China Public Procurement : CLARIFICATION AND UPDATE ANNOUNCEMENT

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CHINA PUBLIC PROCUREMENT LIMITED

中 國 公 共 採 購 有 限 公 司

(incorporated in Bermuda with limited liability)

(Stock code: 1094)

CLARIFICATION AND UPDATE ANNOUNCEMENT

Reference is made to (1) the announcement of China Public Procurement Limited (the "Company") dated 5 June 2017 in relation to, among other matters: (a) subscription of new shares of the Company ("Shares") under general mandate; and (b) proposed share consolidation and proposed change in board lot size (the "Initial Announcement"); and (2) the supplemental announcement of the Company dated 14 June 2017 in relation to the Initial Announcement (collectively, the "Announcements"). Terms defined in the Announcements shall, unless the context requires otherwise, have the same meanings when used in this announcement.

INTRODUCTION

The Company would like to clarify that, among others:

1. the Share Consolidation will also include the consolidation of every ten (10) existing Convertible Preference Shares into one (1) consolidated Convertible Preference Share. As such, "Consolidated Shares" shall comprise "Consolidated Ordinary Shares" and "Consolidated Preference Shares", among which application for listing will only be made in respect of the Consolidated Ordinary Shares;

2. as at the date of this clarification and update announcement, none of the Existing Preference Shares are currently in issue;

3. the closure of the register of members for the entitlement to attend and vote at the SGM will commence on 7 August 2017 instead of 8 August 2017; and

4. there are slight modifications to the reasons for and benefits of the Share Consolidation and Change in Board Lot Size.

In addition, the Company would like to update the Shareholders that, subsequent to the publication to the Initial Announcement, among others:

1. as disclosed in the announcement of the Company dated 4 July 2017, as certain conditions precedent under the Acquisition Agreement have not been fulfilled or waived (if applicable) on or before 30 June 2017 (being the long stop date agreed between the parties to the Acquisition Agreement) and the parties to the Acquisition Agreement have not agreed on any further extension of the abovementioned long stop date, the Acquisition Agreement has lapsed. As such, the Consideration Shares and the 2015 Convertible Bonds will no longer be issued, and accordingly no adjustment will need to be made by virtue of the Acquisition Agreement upon the Share Consolidation becoming effective; and

2. the Company has redeemed all of the 2016 Convertible Bonds on 20 June 2017. As such, there are no outstanding 2016 Convertible Bonds as at the date of this clarification and update announcement, and accordingly no adjustment will need to be made by virtue of the 2016 Convertible Bonds upon the Share Consolidation becoming effective.

   CLARIFICATIONS

   In view of the above, the Company would like to make the following clarifications in respect of the Announcements:

3. The section headed "(2) Proposed share consolidation and change in board size" on pages 8 to 13 of the Initial Announcement should be replaced as follows:

   "The Company proposes to implement the Share Consolidation on the basis that: (i) every ten (10) Existing Ordinary Shares of HK$0.01 each be consolidated into one (1) Consolidated Ordinary Share of HK$0.1 each; and (ii) every ten (10) Existing Preference Shares of HK$0.01 each be consolidated into one (1) Consolidated Preference Share of HK$0.1 each. As at the date of the Initial Announcement, none of the Existing Preference Shares are in issue.

   Effects of the Share Consolidation

   As at the date of the Initial Announcement, the authorized share capital of the Company is HK$300,000,000, which is the sum of: (i) HK$200,000,000 divided into 20,000,000,000 Existing Ordinary Shares, of which 13,429,312,548 Existing Ordinary Shares have been issued; and (ii) HK$100,000,000 divided into 10,000,000,000 Existing Preference Shares, none of which are currently in issue. Upon the Share Consolidation becoming effective and assuming that no new Existing Shares are issued or repurchased from the date hereof until the effective date of the Share Consolidation, the authorized share capital of the Company will remain as HK$300,000,000, but will become the sum of: (i) HK$200,000,000 divided into 2,000,000,000 Consolidated Ordinary Shares of HK$0.1 each, of which 1,342,931,254 Consolidated Ordinary Shares will be in issue; and (ii) HK$100,000,000 divided into 1,000,000,000 Consolidated Preference Shares of HK$0.1 each, none of which will be in issue. Upon the Share Consolidation becoming effective, the Consolidated Ordinary Shares shall rank pari passu in all respects with each other, and the Consolidated Preference Shares shall rank pari passu in all respects with each other. The Share Consolidation will not result in any change in the relative rights of the Shareholders.

   Other than the expenses to be incurred in relation to the Share Consolidation, the implementation of the Share Consolidation will not alter the underlying assets, business operations, management or financial position of the Company or the proportionate interests or rights of the Shareholders, save for any fractional Consolidated Ordinary Shares to which Shareholders may be entitled.

   Conditions of the Share Consolidation

   The Share Consolidation is conditional upon the following conditions:

4. the passing of the ordinary resolution by the Shareholders to approve the Share Consolidation at the SGM;

5. the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Consolidated Ordinary Shares; and

6. the compliance with the relevant procedures and requirements under the Bermuda laws (where applicable) and the Listing Rules to effect the Share Consolidation.

Listing application

An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Consolidated Ordinary Shares to be in issue upon the Share Consolidation becoming effective and any Consolidated Ordinary Shares which may fall to be issued after the Share Consolidation becoming effective (i) upon the exercise of the conversion rights attaching to any Consolidated Preference Shares that may be issued in the future, and/or (ii) pursuant to the exercise of the share options granted under the 2013 Share Option Scheme.