Stock Codes: 600801, 900933  Stock Abbreviations: Huaxin Cement, Huaxin B Share  Ref: Lin 2011-026

 

To the best of our knowledge, the Board of Directors of the Company and its members confirm that there is no material 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 content.

 

 

Approved by the document of China Securities Regulatory Commission (Jian Zheng Xu Ke [2011] No. 1299), Huaxin Cement Co., Ltd. (hereinafter referred to as the “Company”) issued 128,099.9 thousand RMB ordinary shares (A share) with par value of 1 Yuan/share (issuing price was 14.01 Yuan/share) on October 31, 2011.  According to the Capital Verification Report on the A share private placement (PricewaterhouseCoopers Zhong Tian Yan Zi (2011) No. 323) issued by PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd., total amount of funds raised from the private placement was 1,794,679,991 Yuan, net amount of the raised funds was 1,742,887,551 Yuan (deducting the underwriting fee and other transaction costs 51,792,440 Yuan).

 

 

Investment projects of this A-share private placement include: 719.87 million Yuan investment in 15 Waste Heat Power Generation (WHPG) projects, 455.81 million Yuan investment in 25 RMX plants, 159 million Yuan investment in 1 AGG production line and 460 million Yuan in repayment of the Company’s loans.  The Company shall invest in the projects through self-financing according to the actual status of the projects progress before receiving the raised funds and then replace it after the raised funds were received.

 

 

To ensure that the investment projects of fund raised from private placement can run smoothly, before the raised funds is in place, the Company pre-invested in the above projects through self-financing.  According to "Report of Huaxin Cement Co., Ltd. on Investment through Self-financing in Projects of Funds Raised from A-share Private Placement and Authentication Report" (PricewaterhouseCoopers Zhong Tian Te Shen Zi (2011) No. 980) issued by PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd., as of September 30, 2011, details of Huaxin Cement’s pre-investment through self-financing are as follows:

Unit: ‘0000 Yuan

No.	Project name	Total investment	Total used raised funds	Used self-raised funds (as at Sep 30, 2011)	Replacement amount
1	Xiangfan WHPG	5,071.47	1,300.00	4,883.60	1,300.00
2	Xianning WHPG	5,084.06	3,000.00	5,800.52	3,000.00
3	Tibet WHPG	6,000.00	4,801.00	5,688.29	4,801.00
4	Quxian WHPG	5,010.00	4,206.00	5,039.26	4,206.00
5	Wanyuan WHPG	5,197.60	5,100.00	3,605.29	3,605.29
6	Fulin WHPG	5,858.54	5,126.00	4,962.36	4,962.36
7	Zhuzhou WHPG	6,572.00	6,030.00	5,055.81	5,055.81
8	Zigui WHPG	4,985.30	4,606.00	5,237.47	4,606.00
9	Chenzhou WHPG	6,572.00	6,082.00	4,889.59	4,889.59
10	Dongchuan WHPG	3,589.95	3,500.00	2,321.42	2,321.42
11	Daoxian WHPG	5,620.00	5,600.00	4,096.00	4,096.00
12	Huangshi WHPG	9,055.81	8,934.00	7,933.40	7,933.40
13	Yichang WHPG	6,352.08	5,702.00	7,099.62	5,702.00
14	Enshi WHPG	2,489.28	2,400.00	2,548.21	2,400.00
15	Zhaotong WHPG	5,615.00	5,600.00	4,115.41	4,115.41
Total WHPG		83,073.09	71,987.00	73,276.26	62,994.29
1	Yangxin RMX	2,318.00	1,561.00	709.54	709.54
2	Huanggang RMX	2,318.00	1,675.00	727.09	727.09
3	Daye RMX	2,318.00	1,536.00	924.71	924.71
4	Dongchuan RMX	2,198.00	1,669.00	281.23	281.23
5	Wanyuan RMX	2,000.00	1,493.00	693.01	693.01
6	Fulin RMX	2,318.00	1,815.00	47.62	0.00
7	Xinyang RMX	2,000.00	1,539.00	890.21	890.21
8	Yichang RMX	2,468.00	2,066.00	14.29	14.29
9	Chibi RMX	2,318.00	1,824.00	96.78	96.78
10	E’zhou RMX	2,318.00	1,826.00	796.59	796.59
11	Hanchuan RMX	2,163.00	1,747.00	977.47	977.47
12	Shishou RMX	2,368.00	1,891.00	851.27	851.27
13	Tianmen RMX	2,318.00	1,826.00	115.94	115.94
14	Jianglin RMX	2,318.00	1,831.00	4.53	0.00
15	Zigui RMX	2,318.00	1,831.00	736.65	736.65
16	Xuan’en RMX	2,418.00	2,026.00	386.92	386.92
17	Dawu RMX	2,378.00	1,993.00	9.30	0.00
18	Luoshan RMX	2,318.00	1,831.00	8.96	0.00
19	Daoxian RMX	2,000.00	1,564.00	81.76	81.76
20	Chenzhou RMX	2,000.00	1,699.00	49.65	49.65
21	Hefeng RMX	2,218.00	1,752.00	2.35	0.00
22	Zhuzhou RMX	2,618.00	2,067.00	35.04	0.00
23	East lake RMX	2,818.00	2,225.00	518.82	518.82
24	Xianning RMX	2,618.00	2,068.00	1,018.18	1,018.18
25	Gedian RMX	2,818.00	2,226.00	1,381.41	1,381.41
Total RMX		Total RMX	45,581.00	11,359.35	11,251.54
1	Yangxin AGG	16,588.54	15,900.00	15,139.90	15,139.90
Total AGG		Total AGG	15,900.00	15,139.90	15,139.90
Total Projects		Total Projects	133,468.00	99,775.51	89,385.73

 

 

According to the “Administrative Rules on Raised Funds of Listed Companies issued by Shanghai Stock Exchange”, PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd. had made special audit on the pre-investment in the projects through self-financing and issued "Report of Huaxin Cement Co., Ltd. on Investment through Self-financing in Projects of Funds Raised from A-share Private Placement and Authentication Report" (PricewaterhouseCoopers Zhong Tian Te Shen Zi (2011) No. 980).

 

 

The Thirty Second Meeting of the Sixth Board of Directors was convened on November 10-11, 2011, through discussion, Proposal in Respect of Replacing Investment through Self-financing in Projects of Funds Raised from A-share Private Placement with the Raise Funds was reviewed and adopted by all the Directors, they agreed to replace the pre-investment through self-financing with the raised funds with a total amount of 893,857.3 k Yuan.

 

 

Independent Directors of the Company had inspected and verified the replacement of pre-investment through self-financing with the raised funds, they issued independent opinions and agreed that: “The Company’s pre-investment in projects of funds raised from A-share private placement through self-financing is helpful to improving efficiency and carrying out the projects smoothly.  The amount of pre-investment of the Company though self-financing has been audited by Certified Public Accountants.  Replacing pre-investment through self-financing with the raised funds does not change the injection of the raised funds, and will not damage the interests of the Company and its shareholders.  The Company’s act of replacing pre-investment through self-financing with the raised funds is in line with the actual needs for the Company's development.  There is no damage on interests of middle and small shareholders.  Replacing pre-investment through self-financing with the raised funds is therefore agreed.” 

 

VII. Opinions from the Sponsor

 

The Sponsor of the Company Citic Securities Co., Ltd. issued “Verifying Opinions on Use of Raised Funds of Huaxin Cement Co., Ltd.” and considered that:

 

The replacement of pre-investment through self-financing with the raised funds of the Company was in line with the commitments on injection of the raised funds made by the Company in its application documents of the private placement, as well as "Administrative Rules on Securities Issuance and Listing Sponsor Business', " Listing Rules of Shanghai Stock Exchange', “Administrative Rules on Raised Funds of Listed Companies issued by Shanghai Stock Exchange', and other related provisions in relevant laws and regulations.  Use of the raised funds had no conflict with the implementation plan of the investment projects, nor affected the regular progress of the investment projects.  There is no change on injection of the raised funds and no damage to the interests of the shareholders.  Before making the decision of replacement, the Company had communicated with the Sponsor and fulfilled the necessary statutory procedures in accordance with the related requirements contained in "Listing Rules of Shanghai stock Exchange" and "“Administrative Rules on Raised Funds of Listed Companies issued by Shanghai Stock Exchange".  The Sponsor had no objection to the replacement of pre-investment of pre-investment through self-financing with the raised funds of the Company.

 

VIII. Documents for future reference

 

1. Resolution of the Thirty Second Meeting of the Sixth Board of Directors of the Company

2. Opinions of the Independent Directors

3. “Verifying Opinions on Use of Raised Funds of Huaxin Cement Co., Ltd.” issued by Citic Securities Co., Ltd.

4. "Report of Huaxin Cement Co., Ltd. on Investment through Self-financing in Projects of Funds Raised from A-share Private Placement and Authentication Report" issued by PricewaterhouseCoopers Zhong Tian CPAs Co., Ltd..

 

It is herein announced.

 

Huaxin Cement Co., Ltd.

Board of Directors

November 15, 2011