Kingboard Laminates : JOINT ANNOUNCEMENT - CONTINUING CONNECTED TRANSACTIONS WITH THE HALLGAIN GROUP

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

(Incorporated in the Cayman Islands (Incorporated in the Cayman Islands with limited liability) with limited liability)

Reference is made to the joint announcement of KBC and KBL dated 5 November 2013, and the respective circulars of KBC and KBL, both dated 28 November 2013, in relation to the Existing Continuing Connected Transaction Agreements. The annual caps under the Existing Continuing Connected Transaction Agreements will expire on 31 December 2016. Hallgain and, as the case may be, KBC and KBL entered into the New Continuing Connected Transaction Agreements and set out the proposed annual caps thereof for the three years commencing on 1 January 2017 and ending on 31 December 2019 as more particularly described in this announcement.

As at the date of this announcement, Hallgain owns approximately 37% of the issued share capital of KBC and is therefore a connected person of KBC. KBC, directly or indirectly, owns approximately 74.52% of the issued share capital of KBL and therefore KBL is a non-wholly owned subsidiary of KBC. Accordingly, the transactions contemplated under the New Continuing Connected Transaction Agreements constitute continuing connected transactions of KBC under Chapter 14A of the Listing Rules.

As the highest applicable ratio (under Chapter 14A of the Listing Rules) of the aggregate amount on an annual basis under the New KBC Purchase Framework Agreement and New KBL Purchase Framework Agreement for each of the three years ending 31 December 2017, 2018 and 2019 exceeds 0.1% but is lower than 5%, the transactions contemplated under the New KBC Purchase Framework Agreement and New KBL Purchase Framework Agreement are subject to compliance with the annual review, reporting and announcement requirements by KBC under Chapter 14A of the Listing Rules but exempted from the circular and the independent shareholders' approval requirements.

As the highest applicable percentage ratio (under Chapter 14A of the Listing Rules) of the amount on an annual basis under the New KBL Supply Framework Agreement for each of the three years ending 31 December 2017, 2018 and 2019 exceeds 0.1% but is lower than 5%, the transactions contemplated under the New KBL Supply Framework Agreement are subject to compliance with the annual review, reporting and announcement requirements by KBC under Chapter 14A of the Listing Rules but exempted from the circular and the independent shareholders' approval requirements.

Hallgain is also a connected person of KBL. Accordingly, the transactions contemplated under the New KBL Supply Framework Agreement and the New KBL Purchase Framework Agreement constitute continuing connected transactions of KBL under Chapter 14A of the Listing Rules.

As one or more of the applicable percentage ratios (under Chapter 14A of the Listing Rules) of the amount on an annual basis under the New KBL Supply Framework Agreement for each of the three years ending 31 December 2017, 2018 and 2019 is/are equal to or greater than 5%, the transactions contemplated under the New KBL Supply Framework Agreement are subject to compliance with the annual review, reporting, announcement, circular and independent shareholders' approval requirements by KBL under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratio (under Chapter 14A of the Listing Rules) of the amount on an annual basis under the New KBL Purchase Agreement for each of the three years ending 31 December 2017, 2018 and 2019 exceeds 0.1% but is lower than 5%, the transactions contemplated under the New KBL Purchase Agreement are subject to compliance with the annual review, reporting and announcement requirements by KBL under Chapter 14A of the Listing Rules but exempted from the circular and the independent shareholders' approval requirements.

A circular containing, among other things, (i) further details of the New KBL Supply Framework Agreement and the Proposed Annual Caps contemplated thereunder; (ii) the opinion from the independent financial adviser; (iii) the recommendation from the independent board committee (comprising the INEDs); and (iv) the notice of the KBL EGM and other information as required under the Listing Rules is expected to be despatched by KBL to the KBL Shareholders within 15 business days after the publication of this announcement.

Reference is made to the joint announcement of KBC and KBL dated 5 November 2013, and the respective circulars of KBC and KBL, both dated 28 November 2013, in relation to the Existing Continuing Connected Transaction Agreements. The annual caps under the Existing Continuing Connected Transaction Agreements will expire on 31 December 2016. Hallgain and, as the case may be, KBC and KBL entered into the New Continuing Connected Transaction Agreements and set out the proposed annual caps thereof for the three years commencing on 1 January 2017 and ending on 31 December 2019 as more particularly described in this announcement.

On 26 October 2016, KBC entered into a purchase framework agreement with Hallgain (the "New KBC Purchase Framework Agreement") in relation to the purchase of certain materials for the production of PCBs such as copper balls and drill bits from the Hallgain Group by the KBC Group. Details of the New KBC Purchase Framework Agreement are set out below:

Date: 26 October 2016

Parties: (1) Hallgain

(2) KBC

Nature of transaction: Pursuant to the New KBC Purchase Framework Agreement,

the KBC Group agrees to purchase certain materials for the production of PCBs such as copper balls and drill bits from the Hallgain Group.

The amount of materials to be purchased is not fixed but is to be determined and agreed between the parties from time to time. The KBC Group will not be obligated to purchase a minimum amount of materials from the Hallgain Group and the Hallgain Group will not be obligated to sell any set quantity of materials to the KBC Group during the term of the New KBC Purchase Framework Agreement.

The actual quantity, specification and price (with reference to the prevailing market price) of materials such as copper balls and drill bits under the New KBC Purchase Framework Agreement will be subject to the individual orders placed by the KBC Group with the Hallgain Group.

Term: Three years from 1 January 2017 to 31 December 2019, both days inclusive.

Consideration: The price at which the materials are to be purchased will be

at a price which is not less favourable to the KBC Group than the price at which the KBC Group purchases, or would be able to purchase similar materials from independent third parties having regard to the quantity and other conditions of the purchase. To facilitate the KBC Group in determining the prevailing market price, the KBC Group will consider the prices offered by independent third party suppliers of similar materials (based on similar amount and similar specifications). In particular, where appropriate, the relevant purchasing department of the KBC Group will obtain quotations from different suppliers (both the Hallgain Group and the independent third party suppliers) and monitor the movement of market price from time to time.

The Hallgain Group will grant a credit period of 60 days to the KBC Group. The consideration will be settled in cash.

The table below sets out the historical figures and the Existing Annual Caps under the Existing KBC Purchase Framework Agreement and the Proposed Annual Caps under the New KBC Purchase Framework Agreement.

(Note)

(HKD'000) (HKD'000) (HKD'000) (HKD'000) (HKD'000) (HKD'000) (HKD'000) (HKD'000)

700,000 493,396 805,000 430,046 926,000 326,731 435,641 520,000 572,000 629,000

Note: This is an estimated figure by straight-line multiplication from the actual purchase during the nine months ended 30 September 2016.