honour Investments Limited, has undertaken to the Company that they will not deal in the Shares from four clear business days before the hearing date until listing is granted. The Company undertakes that it shall notify the Hong Kong Stock Exchange of any dealing or suspected dealing in the Shares by any connected persons during the above restricted period. The Company undertakes that it shall release price sensitive information to the public as required by relevant laws, rules and regulations applicable to the Company so that anyone who may deal in the Shares as a result of this waiver will not be in possession of non-public price sensitive information. Each of the Company and the Sole Sponsor has undertaken that no non-public information will be disclosed to the existing Substantial Shareholders and the potential new Substantial Shareholders. PROFIT FORECAST MEMORANDUM Rule 9.11(10) of the Hong Kong Listing Rules provides that, where the listing document does not contain a profit forecast, two copies of a draft of the board s profit forecast memorandum covering the period up to the forthcoming financial year end after the date of listing and cash flow forecast memorandum covering at least 12 months from the expected date of publication of the listing document with principal assumptions, accounting policies and calculations for the forecasts are required to be submitted to the Hong Kong Stock Exchange. 63

13 The Company has applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted, a waiver from strict compliance with Rule 9.11(10) of the Hong Kong Listing Rules on the following reasons: There is sufficient disclosure of its financial position, and business and financial prospects, in its periodic financial reports and public announcements by virtue of the relevant listing rules and applicable securities laws to which the Company is subject to: (i) (ii) As required by the Shenzhen Listing Rules and relevant PRC laws and regulations, the Company is required to include a general description of outlook and prospects and a warning statement and related explanations if the forecast operating results for the next reporting period will be a net loss or have a material adverse change when compared with its previous corresponding period in its quarterly unaudited financial statements report. As required by the Shenzhen Listing Rules and relevant PRC laws and regulations, the Company is required to make an announcement where there is any material change (over 50%) in expectations to its financial position and prospects. The Company is already listed on the Shenzhen Stock Exchange where there is extensive coverage on its financial position and prospects through analysts research in the market. The Shenzhen Listing Rules do not require the Company to include a profit forecast in the listing document or its periodic report and the Company does not intend to do so. In such a circumstance, it would be very onerous to require the Company to produce and submit such a memorandum which would not provide any additional material information on top of its general disclosure obligation. NON-EXEMPT CONNECTED TRANSACTION Our Group has entered into, and expects to continue after the Listing, certain transaction which will constitute non-exempt continuing connected transaction under Chapter 14A of the Hong Kong Listing Rules. We have applied to the Hong Kong Stock Exchange for, and the Hong Kong Stock Exchange has granted to us, a waiver under Rule 14A.42(3) of the Hong Kong Listing Rules from strict compliance with the announcement and independent shareholders approval requirements under the Hong Kong Listing Rules in respect of such non-exempt continuing connected transaction. The details of such waiver are set out in the section headed Connected Transactions in this listing document. 64