Aceso Life Science Group Limited — Proxy Solicitation & Information Statement 2017

Jan 25, 2017

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)

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUANCE OF NEW SHARES TO DIRECTOR AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Board is set out on pages 5 to 14 of this circular. A letter from the Independent Board Committee containing its recommendation is set out on pages 15 to 16 of this circular. A letter from the Independent Financial Adviser containing its adviser and recommendation to the Independent Board Committee and the Independent Shareholders is set out on pages 17 to 35 of this circular.

A notice convening the extraordinary general meeting of Hao Tian Development Group Limited to be held at the Room 2702, 27/F., 200 Gloucester Road, Wan Chai, Hong Kong on Friday, 17 February 2017, at 10:30 a.m. is set out on pages 42 to 43 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.

26 January 2017

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Responsibility Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Letter from Central China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix I – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36
Appendix II – Procedures for Poll Voting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
Notice of Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42

– i –

DEFINITIONS

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

• “Announcement”

the announcement of the Company dated 26 September 2016 in relation to (i) the entering into of the Services Agreement between the Company and Mr. Fok; and (ii) allotment and issuance of Emolument Shares to Mr. Fok

“Board”

the board of Directors of the Company

“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

“connected person” has the same meaning as ascribed to it under the Listing Rules

“Directors”

the director(s) of the Company

“EGM”

an extraordinary general meeting of the Company to be convened and held at Room 2702, 27/F, 200 Gloucester Road, Wan Chai, Hong Kong at 10:30 a.m. on 17 February 2017 to consider and, if thought fit, approve the Services Agreement and the allotment and issuance of Emolument Shares to Mr. Fok

• “Emolument Shares”

• the allotment and issuance of 36,452,004 Shares to Mr. Fok pursuant to the Services Agreement

• “Group”

the Company and its subsidiaries

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong”

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

• “Independent Board Committee”

the Board committee comprising all independent nonexecutive directors of the Company, which has been established to give advice to the Independent Shareholders in respect of the Services Agreement

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DEFINITIONS

• “Independent Financial Advisor” Central China International Capital Limited, a licensed or “Central China” 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 to advise the Independent Board Committee and the Independent Shareholders in respect of the Services Agreement

• “Independent Shareholders” the Shareholders who are independent of, and not connected with, Mr. Fok and his associates and are not required to abstain from voting at the EGM

• “Latest Practicable Date”

• 23 January 2017, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein

• “Listing Rules”

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

• “Mr. Fok”

• Mr. Fok Chi Tak, being the executive Director of the Company

• “PRC”

• the People’s Republic of China

• “Services Agreement”

• the services agreement entered into between the Company and Mr. Fok on 26 September 2016, pursuant to which the Company agrees to engage Mr. Fok and Mr. Fok agrees to accept the appointment of the executive Director of the Company for a term of three years commencing from 27 September 2016

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

• “Share(s)”

• ordinary share(s) of the Company

• “Share Award Scheme”

the share award scheme of the Company adopted by the Board on 27 September 2013

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DEFINITIONS

“Shareholder(s)” “Stock Exchange” “%” per cent

the shareholder(s) of the Company

The Stock Exchange of Hong Kong Limited

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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.

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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 business: Mr. Lee Chi Hwa, Joshua Rooms 4917-4932, 49th Floor Sun Hung Kai Centre 30 Harbour Road, Wanchai Hong Kong 26 January 2017

To all Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUANCE OF NEW SHARES TO DIRECTOR AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement of the Company dated 26 September 2016 in relation to the (i) entering into of the Services Agreement and (ii) the allotment and issuance of the Emolument Shares to Mr. Fok.

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LETTER FROM THE BOARD

The purpose of this Circular is to provide you with further details of the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok, being a connected person of the Company under the Listing Rules and to give notice to the Shareholders of the EGM at which ordinary resolutions will be proposed to approve the grant of specific mandate for the allotment and issuance of the Emolument Shares to Mr. Fok and to provide other relevant information in accordance with the Listing Rules.

The Independent Board Committee, comprising all the independent non-executive Directors, has been formed to advise the Independent Shareholders as to whether the Services Agreement is fair and reasonable and in the interests of the Company and the Shareholders as a whole. Independent Financial Adviser has been appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok.

THE EMOLUMENT SHARES TO BE ALLOTTED AND ISSUED TO MR. FOK CHI TAK UNDER THE SERVICES AGREEMENT

On 26 September 2016, the Company and Mr. Fok entered into a Services Agreement, pursuant to which the Company agrees to engage Mr. Fok as, and Mr. Fok agrees to accept the appointment of, the executive director of the Company for a term of three years commencing from 27 September 2016 (the “ Appointment Date ”). Pursuant to the Services Agreement, the Company has agreed to allot and issue 36,452,004 Shares (which was calculated based on the aggregate value of HK$15,000,000 and the average of the closing price of HK$0.4115 per Share as quoted on the Stock Exchange for the last ten consecutive trading days immediately prior to the Appointment Date (the “ Reference Closing Price ”)) to Mr. Fok, subject to the compliance with the requirements under the Listing Rules.

CONDITIONS

The issue and allotment of the Emolument Shares shall be subject to compliance with all requirements under the Listing Rules, including but not limited to (i) the grant of the listing approval by the Stock Exchange in respect of the Emolument Shares and (ii) approval of the independent shareholders at the EGM in respect of the specific mandate for the issue and allotment of the Emolument Shares.

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LETTER FROM THE BOARD

FURTHER DETAILS OF THE EMOLUMENT SHARES

The key terms of the proposed issue of the Emolument Shares are set out below.

• Number of Emolument Shares to be conditionally allotted:

• 36,452,004 Shares, representing approximately 0.872% of the existing total issued Shares of the Company as at the date of the Announcement and 0.864% of the total issued Shares of the Company as enlarged by the issue of the Emolument Shares (assuming no change in the total issued Shares of the Company between the date of the Announcement and the date of issue of the Emolument Shares).

Value of Emolument Shares:

HK$15 million in aggregate based on the Reference Closing Price;

Approximately HK$14.4 million based on the closing price of the Shares on the date of the Announcement.

Schedule of issue:

The following Emolument Shares will be issued on the following dates respectively:

• (a) 6,075,334 shares to be allotted and issued on 26 March 2017, the value of which is equivalent to HK$2,500,000 based on the Reference Closing Price;

• (b) 12,150,668 shares to be allotted and issued on 26 March 2018, the value of which is equivalent to HK$5,000,000 based on the Reference Closing Price;

• (c) 12,150,668 shares to be allotted and issued on 26 March 2019, the value of which is equivalent to HK$5,000,000 based on the Reference Closing Price; and

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LETTER FROM THE BOARD

(d) 6,075,334 shares to be allotted and issued on 26 September 2019, the value of which is equivalent to HK$2,500,000 based on the Reference Closing Price. If Mr. Fok ceases to be an executive director of the Company before any of the above specified date, his entitlement will be calculated on a pro rata basis. Market price of the Emolument Shares: The closing price of the Shares on 26 September 2016 as quoted on the Stock Exchange is HK$0.395 per Share. The average closing price of the Shares for the five consecutive trading days immediately preceding 26 September 2016 as quoted on the Stock Exchange is HK$0.421 per Share.

Status of the Emolument Shares: The Emolument Shares, when issued and fully paid, shall rank pari passu among themselves and with those Shares in issue, with the right to receive all dividends and other distributions declared, made or paid on or after the date of allotment. Funds to be raised: No fund will be raised by the Company as a result of the issue and allotment of the Emolument Shares.

There will be no proceeds from the issue of the Emolument Shares, therefore there will be no net price and issue price per Emolument Share.

There is no restrictions on the subsequent disposal of the Emolument Shares.

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LETTER FROM THE BOARD

ROLES AND RESPONSIBILITIES OF MR. FOK

Mr. Fok, aged 41, was appointed as an executive Director in September 2013. Mr. Fok was also the directors of most of the major operating subsidiaries of the Group and has been the Chief Financial Officer of the Company since December 2010. In addition to the responsibility to oversee the Group’s finance unit and functions, Mr. Fok also involves in:

• (i) the formulation of strategic plans for the business development of the Group;

• (ii) the formulation and execution of various equity financing activities, debt financing activities and merger and acquisition activities (“ M&A ”) of the Group. In particular, through the effort of Mr. Fok, the Company has raised substantial amount of funds during the past few years which enhanced the cashflow of the Group and its capabilities for further business development;

• (iii) the conducting of on-site visits of various potential projects in various parts of the PRC;

• (iv) the day-to-day operation and management of the Group;

• (v) the implementation of all major resolutions and business plans approved by the Board; and

• (vi) the overall supervision of the ongoing compliance by the Company with the Listing Rules and other legal and regulatory requirements.

Mr. Fok also possesses expertise in accounting area. He is a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. Mr. Fok is also a fellow member of the Institute of Chartered Secretaries and Administrators and the Hong Kong Institute of Chartered Secretaries. Mr. Fok has extensive experience in corporate finance, corporate governance, mergers and acquisitions, auditing and financial management.

REMUNERATION POLICY OF THE COMPANY

The Group’s remuneration policies are formulated according to market practices, experiences, skills and performance of individual employee and will be reviewed every year. The Remuneration Committee will consider salaries paid by comparable companies, time commitment and responsibilities in the Group. Remuneration proposals are reviewed and approved with reference to the corporate goals resolved by the Board from time to time.

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LETTER FROM THE BOARD

The emoluments of the Directors are recommended by the Remuneration Committee and determined by the Board. The remuneration package of Mr. Fok has completed the said recommendation and approval procedures.

REASONS AND ADVANTAGES FOR THE ISSUE OF THE EMOLUMENT SHARES

The total remuneration of Mr. Fok (including salaries and other allowances, bonuses, retirement benefit scheme contributions and share award) for each of the years ended 31 March 2015 and 31 March 2016 was approximately HK$3.7 million and HK$8.9 million respectively. Details of the aforesaid remuneration has been disclosed in the annual report of the Company for the year ended 31 March 2016.

The value of Emolument Shares was HK$15 million in aggregate based on the Reference Closing Price, which will be issued to Mr. Fok in stages over a period of 3 years. Therefore, the monetary value of the Emolument Shares will be HK$5 million per year. Taking into account the Emolument Shares, it is estimated that, for the year ending 31 March 2017, Mr. Fok will receive basic remuneration, as both executive Director and the chief financial officer, in the aggregate sum of approximately HK$4.6 million (comprising the aggregate sum of (i) monthly salary of HK$159,720 for 13 months and (ii) Emolument Shares with value of HK$2.5 million) plus bonus, which is discretionary in nature and subject to the final determination of the Board. Taking into account the fact that the amount of bonus during the past few years was in the range of HK$2 million and HK$3 million, it is anticipated that the bonus for the year ending 31 March 2017 will not exceed HK$3 million. Save and except the Emolument Shares, Mr. Fok shall not be entitled to any cash remuneration in the performance of his duties as executive Director. There will also be no award shares to be allotted and issued to Mr. Fok pursuant to the Share Award Scheme for the year ending 31 March 2017.

The Directors are of the view that, although the remuneration of Mr. Fok is substantially higher than other executive Directors, his remuneration packages are not excessive due to the following reasons: (i) the duties and responsibilities of Mr. Fok are much more heavy as compared with other executive Directors as he does not only exercising overall supervision of the Group but he also manages other aspects of the business of the Group, including but not limited to, commercial, financial, legal and implementation aspects; and (ii) his workload is much higher as compared with other executive Directors since he works both within and outside office hours and manages the business of the Group all around the clock. In determining the remuneration of Mr. Fok, the Directors have also referred to the remuneration packages of the senior management

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LETTER FROM THE BOARD

in financial institutions who are responsible for merger and acquisitions, fund raising and other financing activities. Unlike other executive Directors who are mostly responsible for formulating the overall business strategies and exercising overall supervision of the Group, Mr. Fok is, in addition to the aforesaid responsibilities, actively involved in most of the business segments of the Group and their daily operation and is the director of most major operating subsidiaries of the Group.

The Company considers Mr. Fok to be a key personnel for the business and operations of the Group and expects Mr. Fok to make valuable contributions to the Group’s future development, in particular, the financial services business. The terms of the Services Agreement and the number of the Emolument Shares were recommended by the Remuneration Committee and determined by the Board taking into account (i) the Group’s operating results, (ii) the performance, commitment and contribution of Mr. Fok to the Group, (iii) the skills, expertise, professional qualifications and experiences of Mr. Fok, (iv) the potential benefits of successfully retaining Mr. Fok to stay in and serve the Group instead of being solicited by other corporations, (v) Mr. Fok having joined the Group for six years and is familiar with the culture, vision, business and operation of the Group, (vi) the market standards and (vii) the future business plan of the Group and the role of Mr. Fok in those potential projects. In particular, by linking up the performance of the share price and the remuneration of Mr. Fok, the Directors consider that the Emolument Shares can provide more incentives to retain and motivate Mr. Fok to participate in the continuing operation and long-term development of the Company. With the effort of Mr. Fok, (i) the money lending business of the Group has experienced growth, (ii) the Group has completed an acquisition of a brokerage firm in Hong Kong which possess the required licence to carry out Type 1 activity (Dealing in Securities) and (iii) the Group is involved in the restructuring of Fujian Nuoqi Co., Ltd. and assists in the submission of resumption proposal to the Stock Exchange. Mr. Fok was also responsible for various mergers and acquisitions (“ M&A ”) activities of the Group and will continue to identify and locate further M&A opportunities in the future. Taking into the aforesaid factors, the Remuneration Committee and the Board consider that the number and value of the Emolument Shares are appropriate and not excessive and comply with paragraph B.1 of the Corporate Governance Code as set out under Appendix 14 of the Listing Rules.

The Board (including the independent non-executive directors of the Company) is of the view that the terms of the Services Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Furthermore, there will not be any cash outflow by the Group on a regular and periodic basis for the issue and allotment of Emolument Shares. On the other hand, such issue and allotment of Emolument Shares will provide more incentive to Mr. Fok by rewarding him with a direct economic interest in the Company with a view to attaining the long term business objectives of the Group.

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LETTER FROM THE BOARD

Mr. Fok, being the Director who was interested in the transactions, has abstained from voting on the board resolutions approving the Services Agreement and the proposed issue of the Emolument Shares.

REASONS WHY THE EMOLUMENT SHARES ARE NOT ISSUED UNDER SHARE AWARD SCHEME

The Company is always considering granting award shares to its Directors and other staff from time to time with reference to the performance of the Group. The Directors, may, if consider appropriate, refresh the limit of the Share Award Scheme or otherwise adopt new share award scheme, if appropriate.

Despite the above, the allotment of the Emolument Shares is not a grant under the Share Award Scheme. The reasons why the issue Emolument Shares is not conducted under the Share Award Scheme are as follows:

• (a) there is a fundamental difference between the share awards under the Share Award Scheme and the Emolument Shares to the effect that:

• (i) award shares are granted at the sole and absolute discretion of the Board in addition to the contractual remuneration of the employees of the Group and it is not up to the employees to decide as to whether they are awarded any shares or not. Such award shares are allotted and issued without consideration to be paid by the relevant allottees; and

• (ii) the Emolument Shares are the remuneration of Mr. Fok which Mr. Fok shall be contractually entitled, the number of which were agreed between the Company and Mr. Fok after arm’s length negotiations with reference to the roles and responsibilities and potential contribution of Mr. Fok to the Group. In essence, the Emolument Shares are not “award” to Mr. Fok and are to be allotted and issued to Mr. Fok with valuable consideration, being the work and effort to be contributed by Mr. Fok;

• (b) share awards under the Share Award Scheme are determined with reference to the past performance of the employees while the Emolument Shares are determined with reference to the potential future contribution of Mr. Fok to the Group; and

• (c) save and except the Emolument Shares, Mr. Fok is not entitled to any cash remuneration in the performance of his duties as executive Director.

In light of the above, the Emolument Shares are not treated as shares awarded under the Share Award Scheme and the Board (including independent non-executive Directors) consider the issue of the Emolument Shares to be fair and reasonable.

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LETTER FROM THE BOARD

INFORMATION ABOUT THE GROUP

The Company is an investment holding company. The principal businesses of the Group comprises financial services, securities investment, trading of futures and logistics and warehousing.

ESTABLISHMENT OF INDEPENDENT BOARD COMMITTEE AND APPOINTMENT OF INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprising all the independent non-executive Directors has been established to advise and give recommendations to the Independent Shareholders on the terms of the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok.

Central China has been appointed as the Independent Financial Adviser to make recommendations to the Independent Board Committee and the Independent Shareholders on the terms of the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok.

EGM

An EGM will be convened and held to consider and, if thought fit, to approve the terms of the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok, a connected person of the Company under the Listing Rules. Mr. Fok and his associates are required to abstain from voting on the relevant resolution in respect of the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok at the EGM. As at the Latest Practicable Date, Mr. Fok held 15,723,270 Shares and 666,336 share options of the Company. Mr. Fok is entitled to exercise control in respect of those Shares and share options.

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.

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LETTER FROM THE BOARD

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.

RECOMMENDATION

The Directors (including the independent non-executive Directors) consider that the terms of the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM to approve the grant of the specific mandate for the allotment and issuance of the Emolument Shares to Mr. Fok.

Your attention is drawn to (i) the letter from the Independent Board Committee set out on pages 15 to 16 of this circular, which contains its recommendation to the Independent Shareholders as to the terms of the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok; and (ii) the letter from the Independent Financial Adviser set out on pages 17 to 35 of this circular, which contains its advice to the Independent Board Committee and the Independent Shareholders in relation to the terms of the Services Agreement and the allotment and issuance of the Emolument Shares to Mr. Fok and reasons considered by it in arriving at its opinion.

ADDITIONAL INFORMATION

Your attention is also drawn to the general information set out in the Appendix I to this circular.

Yours faithfully,

By Order of the Board

Hao Tian Development Group Limited Xu Hai Ying Executive Director

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 00474)

26 January 2017

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUANCE OF NEW SHARES TO DIRECTOR

We refer to the circular dated 26 January 2017 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 as to whether the terms of the Services Agreement and the allotment and issuance of Emolument Shares to Mr. Fok are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Central China International Capital 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 terms of the Services Agreement and the allotment and issuance of Emolument Shares to Mr. Fok.

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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 terms of the Services Agreement and the allotment and issuance of Emolument Shares to Mr. Fok. We concur with the views of the Independent Financial Adviser that the terms of the Services Agreement and the allotment and issuance of Emolument Shares to Mr. Fok are fair and reasonable 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 terms of the Services Agreement and the allotment and issuance of Emolument Shares to Mr. Fok.

Yours faithfully, For and on behalf of the Independent Board Committee of Hao Tian Development Group Limited

Chan Ming Sun, Jonathan Lam Kwan Sing Lee Chi Hwa, Joshua Independent non-executive Independent non-executive Independent non-executive Director Director Director

– 16 –

LETTER FROM CENTRAL CHINA

The following is the text of a letter of advice from the Independent Financial Adviser, for incorporation in this circular setting out is recommendation to the Independent Board Committee and the Independent Shareholders in relation to the issue of the Emolument Shares.

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Suites 1505-1508, Two Exchange Square, 8 Connaught Place, Central, Hong Kong

26 January 2017

To the Independent Board Committee and

the Independent Shareholders of Hao Tian Development Group Limited

Dear Sirs,

CONNECTED TRANSACTION INVOLVING ALLOTMENT AND ISSUE OF NEW SHARES TO DIRECTOR

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in connection with the terms of the Services Agreement and the proposed allotment and issue of new Shares to Mr. Fok Chi Tak (“ Mr. Fok ”), details of which are set out in the Letter from the Board (the “ Letter from the Board ”) in the circular of the Company dated 26 January 2017 (the “ Circular ”), of which this letter forms part. Capitalised terms used in this letter have the same meanings as defined in the Circular, unless the context requires otherwise.

On 26 September 2016, the Company and Mr. Fok entered into a new director’s services agreement (the “ Services Agreement ” or “ SA ”), which replaced the one dated 27 March 2013 entered into between them. Pursuant to the SA, the Company agrees to engage Mr. Fok as, and Mr. Fok agrees to accept the appointment of, executive director (the “ ED ”) of the Company for a term of three years commencing from 27 September 2016 (the “ Appointment Date ”).

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LETTER FROM CENTRAL CHINA

Pursuant to the SA further, the Company has agreed to allot and issue to Mr. Fok 36,452,004 Shares (the “ Emolument Shares ”), the number of which was calculated based on the aggregate value of HK$15 million and the average of the closing prices of the Shares as quoted on the Stock Exchange for the last 10 consecutive trading days (the “ 10-Trading Day Period ”) immediately prior to the Appointment Date (the “ Reference Closing Price ”), namely, HK$0.405 per Share on each of 12 and 13 September 2016, HK$0.4 on each of 14, 15 and 19 September 2016 (16 September being a public holiday), HK$0.42 on 20 September 2016, HK$0.435 on each of 21 and 22 September 2016, HK$0.42 on 23 September 2016 and HK$0.395 on 26 September 2016, subject to compliance with the requirements under the Listing Rules. Accordingly, the average closing price per Share during the 10-Trading Day Period is HK$0.4115.

Being ED of the Company, Mr. Fok is a connected person of the Company as defined under Chapter 14A of the Listing Rules (“ Chapter 14A ”). The allotment and issue of the Emolument Shares to Mr. Fok (the “ Issue of Emolument Shares ” or “ Issue ”) constitutes a nonexempt connected transaction under Chapter 14A, and is subject to reporting, announcement and Independent Shareholders’ approval requirements.

The EGM will be convened to consider and, if thought fit, to approve the grant of specific mandate for the Issue. Mr. Fok, who is the director interested in the transactions, and his associates is required to abstain from voting on the relevant resolution(s) in respect of the Issue at the EGM.

An Independent Board Committee comprising Mr. Chan Ming Sun Jonathan, Mr. Lam Kwan Sing and Mr. Lee Chi Hwa Joshua, all being independent non-executive directors of the Company, has been established to give advice to the Independent Shareholders on whether the terms of the Issue are fair and reasonable and the Services Agreement and the Issue are in the interests of the Company and the Shareholders as a whole. We, Central China International Capital Limited, have been appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

BASIS OF OUR OPINION

In formulating our opinion, we have relied on the accuracy of the information and representations contained in the Circular and have assumed that all information and representations made or referred to in the Circular were true at the time they were made and continue to be true as at the Latest Practicable Date. We have also relied on our discussion with the Directors and the management of the Company regarding the Group, including the information and representations contained in the Circular. We have also assumed that all statements of belief, opinion and intention made by the Directors and management of the Company in the Circular were reasonably made after due enquiry. We consider that we have reviewed sufficient information to reach an informed view, to justify our reliance on the accuracy of the information contained in the Circular and to provide a reasonable basis for our advice.

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LETTER FROM CENTRAL CHINA

We have no reason to suspect that any material facts have been omitted or withheld from the information contained or opinions expressed in the Circular nor to doubt the truth, accuracy and completeness of the information and representations provided to us by the Directors and management of the Company. We have not, however, conducted an independent in-depth investigation into the business and affairs of the Group, its subsidiaries or Mr. Fok or their respective associates nor have we carried out any independent verification of the information supplied.

OUR INDEPENDENCE

We were 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:

Date	Type of transaction	Details of work performed	Result
14 November 2014	Proposed refreshment of general	Please refer to pages 13-23 of	Approved by the Company’s
	mandate	the Company’s circular dated	independent shareholders at an
		11 December 2014	extraordinary general meeting
			held on 30 December 2014
10 April 2015	Connected transaction for the	Please refer to pages 26-51 of	Approved by the Company’s
	issue of unlisted warrants	the Company’s circular dated	independent shareholders at an
		31 May 2015	extraordinary general meeting
			held on 26 June 2015
5 January 2016	Connected transaction in	Please refer to pages 17-41 of	Approved by the Company’s
	relation to the issue of new	the Company’s circular dated	independent shareholders at an
	shares to connected persons	4 March 2016	extraordinary general meeting
	under share award scheme		held on 22 March 2016

Apart from normal professional fees for our services to the Company in connection with the engagements described above, there are no other arrangements under which we will receive any fees and/or benefits from the Group. As at the Latest Practicable Date, we were not aware of any relationships or interests between us and the Company, Directors, chief executive or substantial shareholders of the Company, or any of their respective associates. We are independent under Rule 13.84 of the Listing Rules to act as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in connection with the Issue.

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LETTER FROM CENTRAL CHINA

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Issue, we have taken into consideration the following principal factors and reasons:

1. Background of and reasons for the Issue

(a) Business overview of the Group

The Company is an investment holding company and is principally engaged in the business of financial services, securities investment, trading of futures and logistics and warehousing. Set out below is a summary of the financial performance of the Group as extracted from its annual report for the year ended 31 March 2016 (the “ AR 2015/16 ”):

	For the financial year	For the financial year
	ended 31 March
	2016	2015
	HK$000	HK$000
Revenue	129,986	60,899
Net profits	465,974	1,522,378
Net profit attributable to owners of
the Company	524,398	1,522,565
Total assets	8,428,362	6,193,193
Net asset value	6,659,881	4,925,310

We note from the AR 2015/16 that the Group recorded revenue of approximately HK$130 million for the year ended 31 March 2016, representing an increase of approximately 113% from the corresponding period last year of HK$61 million. According to the Directors, the increase was mainly attributable to the increase in the number of customers for the Group’s property mortgaged loans and personal loans. Interest expense of approximately HK$30.9 million (2015: approximately HK$23.8 million) was incurred for bank borrowings obtained solely for the Group’s money lending business. However, net profits attributable to Shareholders dropped substantially from approximately HK$1.52 billion of last year to HK$524 million, which represented a drop of approximately 65%.

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LETTER FROM CENTRAL CHINA

The Directors indicated that the volatile stock market and the recent downturn of the property market in Hong Kong had posed new challenges for the Group’s money lending businesses. The Group will grasp such business environment where opportunities and challenges co-exist, capture the opportunities in money lending market, strive to provide diversified, high quality and tailor-made loan products and service to maintain its growth in this segment. In view of the possible property market adjustment, the Group will also continue to strengthen the risk control on the money lending business and optimise the scale of operation.

Furthermore, following the implementation of the favorable financial policies in Hong Kong, such as the Shanghai-Hong Kong Stock Connect, mutual recognition of funds and the prospective Shenzhen-Hong Kong Stock Connect, the Group is optimistic about the future equity securities markets of Hong Kong, and will prudently capture the opportunities in connection with trading in listed securities and continue to identify more investment opportunities to broaden investment strategy and balance investment risks. Depending on the market conditions, the Group is also considering to adjust its portfolio of securities investment and may acquire additional securities and dispose of some of the securities currently held by the Group.

(b) Information on Mr. Fok

Mr. Fok was appointed as ED of the Company in September 2013 and has been the Chief Financial Officer (the “ CFO ”) of the Company since December 2010. In addition to acting as directors of various subsidiaries of the Group, Mr. Fok currently serves as an executive director of Far East Holdings Limited (stock code: 36, a company listed on the Main Board of the Stock Exchange).

Mr. Fok holds a master degree in business administration from the University of Hong Kong. He is a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of Chartered Certified Accountants. Mr. Fok is also a fellow member of the Institute of Chartered Secretaries and Administrators and the Hong Kong Institute of Chartered Secretaries. Mr. Fok has extensive experience in corporate finance, corporate governance, mergers and acquisitions, auditing and financial management.

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LETTER FROM CENTRAL CHINA

Upon our further enquiry with the Company, we understand that Mr. Fok, being ED, is also tasked to (including but not limited to the following):

• (i) develop a vision and strategic plan for the Group;

• (ii) identify, assess, and report to the Board any internal and external issues that affect the operations and financial performance of the Company periodically;

• (iii) develop operational plans which incorporate the goals and objectives that work towards the strategic direction of the Company and implementing the strategies and other ad-hoc assignments from the Board of the Company;

• (iv) oversee the Group’s fund raising activities and potential merger and acquisition activities;

• (v) explore market investment opportunities and organise staff responsible for conducting due diligence of investment projects;

• (vi) set up an efficient and effective management team and conduct training when necessary; and

• (vii) supervise the day-to-day operations of the Company and ensure the good order of the budgeting, financial resources allocation, internal control and compliance of the Company.

Based on the above, the Company considers Mr. Fok to be a key personnel for the business and operations of the Group and expects Mr. Fok to make valuable contributions to the Group’s future development, in particular, the financial services business.

The total remuneration of Mr. Fok (including salaries and other allowances, bonuses, retirement benefit scheme contributions and share award) for each of the years ended 31 March 2015 and 31 March 2016 was approximately HK$3.7 million and HK$8.9 million respectively. Details of the above-mentioned remuneration were disclosed in the Company Annual Report 2014/15 and Annual Report 2015/16 (“ AR 2015/16 ”), respectively.

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LETTER FROM CENTRAL CHINA

(c) Remuneration policy of the Company

The Group’s remuneration policies are formulated according to market practices, experiences, skills and performance of individual employee and will be reviewed every year.

The emoluments of the Directors are recommended by the Remuneration Committee and determined by the Board having regard to the Company’s operating results, individual performance and comparable market standards.

Save and except the Emolument Shares, Mr. Fok shall not be entitled to any cash remuneration in the performance of his duties as executive Director. The remuneration of Mr. Fok is substantially higher than the other executive Directors (please see below) since the duties and responsibilities of Mr. Fok are much more heavier as compared with that of the other executive Directors.

As mentioned above, the emoluments of the Directors are recommended by the Remuneration Committee and determined by the Board. The remuneration package of Mr. Fok has completed the above recommendation and approval procedures.

(d) Reasons and benefits of the Issue

According to the Company, the Issue is part of its remuneration system and the number of the Emolument Shares is determined after considering factors such as Mr. Fok’s years of service, role and responsibilities in the Group. The Issue aims to provide sufficient incentives to attract, retain and motivate Mr. Fok to participate in the continuing operation and long-term development of the Company, and to recognise Mr. Fok’s contributions to the growth of the Company. In addition, there will not be substantial cash outflow by the Company under the Issue.

Based on the information provided by the Company, including the background, working experience and the past contribution of Mr. Fok to the Group, we note that Mr. Fok (i) has had extensive involvement in and made significant contributions to the Group’s operations and/or business development; (ii) has been performing satisfactorily throughout his tenure at the Company; and/or (iii) is currently in charge of executive functions in the Company or its subsidiaries as described above, we concur with the Company that the expertise and experience of Mr. Fok will be valuable and pivotal to the future development of the Group. As such, the Company chooses to reward Mr. Fok by giving him Emolument Shares as part of his ED remuneration package is, in our view, fair and reasonable and in the interest of the Group and the Shareholders as a whole.

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LETTER FROM CENTRAL CHINA

(e) Mr. Fok’s ED remuneration package

We have reviewed a copy of the SA (obtained from the Company) and understood that Mr. Fok’s remuneration package in respect of acting as one of the Company’s EDs, consists of three parts:

• (i) the Emolument Shares;

• (ii) discretionary bonus each year, which is based on the Group’s performance in the year, as a short-term incentive determined with reference to Mr. Fok’s performance, duties and responsibilities with the Company and the prevailing market situation; and

• (iii) the share award scheme (the “ SAS ”), which was adopted by the Company’s board of directors on 27 September 2013 and aims to align the performance of qualifying employees directly with the performance of the Company and the interests of Shareholders through the ownership of Shares. Mr. Fok was granted approximately 15.7 million Shares under the share award scheme on 3 February 2016.

2. Review of Mr. Fok’s total remuneration packages

We have requested from the Company the minutes of the meeting of the remuneration committee and that of the Board of Directors approving the service contract of Mr. Fok as the Company’s ED. We are satisfied that the necessary procedures for approving the service contract had been complied with.

We have also reviewed a copy of the director’s services agreement for the CFO position to which Mr. Fok has also been appointed, and understood that the remuneration package for Mr. Fok acting as the CFO is similar to that of the ED, except instead of being given the Emolument Shares, Mr. Fok is paid a monthly cash salary (“ MCS ”) as the CFO.

When asked why Mr. Fok is not paid a MCS to act as ED, the Company explained that to pay Mr. Fok a MCS as ED, the Company will incur cash outflow on a regular and periodic basis, and it does not serve the purpose of giving rewards in equity form to enable Mr. Fok to take advantage of the potential growth of the Company and align Mr. Fok’s interest with long-term performance with the Group. The Issue, on the other hand, may be able to give Mr. Fok more incentive by rewarding him with a direct economic interest in the Company with a view to attaining the long term business objectives of the Group.

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LETTER FROM CENTRAL CHINA

We understand from the Company that the constituent elements of the remuneration package of the other EDs of the Company, namely, Mr. Xu Hai Ying (“ Mr. Xu ”) and Dr. Zhiliang Ou (“ Dr. Ou ”), are similar to that of Mr. Fok, except that each of Mr. Xu and Dr. Ou is paid a MCS instead of Emolument Shares. The lack of Emolument Shares in Mr. Xu’s and Dr. Ou’s ED remuneration packages may be explained by the fact that Mr. Fok, in addition to being one of the EDs of the Company, is also the Company’s CFO, which entitles him to be paid a cash salary already whereas Mr. Xu and Dr. Ou hold no other positions in the Company in addition to ED.

We have also inquired of the Company as to why Mr. Fok was going to be alloted and issued the Emolument Shares instead of being given Shares under the SAS. The Company replied that the SAS Shares and the Emolument Shares are granted to the recipient(s) on different basis. The SAS Shares are awarded to qualifying employees in recognition of their past service rendered to the Company. The Emolument Shares, on the other hand, are alloted and issued to Mr. Fok, among others, as an incentive, on the occasion of the commencement of a new service agreement, to contribute further to the future development of the Company. Since the Issue of the Emolument Shares is more suited for encouraging Mr. Fok to contribute to the Company’s future development, we share the Company’s view that the Emolument Shares instead of SAS Shares should be alloted and issued to Mr. Fok as part of his remuneration on this occasion.

Another point worth noting in respect of the different basis of SAS Shares and Emolument Shares is that qualifying staff receive their SAS shares on top of their respective salaries and remuneration. In other words, SAS shares are granted to the staff at the sole discretion of the Company’s board of directors, and the staff is not legally nor contractually entitled to the same. Moreover, the number of SAS Shares granted to the staff concerned is not subject to negotiation. However, in Mr. Fok’s case, Mr. Fok is entitled to the Emolument Shares as part of his remuneration under the SA contractually and the number of Emolument Shares allotted and issued to Mr. Fok is subject to negotiation.

As regards the alternative of granting share options to Mr. Fok under the share option scheme, which was adopted by the Company in September 2015, it should be noted that Mr. Fok is required to pay a subscription price in exercising the share options and he can only enjoy the potential reward if he realises the options when the exercise price is above the subscription price. As share options require financial outlay on the part of Mr. Fok, the Company is therefore of the view, with which we concur, that the grant of share options may not necessarily be an appropriate means to reward Mr. Fok for acting as ED.

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LETTER FROM CENTRAL CHINA

Finally, we have compared Mr. Fok’s total remuneration package with that of other senior executives in similar positions in some of the listed companies in Hong Kong. The criteria for choosing the senior executives for comparison are as follows: (i) similar to Mr. Fok, they must hold down two senior positions in the companies in which they work for e.g. CFO + ED, chief executive officer (“ CEO ”) + ED, chief operating officer (“ COO ”) + ED; (ii) the market captialisation of the companies the senior executives work for should be similar to that of the Company and should not in any event exceed that of the Company by a large margin, e.g. 3 times in order to prevent meaningless comparison; and (iii) the companies are chosen from Table 2 below in order to control the size of the comparison.

Based on the above selection criteria, our findings are set out in the following Table 1.

Table 1: Comparison with other senior executives

					Net profits
					(losses) of the
	Market				Company for the
	capitalisation				year ended	Remuneration
	as at				31 December	as a percentage
	18 November			Total annual	2015/	of net profits
Company	2016	Name	Capacity	remuneration	31 March 2016	for the year
Chinese People Holdings Company Limited	HK$916,733,946	Dr. Mo Shikang	CEO + ED	HK$1,958,492	(HK$148,783,753)	N/A
(“Chinese People”) (stock code: 681)				(note 1)	(note 2)
Shirble Department Store	HK$1,472,050,000	Mr. Yang Ti Wei	CEO + ED	HK$4,611,295	HK$58,404,697	7.9%
Holdings (China) Limited (“Shirble”)				(note 3)	(note 4)
(stock code: 312)
China Pioneer Pharma Holdings Limited	HK$3,973,335,320	Mr. Wang Yinping	CEO + ED	HK$1,254,877	HK$200,618,663	0.625%
(“China Pioneer”) (stock code: 1345)				(note 5)	(note 6)
The Company	HK$1,588,435,004	Mr. Fok	CFO + ED	HK$8.9 million	HK$466 million	1.9%
Minimum						0.625%
Maximum						7.9%
Average						2.8%

Notes:

1. Equivalent to RMB1,684,000 2. Equivalent to (RMB127,931,000) 3. Equivalent to RMB3,965,000 4. Equivalent to RMB50,219,000 5. Equivalent to RMB1,079,000

2. Equivalent to RMB172,501,000

(Exchange rate: 1 RMB = HK$1.163)

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LETTER FROM CENTRAL CHINA

As can be seen from Table 1 (column 7 therein), Mr. Fok’s total remuneration for the year ended 31 March 2016, as a percentage of net profits, was within the remuneration ranges of the comparable senior executives and is lower than the average 2.8% by approximately 0.9%.

Taking into account the Emolument Shares, it is estimated that, for the year ending 31 March 2017, Mr. Fok will receive basic remuneration, as both ED and CFO, in the aggregate sum of approximately HK$4.6 million (i.e. monthly salary of HK$159,720 x 13 + Emolument Shares worth HK$2.5 million), exclusively of bonus (if any) yet to be determined by the Board of Directors. Based on the above, we are of the view that Mr. Fok’s remuneration packages, on balance, are not excessive to that of his peers.

Having considered the factors in sub-sections 1 and 2 and noted, in particular: (i) no cashflow impact on rewarding Mr. Fok with Emolument Shares instead of MCS as ED; (ii) the Company's rejection of share options as a constituent element of Mr. Fok’s remuneration as ED for the purpose of not subjecting him to subscription payments; (iii) the Issue is subject to a vesting timetable which will stop operating should Mr. Fok leave the employ of the Company (please see below sub-section); and (iv) Mr. Fok is given an incentive to contribute to the Company's future development, the Issue of Emolument Shares to Mr. Fok, while not in the ordinary and usual course of business of the Group, is nevertheless, in our view, on normal commercial terms and is incidental to the Group’s development of its ordinary and usual course of business, hence in the interests of the Company and Shareholders as a whole.

3. Principal terms of the Issue

The key terms of the proposed Issue are set out below.

Number of Emolument : 36,452,004 Shares, representing approximately Shares to be 0.872% of the existing total issued Shares of the conditionally allotted Company and 0.864% of the total issued Shares of the Company as enlarged by the issue of the Emolument Shares (assuming no change in the total issued Shares of the Company between the date of this announcement and the date of issue of the Emolument Shares).

Value of Emolument : HK$15,000,000 in aggregate based on the Reference Shares Closing Price.

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LETTER FROM CENTRAL CHINA

• Conditions precedent : The proposed Issue is subject to the following conditions including but not limited to: 1. the grant of the listing approval by the Stock Exchange in respect of the Emolument Shares; and

• 1. the approval of the Independent Shareholders at the EGM in respect of the special mandate to issue and allot the Emolument Shares.

• Timing of issue : Subject to the compliance with the requirements under the Listing Rules, and Mr. Fok remaining as ED on each of the following issue dates, the Emolument Shares will be issued in accordance with the timetable below: (a) 6,075,334 Shares to be allotted and issued on 26 March 2017, the value of which is equivalent to HK$2,500,000 based on the Reference Closing Price;

• (b) 12,150,668 Shares to be granted on 26 March 2018, the value of which is equivalent to HK$5,000,000 based on the Reference Closing Price;

• (c) 12,150,668 Shares to be granted on 26 March 2019, the value of which is equivalent to HK$5,000,000 based on the Reference Closing Price; and

• (d) 6,075,334 Shares to be granted on 26 September 2019, the value of which is equivalent to HK$2,500,000 based on the Reference Closing Price.

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LETTER FROM CENTRAL CHINA

Should Mr. Fok cease to be ED of the Company before any of the above specified date, his entitlement will be calculated on a pro rata basis.

Funds to be raised : No funds will be raised as a result of the Issue. Status of Emolument : The Emolument Shares, when issued and fully Shares paid, shall rank pari passu in all respects among themselves and with all those Shares in issue, with the right to receive all dividends and other distributions declared, made or paid on or after the date of allotment.

There will be no proceeds from the Issue; therefore, there will be no net price and issue price per Emolument Share. There are also no restrictions on the subsequent disposal of the Emolument Shares.

4. Assessment of the terms of the Issue

To assess the fairness and reasonableness of the terms of the Issue, we have compared such terms with those of other share awards granted by comparable companies which are listed on the Stock Exchange.

Review of comparable issuance

Based on the information available from the Stock Exchange’s website, we have, to our best knowledge, identified 17 comparable issuance (the “ Comparable Issuance ”) by 16 companies (the “ Grant Comparables ”) which had announced the granting of award shares to their directors and/or employees during the period from September 2015 to September 2016 (the “ Review Period ”), being approximately 12 months preceding the Appointment Date, for comparison purposes. We consider that the length of the Review Period to be a commonly adopted time span for the analysis which covers sufficient number of comparable companies to reflect the current practice in the market in respect of the granting of award shares. This could also avoid a biased result obtained within a short period of time. The comparison is set out in Table 2 below.

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LETTER FROM CENTRAL CHINA

Table 2 – Issue terms of the Grant Comparables and the Company

				Percentage of
			Percentage of	number of
			total number	award shares to
			of award	each individual
			shares to the	awardee to
Company name	Date of		total issued	the total issued
(stock code)	announcement	Awardee(s)	share capital	share capital	Vesting period
Bosideng International	5 August 2016	66 selected persons	2.04%	N/A (Note)	The shares will be vested
Holdings Limited					on 5 August 2017, 5
(3998)					August 2018 and 5
					August 2019, i.e. 3 years
Chinese People (681)	27 July 2016	14 selected persons	2.99%	N/A	N/A
Tencent Holdings	6 July 2016	any employee, executives	0.5974%	N/A	The award shares are
Limited (700)		or officers, directors			vested subject to the
		of any member of			fulfilment of certain
		the group or any			conditions but the length
		invested entity and any			of the vesting period was
		consultant, adviser or			not mentioned
		agent of any member of
		the group
Semiconductor	26 May 2016	3 Directors	0.02%	0.033%, 0.005%	N/A
Manufacturing				and 0.005%
International
Corporation (981)
First Pacific Company	15 April 2016	7 selected persons	0.1004%	N/A	N/A
Limited (142)
Fosun International	1 April 2016	69 selected participants	0.05983%	N/A	The shares will be vested
Limited (656)					on 31 March 2017, 31
					March 2018 and 31
					March 2019, i.e. 3 years
Hao Tian Development	29 January 2016	21 selected participants	0.9%	N/A	N/A
Limited (474)
Biostime International	31 December	(i) Mr. Luo Fei, chief	0.15%	0.02% for Mr.	31 December 2016, i.e. 1
Holdings Limited	2015	executive officer,		Luo Fei, Ms.	year
(1112)		executive Director		Kong Qingjuan,
		and chairman, (ii) Ms.		0.10% for 4
		Kong Qingjuan, chief		directors of
		operating officer and		subsidiaries of
		an executive Director,		the Company
		(iii) 4 directors		and 0.01% for 5
		of subsidiaries of		Participants are
		the Company; 5		not connected
		Participants are not		persons
		connected persons
Biostime International	29 December	54 Selected Participants	0.28%	N/A	The awarded shares will be
Holdings Limited	2015				vested on 30 December
(1112)					2016 and 1 April 2017,
					i.e. 1.5 years
Universal Health	28 December	13 grantees	0.85%	N/A	N/A
International Group	2015
Holdings Limited
(2211)

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LETTER FROM CENTRAL CHINA

				Percentage of
			Percentage of	number of
			total number	award shares to
			of award	each individual
			shares to the	awardee to
Company name	Date of		total issued	the total issued
(stock code)	announcement	Awardee(s)	share capital	share capital	Vesting period
Phoenix Healthcare	22 December	65 selected participants	0.30%	0.01% for the	The awarded shares will be
Group Company	2015	including 4 directors		4 directors	vested on 24 December
Limited (1515)				respectively	2015, 1 January, 2017,
					1 January, 2018 and 1
					January, 2019, i.e. 4
					years
Shirble (312)	16 December	60 Eligible Employees	0.55%	none of them has	N/A
	2015	who are not connected		received more
		persons of the company		than 0.1% of the
				Shares issued
Global Brands Group	1 December	Certain employees of	0.05%	N/A	N/A
Holding Limited	2015	the Company (one of
(787)		whom is a director
		of a subsidiary of the
		Company)
TCL Communication	4 November	29 connected persons	0.16%	0.006%, 0.01%	The awarded shares will be
Technology Holdings	2015			and 0.004%	vested on 31 December
Limited (2618)				for 3 executive	2015, 31 December
				directors,	2016 and 31 December
				0.14% for the	2017, i.e. 3 years
				remaining
				26 connected
				persons
China Pioneer (1345)	9 October 2015	150 Selected Employees	1.88%	0.10% for Mr.	3 years
		(2 connected persons)		WANG Yinping,
				the chief
				executive officer
				and executive
				Director, and
				0.08% for Mr.
				ZHU Mengjun,
				the chief
				financial officer
				and executive
				Director
China Innovative	11 September	Executive Director and	0.03%	0.03%	N/A
Finance Group	2015	chief executive, Mr. Ji
Limited (412)		Kewei
IGG Inc(799)	10 September	The share award grantees	0.07%	N/A	1 year
	2015	of the group pursuant
		to the share award
		scheme
The Company (474)	26 September	Executive Director	0.872%	0.872%	3 years
	2016

Source: the website of the Stock Exchange

Note: No disclosure of number of award shares to each individual awardee to the total issued share capital and/or vesting period was made in the announcements by the Grant Comparables.

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LETTER FROM CENTRAL CHINA

As shown in above Table 1, the percentage of the total number of award shares to the total issued share capital of the Grant Comparables ranges from approximately 0.02% to 2.99% whereas the percentage of the total number of award shares to each individual awardee to the total issued share capital of the Grant Comparables ranges from approximately 0.004% to 0.14%. The vesting period of the Grant Comparables ranges from one year to four years.

Since the percentage of the total number of Emolument Shares to the issued share capital of the Company is approximately 0.872%, it is within the range of the Grant Comparables. Furthermore, the vesting period of the Emolument Shares is three years, which is also within the range of the Grant Comparables insofar as vesting period is concerned. As for the percentage of the number of award shares to each individual awardee to the total issued share capital of the Grant Comparables, the Company exceeds the range. However, it should be noted that this percentage is reported in only 10 out of the 17 Comparable Issuance, which, in our view, is insufficient to make the comparison of this percentage with that of the Company meaningful.

The above comparison with the Grant Comparables is for illustrative purposes only as each of the Grant Comparables may not be entirely comparable to the Company in terms of business activities, market capitalisation, scale of operations, financial positions, business performance, future prospects and other relevant criteria. All these factors may affect the terms of issue of award shares as indicated by the varied range of results in our comparison. Therefore, in forming our opinion, we have considered the results of the above comparison together with all other factors stated in this letter as a whole.

Consideration for the Issue

The Issue will be made for no extra cash consideration, other than the minimum payment required by the applicable law in the Cayman Islands, since the consideration is reflected by the work and effort of Mr. Fok.

As mentioned in the AR 2015/16, the Group (i) generated audited consolidated revenue of approximately HK$0.898 billion and audited consolidated profit of approximately HK$466 million; and (ii) recorded audited consolidated total equity of approximately HK$6.87 billion as at 31 March 2016. Thus, the value of the Emolument Shares in total represents approximately 1.67% of the revenue of the Group and approximately 3.22% of the profit of the Group for the year ended 31 March 2016, and approximately 0.22% of the total equity of the Group as at 31 March 2016.

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LETTER FROM CENTRAL CHINA

Notwithstanding this, it should be reiterated that (i) the Emolument Shares will be vested in Mr. Fok not all at once at the same time but over a period of three years; and (ii) the Company does not intend to issue share options to Mr. Fok (please see above sub-section 1(d)). In light of the above, we consider that the Issue at no extra cash consideration is, on balance, acceptable.

Having regard to (i) the benefit of the Issue in motivating Mr. Fok to promote and enhance the Company’s prospect and value; (ii) the number of the Emolument Shares to be granted to Mr. Fok was determined based on his roles and responsibilities, performance and/or contributions to the Group; (iii) the important roles played by Mr. Fok in the daily operation of the Group; and (iv) the vesting of the Emolument Shares would provide incentives for Mr. Fok to contribute to the continuous operation and development of the Group; we are of the view that the terms of the Issue are fair and reasonable and the Issue is on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

5. Other terms of the Services Agreement

In addition to the Issue, we have reviewed other terms of the SA and found nothing therein unusual and not on normal commercial terms.

For the above reasons, we are of the opinion that the terms of the SA and that of the Issue are fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

6. Financial effects of the Issue on the Group

Earnings:–

According to the AR 2015/16, the Group recorded consolidated audited net profit attributable to the Shareholders of approximately HK$524 million for the year ended 31 March 2016. The Issue of the Emolument Shares to Mr. Fok will slightly decrease the earnings of the Group after deducting the expenses relating to the Issue and the director’s remuneration to be recorded based on the value of the Emolument Shares of HK$15 million in aggregate over three years.

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LETTER FROM CENTRAL CHINA

Net asset value:–

According to the AR 2015/16, the Group recorded consolidated net asset value attributable to owners of the Company of approximately HK$6.66 billion. As the Issue will increase share capital of the Group while the increase in director’s remuneration will reduce the earnings of the Group, the net effect of the Issue of the Emolument Shares on the consolidated net asset value attributable to owners of the Company is minimal.

Cash flow:–

According to the AR 2015/16, the Group had bank balances and cash of approximately HK$296 million as at 31 March 2016. The Issue will have no effect on the cash flow of the Group as no cash outlay by the Group is required.

7. Potential dilution of the shareholdings of existing public Shareholders

Assuming there is no change in the total issued share capital of the Company after the Latest Practicable Date and upon issue of all the Emolument Shares, Mr. Fok will be interested in a total of 52,841,610 (i.e. 16,389,606 Shares + 36,452,004 Shares) approximately, representing approximately 1.26% of the total issued shares of the Company as enlarged by the Issue of Emolument Shares.

Given that the dilution effect on the shareholdings of the existing public Shareholders is relatively insignificant and having considered the reasons set out in the sub-section 1(c) headed “Reasons and benefits of the Issue” above, and the terms of the Issue are fair and reasonable, we are of the opinion that the shareholding dilution to the Independent Shareholders as a result of the Issue is acceptable so far as the Independent Shareholders are concerned.

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LETTER FROM CENTRAL CHINA

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the Issue, while not in the ordinary and usual course of the Group’s business, are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the terms of the Services Agreement and the Issue are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the EGM to approve the Services Agreement and the Issue and the transactions contemplated thereunder and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully For and on behalf of

Central China International Capital Limited Billy C.W. Cheung General Manager

Note: Mr. Cheung is licensed by the SFC as a Responsible Officer and a Principal licence holder of Central China International Capital Limited. He has over 20 years’ experience in the financial services industry in Hong Kong

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GENERAL INFORMATION

APPENDIX I

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 and underlying shares of the Company as at the Latest Practicable Date:

						Approximate
Name of				Number of		percentage of
Director/chief		Nature of	Number of	underlying	Total	total issued
executive	Capacity	interest	Shares held	Shares held	interests	share capital
						(Note 1)
Fok Chi Tak	Beneficial	Personal	15,723,270	666,336	16,389,606	0.39%
	owner	interest		(Note 2)
Xu Hai Ying	Beneficial	Personal	628,931	–	628,931	0.02%
	owner	interest
Ou Zhiliang	Beneficial	Personal	628,931	–	628,931	0.02%
	owner	interest
Chan Ming Sun,	Beneficial	Personal	628,931	–	628,931	0.02%
Jonathan	owner	interest
Lam Kwan Sing	Beneficial	Personal	628,931	–	628,931	0.02%
	owner	interest
Lee Chi Hwa,	Beneficial	Personal	628,931	–	628,931	0.02%
Joshua	owner	interest

Notes:

1. The percentage of shareholding is calculated on the basis of 4,180,092,116 Shares in issue as at the Latest Practicable Date.

2. 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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GENERAL INFORMATION

APPENDIX I

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 and underlying shares of the Company

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

					Approximate
		Number of			percentage of
Name of	Number of	underlying		Total	total issued
shareholder	shares held	shares held	Capacity	interests	share capital
					(Note 1)
Li Shao Yu	2,581,498,949		Interest of	2,586,279,271	61.87%
(“Ms. Li”)	(note 2)		controlled
			corporations
	4,780,322		Beneficial
	(note 3)		Owner
Asia Link Capital	2,581,498,949		Beneficial	2,581,498,949	61.76%
Investment			owner
Holdings Limited
(“Asia Link”)
Central Huijin		389,940,000	Interest of	389,940,000	9.33%
Investment Limited		(note 4)	controlled
(“Central Huijin”)			corporation
(note 5)
China Construction		389,940,000	Interest of	389,940,000	9.33%
Bank Corporation		(note 4)	controlled
(“China			corporation
Construction”)
(note 5)

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GENERAL INFORMATION

APPENDIX I

Notes:

1. The percentage of shareholding is calculated on the basis of 4,180,092,116 shares in issue as at the Latest Practicable Date.

2. These shares were held directly by Asia Link, which was beneficially wholly-owned by Ms. Li.

3. Ms. Li held 4,780,322 shares directly.

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, save as disclosed in this circular:

• (a) none of the Directors had any direct or indirect interest in any assets which have, since 31 March 2016, 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.

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GENERAL INFORMATION

APPENDIX I

5. EXPERT’S CONSENT AND QUALIFICATION

The following is the qualification of the expert who has given opinion or advice which is contained in this circular:

Qualification

Name Qualification Central China International A corporation licensed to carry out type 1 (dealing in Capital Limited securities) and type 6 (advising on corporate finance) regulated activities under the SFO

The letter from the above expert is given as of the date of this circular for incorporation in this circular.

The above expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion therein of its 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 2016, 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.

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GENERAL INFORMATION

APPENDIX I

8. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, save for those disclosed in the profit warning announcement of the Company dated 4 October 2016, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2016, being the date to which the latest published audited consolidated financial statements of the Group were made up.

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 15 to 16 of this circular;

• (b) the letter from the Independent Financial Adviser, the text of which is set out on pages 17 to 35 of this circular;

• (c) the written consent from the expert referred to in paragraph headed “Expert’s consent and qualification” in this appendix;

• (d) the Services Agreement;

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

• (f) the Announcement of the Company dated 26 September 2016; and

• (g) this circular.

10. MISCELLANEOUS

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

– 40 –

PROCEDURES FOR POLL VOTING

APPENDIX II

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.

– 41 –

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 the Room 2702, 27/F, 200 Gloucester Road, Wan Chai, Hong Kong on Friday, 17 February 2017 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 Services Agreement (as defined in the circular to shareholders of the Company dated 26 January 2017) (the “ Circular ”) and the transactions contemplated thereunder be and are hereby approved and ratified;

2. “ THAT :

3. (a) the allotment and issue of the Emolument Shares (as defined in the Circular) to Mr. Fok (as defined in the Circular) be and are hereby approved and confirmed;

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

– 42 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. “ THAT the director(s) of the Company (“ Director(s) ”), be and are hereby authorized 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 Services Agreement, the allotment and issuance of the Emolument Shares to Mr. Fok and all other transactions of the Company 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 Xu Hai Ying Executive Director

Hong Kong, 26 January 2017

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.

4. 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.

5. 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.

– 43 –