Leo Group Co., Ltd. Announcement on Progress of Litigation Matters

Leo Group Co., Ltd. Announcement on Progress of Litigation Matters

The company and all members of the board of directors ensure that the contents of information disclosure are true, accurate and complete, and there are no false records, misleading statements or major omissions.

First, the basic situation of the lawsuit

Leo Group Co., Ltd. (hereinafter referred to as "the company") received the "Notice of Respond" issued by the Intermediate People's Court of Dalian City, Liaoning Province on May 20, 2013 [(2013) Da Min Si Chu Zi No. 51] , Dalian Deep Blue Pump Co., Ltd. "Indictment" and related litigation materials.

Dalian Deep Blue Pump Co., Ltd. filed a lawsuit with the Intermediate People's Court of Dalian City, Liaoning Province, claiming that Liou Group Co., Ltd., Leo (Dalian) Industrial Pump Technology Center Co., Ltd., and Dalian Huaneng Acid Pump Factory Co., Ltd. (now renamed “Dalian Liou Huaneng Pump Industry Co., Ltd.” (the above three parties collectively referred to as the “defendant company”) infringed on the commercial secrets of Dalian Deep Blue Pump Co., Ltd. and requested that the defendant company be ordered to stop the infringement; and the defendant should be ordered to pay for damages. The compensation amounted to 20 million yuan; the litigation fee was borne by the defendant company. For details of the above lawsuits, please refer to the “Announcement on Litigation Matters” (Announcement No. 2013-031) disclosed by the company on May 23, 2013.

Second, the progress of the proceedings

The company objected to the jurisdiction of the case during the filing of the reply and requested that the case be transferred to the jurisdiction of the Intermediate People’s Court of Taizhou City, Zhejiang Province. The Intermediate People’s Court of Dalian City, Liaoning Province, on June 27, 2013, issued the “Civil Adjudication Book (2013) Da Min Si Chu Zi No. 51”. The Intermediate People's Court of Dalian City, Liaoning Province ruled that the company dismissed the company's objections to the jurisdiction of the case.

Recently, the company received "Civil Judgment" ((2013) Damin Sichu Zi No. 51" from Dalian Intermediate People's Court of Liaoning Province. The sentence is as follows:

1. The defendant Liou (Dalian) Industrial Pump Technology Center Co., Ltd. and the defendant Dalian Liouhuaneng Pump Co., Ltd. immediately stopped using the 265HDD125 total assembly drawing owned by the plaintiff Dalian Deep Blue Pump Co., Ltd. from the date when the judgment took legal effect. The trade secrets of the industrial pump's full size and structural information carried on the drawings, the 1800HDD45 assembly drawings and the drawings, and the period of suspension of use continue until the aforementioned trade secret is known to the public.

2. The defendant Liou (Dalian) Industrial Pump Technology Center Co., Ltd. and the defendant Dalian Liou Huaneng Pump Co., Ltd. jointly compensated the plaintiff Dalian Deep Blue Pump Co., Ltd. with RMB 300,000 within 30 days of the date of the legal judgment of this judgment.

If the obligation to pay monetary benefits is not fulfilled in accordance with the period specified in this judgment, the interest on the debt for the period of delayed performance shall be doubled according to Article 253 of the Civil Procedure Law of the People's Republic of China.

3. The Plaintiff Dalian Shenlan Pump Co., Ltd. was dismissed for litigation against the defendant Leo Group Co., Ltd.

4. Dismissed the plaintiff Dalian Deep Blue Pump Co., Ltd. for other litigation requests.

The case acceptance fee was RMB 14,1800 (the plaintiff Dalian Deep Blue Pump Co., Ltd. was pre-paid). Since the plaintiff's change of suit was 10 million yuan, the litigation fee was RMB 81,800. The plaintiff Dalian Deep Blue Pump Co., Ltd. The company paid 50,000 yuan and was paid 31,800 yuan by the defendant Leo (Dalian) Industrial Pump Technology Center Co., Ltd. and Dalian Leo Huaneng Pump Co., Ltd. The 60,000 yuan of multi-payment fee was refunded to Dalian Deep Blue Pump Co., Ltd.; the appraisal fee was RMB 100,000, which was paid by the defendant Liou (Dalian) Industrial Pump Technology Center Co., Ltd. and Dalian Liou Huaneng Pump Co., Ltd. The defendant paid the plaintiff’s payment in the above sum.

If they do not accept this judgment, the parties may submit an appeal to the Dalian Intermediate People's Court of Liaoning Province within fifteen days from the date of the verdict and submit a copy in accordance with the number of opposing parties and appeal to the Higher People's Court of Liaoning Province.

The company is dissatisfied with the first instance and will appeal to the Higher People's Court of Liaoning Province.

Third, other undisclosed lawsuits and arbitrations

As of the date of this announcement, there are no other lawsuits or arbitrations that should be disclosed by the company and its holding subsidiaries.

Fourth, this announcement of the lawsuit of the company's current profits or the impact of future profits

This judgment result will not affect the company's normal production and operation. At the current stage, it is still unable to predict the final lawsuit result. Therefore, it cannot predict the impact of this lawsuit on the company's current profit or future profits.

V. Documents for reference

1. "Notice of Respond" issued by Dalian Intermediate People's Court of Liaoning Province [(2013) Da Min Si Chu Zi No. 51];

2. Dalian Deep Blue Pump Co., Ltd. "Indictment";

3. "Civil Judgment" of the Intermediate People's Court of Dalian, Liaoning Province [(2013) Da Min Si Chu Zi No. 51].

Special announcement!

Leo Group Co., Ltd. Board of Directors

December 26, 2014