Zhejiang AOKANG Footwear Industry Will Invest In Shanghai To Set Up A Wholly Owned Subsidiary.

Stock Code: 603001 stock abbreviation: AOKANG international bulletin number: pro 2012-011

　　 Zhejiang AOKANG shoe Limited by Share Ltd On the establishment of investment Wholly owned subsidiary Of Notice

The board of directors and all directors of the company guarantee that there is no false record, misleading statement or major omission in the contents of this announcement, and shall bear individual and joint liabilities for the authenticity, accuracy and completeness of its contents.

The AOKANG shoe Limited by Share Ltd of Zhejiang (hereinafter referred to as "company" or "our company") held the eleventh meeting of the Fourth Board of directors on the third floor conference room of the 1st branch of the company in June 6, 2012. The related matters are announced as follows:

I. the necessity of investing in wholly owned subsidiaries

The East China region is currently one of the most active markets in the company. The market share of AOKANG brand in East China ranks first in the market for many years, and its market advantage is obvious. The establishment of a wholly owned subsidiary in Shanghai can effectively integrate the East China supply chain system, fully tap the advantages of high-end talents in Shanghai, improve the operational efficiency of the whole East China region and the surrounding areas of East China, and form a certain scale effect, reduce operating costs and improve market adaptability. Through the establishment of a unified logistics and distribution system, the market position of the company in East China will be steadily strengthened and the spanition from strong to monopoly will be realized. Provide human resources protection for the company's rapid development.

Two, investment in the establishment of wholly owned subsidiaries.

According to the actual operation and development plan, the company plans to invest 50 million yuan to establish AOKANG International (Shanghai) Footwear Co., Ltd., and intends to purchase the CB-201202004 site of Jinshan District ting Lin Industrial Zone (East) in Shanghai Jinshan District to build the East China logistics center.

(1) the basic situation of a wholly owned subsidiary to be established (whichever is approved by industry and Commerce).

1. Name: AOKANG International (Shanghai) Shoes Co., Ltd.

2. type of enterprise: limited liability company;

3. scope of business: shoes, leather goods, clothing, e-commerce, warehousing and spanportation.

4. registered address: ting Lin Industrial Park, Jinshan District, Shanghai (East)

5. legal representative: Wang Jinquan;

6. registered capital: RMB 50 million yuan.

7. investment main body: Zhejiang AOKANG shoes Limited by Share Ltd shareholding ratio 100%

(two) the basic situation of land purchased by Shanghai company

The land to be purchased by Shanghai company is located in the CB-201202004 plot of Jinshan District ting Lin Industrial Zone (East) in Jinshan District, Shanghai, with a tentative area of 100 mu (including land requisition and river withdrawal area). The total area of the land shall be based on the land area specified in the report issued by the survey and Mapping Office of the Jinshan District Housing Authority. From the east to the highway G1501, West to industrial land, South to industrial land, and north to Ting Da Highway. The land used for construction is industrial land, and the period of spanferring the right to use state-owned land is 50 years.

Three, investment in the establishment of wholly owned subsidiary of the company's impact and risk point

1, the impact of project construction on the company

The project belongs to the company's main business scope, and the project construction is in line with the company's long-term development strategy. The construction of this project will help the company to expand its operation scale, further enhance its overall strength, consolidate and enhance its industry status, and enhance its comprehensive competitive advantage and risk tolerance capability.

2. Possible risk points

At present, the company has not yet established a Shanghai company. The self financing needs to be established by the Shanghai company, and can be used by the company's management level after signing relevant agreements. The land price is 480 thousand yuan / mu and the total price is only 48 million yuan. If the land auction price exceeds the 480 thousand yuan / mu and the spanaction amount exceeds 48 million yuan, the company may abandon the subscription, so the success of the establishment of the subsidiary company and the purchase of land will remain uncertain.

Four. The board's deliberations

The board of directors of the company held the eleventh meeting of the Fourth Board of directors in June 6, 2012. The meeting passed the "motion on the establishment of wholly owned subsidiary of investment". The board of Directors believes that the establishment of a wholly owned subsidiary by self financing is in line with the needs of the company's strategic planning and market development, and is conducive to the expansion of the company's business. The contents and procedures conform to the relevant provisions of the company law and the articles of association. The company agrees to set up a wholly owned subsidiary to invest in the construction of the East China logistics center by using 50 million yuan of self raised funds.

Five. Reference documents

1, the eleventh session of the Fourth Board of directors of the AOKANG shoe Limited by Share Ltd of Zhejiang.

Notice hereby.

Zhejiang AOKANG shoe Limited by Share Ltd

Board of directors

June 6, 2012