Jiangnan Red Arrow: Announcement on Capital Increase of wholly-owned subsidiaries
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Announcement of Hunan Jiangnan Hongjian Co., Ltd. on Capital Increase of wholly-owned subsidiaries
The company and all members of the board of directors guarantee the truthfulness, accuracy and completeness of the contents of the announcement, and there are no false records, misleading statements or major omissions.
I. Overview of the capital increase of wholly-owned subsidiaries
(1) Basic situation
In view of the issuance of shares by Hunan Red Arrow Red Arrow Co., Ltd. (hereinafter referred to as “the companyâ€), Zhongnan Diamond Co., Ltd. (already changed its organizational form as a limited liability company and changed its name to “Zhongnan Diamond Co., Ltd.â€, hereinafter referred to as “Zhongnan Diamond†The 100% equity of the major asset restructuring (hereinafter referred to as "this restructuring") has all the matching funds have been put in place, in order to ensure the "Nanyang large particle diamond product line construction project involved in this reorganization, high-grade gathering of precision processing The five fundraising projects, such as the crystal cubic boron nitride composite sheet (PCBN) and the polycrystalline diamond composite sheet (PCD) series of tool materials industrialization projects, proceeded smoothly. The company plans to increase the capital of the wholly-owned subsidiary Zhongnan Diamond by RMB 1,269,988,011. The source of funds is the matching funds raised by this restructuring.
After the capital increase is completed, the registered capital of Zhongnan Diamond is 1,719,988,011 yuan, and the company still holds 100% of its equity.
(2) The board of directors considers the above-mentioned capital increase matters
The company held the 19th meeting of the 8th Board of Directors on December 13, 2013. All the directors voted through the above-mentioned capital increase and agreed to submit the matter to the company's 2013 third extraordinary general meeting for consideration.
The above-mentioned capital increase has yet to be reviewed and approved by the company at the 3rd Extraordinary General Meeting of Shareholders held on December 31, 2013.
(3) Whether it constitutes a connected transaction.
This capital increase does not constitute a connected transaction.
Second, the basic situation of the capital increase enterprises
The target company of the company's capital increase is Zhongnan Diamond, a wholly-owned subsidiary of the company. The relevant information is as follows:
1. Major investors and funding methods
On July 29, 2013, the China Securities Regulatory Commission issued the “Approval of Approval of Hunan Jiangnan Red Arrow Co., Ltd. to China Ordnance Industry Group Co., Ltd. to Issue Assets and Raise Matching Funds†to Jiangnan Hongjian (Zheng Jian Li [2013] ] No. 1012), agreeing to the company's public offering of shares to China North Industries Group Corporation, Yuxi Industrial Group Co., Ltd., Shanghai Xunbang Investment Co., Ltd., Beijing Jinwanzhong Technology Development Co., Ltd., Wang Siqing, Yu Guobing, Zhang Kui, Zhang Xiangfa and Liang Haofei It holds a 100% stake in Zhongnan Diamond.
The company is now the sole shareholder of Zhongnan Diamond.
2. Basic situation of South-Central diamonds
Zhongnan Diamond is mainly engaged in the research and development, production and sales of super-hard materials and their tools, high-performance abrasives, abrasives and their products. Before and after the capital increase, the company is a shareholder of 100% of its shares.
The main financial indicators of the most recent one-year and one audited consolidated statement of Zhongnan Diamond are as follows:
(Unit: 10,000 yuan) 
Third, the purpose of capital increase, existing risks and impact on the company
1. Purpose of capital increase
This capital increase is to ensure the construction of the Nanyang large-grain diamond product line construction project, high-grade polycrystalline cubic boron nitride composite sheet (PCBN) and polycrystalline diamond composite sheet (PCD) series tool materials for precision processing. The five fundraising projects, such as the Industrialization Project, went smoothly, and the 1,269,988,011 yuan increase in the capital of the wholly-owned subsidiary Zhongnan Diamond will be used for the investment construction of the above projects.
2, the risk
As of the announcement date, there is no possibility that the project used for investment and construction of this capital increase may cause its change or termination of construction, and there are no foreseeable major events that may lead to its change or termination of construction; the company currently has a sound and effective recruitment. The internal control system for the management and use of funds; if the projects invested by the capital increase will change or terminate construction in the future, the company will strictly abide by the relevant laws and regulations and the “Administrative Measures for the Raised Funds of Hunan Jiangnan Red Arrow Co., Ltd.â€. Prudently conduct the feasibility analysis of the project after the proposed change, and promptly perform the necessary legal procedures to change the use of the raised funds.
3. Impact on the company
This capital increase will ensure the smooth progress of the company's restructuring and investment projects, which will help the company's main business to develop rapidly and improve its core competitiveness.
Special announcement.
Board of Directors
December 16, 2013
