**Abstract**
The Company and all members of the Board of Directors guarantee that the content of the information disclosure is true, accurate, and complete, with no false records, misleading statements, or material omissions.
**Special Note:**
This equity change did not result in any changes to the company’s controlling shareholder or actual controller.
**I. Basic Situation of This Equity Change**
On June 24, 2014, Boshen Tools Co., Ltd. (hereinafter referred to as “the Companyâ€) received a notice from Mr. Chen Huairong, one of the largest shareholders and actual controllers of the Company, regarding the reduction of shares. On June 23, 2014, Mr. Chen Huairong sold 1.5 million shares through block trading on the Shenzhen Stock Exchange, representing 0.67% of the total share capital of the Company.
After this reduction, the controlling shareholder and actual controller of the Company, Mr. Chen Huairong, along with Ms. Lu Guiqin, Mr. Cheng Hui, Mr. Ren Jingjian, Ms. Zhang Shuyu, and their concerted actions including Ms. Tian Jinhong and Mr. Pang Jianhua, had reduced a total of 12,694,600 shares between January 7, 2013, and June 23, 2014, equivalent to 5.63% of the Company's total share capital.
**II. Specific Situation of This Equity Change**
1. **Shareholders Reducing Their Shareholding**
[An image is provided here showing the reduction ratio.]
*Note: The vertical summing of the data in the "Reduce Ratio" column may be due to rounding. Similar notes apply to subsequent tables.*
2. **Information Disclosure Obligations of Equity Changes**
Among the obligors of information disclosure, Mr. Chen Huairong, Ms. Lu Guiqin, Mr. Cheng Hui, Mr. Ren Jingjian, and Ms. Zhang Shuyu are the actual controllers of the Company. Mr. Chen Huairong serves as the Chairman of the Company, while Ms. Lu Guiqin is the Chairman of the Board of Supervisors. Mr. Cheng Hui, Mr. Ren Jingjian, and Ms. Zhang Shuyu are directors, collectively forming joint control over the Company. Ms. Tian Jinhong is the wife of Mr. Chen Huairong, and Mr. Pang Jianhua is the husband of Ms. Lu Guiqin, both acting in concert with the actual controllers.
3. **Disclosure Before and After the Equity Change**
[An image is provided here showing the change in shareholding.]
Since being listed on the market on August 21, 2009, the shareholding ratio of the actual controllers and their related parties has decreased from 60.81% to 55.18%, a reduction of 5.63%. This change exceeded the 5% threshold, triggering mandatory reporting obligations.
After the reduction, the actual controllers—Mr. Chen Huairong, Ms. Lu Guiqin, Mr. Cheng Hui, Mr. Ren Jingjian, and Ms. Zhang Shuyu—held a total of 124,290,900 shares, accounting for 55.14% of the total shares. The actual controller of the Company remains unchanged.
**III. Commitments and Performance**
During the initial public offering of the Company’s shares, the actual controllers—Mr. Chen Huairong, Ms. Lu Guiqin, Mr. Cheng Hui, Mr. Ren Jingjian, Ms. Zhang Shuyu, and related shareholders Ms. Tian Jinhong and Mr. Pang Jianhua—made the following commitments: For a period of 36 months from the date of listing, they would not transfer or entrust others to manage the shares they hold, nor would they acquire additional shares. Additionally, during their tenure as directors, supervisors, or senior executives, the annual transfers could not exceed 25% of their holdings, and within six months after leaving the Company, they would not trade any of their shares.
No other lock-up commitments were made by the controlling shareholders or their concerted parties. The total shares sold via the stock exchange over six consecutive months were less than 5% of the Company’s total shares, and there was no violation of lock-up commitments.
**IV. Other Relevant Instructions**
1. **Violation of Regulations**
This reduction violated Article 13 of the Measures for the Administration of the Acquisition of Listed Companies, which requires that when an investor and its concerted actors reach 5% of a listed company’s issued shares, an equity change report must be prepared within three days, submitted to the CSRC and the stock exchange, and copied to the local dispatch office. During the period, the shares may not be traded again.
Furthermore, if the shareholding increases or decreases by 5%, the investor must report and announce accordingly, and trading is prohibited during the reporting period and within two days after the announcement.
This action also violated the “Shenzhen Stock Exchange Listing Rules†11.8.1, which mandates that shareholders whose interests reach more than 5% of the issued shares, as well as their actual controllers, must comply with the Securities Law and the Measures for the Administration of the Acquisition of Listed Companies, fulfill their reporting and announcement obligations, and promptly notify the Company to issue a notice.
2. **Further Details**
For detailed information on the equity changes, please refer to the “Simplified Equity Change Report†published by the information disclosure obligor at [link].
**V. Reference Documents**
1. The Company’s explanation regarding the reduction of shares by relevant shareholders.
2. The Company’s brief equity change report.
**Special Announcement**
Boshen Tools Co., Ltd.
June 25, 2014
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