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 Hong Kong with limited liability)

(Stock Code: 118) ANNOUNCEMENT

This announcement is made pursuant to Inside Information Provisions under Part XIVA of the SFO and Rule 13.09 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

Reference was made to the announcement of the Company dated 10th January 2013 regarding the MOU (the "Announcement"). Terms in this announcement shall have the same meanings as those defined in the Announcement unless defined otherwise.

The board of directors (the "Board") of Cosmos Machinery Enterprises Limited (the "Company") wishes to inform the shareholders and potential investors that, after the signing of the MOU, the Company was informed by the Purchaser that they decided to terminate the Proposed Disposal.

Shareholders of the Company and potential investors are advised to exercise caution when dealing in the shares of the Company.

By order of the Board

Cosmos Machinery Enterprises Limited TANG To

Chairman

Hong Kong, 15th January, 2013

As at the date hereof, the Board comprises of eleven directors, of which four are executive directors, namely Mr. Tang To, Mr. Jiang Wei, Mr. Wong Yiu Ming and Mr. Tang Yu, Freeman, three are non-executive directors, namely Mr. Wu Ding, Mr. Kan Wai Wah and Mr. Qu Jinping and four are independent non-executive directors, namely Ms. Yeung Shuk Fan, Mr. Cheng Tak Yin, Mr. Ho Wei Sem and Mr. Huang Zhi Wei.

distributed by