09:29 LUOYANG GLASS<01108> - Announcement (5) requirements of Chapter 14A of the Listing Rules, the Company shall comply with the relevant requirements under Rule 14.15(2) of Chapter 14 of the Listing Rules and the relevant requirements of Chapter 14A of the Listing Rules when the abovementioned transactions conducted. The Stock Exchange has indicated that it will aggregate the Company's total capital committment and any guarantee or indemnity provided in connection with the establishment of Long Hai and Long Hao under Rule 14.15(2) of the Listing Rules. LISTING RULES IMPLICATIONS CLFG is the controlling shareholder (as defined in the Listing Rules and the Shanghai Listing Rules) of the Company and is interested in approximately 57.14% of the issued share capital of the Company. Pursuant to Rule 14A.13(6) of the Listing Rules and Rule 10.1.3 of the Shanghai Listing Rules, the transactions described above constitute connected transactions for the Company under the Listing Rules and the Shanghai Listing Rules. The transactions contemplated under the Long Hai Agreement and Long Hao Agreement constitute major transactions of the Company under the Listing Rules as the Company's capital investment under the Long Hai Agreement and Long Hao Agreement exceeds 25% of the average market capitalization of the Company for the five business days immediately preceding the date of the Long Hai Agreement and Long Hao agreement. Therefore, the Company should make an announcement and issue a circular containing the particulars of the transactions and recommendation from an independent financial advisor to the Independent Board Committee and the Independent H Shares' Shareholders for approval of the agreements and the investment of the Company in Long Hai and Long Hao by the Independent H Shares' Shareholders at the EGM. The transactions contemplated under the Long Hai Agreement and Long Hao Agreement exceed RMB30 million and are subject to the requirement of the Rule 10.2.5 of the Shanghai Listing Rules. The transactions are subject to approval of the Independent Shareholders by poll. In view of CLFG and its associates' interests in Long Hai Agreement and Long Hao Agreement, CLFG and its associates shall abstain from voting at the EGM. The Company will send a circular containing, among other things, (i) details of the terms and conditions of the Long Hai Agreement and Long Hao Agreement; (ii) the recommendation from the Independent Board Committee in respect of the Long Hai Agreement and Long Hao Agreement to the Independent H Shares' Shareholders; and (iii) the advice of an independent financial adviser to the Independent Board Committee and the Independent H Shares' Shareholders in respect of the Long Hai Agreement and Long Hao Agreement, to the H Shares' Shareholders in due course. An independent financial adviser will be appointed to advise the Independent Board Committee and the Independent H Shares' Shareholders on these transactions. For the concern of A Shares' Shareholders, please refer to the announcement published on the newspapers, namely, China Securities and Shanghai Securities on 27 May 2005. GENERAL The Company is principally engaged in the production and sale of float flat glass and reprocessed automobile glass. CLFG is a registered company with limited liability incorporated in the PRC and its registered address is No.9, Tang Gong Zhong Lu, Xigong District, Luoyang Municipal, Henan Province. Its legal representative is Mr. Liu Baoying and its controlling beneficial owner is *(Luoyang State Capital State-Owned Assets Operation Company Limited). The business of CLFG includes, inter alia, the production of glass, related raw materials and equipment, import, export and domestic sales of glass, processing technology, design and sub-contracting of engineering works, labour export, provision of industrial production material (excluding those under control of the state), technological service, consultation service and goods transportation. The Company cooperates with CLFG because CLFG is one of the first batch of fifty-five enterprise groups in the PRC and it is also one of the twenty-two enterprises categorized by the State as special planning unit. Also, * (Henan Province Float Glass Technical Engineering Research Centre), a wholly owned subsidiary of CLFG which is principally engaged in the research, design and manufacture of float sheet glass and * (Henan Province Float Glass Technical Engineering Research Centre) can provide technical support to the Long Hai Project and Long Hao Project. Finally, Long Hai and Long Hao shall make use of the* Luoyang Float Glass Patent Technology owned by CLFG to manufacture the float sheet glass and sell the float glass manufactured by Long Hai and Long Hao under the trademark of "* " registered trademark. * (Luoyang Float Glass Technology) was named by * (the China Science and Technology Commission) and was