Almana Limited - Proxy Solicitation & Information Statement 2016

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 your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in IR Resources Limited (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the 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 howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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IR RESOURCES LIMITED 同仁資源有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8186)

PROPOSED RIGHTS ISSUE OF NEW SHARES ON THE BASIS OF TEN (10) RIGHTS SHARES FOR EVERY ONE (1) NEW SHARE HELD ON THE RECORD DATE; PROPOSED CAPITAL REORGANISATION AND NOTICE OF SPECIAL GENERAL MEETING

Underwriter to the Rights Issue

Convoy Securities Limited

Independent Financial Advisers to the Independent Board Committee and the Independent Shareholders of the Company

A letter from the Independent Board Committee is set out on page 26 of this circular and a letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 27 to 53 of this circular.

A notice convening the special general meeting (“SGM”) of the Company to be held at Suites 903-905, 9th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Wednesday, 20 April 2016 at 10:00 a.m. is set out on pages 75 to 78 of this circular. A form of proxy for use at the SGM is enclosed with this circular. Such form of proxy is also published on the websites of The Stock Exchange of Hong Kong Limited at www.hkex.com.hk and the Company at http://www.irresources.com.hk.

Whether or not you are able to attend the SGM, you are requested to complete the accompanying form of proxy, in accordance with the instructions printed thereon and deposit the same at the office of the Company at 36th Floor, Times Tower, 391-407 Jaffe Road, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish and in such event, the instrument appointing a proxy shall be deemed revoked. The Rights Issue is conditional upon the fulfilment of the conditions set out under the paragraph headed “Conditions of the Rights Issue” in the section headed “Letter from the Board” of this circular. In particular, the Rights Issue is conditional upon the approval of the Rights Issue by the Independent Shareholders at the SGM by way of poll.

The Underwriting Agreement contains provisions granting Convoy Securities Limited the right to terminate, by notice in writing served prior to the Latest Time for Termination, the Underwriter’s obligations thereunder on the occurrence of certain events, as more particularly described in the paragraph headed “The Underwriting Agreement” in the section headed “Letter from the Board” in this circular. The Rights Issue is therefore also subject to Convoy Securities Limited not rescinding or terminating the Underwriting Agreement. Accordingly, the Rights Issue may or may not proceed.

The Shares will be dealt in on an ex-rights basis from Friday, 22 April 2016. Dealings in the Rights Shares in the nil-paid form are expected to take place from Monday, 9 May 2016 to Monday, 16 May 2016 (both days inclusive). If the conditions of the Rights Issue are not fulfilled or the Underwriting Agreement is terminated on or before the Latest Time for Termination, the Rights Issue will not proceed. Any persons contemplating buying or selling the Shares and/or nil-paid Rights Shares up to the date when all the conditions of the Rights Issue are fulfilled will bear the risk that the Rights Issue may not become unconditional or may not proceed. Any Shareholder or other person contemplating any dealings in the Shares and/or nil-paid Rights Shares are recommended to consult their own professional advisers.

This circular will remain on the GEM website at http://www.hkgem.com on the “Latest Company Announcements” page for seven days from the date of its publication

22 March 2016

CHARACTERISTICS OF GEM

GEM is positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

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	Page
CHARACTERISTICS OF GEM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	i
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iii
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . . . .	26
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . .	27
APPENDIX I — FINANCIAL INFORMATION OF THE GROUP. . . . . . . . . .	54
APPENDIX II — UNAUDITED PRO FORMA
FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	57
APPENDIX III — GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . .	64
NOTICE OF SGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	75

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EXPECTED TIMETABLE

Set out below is the expected timetable for the proposed Capital Reorganisation and the Rights Issue:

Event 2016 (Hong Kong time) Despatch of the Company’s circular in respect of the Capital Reorganisation and the Rights Issue . . . . . . . . . . . . . . . . . . . . Tuesday, 22 March Latest time for return of proxy form of SGM . . . . . . . . . . . . . . . . . . . . . Monday, 18 April Time and date of SGM . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m., Wednesday, 20 April Announcement of results of the SGM to be published on the website of the Stock Exchange. . . . . . . . . . . . . . . . . . . . . . . Wednesday, 20 April

The following events are conditional on the fulfillment of the conditions for the implementation of the Capital Reorganisation. Effective date of the Capital Reorganisation and dealing of New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 21 April First day of free exchange of existing certificates for Existing Shares into new certificates for New Shares . . . . . . . . . . . . . Thursday, 21 April Commencement of dealing in the New Shares . . . . . . . . . . . . 9:00 a.m., Thursday, 21 April Last day of dealing in New Shares on cum-rights basis . . . . . . . . . . . . . Thursday, 21 April First day of dealing in New Shares on ex-rights basis . . . . . . . . . . . . . . . . .Friday, 22 April Latest time for Shareholders to lodge transfer of New Shares in order to qualify for the Rights Issue . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Monday, 25 April Closure of register of members of the Company to determine the entitlements to the Rights Issue (both dates inclusive) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 26 April to Tuesday, 3 May

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EXPECTED TIMETABLE

Record Date for the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Tuesday, 3 May

Despatch of Prospectus Documents

(in the case of Non-Qualifying Shareholders,

the Prospectus Only). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 5 May

First day of dealing in nil-paid Rights Shares . . . . . . . . . . . . .9:00 a.m. on Monday, 9 May

Last day for splitting nil-paid Rights Shares . . . . . . . . . . 4:30 p.m. on Wednesday, 11 May

Last day of dealing in nil-paid Rights Shares . . . . . . . . . . . .4:00 p.m. on Monday, 16 May

Latest Time for Acceptance . . . . . . . . . . . . . . . . . . . . . . . . .4:00 p.m. on Thursday, 19 May

Latest Time for Termination . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 20 May

Announcement of results of the Rights Issue . . . . . . . . . . . . . . . . . . . . . . Thursday, 26 May

Despatch of certificates for the fully-paid Rights Shares

(in the form of new share certificates) on or before . . . . . . . . . . . . . . . . . Friday, 27 May

If the Rights Issue is terminated, refund cheques to be

despatched on or before . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 27 May

Commencement of dealing in fully-paid

Rights Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9:00 a.m. on Monday, 30 May

Last day of free exchange of existing certificates for Existing Shares

into new certificates for New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 2 June

Note:

all times and dates in this circular refer to Hong Kong local times and dates.
The Latest Time for Acceptance of and payment for the Rights Issue will not take place if there is a tropical cyclone signal number 8 or above, or a “black” rainstorm warning:
(i) in force in Hong Kong at any local time before 12:00 noon but no longer in force after 12:00 noon on the Latest Time for Acceptance. Instead the latest time of acceptance of and payment for the Rights Issue will be extended to 5:00 p.m. on the same business day.

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EXPECTED TIMETABLE

(ii) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on the Latest Time for Acceptance. Instead of the latest time of acceptance of and payment for the Rights Issue will be rescheduled to 4:00 p.m. on the following business day which does not have either of those warnings in force at any time between 9:00 a.m. and 4:00 p.m.

If the Latest Time for Acceptance does not take place on Thursday, 19 May 2016, the dates mentioned in this section headed “Expected Timetable” may be affected. An announcement will be made by the Company in such event as soon as possible.

Dates or times specified in this circular for events in the timetable for (or otherwise in relation to) the Capital Reorganisation and the Rights Issue are indicative only and may be excluded or varied due to additional time required for compliance with the regulatory requirements in Bermuda and/or with any requirements or varied by the Company. Any change to the expected timetable for the Capital Reorganisation and the Rights Issue will be published as and when appropriate.

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DEFINITIONS

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

“Board”

the board of Directors

“Capital Reduction”
the reduction of the issued share capital of the Company by reducing the paid-up capital of the Company to the extent of HK$0.049 on each Existing Shares such that the nominal value of each issued Existing Shares will be reduced to HK$0.001 (as detailed in the paragraph “Proposed Capital Reorganisation” in the section headed “Letter from the Board”)
“Capital Reorganisation”
the proposed reorganisation of the share capital of the Company involving the Capital Reduction, the Reduction of Share Premium and the Elimination of Accumulated Losses (as detailed in the paragraph “Proposed Capital Reorganisation” in the section headed “Letter from the Board”)
“CCASS”
the Central Clearing and Settlement System established and operated by HKSCC
“China Wah Yan”
China Wah Yan Healthcare Limited, a company incorporated in Hong Kong with limited liability and a substantial Shareholder (as defined under the GEM Listing Rules)
“Company”
IR Resources Limited, a company incorporated in Bermuda with limited liability with its issued shares listed on The Growth Enterprise Market of the Stock Exchange
“Companies Ordinance”
the Companies (Winding Up and Miscellaneous Provisions) Ordinance, Chapter 32 of the Laws of Hong Kong or the Companies Ordinance, Chapter 622 of the Laws of Hong Kong, as the case may be
“Company Registrar”
Computershare Hong Kong Investor Services Ltd., at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong
“Directors”
the directors of the Company

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DEFINITIONS

“Elimination of Accumulated Losses”
“Existing Share(s)”
“GEM Listing Rules”
“Group”
“HKSCC”
“Hong Kong”
“Independent Board Committee”
“Independent Financial Adviser” or “Reorient”
“Independent Shareholder(s)”
“Last Trading Day”
the application of the credit amount in the contributed surplus account of the Company following the Capital Reduction and the Reduction of Share Premium to set off against the accumulated losses of the Company (as detailed in the paragraph “Proposed Capital Reorganisation” in the section headed “Letter from the Board”)
the existing ordinary share(s) with nominal value of HK$0.05 each in the share capital of the Company prior to the Capital Reorganisation becoming effective
The Rules Governing the Listing of Securities of The Growth Enterprise Market of the Stock Exchange
the Company and its subsidiaries
the Hong Kong Securities Clearing Company Limited
the Hong Kong Special Administrative Region of the PRC
the independent board committee of the Company comprising all the independent non-executive Directors established to advise the Independent Shareholders on the Rights Issue
Reorient Financial Markets Limited, a corporation licensed to carry out Type 1 (dealing in securities), Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue
Shareholders other than those who are required by the GEM Listing Rules to abstain from voting on the relevant resolution on the Rights Issue at the SGM
1 April 2013, being the last trading day prior to the suspension of trading in the Existing Shares

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DEFINITIONS

“Latest Time for Acceptance”
4:00 p.m. on Thursday, 19 May 2016, or such other date and time as may be agreed between the Company and the Underwriter, being the latest date for acceptance of, and payment for, the Rights Shares as described in the Prospectus
“Latest Time for Termination”
4:00 p.m. on the Friday, 20 May 2016, or such later time or date as may be agreed between the Company and the Underwriter, being the latest time to terminate the Underwriting Agreement
“Latest Practicable Date”
15 March 2016, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular
“Ms. Yu”
Ms. Yu Xiao Min, an executive Director
“New Share(s)”
the ordinary share(s) of HK$0.001 each in the share capital of the Company upon the Capital Reorganisation becoming effective
“Non-Qualifying Overseas Shareholder(s) in respect of whom the Directors, Shareholder(s)” based on legal opinions provided by legal advisers, regarding the legal restrictions under the laws of the relevant places and the requirements of the relevant overseas regulatory bodies or stock exchange, consider it necessary or expedient not to offer the Rights Shares under the Rights Issue to such Overseas Shareholder(s)
“Overseas Shareholder(s)” Shareholder(s) whose name(s) appear on the register of members of the Company at the close of business on the Record Date and whose address(es) as shown on such register is/are in a place(s) outside Hong Kong
“PAL(s)”
the provisional allotment letter(s) to be used in connection with the Rights Issue
“PRC”
The People’s Republic of China, which for the purpose of this circular, shall exclude Hong Kong, Taiwan and the Macau Special Administrative Region of The People’s Republic of China

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DEFINITIONS

“Prospectus”
the prospectus to be issued by the Company in relation to the Rights Issue
“Prospectus Documents” the Prospectus and the PAL
“Qualifying Shareholder(s)”
Shareholder(s), other than the Non-Qualifying Shareholders, whose name(s) appear on the register of members of the Company at the close of business on the Record Date
“Record Date”
Tuesday, 3 May 2016 or such other day as may be agreed between the Underwriter and the Company, being the date for determining the entitlements to the Rights Issue
“Reduction of Share Premium”
the reduction of the share premium account of the Company as at the effective date of the Capital Reduction (as detailed in the paragraph “Proposed Capital Reorganisation” in the section headed “Letter from the Board”)
“Rights Share(s)”
the 26,239,509,650 New Shares proposed to be offered to the Qualifying Shareholders for subscription under the Rights Issue on the terms and subject to the conditions set out in the Underwriting Agreement and the Prospectus Documents
“Rights Issue”
the proposed offer for subscription by the Qualifying Shareholders for the Rights Shares on the basis of ten (10) Rights Shares for every one (1) New Share held on the Record Date at the Subscription Price on the terms and subject to the conditions set out in the Underwriting Agreement and the Prospectus Documents
“Ritz Management”
Ritz Management Limited, a company incorporated in Samoa with limited liabilities and is wholly-owned by Ms. Yu
“SFO”
The Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

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DEFINITIONS

“SGM” the special general meeting of the Company to be convened and held at Suites 903-905, 9th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on 20 April 2016 at 10:00 a.m. for the Shareholders or the Independent Shareholders (as the case may be) to consider, and if thought fit, approve the Capital Reorganisation, the Rights Issue and the transactions contemplated thereunder.
“Share(s)” the Existing Shares or the New Shares (as the context may be)
“Shareholder(s)” holder(s) of issued Share(s)
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Subscription Price” HK$0.01 per Rights Share
“Supplemental Underwriting the supplemental underwriting agreement dated 16 March Agreement” 2016 entered into between the Company and the Underwriter in relation to the amendment of the date of despatch of this circular and certain subsequent dates in respect of the Rights Issue
“Takeovers Code” the Hong Kong Code on Takeovers and Mergers
“Underwriter” Convoy Securities Limited, a corporation licensed to carry out Type 1 (dealing in securities) regulated activity under the SFO
“Underwriting Agreement” the underwriting agreement dated 24 February 2016 entered into between the Company and the Underwriter in relation to the underwriting and certain other arrangements in respect of the Rights Issue
“%”
percentage
“HK$”
Hong Kong dollars, the lawful currency of the Hong Kong

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LETTER FROM THE BOARD

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IR RESOURCES LIMITED 同仁資源有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8186)

Executive Directors: Ms. Yu Xiao Min (Chairperson) Ms. Xu Miaoxia Mr. Zeng Lingchen

Registered office: Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Independent non-executive Directors:

Ms. Pang King Sze, Rufina Mr. Hong Bingxian Mr. Hung Kenneth

Head office and principal place of business in Hong Kong: 36th Floor, Time Tower 391-407 Jaffe Road Wanchai, Hong Kong

22 March 2016

To the Shareholders

Dear Sir or Madam,

PROPOSED RIGHTS ISSUE OF NEW SHARES ON THE BASIS OF TEN (10) RIGHTS SHARES FOR EVERY ONE (1) NEW SHARE HELD ON THE RECORD DATE; PROPOSED CAPITAL REORGANISATION AND NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

Reference is made to the announcements of the Company dated 24 February 2016 and 16 March 2016 relating to the Rights Issue and the Capital Reorganisation.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with details of, amongst other things, (i) the Capital Reorganisation; (ii) the Rights Issue (iii) a notice convening the SGM; and (iv) other information as required under the GEM Listing Rules.

PROPOSED CAPITAL REORGANISATION

The Company intends to put forward to the Shareholders for their approval of the proposed Capital Reorganisation comprising the Capital Reduction, the Reduction of Share Premium and the Elimination of Accumulated Losses, details of which are set out as below:

(i) Capital Reduction

The proposed Capital Reduction will involve (i) reducing the issued share capital of the Company by cancelling the paid-up capital of the Company to the extent of HK$0.049 on each Existing Share such that the nominal value of each Existing Share will be reduced from HK$0.05 each to HK$0.001. The credit arising from such cancellation will be credited to the contributed surplus account of the Company. Based on the 2,623,950,965 Existing Shares in issue as at the Latest Practicable Date, it is estimated that a credit balance of HK$128.57 million will arise from the Capital Reduction.

Forthwith upon the Capital Reduction taking effect, every authorised but unissued Existing Share (including those arising from the Capital Reduction) will be subdivided into 50 New Shares with a par value of HK$0.001 each.

(ii) Reduction of Share Premium

After the Capital Reduction having become effective, the share premium account of the Company will be reduced to nil and the credit arising from such reduction will be credited to the contributed surplus account of the Company. As at 31 December 2015, the Company had a credit balance of HK$973.0 million standing in its share premium account.

(iii) Elimination of Accumulated Losses

Following the Capital Reduction and the Reduction of Share Premium, the credit amount standing in the contributed surplus account of the Company will be used to set off the accumulated losses of the Company in full as at 31 December 2015 and in any other manner as permitted under the bye-laws of the Company and the applicable laws of Bermuda.

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LETTER FROM THE BOARD

Conditions of the Capital Reorganisation

The proposed Capital Reorganisation is subject to, among other things, the following conditions:

(i) the passing of the special resolution(s) to approve the Capital Reorganisation at the SGM;
(ii) compliance with the relevant procedures and requirements under the laws of Bermuda (where applicable) and the GEM Listing Rules to effect the Capital Reorganisation; and
(iii) the Stock Exchange granting the listing of, and permission to deal in, the New Shares arising from the Capital Reorganisation.

Subject to the fulfillment of the above conditions, the Capital Reorganisation is expected to become effective on the next business day following the date of passing the relevant resolution(s) at the SGM.

Effects of the Capital Reorganisation

Save for the relevant expenses to be incurred, the implementation of the Capital Reorganisation will not, by itself, alter the underlying assets, business, operation, management or financial position of the Company and the Capital Reorganisation is not expected to have any material adverse effect on the financial position of the Company.

Assuming there will be no change in the number of issued Existing Shares from the Latest Practicable Date up to the date on which the Capital Reorganisation having become effective, the share capital structures of the Company before and after the Capital Reorganisation are summarised as follows:

As at the Immediately after the Latest Practicable Date Capital Reorganisation Par value HK$0.05 per Existing Share HK$0.001 per New Share Authorised Number of shares 4,000,000,000 200,000,000,000 Existing Shares New Shares Share capital HK$200,000,000 HK$200,000,000

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LETTER FROM THE BOARD

As at the Immediately after the Latest Practicable Date Capital Reorganisation Issue and fully paid Number of issued shares 2,623,950,965 2,623,950,965 Existing Shares New Shares Amount of issued share capital HK$131,197,548.25 HK$2,623,950.965 Unissued: Number of unissued shares 1,376,049,035 197,376,049,035 Existing Shares New Shares Amount of unissued share HK$68,802,451.75 HK$197,376,049.035 capital

Status of the New Shares

The New Shares in issue upon the Capital Reorganisation becoming effective will be identical in all respects and shall rank pari passu in all respects with each other as to all future dividends and distribution which are declared, made or paid in accordance with the bye-laws of the Company. The proposed Capital Reorganisation will not result in any change in the relative rights and interests of the Shareholders as a whole.

Listing Application of the New Shares

An application will be made by the Company to the Stock Exchange for granting the listing of, and permission to deal in, the New Shares arising from the Capital Reorganisation.

Subject to granting of the listing of, and permission to deal in, the New Shares on the Stock Exchange, the New Shares will be accepted as eligible securities by HKSCC for deposits, clearance and settlement in CCASS with effect from the commencement date of dealings in the New Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

Free exchange of share certificates

Subject to the Capital Reorganisation becoming effective, which is expected to be on 21 April 2016, Shareholders may, during the office hours from Thursday, 21 April 2016 to Thursday, 2 June 2016 (both dates inclusive), submit share certificates of the Existing Shares (in yellow colour) to the Company Registrar at Shops 1712-16, 17th Floor,

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LETTER FROM THE BOARD

Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for exchange, of the new certificates of the New Shares (in deep green colour), at the expenses of the Company. Thereafter, certificates for the Existing Shares will be accepted for exchange only on payment of a fee of HK$2.5 (or such higher amount as may from time to time be allowed by the Stock Exchange) for each new share certificate issued for the New Shares or each existing certificate for the Existing Shares cancelled, whichever the number is higher. Nevertheless, the existing certificates for the Existing Shares will continue to be good evidence of legal title and are not valid for dealings, trading and settlement purpose after the Capital Reorganisation has become effective (but before the last day of free exchange of existing certificates for the Shares into new certificates for the New Shares (i.e. 2 June 2016)) and may be exchanged for certificates for the New Shares at any time in accordance with the foregoing.

Reasons for the Capital Reorganisation

The Company believes that the Capital Reorganisation will provide the Company with greater flexibility in future fund raising opportunities. In addition, following the Elimination of Accumulated Losses, the Company will be able to set off its accumulated losses which will in turn allow greater flexibility for the Company to pay dividends in the future so as to attract new investors. Based on the above, the Directors are of the view that the Capital Reorganisation is in the interests of the Company and the Shareholders as a whole.

Shareholders and potential investors of the Company should be aware of and take note that the proposed Capital Reorganisation is conditional upon satisfaction of the conditions precedent set out in the paragraphs headed “Conditions of the Capital Reorganisation” above, and therefore may or may not proceed. Accordingly, they are advised to exercise caution when dealing in the Existing Shares, and if they are in any doubt about their position, they should consult their professional advisers.

THE RIGHTS ISSUE

On 24 February 2016 and 16 March 2016, the Company and the Underwriter entered into the Underwriting Agreement and the Supplemental Underwriting Agreement respectively regarding the Rights Issue.

The terms of the Rights Issue are set out below:

Issue statistics

Basis of the Rights Issue : Ten (10) Rights Shares for every one (1) New Share held on the Record Date Subscription Price : HK$0.01 per Rights Share

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LETTER FROM THE BOARD

Number of New Shares in issue : 2,623,950,965 New Shares upon the Capital Reduction becoming effective Number of Rights Shares : 26,239,509,650 Rights Shares Number of Rights Shares agreed : China Wah Yan and Ritz Management have to be taken up both undertaken to the Company and the Underwriter that they will respectively apply for 7,100,000,000 Rights Shares and 1,200,000,000 Rights Shares to be provisionally allotted to them under the Rights Issue. Details of the undertaking are set out in the paragraph headed “Shareholders Undertakings” in this circular. Number of Rights Shares : 17,939,509,650 Rights Shares, being the number to be underwritten by the of Rights Shares to be allotted and issued less Underwriter(s) the aggregate number of the Rights Shares agreed to be taken up by China Wah Yan and Ritz Management. Accordingly, the Rights Issue is fully underwritten. Nominal value of the Rights : HK$26,239,509.65 Shares Gross proceeds to be raised from : approximately HK$262.4 million the Rights Shares Estimated net proceeds to be : approximately HK$256 million raised from the Rights Issue after deduction of expenses Underwriter : Convoy Securities Limited

Based on the 2,623,950,965 Existing Shares in issue as at the Latest Practicable Date and 2,623,950,965 New Shares in issue upon the Capital Reduction becoming effective, and assuming there will be no change in the number of issued Shares from the Latest Practicable Date up to the Record Date, the 26,239,509,650 Rights Shares to be issued pursuant to the Rights Issue will represent (i) 10 times the number of issued New Shares immediately upon the Capital Reduction becoming effective; and (ii) 90.9% of the number of issued New Share immediately upon the Capital Reduction becoming effective as enlarged by the allotment and issue of the Rights Shares.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, the Company has no other outstanding options, warrants, derivatives or convertible securities which may confer any right to the holder thereof to subscribe for, convert or exchange into Shares.

Basis of provisional allotment

The basis of the Rights Issue will be ten (10) Rights Shares (in nil-paid form) for every one (1) New Share is issue held by the Qualifying Shareholders on the Record Date. Application for all or any part of a Qualifying Shareholder’s provisional allotment should be made by completing the PAL and lodging the same with a remittance for the Rights Shares being applied for to the Company Registrar at Shops 1712-16, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong on or before the Latest Time for Acceptance.

Matching services

No odd lot matching services will be provided for the Rights Shares.

Subscription Price

The Subscription Price is HK$0.01 per Rights Share and is payable in full by a Qualifying Shareholder upon acceptance of the provisional allotment of Rights Shares or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

The Subscription Price represents:

(i) a discount of 87.0% to the closing price of HK$0.077 per Existing Share as quoted on the Stock Exchange on the Last Trading Day;
(ii) a discount of 37.5% to the theoretical ex-rights price of HK$0.016 per New Share (based on the closing price of HK$0.077 per Existing Share as quoted on the Stock Exchange on the Last Trading Day and adjusted for the effect of the Capital Reorganisation); and
(iii) a discount of 54.5% to the closing price of HK$0.022 per Existing Share as quoted on the Stock Exchange on the Latest Practicable Day.

The Subscription Price was arrived at after arm’s length negotiation between the Company and the Underwriter after taking into, among others, the pro-longed period of suspension in the trading of the Existing Shares, the prevailing market sentiment, the poor financial performance of the Group in the past years and the additional fund required by the Group

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LETTER FROM THE BOARD

for its continuous business development. Although the theoretical ex-rights price of the New Shares to be issued under the Rights Issue will approach extremities, the Directors consider that the substantial discount of the Subscription Price to the closing price of the Existing Shares on the Last Trading Day will nevertheless encourage the Qualifying Shareholders to participate in the Rights Issue which would enable them to maintain their shareholdings in the Company and to enjoy the potential growth of the Group.

Given the above, the Directors consider that the terms of the Rights Issue (including the Subscription Price) are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Pursuant to Rule 17.76 of the GEM Listing Rules, where the market price of the securities of an issuer approaches the extremities of HK$0.01, the issuer is required either to change the trading method or to proceed with a consolidation of its securities. The Company proposes to, immediately following completion of the Rights Issue, implement a share consolidation and change of its board lot size so as to comply with the relevant trading requirements under the GEM Listing Rules. As such, Shareholders should note that the timetable relating to the then proposed share consolidation and change in board lot size as disclosed in the announcement of the Company dated 29 February 2016 is no longer applicable. The Company will make further announcement(s) as and when appropriate in accordance with the GEM Listing Rules on any development in respect of the proposed share consolidation and the change in board lot size.

Qualifying Shareholders

The Rights Issue is only available to the Qualifying Shareholders. Subject to the passing of the resolution approving the Rights Issue by the Independent Shareholders at the SGM and the registration of the Prospectus Documents in accordance with the applicable laws and regulations, the Company will send the Prospectus Documents to the Qualifying Shareholders.

A Qualifying Shareholder must be registered as a member of the Company on the Record Date, and not be a Non-Qualifying Shareholder.

In order to be registered as a member of the Company on the Record Date, all transfer of Shares must be lodged for registration with the Company Registrar on or before 4:30 p.m. on Monday, 25 April 2016.

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LETTER FROM THE BOARD

Rights of Overseas Shareholders and Non-Qualifying Shareholders

The Prospectus Documents to be issued in connection with the Rights Issue will not be registered under the applicable securities legislation of any jurisdiction other than Hong Kong. If, on the Record Date, a Shareholder’s address on the register of members of the Company is in a place outside Hong Kong, that Shareholder may not be eligible to take part in the Rights Issue as the Prospectus Documents are not expected to be registered under the applicable securities legislation of any jurisdictions other than Hong Kong. In compliance with Rule 17.41 of the GEM Listing Rules, the Company will make enquiries as to whether the issue of Rights Shares to Overseas Shareholders may contravene the applicable securities legislation of the relevant overseas jurisdictions or the requirements of the relevant regulatory bodies or stock exchanges. If, after making such enquiry, the Directors are of the opinion that it would be necessary or expedient not to offer the Rights Shares to such Overseas Shareholders, the Rights Issue will not be available to such Overseas Shareholders and no provisional allotment of nil-paid Rights Shares will be made to them.

The results of the enquiries and the basis of exclusion of the Overseas Shareholders will be included in the Prospectus. If the Overseas Shareholders are excluded, the Company will only send copies of the Prospectus (without the PAL) to the Non-Qualifying Shareholders for their information only provided that the delivery of such Prospectus does not contravene any applicable security legislation of the relevant overseas jurisdiction.

The Company shall provisionally allot the Rights Shares which represent the entitlements of the Non-Qualifying Shareholders to a nominee of the Company in nil-paid form and the Company shall procure that such nominee shall endeavor to sell the rights as soon as practicable after dealing in nil-paid Rights Shares commence and in any event on or before the last day of dealing in nil-paid Rights Shares at a net premium (nil-paid). If and to the extent that such rights can be so sold, the said nominee of the Company shall account to the Company for the net proceeds of sale (after deducting the expenses for sale, if any), on the basis that the net proceeds after deducting the expenses of sale (if any) attributable to the sale of the Rights Shares that would otherwise have been allotted to the NonQualifying Shareholders shall be distributed pro rata to their shareholding as at the Record Date (but rounded down to the nearest cent) to the Non-Qualifying Shareholders provided that individual amounts of HK$100 or less shall be retained by the Company for its own benefit. Any of such nil-paid rights which are not sold as aforesaid will be dealt with as Rights Shares not accepted in accordance with the terms of the Underwriting Agreement.

Overseas Shareholders should note that they may or may not be entitled to the Rights Issue. Accordingly, Overseas Shareholders should exercise caution when dealing in the securities of the Company.

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LETTER FROM THE BOARD

Ranking of the Rights Shares

The Rights Shares, when allotted, issued and fully-paid, shall rank pari passu in all respects with the New Shares then in issue, including as to the right to receive all future dividends and distributions which may be declared, made or paid on or after the date of allotment of the Rights Shares.

Closure of register of members

The register of members of the Company is expected to be closed from Tuesday, 26 April 2016 to Tuesday, 3 May 2016, both dates inclusive, to determine the eligibility of the Shareholders to the Rights Issue. No transfer of Shares will be registered during this period.

No Application for excess Rights Shares

Having considering that (i) the Rights Issue will give the Qualifying Shareholders an equal and fair opportunity to maintain their respective pro rata shareholding interests in the Company; (ii) the additional effort and costs required to administer the excess application procedures; and (iii) the estimated net proceeds from the Rights Issue have been earmarked for specific uses and therefore it is important to minimise costs arising from the fund raising, the Company decides that Qualifying Shareholders will not be entitled to subscribe for any additional Rights Shares in excess of their provisional allotment under the Rights Issue. Any Rights Shares not being applied for by the Qualifying Shareholders will be taken up by the Underwriter pursuant to the terms of the Underwriting Agreement.

Pursuant to the Underwriting Agreement, the Underwriter has conditionally agreed to subscribe or procure the subscription for the Rights Shares which have not been taken up by the Qualifying Shareholders.

Application for listing

The Company will apply to the Stock Exchange for the listing of, and the permission to deal in, the Rights Shares in both their nil-paid and fully paid forms to be issued and allotted pursuant to the Rights Issue.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in their nil-paid and fully-paid forms on the Stock Exchange, the Rights Shares in both their nil-paid and fully-paid forms will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the respective commencement dates of dealings in the Rights Shares in both their nil-paid and fully-paid forms on the Stock

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LETTER FROM THE BOARD

Exchange or such other dates as may be determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading thereafter. All activities under the CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. Shareholders should seek advice from their stockbroker or other professional advisers for details of those settlement arrangements and how such arrangement will affect their rights and interests.

Dealing in the Rights Shares in both their nil-paid and fully-paid forms registered in the register of members of the Company in Hong Kong will be subject to the payment of the stamp duty and applicable fees and charges in Hong Kong.

The Underwriting Agreement

Date : 24 February 2016 Underwriter : Convoy Securities Limited.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Underwriter and its ultimate beneficial owners are not connected persons (as defined under the GEM Listing Rules) of the Company.

Number of the Rights Shares : 17,939,509,650 Rights Shares to be underwritten by the Underwriter Underwriting commission : 3.0% of the aggregated Subscription Price in respect of the New Shares for which the Underwriter has underwritten.

After taking into account the Rights Shares agreed to be taken up by China Wah Yan and Ritz Management and the number of Rights Shares agreed to be underwritten by the Underwriter, the Rights Issue is fully underwritten.

The commission rate was determined between the Company and the Underwriter by reference to the market rate. The Company has considered that the terms of the Underwriting Agreement (including the underwriting commission rate) are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

— 16 —

LETTER FROM THE BOARD

If, prior to the Latest Time for Termination:

(i) in the reasonable opinion of the Underwriter, the success of the Rights Issue would be materially and adversely affected by:
(a) the introduction of any new regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the reasonable opinion of the Underwriter materially and adversely affect the business or the financial or trading position of the Group as a whole or is materially adverse in the context of the Rights Issue after the signing of the Underwriting Agreement;
(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing after the signing of the Underwriting Agreement), of a political, military, financial, economic or other nature, or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the reasonable opinion of the Underwriter materially and adversely affect the business or the financial or trading position of the Group as a whole;
(c) any material adverse change after the signing of the Underwriting Agreement in the business or in the financial or trading position of the Group as a whole;
(d) any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out occurred after the signing of the Underwriting Agreement which would, in the reasonable opinion of the Underwriter materially and adversely affect the business or the financial or trading position of the Group as a whole;
(ii) there is any material adverse change in market conditions (including, without limitation, a change in fiscal or monetary policy or foreign exchange or currency markets, suspension or material restriction of trading in securities, imposition of economic sanctions, on Hong Kong) occurs which in the reasonable opinion of the Underwriter makes it inexpedient or inadvisable to proceed with the Rights Issue;
(iii) the Prospectus when published contains information (either as to the condition of the Group or as to its compliance with any laws or the GEM Listing Rules or any applicable regulations) which has not prior to the date of the Underwriting Agreement been publicly announced or published by the Company and which may in the reasonable opinion of the Underwriter is material to the Group as a whole and is likely to affect materially and adversely the success of the Rights Issue or might cause a prudent investor not to apply for its provisional allotment of Rights Shares under the Rights Issue,

the Underwriter shall be entitled by notice in writing to the Company, served prior to the Latest Time for Termination, to terminate the Underwriting Agreement.

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LETTER FROM THE BOARD

The Underwriter shall be entitled by notice in writing to rescind the Underwriting Agreement if prior to the Latest Time for Termination:

(i) any breach of or omits to any of the warranties or undertakings contained under the Underwriting Agreement comes to the knowledge of the Underwriter; or
(ii) any events occurring or matter arising on or after the date of the Underwriting Agreement and prior to the Latest Time for Termination which would render the warranties contained under the Underwriting Agreement untrue or incorrect in any material respect, comes to the knowledge of the Underwriter.

Upon the giving of notice of termination as referred to the above prior to the Latest Time for Termination, the obligations of all parties under the Underwriting Agreement (save and except for, among others, the fees and expenses payable by the Company) shall terminate forthwith and no party shall have any claim against any other party for costs, damages, compensation or otherwise, save for any antecedent breaches. If such notice of termination were served by the Underwriter, the Rights Issue will not proceed accordingly.

The Rights Issue is conditional upon the following conditions being fulfilled:

(i) the passing of the ordinary resolution(s) on a vote taken by way of poll at the SGM to approve the Rights Issue by the Independent Shareholders;
(ii) the Capital Reduction having become effective;
(iii) the filing and registration of the Prospectus Documents (together with any other documents required by the applicable laws or regulations) with the Registrar of Companies in Hong Kong by no later than the posting date of the Prospectus;
(iv) the posting of the Prospectus Documents to the Qualifying Shareholders and the posting of the Prospectus to the Non-Qualifying Shareholders by no later than the posting date of the Prospectus;
(v) the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked, the listing of and permission to deal in, all the Rights Shares (in their nil-paid and fully-paid forms) by no later than posting date of the Prospectus and such listing and permission not being revoked prior to the Latest Time for Termination;

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LETTER FROM THE BOARD

(vi) compliance by the Company with all of its undertakings and obligations of the Company under the Underwriting Agreement;
(vii) compliance with and performance of all undertakings and obligations of China Wan Yan and Ritz Management as contains in the irrevocable undertakings as described in the section headed “Shareholders Undertaking”;
(viii) the resumption of trading in the Shares on the Stock Exchange; and
(ix) the obligation of the Underwriter under the Underwriting Agreement becoming unconditional and the Underwriting Agreement not being terminated by the Underwriter pursuant to its terms on or before the Latest Time for Termination.

No parties to the Underwriting Agreement are capable to waive any of the above conditions. If any of the conditions of the Rights Issue is not satisfied in whole or in part by the Latest Time for Termination or such later date as the Company and the Underwriter may agree, the Underwriting Agreement shall terminate and no party will have any claim against any other party for cost, damages, compensation or otherwise, save in respect of any right or liability accrued before such termination.

Underwriting arrangement under the Rights Issue

Pursuant to the Underwriting Agreement, the Underwriter shall not subscribe, for its own account, for such number of Rights Shares not being taken up by the Qualifying Shareholders which will result in the shareholding of it and parties acting in concert (within the meaning of the Takeovers Code) with it in the Company reaching 20% of the voting rights of the Company upon the completion of the Rights Issue. The Underwriter shall also use all reasonable endeavours to ensure that each of the subscribers or purchasers of the untaken Rights Shares procured by it (i) shall be third party independent of, not acting in concert (within the meaning of the Takeovers Code) with and not connected with the Company, any of the directors, chief executive or substantial shareholders of the Company or their respective associates (as defined in the GEM Listing Rules); and (ii) save for the Underwriter itself and its associates, shall not, together with any party acting in concert (within the meaning of the Takeovers Code) with it, hold 10% or more of the voting rights of the Company upon completion of the Rights Issue. As at the Latest Practicable Date, the Underwriter had entered into sub-underwriting agreements with five different subunderwriters. The Underwriter has confirmed that itself, the sub-underwriters and their respective close associates do not hold any Shares as at the Latest Practicable Date. The Underwriter has also confirmed that the Underwriter and each of the sub-underwriters will in any case hold less than 20% and 10% of the voting rights of the Company upon completion of the Rights Issue, respectively.

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LETTER FROM THE BOARD

Shareholders Undertaking

As at the date of the Underwriting Agreement, Ritz Management and China Wah Yan held 120,000,000 and 768,698,967 Existing Shares, respectively (representing 4.57% and 29.30% of the number of issued Existing Shares, respectively). Each of Ritz Management and China Wah Yan has irrevocably undertaken to the Company and the Underwriter that (i) all New Shares beneficially owned by them (or under the companies respectively owned by them) will remain registered in their respective names from the date of the Underwriting Agreement and up to the Record Date; and (ii) Ritz Management and China Wah Yan will respectively subscribe for or procure the subscription of 1,200,000,000 Rights Shares and 7,100,000,000 Rights Shares that will be provisionally allotted to them as the holder of such New Shares under the Rights Issue.

Change in the shareholding structure

Notes China Wah Yan 1 Ritz Management 1 Public Shareholders Underwriter 2 Total	As at the Latest Practicable Date No. of Shares % 768,698,967 29.30% 120,000,000 4.57%	As at the Latest Practicable Date No. of Shares % 768,698,967 29.30% 120,000,000 4.57%	Immediately after the Capital Reduction and the Rights Issue (assuming nil application by the Shareholders) No. of Shares % 7,868,698,967 27.26% 1,320,000,000 4.57%	Immediately after the Capital Reduction and the Rights Issue (assuming nil application by the Shareholders) No. of Shares % 7,868,698,967 27.26% 1,320,000,000 4.57%	Immediately after the Capital Reduction and the Rights Issue (assuming full application by the Shareholders) No. of Shares % 7,868,698,967 27.26% 1,320,000,000 4.57%	Immediately after the Capital Reduction and the Rights Issue (assuming full application by the Shareholders) No. of Shares % 7,868,698,967 27.26% 1,320,000,000 4.57%
	888,698,967 1,735,251,998 —	33.87% 66.13% —	9,188,698,967 1,735,251,998 17,939,509,650	31.83% 6.01% 62.16%	9,188,698,967 19,087,771,978 586,989,670	31.83% 66.13% 2.04%
	2,623,950,965	100.00%	28,863,460,615	100.00%	28,863,460,615	100.00%

Note:

Each of Ritz Management and China Wah Yan will subscribe for 1,200,000,000 and 7,100,000,000 Rights Shares under their respective undertakings.

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LETTER FROM THE BOARD

the Underwriting Agreement shall contain terms restricting the shareholding of the Underwriter in the Company such that the Underwriter shall not subscribe, on its own account, for such number of untaken Rights Shares which will result in the shareholding of it and the parties acting in concert with it (within the meaning of the Takeovers Code) in the Company reaching 20% of the voting right of the Company upon completion of the Rights Issue. The Underwriter shall also use all reasonable endeavours to ensure that each of the subscribers or purchasers of the untaken Rights Shares procured by it (i) shall be third party independent of, not acting in concert (within the meaning of the Takeovers Code) with and not connected with the Company, any of the directors, chief executive or substantial shareholder of the Company or their respective associates (as defined in the GEM Listing Rules); and (ii) save for the Underwriter itself and its associates, shall not, together with any party acting in concert (within the meaning of the Takeovers Code) with it, hold 10% or more of the voting rights of the Company upon completion of the Rights Issue so as to maintain the public float of the Shares as required under the GEM Listing Rules at all times in the event that not all Shareholders participate in the Rights Issue.

If a Shareholder does not take up any entitlement under the Rights Issue, his/her/its percentage interest in the Company will be diluted by 90.9%. However, as all Qualifying Shareholders are being offered equal opportunity to participate in the Rights Issue to maintain their interests in the Company and they are also entitled to split their entitlement to the Rights Issue (i.e. taking up part and selling the remaining part to cash in), the Directors, despite the potential dilution impact, consider that the terms of the Rights Issue are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Reasons for and the use of proceeds from the Rights Issue

The Group is principally engaged in (i) forestry and agricultural business (which comprises the logging of existing trees and sale of timber products and subsequent plantation of rubber trees or other agricultural produces on the forests which the Group has been granted the exploitation concession right and sale of agricultural produces); and (ii) resources and logistics business in the Kingdom of Cambodia (“Cambodia”) and the PRC.

As disclosed in the Company’s annual report (the “2015 Annual Report”) for the year ended 31 December 2015, the Group recorded (i) loss before and after taxation of approximately HK$41.7 million for the year ended 31 December 2014; and (ii) loss before and after taxation of approximately HK$33.4 million and approximately HK$35.1 million for the year ended 31 December 2015, respectively. As at 31 December 2015, the Group had consolidated net assets of approximately HK$178.8 million and consolidated net current liabilities of approximately HK$142.9 million. Given the prolonged trading suspension in the Shares and the poor financial performance of the Group as mentioned above, it is difficult, if not implausible, for the Group to raise fund through debt financing and placing of new Shares (in particular, trading in the Shares resumed only in late February 2016). As such, the Rights Issue is a feasible fund raising means to improve the financial position of Group and offer all the Qualifying Shareholders an equal opportunity to participate and maintain their shareholding interest in the Company.

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LETTER FROM THE BOARD

The gross proceeds of the Rights Issue will amount to approximately HK$262 million and the estimated net proceeds (after the deduction of, among other things, underwriting commission and other related expenses in the amount of approximately HK$6 million) will amount to approximately HK$256 million. The Company intends to apply the net proceeds as to (i) approximately HK$170 million for repayment of the outstanding liabilities; (ii) approximately HK$25 million for general working capital purpose and approximately HK$25 million as working capital for development of the Group’s principal businesses (including capital expenditures and working capital of at least HK$16 million for the Group’s plantation business in 2016 and 2017); and (iii) the remaining balance for potential investment opportunities when available. As at the Latest Practicable Date, the Group has not identified any potential investment opportunity. Taking into account of (i) the outstanding liabilities of approximately HK$170 million of the Group as at 31 December 2015; (ii) the estimated capital expenditure and working capital requirement of the Group’s plantation business of at least HK$16 million in 2016 and 2017; and (iii) the estimated general working capital of the Group of approximately HK$25 million in 2016 and 2017, the Board is of the view that the net proceeds from the Rights Issue of approximately HK$256 million are able to satisfy the Company’s expected funding needs for the next 12 months.

During the second half of 2015, the Group entered into agreements with investors and business partners, who have the relevant connections and experience in the timber and plantation businesses in the Asia region, for purpose of revitalizing its business in Cambodia (the “Restructuring”), details of which are disclosed in the announcements of the Company dated 17 July, 30 September 2015 and 24 February 2016. The Company is in the process of preparing for the Restructuring and expects to complete the Restructuring in or about May 2016. However, as disclosed in the 2015 Annual Report, the Group only had cash balance of approximately HK$4.2 million as at 31 December 2015. As such, additional working capital is required for the Group to accelerate the development pace of its principal businesses. In addition, the outstanding liabilities of the Group amounted to approximately HK$170 million as at the Latest Practicable Date. Given that the Rights Issue will (i) improve the capital structure of the Company; (ii) provide the necessary funding for the Group’s general working capital purpose and development of its businesses; and (iii) provide the Qualifying Shareholders with the opportunity to maintain their respective pro-rata shareholding interest in the Company and enjoy the potential growth prospects of the Group, the Directors consider that the Rights Issue is in the interest of the Company and the Shareholders as a whole.

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

The Company has not conducted any fund raising activities in the past 12 months immediately preceding the Latest Practicable Date.

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LETTER FROM THE BOARD

WARNING OF THE RISKS OF DEALING IN THE SHARES AND RIGHT SHARES IN NIL-PAID FORM

The Rights Issue is subject to the satisfaction of a number of conditions as described in the section headed “Conditions of the Rights Issue”, particularly the Capital Reduction becoming effective, the approval of the Rights Issue at the SGM and the Underwriting Agreement having become unconditional and not having been terminated or rescinded. Accordingly, the Rights Issue may or may not proceed. If the Rights Issue does not proceed, a further announcement will be made by the Company.

The issuance of this circular does not mean that listing of the Rights Shares will be approved by the Stock Exchange.

Shareholders and potential investors of the Company contemplating selling or purchasing the Shares and/or nil-paid Rights Shares up to the date when the conditions of the Rights Issue are fulfilled will bear the risk that the Rights Issue may not become unconditional and may not proceed and they are recommended to consult their own professional advisers in dealing in the securities of the Company.

IMPLICATIONS UNDER THE GEM LISTING RULES

The Capital Reorganisation is subject to, among other things, the passing of the relevant resolution(s) by the Shareholders approving the same at the SGM. As none of the Shareholders or their associates would have any interest in the Capital Reorganisation, no Shareholders would be required to abstain from voting of the resolution relating to the Capital Reorganisation at the SGM.

As the Rights Issue will increase the issued share capital and the market capitalisation of the Company by more than 50%, according to Chapter 10 of the GEM Listing Rules, the Rights Issue is subject to the approval by the Shareholders at the SGM by resolution(s) on which any controlling Shareholders and their associates, or where there are no controlling Shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the Rights Issue.

As at the Latest Practicable Date, the Company has no controlling Shareholder and Ms. Yu, an executive Director, holds 120,000,000 Existing Shares (representing approximately 4.57% of the number of issued Existing Shares as at the Latest Practicable Date) through her wholly-owned company, Ritz Management. Accordingly, Ritz Management will abstain from voting in favour of the resolution(s) relating to the Rights Issue. The Company has been informed by Ritz Management that it has no intention to vote against the resolution(s)

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LETTER FROM THE BOARD

relating to the Rights Issue at the SGM. Save as the aforesaid, to the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no other Director or any of his/her associates holds any Existing Shares as at the Latest Practicable Date and no Shareholder has a material interest in the Rights Issue and is required to abstain from voting on the resolution(s) approving the Right Issue at the SGM pursuant to the GEM Listing Rules.

GENERAL

The SGM will be held at Suites 903-905, 9th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong on Wednesday, 20 April 2016 at 10:00 a.m. for the purpose of considering and, if thought fit, approving the resolution in respect of the Capital Reorganisation, the Rights Issue and the transactions contemplated thereunder. The notice convening the SGM is set out on pages 75 to 78 to this circular. A form of proxy for use at the SGM is enclosed with this circular.

Whether or not you are able to attend the SGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same at the office of the Company at 36th Floor, Times Tower, 391-407 Jaffer Road, Wanchai, Hong Kong as soon as possible but in an event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

The Company’s register of members will be closed from Tuesday, 26 April 2016 to Tuesday, 3 May 2016 (both days inclusive) to determine the entitlement to the Rights Issue. No transfer of Shares will be registered during such period.

The Record Date is Tuesday, 3 May 2016. The last day of dealing in Shares on a cum-right basis is Thursday, 21 April 2016. The Shares will be dealt in on an ex-right basis from Friday, 22 April 2016. To qualify for the Rights Issue, Shareholders must be registered as a member of the Company as at the close of business on the Record Date and not be a Non-Qualifying Shareholder.

Subject to the approval of the Rights Issue by the Independent Shareholders at the SGM and the registration of the Prospectus Documents in accordance with the applicable laws and regulations, the Prospectus Documents setting out details of the Rights Issue will be despatched to the Qualifying Shareholders on Thursday, 5 May 2016. Subject to the advice of the Company’s legal advisers in the relevant jurisdictions and to the extent reasonably practicable, the Prospectus (without the PAL) will be despatched to the Non-Qualifying Shareholders for information only.

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LETTER FROM THE BOARD

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Company has established the Independent Board Committee, which comprises all independent non-executive Directors in compliance with the GEM Listing Rules, to advise the Independent Shareholders as to whether the terms of the Rights Issue are fair and reasonable and in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders on how to vote. In this connection, the Company has appointed Reorient as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders on the Rights Issue.

Your attention is drawn to the letter from the Independent Board Committee as set out on page 26 and the letter from the Independent Financial Adviser as set out on pages 27 to 53 to this circular.

RECOMMENDATION

The Directors believe that the terms of the Rights Issue and the Capital Reorganisation are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors after their review of the letter of advice from the Independent Financial Adviser) recommend the Shareholders to vote in favor of the relevant resolutions relating to the Capital Reorganisation and the Independent Shareholders to vote in favour of the relevant resolutions relating to the Rights Issue to be proposed at the SGM.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices of this circular.

Yours faithfully,

For and on behalf of the Board

Yu Xiao Min

Chairperson of the Board

— 25 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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IR RESOURCES LIMITED 同仁資源有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8186)

22 March 2016

To the Independent Shareholders

Dear Sir or Madam,

PROPOSED RIGHTS ISSUE OF NEW SHARES ON THE BASIS OF TEN (10) RIGHTS SHARE FOR EVERY ONE (1) NEW SHARE HELD ON THE RECORD DATE

We refer to the circular (the “ Circular ”) dated 22 March 2016 issued by the Company of which this letter forms part. Terms used in the Circular shall bear the same meanings when used herein unless the context requires otherwise.

We have been appointed by the Board as the Independent Board Committee to advise the Independent Shareholders in connection with the Rights Issue and advise you as to whether, in our opinion, the terms of the Rights Issue are fair and reasonable so far as the Independent Shareholders are concerned. Details of the Rights Issue are set out in the section headed “Letter from the Board” contained in this Circular. Reorient has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the Rights Issue. Details of its advice and the principal factors taken into consideration in arriving at its recommendation are set out in the sectioned headed “Letter from the Independent Financial Adviser” contained in this Circular.

Having considered the terms of the Rights Issue, and taking into account the advice from the Independent Financial Adviser, we are of the opinion that the terms of the Rights Issue are on normal commercial terms, fair and reasonable and are in the interest of the Company and the Shareholders as a whole.

Accordingly, we would recommend the Independent Shareholders to vote in favour of the relevant resolution approving the Rights Issue at the SGM.

Yours faithfully, For and on behalf of the

Independent Board Committee

— 26 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of a letter of advice from REORIENT Financial Markets Limited, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, for the purpose of incorporation into this circular.

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Suites 3201-3204 One Exchange Square 8 Connaught Place, Central, Hong Kong

22 March 2016

The Independent Board Committee and the Independent Shareholders IR Resources Limited

Dear Sirs,

PROPOSED RIGHTS ISSUE OF NEW SHARES ON THE BASIS OF TEN RIGHTS SHARES FOR EVERY ONE SHARE HELD ON THE RECORD DATE

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in connection with the Rights Issue, details of which are set out in the circular of the Company dated 22 March 2016 (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 24 February 2016 and 16 March 2016, the Company and the Underwriter entered into the Underwriting Agreement and the Supplemental Underwriting Agreement respectively regarding the Rights Issue pursuant to which the Company proposes to raise HK$262.4 million before expenses by issuing 26,239,509,650 Rights Shares (based on the number of Shares in issue as at the Latest Practicable Date and assuming that there will be no change in the number of Shares between the Latest Practicable Date and the Record Date) to the Qualifying Shareholders at the Subscription Price of HK$0.01 on the basis of ten Rights Shares for every one New Share in issue. For the purpose of this letter, the term Underwriting Agreement means the Underwriting Agreement as amended by the Supplemental Underwriting Agreement.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As the Rights Issue will increase the issued share capital and the market capitalisation of the Company by more than 50%, according to Chapter 10 of the GEM Listing Rules, the Rights Issue is subject to the approval by the Shareholders at the SGM by resolution(s) on which any controlling Shareholders and their associates, or where there are no controlling Shareholders, the directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the Rights Issue.

As at the Latest Practicable Date, the Company had no controlling Shareholder and Ms. Yu, the executive Director, held 120,000,000 Existing Shares (representing approximately 4.57% of the number of issued Existing Shares as at the Latest Practicable Date) through her wholly-owned company, Ritz Management. Ritz Management will abstain from voting in favour of the resolution relating to the Rights Issue. Save as the aforesaid, to the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no other Director held any Existing Shares as at the Latest Practicable Date.

The Independent Board Committee comprising all the independent non-executive Directors has been established to give advice and recommendation to the Independent Shareholders in relation to the Rights Issue.

We, REORIENT Financial Markets Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to (i) whether the terms of the Rights Issue are fair and reasonable, in the interests of the Company and its Shareholders as a whole; and (ii) whether to vote for or against the resolution in respect of the Rights Issue.

In formulating our opinion, we have relied upon the information, facts and representations contained in the Circular and those supplied or made available by the management of and advisers to the Company to us. We have assumed that all such information, facts and representations were true and accurate in all respects at the time they were supplied or made and continue to be true and accurate as at the Latest Practicable Date and can be relied upon. We have no reason to doubt the truth, accuracy and completeness of such information and representations and have confirmed with the management of the Company that no material facts have been withheld or omitted from such information and representations.

We have taken all reasonable and necessary steps to comply with the requirements set out in Rule 17.92 of the GEM Listing Rules. We consider that we have been provided with sufficient information to enable us to reach an informed view. We have not, however, conducted any independent verification of such information or any independent in-depth

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

investigation into the business, affairs, financial position or prospects of the Group nor have we carried out any in-depth research on the Group and its associates.

Apart from normal professional fees for our services to the Company in connection with the engagements described above, no other arrangement exists whereby we will receive any fees and/or benefits from the Group. As at the Latest Practicable Date, we are not aware of any relationships or interests between us and the Company or its substantial shareholders, directors or chief executive, or any of their respective associates. We are independent under Rule 17.96 of the GEM Listing Rules to act as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in connection with the Rights Issue.

PRINCIPAL FACTORS CONSIDERED

In formulating our opinion on the Rights Issue, we have taken into consideration the following principal factors:

Business of the Group

The Group owns the economic land concessions (the “Economic Land Concessions”) in respect of three forests (the “Three Forests”) in the Kingdom of Cambodia (“Cambodia”) which allow the Group to use the Three Forests for agriculture and/or industrial exploitation. The Group plans to log the existing trees growing at the Three Forests and subsequently plant rubber trees or other plants on the Three Forests. The Group plans to sell the timbers from the initial logging and then rubber from its rubber plantation.

We set out below the audited financials and positions of the Group for the years ended 31 December 2014 and 2015 as set out in the annual report of the Company published on 11 March 2016 (the “2015 Annual Report”).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Consolidated statement of profit and loss

CONTINUING OPERATIONS
REVENUE
Costs of sales
Gross profit
Other income and gains
Administrative expenses
Finance costs
Impairment loss on prepayments, deposits and other
receivables
Impairment loss on biological assets
LOSS BEFORE TAX FROM CONTINUING
OPERATIONS
Income tax expense
LOSS FOR THE YEAR FROM CONTINUING
OPERATIONS
DISCONTINUED OPERATION
Share of loss of associates
LOSS FOR THE YEAR
Loss attributable to:
Equity holders of the Company
Non-controlling interests
Basic loss per share
For loss for the year
For loss from continuing operations
Diluted loss per share
For loss for the year
For loss from continuing operations

Year ended 31 December
2015
2014
HK$’000
HK$’000
38,914
—
(28,096)
—
10,818
—
653
1,172
(15,696)
(15,464)
(29,162)
(25,728)
—
(1,163)
—
(481)
(33,387)
(41,664)
(1,693)
—
(35,080)
(41,664)
(3)
(1)
(35,083)
(41,665)
(35,083)
(41,665)
—
—
(35,083)
(41,665)
(1.34) cents
(1.59) cents
(1.34) cents
(1.59) cents
(1.34) cents
(1.59) cents
(1.34) cents
(1.59) cents

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Consolidated statement of financial position

Non-current assets
Property, plant and equipment
Intangible assets
Interests in associates
Total non-current assets
Current assets
Inventories
Trade receivables
Prepayments, deposits and other receivables
Cash and bank balances
Total current assets
Current liabilities
Trade payables
Other loans, other payables and accruals
Tax payables
Total current liabilities
Net current liabilities
Net assets
EQUITY
Share capital
Reserves
Total equity attributable to:
Equity holders of the Company
Non-controlling interests
Total equity

As at 31 December
2015
2014
HK$’000
HK$’000
14,600
17,422
307,164
307,164
—
2,889
321,764
327,475
—
—
13,983
—
4,592
10,545
4,246
2,288
22,821
12,833
6,107
—
157,746
126,377
1,884
—
165,737
126,377
(142,916)
(113,544)
178,848
213,931
131,198
131,198
47,650
82,736
178,848
213,934
—
(3)
178,848
213,931

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Trading in the Shares was suspended from 2 April 2013 to 25 February 2016 as a result of the Company’s failing to timely publish (i) the audited financial information of the Group for the years ended 31 December 2012, 2013 and 2014; (ii) the unaudited first quarterly financial information of the Group for the three months ended 31 March 2013, 2014 and 2015; (iii) the unaudited interim financial information of the Group for the six months ended 30 June 2013, 2014 and 2015; and (iv) the unaudited third quarterly financial information of the Group for the nine months ended 30 September 2013, 2014 and 2015. The above financial statements/information were published by the Company on 24 February 2016. Trading in the Shares resumed on 26 February 2016.

We would like to point out that the Company’s auditors (the “Auditors”) have expressed a qualified opinion in respect of the financial statements of the Group for the year ended 31 December 2015. Shareholders shall refer to the 2015 Annual Report for full details of the Group’s financial statements and the opinion of the Auditors.

One of the bases of the above Auditors’ qualified opinion relates to a fundamental uncertainty — going concern which is reproduced below.

In forming the Auditors’ opinion, the Auditors have considered the adequacy of the disclosures made in note 2.1 to the consolidated financial statements concerning the liquidity position of the Company and its subsidiaries and the adoption of the going concern basis in the preparation of the consolidated financial statements. The Company and its subsidiaries incurred a loss of approximately HK$35,080,000 from its continuing operations during the year ended 31 December 2015 and had consolidated net current liabilities of approximately HK$142,916,000 as at 31 December 2015 which indicates the existence of a material uncertainty which may cast significant doubt on the ability of the Company and its subsidiaries to continue as a going concern and therefore it may be unable to realise its assets and discharge its liabilities in the normal course of business. Despite the above, the consolidated financial statements have been prepared on the going concern basis, the validity of which depends on the results of the future funding being available to the Company and its subsidiaries and the success of their future operation. Should the Company and its subsidiaries be unable to continue as a going concern, adjustments would have to be made to restate the value of assets to their recoverable amounts, to provide for any further liabilities which might arise, and to reclassify non-current assets and liabilities as current assets and liabilities, respectively. The effects of these potential adjustments have not been reflected in the consolidated financial statements. The Auditors consider that appropriate disclosures have been made. However, the Auditors consider this fundamental uncertainty is significant to the consolidated financial statements and therefore the Auditors have qualified their opinion in respect of the appropriateness of adopting the going concern basis for the preparation of the consolidated financial statements.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Below is the existing structure of the Group

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

The Company
100%
Green Resources
Navigator
International Limited
(“Green Resources”)
100%
Keen Wood Group
Limited
(“Keen Wood”)
100% 100% 100%
China Cambodia
Forest Glen Group
Resources Limited
Limited Mighty Pine Limited
(“China Cambodia
(“Forest Glen”)
Resources”)
100% 100% 100% 100%
Crops & Land
(Cambodia) Tong Min Agri-Industrial Richking
Development
Group Engineering Crop Development Development
(Cambodia)
Co., Ltd. (Cambodia) Co., Ltd. Limited
Co., Ltd.
100% 100% 100%
First Forest Second Forest Third Forest
----- End of picture text -----

represents Economic Land Concessions

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

According to the Company, the three Economic Land Concessions are granted for a fixed term of 70 years and will expire in 2077 and 2078. The investment contracts granting the Economic Land Concessions require the Group to meet certain plantation volume requirements, failure of which may lead the Economic Land Concessions being cancelled by the Cambodian government without compensation. The Group, due to the lack of working capital to implement the plantation plan and adverse weather conditions, has not been able to meet the plantation requirements. We have been informed by the Company that the Group is in the process of devising a feasible plantation plan for the Three Forests to reactivate the plantation business and expects to finalise the plan in the second quarter of 2016. We understand from the Company that it has discussed with the relevant authority in Cambodia that the Economic Land Concessions would not be withdrawn or confiscated and the Group will resume plantation activities in the Three Forests.

The Group recorded no revenue for the year ended 31 December 2014. The Group resumed its timber business in the second half of 2015. For the year ended 31 December 2015, the Group recorded revenue of HK$38.9 million and a gross profit of HK$10.8 million. However, plantation work is capital and labour intensive. The Group requires additional working capital to support any plantation activities of the Three Forests after the Restructuring (as defined and detailed below).

In view of the above financial and operating challenges, the Company has proposed to carry out a restructuring exercise including the formation of joint venture companies and other cooperation arrangements with financial and strategic investors and partners.

As announced by the Company on 17 July 2015, 30 September 2015 and 24 February 2016, the Company is proposing and implementing the following restructuring exercise (the “Restructuring”):

the Company will form two joint venture companies, and the concession rights of the Three Forest will be held through a company (the “Plantation Company”) owned by a joint venture company (“Joint Venture 2”) and the timber logging right of the Three Forest will be granted to another company (the “Timber Exploration Company”) owned by another joint venture company (“Joint Venture 1”);
six investors (Subscribers A, B, C, D, E and F (as shown in the group chart below) (together, the “Subscribers”)) entered into agreements with the Company on 7 July 2015 (as amended/supplemented by agreements among the Company and certain relevant Subscribers dated 30 September 2015 and 31 December 2015) under which the Subscribers will, among other things, acquire shares in Joint Venture 1, Joint Venture 2, the Plantation Company or the Timber Exploration Company (the “Subscription”); and

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Keen Wood entered into a plantation cooperation agreement with Cong Ty Tnhh Mtv Phat Phat Trien (the “Plantation Partner”) on 27 November 2015 under which Keen Wood will transfer a 49% equity interest in each of China Cambodia Resources and Forest Glen to the Plantation Partner.

Under the Restructuring, (a) the Subscribers and the Plantation Partner have agreed to procure the provision of or provide funding to the Group in respect of its timber and plantation businesses (as further described in the paragraph headed “funding arrangements” below in this letter) in proportional to their respective shareholding interests in the plantation business owned through Joint Venture 2 and the Plantation Company; (b) Subscriber D and Subscriber E have agreed to guarantee that for the six-month period immediately after completion of the Subscription, the six-month period commencing on the seventh month after completion of the Subscription and the twelve-month period commencing on the thirteen month after completion of the Subscription Agreement, the Timber Exploration Company’s revenue derived from the timber business (i.e. the timber logging, the processing of the timber logged and the sale of wood products but excluding any trading activities) will not be less than HK$50 million, HK$50 million and HK$100 million, respectively; and the Plantation Partner will, among other things, establish a management team which are experienced in plantation operation and provide on-going technical support to the Group’s plantation business (e.g. procurement of seeds/seedling, purchase of raw materials and establishment of a sales network, etc.), and procure that the annual rubber plantation volume of the Three Forests shall not be less than those required by the Cambodian government.

We understand from the Company that the Restructuring is important to the continuing business development of the Group. Shareholders shall refer to the Company’s announcements dated 17 July 2015, 30 September 2015 and 24 February 2016 respectively for details of the Restructuring.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

After the Restructuring, the structure of the Group will be as follows:

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

Oriental Elite The Rosy Charm
Holdings Limited Limited
Company
(“Subscriber D”) (“Subscriber A”)
39.2% 60.8% 39.2%
Rocsky Spring Well
Oceanic Knight Chinabright Pacific Joint Venture Joint Venture International International
Limited Limited
1 2 Limited Limited
(“Subscriber F”) (“Subscriber E”)
(“Subscriber B”) (“Subscriber C”)
9% 40% 51% 51% 40% 9%
Timber
Plantation
Exploration
Company
Company
Timber logging 100%
right and
beneficial Green Resources
interest of all Navigator
timber of the International
Three Forests Limited
100%
Keen Wood
51% 51%
China Cambodia
Forest Glen
Resources
100%
100% 100%
(Cambodia) Agri-Industrial
Richking
Tong Min Group Crop Development
Development
Engineering Co., (Cambodia) Limited
Ltd. Co., Ltd.
100% 100% 100%
First Forest Second Forest Mighty Pine
Limited
All plantation All plantation 100%
right and economic right and economic
interest thereof interest thereof Crops & Land
Development
(Cambodia)
Co., Ltd.
100%
Third Forest
----- End of picture text -----

represents Economic Land Concessions

==> picture [66 x 22] intentionally omitted <==

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

All plantation
right and economic
interest thereof
----- End of picture text -----

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Funding arrangements

The Group only had cash and bank balances of HK$4.2 million but had net current liabilities of HK$142.9 million as at 31 December 2015.

Pursuant to the Restructuring, each of Subscriber D, Subscriber E and Subscriber F will enter into a working capital loan facility agreement with the Company for a term of 2 years, pursuant to which, they will in aggregate provide unsecured interest free working capital loans, to the Timber Exploration Company of up to HK$51,750,000 for the carrying out of timber logging activities. We understand from the Company that such amount of the working capital loans is sufficient to carry out the Group’s timber logging business and additional working capital to the Timber Exploration Company is required only if the Group and the relevant Subscribers intend to further speed up the business development.

Subscriber A, Subscriber B and Subscriber C have undertaken that the Plantation Company will provide funding for the development of the Group’s plantation business in proportional to their respective shareholding interests in the business (expected to be held through China Cambodia Resources and Forest Glen).

Pursuant to the Plantation Cooperation Agreement, the Plantation Partner, will provide funding to China Cambodia Resources and Forrest Glen for carrying out the plantation business of the Three Forests in proportional to its shareholding interests and will undertake that the annual plantation volume of each of the Three Forests will be no less than those required by the local registration under the investment contracts. In addition, the Plantation Partner will compensate the Company any penalty imposed by the Cambodian government for reasons that the required annual plantation volume cannot be met.

Liabilities and indebtedness of the Group

As at 31 December 2015, the Group had the following liabilities and indebtedness.

Trade payables, other payables and accruals Tax payable Amount due to a director Loans and accrued interest Total on balance sheet liabilities	HK$’000 40,987 1,884 30 122,836
	165,737

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

All the above liabilities and indebtedness of the Group are short term and repayable in 2016.

The most significant part of the Group’s liabilities is outstanding loans and the related accrued interest composing of (as at 31 December 2015 and 29 February 2016):

		31	December	2015	29	February	2016
			Accrued			Accrued
		Principal	interest	Total	Principal	interest	Total
		HK$’000	HK$’000	HK$’000	HK$’000	HK$’000	HK$’000
Loan	1	46,787	60,060	106,847	46,787	65,865	112,652
Loan	2	15,500	489	15,989	18,000	629	18,629
		62,287	60,549	122,836	64,787	66,494	131,281

Loan 1 is being owed by Keen Wood to a company (the “Lender”), which acquired the loan from an ex-director of the Company. The loan is currently in default and is subject to a default interest rate of 50% per annum.

Loan 2 is being owed by the Company to the Lender pursuant to a loan facility dated 12 November 2014 (as amended subsequently by the parties). The loan facility amounts up to HK$25,000,000 bearing interest at a rate of 5% per annum, which is unsecured and due on 31 May 2016. As at 29 February 2016, the Group had withdrawn HK$18,000,000. As at the Latest Practicable Date, the Company withdraw an accumulated amount of HK$21,000,000.

The Lender has agreed not to demand for repayment of Loan 1 or Loan 2 until the completion of the Rights Issue which is expected to be no later than May 2016. We understand from the Company that it has agreed with the Lender that both Loan 1 and Loan 2 will be repaid in full after completion of the Rights Issue. If the Rights Issue is not successfully completed, the Company will further negotiate with the Lender on the repayment arrangements.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Major terms of the Rights Issue

Basis of the Rights Issue : Ten Rights Shares for every one New Share in issue on the Record Date Subscription Price : HK$0.01 per Rights Share Number of New Shares entitled to : 2,623,950,965 New Shares the Rights Issue (based on the number of Shares in issue as at the Latest Practicable Date and under the Capital Reorganisation each existing Share will convert into one New Share)

Number of Rights Shares : 26,239,509,650 Rights Shares Number of Rights Shares undertaken : China Wah Yan and Ritz Management have to be taken up by existing both undertaken to the Company and the Shareholders Underwriter that they will respectively apply for 7,100,000,000 Rights Shares and 1,200,000,000 Rights Shares, to be provisionally allotted to them under the Rights Issue. Details of the undertakings are set out in the paragraph headed “Undertakings of the Shareholders” in the Letter from the Board and are summarised in the paragraph headed “Shareholders’ Undertakings” below.

Number of Rights Shares to be : 17,939,509,650 Rights Shares, being the number underwritten by the Underwriter(s) of Rights Shares to be allotted and issued less the aggregate number of the Rights Shares undertaken to be taken up by China Wah Yan and Ritz Management. Accordingly, the Rights Issue is fully underwritten. Nominal value of the Rights Shares : HK$26,239,509.65

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Gross proceeds to be raised from the Rights Shares

Estimated net proceeds to be raised from the Rights Issue after deduction of expenses

: HK$262.4 million : HK$256 million

Underwriter

: Convoy Securities Limited

Assuming there will be no change in the number of issued Shares (or New Shares after the Capital Reduction has become effective) from the Latest Practicable Date up to the Record Date, the 26,239,509,650 Rights Shares to be issued pursuant to the Rights Issue will represent (i) 10 times the number of issued New Shares entitled to the Rights Issue immediately upon the Capital Reduction becoming effective (based on the number of issued Existing Shares as at the Latest Practicable Date); and (ii) 90.9% of the number of issued New Share immediately after the Rights Issue.

As at the Latest Practicable Date, the Company had no other outstanding options, warrants, derivatives or convertible securities which may confer any right to the holder thereof to subscribe for, convert or exchange into Shares.

Conditions of the Rights Issue

The Rights Issue is conditional upon the following conditions being fulfilled:

(i) the passing of the ordinary resolution on a vote taken by way of poll at the SGM to approve the Rights Issue by the Independent Shareholders;
(ii) the Capital Reduction having become effective;
(iii) the filing and registration of the Prospectus Documents (together with any other documents required by the applicable laws or regulations) with the Registrar of Companies in Hong Kong by no later than the posting date of the Prospectus;
(iv) the posting of the Prospectus Documents to the Qualifying Shareholders and the posting of the Prospectus to the Non-Qualifying Shareholders by no later than the posting date of the Prospectus;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(v) the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked, the listing of and permission to deal in, all the Rights Shares (in their nil-paid and fully-paid forms) by no later than posting date of the Prospectus and such listing and permission not being revoked prior to the Latest Time for Termination;
(vi) compliance by the Company with all of its undertakings and obligations of the Company under the Underwriting Agreement;
(vii) compliance with and performance of all undertakings and obligations of China Wah Yan and Ritz Management as contained in the irrevocable undertakings provided by them;

(viii) the resumption of trading in Shares on the Stock Exchange; and

(ix) the obligation of the Underwriter under the Underwriting Agreement becoming unconditional and the Underwriting Agreement not being terminated by the Underwriter pursuant to its terms on or before the Latest Time for Termination.

Condition (viii) has been satisfied.

Subscription Price

Trading in the Shares was suspended from 2 April 2013 to 25 February 2016 and resumed on 26 February 2016 (the “First Resumption Date”).

The terms of the Rights Issue were agreed when trading in the Shares was suspended. The Subscription Price was arrived at after arm’s length negotiation between the Company and the Underwriter after taking into, among others, the prolonged period of suspension in the trading of the Shares, the then prevailing market sentiment, the poor financial performance of the Group in the past years and the additional fund required by the Group for its continuous business development.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Subscription Price is HK$0.01 per Rights Share and is payable in full upon application for Rights Shares. The Subscription Price represents:

(i) a discount of 73.68% to the closing price of HK$0.038 per Share as quoted on the Stock Exchange on the First Resumption Date; and
(ii) a discount of 20% to the theoretical ex-rights price of HK$0.0125 per New Share (based on the closing price of HK$0.038 per Share as quoted on the Stock Exchange on the First Resumption Date).

The Chart below shows the closing price of the Shares from the First Resumption Date to the Latest Practicable Date.

==> picture [426 x 252] intentionally omitted <==

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

Closing
Price
HK$
0.040
0.035
0.030
0.025
0.020
0.015
0.010
0.005
0.000
26/2/201627/2/201628/2/201629/2/2016 1/3/20162/3/20163/3/20164/3/20165/3/2016 6/3/20167/3/2016 8/3/20169/3/2016 10/03/16 11/03/1612/03/16 13/03/1614/03/1615/03/16
----- End of picture text -----

Source: Bloomberg

Same as any other rights issues, every Qualifying Shareholder has the equal opportunity to subscribe for a Rights Share at the same Subscription Price. No Qualifying Shareholder enjoys any special pricing benefit which is not available to every Qualifying Shareholder. If all Shareholders are Qualifying Shareholders and do subscribe for the Rights Shares that they are entitled to under the Rights Issue, every Shareholder will be affected in the same way proportional to its shareholding in the Company. Again no Qualifying Shareholder will be benefited as a result of the Rights Issue regardless of the amount of the Subscription Price.

— 42 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We note that the Group recorded an audited net asset value of approximately HK$178.8 million as at 31 December 2015, representing a consolidated net asset value per Share of approximately HK$0.068. The Subscription Price represents a discount of approximately 85% to the consolidated net asset value per Share as at 31 December 2015 and a discount of approximately 33% to the consolidated net asset value per New Share after completion of the Rights Issue as adjusted by the estimated net proceeds of the Rights Issue (based on the net asset value of the Group as at 31 December 2015, the number of Shares in issue as at the Latest Practicable Date and assuming that there is no other change to the Group’s net asset value and the number of Shares in issue apart from the Capital Reorganisation and the Rights Issue). A substantial balance of the Group’s total assets as at 31 December 2015 comprised intangible assets representing value of the Economic Land Concessions amounting at HK$307.2 million. If the intangible assets are excluded, the Group would have recorded net tangible liabilities of HK$128.3 million as at 31 December 2015. The Group would have recorded net tangible assets of HK$127.2 million (representing net tangible assets per Share of HK$0.004) in contrary to net tangible liabilities should the Rights Issue have been completed on 31 December 2015 as stated in the unaudited pro forma financial information as set out in Appendix II to the Circular.

We note that the Restructuring will effectively involve the disposal of approximately 84.2% of the Company’s indirect interests in Green Resources and its subsidiaries (after having transferred the logging right to the Timber Exploration Company) (the “Green Resources Group”) and the disposal of approximately 69.0% of the Group’s interest in the logging right to be transferred to the Timber Exploration Company. The Company is in the process of preparing for the Restructuring, which is expected to be completed in or about May 2016, and based on the preliminary estimation by the Company and the financial information of the Group as at 31 December 2015, the Restructuring would lead to a loss or a debit balance in the Group’s equity of approximately HK$117 million. If the Restructuring completes, the consolidated equity capital attributable to owners of the Company (i.e. share of the Shareholders in the net assets of the Group) will decrease significantly as a result of the decrease of the Company’s interests in the Green Resources Group and the logging right before taking into account of the Rights Issue.

Given the nature and characteristics of a rights issue, the risk of the Group where its ability to continue to operate as a going concern depends on, among other things, the success of the Restructuring which involves a new business model involving different business partners and stakeholders, we consider the Subscription Price fair and reasonable.

— 43 —

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Reasons for the Rights Issue

The gross proceeds of the Rights Issue will amount to HK$262.4 million. The estimated net proceeds of the Rights Issue (after the deduction of, among other things, underwriting commission) will amount to approximately HK$256 million. The Company intends to apply the net proceeds from the Rights Issue as the general working capital of the Group for the development of the Group’s principal businesses, the potential investment opportunities of the Group and repayment of the outstanding liabilities.

In July and November 2015, the Group entered into agreements with the Subscribers and the Plantation Partner, with a view to revitalizing the Group’s timber and plantation businesses in Cambodia. Whilst the Subscribers and the Plantation Partner have agreed to provide working capital to the Group after the Restructuring, we understand from the Company that it also expects to provide working capital to the restructured plantation business after the Restructuring. We understand from the Company that it plans to designate at least HK$16 million to finance the budgeted capital expenditures and the required working capital for the proposed plantation work of the Three Forests up to 31 October 2017 (the amount of which is subject to whether the Group, the Plantation Subscribers and the Plantation Partner intend to further accelerate the business development) in addition to the loans to be provided by the Plantation Subscribers and the Plantation Partner.

Loan 1 and Loan 2 as described in the paragraph headed “liabilities and indebtedness of the Group” above in this letter are expected to be repaid soon after the Rights Issue. As at the Latest Practicable Date, the outstanding liabilities of the Group amounted to approximately HK$170 million (including the balance of Loan 1 and Loan 2 (principal and interest) which will increase as interest accrues further). We understand from the Company that subject to actual implementation of its business plan and agreement with the relevant Subscribers and the Plantation Partners, it intends to allocate up to HK$50 million as general working capital and working capital to speed up development of its principal businesses (including the above projected working capital needs of HK$16 million), and the remaining proceeds of approximately HK$36 million for potential business opportunities when available.

The cash level of the Group as at 31 December 2015 amounted to only HK$4.2 million. The Group also recorded substantial net current liabilities of HK$142.9 million as at 31 December 2015. The Company considers the expected increase in the Group’s cash level is in the interests of Group as it (1) allows the Group to maintain a safe buffer of cash for any unexpected cash outflow, and (2) provides the Group with the financial ability to invest in other business opportunities that would benefit the Group’s future growth and prospect.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Given the above funding needs of the Group and benefits of the additional cash resources, we agree with the Company that the reasons for the Rights Issue are good, fair and reasonable.

However, Shareholders should note that completion of the Rights Issue is not subject to the completion of the Restructuring. This may impose uncertainty and risk to the Shareholders’ investment in the Company. Based on the tentative timetable for the Rights Issue and the proposed timetable for the Restructuring as advised by the Company, we understand that both the Restructuring and the Rights Issue are targeted to take place within first half of 2016. The Rights Issue, if proceeds, may complete prior to the completion of the Restructuring. In the event that the Restructuring does not complete, we understand from the Company that the Group will adopt other business/cooperation model/plans for the development of its forestry and agricultural business. In such case, proceeds from the Rights Issue will still be applied for repayment of outstanding liabilities (including, among others, Loan 1 is already in default and charging interest at a rate of 50% per annum) and allow the Group to seek alternative business plans.

The Underwriting Agreement

It is a requirement under the GEM Listing Rules that all rights issues shall be fully underwritten unless in some exceptional circumstances. The Rights Issue is fully underwritten in view of the Underwriting Agreement and the undertakings given by Ritz Management and China Wah Yan.

Date : 24 February 2016 Underwriter : Convoy Securities Limited.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, each of the Underwriter and its ultimate beneficial owners are not connected persons (as defined under the GEM Listing Rules) of the Company.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Number of the Rights Shares to be : 17,352,519,980 Rights Shares underwritten by the Underwriter (based on the number of Shares in Issue as at the Latest Practicable Date and assuming that there will be no change in the number

of Shares between the Latest Practicable Date and the Record Date)

Underwriting commission

: 3.0% of the aggregated Offer Price in respect of the New Shares for which the Underwriter has underwritten.

The commission rate was determined between the Company and the Underwriter by reference to the market rate. The underwriting commission of 3% is within the range of the underwriting commissions charged in respect of other recent rights issues that we have reviewed in the past 6 months ranging from 1.5% to 3.5%. We consider that the underwriting commission rate is fair and reasonable.

Pursuant to the Underwriting Agreement, the Underwriter shall not subscribe, for its own account, for such number of Rights Shares not being taken up by Qualifying Shareholders which will result in the shareholding of it and parties acting in concert (within the meaning of the Takeovers Code) with it in the Company to exceed 20% of the voting rights of the Company upon the completion of the Rights Issue. The Underwriter shall also use all reasonable endeavours to ensure that each of the subscribers or purchasers of the untaken Rights Shares procured by it (i) shall be third party independent of, not acting in concert (within the meaning of the Takeovers Code) with and not connected with the Company, any of the directors, chief executive or substantial shareholders of the Company or their respective associates (as defined in the Listing Rules); and (ii) save for the Underwriter itself and its associates, shall not, together with any party acting in concert (within the meaning of the Takeovers Code) with it, hold 10% or more of the voting rights of the Company upon completion of the Rights Issue. This arrangement will help ensure that the Company will have sufficient public float after the Rights Issue as required under the GEM Listing Rules and that no placee will presumed to be a party acting in concert with China Wah Yan and Ritz Management.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Shareholders’ Undertakings

As at the date of the Underwriting Agreement, Ritz Management and China Wah Yan held 120,000,000 and 768,698,967 Shares, respectively (representing 4.57% and 29.30% of the issued number of Shares, respectively as at the Latest Practicable Date). Each of Ritz Management and China Wah Yan has irrevocably undertaken to the Company that (i) all New Shares owned by them will remain registered in their respective names from the date of the Underwriting Agreement and up to the Record Date; and (ii) Ritz Management and China Wah Yan will respectively subscribe for or procure the subscription of 1,200,000,000 Rights Shares and 7,100,000,000 Rights Shares that will be provisionally allotted to them as the holder of such New Shares under the Rights Issue. China Wah Yan does not intend to subscribe for 586,989,670 Rights Shares that it will be entitled to under the Rights Issue. Such 586,989,670 Rights Shares will therefore be subscribed for by the Underwriter as there is no excess application arrangement.

Termination of the Underwriting Agreement

The Underwriting Agreement contains provisions granting the Underwriter, by notice in writing, the right to terminate the Underwriter’s obligations under the Underwriting Agreement on the occurrence of certain events. The Underwriter may terminate the Underwriting Agreement prior to the Latest Time for Termination if:

(i) in the reasonable opinion of the Underwriter, the success of the Rights Issue would be materially and adversely affected by:
(a) the introduction of any new regulation or any change in existing law or regulation (or the judicial interpretation thereof) or other occurrence of any nature whatsoever which may in the reasonable opinion of the Underwriter materially and adversely affect the business or the financial or trading position of the Group as a whole or is materially adverse in the context of the Rights Issue after the signing of the Underwriting Agreement;
(b) the occurrence of any local, national or international event or change (whether or not forming part of a series of events or changes occurring or continuing after the signing of the Underwriting Agreement), of a political, military, financial, economic or other nature, or in the nature of any local, national or international outbreak or escalation of hostilities or armed conflict, or affecting local securities markets which may, in the reasonable opinion of the Underwriter materially and adversely affect the business or the financial or trading position of the Group as a whole;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(c) any material adverse change after the signing of the Underwriting Agreement in the business or in the financial or trading position of the Group as a whole;
(d) any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic, terrorism, strike or lock-out occurred after the signing of the Underwriting Agreement which would, in the reasonable opinion of the Underwriter materially and adversely affect the business or the financial or trading position of the Group as a whole;
(e) the commencement by any third party of any litigation or claim against any member of the Group after the signing of the Underwriting Agreement which, in the reasonable opinion of the Underwriter, is or might be material to the Group taken as a whole;
(ii) there is any material adverse change in market conditions (including, without limitation, any change in fiscal or monetary policy, or foreign exchange or currency markets, suspension or material restriction or trading in securities, impositions of economic sanctions, on Hong Kong) occurs which in the reasonable opinion of the Underwriter makes it inexpedient or inadvisable to proceed with the Rights Issue; or
(iii) the Prospectus when published contains information (either as to the condition of the Group or as to its compliance with any laws or the GEM Listing Rules or any applicable regulations) which has not prior to the date of the Underwriting Agreement been publicly announced or published by the Company and which may in the reasonable opinion of the Underwriter is material to the Group as a whole and is likely to affect materially and adversely the success of the Rights Issue or might cause a prudent investor not to apply for its provisional allotment of Rights Shares under the Rights Issue.

The Underwriter shall be entitled by notice in writing to rescind the Underwriting Agreement if prior to the Latest Time for Termination:

(i) any breach of or omits to any of the warranties or undertakings contained under the Underwriting Agreement comes to the knowledge of the Underwriter; or
(ii) any events occurring or matter arising on or after the date of the Underwriting Agreement and prior to the Latest Time for Termination which would render the warranties contained under the Underwriting Agreement untrue or incorrect in any material respect, comes to the knowledge of the Underwriter.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Effect on shareholding structure

Set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately after the Capital Reduction and Rights Issue (assuming nil application by the Shareholders other than China Wah Yan and Ritz Management); and (iii) immediately after the Capital Reduction and the Rights Issue (assuming full application by the Shareholders (other than the 586,989,670 Rights Shares which China Wah Yan does not intend to subscribe for as described in the paragraph headed “Shareholders’ Undertakings” above)):

China Wah Yan Ritz Management (which is a company wholly owned by Ms. Yu) Public Shareholders Underwriter Total	As at the Latest Practicable Date No. of Shares % 768,698,967 29.30% 120,000,000 4.57% 888,698,967 33.87% 1,735,251,998 66.13% — — 2,623,950,965 100.00%	Immediately after the Capital Reduction and the Rights Issue (assuming nil application by the Shareholders other than China Wah Yan and Ritz Management) No. of Shares % 7,868,698,967 27.26% 1,320,000,000 4.57% 9,188,698,967 31.83% 1,735,251,998 6.01% 17,939,509,650 62.16% 28,863,460,615 100.00%	Immediately after the Capital Reduction and the Rights Issue (assuming full application by the Shareholders (other than the 586,989,670 Rights Shares which China Wah Yan does not intend to subscribe for as described in the paragraph headed “Shareholders’ Undertakings” above)) No. of Shares % 7,868,698,967 27.26% 1,320,000,000 4.57% 9,188,698,967 31.83% 19,087,771,978 66.13% 586,989,670 2.04% 28,863,460,615 100.00%	Immediately after the Capital Reduction and the Rights Issue (assuming full application by the Shareholders (other than the 586,989,670 Rights Shares which China Wah Yan does not intend to subscribe for as described in the paragraph headed “Shareholders’ Undertakings” above)) No. of Shares % 7,868,698,967 27.26% 1,320,000,000 4.57% 9,188,698,967 31.83% 19,087,771,978 66.13% 586,989,670 2.04% 28,863,460,615 100.00%
				31.83% 66.13% 2.04%
				100.00%

Note: The Underwriting Agreement contains terms restricting the shareholding of the Underwriter in the Company such that the Underwriter shall not subscribe, on its own account, for such number of untaken Rights Shares which will result in the shareholding of it and the parties acting in concert with it (within the meaning of the Takeovers Code) in the Company to exceed 20% of the voting right of the Company upon completion of the Rights Issue. The Underwriter shall also use all reasonable endeavours to ensure that each of the subscribers or purchasers of the untaken Rights Shares procured by it (i) shall

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

be third party independent of, not acting in concert (within the meaning of the Takeovers Code) with and not connected with the Company, any of the directors, chief executive or substantial shareholder of the Company or their respective associates as defined in the GEM Listing Rules); and (ii) save for the Underwriter itself and its associates, shall not, together with any party acting in concert (within the meaning of the Takeovers Code) with it, hold 10% or more of the voting rights of the Company upon completion of the Rights Issue so as to maintain the public float of the Shares as required under the GEM Listing Rules at all times in the event that not all Shareholders participate in the Rights Issue.

Same as every other rights issue, every Qualifying Shareholder will be entitled to subscribe for Rights Shares under the Rights Issue to maintain its percentage shareholding interest in the Company. If the Qualifying Shareholders will take up their allotment entitlements of the Rights Shares in full, there would not be any dilution effect on their shareholding interests in the Company. It is only when a Shareholder does not take up its entitlement, its percentage shareholding interest in the Company will be diluted. A Shareholder’s percentage shareholding in the Company will be diluted by 90.9% as a result of the Rights Issue if it does not take up any of its entitlement under the Rights Issue. A Shareholder is entitled to split its entitlement to the Rights Shares and take up part and discard/sell the remaining part. In the case, the percentage shareholding of such Shareholder in the Company will be less diluted. The Rights Issue offers all Qualifying Shareholders the equal opportunity to maintain their respective interests in the Company, we are of the view that the possible dilution effect of the Rights Issue on the shareholding in view of each Qualifying Shareholder is fair and reasonable to the Independent Shareholders as a whole.

Equity fund raising activities in the past twelve months

The Company has not conducted any fund raising activities in the past 12 months immediately preceding the Latest Practicable Date.

Other financing alternatives

As at 31 December 2015, the audited current liabilities of the Group amounted to approximately HK$142,916,000, which consisted of mainly loans, payables and accruals. The major non-current assets of the Group are its economic land concession rights over the Three Forecasts amounted to HK$307,164,000 as at 31 December 2015. The Auditors have expressed concern over the preparation of the Group’s financial statements on a going concern basis and have issued a qualified opinion on the Group’s latest financial statements for the year ended 31 December 2015. The continued operation of the Group will materially be subject to the implementation of the Restructuring. We understand from the Company that it is extremely difficult, if not implausible, for the Group to secure any new borrowing from any bank or other financial institution or to raise any debts in the market.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Whilst the Rights Issues will take longer time than a placing to complete, the Rights Issue is on a fully underwritten basis and will remove uncertainty as compared to a placing on a best effort basis. We consider that given the prolonged trading suspension in the Company’s Shares and the financial and operation difficulties being faced by the Group now, any placing (even on a fully underwritten basis) will also likely be subject to the Capital Reduction which in turn is subject to the Shareholders’ approval. Accordingly, the timetable for the Rights Issue shall not be materially longer than the timetable for a placing. As compared to a placing, the Rights Issue offers the Qualifying Shareholders the equal rights to participate in the capital exercise and their interests in the Company would not be diluted as a result. In this case, we agree with the Company that the Rights Issue is a fair and reasonable mean for raising the necessary capital.

Financial Effects of the Rights Issue

Cash position

Working capital

Upon completion of the Rights Issue, the net proceeds are estimated to be approximately HK$256 million (on the basis that 26,239,509,650 Rights Shares are issued). As such, immediately upon completion of the Rights Issue, the cash level of the Group will be increased and hence it is expected to have a positive effect on the working capital of the Group.

Net assets

According to the 2015 Annual Report, the audited consolidated net assets of the Group as at 31 December 2015 were approximately HK$178,848,000. The unaudited pro forma adjusted consolidated net assets of the Group would increase to approximately HK$434,387,000 as at 31 December 2015 upon completion of the Rights Issue (before consideration the impact of the Restructuring). The unaudited pro forma adjusted consolidated net assets of the Group per Share as at 31 December 2015 would decrease from approximately HK$0.068 to approximately HK$0.015.

A substantial balance of the Group’s total assets as at 31 December 2015 comprised intangible assets representing value of the Economic Land Concessions for the Three Forests amounting at HK$307.2 million. If the intangible assets are excluded, the Group would have recorded net tangible liabilities of HK$128.3 million as at 31 December 2015. The Group would have recorded net tangible assets of HK$127.2 million (representing net

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

tangible assets per Share of HK$0.004) in contrary to net tangible liabilities should the Rights Issue had completed on 31 December 2015 as stated in the unaudited pro forma financial information as set out in Appendix II to the Circular.

The Shareholders should note that the financial statements of the Group as at 31 December 2015 are prepared on a going concern basis. It is explained in the Auditors’ opinion that if the going concern basis is not valid, adjustments will have to be made to the value of the assets and liabilities as stated in the Company’s statement of financial position. If the Restructuring and the Rights Issue do not complete, the Company may not be able to revive its operation and value of the Shareholders’ investment in the Company may materially and adversely be affected. Having taken into account the facts that the Rights Issue would (i) improve the capital structure of the Company and provide the necessary funding for the Group’s development of its business; (ii) provide funds to repay Loan 1 and Loan 2; and (iii) help the Company to revive its business in view of the current financial difficulties and challenges being faced by the Group as described in various official announcements and other publication of the Company and above in this letter, and (iv) affect every Shareholder in the same way in proportional to its interest in the Company, we are of the view that the aforesaid decrease in unaudited pro forma adjusted consolidated net assets per Share is fair and reasonable.

Gearing ratio

According to the 2015 Annual Report, the audited consolidated net assets of the Group attributable to the Shareholders as at 31 December 2015 was approximately HK$178,848,000. The unaudited pro forma adjusted consolidated total and net assets of the Group attributable to the Shareholders immediately after the completion of the Rights Issue would be approximately HK$600,124,000 and HK$434,387,000 respectively as a result of the inflow of the estimated net proceeds from the Rights Issue (based on the number of Shares in Issue as at the Latest Practicable Date and assuming that there will be no change in the number of Shares between the Latest Practicable Date and the Record Date). The Group’s gearing ratio would decrease from 48.1% to 27.6% as a result. Based on the foregoing, we consider that the Rights Issue can help improve gearing and liquidity of the Company.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

Having considered the above principal factors and reasons, we consider that the terms of the Rights Issue are fair and reasonable and the Rights Issue is in the interests of the Company and its shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders vote in favour of the ordinary resolution to be proposed at the SGM to approve the Rights Issue.

Yours faithfully, For and on behalf of

REORIENT Financial Markets Limited Allen Tze

Managing Director

Mr. Allen Tze is a licensed person registered with the Securities and Futures Commission to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance and has over 18 years of experience in corporate finance industry.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. THREE-YEAR FINANCIAL INFORMATION

Details of the financial information of the Group for the years ended 31 December 2013, 31 December 2014 and 31 December 2015 respectively have been set out in the Company’s annual reports for the years ended 31 December 2013 (from page 24 to 95), 31 December 2014 (from page 24 to 95) and 31 December 2015 (from page 20 to 83).

Please see below the link to the annual report 2013:

http://www.hkexnews.hk/listedco/listconews/GEM/2016/0225/GLN20160225019.pdf

Please see below the link to the annual report 2014:

http://www.hkexnews.hk/listedco/listconews/GEM/2016/0225/GLN20160225035.pdf

Please see below the link to the annual report 2015:

http://www.hkexnews.hk/listedco/listconews/GEM/2016/0311/GLN20160311075.pdf

All annual reports of the Company have been posted on the website of the Company at www.irresources.com.hk and published on the website of the Stock Exchange (http://www.hkexnews.hk).

2. INDEBTEDNESS OF THE GROUP

Borrowing

As at 29 February 2016, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had the following outstanding borrowings:

(a) Loans of principal amount of HK$46,787,000 (the “KW Loan”) together with the accrued interest of HK$65,865,000, represented the loans held by a new lender (the “New Lender”). The KW Loan (i) bears interest at 5% per annum; (ii) secured by 100% of the shares in two wholly-owned subsidiaries engaging in timber business; and (iii) should be repayable on or before 20 May 2015 and 20 May 2016, respectively. As the terms of such loans have been defaulted in 2013, an additional interest of 50% per annum was further charged to the Group and became repayable on demand.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(b) Loan of principal amount of HK$18,000,000 (the “New Lender Loan”) together with the accrued interest of HK$629,000, represented a further loan from the New Lender. The New Lender Loan bears interest at 5% per annum, unsecured and has no fixed term of repayment.
(c) Loan of HK$30,000 from a director which is unsecured and interest-free.

Debt securities

As at 29 February 2016, the Group did not have any debt securities.

Contingent liabilities

The Group did not have any material contingent liabilities as at 29 February 2016.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities and normal trade and others payables in the ordinary course of business, the Group did not have any other loan capital issued or agreed to be issued, bank overdrafts, loans, debt securities issued and outstanding, and authorised or otherwise created but unissued and term loans or other borrowings, indebtedness in the nature of borrowings, liabilities under acceptance (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, finance leases or hire purchase commitments, which are either guaranteed, unguaranteed, secured or unsecured, guarantees or other material contingent liabilities outstanding as at 29 February 2016.

3. WORKING CAPITAL SUFFICIENCY OF THE GROUP

The Directors are satisfied after due and careful enquiry and taking into account (i) the present internal financial resources available to the Group; (ii) the expected availability of the working capital loans in the aggregate amount of HK$51.75 million from the relevant Subscribers (as defined below) which are unsecured, interest-free with a term of 2 years for timber logging business; (iii) the contribution of the working capital from the relevant Subscribers and the Plantation Partner (as defined below) for plantation business; and (iii) the net proceeds of HK$256 million from the Rights Issue that the Group will have sufficient working capital for its business for the next twelve months from the date of this circular in the absence of unforeseen circumstances.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

4. 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 December 2015, being the date to which the latest published audited consolidated financial statements of the Group were made up.

5. FOREIGN EXCHANGE

As at the Latest Practicable Date, there was no restriction affecting the remittance of profits or repatriation of capital of the Company into Hong Kong from outside of Hong Kong. As the revenue and cost of business are principally denominated in Hong Kong dollars and United States dollars, the Company has no exposure to foreign exchange liabilities.

6. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

As mentioned in the 2015 Annual Report, the Group entered into agreements to revitalise its forestry business in Cambodia, including (i) the subscription agreement in July 2015 (as subsequently supplemented, and collectively referred to as the “Subscription Agreement”) with a group of investors (the “Subscribers”) who have substantial experience in the timber industry with sales network; and (ii) the plantation cooperation agreement in November 2015 (the “Plantation Cooperation Agreement”) with an experienced plantation operator (the “Plantation Partner”). Details of the above agreements are set out in the paragraphs headed “4. Material Contracts” in Appendix III “General Information” of this circular. After completion of the Restructuring, the relevant Subscribers will provide working capital loans of HK$51.75 million for development of the Group’s timber logging business and the Plantation Partner and the relevant Subscribers will provide funding for development the Group’s plantation business in proportion to their shareholding interests in the Group’s plantation business. Under the Subscription Agreement and the Plantation Cooperation Agreement, the Subscribers and the Plantation Partner shall charge their respective equity interest in the Group’s timber logging business and plantation business and such share charges will only be released upon fulfilment of certain undertakings (including provision of funding, details of which have been disclosed in the announcements of the Company dated 17 July and 30 September 2015 and 24 February 2016). Following completion of the Subscription Agreement and the Plantation Cooperation Agreement as well as the obtaining of the additional working capital from the Rights Issue, it is expected that the Group will be able to accelerate the development of its timber logging business and the plantation business. Going forward, the Group will, as mentioned above, seek appropriate investment/business opportunities to enhance its business portfolio.

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APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION

For illustrative purpose only, set out below is the unaudited pro forma adjusted consolidated net tangible assets of the Group as if the capital reorganisation and rights issue has been completed on 31 December 2015. Although reasonable care has been exercised in preparing the unaudited pro forma financial information, Shareholders who read the information below should bear in mind that these figures are inherently subject to adjustments and, because of its hypothetical nature, may not give a true picture of the Group’s financial position had the capital reorganisation and the rights issue been completed as at 31 December 2015 or any future dates.

A. UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE ASSETS OF THE GROUP

1. Introduction

The following is the unaudited pro forma statement of adjusted consolidated net tangible assets (the “Unaudited Pro Forma Financial Information”) of the Group which has been prepared on the basis of the notes set out below for illustrating the effect of (i) the proposed capital reorganisation (the “Capital Reorganisation”) involving the capital reduction, the reduction of share premium and the elimination of accumulated losses; and (ii) the proposed rights issue (the “Rights Issue”) on the consolidated net tangible assets of the Group as if it had taken place on 31 December 2015. The Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only, and because of its hypothetical nature, it may not give a true picture of the financial position of the Group as at 31 December 2015 or any future date.

The Unaudited Pro Forma Financial Information of the Group is prepared based on the unaudited consolidated net tangible liabilities of the Group as at 31 December 2015 as extracted from the annual report of the Company and adjusted for the effect of the Capital Reorganisation and Rights Issue.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

2. Unaudited pro forma statement of adjusted consolidated net tangible assets of the Group

			Unaudited pro
			forma adjusted
			consolidated net
			tangible assets
			of the Group as
			if the Capital
Unaudited			Reorganisation
consolidated			and the Rights
net tangible	Estimated net		Issue had been
liabilities of the	proceeds from	Estimated net	completed as at
Group as at 31	the Capital	proceeds from	31 December
December 2015	Reorganisation	the Rights Issue	2015
HK$’000	HK$’000	HK$’000	HK$’000
(Note a)	(Note b)	(Note c)
(128,316)	—	255,539	127,223

Unaudited consolidated net tangible

liabilities of the Group per share as at 31 December 2015 prior to the completion of the Capital Reorganisation and the Rights Issue (Note d) (4.89 HK cents)

Unaudited pro forma adjusted

consolidated net tangible assets of the Group per share as if the Capital Reorganisation and the Rights Issue had been completed as at 31 December 2015 (Note e) 0.44 HK cents

Notes:

(a) The unaudited consolidated net tangible liabilities of the Group as at 31 December 2015 is arrived at by deducting the intangible assets of approximately HK$307,164,000 from the net assets of the Group of approximately HK$178,848,000 as extracted from the published annual report of the Group for the year ended 31 December 2015.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

(b) The proposed Capital Reorganisation involves the capital reduction, the reduction of share premium and the elimination of accumulated losses as follows:
(i) Capital reduction

This involves the reduction of the nominal value of each existing share from HK$0.05 each to HK$0.001 each and every authorised but unissued existing share will be sub-divided into 50 new shares (the “New Share(s)”) with a par value of HK$0.001 each;

(ii) Reduction of share premium

After the capital reduction having become effective, the entire amount standing to the credit of the share premium account of the Company will be reduced to nil and the credit arising from such reduction will be credited to the contributed surplus account of the Company; and

(iii) Elimination of accumulated losses

Following the completion of the capital reduction and the reduction of share premium, the credit amount standing in the contributed surplus account of the Company will be used to set off the accumulated losses of the Company in full.

The Capital Reorganisation does not have any impact on the unaudited pro forma consolidated net tangible assets/liabilities of the Group.

(c) The estimated net proceeds from the Rights Issue of approximately HK$255,539,000 are calculated based on 26,239,509,650 rights shares (“Rights Share(s)”) to be issued at the subscription price of HK$0.01 per Rights Share and after deduction of the estimated legal and professional expenses and other related expenses which are directly attributable to the Rights Issue of approximately HK$6,856,000.
(d) The calculation of the unaudited consolidated net tangible liabilities of the Group per share as at 31 December 2015 prior to the completion of the Capital Reorganisation and the Rights Issue is based on the unaudited consolidated net tangible liabilities of the Group of approximately HK$128,316,000 and 2,623,950,965 shares in issue as at 31 December 2015.
(e) The calculation of the unaudited pro forma adjusted consolidated net tangible assets of the Group per share as if the Capital Reorganisation and the Rights Issue had been completed as at 31 December 2015 is based on (i) unaudited pro forma adjusted consolidated net tangible assets of the Group as if the Capital Reorganisation and the Rights Issue had been completed of approximately HK$127,223,000 as at 31 December 2015; and (ii) 28,863,460,615 shares, which comprise of 2,623,950,965 shares in issue as at 31 December 2015 and 26,239,509,650 Rights Shares expected to be issued on the completion of the Rights Issue.
(f) No adjustment has been made to reflect the operating results or other transaction of the Group entered into subsequent to 31 December 2015.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

The following is the text of a report received from the independent reporting accountants, Ascenda Cachet CPA Limited, prepared for the sole purpose of incorporation in this Circular, in respect of the unaudited pro forma financial information of the Company.

B. ACCOUNTANTS’ REPORT ON THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

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13F Neich Tower 128 Gloucester Road Wanchai Hong Kong

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION INCLUDED IN THE CIRCULAR

To the Directors of IR RESOURCES LIMITED

We have completed our assurance engagement to report on the compilation of unaudited pro forma statement of adjusted consolidated net tangible assets (the “Unaudited Pro Forma Financial Information”) of IR Resources Limited (the “Company”) and its subsidiaries (collectively the “Group”) by the directors (the “Directors”) of the Company for illustrative purposes only, to provide information about how (i) the capital reorganisation (the “Capital Reorganisation”) involving the capital reduction, the reduction of share premium and the elimination of accumulated losses; and (ii) the rights issue (the “Rights Issue”) of 26,239,509,650 rights shares (the “Rights Share(s)”) to the qualifying shareholders at the subscription price of HK$0.01 per Rights Share on the basis of ten Rights Shares for every one share held on 3 May 2016 (or such other date as the underwriter may agree in writing with the Company) (the “Record Date”) might have affected the unaudited consolidated net tangible assets of the Group as if the Capital Reorganisation and the Rights Issue had taken place and completed on 31 December 2015. The Unaudited Pro Forma Financial Information consists of the unaudited pro forma statement of adjusted consolidated net tangible assets as at 31 December 2015 and related notes as set out in Section A of Appendix II of this circular (the “Circular”) issued by the Company. The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described in Section A of Appendix II of the Circular.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the Capital Reorganisation and Rights Issue on the Group’s unaudited consolidated net tangible liabilities as at 31 December 2015 as if the Capital Reorganisation and the Rights Issue had taken place at 31 December 2015. As part of this process, information about the Group’s unaudited consolidated net tangible liabilities have been extracted by the Directors from the Group’s consolidated financial statements for the year ended 31 December 2015, of which an auditors’ report has been published.

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with Rule 7.31 of the Rules Governing the Listing of Securities on the Growth Enterprise Market of The Stock Exchange of Hong Kong Limited (the “GEM Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

We have applied Hong Kong Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by Rule 7.31(7) of the GEM Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owned to those to whom those reports were addressed by us at the respective dates of their issue.

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APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements (“HKSAE”) 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountant plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the Unaudited Pro Forma Financial Information in accordance with Rule 7.31 of the GEM Listing Rules and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of the Unaudited Pro Forma Financial Information included in the Circular is solely to illustrate the impact of the Capital Reorganisation and the Rights Issue on unadjusted financial information of the Group as if the Capital Reorganisation and the Rights Issue had been undertaken at 31 December 2015 selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Capital Reorganisation and the Rights Issue would have been as presented.

A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial Information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the significant effects directly attributable to the transaction, and to obtain sufficient appropriate evidence about whether:

the related pro forma adjustments give appropriate effect to those criteria; and
the Unaudited Pro Forma Financial Information reflects the proper application of those adjustments to the unadjusted financial information.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION

APPENDIX II

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the Group, the event or the transaction in respect of which the Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to Rule 7.31(1) of the GEM Listing Rules.

Yours faithfully,

ASCENDA CACHET CPA LIMITED

Certified Public Accountants

Chan Yuk Tong

Practising Certificate Number P03723

Hong Kong

22 March 2016

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GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Group. 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.

2. SHARE CAPITAL

The authorised and issued share capital of the Company (i) as at the Latest Practicable Date and (ii) immediately after completion of the Rights Issue (assuming there is no change in the issued share capital of the Company from the Latest Practicable Date and up to the Record Date):

As at the Latest Practicable Date Authorised: 4,000,000,000 Existing Shares Issued and fully-paid or credited as fully paid: 2,623,950,965 Existing Shares	HK$ 200,000,000

	131,197,548

(i) As at the Latest Practicable Date
(ii) Immediately after completion of the Capital Reduction and Rights Issue (assuming there is no change in the issued share capital of the Company from the Latest Practicable Date and up to the Record Date)

Authorised:

200,000,000,000 New Shares Issued and fully-paid or credited as fully paid: 2,623,950,965 New Shares as at the Latest Practicable Date 26,239,509,650 Rights Shares to be allotted and issued 28,863,460,615	200,000,000

	2,623,951 26,239,510
	28,863,461

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GENERAL INFORMATION

APPENDIX III

All of the Rights Shares to be issued will rank pari passu in all respect with each other, including, in particular, as to dividends, distribution and voting rights, and once issued and fully-paid, with all the Shares in issue as at the date of allotment and issue of the Rights Shares. The Rights Shares to be issued will be listed on the Stock Exchange.

No part of the share capital or any other securities of the Company is listed or dealt in on any stock exchange other than the Stock Exchange and no application is being made or is currently proposed or sought for the Rights Shares or any other securities of the Company to be listed or dealt in on any other stock exchange.

As at the Latest Practicable Date, there were no arrangements under which future dividends were waived or agreed to be waived.

3. DISCLOSURE OF INTERESTS

(i) Interests of Directors and chief executive

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which (i) 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 they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by directors were as follows:

Long position in the Shares and underlying Shares of the Company

			Approximate
			percentage
			of the total
		Number of Shares	issued share
Name of		and underlying	capital of the
Director	Capacity	Shares held	Company
Ms. Yu	Interest of controlled	120,000,000	4.57%
	corporation_(Note)_

Note: Since these Shares are registered under Ritz Management, a company wholly-owned by Ms. Yu, Ms. Yu is deemed to be interested in all the Shares held by Ritz Management under the SFO.

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GENERAL INFORMATION

APPENDIX III

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had or was deemed to have any interests and short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which (i) 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 they were taken or deemed to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required to be notified to the Company and the Stock Exchange pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules relating to securities transactions by the Directors.

(ii) Interests of substantial Shareholders

As at the Latest Practicable Date, so far as was known to the Directors, the following persons, other than the Directors or chief executive of the Company, had or were deemed or taken to have interests or short positions in the Shares or underlying Shares which were recorded in the register required to be kept by the Company under Section 336 of the SFO, who is interested in 10% or more of any class of share capital carrying rights to vote at general meetings of the Company:

			Approximate
			percentage
			of the total
		Number of Shares	issued share
		and underlying	capital of the
Name	Capacity	Shares held	Company
China Wah Yan	Corporate owner	768,698,967	29.3%

Save as disclosed above, the Directors were not aware of any other person who, as at the Latest Practicable Date, had or was deemed to have interests or short positions in the Shares or underlying Shares, which were recorded in the register required to be kept by the Company under Section 336 of the SFO, who is interested in 10% or more of any class of share capital carrying rights to vote at general meetings of the Company.

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GENERAL INFORMATION

APPENDIX III

4. MATERIAL CONTRACTS

The following contracts, not being contracts entered into in the ordinary course of business of the Group, have been entered into by the members of the Group within two years immediately preceding the date of this circular, which are or may be material:

(i) the subscription agreement dated 7 July 2015 and entered into between the Company and the investors in relation to the restructuring of the Group’s business and the subsequent disposal of certain interest in subsidiaries which are engaged in timber business at an aggregate consideration of approximately US$1,800, details of which are set out in the announcements of the Company dated 17 July and 30 September 2015;
(ii) the plantation cooperation agreement dated 27 November 2015 and entered into between the Company and Cong Ty Tnhh Mtv Phat Phat Trien relating to the disposal of certain interest in subsidiaries which are engaged in plantation business at an aggregate consideration of US$2, details of which are set out in the announcement of the Company dated 24 February 2016; and
(iii) the Underwriting Agreement.

5. INTERESTS IN CONTRACTS AND ARRANGEMENTS

None of the Directors was materially interested in any contract or arrangement subsisting as at the Latest Practicable Date which was significant in relation to the business of the Group, nor had any Director had any direct or indirect interests in any assets which have been acquired or disposed of by or leased to, or are proposed to be acquired or disposed of by or leased to, any member of the Group since 31 December 2015, being the date to which the latest published audited consolidated financial statements of the Group were made up.

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GENERAL INFORMATION

APPENDIX III

6. QUALIFICATIONS AND CONSENT OF EXPERTS

The following are the qualifications of the experts who have given their opinions and advice which are included in this circular:

Name

Qualification

Reorient a licensed corporation to carry on Type 1 (dealing in securities), Tyep 4 (advising on securities), type 6 (advising on corporate finance) and Type 9 (asset management) regulated activity under the SFO

Ascenda Cachet CPA certified public accountants Limited (“Ascenda Cachet”)

Each of Reorient and Ascenda Cachet has given and has not withdrawn its written consent to the issue of this circular with inclusion of its letter or reports and the references to its name in the form and context in which they respectively appear.

Each of Reorient and Ascenda Cachet did not have any interests in any Shares or shares in any member of the Group, or any right or option (whether legally enforceable or not) to subscribe for or nominate persons to subscribe for any securities in any member of the Group as at the Latest Practicable Date.

As at the Latest Practicable Date, each of Reorient and Ascenda Cachet did not have any direct or indirect interests in any assets which have since 31 December 2015 (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 by any member of the Group, or was proposed to be acquired or disposed of by or leased to or by any member of the Group.

7. SERVICE CONTRACTS

As at the Latest Practicable Date, there is no service contract or proposed service contract between the Directors and any member of the Group which is not determinable by the Group within one year without payment of compensation other than statutory compensation.

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GENERAL INFORMATION

APPENDIX III

8. COMPETING INTERESTS

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors nor their respective close associates had any business or interest, which competes or may compete with the business of the Group which would be required to be disclosed under Rule 11.04 of the GEM Listing Rules.

9. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation, claim or arbitration of material importance and there was no litigation, claim or arbitration of material importance known to the Directors to be pending or threatened against any member of the Group.

10. CORPORATE INFORMATION OF THE COMPANY AND PARTIES INVOLVED IN THE RIGHTS ISSUE

Registered office Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda Principal place of business in 36th Floor, Times Tower Hong Kong 391-407 Jaffe Road Wanchai, Hong Kong Principal share registrar and Appleby Management (Bermuda) Ltd. transfer agent office Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda Hong Kong branch share Computershare Hong Kong Investor Services Ltd. registrar and transfer office Shops 1712-16, 17th Floor, Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong Authorised representatives Ms. Yu Xiao Min Mr. Fung Wing Sang Company secretary Mr. Fung Wing Sang Compliance officer Ms. Yu Xiao Min

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GENERAL INFORMATION

APPENDIX III

Underwriter	Convoy Securities Limited
	Rooms 1406-1412, Nan Fung Tower
	88 Connaught Road Central
	Central, Hong Kong
Legal advisers to the Company	As to Hong Kong law
	Baker & McKenzie
	14/F., Hutchison House
	10 Harcount Road
	Hong Kong
	Norton Rose Fulbright Hong Kong
	38/F., Jardine House
	1 Connaught Place
	Central, Hong Kong
Auditor	Ascenda Cachet CPA Limited
	13/F., Neich Tower
	128 Gloucester Road
	Wanchai, Hong Kong
Independent Financial Adviser	Reorient Financial Markets Limited
to the Independent Board	Suites 3201-3204, One Exchange Square
Committee and the	8 Connaught Place
Independent Shareholders	Central, Hong Kong
Principal bankers	ANZ Royal Bank (Cambodia) Limited
	20, Kramuon Sar & Corner of Street 67
	Phnom Penh, Cambodia
	Bank of China (Hong Kong) Limited
	Bank of China Tower
	1 Garden Road
	Central, Hong Kong
	The Hong Kong and Shanghai Banking Corporation
	Limited
	1 Queen’s Road Central
	Hong Kong

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GENERAL INFORMATION

APPENDIX III

11. DIRECTORS AND SENIOR MANAGEMENT OF THE COMPANY

Particulars of the Directors

Name

Business Address

Executive Directors

Yu Xiao Min 36th Floor, Times Tower, 391-407 Jaffe Road, Wanchai, Hong Kong Xu Miaoxia 36th Floor, Times Tower, 391-407 Jaffe Road, Wanchai, Hong Kong Zeng Lingchen 36th Floor, Times Tower 391-407 Jaffe Road, Wanchai, Hong Kong

Independent non-executive Directors

Pang King Sze, Rufina 36th Floor, Times Tower 391-407 Jaffe Road, Wanchai, Hong Kong Hong Bingxian 36th Floor, Times Tower 391-407 Jaffe Road, Wanchai, Hong Kong Hung Kenneth 36th Floor, Times Tower 391-407 Jaffe Road, Wanchai, Hong Kong

Executive directors

Ms. Yu Xiao Min, aged 46, has been appointed as an executive Director and the chairperson of the Board since February 2012. Ms. Yu has extensive international network and substantial business experience in Hong Kong, the PRC, Southeast Asia, North and South America. Ms. Yu was awarded the “Outstanding Entrepreneur of Guangdong Province” by the Guangdong Provincial Executive Association of Entrepreneurs and the “Asia Pacific Entrepreneurship Awards — Most Promising Category” by Enterprise Asia. She is also an independent non-executive director of China Green (Holdings) Limited, a company whose shares are listed on the main board of the Stock Exchange. Ms. Yu holds a master’s degree in business administration. Save as disclosed above, Ms. Yu did not hold any directorship in any other listed Company in the past three years.

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APPENDIX III

GENERAL INFORMATION

Ms. Xu Miaoxia, aged 57, has been appointed as an executive Director since May 2015. Ms. Xu has more than 30 years of experience in sales and distribution, procurement, production and logistics in the PRC. Prior to joining the Group, Ms. Xu was the director of a manufacturing and logistics group in the PRC. She also used to hold progressive positions from procurement, shop management, distribution to logistics in a large retail and logistics group listed in the PRC and was a senior management before leaving the group. Ms. Xu holds a university diploma in economics. Save as disclosed above, Ms. Xu did not hold any directorship in any other listed Company in the past three years.

Mr. Zeng Lingchen, aged 35, has been appointed as an executive Director since October 2010. Mr. Zeng possesses substantial experience in plantation of rubber trees and sale of rubber products. Prior to joining the Group, Mr. Zeng held management positions in two rubber plantation companies in the PRC. Mr. Zeng holds a bachelor’s degree in environmental engineering. Save as disclosed above, Mr. Zeng did not hold any directorship in any other listed Company in the past three years.

Independent non-executive directors

Ms. Pang King Sze, Rufina, aged 40, has been appointed as an independent nonexecutive Director since September 2014. Ms. Pang has more than 15 years of experience in the areas of audit, financial management and internal control. She is currently the co-founder and a partner of a certified public accountants firm in Hong Kong. Ms. Pang is a member of the Hong Kong Institute of Certified Public Accountants and a member of the New Zealand Institute of Chartered Accountants. Ms. Pang holds a bachelor’s degree in business. Save as disclosed above, Ms. Pang did not hold any directorship in any other listed Company in the past three years.

Mr. Hong Bingxian, aged 48, has been appointed as an independent non-executive Director since October 2012. Mr. Hong has more than 20 years of experience in production and international trade and substantial knowledge in logistics management and production process. He is the founder and managing director of a manufacturing group in the PRC. Save as disclosed above, Mr. Hong did not hold any directorship in any other listed Company in the past three years.

Mr. Kenneth Hung, aged 44, has been appointed as an independent non-executive Director since March 2015 Mr. Hung has extensive experience in the entertainment industry in Hong Kong and the PRC. Mr. Hung is presently an executive director of Interactive Entertainment China Cultural Technology Investment Limited and an independent non-executive director of China Demeter Investments Limited and

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GENERAL INFORMATION

APPENDIX III

DX.com Holding Limited, respectively, all of whose shares are listed on the Growth Enterprise Market of the Stock Exchange. Mr. Hung holds a bachelor’s degree in science. Save as disclosed above, Mr. Hung did not hold any directorship in any other listed Company in the past three years.

The Directors’ interest in the Company is disclosed in the paragraph “Disclosure of interests” in the Appendix 3 of this circular.

Audit committee

The audit committee of the Board (the “Audit Committee”) is established with written terms of reference in compliance with Rules 5.28 to 5.33 of the GEM Listing Rules. The Audit Committee’s primary duties include (i) review of the Group’s annual reports and quarterly financial reports and provision of advice and comments thereon to the Board; and (ii) review and supervision of the Group’s financial reporting and internal control procedures. The Audit Committee currently comprises of three independent non-executive Directors, namely, Ms. Pang King Sze, Rufina, Mr. Hong Bingxian and Mr. Kenneth Hung.

12. GENERAL

The English text of this circular and the accompanying form of proxy shall prevail over the Chinese text.

13. EXPENSES

The expenses in connection with the Rights Issue, including underwriting commission, printing, registration, translation, legal and accounting fees, are estimated to be approximately HK$6 million and are payable by the Company.

14. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours (Saturdays and public holidays excepted) from 9:00 a.m. to 6:00 p.m. and at the registered office of the Company in Hong Kong at 36th Floor, Times Tower, 391-407 Jaffe Road, Wanchai, Hong Kong from the date of this circular to 11 April 2016 (both day inclusive):

(a) the bye-laws of the Company;

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GENERAL INFORMATION

APPENDIX III

(b) the annual reports of the Company for the two financial years ended 31 December 2014 and 2015;
(c) the letter of advice from Reorient, the Independent Financial Adviser to the Independent Board Committee and Independent Shareholders, the text of which is set out on pages 27 to 53 of this circular;
(d) the unaudited pro forma financial information of the Group issued by Ascenda Cachet set out in Appendix II to this circular;
(e) the written consents referred to in the paragraph headed “Qualifications and Consent of Experts” in this appendix; and
(f) the material contracts referred to in the section headed “Material Contracts” in this appendix.

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NOTICE OF SGM

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IR RESOURCES LIMITED 同仁資源有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8186)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the special general meeting (“SGM”) of IR Resources Limited (‘‘Company’’) will be held at 10:00 a.m. on Wednesday, 20 April 2016 at Suites 903-905, 9th Floor, Shui On Centre, 6-8 Harbour Road, Wanchai, Hong Kong to consider and, if thought fit, approve the following resolutions of the Company:

ORDINARY RESOLUTION

“ THAT

(a) subject to the passing of the special resolution as set out in this notice below and the fulfilment of the conditions of the Underwriting Agreement (as defined below) (as amended and supplemented by the Supplemental Underwriting Agreement (as defined below)), the Rights Issue (as defined below) and the transactions contemplated thereunder be and are hereby approved;
(b) the underwriting agreement (the “ Underwriting Agreement ”) dated 24 February 2016 and entered into between the Company and Convoy Securities Limited (the “ Underwriter ”) (as amended and supplemented by the supplemental underwriting agreement dated 16 March 2016 (the “ Supplemental Underwriting Agreement ”) (copies of which have been produced to the SGM marked “A” and signed by the chairman of the SGM for the purpose of identification) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;
(c) subject to the passing of the special resolution as set out in this notice below and the fulfilment of the conditions set out in the Underwriting Agreement (as amended and supplemented by the Supplemental Underwriting Agreement), the Rights Issue (as defined below), the issue by way of rights issue (the “ Rights Issue ”) of 26,239,509,650 New Shares (as defined below) (the “ Rights Shares ”) to the shareholders (the “ Qualifying Shareholders ”) of the Company whose names appear on the register of members of the Company on the date by reference to

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NOTICE OF SGM

which entitlements to the Rights Issue are to be determined (the “ Record Date ”) (excluding those shareholders (the “ Non-Qualifying Shareholders ”) of the Company with registered addresses as shown in the register of members of the Company at the close of business on the Record Date in places outside Hong Kong in respect of whom the board (the “ Board ”) of directors (the “ Directors ”) of the Company consider it necessary or expedient not to offer the Rights Shares after making the relevant enquiries regarding the legal restrictions under the laws of the relevant places and the requirements of the relevant regulatory body or stock exchange in those places) on the basis of ten Rights Shares for every one New Share then held is hereby approved, confirmed and ratified;

(d) any Directors be and is hereby authorised to allot and issue the Rights Shares pursuant to or in connection with the Rights Issue notwithstanding that the same may be offered, allotted or issued otherwise than pro rata to the Qualifying Shareholders and, in particular, the Directors be and are hereby authorised to make such exclusions or other arrangements in relation to Non-Qualifying Shareholders as they deem necessary or expedient having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong applicable to the Company; and
(e) any Director be and is hereby authorised to sign and execute such documents and do all such acts and things in connection with the Rights Issue or as they consider necessary, desirable or expedient in connection with the implementation of or giving effect to the Rights Issue, the Underwriting Agreement (as amended and supplemented by the Supplemental Underwriting Agreement), the Rights Issue and the transactions contemplated thereunder.”

SPECIAL RESOLUTION

“ THAT subject to and conditional upon (i) compliance by the Company with the requirements of Section 46(2) of the Companies Act 1981 of Bermuda (as amended) in respect of the Capital Reorganisation (as defined below), (ii) the granting by The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) of the listing of, and permission to deal in, the New Shares (as defined below) arising from the Capital Reorganisation (as defined below), and (iii) the obtaining of all necessary approvals from the regulatory authorities or otherwise as may be required in respect of the Capital Reorganisation, with effect from the business day immediately following the date on which this resolution is passed:
(a) the nominal value of each of the issued ordinary shares of the Company (the “ Shares ”) be and is hereby reduced from HK$0.05 to HK$0.001 (the “ New

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NOTICE OF SGM

Shares ”) by cancelling the paid-up capital to the extent of HK$0.049 on each of the issued Shares (the “ Capital Reduction ”) and the credit arising from the Capital Reduction be credited to the contributed surplus account of the Company;

(b) immediately upon the Capital Reduction becoming effective, each of the authorised but unissued Shares (including those arising from the Capital Reduction) be subdivided into 50 New Shares (the “ Share Subdivision ”);
(c) the entire amount standing to the credit of the share premium account of the Company as at the date of the passing of this resolution be and is hereby reduced to nil and the credit arising from such reduction will be credited to an account designated as the contributed surplus account of the Company (the “ Reduction of Share Premium ”, together with the Capital Reduction and the Share Subdivision, the “ Capital Reorganisation ”);
(d) the utilisation of the contributed surplus account of the Company to offset the accumulated losses of the Company as at 31 December 2015 as permitted by the bye-laws of the Company and all applicable laws in Bermuda on or after the date the Capital Reorganisation becomes effective (the “ Elimination of Accumulated Losses ”) be and is hereby approved; and
(e) the Directors be and are hereby authorised to do all such acts and things and execute all such documents on behalf of the Company, including under seal where applicable, as they may consider necessary or expedient to give effect to or in connection with the implementation of the Capital Reorganisation and/ or the Elimination of Accumulated Losses.”

On behalf of the Board

IR Resources Limited Yu Xiao Min Chairperson

Hong Kong, 22 March 2016

Registered office:

Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Head office and principal place of business in Hong Kong: 36th Floor, Time Tower 391-407 Jaffe Road Wanchai Hong Kong

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NOTICE OF SGM

Notes:

A member of the Company entitled to attend and vote at the SGM convened by the above notice is entitled to appoint another person as his/her/its proxy to attend and vote instead of him/her/it. A member of the Company who is the holder of two or more shares may appoint more than one proxy to represent him/her/it and vote on his/her/its behalf. A proxy needs not be a member of the Company. In order to be valid, the form of proxy must be deposited at the office of the Company in Hong Kong, 36th Floor, Times Tower, 391-407 Jaffe Road, Wanchai, Hong Kong together with a power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority, not less than 48 hours before the time for holding the SGM or any adjournment thereof.
In the case of joint holders of shares in the Company, the vote of the senior who tenders a vote whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holders, seniority being determined by the order in which names stand in the register of members.
Completion and return of the form of proxy will not preclude members from attending in person and voting at the SGM or any adjournment thereof, should he/she/it so wish, and in such event, the form of proxy previously submitted shall be deemed to be revoked.

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AI assistant

Almana Limited — Proxy Solicitation & Information Statement 2016

51315_rns_2016-03-21_85144150-5579-4782-859e-6aa5e6a5715b.pdf

IR RESOURCES LIMITED 同仁資源有限公司

PROPOSED RIGHTS ISSUE OF NEW SHARES ON THE BASIS OF TEN (10) RIGHTS SHARES FOR EVERY ONE (1) NEW SHARE HELD ON THE RECORD DATE; PROPOSED CAPITAL REORGANISATION AND NOTICE OF SPECIAL GENERAL MEETING

CHARACTERISTICS OF GEM

CONTENTS

EXPECTED TIMETABLE

Commencement of dealing in fully-paid

EXPECTED TIMETABLE

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

IR RESOURCES LIMITED 同仁資源有限公司

INTRODUCTION

PROPOSED CAPITAL REORGANISATION

(i) Capital Reduction

(ii) Reduction of Share Premium

(iii) Elimination of Accumulated Losses

LETTER FROM THE BOARD

Conditions of the Capital Reorganisation

Effects of the Capital Reorganisation

Status of the New Shares

Listing Application of the New Shares

Free exchange of share certificates

LETTER FROM THE BOARD

Reasons for the Capital Reorganisation

THE RIGHTS ISSUE

Issue statistics

Basis of provisional allotment

Matching services

Subscription Price

LETTER FROM THE BOARD

Qualifying Shareholders

Rights of Overseas Shareholders and Non-Qualifying Shareholders

LETTER FROM THE BOARD

Ranking of the Rights Shares

Closure of register of members

No Application for excess Rights Shares

Application for listing

LETTER FROM THE BOARD

The Underwriting Agreement

LETTER FROM THE BOARD

Underwriting arrangement under the Rights Issue

Shareholders Undertaking

Change in the shareholding structure

LETTER FROM THE BOARD

Reasons for and the use of proceeds from the Rights Issue

LETTER FROM THE BOARD

FUND RAISING ACTIVITIES IN THE PAST TWELVE MONTHS

IMPLICATIONS UNDER THE GEM LISTING RULES

LETTER FROM THE BOARD

GENERAL

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

ADDITIONAL INFORMATION

Yu Xiao Min

IR RESOURCES LIMITED 同仁資源有限公司

PROPOSED RIGHTS ISSUE OF NEW SHARES ON THE BASIS OF TEN (10) RIGHTS SHARE FOR EVERY ONE (1) NEW SHARE HELD ON THE RECORD DATE

Independent Board Committee

PROPOSED RIGHTS ISSUE OF NEW SHARES ON THE BASIS OF TEN RIGHTS SHARES FOR EVERY ONE SHARE HELD ON THE RECORD DATE

INTRODUCTION

PRINCIPAL FACTORS CONSIDERED

Business of the Group

Consolidated statement of profit and loss

Consolidated statement of financial position

Below is the existing structure of the Group

Funding arrangements

Liabilities and indebtedness of the Group

Major terms of the Rights Issue

Conditions of the Rights Issue

Subscription Price

Reasons for the Rights Issue

The Underwriting Agreement

Shareholders’ Undertakings

Termination of the Underwriting Agreement

Effect on shareholding structure

Equity fund raising activities in the past twelve months

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