Aceso Life Science Group Limited — Proxy Solicitation & Information Statement 2015

May 31, 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Hao Tian Development Group Limited , you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale was effected for transmission to the purchaser or transferee.

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

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00474)

(1) CONNECTED TRANSACTION: ISSUE OF UNLISTED WARRANTS AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent financial adviser to the independent board committee and the independent shareholders

A letter from the Board is set out on pages 5 to 23 of this circular. A letter from the Independent Board Committee containing its recommendation is set out on pages 24 to 25 of this circular. A letter from the Independent Financial Adviser containing its advice and recommendation to the Independent Board Committee and the Independent Shareholders is set out on pages 26 to 51 of this circular.

A notice convening the extraordinary general meeting of Hao Tian Development Group Limited to be held at Room 2702, 27/F., 200 Gloucester Road, Wanchai, Hong Kong on Friday, 26 June 2015, at 10:30 a.m. is set out on pages 66 to 68 of this circular. A form of proxy for use at the extraordinary general meeting is enclosed. Whether or not you intend to attend and vote at the extraordinary general meeting or any adjourned meeting (as the case may be) in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar and transfer office of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed for holding such meeting or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or any adjourned meeting (as the case may be) should you so wish.

31 May 2015

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Responsibility Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24
Letter from the Independent Financial Adviser. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26
Appendix I – Warrants Valuation Report. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	52
Appendix II – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	60
Appendix III – Procedures for Poll Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	65
Notice of Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	66

– i –

DEFINITIONS

In this Circular, unless the context otherwise requires, the following expressions have the following meanings:

“associate(s)”

has the meaning ascribed thereto under the Listing Rules

“Board”

the board of Directors

“Business Day”

a day on which licensed banks are generally open for banking business in Hong Kong, other than Saturdays, Sundays and any day on which a tropical cyclone warning No. 8 or above is hoisted or remains hoisted between 9:00 a.m. and 12:00 noon and is not lowered at or before 12:00 noon or on which a black rainstorm warning signal is hoisted or remains in effect between 9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon

“Company”

Hao Tian Development Group Limited（昊天發展集團有限 公司）, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

“Completion”

completion of the Subscription Agreement

• “connected person(s)”

has the meaning ascribed thereto under the Listing Rules

• “Controlling Shareholder(s)”

has the meaning ascribed thereto under the Listing Rules

“core connected person(s)”

has the meaning ascribed thereto under the Listing Rules

“Directors”

the directors of the Company (including the independent non-executive directors of the Company) and “Director” shall mean any one of them

“EGM”

the extraordinary general meeting of the Company to be convened and held to consider, and if thought fit, to approve the Subscription Agreement, the issue of the Warrants and the grant of the specific mandate for issue of the Warrant Shares upon exercise of the Subscription Rights attaching to the Warrants

“Group”

the Company and its subsidiaries

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

– 1 –

DEFINITIONS

• “Hong Kong”

• “Independent Board Committee”

• “Independent Financial Adviser”

• “Independent Shareholders”

• “Issue Price”

• “Latest Practicable Date”

• “Listing Rules”

• “Long Stop Date”

• “SFO”

• “Share(s)”

• “Share Options”

the Hong Kong Special Administrative Region of the People’s Republic of China

• a committee of the Board comprising all the independent non-executive Directors formed for the purpose of advising the Independent Shareholders in relation to the Subscription Agreement and the issue of the Warrants

• Pan Asia Corporate Finance Limited, a licensed corporation under the SFO to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities and the independent financial adviser appointed for the purpose of advising the Independent Board Committee and the Independent Shareholders as to the Subscription Agreement and the issue of the Warrants

• the Shareholders who are independent of, and not connected with, the Subscriber and its associates and are not required to abstain from voting at the EGM

• HK$0.01 per 10 Warrants to be issued pursuant to the Subscription Agreement (equivalent to HK$0.001 per Warrant)

• 28 May 2015, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein

• the Rules Governing the Listing of Securities on the Stock Exchange

• 30 June 2015 or such later date as the parties may agree in writing

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ordinary share(s) of HK$0.01 each in the share capital of the Company

share options granted by the Company under the share option scheme adopted on 16 May 2006

– 2 –

DEFINITIONS

• “Shareholder(s)”

the shareholder(s) of the Company

• “Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “Subscriber”

• Asia Link Capital Investment Holdings Limited, a company with limited liability incorporated in the British Virgin Islands and a Controlling Shareholder

• “Subscription Agreement”

• the subscription agreement dated 10 April 2015 entered into between the Company and the Subscriber, pursuant to which the Subscriber agrees to subscribe for, and the Company agrees to issue, the Warrants

• “Subscription Price” HK$0.50 per Warrant Share, being the exercise price per Warrant Share at which the holder of each Warrant may subscribe for the Warrant Share

• “Subscription Rights” the rights of the Warrant Holders represented by the Warrants to subscribe for the Warrant Shares upon and subject to the conditions of the Warrants

• “Warrants” a total of 588,858,000 unlisted non-transferable warrants proposed to be issued by the Company at the Issue Price of HK$0.01 per 10 warrants (equivalent to HK$0.001 per warrant) in registered form conferring rights entitling the Warrant Holder(s) to subscribe for up to 588,858,000 Warrant Shares at the Subscription Price

• “Warrant Holder(s)”

• in relation to any Warrant, the person which is for the time being registered in the register of warrant holders of the Company as the holder or joint holders of such Warrant

• “Warrant Instrument”

the deed poll constituting the Warrants to be executed by the Company on Completion

• “Warrant Share(s)”

• up to 588,858,000 new Shares (subject to adjustment upon the occurrence of any of the adjustment events) to be allotted and issued by the Company upon the exercise of the Subscription Rights

“%”

per cent

– 3 –

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

– 4 –

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00474)

Executive Directors:	Registered office:
Mr. Xu Hai Ying	Cricket Square
Dr. Zhiliang Ou,JP (Australia)	Hutchins Drive
Mr. Fok Chi Tak	P.O. Box 2681
	Grand Cayman KY1-1111
Independent Non-executive Directors:	Cayman Islands
Mr. Chan Ming Sun Jonathan
Mr. Lam Kwan Sing	Head office and principal place of
Mr. Lee Chi Hwa, Joshua	business:
	Rooms 4917-4932, 49th Floor
	Sun Hung Kai Centre
	30 Harbour Road, Wanchai
	Hong Kong
	31 May 2015

To all Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION: ISSUE OF UNLISTED WARRANTS AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcements of the Company dated 10 and 13 April 2015.

– 5 –

LETTER FROM THE BOARD

As disclosed in the announcements, the Company has entered into the Subscription Agreement.

The Independent Board Committee has been formed by the Board to advise the Independent Shareholders in respect of the Subscription Agreement and the issue of the Warrants. Pan Asia Corporate Finance Limited has been appointed as the independent financial adviser to make recommendations to the Independent Board Committee and the Independent Shareholders in respect of the Subscription Agreement and the issue of the Warrants.

The purpose of this Circular is to provide you with further details on the Subscription Agreement and the Warrants and to give notice to the Shareholders of the EGM at which ordinary resolutions will be proposed to approve the Subscription Agreement, the issue of the Warrants and the grant of the specific mandate for issue of the Warrant Shares upon exercise of the Subscription Rights attaching to the Warrants thereunder and to provide other relevant information in accordance with the Listing Rules.

SUBSCRIPTION AGREEMENT DATED 10 APRIL 2015

On 10 April 2015 (after trading hours), the Company has entered into the Subscription Agreement with the Subscriber, in relation to the conditional issue of 588,858,000 Warrants to the Subscriber, details of which are as follows:

Parties

Subscriber:

Subscriber: Asia Link Capital Investment Holdings Limited, a Controlling Shareholder Issuer: The Company

As at the Latest Practicable Date, the Subscriber (i) is wholly-owned by Ms. Li Shao Yu, the chief executive officer of the Company; and (ii) held 1,637,008,263 Shares, representing approximately 55.60% of the entire issued share capital of the Company and is accordingly a connected person of the Company.

Information on the Warrants

Upon full exercise of the Subscription Rights, a total of 588,858,000 Warrant Shares will be allotted and issued by the Company.

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LETTER FROM THE BOARD

The Warrant Shares represent approximately 20% of the issued share capital of the Company as at the Latest Practicable Date and approximately 16.67% of the issued share capital of the Company as enlarged by the allotment and issue of the Warrant Shares assuming that there will not be any changes in the issued share capital of the Company before the exercise of all the Subscription Rights.

Issue Price

The Issue Price is HK$0.01 per 10 Warrants (equivalent to HK$0.001 per Warrant). Calculation based on the unit of 10 Warrants is merely for administrative convenience purpose because the denomination cent（分）is more commonly used as compared with mil（文）. The Issue Price was determined after arm’s length negotiations between the Company and the Subscriber taking into account the non-transferrable nature of the Warrants, the liquidity of the Shares in the capital market, the historical prices of the Shares, the prevailing stock market sentiment and the costs and expenses which may be incurred for the issue of the Warrants. The Independent Financial Adviser has assessed the fairness and reasonableness of the Issue Price by making reference to the Black-Scholes Option Pricing Model (the “ BOPM ”) used by Roma Appraisals Limited (“ RAL ”), a valuation firm which is an independent third party resolved by the Directors to be engaged by the Company to assess the fair value of the Warrants. Based on the BOPM model, RAL concluded that, among others, the unit Warrant value was HK$0.171 as at 10 April 2015, i.e. the date of the Subscription Agreement.

The key assumptions and parameters adopted by RAL include the closing stock price of the Company as at the date of valuation, the Subscription Price, the risk free rate, the period of the Warrant, the expected volatility and the expected dividend yield. In particular, the risk free rate is 0.388% which was determined with reference to the yields of Hong Kong government bonds and treasury bills. The expected volatility was determined with reference to the historical volatilities of the Company over the expected warrant period as at the date of valuation whereas the expected dividend yield was estimated with reference to the historical dividend payout of the Company. Further details about the valuation of the Warrants are set out in Appendix I to this circular.

Although, on the face of it, the Issue Price of the Warrant was discounted compared to the theoretical unit value of the Warrants, the Independent Financial Adviser advised that the BOPM model is subject to a number of key assumptions and parameters, including, inter alia, stock price, risk free rate and expected volatility, which may not hold in real practice. One of such assumptions is the availability of the risk-free rate of 0.388% used by RAL in its valuation as risk-free rates, such as a theoretical rate of return, are not observable in real practice but are only estimated through proxy rates. The theoretical unit value of the Warrants calculated by the BOPM may differ significantly from the actual value if any of the assumptions and parameters does not hold. Therefore, the Independent Financial Adviser is of the view that the unit Warrant value calculated by way of the BOPM model by RAL shall be used as a reference only, given that the usefulness of the BOPM as a pricing model is limited by its assumptions which may not hold in real practice.

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LETTER FROM THE BOARD

Further, based on the market comparables adopted by the Independent Financial Adviser, details of which are set out in the letter from the Independent Financial Adviser, the issue price of the respective warrants ranged from the highest of HK$0.43 per warrant to the lowest of HK$0.001 per warrant. Although the Issue Price of the Warrant is the lowest among the comparables, it is still within the relevant range of those comparables. Given that (i) completion of the Issue and the Subscription is expected to increase the Company’s net asset value by way of net proceeds generated from the Subscription; (ii) the trading of the Shares in the open market is relatively inactive and as such it may be difficult to attract investors to the Shares; and (iii) the Issue Price is within the range of the respective issue price of the market comparables, the Independent Financial Adviser is of the view that, which the Directors concur, the Issue Price is fair and reasonable.

After taking into account of (i) the advice of the Independent Financial Adviser, (ii) the grant of the Warrants has no negative cashflow impact on the Group but a positive cashflow if the Warrants are exercised; (iii) the Warrants (upon exercise of the rights attaching thereto) will further enhance the capital base of the Company; (iv) the Warrants are non-transferable and non-interest bearing and the Company can apply the proceeds upon the exercise of the Warrants as general working capital to expand the Group’s existing business and to strengthen the Company’s capital base; and (v) there is no other significant costs and expenses incurred or to be incurred by the Company (e.g. placing commissions, underwriting commissions, etc.) in connection with the issue of the Warrants, the Directors (including the independent non-executive Directors) consider that the Issue Price is fair and reasonable and is in the interest of the Company and the Shareholders as a whole.

Subscription Price

The Subscription Price is HK$0.50 per Warrant Share. The Subscription Price is determined after arm’s length negotiations between the Company and the Subscriber taking into account the requirements of the Listing Rules, the liquidity of the Shares in the capital market and the historical prices of the Shares and the prevailing stock market sentiment.

The Subscription Price of HK$0.50:

• (i) represents a premium of approximately 2.04% over the closing price of HK$0.49 per Share as quoted on the Stock Exchange on 10 April 2015, being the date of the Subscription Agreement;

• (ii) equals to the average of the closing price of HK$0.50 per Share as quoted on the Stock Exchange for the last five trading days up to and including the date of the Subscription Agreement; and

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LETTER FROM THE BOARD

• (iii) represents a premium of approximately 8.70% over the average of the closing price of HK$0.46 per Share as quoted on the Stock Exchange for the last ten trading days up to and including the date of the Subscription Agreement.

Having considered, amongst other things, the recent market prices of the Shares and the prevailing stock market sentiment, the Directors (including the independent non-executive Directors) consider that the Subscription Price and the aggregate of the Subscription Price and the Issue Price are fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

Principal Terms of the Warrants

The principal terms of the Warrants are as follows:

Number of Warrants and A total of 588,858,000 Warrants. Each Warrant carries the Warrant Shares: right to subscribe for one Warrant Share. Upon full exercise of the Subscription Rights, a total of 588,858,000 Warrant Shares will be issued.

Status: The Warrants will be constituted by the Warrant Instrument. The Warrants will rank pari passu in all respects among themselves. Form: The Warrants will be issued upon Completion in registered form. Warrant certificate will be issued to the Subscriber.

Subscription Price: HK$0.50 per Warrant Share, subject to adjustment upon occurrence of the following events:

• (a) an alteration of the nominal amount of the Shares by reason of any consolidation or subdivision;

• (b) an issue (other than pursuant to a scrip dividend scheme in lieu of a cash dividend) by the Company of Shares credited as fully paid by way of capitalization of profits or reserves (including any share premium account or capital redemption reserve fund);

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LETTER FROM THE BOARD

• (c) a capital distribution other than the issue of Shares credited as fully paid or partly paid out of profits or reserves and issued in lieu of a cash dividend being made by the Company, whether on a reduction of capital or otherwise, to the Shareholders;

(d) an offer of new Shares for subscription by way of rights, or a grant of options or warrants to subscribe for new Shares, at a price which is less than 80% of the market price of the Shares on the date of the announcement of the terms of the offer or grant being made by the Company to the Shareholders;

(e) an issue wholly for cash being made by the Company or any other company of securities (other than options granted pursuant to any employee incentive schemes of the Company) convertible into or exchangeable for or carrying rights of subscription for new Shares, if in any case the total effective consideration per new Share initially receivable for such securities is less than 80% of the market price of the Shares on the date of the announcement of the terms of issue of such securities;

(f) an issue of Shares being made wholly for cash at a price less than 80% of the market price of the Shares on the date of the announcement of the terms of such issue (other than any issue of Shares pursuant to any employee incentive scheme of the Company);

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LETTER FROM THE BOARD

• (g) the purchase and cancellation by the Company of Shares or securities convertible into Shares or any rights to acquire Shares (excluding any such purchase made on the Stock Exchange or any recognized stock exchange, being a stock exchange recognized for this purpose by the Securities and Futures Commission of Hong Kong and the Stock Exchange) in circumstances where the Directors consider that it may be appropriate to make an adjustment to the Subscription Price.

Every adjustment to the Subscription Price shall be certified by the auditors of the Company or an approved merchant bank.

Subscription Period:

The Subscription Rights may be exercised at the discretion of the Warrant Holder at any time from the date of issue of the Warrants to the close of business on the second anniversary date from the date of issue.

Ranking of Warrant Shares:

• The Warrant Shares will rank pari passu in all respects with the Shares in issue on the relevant date of registration of the name of the relevant Warrant Holder(s) on the register of the Company as holder of such Warrant Shares.

Voting Rights:

The Warrant Holder(s) will not be entitled to receive notices of, attend or vote at any meetings of the Company by reason only of being a holder of the Warrants.

• Rights on Distributions and/or offer of further securities:

The Warrant Holder(s) will not be entitled to receive any distributions or participate in an offer of further securities which are available to the Shareholders.

Transferability:

The Warrants are non-transferrable.

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LETTER FROM THE BOARD

Rights on Liquidation:

If the Company is wound up during the subscription period of the Warrants, all Subscription Rights which have not been exercised shall lapse, save for in the event of voluntary winding-up, the Warrant Holders shall be entitled to surrender their Warrants to the Company and the Company shall as soon as possible and in any event no later than the day immediately prior to the date of the proposed shareholders’ meeting allot such number of Warrant Shares to the Warrant Holder(s) which fall to be issued.

• Minimum period before exercise of Subscription Rights:

There is no minimum period for which the Warrants must be held before it can be exercised.

• Performance Target:

There is no performance target on the part of the Subscriber or Ms. Li Shao Yu which must be achieved before the Warrants can be exercised by the Subscriber.

Lapse of Subscription Rights:

The Subscription Rights attached to the Warrants will lapse upon (i) the expiry of the Subscription Period or (ii) the commencement of winding-up of the Company.

Cancellation of Warrants:

The Company or any of its subsidiaries may at any time purchase Warrants on such terms and conditions as may be agreed between the Company and the holder of the Warrants in writing. All Warrants purchased as aforesaid shall be cancelled forthwith and may not be re-issued or re sold.

If at any time Warrants which have not been exercised carry rights to subscribe for Shares are equal to or less than HK$3,000 of Subscription Rights during the Subscription Period, the Company may, on giving not less than three months’ notice, require holders of the Warrants either to exercise their Subscription Rights or to allow them to lapse. On expiry of such notice, all unexercised Warrant(s) will be automatically cancelled.

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LETTER FROM THE BOARD

Modification of the terms of the Warrants:

The terms of the Warrants can only be modified by the Directors without the approval of the Shareholders if such modifications are minor amendments which are certified by the auditors or an approved merchant bank to be amendments which do not adversely affect the rights of the holders of the Warrants under the Instrument.

Conditions for issue of the Warrants

Completion shall be subject to and conditional upon the following:

• (a) (i) the application having been made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Warrant Shares fall to be issued and allotted upon the exercise of the Subscription Rights attached to the Warrants; and

• (ii) the Listing Committee of the Stock Exchange having granted (either unconditionally or subject to conditions to which neither the Company nor the Subscriber shall reasonably object) the listing of, and permission to deal in, the Warrant Shares fall to be issued and allotted upon the exercise of the Subscription Rights attached to the Warrants; and

• (b) the approval of the Independent Shareholders of the Subscription Agreement, the Warrant Instrument and the grant of the specific mandate to issue the Warrant Shares at the EGM.

If the above conditions are not fulfilled on or before the Long Stop Date or such later time or date as may been agreed between the Company and the Subscriber, the Subscription Agreement shall lapse and become null and void and the parties shall be released from all obligations under the Subscription Agreement, save for the liabilities under any antecedent breaches.

Completion

Subject to the fulfilment of the conditions precedent, Completion shall take place on or before the seventh Business Day following the date on which the conditions precedent as set out in the Subscription Agreement are fulfilled.

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LETTER FROM THE BOARD

DEVIATION OF THE TERMS OF THE WARRANTS FROM CHAPTER 17 OF THE LISTING RULES

The Subscription Agreement and the Warrants also fall under Chapter 17 of the Listing Rules and the Company is required to comply with the requirements of the same. Some of the terms of the Warrants deviate from the provisions of Chapter 17 of the Listing Rules in the following manner:

Requirements under Chapter 17 of the Listing Rules

Terms of the Warrants and action of the Company

Note 1 to Rule 17.03(3):

The total number of securities which may be issued upon exercise of all options to be granted under the share option scheme and any other schemes must not in aggregate exceed 10% of the relevant class of securities of the listed issuer (or the subsidiary) in issue as at the date of approval of the scheme.

The listed issuer may seek separate approval by its shareholders in general meeting for granting options beyond the 10% limit provided the options in excess of the limit are granted only to participants specifically identified by the listed issuer before such approval is sought. The listed issuer must send a circular to the shareholders containing a generic description of the specified participants who may be granted such options, the number and terms of the options to be granted, the purpose of granting options to the specified participants with an explanation as to how the terms of the options serve such purpose, etc.

The Warrant Shares represent approximately 20% of the issued share capital of the Company as at the date of the Subscription Agreement and approximately 16.67% of the issued share capital of the Company as enlarged by the allotment and issue of the Warrant Shares assuming that there will not be any changes in the issued share capital of the Company before the exercise of all the Subscription Rights.

The Warrants are issued to the Subscriber, a Controlling Shareholder. The Subscriber is wholly-owned by Ms. Li Shao Yu, the chief executive officer of the Company. The Warrants are non-transferrable.

This circular contains information required under the Listing Rules.

– 14 –

LETTER FROM THE BOARD

Requirements under Chapter 17 of the Listing Rules

Terms of the Warrants and action of the Company

Note 2 to Rule 17.03(3):

The limit on the number of securities which may be issued upon exercise of all outstanding options granted and yet to be exercised under the scheme and any other schemes must not exceed 30% of the relevant class of securities of the listed issuer (or the subsidiary) in issue from time to time. No options may be granted under any schemes of the listed issuer (or the subsidiary) if this will result in the limit being exceeded.

The Company will comply with such requirement.

Note to Rule 17.03(4):

Unless approved by shareholders, the total number of securities issued and to be issued upon exercise of the options granted to each participant (including both exercised and outstanding options) in any 12-month period must not exceed 1% of the relevant class of securities of the listed issuer in issue. Where any further grant of options to a participant would result in the securities issued and to be issued upon exercise of all options granted and to be granted to such person (including exercised, cancelled and outstanding options) in the 12-month period up to and including the date of such further grant representing in aggregate over 1% of the relevant class of securities in issue, such further grant must be separately approved by shareholders of the listed issuer in general meeting with such participant and his close associates (or his associates if the participant is a connected person) abstaining from voting. The listed issuer must send a circular to the shareholders and the circular must disclose the identity of the participant, the number and terms of the options to be granted (and options previously granted to such participant), etc.

The percentage represented by the Warrant Shares in the issued share capital of the Company has been set out above.

This circular contains information required under the Listing Rules. The Company will comply with all requirements relating to the holding of Shareholders’ meeting and the voting arrangements under the Listing Rules.

– 15 –

LETTER FROM THE BOARD

Requirements under Chapter 17 of the Listing Rules

Terms of the Warrants and action of

the Company

Rule 17.04(1)

Each grant of options to a director, chief executive or substantial shareholder of a listed issuer, or any of their respective associates must be approved by independent non-executive Directors. Where any grant of options to a substantial shareholder of the listed issuer, or any of its associates, would result in the securities issued and to be issued upon exercise of all options already granted and to be granted (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant (a) representing in aggregate over 0.1% of the relevant class of securities in issue and (b) having an aggregate value, based on the closing price of the securities at the date of such grant, in excess of HK$5 million, such further grant of options must be approved by shareholders of the listed issuer. The listed issuer must send a circular to the shareholders. The grantee, his associates and all core connected persons of the listed issuer must abstain from voting in favour at such general meeting.

The percentage represented by the Warrant Shares in the issued share capital of the Company has been set out above.

This circular contains information required under the Listing Rules. The Company will comply with all requirements relating to the holding of Shareholders’ meeting and the voting arrangements under the Listing Rules.

– 16 –

LETTER FROM THE BOARD

CHANGES IN SHAREHOLDING STRUCTURE

As at the Latest Practicable Date, the Company has 2,944,303,100 Shares in issue. There were outstanding Share Options with subscription rights to subscribe for an aggregate of 28,410,144 new Shares granted under the applicable rules of the share option scheme of the Company. Apart from the outstanding Share Options, the Company has no other outstanding convertible securities, options, warrants or other derivatives in issue which are convertible or exchangeable into Shares.

As at the Latest Practicable Date, the aggregate number of Shares which will be issued upon exercise of all outstanding Share Options and the Warrants shall be 617,268,144 Shares, representing approximately 20.96% of the issued share capital of the Company and approximately 17.33% of the issued share capital of the Company as enlarged by the new Shares to be issued upon exercise of the Share Options and the Warrants.

The following table illustrates changes in shareholding structure before and after the exercise of the Subscription Rights:

Shares held by Ms. Li Shao Yu or companies beneficially owned by her Subscriber (Note 1) Li Shao Yu (Note 2) Real Power Holdings Limited (Note 3) Sub-total: Other Shareholders: Other public Shareholders Total:	As at the date of the Subscription Agreement Number of Shares Approx. % 1,637,008,263 55.60% – – 52,240,055 1.77% 1,689,248,318 57.37% 1,255,054,782 42.63% 2,944,303,100 100.00%	Immediately upon full exercise of Subscription Rights Number of Shares Approx. % 2,225,866,263 63.00% – – 52,240,055 1.48% 2,278,106,318 64.48% 1,255,054,782 35.52% 3,533,161,100 100.00%	Immediately upon full exercise of Subscription Rights and outstanding Share Options Number of Shares Approx. % 2,225,866,263 62.50% 10,070,760 0.28% 52,240,055 1.47% 2,288,177,078 64.25% 1,273,394,166 35.75% 3,561,571,244 100.00%	Immediately upon full exercise of Subscription Rights and outstanding Share Options Number of Shares Approx. % 2,225,866,263 62.50% 10,070,760 0.28% 52,240,055 1.47% 2,288,177,078 64.25% 1,273,394,166 35.75% 3,561,571,244 100.00%
				64.25%
				35.75%
				100.00%

– 17 –

LETTER FROM THE BOARD

Notes:

1. The Subscriber is wholly-owned by Ms. Li Shao Yu, the chief executive officer of the Company.

2. These are the number of outstanding Shares which may fall to be allotted and issued upon exercise of any subscription rights attaching to the Share Options granted to Ms. Li Shao Yu by the Company under the share option scheme adopted on 16 May 2006.

3. Real Power Holdings Limited is a company owned as to 99.90% by Ms. Li Shao Yu and as to 0.1% by China Capital Group Limited. China Capital Group Limited is a company beneficially owned as to 50% by Ms. Li Shao Yu, as to 40% by Mr. Ma Lishan and as to 10% by Mr. Liu Zhibin.

4. As at the date of the Subscription Agreement, these are the total number of outstanding shares amounted to 28,410,144 shares which may fall to be allotted and issued upon exercise of any subscription rights attaching to the Share Options granted by the Company under the share option scheme adopted on 16 May 2006.

5. The percentages are subject to round figures.

APPLICATION FOR LISTING

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Warrant Shares which may fall to be allotted and issued upon exercise of the Subscription Rights. No listing of the Warrants will be sought on the Stock Exchange or any other stock exchanges.

REASONS FOR THE ISSUE AND USE OF PROCEEDS

The Board has considered other alternative fund raising methods such as debt financing (e.g. issue of convertible bonds) or placement of shares. The issue of convertible bonds requires the investors to pay the entire amount of the investment sum at the time of subscription. The Company will also incur expenses on interests payable, the amount of which may be substantial, pursuant to the terms of the convertible bonds. There may be risks that the investor eventually refuses to exercise the conversion rights attached to the convertible bonds, which will result in the Company being required to use large amount of financial resources to redeem the bonds. Besides, placement of shares also requires the payment of the entire amount of investment sum at the time of placing and also causes immediate pressure and impact on the share price. Further, the Company has already carried out an open offer in June 2014 and a placing in October 2014 and the amount were significant. Taking into account the above and given that the Company has no immediate need for financial resources, the Board considers that the issue of the Warrants is a more preferred and appropriate means of fund raising for the Company as it does not have any immediate dilution effect on the shareholding of the existing Shareholders. Further capital would be raised upon exercise of the subscription rights attaching to the Warrants. Since the Subscriber is also the Controlling Shareholder as well as the chief executive officer of the Group, the Subscriber will be in the position to understand the funding needs of the Company. Therefore, being the

– 18 –

LETTER FROM THE BOARD

Controlling Shareholder and the chief executive officer, it is likely that the Subscriber will exercise the Subscription Rights whenever the Company is in need of financial resources in order to capture valuable market opportunities and thus enhance the value of the Group and the Shares. Before the Board considered and approved the issue of the Warrants, Ms. Li Shao Yu has expressed her intention to the Directors that she will procure the Subscriber to exercise the Subscription Rights whenever the Company is in need of financial resources. Considering the commitment of Ms. Li Shao Yu on the businesses of the Group in the past and her recent increase in shareholdings in the Company, which demonstrates her support to the Group, the Directors believe that, unless there is justifiable and persuasive reason, the possibility for the Subscriber not to exercise the Subscription Rights is very low. Further, the term of the Warrants is only two years, which is a relatively short period of time before the receipt of the proceeds by the Company. The Board therefore considers that the issue of the Warrants and the issue of the Warrant Shares provide opportunities for the Group to strengthen the Group’s capital base and financial position to better equipped itself with the financial flexibility for development of the business of the Group.

The gross proceeds from the issue of Warrants will be HK$588,858. The net proceeds from the issue of Warrants, after the deduction of related expenses, are estimated to be approximately HK$223,858, representing net issue price of approximately HK$0.00038 per Warrant.

Assuming full exercise of the Subscription Rights at the Subscription Price, it is expected that an additional gross proceeds and net proceeds of approximately HK$294,430,310 will be raised.

It is intended that the aforesaid net proceeds will be applied for (i) the expansion of the money lending business of the Group; (ii) the investment in securities by the Group; and (iii) the general working capital of the Group.

– 19 –

LETTER FROM THE BOARD

FUND RAISING ACTIVITIES DURING THE PAST TWELVE MONTHS

The Company has conducted the following fund raising activities in the past 12 months from the date of the Subscription Agreement and the total amount of funds raised was approximately HK$378.1 million:

				Actual use of
				proceeds as at
				the date of
Date of		Approximate net		the Subscription
announcement	Event	proceeds	Intended use of net proceeds	Agreement
31 July 2014	Open Offer	Approximately	(a) approximately HK$134.54	Use as intended
		HK$192.20 million	million for the development
			and expansion of the money
			lending business of the
			Group; and
			(b) the remaining of approximately
			HK$57.66 million for general
			working capital of the Group
7 October 2014	Placing of	Approximately	Expansion of the securities	Use as intended
	397,200,000	HK$185.9 million	investments business of the
	new Shares		Group

Save as disclosed, the Company had not conducted any other capital fund raising activities in the past twelve months immediately prior to the date of the Subscription Agreement.

VIEWS OF THE DIRECTORS

The Directors (including the independent non-executive Directors) consider that the terms of the Subscription Agreement was entered into upon normal commercial terms following arm’s length negotiations between the Company and the Subscriber and that the terms of the Subscription Agreement are fair and reasonable. Whilst the Company has no immediate need for financial resources, the Directors are of the view that it would be in the interests of the Company and the Shareholders to prepare for the expansion of the existing businesses of the Group in the long run. Due to the nature of the relevant businesses of the Group, namely, money lending and securities investment, financial resources are crucial for such expansion. Further, although there is a dilution effect, the issue of the Warrants and the exercise of the Subscription Rights can nevertheless strengthen the share capital of the Company in the long run. Given that (i) the costs and expenses for the issue of the Warrants are relatively low; and (ii) it is likely that the Subscription Rights will be exercised by the Subscriber whenever the Company is in need of financial resources, the Directors consider that the issue of the Warrants is in the interests of the Company and the Shareholders as a whole.

– 20 –

LETTER FROM THE BOARD

None of the Directors was interested in the Subscription Agreement and the transaction contemplated thereunder and none of them has abstained from voting on the board resolutions approving the aforesaid matters.

IMPLICATIONS UNDER THE LISTING RULES

As at the Latest Practicable Date, the Subscriber is wholly-owned by Ms. Li Shao Yu, the chief executive officer of the Company and held 1,637,008,263 Shares, representing approximately 55.60% of the entire issued share capital of the Company and is accordingly a connected person of the Company. As such, the Subscription Agreement constitutes connected transaction of the Company and is subject to the announcement, reporting and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

In light of the above, Ms. Li Shao Yu, her associates and all core connected persons will abstain from voting in favour of the relevant resolution to approve the Subscription Agreement, the issue of the Warrants and the grant of the specific mandate for issue of the Warrant Shares upon exercise of the Subscription Rights attached to the Warrants. The aforesaid persons are entitled to exercise control over the voting rights in respect of the Shares held by them.

Details of the connected transaction of the Company will be disclosed in the Company’s published annual report and accounts in accordance with Rule 14A.49 of the Listing Rules.

APPOINTMENT OF INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The independent board committee of the Company comprising all the independent non-executive Directors has been established to advise and give recommendations to the Independent Shareholders on the Subscription Agreement and the issue of the Warrants.

Pan Asia Corporate Finance Limited has been appointed as the independent financial adviser to make recommendations to the independent board committee of the Company and the Independent Shareholders in respect of the Subscription Agreement and the issue of the Warrants.

– 21 –

LETTER FROM THE BOARD

INFORMATION ABOUT THE GROUP

The Company is an investment holding company. It is the corporate strategy of the Group to focus on the development of natural gas business and to expand its business gradually to various sectors of clean resources along with expansion of business coverage to other industries. The Group is also engaged in provision of loan financing services, trading of commodities and securities investments.

INFORMATION ABOUT THE SUBSCRIBER

The Subscriber is a company incorporated in the British Virgin Islands and is an investment holding company.

GENERAL

Completion is subject to the satisfaction of the conditions precedent under the Subscription Agreement. As the issue of Warrants may or may not proceed, Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

EGM

The notice of EGM is set out on pages 66 to 68 of this circular for the purpose of considering and, if thought fit, passing the resolutions set out therein.

A form of proxy for the EGM is enclosed herewith. Whether or not you are able to attend the EGM in person, please complete and return the form of proxy in accordance with the instructions printed thereon to the branch share registrar and transfer office of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjourned meeting (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjourned meeting (as the case may be) should you so wish. Pursuant to the Listing Rules, voting by poll is required for any resolution put to vote at the EGM.

VOTING BY POLL AT THE EGM

Pursuant to Rule 13.39 of the Listing Rules and article 66 of the Articles, any votes of the Shareholders at a general meeting must be taken by poll. An announcement on the poll results will be published after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

– 22 –

LETTER FROM THE BOARD

Details of procedures for conducting a poll are set out in the Appendix III to this circular.

RECOMMENDATION

Your attention is drawn to (i) the “Letter from the Independent Board Committee” set out on pages 24 to 25 of this Circular containing the recommendation from the Independent Board Committee to the Independent Shareholders regarding the Subscription Agreement and the issue of the Warrants; and (ii) the “Letter from the Independent Financial Adviser” set out on pages 26 to 51 of this Circular containing the advice of the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders regarding the Subscription Agreement and the issue of the Warrant.

The Directors are of the opinion that the terms of the Subscription Agreement are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned. The Directors consider that the Subscription Agreement and the transaction contemplated thereunder are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that the Independent Shareholders vote in favour of the resolutions to be proposed at the EGM to approve the Subscription Agreement, the issue of the Warrants and the grant of the specific mandate for issue of the Warrant Shares upon exercise of the Subscription Rights attaching to the Warrants and the transactions contemplated thereunder.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the Appendix II to this circular.

By Order of the Board Hao Tian Development Group Limited Fok Chi Tak Executive Director

– 23 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00474)

CONNECTED TRANSACTION: ISSUE OF UNLISTED WARRANTS

31 May 2015

To the Independent Shareholders

Dear Sir or Madam,

We refer to the circular dated 31 May 2015 issued by the Company to the Shareholders (the “ Circular ”) of which this letter forms part. Terms defined in the Circular shall have the same meaning when used in this letter, unless the context otherwise requires.

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders on whether the terms of the Subscription Agreement and the transactions contemplated thereunder are on normal commercial terms, in the ordinary and usual course of business, fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Pan Asia Corporate Finance Limited has been appointed as independent financial adviser to advise us and the Independent Shareholders in this respect.

Your attention is drawn to the letter from the Independent Financial Adviser in the Circular containing the advice of the Independent Financial Adviser in respect of the Subscription Agreement and the transactions contemplated thereunder.

– 24 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

RECOMMENDATION

We have considered the principal factors taken into account by the Independent Financial Adviser in arriving at its opinion in respect of the Subscription Agreement and the transactions contemplated thereunder. We concur with the views of the Independent Financial Adviser that the Subscription Agreement and the transactions contemplated thereunder are fair and reasonable so far as the Company and the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend that the Independent Shareholders vote in favour of the resolutions in respect of the Subscription Agreement, the issue of the Warrants and the grant of the specific mandate for issue of the Warrant Shares upon exercise of the Subscription Rights attaching to the Warrants.

Yours faithfully,

For and on behalf of

the Independent Board Committee of Hao Tian Development Group Limited

Chan Ming Sun Jonathan

Independent non-executive Director

Lam Kwan Sing Lee Chi Hwa, Joshua Independent Independent non-executive Director non-executive Director

– 25 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter from the Independent Financial Adviser which sets out its advice to the Independent Board Committee and the Independent Shareholders in respect of the Subscription which has been prepared for the purpose of incorporation in this circular:

Unit 1504, 15th Floor, The Center, 99 Queen’s Road Central, Central, Hong Kong

31 May 2015

• To: The Independent Board Committee and

the Independent Shareholders of Hao Tian Development Group Limited

Dear Sir or Madam,

CONNECTED TRANSACTION: ISSUE OF UNLISTED WARRANTS

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the subscription of unlisted warrants of the Company and connected transaction, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in this circular (the “ Circular ”) dated 31 May 2015 issued by the Company, of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

On 10 April 2015 (after trading hours), the Company entered into the Subscription Agreement with the Subscriber in relation to the conditional issue of 588,858,000 Warrants to the Subscriber at the Issue Price of HK$0.01 per 10 Warrants (the “ Issue ”). The Warrants, in turn, entitle the Subscriber to subscribe for 588,858,000 Warrant Shares at the Subscription Price of HK$0.5 per Warrant Share (the “ Subscription ”).

– 26 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

A total of 588,858,000 Warrant Shares will be allotted and issued by the Company upon full exercise of the Subscription Rights, which represent approximately 20% of the existing issued share capital of the Company as at the Latest Practicable Date and approximately 16.67% of the issued share capital as enlarged by the allotment and issue of the Warrant Shares, assuming that there will not be any changes in the issued share capital of the Company before the exercise of all the Subscription Rights.

As at the Latest Practicable Date, the Subscriber is wholly-owned by Ms. Li Shao Yu (“ Ms. Li ”), who is the chief executive officer (the “ CEO ”) of the Company and held 1,637,008,263 Shares, representing approximately 55.6% of the entire issued share capital of the Company. Ms. Li is therefore a connected person of the Company. As a result, the Subscription Agreement constitutes a connected transaction of the Company and is subject to the announcement, reporting and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

In light of the above, Ms. Li, her associates and all core connected persons will abstain from voting at the EGM in favour of the relevant resolution to approve the Subscription Agreement, the issue of the Warrants and the grant of the specific mandate for issue of the Warrant Shares upon exercise of the Subscription Rights attached to the Warrants.

Rule 14A.39 of the Listing Rules requires that the Company shall establish an Independent Board Committee, which comprises all independent non-executive Directors without any material interest in the Acquisition, namely, Mr. Chan Ming Sun, Jonathan, Mr. Lee Chi Hwa, Joshua and Mr. Lam Kwan Sing, to advise the Independent Shareholders in respect of the terms of the Subscription Agreement, the Issue and the transactions contemplated thereunder. In our capacity as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders for the purposes of the Listing Rules, we are required by Rule 14A.45 of the Listing Rules to give an independent opinion as to whether the terms of the Subscription Agreement are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole, and whether the Independent Shareholders should vote in favour of the resolution to be proposed at the EGM to approve the Subscription Agreement, the Issue and the transactions contemplated thereunder.

BASIS OF OUR OPINION

In formulating our opinion and recommendation to the Independent Board Committee and the Independent Shareholders, we have relied on the accuracy of the statements, information, opinions and representations contained or referred to in the Circular as well as the information and representations provided to us by the Company, the Directors and the management of the Company.

– 27 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have assumed that all information, representations and opinions contained or referred to in the Circular, which have been provided to us by the Company, the Directors and the management of the Company and for which they are solely and wholly responsible, were true and accurate at the time when they were made and continue to be true up to the Latest Practicable Date. Should there be any subsequent material changes which occurred during the period from the date of the Circular up to the date of the EGM that would affect or alter our opinion on the Subscription Agreement, we will notify the Independent Board Committee and the Independent Shareholders as soon as possible.

We have no reason to doubt the truth, accuracy or completeness of the information and representations made to us by the management of the Group. We have been advised that no material facts have been omitted from the information supplied and opinions expressed. As such, we have no reason to suspect that any relevant information has been withheld or omitted from the information provided and referred to in the Circular or the reasonableness of the opinions and representations provided by the management of the Group to us, nor are we aware of any facts or circumstances which would render the information provided and representations made to us untrue, inaccurate or misleading.

We consider that we have reviewed sufficient information to reach an informed view, to justify reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our opinion. We have not, however, conducted any independent investigation into the business and affairs or the future prospects of the Group, nor have we carried out any independent verification of the information provided by the management of the Group.

All Directors jointly and severally accept full responsibility for the accuracy of information contained in the Circular and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading.

This letter is issued for the information for the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the Subscription Agreement, the Issue and the transactions contemplated thereunder and, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

– 28 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

OUR QUALIFICATIONS AND INDEPENDENCE

Pan Asia has been licensed by the Securities and Futures Commission (the “ SFC ”) since 1992 and is now a licensed corporation engaging in Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO. Mr Cheung, who is the Chairman of Pan Asia and signs off on this letter, is licensed by the SFC as a Responsible Officer and a Principal licence holder of Pan Asia, and has over 20 years’ experience in the financial services industry in Hong Kong.

Pan Asia was engaged to act as the independent financial adviser to the independent board committee and the independent shareholders of the Company in a number of transactions before, details of which are summarised in the following table:

		Details of work
Date	Type of transaction	performed	Result
16 December 2013	a discloseable and connected	please refer to pages 33-	approved by the Company’s
	transaction in relation to	74 of the Company’s	independent shareholders
	the proposed acquisition	circular dated 26 January	at a general meeting held
	of the entire issued share	2015	on 16 February 2015
	capital of an investment
	holding company with
	logistics project in
	Urumqi, the PRC
28 December 2013	a very substantial disposal	please refer to pages 18-	approved by the Company’s
	and connected transaction	39 of the Company’s	independent shareholders
	in relation to the sale of	circular issued dated 24	at a general meeting held
	the entire issued share	February 2014	on 14 March 2014
	capital of Winbox (BVI)
	Limited to Goodwill
	International Holdings
	Limited

– 29 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

		Details of work
Date	Type of transaction	performed	Result
25 April 2014	an open offer on the basis	please refer to pages 50-	approved by the Company’s
	of two offer shares for	79 of the Company’s	independent shareholders
	one adjusted share at	circular dated 2 July	at a general meeting held
	HK$0.25 per offer share	2014	on 30 July 2014
	with bonus issue on the
	basis of one bonus share
	for one offer share taken
	up under the open offer;
	(ii) the underwriting
	agreement; and (iii)
	the application for
	whitewash waiver
14 November 2014	proposed refreshment of	please refer to pages 13-	approved by the Company’s
	general mandate	23 of the Company’s	independent shareholders
		circular dated 11	at a general meeting held
		December 2014	on 30 December 2014

Notwithstanding that we took on the above engagements within two years of acting as the Independent Financial Adviser in the current transaction, we are not associated with the Company’s directors, substantial shareholders and their respective associates, and we are of the view that we meet the independence guidelines set out in Rule 13.84 of the Listing Rules.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation, we have considered the following principal factors and reasons.

– 30 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1. Information on the Group

(a) The Group and its principal business activities

Incorporated in the Cayman Islands on 30 September 2005 as an exempted company with limited liability under the Companies Law, Cap. 22 (Laws 3 of 1961, as consolidated and revised) of the Cayman Islands, the Company is an investment holding company currently engaged in the provision of loan financing services, trading of commodities and securities investments. The Company’s shares have been listed on the Stock Exchange since June 2006.

(b) Financial information of the Group

The following table summarises the financial information of the Group for the two years ended 31 March 2014 and the six months ended 30 September 2014, which have been extracted from the annual report of the Company for the year ended 31 March 2014 (the “ AR 2013/14 ”) and the interim report for the six months ended 30 September 2014 (the “ IR 2014/15 ”) respectively.

	For the year	ended	For the six	months ended
	31 March		30 September
	2014	2013	2014	2013
	HK$’000	HK$’000	HK$’000	HK$’000
	(Audited)	(Audited)	(Unaudited)	(Unaudited)
Revenue	40,323	–	31,966	15,674
Profit (loss) before taxation	(106,609)	(130,841)	1,329,813	(79,850)
Profit (loss) for the period from
continuing operations	(106,865)	(130,841)	1,065,663	(79,850)
Profit (loss) for the period from
discontinued operations	94,406	(88,485)	–	87,500
Profit (loss) for the period	(12,459)	(219,326)	1,065,663	7,700

– 31 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(i) For the six months ended 30 September 2014

According to the IR 2014/15, the Group recorded a profit from continuing operations of approximately HK$1,065.7 million (2013: approximately HK$7.7 million) for the period under review, and there was no profit from discontinued operations during this review period (2013: a profit of approximately HK$87.6 million). As a result, the total net profit from continuing operations and discontinued operations attributable to the shareholders for the six months ended 30 September 2014 was approximately HK$1,065.8 million (2013: approximately HK$7.9 million).

The basic and diluted profit per share from continuing operations and discontinued operations were approximately HK63.65 cents and HK53.64 cents respectively (2013: basic and diluted HK0.49 cents).

The substantial increase in profit was mainly attributable to (a) fair value gain on investments held for trading; (b) gain on disposal of available-for-sale investments; and (c) interest income derived from money lending business. In terms of (a) and (b), the Group recorded substantial other gains and losses from its continuing operations resulting from the fair value gain on investments held for trading by the Group, gain on disposal of available-for-sale investments and fair value loss on derivative financial instruments. The market value of the investment portfolio of the Group appreciated, giving rise to a gain of approximately HK$1,363.3 million (2013: loss of approximately HK$55 million) during the period under review.

As for (c), interest income from money lending business amounted to approximately HK$31.5 million (2013: approximately HK$15.2 million). Interest expense of approximately HK$8.7 million (2013: nil) was incurred for borrowings obtained solely for the Group’s money lending business. The Group financed the money lending business by external and internal resources during the period under review.

(ii) For the year ended 31 March 2014

Based on AR 2013/14, the Group’s financial performance for the year ended 31 March 2014 can be briefly summarised as follows.

– 32 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In terms of continuing operations, the Group had (i) a revenue of approximately HK$40.32 million which included interest income generated from lending of money to outside borrowers and service income from trading of commodities; (ii) other income of HK$5.52 million (2013: HK$2.76 million) representing interest income earned on bank deposits and loan receivables; and (iii) other loss of HK$59.73 million (2013: HK$71.91 million) from, inter alia, fair value losses on financial instruments and impairment loss on available-for-sale investments. After accounting for administrative expenses and finance costs, the Group recorded a loss from continuing operations at approximately HK$106.86 million (2013: HK$130.84 million).

As regards the discontinued operations, which included the disposal of coal mine operations in Xinjiang as well as packaging business in Winbox, a profit of approximately HK$94.41 million (2013: loss of HK$88.49 million) was recorded.

The total net loss from continuing operations and discontinued operations attributable to the shareholders was approximately HK$12.42 million (2013: HK$219.33 million). The basic and diluted loss per share from continuing and discontinued operations was approximately HK0.31 cents (2013: HK5.58 cents).

(c) Fund raising activities in the last 12 months

The Company conducted two fund raising activities in the past 12 months from the date of the Subscription Agreement, namely, open offer and share placement. The total amount of funds raised was approximately HK$378.1 million. Details of those two fund raising activities are set out below.

(i) Open offer

In an announcement dated 25 April 2014, the Company proposed to, among others, raise not less than approximately HK$198.60 million and not more than approximately HK$237.95 million by issuing not less than 794,407,160 shares and not more than 951,787,160 shares at a price of HK$0.25 per offer share to the qualifying shareholders by way of an open offer on the basis of two (2) shares for every one (1) adjusted share held on record date.

The open offer was approved by the Company’s independent shareholders at a general meeting held on 30 July 2014 and subsequently raised approximately HK$192.2 million. Some HK$134.54 million of the amount raised was used for the development and expansion of the money lending business of the Group, with the balance of approximately HK$57.66 million being used for general working capital of the Group.

– 33 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(ii) Share placement

On 7 October 2014, the Company entered into a placing agreement with a placing agent to issue up to 397,200,000 new shares at HK$0.48 per share to not fewer than six independent placees. The shares were allotted and issued pursuant to the general mandate granted to the Directors at the annual general meeting held on 26 September 2014. The purpose of the placement was to raise funds for the expansion of the Group’s securities investment business. Approximately HK$185.9 million was subsequently raised through the share placement.

2. Principal terms of the Subscription Agreement

(a) The Issue and the Subscription

According to the Subscription Agreement dated 10 April 2015, the Subscriber had conditionally agreed to subscribe for 588,858,000 Warrants at the Issue Price of HK$0.01 per 10 Warrants, which entitle the holder thereof to subscribe for up to 588,858,000 Warrant Shares at the Subscription Price of HK$0.50 each (subject to adjustment upon occurrence of any of the events set out on pages 9-11 of the Circular).

The issue price of HK$588,858 is payable by the Subscriber in cash upon completion of the subscription. Each Warrant will carry the right to subscribe for one Warrant Share (subject to adjustment). The subscription rights attaching to the Warrants may be exercised at the discretion of the Warrant Holder at any time from the date of issue of the Warrants to the second anniversary date from the issue date. The Warrants are not transferable.

Upon full exercise of the Subscription Rights, a total of 588,858,000 Warrant Shares will be allotted and issued by the Company and they will rank pari passu in all respects with the then existing issued shares of the Company. The Warrant Shares represent approximately 20% of the issued share capital of the Company as at the Latest Practicable Date and approximately 16.67% of the issued share capital of the Company as enlarged by the Warrant Shares, assuming that there will not be any changes in the issued share capital of the Company before the exercise of all the Subscription Rights.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Subscription Agreement and the Warrants fall under Chapter 17 of the Listing Rules and the Company is required to comply with the requirements therein. However, some of the terms of the Warrants deviate from the provisions of Chapter 17 of the Listing Rules, details of which are set out on pages 14-16 of the Circular. The Company will apply to the Listing Committee for the listing of, and permission to deal in, the Warrant Shares which may fall to be allotted and issued upon exercise of the subscription rights attaching to the Warrants. No listing of the Warrants will be sought on the Stock Exchange or any other stock exchanges.

(b) The Issue Price and the Subscription Price

As advised by the Directors, the Issue Price was determined after arm’s length negotiations between the Company and the Subscriber after taking into account (i) the nontransferable nature of the Warrants; (ii) the liquidity of the Shares in the capital market; (iii) the historical prices of the Shares; (iv) the prevailing stock market sentiment; and (v) the costs and expenses which may be incurred in issuing the Warrants. In determining the Subscription Price, the Company and the Subscriber considered the above factors and the requirements of the Listing Rules.

The aggregate of the Issue Price of HK$0.01 per 10 Warrants and the Subscription Price of HK$0.50 per Warrant Share is therefore HK$0.501 (the “ Aggregate Price ”), which represents:

• a discount of approximately 55.3% to the closing price of HK$1.12 per Share as quoted on the Stock Exchange as at the Latest Practicable Date;

• a premium of approximately 2.24% over the closing price of HK$0.49 per Share as quoted on the Stock Exchange as at the Last Trading Day;

• a premium of approximately 0.20% over the average closing price of approximately HK$0.50 per Share for the last five trading days for the Shares prior to and including the Last Trading Day; and

• a premium of approximately 8.9% over the average closing price of approximately HK$0.46 per Share for the last ten trading days for the Shares prior to and including the Last Trading Day.

Having considered, amongst other things, the recent market prices of the Shares and the prevailing stock market sentiment, the Directors take the view that the Subscription Price and the Aggregate Price are fair and reasonable, and in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(c) Conditions for completion

Completion of the Subscription Agreement is subject to and conditional upon the fulfillment of two conditions which are set out in full on page 13 of the Circular. The two conditions precedent are summarised as follows:

1. The Listing Committee of the Stock Exchange having granted the listing of, and permission to deal in, the Warrant Shares which may fall to be allotted and issued upon exercise of the Subscription Rights; and

2. the approval of the Independent Shareholders of the Subscription Agreement, the Warrant Instrument and the grant of the specific mandate to issue the Warrant Shares at the EGM.

If the above conditions are not fulfilled on or before the Long Stop Date or such agreed later time by both parties, the Subscription Agreement shall lapse and become null and void and the parties shall be released from all obligations under it.

Subject to the fulfilment of the above two conditions precedent, Completion shall take place on or before the seventh Business Day following the date on which the conditions precedent as set out in the Subscription Agreement are fulfilled.

While the Company has no immediate need for financial resources, the Directors are of the view that it would be in the interests of the Company and the Shareholders to prepare for the expansion of the existing businesses of the Group in the long run. Due to the nature of the relevant businesses of the Group, namely, money lending and securities investment, financial resources are crucial for such expansion. Since Ms. Li is the Controlling Shareholder as well as the CEO of the Group, she has a full understanding of the funding needs of the Company. In light of Ms. Li’s shareholding (which had recently been increased to approximately 55.6% of the Company’s issued share capital as at the Latest Practicable Date) and leadership position in the Company as well as her past contribution to the improved financial performance of the Group from 2010 to 2014 (please refer to sub-section headed “3. Reasons for entering into the Subscription Agreement” below), we understand from the Directors that Ms. Li (through the Subscriber) is keen to exercise the Subscription Rights when the Group is in need of financial resources in order to capture valuable market opportunities and thus enhance the value of the Group and the Shares. Moreover, the term of the Warrants is only two years, which is a relatively short period of time before the Company will receive the proceeds from the Subscription. For these reasons, the Board is of the view, with which we concur, that, notwithstanding the dilution effect as set out in the sub-section headed “6. Dilution effect of shareholding interests of existing shareholders”, the Issue and the Subscription will provide opportunities for the Group to (i) strengthen its capital base and financial position; and (ii) to better equip itself for development of business activities in the future.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Given that (i) the costs and expenses for the issue of the Warrants are relatively low; and (ii) the Subscriber will, as mentioned before, exercise the Subscription Rights when the Company is in need of financial resources, the Directors consider that the issue of the Warrants is in the interests of the Company and the Shareholders as a whole, and that the terms of the Subscription Agreement (including the Issue Price and Subscription Price) are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

In the next three sub-sections, we will set out our analysis of (i) reasons for entering into the Subscription Agreement; (ii) other financing alternatives; and (iii) the principal terms of the Subscription Agreement, which leads to our view that the Subscription Agreement is, on balance, fair and reasonable and in the interests of the Company and its Shareholders as a whole.

3. Reasons for entering into the Subscription Agreement

In assessing the possible benefits associated with the Issue and the Subscription, we noted that during the five financial years from 31 March 2010 to 31 March 2014, (i) the revenue of the Group increased from approximately HK$97 million in 2010 to approximately HK$201.8 million in 2014; and (ii) the losses for those five years were also reduced from approximately HK$469.4 million in 2010 to approximately HK$12.46 million in 2014. These results were achieved notwithstanding the tough market environment in the aftermath of the financial tsunami and the Eurozone debt crisis as well as the volatile recovery of the economy in the United States of America.

As advised by the Directors and as stated in the Company’s financial reports during these five years, the increase in revenue and the reduction in losses were mainly attributable to the shift in the erstwhile business focus of the Group from natural gas business and clean resources sector to the current one of provision of financial services, securities investment and trading of commodities.

While the Subscription Agreement enables the Subscriber to maintain and/or increase its level of shareholding in the Group without granting pro-rata entitlement to all shareholders, the continued support of Ms. Li of the Company through her controlling shareholding interests is, in the view of the Directors, one of the Group’s important assets. The Subscriber’s entering into the Subscription Agreement demonstrates the commitment of Ms. Li (via the Subscriber) to the Group. The Directors are further of the view that this show of confidence in the Group by the Subscriber has the potential to positively affect the marketability of the Warrants.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

It should also be noted that the Warrants are non-transferable, and that the economic benefits of the Warrants is dependent on the increase in trading price of the Shares which is driven by improving fundamentals of the Company. Hence, the benefit of the Warrants will only be realised when all the Shareholders are also in a position to benefit from the same. As a result, the Subscription would align the interest of Ms. Li (through the Subscriber) with that of the Shareholders, and thereby improving Ms. Li’s incentive to continue to use her best endeavour to manage the business of the Group.

Since (i) the financial performance of the Group has substantially improved in recent years due to the efforts devoted by and the management expertise of Ms. Li (together with the Directors and other senior management of the Group); and (ii) Ms. Li will be motivated by her potential gain from the Subscription to increase her efforts and make further contribution to the Company’s prospects; (iii) improved Company’s performance will lead to higher Share prices which benefits all Shareholders; and (iv) Shareholders would gain from selling their Shares at a higher market price, we concur with the Directors that the Issue and Subscription are in the interests of the Shareholders as a whole.

The gross proceeds from the issue of Warrants will be HK$588,858. The net proceeds from the issue of Warrants, after the deduction of related expenses, are estimated to be approximately HK$223,858 representing net issue price of approximately HK$0.0038 cents per Warrant. Assuming full exercise of the Subscription Rights at the Subscription Price, it is expected that an additional gross proceeds and net proceeds of approximately HK$294.4 million will be raised. It is intended that the net proceeds will be applied for (i) the expansion of the money lending business of the Group; (ii) the investment in securities by the Group; and (iii) the general working capital of the Group.

4. Financing alternatives

As discussed with the Directors and as disclosed in the Letter from the Board, we understand that in addition to the Issue, the Company has considered other means of fund raising, including bank borrowing, debt financing, share placement and open offer. However, the Directors, for the reasons below, have decided to settle on the Issue and Subscription as the Company’s preferred method to raise funds in this case.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Each of the financing alternatives explored by the Directors and the reasons for its rejection are set out below:

(a) Bank borrowing

Bank borrowings or debt financing would result in an additional interest burden on the Group and may not be achievable on favourable terms or on a timely basis, due to the possibility of the Company being subject to lengthy due diligence and negotiation processes with banks. Moreover, banks are likely to impose stringent conditions on the loans which may adversely affect the borrower’s flexibility in its operations. Such conditions may include, without limitation, stipulation of adequate security to be provided by the borrower, provision of personal guarantees on the part of the borrower’s substantial shareholders, limited purposes for using the loans and other restrictive covenants.

(b) Convertible bonds

Insofar as the option of issuing convertible bonds is concerned, it requires investors to pay the entire amount of the investment sum at the time of subscription. The Company will also incur expenses on interests payable, the amount of which may be substantial, pursuant to the terms of the convertible bonds. There may be risks that the investor eventually refuses to exercise the conversion rights attached to the convertible bonds, which will result in the Company being required to use large amount of financial resources to redeem the bonds.

(c) Share placement

A placement of new Shares to independent third parties (a) would not offer the existing Shareholders the first opportunity to share the results of the Company and maintain their respective pro-rata shareholding in the Company; and (b) would immediately dilute the shareholding of the existing Shareholders.

Placement of shares also requires the payment of the entire amount of investment sum at the time of placing and also causes immediate pressure and impact on the share price. Further, the Company already carried out a share placement in October 2014 and the amount of funds were quite significant.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(d) Open offer

Open offer incurs relatively higher costs than the Issue, the additional costs would lower the net proceeds obtained by the Group as a result. The Directors believes that it is commercially justifiable to opt for the Issue over open offer since the former is a more cost-effective fund-raising method. More importantly, we concur with the Directors’ view that while open offer exercise is recognised to give equal opportunities to all existing Shareholders to participate in a fund raising exercise, it may however be difficult to find a suitable underwriter(s) to underwrite the Shares because of the latter’s relatively low trading volume in the past year. Pursuant to Rule 7.24(1) of the Listing Rules, all open offers must be fully underwritten in normal circumstances. Further, the Company already carried out an open offer in July 2014 and the amount of funds raised were quite significant.

Having regard to the above and given that the Company has no immediate need for financial resources, the Board considers that the Issue is a more preferred and appropriate means of fund raising for the Company as it does not have any immediate dilution effect on the shareholding of the existing Shareholders. Further capital would be raised upon exercise of the Subscription Rights. Since Ms. Li is also the Controlling Shareholder as well as the CEO of the Group, she will be in the position to understand the funding needs of the Company. Therefore, it is likely that the Subscriber will exercise the Subscription Rights whenever the Company is in need of financial resources in order to capture valuable market opportunities and thus enhance the value of the Group and the Shares.

Further, the term of the Warrants is only two years, which is a relatively short period of time before the receipt of the proceeds by the Company. The Board therefore considers that the Issue provides opportunities for the Group to strengthen the Group’s capital base and financial position to better equipped itself with the financial flexibility for development of the business of the Group.

After considering the above, we concur with the Directors’ view that fund raising by way of the Issue and the Subscription are more suitable and viable for the Group at this juncture. The Issue would also improve financial position of the Group due to the increase in net asset value, as further discussed in the section headed “7. Possible financial effects of the Issue and the Subscription” below.

– 40 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

5. Assessment of principal terms of the Subscription Agreement

In order to assess whether the terms of the Subscription Agreement are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole, we have reviewed three relevant aspects including (i) performance of the Share price; (ii) trading liquidity of the Shares; and (iii) fairness and reasonableness of the Aggregate Price over a 12-month period from 11 May 2014 to 10 April 2015, which was the date of the Subscription Agreement (the “ Review Period ”). We consider that the length of the Review Period to be reasonably long enough to capture the recent price movements of the Shares so that a reasonable comparison between the closing prices and the Aggregate Price can be conducted.

(a) Review of Share price performance

We set out below: (i) Chart 1 which shows the movement of the Share price as quoted on the Stock Exchange versus the Aggregate price during the Review period; and (ii) Table 1 which shows the highest and the lowest closing prices as well as the average daily closing price of the Shares as quoted on the Stock Exchange in each month of the Review Period.

Chart 1: The daily closing price of the Shares during the Review Period (HK$) Vs the Aggregate Price

==> picture [356 x 252] intentionally omitted <==

----- Start of picture text -----

1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
Offer Price Closing Price
12/5/2014 12/6/2014 12/7/2014 12/8/2014 12/9/201412/10/2014 12/11/2014 12/12/201412/1/2015 12/2/201512/3/2015
----- End of picture text -----

Source: The website of the Stock Exchange (www.hkex.com.hk)

– 41 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Table 1: Highest, lowest and average daily closing price of the Shares during the Review Period

					Premium/
					(Discount) of
					the Aggregate
					Price to
					the average
		Highest daily	Lowest daily	Average daily	daily closing
	Number of	closing price	closing price	closing price	price of
	trading days	of the Shares	of the Shares	of the shares	the Shares
		(HK$	(HK$	(HK$	%
		per Share)	per Share)	per Share)	(approximately)
2014
May	15	0.388	0.364	0.377	32.89%
June	20	0.390	0.370	0.379	32.19%
July	22	0.630	0.374	0.421	19.00%
August	21	0.860	0.650	0.735	-31.84%
September	21	0.750	0.455	0.559	-10.38%
October	21	0.590	0.500	0.525	-4.57%
November	20	0.600	0.465	0.501	0.00%
December	21	0.570	0.380	0.456	9.87%
2015
January	21	0.395	0.330	0.356	40.73%
February	18	0.415	0.360	0.388	29.12%
March	22	0.465	0.330	0.380	31.84%
April	5	0.530	0.460	0.500	0.20%
Highest	0.86
Lowest	0.33
Average	0.46

Source: the website of the Stock Exchange (www.hkex.com.hk)

As can be observed from Table 1, the lowest closing price of the Shares was HK$0.33 per Share as quoted between 27 and 30 January 2015 and 16 March 2015 and the highest closing price was HK$0.86 per Share on 13 August 2014. The Aggregate Price of HK$0.501 represents a premium of approximately 51.8% over the lowest closing price of the Shares and a discount of approximately 41.7% to the highest closing price of the Shares accordingly. The Aggregate Price (i.e. HK$0.501) is within the said range of the closing prices of the Shares during the Review Period.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(b) Review of trading liquidity

For the purpose of assessing the trading volume of the Shares during the Review Period, we set out below (i) the trading volume of the Shares during the Review Period; and (ii) the average daily number of Shares traded for each month of the Review Period.

Chart 2: The daily trading volume of the Shares during the Review Period

==> picture [386 x 226] intentionally omitted <==

----- Start of picture text -----

200,000,000
180,000,000
160,000,000
140,000,000
120,000,000
100,000,000
80,000,000
60,000,000
40,000,000
20,000,000
0
12/5/2014 12/6/2014 12/7/2014 12/8/2014 12/9/201412/10/2014 12/11/2014 12/12/201412/1/2015 12/2/201512/3/2015
----- End of picture text -----

Source: The website of the Stock Exchange (www.hkex.com.hk)

– 43 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Table 2

						Percentage of
						average daily
		Highest daily	Lowest daily	Average daily		turnover over
		turnover	turnover	turnover	Total number	total number
	Number of	(in number	(in number	(in number	of Shares	of Shares
	trading days	of Shares)	of Shares)	of Shares)	in issue	in issue*
						%
						(approximately)
2014
May	15	2,368,000	88,000	870,023	3,972,035,804	0.02
June	20	7,916,680	0	1,837,382	3,972,035,804	0.05
July	22	143,093,923	484,000	12,504,475	397,203,580	3.15
August	21	11,022,800	369,455	2,785,504	397,203,580	0.70
September	21	45,016,539	534,000	15,255,738	1,986,017,900	0.77
October	21	54,992,955	1,166,000	6,916,479	2,383,217,900	0.29
November	20	178,118,836	752,000	12,552,423	2,385,489,500	0.53
December	21	26,948,400	968,400	9,416,324	2,391,267,500	0.39
2015
January	21	8,738,000	96,000	2,283,701	2,944,303,100	0.08
February	18	14,280,000	54,000	4,029,200	2,944,303,100	0.14
March	22	54,814,400	460,000	9,523,827	2,944,303,100	0.32
April	5	60,884,800	10,304,800	28,684,320	2,944,303,100	0.97

• The percentage of average daily turnover over the total number of Shares in issue is based on the total number of issued Shares as at the last trading day of the respective month

Source: The website of the Stock Exchange (www.hkex.com.hk)

As observed in Table 2 above, apart from the figure of 0.97% in April 2015 (which had only five trading days being accounted for), the average daily trading volume has been less than 0.8% of the total number of issued Shares during the Review Period, with the lowest level at 0.02% in May 2014. As a result, the Directors are of the view, with which we concur, that given the relatively inactive trading of the Shares in the open market, it may be difficult to attract investors to purchase Shares. In issuing the Warrants, the Company is able to raise funds by issuing new Shares at the premium over the market price, it is therefore favourable to the Company and the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(c) Fairness and reasonableness of the Aggregate Price

To assess the fairness and reasonableness of the Aggregate Price, we have conducted a market comparison of recent warrant issue exercises (the “ Comparable Transactions ”) based on three criteria. The Comparable Transactions: (i) were conducted by issuers who have been listed on the Stock Exchange and publicly disclosed by way of announcements; (ii) involved the placing or subscription of unlisted warrants, excluding those involving subscription of bonus warrants or issue of warrants attached to other fund raising activity at nil consideration; and (iii) in an approximately six months’ period from 1 November 2014 to 10 April 2015, i.e. the date of the Subscription Agreement (the “ Comparable Period ”).

We consider that a Comparable Period of approximately six calendar months including the date of the Subscription Agreement is appropriate to capture the recent market practice because the warrant issue exercises of the companies being compared (the “ Comparables ”), notwithstanding that they are different from the Company in terms of their business operations, financial positions and future prospects, were determined under similar market conditions and sentiment and hence, reflect the up-to-date trend of warrant issue in the open market. We are also reminded of any analysis further back in time may run the risk of no longer being indicative of the current market environment.

Furthermore, there were 13 Comparable Transactions during the Comparable Period, which are exhaustive and represents a reasonable number of Comparable Transactions for the purpose of comparison. Accordingly, we are of the view that the Comparable Period sets an appropriate basis for our analysis and that the Comparable Transactions represent fair and representative samples.

– 45 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Table 3: Comparison of proposed warrant subscriptions between 1 November 2014 and 10 April 2015

			Premium/(Discount)
			of the exercise price
			and the issue price, if
			any, (the “aggregate
			subscription price”) of
			the warrants over/(to)
			closing price per share
			on the last trading
			day prior to/the date
			of announcement/
			agreement in relation
			to the respective	Subscription
		Date of	placing/subscription	period of	Issue price of
	Company name	announcement	of shares	warrants	warrants
					HK$
			% (approximately)	Year	(approximately)
364	Ping Shan Tea Group Limited	3 December 2014	20.30	2.00	0.01
6828	Blue Sky Power Holdings Limited	9 December 2014	21.05	1.00	0.01
1636	China Metal Resources Utilization	19 December 2014	(5.72)	5.00	0.001
	Limited
2118	Tian Shan Development	21 January 2015	10.88	2.75	0.43
	(Holding) Limited
1236	National Agricultural	28 January 2015	25.06	1.00	0.189
	Holdings Limited
8066	Phoenitron Holdings Limited	6 February 2015	16.67	2.00	0.02
8083	China Innovationpay Group Limited	6 February 2015	31.27	5.00	0.002
1002	V.S. International Group Limited	10 February 2015	0.00	1.00	0.01
829	Shenguan Holdings (Group) Limited	12 February 2015	31.05	4.00	0.001
2623	China Zhongsheng Resources	2 March 2015	(33.00)	1.00	0.016
	Holdings Limited
1121	Baofeng Modern International	13 March 2015	137.88	1.50	0.07
	Holdings Company Limited
1129	China Water Industry Group Limited	2 April 2015	14.94	1.50	0.1
1699	China Putian Food Holding Limited	8 April 2015	(6.90)	2.00	0.05
	Minimum		(33.00)	1.00	0.001
	Maximum		137.88	5.00	0.43
	Average		20.27	2.34	0.07
474	The Company		2.245	2.00	0.001

Soure: The website of the Stock Exchange (www.hkex.com.hk)

– 46 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

From Table 3, we note that the 2.245% premium of the Aggregate Price to the Share price on the date of the Subscription Agreement is within the range of the Comparables (from a discount of approximately 33% to a premium of approximately 138%) but is below the average – a premium of approximately 20.27%.

Further, the issue price of warrants ranged from the highest of HK$0.43 per warrant to the lowest of HK$0.001 per warrant, with the average issue price of warrants being approximately HK$0.07 per warrant. It is noted that the Issue Price of HK$0.001 per Warrant is the lowest among the Comparables, and that the issue price of warrants of two Comparables, namely, China Metal Resources Utilization Limited (stock code: 1636) and Shenguan Holdings (Group) Limited (stock code: 829) was also HK$0.001 per warrant.

Given that the Aggregate Price, which is a combination of the Issue Price and the Subscription Price, is within the relevant range of the Comparable Transactions in Table 3, we are of the view that the Aggregate Price and hence the Issue Price is, on balance, fair and reasonable.

(d) Valuation on the Issue Price

Further, we have assessed the fairness and reasonableness of the Issue Price by making reference to the Black-Scholes Option Pricing Model (the “ BOPM ”) used by Roma Appraisals Limited (“ RAL ”), which is an independent valuation firm engaged by the Company to assess the fair value of the Warrants.

According to RAL, the BOPM model provides a generalizable numerical method for the valuation of options, and adopts discrete time and non-closed form model of varying price over time of the underlying instruments. Based on the BOPM model, RAL concluded that, among others, the unit Warrant value was HK$0.171 as at 10 April 2015, which implied that the Issue Price of HK$0.001 per Warrant as per the Subscription Agreement has a discount of approximately 99.4% to the theoretical unit value of the Warrants.

Nevertheless, it must however be pointed out that the BOPM model is subject to a number of key assumptions and parameters such as risk free rate of 0.388%, expected volatility of 78.846%, and some of which may not hold in real practice. For example, the risk-free rate, such as theoretical rate of return, is not observable in real practice but is only estimated through proxy rates. If any of the assumptions of the BOPM model does not hold, the theoretical unit value of the warrants calculated by this pricing model may differ significantly from the actual value. Given that the usefulness of BOPM as a pricing model is limited by its assumptions which may not hold in practice, the unit Warrant value calculated by way of the BOPM model in this case should be used as a reference only.

– 47 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

It is further observed that in this case, (i) completion of the Issue and the Subscription is expected to increase the Company’s net asset value by way of the net proceeds generated from the Subscription; (ii) the trading of the Shares in the open market is generally relatively inactive and as such it may be difficult to attract investors to the Shares; and (iii) finally, as shown in the above Table 3, the Issue Price of HK$0.001 is within the range of the highest of HK$0.43 per warrant to the lowest of HK$0.001 per warrant in the Comparable Transactions. Moreover, from Table 1, the Aggregate Price of HK$0.501 per Warrant is noted to be within the said range of the daily closing prices of the Shares during the Review Period.

(e) The Subscription period

According to the Letter from the Board, the Subscription Rights attaching to the Warrants may be exercised by the Warrant Holder at any time from the date of issue of the Warrants to the close of business on the second anniversary date from the issue date, i.e. a subscription period of two years (the “ Subscription Period ”). As shown in Table 3, the subscription periods of the Comparable Transactions ranged from one year to five years, with the average subscription period of 2.34 years. The Subscription Period is therefore within this range and is lower than the average. As it is, we are satisfied that the length of the Subscription Period is fair and reasonable.

(f) Other terms

In addition, we have also reviewed other major terms in the Subscription Agreement, and are not aware of any terms being unusual and not on normal commercial terms.

For the reasons stated above, we concur with the Directors that the terms of the Subscription Agreement (including the Issue Price and Subscription Price) are, on balance, fair and reasonable so far as the Independent Shareholders are concerned.

6. Dilution effect of shareholding interests of existing shareholders

As at the Latest Practicable Date, the Company has 2,944,303,100 Shares in issue. There were outstanding Share Options with subscription rights to subscribe for an aggregate of 28,410,144 new Shares granted under the applicable rules of the share option scheme of the Company. Apart from the outstanding Share Options, the Company has no other outstanding convertible securities, options, warrants or other derivatives in issue which are convertible or exchangeable into Shares.

As at the Latest Practicable Date, the aggregate number of Shares which will be issued upon exercise of all outstanding Share Options and the Warrants shall be 617,268,144 Shares, representing approximately 20.96% of the issued share capital of the Company and approximately 17.33% of the issued share capital of the Company as enlarged by the new Shares to be issued upon exercise of the Share Options and the Warrants.

– 48 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following table illustrates changes in shareholding structure before and after the exercise of the Warrants:

Shares held by Ms. Li Shao Yu or companies beneficially owned by her Subscriber (Note 1) Ms. Li (Note 2) Real Power Holdings Limited (Note 3) Sub-total: Other Shareholders: Other public Shareholders Total:	As at the date of the Subscription Agreement Number of Shares Approx. % 1,637,008,263 55.60% – – 52,240,055 1.77% 1,689,248,318 57.37% 1,255,054,782 42.63% 2,944,303,100 100.00%	Immediately upon full exercise of Subscription Rights Number of Shares Approx. % 2,225,866,263 63.00% – – 52,240,055 1.48% 2,278,106,318 64.48% 1,255,054,782 35.52% 3,533,161,100 100.00%	Immediately upon full exercise of Subscription Rights and outstanding Share Options Number of Shares Approx. % 2,225,866,263 62.50% 10,070,760 0.28% 52,240,055 1.47% 2,288,177,078 64.25% 1,273,394,166 35.75% 3,561,571,244 100.00%	Immediately upon full exercise of Subscription Rights and outstanding Share Options Number of Shares Approx. % 2,225,866,263 62.50% 10,070,760 0.28% 52,240,055 1.47% 2,288,177,078 64.25% 1,273,394,166 35.75% 3,561,571,244 100.00%
				64.25%
				35.75%
				100.00%

Notes:

1. The Subscriber is wholly-owned by Ms. Li, the chief executive officer of the Company.

2. These are the number of outstanding Shares which may fall to be allotted and issued upon exercise of any subscription rights attaching to the Share Options granted to Ms. Li by the Company under the share option scheme adopted on 16 May 2006.

3. Real Power Holdings Limited is a company owned as to 99.90% by Ms. Li and as to 0.1% by China Capital Group Limited. China Capital Group Limited is a company beneficially owned as to 50% by Ms. Li, as to 40% by Mr. Ma Lishan and as to 10% by Mr. Liu Zhibin.

4. As at the date of the Subscription Agreement, these are the total number of outstanding shares amounted to 28,410,144 shares which may fall to be allotted and issued upon exercise of any subscription rights attaching to the Share Options granted by the Company under the share option scheme adopted on 16 May 2006.

5. The percentages are subject to round figures.

– 49 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

It is noted from the above table that the shareholding interests of the Independent Shareholders would decrease by approximately 7.11% (being the difference between the shareholding interests of the existing public Shareholders as at the date of the Subscription Agreement of 42.63% and the shareholding interests of the existing public Shareholders immediately upon full exercise of the Subscription Rights attaching to the Warrants of 35.52%) immediately upon full exercise of Subscription Rights. The dilution effect would be lowered to 6.88% immediately upon full exercise of Subscription Rights and outstanding Share Options. It is also noted that the Subscriber will increase its shareholding interest by approximately 7.11% pursuant to the exercise of the maximum number of Warrants (6.88% upon full exercise of Subscription Rights and outstanding Share Options).

Despite the effects of dilution in terms of percentage of shareholdings to the Independent Shareholders, having taken into account (i) the reasons for and benefits of the issue and subscription of the Warrants; (ii) the Subscription together with the exercise of the Subscription Rights would strengthen the capital base of the Company; (iii) the favourable Issue Price and Subscription Price, as further discussed under the italicised sub-section headed “(c) Fairness and reasonableness of the Aggregate Price” above; and (iv) the terms of the Subscription Agreement being fair and reasonable so far as the Independent Shareholders are concerned, we are of the view that the aforementioned level of dilution to the shareholding interests of the existing public Shareholders would be balanced by the potential benefits to the Shareholders and is therefore acceptable.

7. Possible financial effect of the Issue

(a) Effect on net asset value and gearing

As extracted from the AR 2013/14, the audited consolidated net asset value and the gearing ratio (calculated as total liabilities to total assets) of the Group were approximately HK$2,554 million and approximately 9.8% respectively as at 31 March 2014. In the event that the Subscription Rights attaching to the Warrants are exercised in full, the Group’s net asset value and the total assets are expected to further increase by the net proceeds therefrom in the maximum amount of approximately HK$294.4 million. Since the Issue would not lead to any change in the total debt borrowings of the Group while the total assets of the Group are expected to increase, the gearing ratio of the Group is expected to drop further.

– 50 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(b) Effect on working capital

As mentioned before, the Company intends to apply part of the net proceeds from the Subscription as the general working capital of the Group. Therefore, the Group’s working capital position would be strengthened as a result of the Subscription.

RECOMMENDATION

Having considered the above factors and reasons, in particular, in the sub-sections headed “3. Reasons for entering into the Subscription Agreement” and “5. Assessment of principal terms of the Subscription Agreement”, we are of the opinion that (i) the terms of the Subscription Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the Issue and the Subscription is in the interests of the Company and the Shareholders as a whole.

Accordingly, we recommend that the Independent Board Committee advise the Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the EGM to approve the Subscription Agreement, the Issue and the transactions contemplated thereunder, and we further recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully For and on behalf of

Pan Asia Corporate Finance Limited Billy C. W. Cheung Chairman

– 51 –

APPENDIX I

WARRANTS VALUATION REPORT

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Unit 3806, 38/F, China Resources Building, 26 Harbour Road, Wan Chai, Hong Kong Tel (852) 2529 6878 Fax (852) 2529 6806 E-mail info@romagroup.com http://www.romagroup.com

Hao Tian Development Group Limited

Rooms 4917-4932, 49/F, Sun Hung Kai Centre, 30 Harbour Road, Wan Chai, Hong Kong

31 May 2015

Dear Sir/Madam,

Re: Valuation of Fair Value of the Warrants to be Issued by Hao Tian Development Group Limited

In accordance with the instructions from Hao Tian Development Group Limited (hereinafter referred to as the “ Company ”), we have carried out a valuation of the fair value of the warrants carrying rights to subscribe for up to a total of 588,858,000 warrant shares (hereinafter referred to as the “ Warrants ”) to be issued by the Company in relation to the subscription agreement signed between the Company and Asia Link Capital Investment Holdings Limited (hereinafter referred to as the “ Subscriber ”) on 10 April 2015. We are pleased to report that we have made relevant enquiries and obtained other information which we considered relevant for the purpose of providing you with our opinion of the fair value of the Warrants as at 10 April 2015 (hereinafter referred to as the “ Date of Valuation ”).

This report states the purpose of valuation, scope of work, terms and conditions of the Warrants, basis of valuation, valuation methodology, assumptions and sources of information, limiting conditions, remarks and presents our opinion of value.

– 52 –

WARRANTS VALUATION REPORT

APPENDIX I

1. PURPOSE OF VALUATION

This report is prepared solely for the use of the directors and management of the Company for internal reference purpose only. This report is not to be used for any purpose other than that mentioned above, including issue to third parties, without our prior approval of use, form, context in which it is released.

Roma Appraisals Limited assumes no responsibility whatsoever to any person other than the Company in respect of, or arising out of, the contents of this report. If others choose to rely in any way on the contents of this report they do so entirely at their own risk.

2. SCOPE OF WORK

Our valuation conclusion is based on the assumptions stated herein and information provided by the management of the Company and/or its representative(s) (together referred to as the “ Management ”).

In preparing this report, we have had discussions with the Management in relation to the terms and conditions of the Warrants (hereinafter referred to as the “ Terms and Conditions ”) and other relevant information concerning the Warrants. As part of our analysis, we have reviewed such financial information and other pertinent data concerning the Warrants provided to us by the Management and have considered such information and data as accurate and reasonable.

We have no reason to believe that any material facts have been withheld from us. However, we do not warrant that our investigations have revealed all of the matters which an audit or a more extensive examination might disclose.

3. TERMS AND CONDITIONS OF THE WARRANTS

On 10 April 2015 (after trading hours), the Company has entered into subscription agreement with the Subscriber, in relation to the conditional issue of 588,858,000 Warrants to the Subscriber at the issue price of HK$0.01 per 10 Warrants.

The Warrants will entitle the Subscriber to subscribe for 588,858,000 warrant shares at the subscription price of HK$0.5 per warrant share. The subscription rights attaching to the Warrants will be exercisable from the date of issue until the close of business on the second anniversary date from the date of issue.

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WARRANTS VALUATION REPORT

APPENDIX I

A total of 588,858,000 warrant shares will be allotted and issued by the Company upon full exercise of the subscription rights, which represent approximately 20% of the existing issued share capital of the Company and approximately 16.67% of the issued share capital as enlarged by the allotment and issue of the warrant shares, assuming that there will not be any changes in the issued share capital of the Company before the exercise of all the subscription rights.

The terms and conditions of the Warrants are summarized as follows:

Number of the Warrant : 588,858,000 Shares upon Exercise of the Warrants Subscription Price : HK$0.50 per Warrant Share (subject to adjustments) Term : 2 years Transferability of the Warrants : The Warrants are non-transferrable.

4. BASIS OF VALUATION

Our valuation is conducted on a fair value basis. Fair value should represent the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

5. VALUATION METHODOLOGY

Having considered a number of alternative valuation methods, it was concluded that the most appropriate one for valuing the Warrants is the binomial option pricing model. Whilst constructing the valuation model for pricing the Warrants, we have taken into account the following:

• Specific terms and structure of the Warrants as well as the trading conditions and liquidity for the instrument; and

• Dilution effect associated with the exercise, conversion or subscription including cash flows and partial conversion in relation to the Conversion Shares and the Warrants which affect the Company.

– 54 –

WARRANTS VALUATION REPORT

APPENDIX I

5.1 Binomial Option Pricing Model

Binomial option pricing model provides a generalizable numerical method for the valuation of options. The binomial model was first proposed by Cox, Ross and Rubinstein in 1979. It adopts discrete time and non-closed form model of varying price over time of the underlying instruments.

There are three basic steps for the binomial model, namely (i) binomial tree construction, (ii) calculation of option value at each final node, and (iii) sequential calculation of the option value at each preceding node.

5.1.1 Binomial Tree Construction

Binomial tree construction for the underlying asset is based on the up-move factor (u), down-move factor (d), and probability of such moves (p) to determine the up-move price of the underlying asset (Su) and down-move price of the underlying asset (Sd) from the preceding node of the underlying asset (S) based on input parameters such as return volatilities (ơ), risk free rate, time duration of each step (i.e. time interval) (t).

If the dilution effect is incorporated in the calculation, the equation of the diluted price of the underlying asset is as follows:

S = (N0×S0 + N×X)/(N0 + N)

In which

N0 = Number of outstanding shares;

S0 = Initial share price;

N = Number of new shares upon exercising the Warrants; and

X = Exercise price of the Warrants.

The Cox, Ross and Rubinstein (CRR) method was adopted for building the binomial tree in the valuation for the stock price of the target company. The equations of u and d are as follows:

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– 55 –

WARRANTS VALUATION REPORT

APPENDIX I

5.1.2 Calculation of Option Value at Each Final Node

Option value is estimated at each final node in the binomial tree according to the final payoff function of the option, which is formula with the price of the underlying assets at the final node. The final payoff of call option at the maturity date will be: max (0, S – X).

5.1.3 Sequential Calculation of the Option Value at Each Preceding Node

Option value is estimated at each preceding node by backward induction from the final nodes in the binomial tree to compute present value of the option (C) based on the probability of such moves (p) and discount rate, which is the risk free rate. The option value at each node can be estimated as: C = p× (Cu) + (1-p) (Cd).

5.1.4 Schematic Diagrams of the Binomial Model for Option Valuation

Binomial Tree with One Time Step

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Binomial Tree with Multiple Time Steps

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– 56 –

WARRANTS VALUATION REPORT

APPENDIX I

6. ASSUMPTIONS AND SOURCES OF INFORMATION

Key Assumptions and Parameters

10 April 2015

a)	Stock Price (HK$)	0.490
b)	Exercise Price (HK$)	0.500
c)	Risk Free Rate (%)	0.388
d)	Expected Warrant Period (Years)	2.000
e)	Expected Volatility (%)	78.846
f)	Expected Dividend Yield (%)	0.000

Notes:

• a) Stock Price : Based on the closing stock price of the Company (Stock Code: 474.HK) as at the Date of Valuation as extracted from Bloomberg.

• b) Exercise Price : Based on the Terms and Conditions.

• c) Risk Free Rate : The rate was determined with reference to the yields of Hong Kong government bonds and treasury bills as extracted from Bloomberg.

• d) Expected Warrant Period : Calculated based on the Terms and Conditions.

• e) Expected Volatility : With reference to the historical volatilities of the Company (Stock Code: 474.HK) over the expected warrant period as at the Date of Valuation as extracted from Bloomberg.

• f) Expected Dividend Yield : Estimated by Bloomberg regarding the historical dividend payout of the Company (Stock Code: 474.HK).

– 57 –

WARRANTS VALUATION REPORT

APPENDIX I

7. LIMITING CONDITIONS

Our conclusion of the fair value is derived from generally accepted appraisal procedures and practices that rely substantially on the use of various assumptions and the consideration of many uncertainties, not all of which can be easily quantified or ascertained. This appraisal reflects the facts and conditions existing at the Date of Valuation. Subsequent events have not been considered and we are not required to update our report for such events and conditions.

To the best of our knowledge, all data set forth in this report are reasonable and accurately determined. The data, opinion, or estimates identified as being furnished by others, which have been used in formulating this analysis, are gathered from reliable sources; yet, no guarantee is made nor liability assumed for their accuracy.

We have relied on information provided by the Management and the relevant announcements, circulars and financial data published by the Company, if necessary, to a considerable extent in arriving at our opinion of value. We are not in the position to verify the accuracy of all information provided to us. However, we have had no reason to doubt the truth and accuracy of the information provided to us and to doubt that any material facts have been omitted from the information provided. No responsibilities for the operation and financial information that have not been provided to us are accepted.

We have not investigated the title to or any legal liabilities of the Warrants. We have assumed no responsibility for the title to the Warrants appraised. Save as and except for the purpose stated above, neither the whole nor any part of this report nor any reference thereto may be included in any document, circular or statement without our written approval of the form and context in which it will appear. In accordance with our standard practice, we must state that this report is for the exclusive use of the party to whom it is addressed and for the specific purpose stated above. No responsibility is accepted to any third party for the whole or any parts of its contents. The title of this report shall not pass to the Company until all professional fee has been paid in full.

8. REMARKS

Unless otherwise stated, all monetary amounts stated in this valuation report are in Hong Kong Dollars (HK$). We hereby confirm that we have neither present nor prospective interests in the Company, the Warrants or the values reported herein.

– 58 –

WARRANTS VALUATION REPORT

APPENDIX I

9. OPINION OF VALUE

Based on the investigation and analysis stated above, the valuation method employed and key assumptions appended above, the fair value of the Warrants, as at the Date of Valuation, was reasonably stated as below:

Fair Value of the Warrants as at 10 April 2015

Unit Warrant Value (HK$) : 0.171 Number of the Warrants : 588,858,000 Fair Value of the Warrants (HK$) : 100,694,718

Yours faithfully, For and on behalf of

Roma Appraisals Limited

– 59 –

GENERAL INFORMATION

APPENDIX II

1. DISCLOSURE OF INTERESTS OF DIRECTORS AND CHIEF EXECUTIVES IN EQUITY OR DEBT SECURITIES

As at the Latest Practicable Date, the interests and short positions of each Director, chief executive of the Company and their respective associates in the Shares, underlying shares and debentures of the Company or any of its associated corporation(s) (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of the SFO); or were required pursuant to Section 352 of the SFO to be entered into the register referred to therein; or were required pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers to be notified to the Company and the Stock Exchange are set out below:

a. Long positions in Shares as at the Latest Practicable Date:

						Approximate
Name of				Number of		percentage of
Director/chief			Number of	underlying	Total	total issued
executive	Capacity	Nature of interest	Shares held	Shares held	interests	share capital
						(Note 1)
Li Shao Yu	Interest held by controlled	Corporate interest	1,689,248,318	–	1,699,319,078	57.72%
	corporations		(Note 2)
	Beneficial owner	Personal interest		10,070,760
				(Note 3)
Fok Chi Tak	Beneficial owner	Personal interest		1,060,080	1,060,080	0.04%
				(Note 3)

Notes:

1. The percentage of shareholding is calculated on the basis of 2,944,303,100 Shares in issue as at the Latest Practicable Date.

2. These Shares were held (a) directly by Real Power Holdings Limited, which is beneficially owned as to 75% by TRXY Development (HK) Limited; and (b) directly by Asia Link Capital Investment Holdings Ltd., which was wholly-owned by Ms. Li. Accordingly, Ms. Li was deemed to be interested in 1,689,248,318 Shares under the SFO.

3. These are the number of Shares which may fall to be allotted and issued upon exercise of any subscription rights attaching to the share options granted by the Company under the share option scheme adopted on 16 May 2006.

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APPENDIX II

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, none of the Directors, chief executives of the Company and their respective associates had any interests or short positions in the Shares, underlying shares and debentures of the Company or any of its associated corporation(s) (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he was taken or deemed to have under such provisions of the SFO); or were required pursuant to Section 352 of the SFO to be entered into the register referred to therein; or were required pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers to be notified to the Company and the Stock Exchange.

2. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as was known to the Directors and chief executives of the Company, the following persons (other than a Director or chief executive of the Company) had an interest or a short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

(i) Interest in the Shares

Long positions in Shares and underlying shares of equity derivatives of the Company as at the Latest Practicable Date:

					Approximate
		Number of			percentage of
	Number of	underlying			total issued
Name of shareholders	shares held	shares held	Capacity	Total interest	share capital
					(Note 1)
Asia Link Capital Investment	1,637,008,263	–	Beneficial owner	1,637,008,263	55.60%
Holdings Limited	(Note 2)
Notes:

1. The percentage of shareholding is calculated on the basis of 2,944,303,100 shares in issue as at the Latest Practicable Date.

2. Asia Link Capital Investment Holdings Limited is beneficially wholly-owned by Ms. Li Shao Yu.

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GENERAL INFORMATION

APPENDIX II

Save as disclosed herein, as at the Latest Practicable Date, there was no other person so far as was known to the Directors and chief executives of the Company (other than a Director or chief executive of the Company) had an interest or a short position in the Shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

3. DIRECTORS’ SERVICES CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which was not expiring or determinable within one year without payment of compensation (other than statutory compensation).

4. OTHER INTERESTS OF THE DIRECTORS

As at the Latest Practicable Date:

• (a) none of the Directors had any direct or indirect interest in any assets which have, since 31 March 2014, being the date to which the latest published audited consolidated financial statements of the Group were made up, been acquired or disposed of by, or leased to, or were proposed to be acquired or disposed of by, or leased to any member of the Group; and

• (b) none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group which contract or arrangement was subsisting as at the date of this circular and which was significant in relation to the business of the Group as a whole.

5.

EXPERTS’ CONSENTS AND QUALIFICATIONS

The following are the qualifications of the experts who have given opinion or advice which are contained in this circular:

Name Qualification Pan Asia Corporate Finance Limited A corporation licensed to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO Roma Appraisals Limited Asset valuer

– 62 –

GENERAL INFORMATION

APPENDIX II

The letter from the above experts are given as of the date of this circular for incorporation in this circular.

Each of the above expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion therein of its reports, letters and opinions and references to its name in the form and context in which it appears.

As at the Latest Practicable Date, the above expert had not any direct or indirect shareholding in any member of the Group, or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group or any interests, directly or indirectly, in any assets which have been, since 31 March 2014, being the date to which the latest published audited accounts of the Company were made up, acquired, disposed of or leased to any member of the Group, or were proposed to be acquired, disposed of or leased to any member of the Group.

6. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or their respective close associates was interested directly or indirectly in any business, apart from their interest in the Company, which competes or is likely to compete, either directly or indirectly, with the business of the Group.

7. WORKING CAPITAL

The Directors, after due and careful enquiry, are of the opinion that, after taking into consideration the financial resources presently available to the Group, including banking and other facilities and other internal resources, the Group has sufficient working capital for at least the next twelve months from the Latest Practicable Date.

8. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2014, being the date to which the latest published audited consolidated financial statements of the Group were made up.

– 63 –

GENERAL INFORMATION

APPENDIX II

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours (Saturdays and public holidays excepted) at Rooms 4917-4932, 49/F, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong from the date of this circular up to and including the date which is 14 days from the date of this circular:

• (a) the letter from the Independent Board Committee, the text of which is set out on pages 24 and 25 of this circular;

• (b) the letter from the Independent Financial Adviser, the text of which is set out on pages 26 to 51 of this circular;

• (c) the valuation report from RAL, the text of which are set out on Appendix I to this circular;

• (d) the written consents from the experts referred to in paragraph headed “Experts’ consents and qualifications” in this appendix;

• (e) the Subscription Agreement;

• (f) the Warrant Instrument;

• (g) the memorandum and articles of association of the Company;

• (h) the announcements of the Company dated 10 and 13 April 2015; and

• (i) this circular.

10. MISCELLANEOUS

The English text of this circular will prevail over the Chinese text in the case of any inconsistency.

– 64 –

PROCEDURES FOR POLL VOTING

APPENDIX III

The chairman of the meeting will at the EGM demand, pursuant to article 66 of the Articles, poll voting on all resolutions set out in the notice of the EGM.

On a poll, every Shareholder present in person or by proxy or, in the case of a Shareholder being a corporation, by its duly authorised representatives, shall have one vote for every Share of which he/she is the holder.

A Shareholder present in person or by proxy or by authorised representatives who is entitled to more than one vote does not have to use all his/her votes (i.e., he/she can cast less votes than the number of Shares he/she holds or represents) or to cast all his/her votes the same way (i.e., he/ she can cast some of his/her votes in favour of the resolution and some of his/her votes against the resolution).

The poll voting slip will be distributed to Shareholders or their proxies or authorized representatives upon registration of attendance at the EGM. Shareholders who want to cast all their votes entitled may mark a “✓” in either “FOR” or “AGAINST” box corresponding to the resolution to indicate whether he/she supports that resolution. For Shareholders who do not want to use all their votes or want to split votes in casting a particular resolution shall indicate the number of votes cast on a particular resolution in the “FOR” or “AGAINST” box, where appropriate, but the total votes cast must not exceed his/her entitled votes, or otherwise, the voting slip will be spoiled and the Shareholder’s vote will not be counted.

After closing the poll, the Company’s share registrar, Computershare Hong Kong Investor Services Limited, will act as scrutineer and count the votes and the poll results will be published after the EGM.

– 65 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00474)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting of Hao Tian Development Group Limited (“ Company ”) will be held at Room 2702, 27/F., 200 Gloucester Road, Wanchai, Hong Kong on Friday, 26 June 2015 at 10:30 a.m. for the purposes of considering and, if thought fit, passing, with or without modifications, the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

1. “ THAT the Subscription Agreement (as defined in the circular to shareholders of the Company dated 31 May 2015 (the “ Circular ”)) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

2. THAT the Warrant Instrument (as defined in the Circular) be and is hereby approved and confirmed;

3. THAT:

4. (a) the allotment and issue of 588,858,000 Warrant Shares (as defined in the Circular) upon exercise of the Subscription Rights (as defined in the Circular) attached to the Warrants (as defined in the Circular) to the holder(s) of the Warrants be and are hereby approved and confirmed;

5. (b) any one director of the Company be and is hereby authorized to allot, issue and deal with the Warrant Shares;

– 66 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. THAT the director(s) of the Company (“ Director(s) ”) be and are hereby authorised to do all such further acts and things and execute such further documents and take all steps which in their opinion may be necessary, desirable or expedient to implement and/or give effect to the Subscription Agreement, the issue of the Warrants, the grant of the specific mandate for issue of the Warrant Shares upon exercise of the Subscription Rights attaching to the Warrants and all other transactions of the Company which arise following completion of the Subscription Agreement and all other transactions contemplated thereunder with any changes as such Director(s) may consider necessary, desirable or expedient.”

By Order of the Board Hao Tian Development Group Limited Yick Ting Fai Jeffrey Company Secretary

Hong Kong, 31 May 2015

Principal place of business in Hong Kong: Rooms 4917-4932, 49th Floor Sun Hung Kai Centre 30 Harbour Road, Wanchai Hong Kong

Notes:

1. A member entitled to attend and vote at the above meeting (or at any adjournment thereof) is entitled to appoint another person as his proxy to attend and vote in his stead. A proxy need not be a member of the Company.

2. Where there are joint registered holders of any shares, any one of such persons may vote at the above meeting (or at any adjournment thereof), either personally or by proxy, in respect of such shares as if he were solely entitled thereto; but if more than one of such joint holders be present at the above meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

3. In order to be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a certified copy of that power of attorney or authority (such certification to be made by either a notary public or a solicitor qualified to practise in Hong Kong), must be deposited with the branch share registrar and transfer office of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 17121716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not less than 48 hours before the time fixed for holding the above meeting or any adjournment thereof.

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NOTICE OF EXTRAORDINARY GENERAL MEETING

1. Completion and return of the form of proxy will not preclude a member from attending and voting in person at the EGM or any adjourned meeting (as the case may be) should he so wish.

2. The translation into Chinese language of this notice is for reference only. In case of any inconsistency, the English version shall prevail.

As at the date of this notice, the board comprises three executive Directors, namely Mr. Xu Hai Ying, Dr. Zhiliang Ou, JP (Australia), and Mr. Fok Chi Tak and three independent non-executive Directors, namely Mr. Chan Ming Sun Jonathan, Mr. Lam Kwan Sing and Mr. Lee Chi Hwa, Joshua.

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