History and Corporate Structure
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THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT HISTORY AND CORPORATE STRUCTURE HISTORY On June 20, 1987, we were established as a sino-foreign equity joint venture in Fuzhou by Fuqing County Gaoshan Special Shaped Glass Factory (福清縣高山異形玻璃廠), Tennessee Plastic Engineering Company Limited, Fuqing Overseas Chinese Hometown Construction and Investment Co., Ltd. (福清縣僑鄉建設投資有限公司), Fuqing Honglu Real Estate Construction Materials Factory (福清縣宏路地產建材厰), Fujian Trading Automobile Repairing Factory (福 建省外貿汽車維修廠), Mr. Fang Ming Wu (方明梧, a Chinese Indonesian), and Fujian Minhui Mansion Co., Ltd. (福建省閩輝大廈有限公司), under the name of Fujian Yaohua Industrial Glass Co., Ltd. (福建省耀華玻璃工業有限公司), with a registered capital of RMB6,270,000. At the time, Fuqing County Gaoshan Special Shaped Glass Factory was managed by Mr. Cho Tak Wong under a contract operation agreement entered into in 1983 with its then owners. Fuqing County Gaoshan Special Shaped Glass Factory and Tennessee Plastic Engineering Company Limited each contributed RMB1,567,500 in cash to our registered capital and held a 25% equity interest. Each of the other five shareholders contributed RMB627,000 in cash and held a 10% equity interest. In preparation of our conversion into a sino-foreign joint stock company and to rationalize the shareholding structure of our Company, in March 1990, Fuqing County Gaoshan Special Shaped Glass Factory transferred its 15% equity interest in our Company to Fuzhou Tenghui Decoration Material Company Limited (福州騰暉裝飾材料有限公司), an entity controlled by Mr. Cho Tak Wong at the time. Such equity interest in our Company was transferred in February 1991 to Island Mile Limited, a company controlled by Mr. Cho Tak Wong and Mr. Tso Fai. On June 21, 1992, we converted into a sino-foreign joint stock company under the name of Fujian Yaohua Glass Industry Co., Ltd. (福建省耀華玻璃工業股份有限公司). In connection with this conversion, we issued shares to our employees, certain corporate entities and public investors, and increased our total share capital to RMB57,190,000, divided into 57,190,000 Shares. After the conversion and share issuance, Mr. Cho Tak Wong and Mr. Tso Fai together held 11.13% of our share capital through Island Mile Limited. On June 10, 1993, we completed an initial public offering on the Shanghai Stock Exchange and became the first listed automotive glass manufacturer in China. Subsequently, Island Mile Limited transferred its interest in our Company to Sanyi (a company controlled by Mr. Cho Tak Wong and his son, Mr. Tso Fai). In early 1996, Sanyi held approximately 24.89% of our Company. In early 1996, as part of a strategic arrangement with Compagnie De Saint Gobain, Mr. Cho Tak Wong, through Home Bridge, acquired approximately 17.28% of our share capital from Independent Third Party Shareholders, and in February 1996, sold to Compagnie De Saint Gobain the entire issued share capital of Sanyi and Home Bridge, which held an aggregate of 42.17% of our share capital after arm’s length negotiations among the parties. At around the same time, Fuzhou Lvrong Glass Company Limited, a company whose equity interest was indirectly held by Mr. Cho Tak Wong and his spouse, Ms. Chan Fung Ying, acquired shares in our Company representing approximately 16.65% equity interest in our Company. –94– THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT HISTORY AND CORPORATE STRUCTURE In May 1999, Mr. Cho Tak Wong acquired from Compagnie De Saint Gobain the entire issued share capital of Sanyi and Home Bridge at an aggregate consideration of US$14 million, which was determined after arm’s length negotiations between the parties. Sanyi and Home Bridge in aggregate was interested in approximately 42.17% of our then issued share capital. In October of the same year, Fuzhou Lvrong Glass Company Limited transferred 16.65% equity interest in our Company to Yaohua. Yaohua is 100% indirectly owned by Ms. Chan Fung Ying (an associate of Mr. Cho Tak Wong and Mr. Tso Fai) and Mr. Cho Tak Wong. Mr. Cho Tak Wong was therefore interested, indirectly though his interest in Sanyi, Home Bridge and Yaohua, in approximately 58.82% of our Company. Since our A Share listing, we have conducted seven bonus share issues, two rights issues and three increases in share capital through a conversion of our capital reserves. Pursuant to the “Reply of the Ministry of Civil Affairs on the Establishment and Registration of Heren Charitable Foundation” (民政部關於河仁慈善基金會設立登記的批覆, Minhan 2010 No. 125) issued by the Ministry of Civil Affairs in June 2010, Heren Charitable Foundation was established with original funding capital of RMB20 million. On April 11, 2011, Mr. Cho Tak Wong and his associates donated 300 million A Shares to Heren Charitable Foundation through Yaohua and Sanyi, comprising 240,089,084 A Shares held by Yaohua and 59,910,916 A Shares held by Sanyi. Upon completion of the share transfer, Heren Charitable Foundation became our Substantial Shareholder and held approximately 14.98% of our then issued share capital, and the shareholding of Mr. Cho Tak Wong and his associates in our Company reduced from 35.08% to 20.1%. Heren Charitable Foundation’s highest decision-making body is its council, which currently comprises nine members. Among these nine council members of Heren Charitable Foundation, Mr. Cao Degan (曹德淦) is the brother of Mr. Cho Tak Wong, Mr. Wu Shinong and Ms. Zhu Dezhen are the non-executive Directors of our Company, and the other six council members are Independent Third Parties. Heren Charitable Foundation is an independent charitable foundation that operates in accordance with the PRC laws and its articles of association. Under Heren Charitable Foundation’s articles of association, a quorum for a meeting of the council is three-fourths of council members. All resolutions are passed by at least a majority of members attending the meeting, and major resolutions, such as amendment of the articles, election and removal of the council’s chairman, vice chairman and secretary-general and the dissolution of Heren Charitable Foundation require at least two-thirds of council members attending the meeting. As confirmed by Mr. Cho Tak Wong and Heren Charitable Foundation, Mr. Cho Tak Wong and his associates, including Yaohua, Home Bridge and Sanyi, do not have any control over Heren Charitable Foundation, nor are they beneficiary of the Heren Charitable Foundation. Based on the above, Heren Charitable Foundation is independent from Mr. Cho Tak Wong and his associates. –95– THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT HISTORY AND CORPORATE STRUCTURE MILESTONES The following table sets forth the key milestones of our corporate development. KEY MILESTONES AND ACHIEVEMENTS June 1987 We were established as a sino-foreign equity joint venture in Fuqing, China. May 1989 We began to export automotive glass to the ARG market in Hong Kong. July 1989 We began to sell automotive glass to Guangzhou Peugeot, signifying our expansion into the OEM automotive glass market. September 1991 We began to export automotive glass to TCG International Inc. in Canada (formerly known as Trans Canada Glass), signifying our expansion into the ARG market in developed countries. June 1992 We converted into a joint stock company. June 1993 Our A Shares were listed on the Shanghai Stock Exchange. Between 1993 and We established a number of subsidiaries in Hong Kong 1994 including, among others: • Fuyao Hong Kong, which principally engages in the export of automotive glass and import of raw materials; and • Yung Tak Investment to hold office properties. July 1994 We established Fujian Wanda in Fuqing as part of our plan to double our annual production capacity by 1996. December 1994 We embarked on overseas expansion by establishing a subsidiary in the United States to sell automotive glass in North America. September 2000 We established Fuyao Changchun in Changchun, Jilin Province, as our first step towards building a nationwide manufacturing network in China. October 2002 We entered into a supply agreement with Hyundai Mobis (Hong Kong) Company (a subsidiary of Hyundai Motor Group), our first agreement to sell OEM automotive glass to an overseas automobile manufacturer. –96– THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED “WARNING” ON THE COVER OF THIS DOCUMENT HISTORY AND CORPORATE STRUCTURE KEY MILESTONES AND ACHIEVEMENTS May 2005 We entered into an agreement with Audi AG Ingolstadt in Germany to sell automotive glass used in the windshields of Audi C6. Between 2006 and We established subsidiaries in Germany, South Korea, Japan and 2008 the United States to provide sales and customer support services to our OEM customers located in those markets. May 2009 Mr. Cho Tak Wong was awarded the “World Entrepreneur of The Year” by Ernst & Young. December 2009 We received the “Board of the Year” award from the Shanghai Stock Exchange. June 2011 We entered into an investment agreement with the Government of Kaluga Oblast, Russia, in relation to the establishment of an automotive glass production project in Kaluga Oblast, Russia. July 2012 We were ranked as one of the “Top 500 Chinese Companies” by Fortune magazine, which was the third time since 2010. November 2012 We were awarded the “Leading Technology Innovative Enterprise” by the Chinese Ministry of Industry and Information Technology and the Chinese Ministry of Finance. Between September The construction of Phase I of the automotive glass production 2013 and August facility in Kaluga Oblast, Russia was completed.