11:26 CHALCO<02600> - Announcement (3) Reasons for and the benefits of the Proposed A Share Issue The Directors believe that the Proposed A Share Issue, if it occurs, will be able to further enhance the Company's financing channels and improve its capital and debt raising capabilities. In addition, the Proposed A Share Issue is expected to provide the Company with capital required to fund its intended projects as itemised above, thereby improving its alumina production capacity and, in turn, its ability to further its business pursuits and developments in the industry. It is also believed that the Proposed A Share Issue will be able to promote the Company's position and to further enhance its reputation in the PRC. Effect of the Proposed A Share Issue on the Company's shareholding structure Assuming that a total of 1,500,000,000 A Shares will be issued under the Proposed A Share Issue, the Company's expected shareholding structure immediately before and immediately upon completion of the Proposed A Share Issue is set out and summarised as follows: Immediately Approximate Immediately Approximate before completion shareholding upon completion shareholding of the Proposed percentage of the Proposed percentage Type of shares A Share Issue (%) A Share Issue (%) 1. Unlisted domestic shares Unlisted domestic shares 7,750,010,185 70.13 7,750,010,185 61.75 2. Listed shares A Shares - - 1,500,000,000 11.95 H shares 3,299,865,968 29.87 3,299,865,968 26.30 3. Total 11,049,876,153 100.00 12,549,876,153 100.00 The Proposed A Share Issue, if it occurs, shall be conducted in accordance with the requirements of the CSRC and other relevant PRC regulatory authorities. Please note that the Proposed A Share Issue (including, but not limited to, its structure and the intended use of proceeds), upon being approved by the Company's shareholders at the AGM, is also subject to the approval of the CSRC and, in respect of the listing of the A Shares, that of the Shanghai Stock Exchange. Should there be any material developments regarding the Proposed A Share Issue, the Company will, if and when considered appropriate, issue further announcement(s) in accordance with the relevant disclosure requirements under the Listing Rules. PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION TO ACCOMMODATE THE PROPOSED A SHARE ISSUE To accommodate the Proposed A Share Issue, the Company will, when proceeding with the Proposed A Share Issue, make proposed amendments to the Articles of Association in compliance with all relevant and applicable PRC legal and regulatory requirements. Such amendments are proposed in accordance with laws and regulations prescribed by the relevant PRC authorities including the CSRC, stipulating provisions mandatory or recommended for inclusion in articles of associations of PRC listed companies. The proposed amended Articles of Association will be adopted for use by the Company after completion of the Proposed A Share Issue. The proposed amendments to be made to the Articles of Association primarily aim to enhance the corporate governance of the Company and, in accordance with the relevant PRC laws and regulations, deal with matters relating to different areas such as protection of public shareholders' rights, shareholders' meetings, independent directors and certain other related matters. Further details regarding such proposed amendments will be set out in the Shareholders' Circular. The proposed amendments to the Articles of Association are subject to approval by way of a special resolution by the Company's shareholders at the AGM, and are conditional upon obtaining any approval, endorsement or registration as may be necessary from the relevant PRC authorities. PROPOSED CHANGE OF THE COMPANY'S SCOPE OF BUSINESS AND ASSOCIATED AMENDMENT PROPOSED TO BE MADE TO THE ARTICLES OF ASSOCIATION In light of the Company's current business operations and its future strategic developments and business pursuits, the board of Directors has resolved to change the Company's scope of business as follows: Business activities proposed to be included in the Company's scope of business: Production and sales of water, electricity, gas, industrial oxygen and nitrogen; manufacture, installation and repair of spare parts and non-standard equipment; repair of automobiles and construction machineries as well as manufacture and sales of special production vehicles; highway freightage; telecommunications and communications as well as installation, repair, calibration and sales of measuring and control instruments; design, installation and testing of automatic measurement and control, network and software system; office automation and instruments and gauges.