THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China Resources and Transportation Group Limited , you should at once hand this circular and the accompanying proxy form to the purchaser or the transferee or to the bank, stockbroker 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. This circular is for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

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CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 269)

(1) PROPOSED SHARE CONSOLIDATION ON THE BASIS OF EVERY TWENTY ISSUED AND UNISSUED EXISTING SHARES INTO ONE CONSOLIDATED SHARE;

(2) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL;

(3) PROPOSED CHANGE IN BOARD LOT SIZE; (4) PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE; AND

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial adviser to the Company

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VMS Securities Limited

Underwriters to the Rights Issue

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VMS Securities Limited

Mr. Cao Zhong

Mr. Fung Tsun Pong

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

Capitalised terms used in this cover page shall have the same meanings as those defined in this circular.

A letter from the Board is set out on pages 14 to 44 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 45 to 46 of this circular. A letter of advice from Veda Capital to the Independent Board Committee and the Independent Shareholders is set out on pages 47 to 69 of this circular.

To qualify for the Rights Issue, the Shareholder must be registered as a member of the Company on the Record Date. The Shareholders must lodge any transfers of Shares (together with the relevant share certificate(s)) with the Registrar by 4:30 p.m. on Monday, 9 November 2015. The last day of dealings in Consolidated Shares on a cum-rights basis is therefore expected to be Thursday, 5 November 2015. The Consolidated Shares will be dealt with on an ex-rights basis from Friday, 6 November 2015.

A notice convening the EGM of the Company to be held at 17th Floor, China Railway South Headquarters Building, No. 3333 Zhongxin Road (Shenzhen Bay Section), Nanshan District, Shenzhen, PRC (深圳市南山區中心路3333號（深圳灣段）中鐵南方總部大廈17樓) on Wednesday, 4 November 2015, at 11:00 a.m. is set out on pages 100 to 102 of this circular. A proxy form for use at the meeting is enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete the proxy form and return the same to the Company’s branch share registrar in Hong Kong, Tricor Progressive Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong in accordance with the instructions printed thereon as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting or any adjournment thereof. Completion and return of the proxy form will not preclude you from attending and voting in person at the meeting or any adjourned meeting (as the case may be) if you so wish. The Underwriters may terminate the arrangements set out in the Underwriting Agreement by notice in writing given to the Company at any time prior to 4:00 p.m. on Friday, 4 December 2015, if (1) in the reasonable opinion of the Underwriters, 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 Underwriters, 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; or (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 after the signing of the Underwriting Agreement 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 Underwriters, materially and adversely affect the business or the financial or trading position of the Group as a whole; or (c) any materially 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; or (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 Underwriters, materially and adversely affect the business or the financial or trading position of the Group as a whole; or (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 Underwriters, is or might be material to the Group taken as a whole; or (f) there occurs or comes into effect the imposition of any moratorium, suspension or material restriction on trading in the Shares or Consolidated Shares (as the case may be) generally on the Stock Exchange due to exceptional financial circumstances or otherwise; or (2) 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 restriction of trading in securities, imposition of economic sanctions, on Hong Kong, the PRC or other jurisdiction relevant to the Group or any member of the Group and a change in currency conditions for the purpose of this event includes a change in the system under which the value of the Hong Kong currency is pegged with that of the currency of the United States of America) occurs which, in the reasonable opinion of the Underwriters, makes it inexpedient or inadvisable to proceed with the Rights Issue; or (3) the Circular, the Prospectus and all amendments and supplements thereto when published contain information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or the Takeovers Code or any applicable regulations) which has not prior to the date hereof been publicly announced or published by the Company and which may, in the reasonable opinion of the Underwriters, is material to the Group as a whole and is likely to affect materially and adversely the success of the Rights Issue. Upon giving of notice of termination or rescission pursuant to the Underwriting Agreement, all obligations of the Underwriters under the Underwriting Agreement shall cease and terminate and none of the parties to the Underwriting Agreement shall have any claim against any other parties in respect of any matter or thing arising out of or in connection with the Underwriting Agreement save that all costs and other all out-of-pocket expenses which have been properly incurred by the Underwriters in connection with the Rights Issue and its associated transactions (excluding the underwriting commission, sub-underwriting fees and related expenses) shall be borne by the Company. If the Underwriters exercise such right, the Rights Issue will not proceed.

It should be noted that the Consolidated Shares will be dealt in on an ex-rights basis from Friday, 6 November 2015. Dealings in the Rights Shares in their nil-paid form will take place from Thursday, 19 November 2015 to Thursday, 26 November 2015 (both dates inclusive). If the conditions of the Rights Issue are not fulfilled or waived (as applicable) at or before 4:00 p.m. on Friday, 4 December 2015 (or such later time as the Company and the Underwriters may agree), the Rights Issue will not proceed. Any persons contemplating dealings in the Existing Shares or the Consolidated Shares prior to the date on which the conditions of the Rights Issue are fulfilled or waived (as applicable), and/or dealings in the nil-paid Rights Shares, are accordingly subject to the risk that the Rights Issue may not become unconditional or may not proceed.

19 October 2015

CONTENTS

	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Summary of the Rights Issue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . .	45
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
Appendix I – Financial Information of the Group . . . . . . . . . . . . . . . . . . . .	70
Appendix II – Unaudited Pro Forma Financial Information of the Group . .	76
Appendix III – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	81
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	100

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following words and expressions shall have the meanings ascribed to them below:

“1st Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$800 million issued by the Company, which will mature on 10 February 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“2nd Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$700 million issued by the Company, which will mature on 12 February 2018, details of which were set out in the Company’s announcement dated 28 November 2014
“3rd Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$800 million issued by the Company, which will mature on 24 October 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“4th Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$700 million issued by the Company, which will mature on 24 October 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“5th Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$160 million issued by the Company, which will mature on 10 February 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“6th Convertible Bonds”
the 9% unlisted convertible bonds in the aggregate principal amount of HK$32 million issued by the Company, which will mature on 10 February 2016, details of which were set out in the Company’s announcement dated 28 November 2014
“Announcement”
the announcement of the Company dated 29 September 2015
“associate(s)”
has the meaning ascribed thereto under the Listing Rules
“Board”
the board of Directors

– 1 –

DEFINITIONS

“Business Day(s)”
“CCASS”
“Champion Rise”
“China Life”
“Company”
“Consolidated Share(s)”
“Director(s)”
“EAF(s)”
“EGM”
a day (excluding Saturday and Sunday and any day on which a tropical cyclone warning no. 8 or above is hoisted or remains hoisted between 9:00 a.m. and 4:00 p.m. or on which a “black” rainstorm warning is hoisted or remains in effect between 9:00 a.m. and 4:00 p.m.) on which licensed banks in Hong Kong are open for general business
the Central Clearing and Settlement System established and operated by HKSCC
Champion Rise International Limited, a company wholly owned by Mr. Cao Zhong which is interested in 2,993,300,000 Existing Shares as at the Latest Practicable Date
China Life Insurance (Overseas) Company Limited, a Company incorporated in the People’s Republic of China with limited liability
China Resources and Transportation Group Limited a company incorporated in Cayman Islands with limited liability, the issued Shares of which are listed on the Main Board of the Stock Exchange (stock code: 269)
ordinary share(s) of HK$0.20 each in the issued and unissued capital of the Company upon the Share Consolidation becoming effective
the director(s) of the Company
the form(s) of application for use by the Qualifying Shareholders who wish to apply for excess Rights Shares, in such usual form as may be agreed between the Company and the Underwriters
the extraordinary general meeting of the Company to be convened and held to consider and, if thought fit, approve the Share Consolidation, the Increase in Authorised Share Capital and the Rights Issue (including the Underwriting Agreement) and the transactions contemplated thereunder

– 2 –

DEFINITIONS

“Existing Share(s)”
“Group”
“HKSCC”
“HK$”
“Hong Kong”
“Increase in Authorised Share Capital”
“Independent Board Committee”
“Independent Financial Adviser” or “Veda Capital”

the ordinary share(s) of HK$0.01 each in the existing share capital of the Company, before the Share Consolidation becoming effective

the Company and its subsidiaries
Hong Kong Securities Clearing Company Limited

Hong Kong dollar, the lawful currency of Hong Kong

the Hong Kong Special Administrative Region of the People’s Republic of China
subject to the Share Consolidation becoming effective, the increase in the authorised share capital of the Company from HK$700,000,000 divided into 3,500,000,000 Consolidated Shares to HK$3,000,000,000 divided into 15,000,000,000 Consolidated Shares by the creation of an additional 11,500,000,000 new Consolidated Shares

the committee of the Board comprising all independent non-executive Directors established for the purpose of giving recommendations to the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement

Veda Capital Limited, a corporation licensed to carry on type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), an independent financial adviser appointed by the Company for the purpose of giving recommendations to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement

– 3 –

DEFINITIONS

“Independent Shareholder(s)”
“Irrevocable Undertakings”
“Joint Gain”
“Last Practicable Date”
“Last Trading Day”
“Latest Time for Acceptance”
“Latest Time for Termination”
“Listing Rules”
any Shareholder other than controlling Shareholders (as defined in the Listing Rules) and their associates or, where there are no controlling Shareholders, any Shareholder other than the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates and any Shareholder (including the Underwriters) who is involved or interested in the Rights Issue, the Underwriting Agreement and the transactions contemplated thereunder
the irrevocable undertaking to be given by each of Champion Rise, Ocean Gain, Mr. Cao and Mr. Fung, dated 9 September 2015 in favour of the Company and the Underwriters
Joint Gain Holdings Limited, a company incorporated in the British Virgin Islands
16 October 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information for the purpose of inclusion in this circular
9 September 2015, being the last trading day of the Shares on the Stock Exchange before the release of the Announcement
4:00 p.m. on Tuesday, 1 December 2015 or such other time or date as may be agreed between the Company and the Underwriters, being the latest time for acceptance of the offer of and payment for the Rights Shares
4:00 p.m. on Friday, 4 December 2015, being the third Business Day after (but excluding) the Latest Time for Acceptance, or such other time or date as may be agreed between the Company and the Underwriters
the Rules Governing the Listing of Securities on the Stock Exchange

– 4 –

DEFINITIONS

“Mr. Cao”
“Mr. Fung”
“Non-Qualifying Shareholder(s)”
“Ocean Gain”
“Outstanding CBs”
“Outstanding Share Options”
“Overseas Shareholder(s)”
“PAL(s)”

Mr. Cao Zhong, the chairman of the Company and executive Director, who is legally and beneficially interested in 3,128,500,000 Existing Shares representing approximately 11.58% of the existing issued share capital of the Company as at the Latest Practicable Date

Mr. Fung Tsun Pong, an executive Director, who is legally and beneficially interested in 3,071,662,449 Existing Shares, representing approximately 11.37% of the existing issued share capital of the Company as at the Latest Practicable Date
those Overseas Shareholder(s) whom the Directors, based on legal advice provided by the Company’s legal advisers, consider it necessary or expedient not to offer the Rights Shares to such Shareholders on account either of legal restrictions under the laws of the relevant place or the requirements of the relevant regulatory body or stock exchange in that place
Ocean Gain Limited, a company wholly owned by Mr. Fung which is interested in 1,829,300,000 Existing Shares as of the Latest Practicable Date
the 1st Convertible Bonds, 2nd Convertible Bonds, 3rd Convertible Bonds, 4th Convertible Bonds, 5th Convertible Bonds and 6th Convertible Bonds
the outstanding share options to subscribe for an aggregate of 346,500,000 Existing Shares under the Share Option Scheme, which could be exercisable on or before the Record Date
Shareholder(s) whose name(s) appear(s) 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) outside Hong Kong

the renounceable provisional allotment letter(s) proposed to be issued to the Qualifying Shareholders in connection with the Rights Issue

– 5 –

DEFINITIONS

“Posting Date”
Tuesday, 17 November 2015 or such other date as the Underwriters may agree in writing with the Company, being the date of despatch of the Prospectus Documents to the Qualifying Shareholders or the Prospectus for information only to the Non-Qualifying Shareholders
“PRC”
the People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the People’s Republic of China and Taiwan
“Prospectus” the prospectus to be despatched to the Shareholders containing details of the Rights Issue
“Prospectus Documents”
the Prospectus, the PAL and the EAF
“Qualifying Shareholder(s)”
Shareholder(s), other than the Non-Qualifying Shareholders, whose name(s) appear(s) on the register of members of the Company on the Record Date
“Record Date”
Monday, 16 November 2015, being the date by reference to which entitlements of the Shareholders to participate in the Rights Issue will be determined (or such other date as the Underwriters may agree in writing with the Company)
“Registrar”
the Company’s branch share registrar and transfer office in Hong Kong, Tricor Progressive Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong
“Rights Issue” the proposed issue by way of rights of four (4) Rights Shares for every one (1) Consolidated Share in issue and held on the Record Date at the Subscription Price on the terms and subject to the conditions in the Underwriting Agreement and to be set out in the Prospectus Documents
“Rights Share(s)” not less than 5,401,916,776 Consolidated Shares but not more than 9,063,216,776 Consolidated Shares to be issued and allotted under the Rights Issue
“Share(s)”
the Existing Share(s) and/or the Consolidated Share(s), as the case may be

– 6 –

DEFINITIONS

“Share Consolidation”
the consolidation of every twenty (20) issued and unissued Existing Shares of par value of HK$0.01 each into one Consolidated Share of par value of HK$0.20 each
“Share Option Scheme”
the share option scheme of the Company adopted pursuant to the ordinary resolution passed by the Shareholder on 16 July 2004 which became effective on 16 July 2004
“Shareholder(s)”
the holder(s) of issued Shares
“Specified Event”
an event occurring or matter arising on or after the date of the Underwriting Agreement and prior to the Latest Time for Termination which render any of the warranties contained in the Underwriting Agreement untrue, inaccurate or misleading
“Stock Exchange”
The Stock Exchange of Hong Kong Limited
“Strait Capital”
Strait Capital Service Limited, a company incorporated in the Cayman Islands with limited liability, which is the general partner of Strait Fund
“Strait Fund”
Strait CRTG Fund, L.P., a Cayman Islands exempted limited partnership, which is an investment fund managed by Strait Capital
“Subscription Price” HK$0.20 per Rights Share
“Underwriters”
VMS Securities, Mr. Cao and Mr. Fung
“Underwriting Agreement”
the underwriting agreement dated 9 September 2015 entered into between the Underwriters and the Company in relation to the underwriting arrangement in respect of the Rights Issue
“Underwritten Shares”
not less than 4,161,884,288 Rights Shares and not more than 7,823,184,288 Rights Shares, subject to the terms and conditions of the Underwriting Agreement

– 7 –

DEFINITIONS

“Unlisted Warrants”
“Untaken Shares”
“VMS Securities”
“Zhunxing”
“Zhunxing Expressway”
“%”
the conditional warrants issued by the Company with rights to subscribe for a fixed number of 2,000,000,000 Existing Shares or 100,000,000 Consolidated Shares upon completion of the Share Consolidation, under general mandate granted in the general meeting held on 8 August 2012, at HK$0.48 per Share (subject to adjustment) until 20 December 2015 pursuant to the agreement dated 20 December 2012 entered into between the Company and Joint Gain, were set out in the Company’s announcement dated 20 December 2012
any of the Underwritten Shares which have not been taken up by Qualifying Shareholders by the Latest Time for Acceptance
VMS Securities Limited, a licensed corporation to carry out business in 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 Securities and Futures Ordinance (Cap 571 of the laws of Hong Kong)
Inner Mongolia Zhunxing Heavy Haul Expressway Company Limited (內蒙古准興重載高速公路有限責任公司), a 86.87% subsidiary of the Group as at the Latest Practicable Date
a 265-kilometer heavy haul toll expressway in Inner Mongolia, the PRC
per cent

– 8 –

SUMMARY OF THE RIGHTS ISSUE

The following information is derived from, and should be read in conjunction with, the full text of this circular:

Basis of the Rights Issue : Four (4) Rights Shares for every one (1) Consolidated Share held on the Record Date
Subscription Price : HK$0.20 per Rights Share Number of Shares in : 27,009,583,895 Existing Shares (equivalent to issue as at the Latest 1,350,479,194 Consolidated Shares assuming the Practicable Date Share Consolidation and the Increase in Authorised Share Capital become effective)
Minimum number of : 5,401,916,776 Rights Shares (assuming no further new Rights Shares Shares are issued (other than the Rights Shares) and no repurchase of Shares on or before the Record Date)
Maximum number of : 9,063,216,776 Rights Shares (assuming new Shares are Rights Shares issued on or before the Record Date upon full exercise of all Outstanding Share Options and Unlisted Warrants and the conversion of all Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares on or before the Record Date)
Minimum number of : 6,752,395,970 Consolidated Shares (assuming no new Consolidated Shares in Shares are issued (other than the Rights Shares) on or issue upon completion of before the Record Date and no repurchase of Shares the Rights Issues upon completion of the Rights Issue), details are set out in the table under the section headed “Shareholding Structure of the Company”
Maximum number of : 11,329,020,970 Consolidated Shares (assuming new Consolidated Shares in Shares are issued on or before the Record Date upon issue upon completion of full exercise of all Outstanding Share Options and the Rights Issues Unlisted Warrants and the conversion of all Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares upon completion of the Rights Issue), details are set out in the table under the section headed “Shareholding Structure of the Company”
Amount to be raised : Not less than approximately HK$1,080.4 million and not more than approximately HK$1,812.6 million
Right of excess applications : Qualifying Shareholders may apply for Rights Shares in excess of their provisional allotment

– 9 –

EXPECTED TIMETABLE

The expected timetable for the Share Consolidation, the change in board lot size and the Rights Issue is set out below.

	(Hong Kong time)
Latest time for lodging proxy forms for the EGM	. . . . . . . . . . . . . 11:00 a.m. on Monday,
	2 November 2015
Latest time for lodging transfer of Shares to be qualified
for attendance at the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Monday,
	2 November 2015
Register of members of the Company closes
(both dates inclusive) . . . . . . . . . . . . . . . . . . . . . . . . . . . From Tuesday, 3 November to
	Wednesday, 4 November 2015
Record Date for the EGM . . . . . . . . . . . . . . . . . . .	. . . . . . . Wednesday, 4 November 2015
Expected date and time of the EGM . . . . . . . . . . .	. . . . . . . . . . 11:00 a.m. on Wednesday,
	4 November 2015
Announcement of the poll result of the EGM . . . .	. . . . . . . Wednesday, 4 November 2015
Register of members of the Company re-opens . . .	. . . . . . . . Thursday, 5 November 2015
Effective date of the Share Consolidation . . . . . . .	. . . . . . . . Thursday, 5 November 2015
Commencement of dealings in the Consolidated Shares . . . . . . . . 9:00 a.m. on Thursday,
	5 November 2015
Original counter for trading in the Existing Shares
(in board lots of 100,000 Existing Shares) to be closed . . . . . . . . 9:00 a.m. on Thursday,
	5 November 2015
Temporary counter for trading in Consolidated Shares
in board lots of 5,000 Consolidated Shares (in form
of existing share certificates) to be opened . . . . . . . . . . . . . . . . . 9:00 a.m. on Thursday,
	5 November 2015
First day of free exchange of existing share certificates of
the Existing Shares into new share certificates for
the Consolidated Shares . . . . . . . . . . . . . . . . . . .	. . . . . . . . Thursday, 5 November 2015
Last day of dealing in the Consolidated Shares
on cum-rights basis . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . Thursday, 5 November 2015

– 10 –

EXPECTED TIMETABLE

First day of dealings in the Consolidated Shares
on ex-rights basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 6 November 2015
Latest time for lodging transfer of the Shares in order
to be qualified for the Rights Issue . . . . . . . . . . . . . . . . . . .	. . . . . 4:30 p.m. on Monday,
	9 November 2015
Closure of register of members to determine
the eligibility of the Rights Issue
(both dates inclusive) . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 10 November 2015 to
	Monday, 16 November 2015
Record Date for the Rights Issue . . . . . . . . . . . . . . . . . . . . . .	Monday, 16 November 2015
Register of members of the Company re-opens . . . . . . . . . . .	Tuesday, 17 November 2015
Prospectus Documents expected to be despatched . . . . . . . .	Tuesday, 17 November 2015
First day of dealings in nil-paid Rights Shares . . . . . . . . . . .	. . . . 9:00 a.m. on Thursday,
	19 November 2015
Designated broker starts to stand in the market to
provide matching services for the sale and
purchase of odd lots of Consolidated Shares . . . . . . . . . . .	. . . . 9:00 a.m. on Thursday,
	19 November 2015
Original counter for trading in Consolidated Shares
(in new board lots of 5,000 Consolidated Shares
in the form of new share certificates for
Consolidated Shares) reopens . . . . . . . . . . . . . . . . . . . . . . .	. . . . 9:00 a.m. on Thursday,
	19 November 2015
Parallel trading in Consolidated Shares
(in form of new share certificate and
existing share certificate) commences . . . . . . . . . . . . . . . . .	. . . . 9:00 a.m. on Thursday,
	19 November 2015
Latest time for splitting in nil-paid Rights Shares . . . . . . . . .	. . . . . 4:30 p.m. on Monday,
	23 November 2015
Last day of dealings in nil-paid Rights Shares . . . . . . . . . . . . .	. . . . 4:00 p.m. on Thursday,
	26 November 2015
Latest time for acceptance of, and payment for
the Rights Shares and application for excess Rights Shares	. . . . . 4:00 p.m. on Tuesday,
	1 December 2015
Latest time for termination of the Underwriting Agreement . . . . . . . 4:00 p.m. on Friday,
	4 December 2015

– 11 –

EXPECTED TIMETABLE

Announcement of results of the Rights Issue . . . . . . . . . . . . . Tuesday, 8 December 2015

Refund cheques for wholly and partially unsuccessful applications for excess Rights Shares expected to be posted on or before . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 9 December 2015
Certificates for the Rights Shares expected to be despatched on or before . . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 9 December 2015
Parallel trading in Consolidated Shares (in form of new and existing share certificate) ends . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 9 December 2015
Temporary counter for trading in Consolidated Shares in board lots of 5,000 Consolidated Shares (in form of existing share certificates) to be closed . . . . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 9 December 2015
Designated broker ceases to stand in the market to provide matching services for the sale and purchase of odd lots of Consolidated Shares . . . . . . . . . . . . . 4:00 p.m. on Wednesday, 9 December 2015

Dealings in fully-paid Rights Shares commence . . . . . . . . . . . . . . 9:00 a.m. on Thursday, 10 December 2015 Free exchange of existing share certificates for new share certificates ends . . . . . . . . . . . . . . . . . . . . . . . . . . Friday, 11 December 2015

All times and dates in this circular refer to Hong Kong local times and dates. Dates or deadlines specified in the expected timetable above or in other parts of this circular are indicative only and may be extended or varied by agreement between the Company and the Underwriters. Any changes to the expected timetable will be published or notified to the Shareholders and the Stock Exchange as and when appropriate.

Effect of bad weather on the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares

The latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will not take place if there is a tropical cyclone warning signal no. 8 or above, or a “black” rainstorm warning:

i. in force in Hong Kong at any local time before 12:00 noon and no longer in force after 12:00 noon on Tuesday, 1 December 2015. Instead the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares will be extended to 5:00 p.m. on the same Business Day; or

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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 Tuesday, 1 December 2015. Instead the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares 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 of and payment for the Rights Shares and for application and payment for excess Rights Shares does not take place on Tuesday, 1 December 2015, the dates mentioned in the “Expected Timetable” section in this circular may be affected. The Company will notify Shareholders by way of announcement(s) on any change to the expected timetable as soon as practicable.

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LETTER FROM THE BOARD

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CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 269)

Directors Executive Directors: Mr. Cao Zhong (Chairman) Mr. Fung Tsun Pong (Vice-Chairman) Mr. Duan Jingquan (Chief Executive Officer) Mr. Tsang Kam Ching, David (Finance Director) Mr. Gao Zhiping

Registered Office Sterling Trust (Cayman) Limited Caledonian House 69 Dr. Roy’s Drive P.O. Box 1043 Grand Cayman, KYl-1102 Cayman Islands

Non-Executive Director:

Mr. Suo Suo Stephen

Independent Non-Executive Directors:

Mr. Yip Tak On Mr. Jing Baoli Mr. Bao Liang Ming

Head office and Principal Place of Business Room 1801-07, 18/F China Resources Building 26 Harbour Road Wanchai Hong Kong 19 October 2015

Dear Shareholder(s),

(1) PROPOSED SHARE CONSOLIDATION ON THE BASIS OF EVERY TWENTY ISSUED AND UNISSUED EXISTING SHARES INTO ONE CONSOLIDATED SHARE;

(2) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (3) PROPOSED CHANGE IN BOARD LOT SIZE;

(4) PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE; AND

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the Announcement in relation to the proposed Share Consolidation, Increase in Authorised Share Capital, change in board lot size and Rights Issue.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) further details of the Share Consolidation, the Increase in Authorised Share Capital, the change in board lot size and the Rights Issue (including the Underwriting Agreement); (ii) a letter of recommendation from the Independent Board Committee to the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement; (iii) a letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement; and (iv) a notice of the EGM.

PROPOSED SHARE CONSOLIDATION

The Board proposes to put forward a proposal to the Shareholders to effect the Share Consolidation which involves the consolidation of every twenty (20) issued and unissued Existing Shares of par value of HK$0.01 each into one (1) Consolidated Share of par value of HK$0.20.

Effects of the Share Consolidation

As at the Latest Practicable Date, the authorised share capital of the Company is HK$700,000,000 divided into 70,000,000,000 Existing Shares of HK$0.01 each, of which 27,009,583,895 Existing Shares have been issued and are fully paid or credited as fully paid. Assuming no further Existing Shares will be issued or repurchased between the Latest Practicable Date and the date of the EGM, immediately after the Share Consolidation becoming effective and before completion of the Rights Issue, the authorised share capital of the Company will become HK$700,000,000 divided into 3,500,000,000 Consolidated Shares of HK$0.20 each, of which 1,350,479,194 Consolidated Shares (which are fully paid or credited as fully paid) will be in issue. The Consolidated Shares will rank pari passu in all respects with each other and the Share Consolidation will not result in any change in the relative rights of the Shareholders.

Any fractional Consolidated Share to which an individual Shareholder is entitled to will not be issued by the Company to such Shareholder, but will be aggregated, sold (if a premium, net of expenses, can be obtained) and retained for the benefit of the Company. Any fractional Consolidated Share in the issued share capital of the Company arising from the Share Consolidation will be cancelled.

Save for the necessary expenses for the implementation of the Share Consolidation which are expected to be insignificant in the context of the net asset value of the Company, the implementation of the Share Consolidation will not alter the underlying assets, business operation, management or financial position of the Company or the interests and rights of the Shareholders.

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LETTER FROM THE BOARD

Application for Listing of the Consolidated Shares

The Company will apply to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Consolidated Shares. Subject to the granting of the listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange, the Consolidated Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated 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.

Conditions and expected effective date of the Share Consolidation

The Share Consolidation is conditional upon the satisfaction of the following conditions: (a) the passing of an ordinary resolution by the Shareholders approving the Share Consolidation at the EGM; and (b) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Consolidated Shares in issue.

Assuming the above conditions are fulfilled, it is expected that the Share Consolidation will become effective on Thursday, 5 November 2015.

Reasons for the Share Consolidation

The Share Consolidation will increase the nominal value of the Shares and will reduce the total number of Existing Shares currently in issue. As such, it is expected that the Share Consolidation will bring about a corresponding upward adjustment in the trading price of the Shares and reduce the overall transaction costs of dealing in the Consolidated Shares. This will provide flexibility for equity fund raising of the Company in the future and facilitate the Rights Issue. Accordingly, the Board is of the view that the Share Consolidation is beneficial to the Company and the Shareholders as a whole.

Free exchange of Share certificates and Trading Arrangement

Subject to the Share Consolidation becoming effective, Shareholders may, from Thursday, 5 November 2015 to Friday, 11 December 2015 (both days inclusive), submit certificates for the Existing Shares to the Registrar for exchange, at the expense of the Company, for certificates for the Consolidated Shares. Thereafter, certificates for the Existing Shares will be accepted for exchange only on payment of a fee of the higher of HK$2.50 or such other amount as may from time to time be specified by the Stock Exchange for each certificate issued or cancelled. Certificates for the Existing Shares will continue to be good evidence of legal title and may be exchanged for certificates for the Consolidated Shares at any time at the expense of the Shareholders. The new share certificates for the Consolidated Shares will be blue in colour so as to be distinguished from the existing share certificates for the Existing Shares which are pink in colour.

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LETTER FROM THE BOARD

Odd lots arrangements and matching services

In order to alleviate the difficulties in the trading of odd lots of the Consolidated Shares arising from the Share Consolidation, the Company has appointed VMS Securities Limited as the agent to provide matching service to those Shareholders who wish to top-up or sell their shareholdings of odd lots of the Consolidated Shares on a best effort basis during the period from 9:00 a.m. on Thursday, 19 November 2015 to 4:00 p.m. on Wednesday, 9 December 2015.

Holders of the Consolidated Shares in odd lots who wish to take advantage of this facility either to dispose of their odd lots of the Consolidated Shares or to top-up their odd lots to a full new board lot may directly or through their broker contact Ms. Stefanie Chan of VMS Securities Limited at 49/F, One Exchange Square, 8 Connaught Place, Central, Hong Kong (Telephone number: (852) 2996 2136) during the aforesaid period. Holders of the Consolidated Shares in odd lots should note that the matching of the sale and purchase of odd lots of the Consolidated Shares is on a best effort basis and successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed. Shareholders are recommended to consult their professional advisers if they are in doubt about the above facility.

Shareholders should note that successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed.

New Shares issuable

As at the Latest Practicable Date, the Company has no outstanding options, convertible securities or warrants which confer right to subscribe for or convert or exchange into the Shares or Consolidated Shares except those set out below:

	Number of	Number of
	new Existing	new Consolidated
Description	Shares issuable	Shares issuable
		(Note)
1st Convertible Bonds	4,000,000,000	200,000,000
2nd Convertible Bonds	3,500,000,000	175,000,000
3rd Convertible Bonds	4,000,000,000	200,000,000
4th Convertible Bonds	3,500,000,000	175,000,000
5th Convertible Bonds	800,000,000	40,000,000
6th Convertible Bonds	160,000,000	8,000,000
Unlisted Warrants	2,000,000,000	100,000,000
Outstanding Share Options	346,500,000	17,325,000

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LETTER FROM THE BOARD

Note:

The number of Consolidated Shares issuable upon the Share Consolidation becoming effective has not taken into account the adjustment (if any) to the conversion and exercise price of the Outstanding CBs, the Unlisted Warrants and the Outstanding Share Options, respectively, as a result of the Rights Issue. All the Outstanding CBs with terms cater for future adjustment mechanisms under certain circumstances were approved by the Shareholders under specific mandates. Any adjustment on the number of Shares to be issued for the Outstanding CBs as a result of the Rights Issue represents an extension but not alteration of the terms approved by the Shareholders under the specific mandates. As a result, no shareholders’ approval is necessary for the above adjustment (if any).

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

As at the Latest Practicable Date, the authorised share capital of the Company is HK$700,000,000 divided into 70,000,000,000 Existing Shares of HK$0.01 each, of which 27,009,583,895 Existing Shares have been allotted and issued as fully paid or credited as fully paid. Upon the Share Consolidation becoming effective, on the basis that the Company does not allot and issue any further Existing Shares prior thereto, the authorised share capital of the Company shall remain at HK$700,000,000 divided into 3,500,000,000 Consolidated Shares of HK$0.20 each, of which 1,350,479,194 Consolidated Shares will be in issue.

The Board further proposes to increase the authorised share capital of the Company from HK$700,000,000 divided into 3,500,000,000 Consolidated Shares to HK$3,000,000,000 divided into 15,000,000,000 Consolidated Shares of HK$0.20 each by creating an additional 11,500,000,000 new Consolidated Shares of HK$0.20 each. Such additional Consolidated Shares will rank pari passu in all respects with each other. The proposed Increase in Authorised Share Capital of the Company is subject to the approval of the Shareholders by way of an ordinary resolution at the EGM and subject to the Share Consolidation becoming effective. As none of the Shareholder has any material interest in the Increase in Authorised Share Capital, no Shareholder is required to abstain from voting for such resolution at the EGM.

PROPOSED CHANGE IN BOARD LOT SIZE

The Board proposes to change the board lot size for trading on the Stock Exchange from 100,000 Existing Shares to 5,000 Consolidated Shares upon the Share Consolidation becoming effective. Based on the closing price of the Existing Shares of HK$0.058 per Existing Share as quoted on the Stock Exchange as at the Last Trading Day and the existing board lot size of 100,000 Existing Shares, the prevailing board lot value is HK$5,800. On the basis of the aforesaid closing price and the new board lot size of 5,000 Consolidated Shares, the new board lot value would be HK$5,800. The monetary value of each board lot will remain unchanged as a result of the change in board lot size.

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LETTER FROM THE BOARD

PROPOSED RIGHTS ISSUE

The Rights Issue is proposed to take place after and is conditional upon the Share Consolidation and the Increase in Authorised Share Capital becoming effective.

Issue statistics

Basis of the Rights Issue

: Four (4) Rights Shares for every one (1) Consolidated Share held on the Record Date

Subscription Price

: HK$0.20 per Rights Share
Number of Shares in issue as at the Latest Practicable Date
: 27,009,583,895 Existing Shares (equivalent to 1,350,479,194 Consolidated Shares assuming the Share Consolidation and the Increase in Authorised Share Capital become effective)
Minimum number of Rights Shares
: 5,401,916,776 Rights Shares (assuming no further new Shares are issued (other than the Rights Shares) and no repurchase of Shares on or before the Record Date)
Maximum number of Rights Shares
: 9,063,216,776 Rights Shares (assuming new Shares are issued on or before the Record Date upon full exercise of all Outstanding Share Options and Unlisted Warrants and the conversion of all Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares on or before the Record Date)
Minimum number of Consolidated Shares in issue upon completion of the Rights Issues
: 6,752,395,970 Consolidated Shares (assuming no new Shares are issued (other than the Rights Shares) on or before the Record Date and no repurchase of Shares upon completion of the Rights Issue), details are set out in the table under the section headed “Shareholding Structure of the Company”
Maximum number of : 11,329,020,970 Consolidated Shares (assuming new Consolidated Shares Shares are issued on or before the Record Date upon full in issue upon completion exercise of all Outstanding Share Options and Unlisted of the Rights Issues Warrants and the conversion of all Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares upon completion of the Rights Issue), details are set out in the table under the section headed “Shareholding Structure of the Company”

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LETTER FROM THE BOARD

Amount to be raised : Not less than approximately HK$1,080.4 million and not more than approximately HK$1,812.6 million
Right of excess applications : Qualifying Shareholders may apply for Rights Shares in excess of their provisional allotment

Assuming no new Shares (other than the Rights Shares) are issued on or before the Record Date and no repurchase of Shares upon completion of the Rights Issue, the minimum number of 5,401,916,776 Rights Shares to be issued pursuant to the terms of the Rights Issue represents approximately 400% of the Company’s existing issued share capital immediately after the Share Consolidation and the Increase in Authorised Share Capital becoming effective and approximately 80% of the Company’s issued share capital as enlarged by the issue of the Rights Shares (assuming no new Shares are issued on or before the Record Date and no repurchase of Shares upon completion of the Rights Issue).

Assuming new Shares are issued on or before the Record Date upon full exercise of all Outstanding Share Options and Unlisted Warrants and the conversion of all Outstanding CBs, but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares upon completion of the Rights Issue, the maximum number of 9,063,216,776 Rights Shares to be issued pursuant to the terms of the Rights Issue represent approximately 671% of the Company’s existing issued share capital immediately after the Share Consolidation and the Increase in Authorised Share Capital becoming effective and approximately 80% of the Company’s issued share capital as enlarged by the issue of the Rights Shares (assuming new Shares are issued on or before the Record Date upon full exercise of all Outstanding Share Options, Unlisted Warrants and the conversion of all Outstanding CBs, but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares upon completion of the Rights Issue).

Qualifying Shareholders

To qualify for the Rights Issue, a Shareholder must:

(i) be registered as a member of the Company at the close of business on the Record Date; and
(ii) be a Qualifying Shareholder.

In order to be registered as members of the Company at the close of business on the Record Date, transfer documents (together with the relevant share certificates) must be lodged with the Registrar no later than 4:30 p.m. on Monday, 9 November 2015.

The Company expects to despatch the Prospectus Documents to Qualifying Shareholders on or before the Posting Date. Subject to the advice of the Company’s legal advisers in the relevant jurisdictions and to the extent reasonably practicable and legally permitted, the Company will send copies of the Prospectus to Non-Qualifying Shareholders for their information only but will not send any PAL or EAF to them.

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LETTER FROM THE BOARD

Closure of register of members

The register of members of the Company will be closed from Tuesday, 10 November 2015 to Monday, 16 November 2015 (both dates inclusive) for determining the entitlements to the Rights Issue. No transfer of Consolidated Shares will be registered during this period.

Basis of provisional allotments

The basis of the provisional allotment shall be four (4) Rights Shares (in nil-paid form) for every one (1) Consolidated Share held by the Qualifying Shareholders as at the close of business on the Record Date.

Application for all or any part of a Qualifying Shareholder’s provisional allotment shall be made by completing a PAL and lodging the same with remittance for the Rights Shares being applied for with the Registrar by 4:00 p.m. on Tuesday, 1 December 2015.

Rights of Overseas Shareholders

The Prospectus Documents are not intended to be registered under the applicable securities legislation of any jurisdiction other than Hong Kong. According to the register of members of the Company as at the Latest Practicable Date, there were 32 Shareholders with registered addresses in 9 jurisdictions outside Hong Kong shown on such register, namely, Australia, Brunei, Canada, the United Kingdom, Indonesia, Macau, New Zealand, Singapore and the United States. The Overseas Shareholders are interested in less than 1% of the issued share capital of the Company. The Company will comply with Rule 13.36(2)(a) of the Listing Rules and make enquiries regarding the feasibility of extending the offer of the Rights Shares to Overseas Shareholders and make relevant disclosures in the Prospectus. If, based on the legal opinions provided by the legal advisers to the Company, the Directors consider that it is necessary or expedient not to offer the Rights Shares to Overseas Shareholders on account either of the legal restrictions under the laws of the relevant place(s) or the requirements of the relevant regulatory body or stock exchange in such place(s), the Rights Issue will not be extended to such Overseas Shareholders. Further information in this connection will be set out in the Prospectus Documents containing, among other things, details of the Rights Issue to be despatched to the Qualifying Shareholders on the Posting Date.

The Company will send the Prospectus to the Non-Qualifying Shareholders for their information only, without any PAL and EAF. Arrangements will be made for the Rights Shares which would otherwise have been provisionally allotted to the Non-Qualifying Shareholders to be sold in the market in their nil-paid form as soon as practicable after dealings in the Rights Shares in their nil-paid form commence and before dealings in the Rights Shares in their nil-paid form end. The proceeds of such sale, less expenses, of more than HK$100 will be paid to the Non-Qualifying Shareholders pro rata to their shareholdings held at the Record Date. In light of the administrative costs, the Company will retain individual amounts of HK$100 or less for its own benefit. Any unsold entitlement of Non-Qualifying Shareholders to the Rights Shares, and any Rights Shares provisionally allotted but not accepted by the Qualifying Shareholders or otherwise subscribed for by transferees of nil-paid Rights Shares, will be made available for excess applications by Qualifying Shareholders under the EAF(s).

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LETTER FROM THE BOARD

Overseas Shareholders should note that they may or may not be entitled to the Rights Issue subject to the results of the enquiries made by the Board pursuant to Rule 13.36(2)(a) of the Listing Rules. Accordingly, Overseas Shareholders should exercise caution when dealing in the Shares.

Subscription Price

The Subscription Price is HK$0.20 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares and, where applicable, application for excess Rights Shares under the Rights Issue or when a transferee of nil-paid Rights Shares applies for the Rights Shares.

The Subscription Price represents:

(a) a discount of approximately 82.8% to the equivalent closing price of HK$1.16 per Consolidated Share based on the closing price of HK$0.058 per Existing Share as quoted on the Stock Exchange on the Last Trading Day after taking into account the effect of the Share Consolidation;
(b) a discount of approximately 49.0% to the theoretical ex-rights price of approximately HK$0.392 per Consolidated Share based on the closing price of HK$0.058 per Existing Share as quoted on the Stock Exchange on the Last Trading Day after taking into account the effect of the Share Consolidation; and
(c) a discount of approximately 82.5% to the equivalent average closing price of HK$1.144 per Consolidated Share based on the average closing price per Existing Share as quoted on the Stock Exchange for the five consecutive trading days up to and including the Last Trading Day after taking into account the effect of the Share Consolidation.

The Subscription Price was determined after arm’s length negotiations between the Company and the Underwriters with reference to the market price of the Existing Shares prior to the Last Trading Day and the prevailing market conditions and taking into account the effect of the Share Consolidation. The Directors (including the independent non-executive Directors whose opinion on this matter is set out in the letter from the Independent Board Committee set out on pages 45 to 46 of this Circular) consider that the terms of the Rights Issue, including the Subscription Price which has been set at a discount to the recent closing prices of the Existing Shares with an objective of encouraging the existing Shareholders to take up their entitlements so as to participate in the potential growth of the Company in the future, are fair and reasonable and in the best interests of the Company and the Shareholders as a whole. The net price per Rights Share upon full acceptance of the provisional allotment of all the Rights Shares will be approximately HK$0.194.

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LETTER FROM THE BOARD

Status of the Rights Shares

The Rights Shares, when allotted and fully paid, will rank pari passu in all respects with the Consolidated Shares then in issue. Holders of fully-paid Rights Shares will be entitled 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.

Share certificates and refund cheques for the Rights Issue

Subject to fulfilment of the conditions of the Rights Issue, share certificates for all fully-paid Rights Shares are expected to be sent on or before Wednesday, 9 December 2015 by ordinary post to the allottees, at their own risk, to their registered addresses. Refund cheques in respect of wholly or partially unsuccessful applications for the excess Rights Shares (if any) are expected to be posted on or before Wednesday, 9 December 2015 by ordinary post to the applicants, at their own risk, to their registered addresses.

Fractions of Rights Shares

No fractional entitlements to the Rights Shares shall be issued to the Shareholders. All fractions of the Rights Shares shall be rounded down to the nearest whole number of Rights Shares and aggregated and, if a premium (net of expenses) can be achieved, sold in the market by the Company. Any unsold fractions of the Rights Shares will be made available for excess application by the Qualifying Shareholders.

Application for excess Rights Shares

Qualifying Shareholders may apply, by way of excess application, for any unsold entitlements of the Non-Qualifying Shareholders, any Rights Shares provisionally allotted but not accepted and any unsold fractions of Rights Shares not provisionally allotted.

Application for excess Rights Shares can be made only by duly completing and signing the EAF (in accordance with the instructions printed therein) and lodging the same with a separate remittance for the excess Rights Shares being applied for with the Registrar by 4:00 p.m. on Tuesday, 1 December 2015.

The Board will allocate the excess Rights Shares (if any) at their discretion on a pro rata basis in proportion to the number of excess Rights Shares being applied for under each application subject to availability of excess Rights Shares and on the principle that preference will be given to applications for topping-up odd lot holdings to whole lot holdings where it appears to the Board that such applications are not made with the intention to abuse such mechanism. No reference will be made to Rights Shares comprised in applications by PAL or the number of Consolidated Shares held by the Qualifying Shareholders.

Shareholders with Shares held by a nominee (or which are held in CCASS) should note that the Board will consider the nominee (including HKSCC Nominees Limited) as a single Shareholder according to the register of members of the Company. Accordingly, such Shareholders should note that the aforesaid arrangement in relation to the allocation of the excess Rights Shares will not be extended to the relevant beneficial owners individually.

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LETTER FROM THE BOARD

Shareholders with Shares held by a nominee (or which are held in CCASS) are advised to consider whether they would like to arrange for the registration of their relevant Shares under the names of the beneficial owners prior to the Record Date for the purpose of the Rights Issue. Shareholders and investors should consult their professional advisers if they are in doubt as to their status.

Application for listing

The Company will apply to the Listing Committee of the Stock Exchange for the listing of and permission to deal in, the Rights Shares in both their nil-paid and fully-paid forms.

Both nil-paid Rights Shares and fully-paid Rights Shares will be traded in board lots of 5,000 Shares.

No part of securities of the Company is listed or dealt in or on which listing or permission to deal is being or is proposed to be sought on any other stock exchange.

Subject to the granting of the listing of, and permission to deal in, the Rights Shares in both 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 Exchange or such other dates 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. Shareholders should seek advice from their stockbrokers or other professional advisers for details of those settlement arrangements and how such arrangements will affect their rights and interests. Dealings in the Rights Shares in both their nil-paid and fully-paid forms, which are registered in the branch register of members of the Company in Hong Kong will be subject to the payment of stamp duty, Stock Exchange trading fee, transaction levy, investor compensation levy or any other applicable fees and charges in Hong Kong.

THE UNDERWRITING AGREEMENT

On 9 September 2015 (after trading hours), the Underwriters and the Company entered into the Underwriting Agreement in respect of the underwriting arrangement for the Rights Issue.

The principal terms of the Underwriting Agreement are as follows:

Date : 9 September 2015 Underwriters : (1) Mr. Cao (2) Mr. Fung (3) VMS Securities

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LETTER FROM THE BOARD

Total number of : The Underwriters have conditionally agreed pursuant Rights Shares being to the Underwriting Agreement to underwrite the underwritten Rights Shares not subscribed by the Qualifying Shareholders on a fully underwritten basis, being not less than 4,161,884,288 Rights Shares and not more than 7,823,184,288 Rights Shares, subject to the terms and conditions of the Underwriting Agreement
Commission : 2% of the aggregate subscription price in respect of the Underwritten Shares to be underwritten by VMS Securities (for avoidance of doubt, it shall mean the maximum number of the Underwritten Shares to be underwritten by VMS Securities, regardless whether or not it is called upon to subscribe or procure subscribers for any such Underwritten Shares)

No commission will be paid to Mr. Cao and Mr. Fung

The terms of the Underwriting Agreement (including the commission rate) were determined after arm’s length negotiation between the Company and the Underwriters by reference to the existing financial position of the Group, the size of the Rights Issue, and the current and the expected market condition. The Board (including the independent non-executive Directors whose opinion on this matter is set out in the letter from the Independent Board Committee set out on pages 45 to 46 of this Circular) considers that the terms of the Underwriting Agreement, including the commission rate, are fair and reasonable so far as the Company and the Shareholders are concerned.

The Underwriters

As at the Latest Practicable Date, (a) Mr. Cao and Champion Rise, a company wholly owned by him, hold 3,128,500,000 Existing Shares in aggregate (representing approximately 11.58% of the existing issued share capital of the Company); and (b) Mr. Fung and Ocean Gain, a company wholly owned by him, hold 3,071,662,449 Existing Shares in aggregate (representing approximately 11.37% of the existing issued share capital of the Company). As such, Mr. Cao, Mr. Fung and their respective associate are substantial shareholders (as defined under the Listing Rules) of the Company.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, VMS Securities and its associates are third parties independent of and not connected persons of the Company and its connected persons. As at the Latest Practicable Date, VMS Securities and its associates are interested in 466,000,000 Existing Shares (representing approximately 1.73% of the existing issued share capital of the Company) and the 5th Convertible Bonds.

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LETTER FROM THE BOARD

The Underwritten Shares

Pursuant to the Underwriting Agreement, the Underwriters have conditionally agreed to underwrite not less than 4,161,884,288 Rights Shares and not more than 7,823,184,288 Rights Shares, on a fully underwritten basis, as follow:

(i) Mr. Cao and Mr. Fung shall, jointly and severally, underwrite up to 400,000,000 Untaken Shares, on a pro rata basis in equal proportion and in the event that there is any fractional Untaken Share arising from the allocation between Mr. Cao and Mr. Fung, such fractional Untaken Share shall be taken up by VMS Securities; and
(ii) VMS Securities shall underwrite all the remaining balance of the Untaken Shares that are not taken up by Mr. Cao and Mr. Fung pursuant to (i) above up to (a) a minimum of 3,761,884,288 Rights Shares (assuming no further new Shares are issued (other than the Rights Shares) and no repurchase of Shares on or before the Record Date) and (b) a maximum of 7,423,184,288 Rights Shares (assuming new Shares are issued on or before the Record Date upon full exercise of Outstanding Share Options and Unlisted Warrants and full conversion of the Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares on or before the Record Date).

For the avoidance of doubt, if the Untaken Shares available under the Rights Issue are less than 400,000,000, Mr. Cao and Mr. Fung shall take up all such Untaken Shares before VMS Securities.

Termination of the Underwriting Agreement

If, prior to the Latest Time for Termination, one or more of the following events or matters shall occur, arise, exist, or come into effect:

(1) In the reasonable opinion of the Underwriters, 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 Underwriters, 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; or

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(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 after the signing of the Underwriting Agreement 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 Underwriters, materially and adversely affect the business or the financial or trading position of the Group as a whole; or
(c) any materially 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; or
(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 Underwriters, materially and adversely affect the business or the financial or trading position of the Group as a whole; or
(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 Underwriters, is or might be material to the Group taken as a whole; or
(f) there occurs or comes into effect the imposition of any moratorium, suspension or material restriction on trading in the Shares or Consolidated Shares (as the case may be) generally on the Stock Exchange due to exceptional financial circumstances or otherwise; or
(2) 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 restriction of trading in securities, imposition of economic sanctions, on Hong Kong, the PRC or other jurisdiction relevant to the Group or any member of the Group and a change in currency conditions for the purpose of this event includes a change in the system under which the value of the Hong Kong currency is pegged with that of the currency of the United States of America) occurs which, in the reasonable opinion of the Underwriters, makes it inexpedient or inadvisable to proceed with the Rights Issue; or

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(3) the Circular, the Prospectus and all amendments and supplements thereto when published contain information (either as to business prospects or the condition of the Group or as to its compliance with any laws or the Listing Rules or the Takeovers Code or any applicable regulations) which has not prior to the date hereof been publicly announced or published by the Company and which may, in the reasonable opinion of the Underwriters, is material to the Group as a whole and is likely to affect materially and adversely the success of the Rights Issue.

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

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

(1) any material breach of any representations, warranties or undertakings contained in the Underwriting Agreement comes to the knowledge of the Underwriters; or
(2) any Specified Event comes to the knowledge of the Underwriters.

Upon giving of notice of termination or rescission pursuant to the Underwriting Agreement, all obligations of the Underwriters under the Underwriting Agreement shall cease and terminate and none of the parties to the Underwriting Agreement shall have any claim against any other parties in respect of any matter or thing arising out of or in connection with the Underwriting Agreement save that all costs and other all out-of-pocket expenses which have been properly incurred by the Underwriters in connection with the Rights Issue and its associated transactions (excluding the underwriting commission, sub-underwriting fees and related expenses) shall be borne by the Company. If the Underwriters exercise such right, the Rights Issue will not proceed.

Conditions of the Rights Issue

The Rights Issue is conditional upon the following conditions being fulfilled or waived (as appropriate):

(1) the passing of the necessary resolution(s) (i) by the Shareholders at the EGM to approve the Share Consolidation and the Increase in Authorised Share Capital; and (ii) by the Independent Shareholders at the EGM to approve the Rights Issue and the transactions contemplated thereunder by no later than the Record Date;
(2) the Share Consolidation and Increase in Authorised Share Capital having become effective;

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(3) the Listing Committee of the Stock Exchange granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked listing of and permission to deal in the Consolidated Shares and the Rights Shares (in their nil-paid and fully-paid forms) by no later than the Prospectus Posting Date;
(4) the filing and registration of the Prospectus Documents (together with any other documents required by applicable law or regulation to be annexed thereto) with the Registrar of Companies in Hong Kong by no later than the Prospectus Posting Date;
(5) the posting of the Prospectus Documents to the Qualifying Shareholders by no later than the Prospectus Posting Date;
(6) the Underwriting Agreement not being terminated or rescinded by the Underwriters pursuant to the terms hereof on or before the Latest Time for Termination;
(7) there being no Specified Event occurred prior to the Latest Time for Termination;
(8) there being no breach of the undertakings and obligations of the Company under the terms of the Underwriting Agreement;
(9) there being no breach of the undertakings and obligations of the Underwriters under the terms of the Underwriting Agreement;
(10) delivery to the Underwriters on or before the date of the Underwriting Agreement the original Irrevocable Undertakings duly executed by each of Champion Rise, Ocean Gain, Mr. Cao and Mr. Fung; and
(11) compliance with and performance by each of Champion Rise, Ocean Gain, Mr. Cao and Mr. Fung of all of their respective undertakings and obligations in accordance with the terms of the Irrevocable Undertakings.

The conditions precedent set out in paragraphs (1) to (6) and (11) are incapable of being waived by the Underwriters and the Company. The Underwriters may waive the conditions precedent set out in paragraph (7), (8) and (10) in whole or in part by written notice to the Company. The Company may waive the condition precedent set out in paragraph (9) in whole or in part by written notice to the Underwriters.

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If the conditions precedent set out in the above paragraphs are not satisfied and/or waived in whole or in part by the Underwriters by the Latest Time for Termination (or the relevant dates set out in the Underwriting Agreement) or such other date and time as the Underwriters may agree with the Company in writing, the Underwriting Agreement shall terminate (save in respect of the provisions in relation to payment of costs and expenses incurred by the Underwriters, indemnity, notices and governing law and any rights or obligations which have accrued under the Underwriting Agreement prior to such termination), all liabilities of the parties of the Underwriting Agreement shall lapse and no party will have any claim against any other party for costs, damages, compensation or otherwise, and the Rights Issue will not proceed. The Irrevocable Undertakings shall lapse upon the termination of the Underwriting Agreement.

IRREVOCABLE UNDERTAKINGS

As at the Latest Practicable Date, (a) Mr. Cao and Champion Rise, a company wholly owned by him, hold 3,128,500,000 Existing Shares in aggregate (representing approximately 11.58% of the existing issued share capital of the Company); and (b) Mr. Fung and Ocean Gain, a company wholly owned by him, hold 3,071,662,449 Existing Shares in aggregate (representing approximately 11.37% of the existing issued share capital of the Company), have unconditionally and irrevocably undertaken respectively to the Company and the Underwriters that, among other things, he/it:

(a) will remain as the beneficial owner of the Shares as set out above at the close of business on the Record Date;
(b) will subscribe for the Rights Shares to which he/it will be provisionally allotted pursuant to the Rights Issue, representing their respective full entitlement under the Rights Issue, by lodging the duly completed and signed PAL in respect of all such Rights Shares with payment in full therefor with the Registrar before the Latest Time for Acceptance in accordance with the terms of the Prospectus Documents; and
(c) shall not, during the period from the date of the respective Irrevocable Undertaking to (and including) the Record Date, transfer or otherwise dispose of the Shares or acquire any Shares or any interests therein (except by taking up the Rights Shares under their respective entitlement), unless with the prior written consent of the Company and the Underwriters.

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LETTER FROM THE BOARD

SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately upon the Share Consolidation becoming effective; and (iii) after Share Consolidation becoming effective and immediately after completion of the Rights Issue:

Scenario 1:

Assuming no further issue of new Shares or repurchase of Shares on or before the Record Date:

After Share Consolidation becoming effective and immediately after completion of the Rights Issue	After Share Consolidation becoming effective and immediately after completion of the Rights Issue	After Share Consolidation becoming effective and immediately after completion of the Rights Issue
Assuming all Shareholders have taken up Rights Shares Shares % 33,800,000 0.50 748,325,000 11.08 310,590,610 4.60 457,325,000 6.77 12,906,125 0.19 1,562,946,735 23.14 5,072,949,235 75.13 116,500,000 1.73 6,752,395,970 100.00	Assuming the Underwriters have taken up all the Rights Shares (assuming no Qualifying Shareholders except for Mr. Cao, Mr. Fung, Champion Rise and Ocean Gain take up 1,240,032,488 Rights Shares pursuant to the Irrevocable Undertakings) Shares % 233,800,000 3.46 748,325,000 11.08 510,590,610 7.56 457,325,000 6.77 2,581,225 0.04 1,952,621,835 28.91 1,014,589,847 15.03 3,785,184,288 56.06 6,752,395,970 100.00
		28.91 15.03 56.06
		100.00

If the existing shareholders (other than those who have provided the Irrevocable Undertakings) elect not to participate in the Rights Issue, their shareholding will decrease from 77.05% to 15.42%, representing about 80% dilution to their existing shareholdings.

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LETTER FROM THE BOARD

Scenario 2:

Assuming Shares are issued upon the exercise of the subscription rights attached to the Unlisted Warrants in full, and the exercise of Share Options and the conversion rights attached to the Outstanding CBs in full and no other issue or repurchase of Shares on or before the Record Date:

Shareholders Mr. Cao_(notes 1, 2, 5) Champion Rise(note 2) Mr. Fung(notes 1, 3, 5) Ocean Gain(note 3) Mr. Tsang Kam Ching, David (note 1) Public Shareholders China Life and its associate Strait Capital and Strait Fund Holders of the Outstanding CBs, Unlisted Warrants and Share Options(note 6) VMS Securities and its associates(notes 4, 5)_ Total	As at the Latest Practicable Date Shares % 135,200,000 0.50 2,993,300,000 11.08 1,242,362,449 4.60 1,829,300,000 6.77 51,624,499 0.19 6,251,786,948 23.14 19,161,796,947 70.95 1,130,000,000 4.18 – – – – 466,000,000 1.73 27,009,583,895 100.00	Assuming Shares are issued upon the exercise of the subscription rights attached to the Unlisted Warrants in full, and the exercise of the Outstanding Share Options and the conversion rights attached to the Convertible Bonds in full, but before the Share Consolidation becoming effective Shares % 135,200,000 0.30 2,993,300,000 6.60 1,242,362,449 2.74 1,829,300,000 4.04 79,624,499 0.18 6,279,786,948 13.86 19,161,796,947 42.28 8,630,000,000 19.04 7,500,000,000 16.55 2,478,500,000 5.47 1,266,000,000 2.80 45,316,083,895 100.00	Immediately upon the Share Consolidation becoming effective but before completion of the Rights Issue Shares % 6,760,000 0.30 149,665,000 6.60 62,118,122 2.74 91,465,000 4.04 3,981,225 0.18 313,989,347 13.86 958,089,847 42.28 431,500,000 19.04 375,000,000 16.55 123,925,000 5.47 63,300,000 2.80 2,265,804,194 100.00	After Share Consolidation becoming effective and immediately after completion of the Rights Issue	After Share Consolidation becoming effective and immediately after completion of the Rights Issue
				Assuming all Shareholders have taken up Rights Shares Shares % 33,800,000 0.30 748,325,000 6.60 310,590,610 2.74 457,325,000 4.04 19,906,125 0.18 1,569,946,735 13.86 4,790,449,235 42.28 2,157,500,000 19.04 1,875,000,000 16.55 619,625,000 5.47 316,500,000 2.80 11,329,020,970 100.00	Assuming the Underwriters have taken up all the Rights Shares (assuming no Qualifying Shareholders except for Mr. Cao, Mr. Fung, Champion Rise and Ocean Gain take up 1,240,032,488 Rights Shares pursuant to the Irrevocable Undertakings) Shares % 233,800,000 2.06 748,325,000 6.60 510,590,610 4.51 457,325,000 4.04 3,981,225 0.04 1,954,021,835 17.25 958,089,847 8.46 431,500,000 3.81 375,000,000 3.31 123,925,000 1.09 7,486,484,288 66.08 11,329,020,970 100.00

If the existing shareholders (other than those who have provided the Irrevocable Undertakings) elect not to participate in the Rights Issue, their shareholding will decrease from 77.05% to 9.21%, representing about 88% dilution to their existing shareholdings.

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LETTER FROM THE BOARD

Notes:

Mr. Cao, Mr. Fung and Mr. Tsang Kam Ching, David are executive Directors.
Champion Rise is wholly owned by Mr. Cao.
Ocean Gain is wholly owned by Mr. Fung.
In circumstances where the Rights Issue were to become unconditional and VMS Securities as its capacity as one of the Underwriters was obliged to take up all its commitment to the relevant number of Underwritten Shares in accordance with the Underwriting Agreement, VMS Securities and its associates’ interest would extend to a maximum stake of approximately 66.08% in the share capital of the Company as enlarged by the issue of the Rights Shares. VMS Securities’ underwriting commitment would extend to a maximum stake of approximately 65.52% in the share capital of the Company as enlarged by the issue of the Rights Shares. VMS Securities procures that it and its sub-underwriters (i) will be a third party independent of, not acting in concert with and will not be connected with the Directors, chief executive or substantial Shareholders of the Company or their respective associates; and (ii) will not, together with party(ies) acting in concert with each of them or their respective associates, hold in aggregate 30% or more of the voting rights of the Company immediately upon completion of the Rights Issue.
VMS Securities has, on 9 September 2015, sub-underwritten all its Underwritten Shares to the sub-underwriters. As at the Latest Practicable Date, VMS Securities and each of the sub-underwriters is independent third party of the Company. Under the sub-underwriting agreements, VMS Securities has sole discretion to allocate the Untaken Shares among the sub-underwriters. Under the scenario where maximum number of Rights Shares will be issued, public float will be about 36% immediately upon completion of the Rights Issue, which ensures that the Company will maintain the minimum public float requirement in compliance with Rule 8.08 of the Listing Rules. Theoretically, public float can be maintained in all scenarios.
Holders of the Outstanding CBs presented in this table represent holders of the Outstanding CBs other than China Life, Strait Capital, Strait Fund and an associate of VMS Securities.

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

The Group is principally engaged in expressway operations, trading of petroleum and related products, compressed natural gas stations operations and timber operations. The gross proceeds from the Rights Issue will be not less than approximately HK$1,080.4 million (assuming no further Shares will be issued or repurchased on or before the Record Date) but not more than approximately HK$1,812.6 million (assuming all the Outstanding CBs, Unlisted Warrants and the Outstanding Share Options are converted and exercised in full before Record Date). The estimated net proceeds of the Rights Issue will be not less than approximately HK$1,046.5 million (assuming no further Shares will be issued or repurchased on or before the Record Date) but not more than approximately HK$1,778.7 million (assuming all the Outstanding CBs, Unlisted Warrants and the Outstanding Share Options are converted and exercised in full before Record Date) which are intended to be used in the following manner:

(i) approximately HK$780.0 million will be applied to repay the principal amount of Company’s loans and borrowings;
(ii) approximately HK$166.5 million will be applied to the interest payments of the Outstanding CBs and other borrowings;

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(iii) approximately HK$60.0 million will be applied to invest in a new investment opportunity including the establishment of a joint venture with CNOOC Oil & Petrochemicals Company Limited (中海石油煉化有限責任公司) (“ CNOOC ”) for the investment, construction and operation of the partial oxidation coal-to-hydrogen plant under the Huizhou petrochemicals phase II project in the petrochemical area of Daya Bay technological and economic development zone, the PRC;
(iv) approximately HK$40.0 million will be applied to the construction and installation of new compressed natural gas and/or liquefied natural gas dispensing stations in the PRC; and
(v) any amount above the minimum net proceeds will be applied to repay the remaining principal amount of the debts.

The Directors are of the view that the Rights Issue would facilitate the repayment of the loans and borrowings of the Group, which will improve the financial position of the Group and lower the interest expense of the Group. The Rights Issue will also allow the Group to capture and materialise the identified investment opportunities (with details as set out below) and strengthen the capital base of the Group.

Use of Proceeds

Details of the Group’s outstanding loans and borrowings as at the Latest Practicable Date are as follow:

Due within 12 months from the Latest Practicable Date

Debts Straight bonds Convertible bonds Bank borrowings	Aggregate debts amount Maturity date Interest rate (HK$’million) 592 December 2015 9% 500 March 2016 9% 500 September 2016 9% 992 February 2016 9% 1,127 By September 2016 5.41% – 12% 3,711 - - - - - - - - - - - -

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LETTER FROM THE BOARD

Due after 12 months from the Latest Practicable Date

Debts Convertible bonds Bank borrowings Total loans and borrowings	Aggregate debts amount Maturity date Interest rate (HK$’million) 1,500 October 2016 9% 700 February 2018 9% 10 By December 2016 5.41% 332 By December 2017 5.41% to 10.6% 197 By December 2018 5.41% to 10% 10,458 From 2019 to 2034 5.41% 13,197 - - - - - - - - - - - - 16,908

The conversion price (before Share Consolidation) for all the convertible bonds is HK$0.2. Comparing with the closing price of HK$0.058 (before Share Consolidation) as at the Last Trading Date, all the convertible bonds are deep out-of-the money which are unlikely to be converted to Shares and have to be repaid by their maturity date. According to the above table, a total of HK$3,711 million will be due in the next 12 months if there is no extension of the repayment date. The Board has been actively negotiating with the debts holders on the possibility of extending the repayment date. Based on the current discussions, the Board expects that approximately HK$780 million of the debts have to be repaid without further delay. It is not in the interest of the Company to default its debt obligations. Also, repayments of the above debts by using the proceeds of the Rights Issue not only save interest payments but also improves the overall financial position of the Group, which facilitates the Company’s on-going financial planning. Therefore, the Board considers that it is essential to raise funds to repay the HK$780 million debts.

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LETTER FROM THE BOARD

Based on the latest repayment schedule of the outstanding debts, management account, recent business plans and the cash flow forecast for the next 12 months, the Board expects that after taking into account the operating net cash inflow from the Group’s operations, the Company’s funding needs in the upcoming 12 months will be approximately HK$3,000 million, which mainly represents the principal and interest due for the outstanding straight bonds and convertible bonds of HK$2,954 million. The above expectation is based on the key assumptions that (i) all straight bonds and convertible bonds falling due will not be able to be extended, (ii) no other long term funds can be raised by way of other fund raising alternatives and (iii) the Group’s operating results and cash flow will not have significant changes compared to the preceding year.

The Board has been actively negotiating with the debts holders on the possibility of extending the repayment date. Based on the recent discussions, the Board estimates that a minimum of approximately HK$780 million of the principal and approximately HK$166.5 million of the interest payments will have to be repaid in the coming 5 months without delay. If additional funding can be raised above the minimum proceeds sourced from the Rights Issue, it will also be applied to repay the remaining debts. The Board considers that it is crucial to cater for the above throat-cutting funding needs before it can take a next step to negotiate further with holders of the remaining debts falling due in the remaining 7 months. The Board considers that by repaying the above debts and interest, it will improve its gearing ratio and the overall financial position and relieve its interest burden, and thus facilitate it to negotiate with the debts holders for rescheduling the remaining debts.

Apart from the Rights Issue which cater for most of the imminent funding needs in the coming 5 months, the Board has been and will be in its best endeavor sourcing further funding for debt repayments purpose, in the remaining 7 months.

The possible ways to satisfy its remaining funding needs in the remaining 7 months includes debts payment rescheduling and further fund raisings alternatives. The Company maintains good relationship with its debt holders. As disclosed in the announcements dated 14 August 2015 and 28 August 2015, the Company has successfully restructured a number of convertible bonds to extend the repayment dates. Settling the debts by using the proceeds sourced from the Rights Issue will lubricate the negotiation process. The Board considers that only when the Rights Issue becomes materialized it can further formulate and finalize its strategy in satisfying its remaining funding needs in the remaining 7 months. Having said that, preliminarily, besides debts payment rescheduling, the Company has been considering the possibility of other equity fund raising alternatives (e.g. private placement) subject to the completion of the Rights Issue. The Company will make further announcement in this regard in accordance with the Listing Rules as and when appropriate.

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LETTER FROM THE BOARD

Regarding the loans and borrowings of the Group to be due after one year from the Latest Practicable Date, the Directors will frequently evaluate and determine appropriate settlement plans towards these loans and borrowings by taking into consideration the actual operating cash flow of the Group in the next 12 months, the economic environment and the prevailing market condition by the time when these loans and borrowings become due.

As disclosed in the Company’s announcement dated 16 January 2015, Shenzhenshi Qianhai Zitong Clean Energy Company Limited (深圳市前海資通清潔能源有限公司) (“ Zitong Clean Energy ”), which is an 85% indirectly owned subsidiary of the Company in the PRC, has entered into a legally-binding letter of intent dated 16 January 2015 with CNOOC in relation to, among other things, the establishment of a joint venture for the investment, construction and operation of the partial oxidation coal-to-hydrogen plant (“ POX Project ”) under the Huizhou petrochemicals phase II project in the petrochemical area of Daya Bay technological and economic development zone, the PRC.

Hydrogen, being an essential reducing agent in oil refining process, is mainly utilized in the hydro-desulfurization, hydrocracking and hydrofining processes in the chemical processing industry. To fulfill the environmental requirements of the PRC, the oil quality standard of diesel has been increasingly elevated. Hydrocracking and hydrofining in oil refining process are the main stages to produce high quality clean energy, and both stages require mass usage of hydrogen. The urge to enhance the oil quality upgrade within the chemical processing industry has resulted in high demand of hydrogen supply. Currently, the annual oil refining capacity in the PRC has reached approximately 600 million tons per year, and by the year of 2020, it is expected to reach 750 million tons per year. By that time, the hydrogen demand in the chemical processing industry is expected to reach over 10 million tons per year.

Currently, domestic refineries in the PRC usually use the natural gas conversion/partial oxidation method or the light/heavy oil catalytic conversion method for production of hydrogen. China is a country with rich coal resources but limited gas resources. Given an increasing demand of hydrogen, limited supply and high price of natural gas resources and related policy control, the coal-to-hydrogen partial oxidation method of hydrogen production provides a lower cost and cleaner solution for hydrogen production in the PRC. Costs of hydrogen production by other methods are currently over RMB20,000 per ton, while the cost of hydrogen production by using the coal-to-hydrogen partial oxidation method is estimated to be lowered by 30% to 40%.

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LETTER FROM THE BOARD

As disclosed in the Company’s announcements dated 28 August 2014 and 18 September 2014, the Company has entered into framework agreements with PetroChina Guangdong Marketing Company (“ PetroChina Guangdong ”) and PetroChina Henan Marketing Company (“ PetroChina Henan ”) (collectively, “ PetroChina ”) under which the Company has obtained first rights for the installation and operation of electric vehicle charging and CNG and/or LNG dispensing stations (“ CNG/LNG Projects ”) in over 1,100 gas stations of PetroChina Guangdong in Guangdong province, the PRC and 840 gas stations of PetroChina Henan in Henan province, the PRC, respectively. Both the POX Project and CNG/LNG Projects are still in the preliminary stage of design and research phase. Detailed development plan and funding needs are as below:

(a) The construction of POX Project will have three phases with each phase last for 2 years. It is expected that the construction of the first phase will start in early 2016 and the operation will start in early 2018. The HK$60 million sourced from the Rights Issue will be applied as initial working capital and for detailed design process for the first phase. The management of the Company estimates that the total funding requirement for the first phase will be approximately RMB4,690 million over the next two years. The funding needs for the project company is expected to be satisfied by long term bank loans to be borrowed at the project company level. As the plant for the POX Project in Huizhou will be jointly-owned and jointly-operated by CNOOC, a state-owned enterprise in the PRC, the Board expects that the project company, with CNOOC as one of the venturers, can easily secure the funding through long term bank loans at a competitive low interest rate.
(b) From the Group’s experience in the construction and operations of CNG/LNG dispensing stations, it is estimated that the construction cost for a CNG/LNG dispensing station in the PRC will be approximately RMB5 million to RMB6 million. Based on the estimation of future operation capacity, the management of the Company plans to establish 6 CNG/LNG dispensing stations in the coming year which will cost approximately HK$40 million and have to be financed by the proceeds generated from the Rights Issue.

Given the opportunity to cooperate with CNOOC and PetroChina marketing branches, the Company aims at achieving effective provision of resources to the market and thereby realizing the strategic development objective of the Group, and thus the Board is full of confidence in the Group’s energy business prospects.

Reasons for Rights Issue

After due and careful consideration, the Board considers that the current structure of the Rights Issue, as a form of equity financing available for all the existing shareholders to participate, is the best, if not the only alternative which the terms are acceptable to both the Company and the Underwriters in light of the Group’s current circumstance.

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LETTER FROM THE BOARD

There is about HK$1,046.5 million imminent funding needs for the Group after the Board’s assessment over its financial and operation position. The Group has taken various steps to address the funding needs of the Company. The Company has negotiated and agreed with holders of certain convertible bonds, namely, Li Ka Shing (Canada) Foundation, Dr. Lo Ka Shui, Grand Version Investments Limited and Guotai Junan Investments (Hong Kong) Limited (“ GJHK ”), to extend the maturity dates of the outstanding convertible bonds held by them. In this connection, Mr. Cao has agreed to provide personal guarantees in respect of such convertible bonds other than the convertible bonds held by GJHK.

The Group is in heavy debts. The Board considers that debt raising (including bank financing) would not be an option as it would worsen the gearing and debt position of the Group.

The Board has also considered other non-pre-emptive equity fund raising possibilities, such as placing. Due to the relatively large fund raising amount, the placing agents did not come up with reasonable terms that are acceptable to the Company. The pre-emptive nature of the Rights Issue allows the Qualifying Shareholders to maintain their respective pro-rata shareholding through their participating in the Rights Issue. The Rights Issue allows the Qualifying Shareholders who participate to (a) increase its interests in the shareholding of the Company by (i) acquiring additional rights entitlement in the open market (subject to the availability); and/or (ii) applying through excess applications for rights shares or (b) decrease its interests in the shareholding of the Company by disposing of their rights entitlements in the open market (subject to availability). Also, the Rights Issue has been fully underwritten and thus, the Group’s target funding in need will be secured. In light of the above, the Board considers that the Rights Issue is the fairest equity financing to the existing shareholders.

The Board has approached not less than three third-party underwriters. Among them, VMS Securities offers the most reasonable terms which are acceptable to the Company.

The Board is minded to set the subscription price at a level which is compelling and acceptable to the existing shareholders for them to maintain their existing shareholding through subscribing the Rights Issue. The Subscription Price is at HK$0.20 per Rights Shares which is about 82% discount to the equivalent closing price of HK$1.16 per Consolidated Share as at the Last Trading Day. The relative high discount is targeted to attract more of the existing shareholders to subscribe for the Rights Shares, which is common in many similar exercises in the market.

With the funding needs amount as estimated by the Board together with the purposive subscription price, the Board comes up with the resulting 4-for-1 Rights Issue. If the existing shareholders (other than those who have provided the Irrevocable Undertakings) elect not to participate in the Rights Issue, their aggregate shareholding will decrease from 77.05% to 9.21%, resulting a maximum of 88% dilution to their existing shareholdings as illustrated in scenario 2 under the section headed “Shareholding Structure of the Company” in this circular. In light of the relative low subscription price at HK$0.20 per Rights Shares, the Board considers that the Rights Issue is attractive to the existing shareholders and expects that they will subscribe for their respective entitlements to maintain their existing shareholding. The Board expects that the actual dilution effect will be lower than the above theoretical maximum dilution effect.

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LETTER FROM THE BOARD

Based on the above, in particular the pre-emptive nature of the Rights Issue with the availability of excess application, the Board considers that the terms of the Rights Issue are fair and reasonable and in the best interest of the Shareholders.

FUND RAISING ACTIVITIES INVOLVING ISSUE OF SECURITIES IN THE PAST 12 MONTHS

Date of Actual use of proceeds as at announcements Description Net proceeds Intended use of proceeds the Latest Practicable Date 28 November 2014 Issue of 9% Approximately (i) To set-off against HK$3,092 (i) HK$3,092 million was convertible bonds HK$3,192 million million of the total principal used for set-off (a) part of due in 2016 and amount of the 9% convertible bonds 2018 under specific due in 2015; (b) all of the mandate (a) part of the 9% convertible convertible bonds due on bonds due 2015, which 24 October 2016 and (c) all matured on 3 September of the convertible bonds 2015; due on 3 October 2017; and
(b) all of the convertible bonds due on 24 October 2016; and (ii) HK$100 million was used for repayment of
(c) all of the convertible bonds borrowings and accrued due on 3 October 2017 (note) interest
(ii) The remaining HK$100 million is to be used as general working capital of the Group
28 September 2014 Issue of 9% Approximately To refinance the HK$600 million Used as intended convertible bonds HK$600 million 9% convertible bonds due in due in 2017 under 2014, which matured on 29 general mandate September 2014 (note)

Note: The convertible bond due in 2017 under the general mandate was subsequently offset by the convertible bond due in 2018 which was approved by Shareholders under the specific mandate granted in the general meeting held on 28 January 2015.

Save for the above, the Company has not conducted any equity fund raising activities in the past 12 months immediately preceding the Latest Practicable Date.

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LETTER FROM THE BOARD

ADJUSTMENTS TO THE SUBSCRIPTION PRICE AND/OR NUMBER OF SHARES UNDER THE SHARE OPTIONS, THE CONVERSION PRICE UNDER THE CONVERTIBLE BONDS AND THE SUBSCRIPTION PRICE UNDER THE UNLISTED WARRANTS

The Share Consolidation and the Rights Issue may lead to adjustments to the subscription price and/or the number of Consolidated Shares to be issued under the Outstanding Share Options, the conversion price of the Outstanding CBs and the subscription price under the Unlisted Warrants pursuant to their respective terms. The Company will inform holders of the aforesaid securities and the Shareholders of such adjustments by announcement, if and when necessary.

LISTING RULES IMPLICATIONS

Under the Listing Rules, Mr. Cao is the chairman of the Company and an executive Director, Mr. Fung is an executive Director and each of them and their respective associates are substantial Shareholders of the Company. Accordingly, the entering into of the Underwriting Agreement between the Company, Mr. Cao and Mr. Fung is a connected transaction under the Listing Rules. Pursuant to Rule 14A.92(2) of the Listing Rules, provided that Rule 7.21 of the Listing Rules has been complied with, the transaction(s) under the Underwriting Agreement will be exempted from the reporting, announcement and Independent Shareholders’ approval requirements. Also, no underwriting commission will be paid to both Mr. Cao and Mr. Fung. As such, no commission and fee payable by the Company to the connected person for the underwriting arrangement is subject to connected transaction requirements under the Listing Rules.

As at the Latest Practicable Date, the Company does not have any controlling shareholder. Mr. Cao together with Champion Rise in aggregate interested in 3,128,500,000 Existing Shares, representing approximately 11.58% of the existing issued share capital of the Company, Mr. Fung, together with Ocean Gain in aggregate interested 3,071,662,449 Existing Shares, representing approximately 11.37% of the existing issued share capital of the Company and Mr. Tsang Kam Ching, David, an executive Director, holds 51,624,499 Existing Shares, representing approximately 0.19% of the existing issued share capital of the Company. Save for Mr. Cao’s, Mr. Fung’s and Mr. Tsang Kam Ching, David’s interests, none of the Directors and the chief executive of the Company and their respective associates hold any Shares. Mr. Cao, Mr. Fung, Mr. Tsang Kam Ching, David and their respective associates together with parties acting in concert with any of them, will abstain from voting at the EGM to approve the Rights Issue in compliance with Rule 7.19(6)(a) of the Listing Rules.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, VMS Securities, and its associates are interested in 466,000,000 Existing Shares and the 5th Convertible Bonds. VMS Securities, as one of the Underwriters, has an interest in the Rights Issue. As such, VMS Securities and its associates will abstain from voting at the EGM to approve the Rights Issue.

INFORMATION OF THE GROUP

The Group is principally engaged in expressway operations, trading of petroleum and related products, compressed natural gas (“ CNG ”) gas stations operations and timber operations.

EGM

The EGM will be convened by the Company to consider and, if thought fit, approve the resolutions in relation to the Share Consolidation, the Increase in Authorised Share Capital and the Rights Issue (including the Underwriting Agreement) and the transactions contemplated thereunder, by way of poll.

The notice convening the EGM of the Company to be held at 17th Floor, China Railway South Headquarters Building, No. 3333 Zhongxin Road (Shenzhen Bay Section), Nanshan District, Shenzhen, PRC (深圳市南山區中心路3333號（深圳灣段）中鐵南方總部大廈 17樓) on Wednesday, 4 November 2015, at 11:00 a.m. is set out on pages 100 to 102 of this circular. A form of proxy for use by the Shareholders at the EGM is enclosed. Whether or not you intend to attend and vote at the EGM in person, you are requested to read the notice of EGM and complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Progressive Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meetings should you so wish.

CLOSURE OF THE SHAREHOLDERS’ REGISTER

For the purpose of determining the list of shareholders who are entitled to attend and vote at the EGM, the shareholders’ register of the Company will be closed from Tuesday, 3 November 2015 to Wednesday, 4 November 2015, both days inclusive. No transfer of shares of the Company will be registered during that period.

In order to qualify to attend and vote at the EGM, all instruments of transfer together with the relevant share certificate(s) must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Progressive Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Monday, 2 November 2015.

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LETTER FROM THE BOARD

RECOMMENDATION

The Independent Board Committee has been established to advise the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement. Veda Capital has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders on the same.

The Directors (including the independent non-executive Directors whose opinion on this matter is set out in the letter from the Independent Board Committee set out on pages 45 to 46 of this circular) consider that the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue and the Underwriting Agreement are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors whose opinion on this matter is set out in the letter from the Independent Board Committee set out on pages 45 to 46 of this circular) recommend the Independent Shareholders to vote in favour of the proposed resolutions at the EGM to approve the Share Consolidation, the Increase in Authorised Share Capital, the Rights Issue, the Underwriting Agreement and the transactions contemplated thereunder. You are advised to read the letter from the Independent Board Committee and the letter from Veda Capital before deciding how to vote on the resolutions to be proposed at the EGM.

WARNING OF THE RISKS OF DEALING IN EXISTING SHARES, CONSOLIDATED SHARES AND RIGHTS SHARES

The Consolidated Shares will be dealt in on an ex-rights basis from Friday, 6 November 2015. Dealings in the Rights Shares in the nil-paid form will take place from Thursday, 19 November 2015 to Thursday, 26 November 2015 (both dates inclusive). If the conditions of the Rights Issue are not fulfilled or waived (as applicable) or the Underwriting Agreement is terminated or rescinded by the Underwriters, the Rights Issue will not proceed.

Any Shareholders or other persons contemplating selling or purchasing Rights Shares in their nil-paid form during the period from Thursday, 19 November 2015 to Thursday, 26 November 2015 (both dates inclusive) who are in any doubt about their position are recommended to consult their professional advisers. Any Shareholders or other persons dealing in the Existing Shares or the Consolidated Shares up to the date when the conditions of the Rights Issue are fulfilled or waived (as applicable) (and the date on which the Underwriters’ right of termination or rescission of the Underwriting Agreement ceases) and any persons dealing in the nil-paid Rights Shares during the period from Thursday, 19 November 2015 to Thursday, 26 November 2015 (both dates inclusive) will accordingly bear the risk that the Rights Issue could not become unconditional or does not proceed.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

In the event of inconsistency, the English text of this circular and the accompanying form of proxy shall prevail over their respective Chinese texts.

Your attention is drawn to the additional information set out in Appendices I to III to this circular.

By Order of the Board China Resources and Transportation Group Limited Cao Zhong Chairman

– 44 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in relation to the Rights Issue and the Underwriting Agreement.

==> picture [176 x 61] intentionally omitted <==

CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 269)

19 October 2015

To Independent Shareholders

Dear Sir or Madam,

PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE

We refer to the circular of the Company dated 19 October 2015 (the “ Circular ”), of which this letter forms part. Terms used herein have the same meanings as those defined in the Circular unless otherwise specified.

We have been appointed by the Board to form the Independent Board Committee to advise the Independent Shareholders as to whether the terms of the Rights Issue and the Underwriting Agreement are fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole, and to recommend how the Independent Shareholders should vote regarding the relevant proposed resolutions at the EGM.

Veda Capital has been appointed as the Independent Financial Adviser to advise us and the Independent Shareholders as to whether the terms of the Rights Issue and the Underwriting Agreement are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole, and to recommend how the Independent Shareholders should vote regarding the relevant proposed resolutions at the EGM. Details of the advice of Veda Capital Limited, together with the principal factors taken into consideration in arriving at such advice, are set out on pages 47 to 69 of the Circular. Your attention is also drawn to the letter from the Board set out on pages 14 to 44 to the Circular and the additional information set out in the appendices to the Circular.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the advice of Veda Capital, we consider that the terms of the Rights Issue and the Underwriting Agreement are fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favor of the relevant proposed resolutions to approve the terms of the Rights Issue and the Underwriting Agreement at the EGM.

Yours faithfully,

For and on behalf of the Independent Board Committee Yip Tak On Jing Baoli Bao Liang Ming Independent Independent Independent Non-executive Director Non-executive Director Non-executive Director

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter from Veda Capital Limited setting out the advice to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement, which has been prepared for the purpose of inclusion in this circular.

Veda Capital Limited Suite 3711, 37/F Tower Two, Times Square 1 Matheson Street Causeway Bay Hong Kong

19 October 2015

To the Independent Board Committee and the Independent Shareholders of China Resources and Transportation Group Limited

Dear Sirs,

(1) PROPOSED SHARE CONSOLIDATION ON THE BASIS OF EVERY TWENTY ISSUED AND UNISSUED EXISTING SHARES INTO ONE CONSOLIDATED SHARE;

(2) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (3) PROPOSED CHANGE IN BOARD LOT SIZE; (4) PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE

INTRODUCTION

We refer to our engagement to advise the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue, details of which are set out in the Letter from the Board (the “ Board Letter ”) contained in the circular to the Shareholders dated 19 October 2015 (the “ Circular ”), of which this letter forms part. Terms used herein have the same meanings as defined elsewhere in the Circular unless the context require otherwise.

As announced by the Company on 29 September 2015, the Board proposes to put forward a proposal to the Shareholders to effect the Share Consolidation which involves the consolidation of every twenty (20) issued and unissued Existing Shares of par value of HK$0.01 each into one (1) Consolidated Share of par value of HK$0.20 each. The Board further proposes to, subject to the Share Consolidation becoming effective, increase the authorised share capital of the Company from HK$700,000,000 divided into 3,500,000,000 Consolidated Shares to HK$3,000,000,000 divided into 15,000,000,000 Consolidated Shares by the creation of an additional 11,500,000,000 new Consolidated Shares of HK$0.20 each, which will rank pari passu in all respects with each other. The Board also proposes to change the board lot size for trading on the Stock Exchange from 100,000 Existing Shares to 5,000 Consolidated Shares upon the Share Consolidation becoming effective.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As further announced in the Announcement, the Board proposes, subject to, amongst others, the Share Consolidation and the Increase in Authorised Share Capital becoming effective, to implement the Rights Issue on the basis of four (4) Rights Shares for every one (1) Consolidated Share held on the Record Date at the Subscription Price of HK$0.20 per Rights Share, to raise not less than approximately HK$1,080.4 million and not more than approximately HK$1,812.6 million before expenses by way of the issue of not less than 5,401,916,776 Rights Shares and not more than 9,063,216,776 Rights Shares.

The Rights Issue is fully underwritten by the Underwriters. Pursuant to the Underwriting Agreement, Mr. Cao and Mr. Fung shall, jointly and severally (in addition to their respective obligation under the Irrevocable Undertakings) underwrite up to 400,000,000 Untaken Shares on a pro rata basis in equal proportion, whereas VMS Securities shall underwrite the remaining Untaken Shares, subject to the terms and conditions set out in the Underwriting Agreement, in particular the fulfillment of the conditions precedent contained therein.

In accordance with Rule 7.19(6) of the Listing Rules, as the Rights Issue will increase the issued share capital of the Company by more than 50%, the Rights Issue is subject to the approval of the Shareholders at the EGM by way of poll. Pursuant to Rule 7.19(6)(a) of the Listing Rules, the Rights Issue must be made conditional on approval by the Shareholders in general meeting by a resolution 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 does not have any controlling Shareholder. Mr. Cao, the chairman and an executive Director, together with his associate are interested in 3,128,500,000 Existing Shares, representing approximately 11.58% of the existing issued share capital of the Company, Mr. Fung, an executive Director, together with his associate are interested in 3,071,662,449 Existing Shares, representing approximately 11.37% of the existing issued share capital of the Company and Mr. Tsang Kam Ching, David, an executive Director, holds 51,624,499 Existing Shares, representing approximately 0.19% of the existing issued share capital of the Company. Save for Mr. Cao’s, Mr. Fung’s and Mr. Tsang Kam Ching, David’s interests, none of the Directors and the chief executive of the Company and their respective associates hold any Existing Shares. Mr. Cao, Mr. Fung, Mr. Tsang Kam Ching, David and their respective associates, together with parties acting in concert with any of them (if any), will abstain from voting in favour at the EGM to approve the Rights Issue in compliance with Rule 7.19(6)(a) of the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As at the Latest Practicable Date, VMS Securities as one of the Underwriters, and its associates are interested in 466,000,000 Existing Shares and the 5th Convertible Bonds. As such, VMS Securities and its associates will abstain from voting at the EGM to approve the Rights Issue.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising all the independent non-executive Directors, namely, Mr. Yip Tak On, Mr. Jing Baoli and Mr. Bao Liang Ming, has been formed to make recommendations to the Independent Shareholders as to whether the Rights Issue and the Underwriting Agreement are fair and reasonable so far as the Company and the Independent Shareholders are concerned and in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders on how to vote on the resolutions approving the Rights Issue and the Underwriting Agreement at the EGM. We have been appointed to advise the Independent Board Committee and the Independent Shareholders in these regards.

As at the Latest Practicable Date, we were not aware of any relationships or interest between us and the Company or any other parties that could be reasonably be regarded as hindrance to our independence as defined under Rule 13.84 of the Listing Rules to act as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue and the Underwriting Agreement. We are not associated with the Company, its subsidiaries, its associates or their respective substantial shareholders or associates, and accordingly, are eligible to give independent advice and recommendations on the Rights Issue and the Underwriting Agreement. Apart from normal professional fees payable to us in connection with this appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders, no arrangement exists whereby we will receive any fees from the Company, its subsidiaries, its associates or their respective substantial shareholders or associates.

BASIS OF OUR OPINION

In formulating our opinion and advice, we have relied upon accuracy of the information and representations contained in the Circular and information provided to us by the Company, the Directors and the management of the Company. We have assumed that all statements, information and representations made or referred to in the Circular and all information and representations which have been provided by the Company, the Directors and the management of the Company, for which they are solely and wholly responsible, were true at the time they were made and continue to be true as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion and intention made by the Directors in the Circular were reasonably made after due and careful enquiry and were based on honestly-held opinions.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Directors have collectively and individually accepted full responsibility for the accuracy of the information contained in the Circular and have confirmed, having made all reasonable enquiries that, to the best of their knowledge and belief, there are no other facts the omission of which would make any statements in the Circular misleading. We have no reason to believe that any information and representations relied on by us in forming our opinion is untrue, inaccurate or misleading, nor are we aware of any material facts the omission of which would render the information provided and the representations made to us untrue, inaccurate or misleading. We have not, however, conducted any independent in-depth investigation into the business affairs, financial position or future prospects of the Group, nor have we carried out any independent verification of the information provided by the Directors and management of the Company.

We have not considered the tax consequences on the Qualifying Shareholders arising from the subscription for, holding or dealing in the Rights Shares or otherwise, since these are particular to their own circumstances. We will not accept responsibility for any tax effect on, or liabilities of, any person resulting from the subscription for, holding of or dealing in the Rights Shares or the exercise of any rights attaching thereto or otherwise. In particular, Qualifying Shareholders subject to overseas taxes or Hong Kong taxation on securities dealings should consider their own tax positions with regard to the Rights Issue, and if in any doubt, should consult their own professional advisers.

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

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving our recommendation to the Independent Board Committee and the Independent Shareholders in respect of the Rights Issue, we have taken into consideration the following principal factors and reasons:

I. Financial performances of the Group

Financial information of the Group for the two years ended 31 March 2015 are as below:

For the year ended 31 March 2015

As disclosed in the annual report of the Company for the year ended 31 March 2015 (the “ AR 2015 ”), the Group recorded turnover of approximately HK$5,016.55 million for the year ended 31 March 2015, representing an decrease of approximately 41.57% as compared to the turnover of approximately HK$8,585.72 million for the year ended 31 March 2014. As set out in the AR 2015, the turnover was recognized under three reportable segments under the continuing operations of the Group, namely expressway operations, petroleum and related products business and timber operations.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Group recorded a loss attributable to owners of the Company of approximately HK$1,765.9 million for the year ended 31 March 2015, representing an increase in loss by approximately 199.06% from a loss attributable to owners of the Company of approximately HK$590.49 million for the year ended 31 March 2014. As set out in the AR 2015, the substantial increase in net loss was mainly attributable to the significant increase in finance costs arising from bank borrowings and convertible bonds issued by the Company (collectively the “ Specific Borrowings ”) to finance the construction of Zhunxing Expressway. During the construction phase of Zhunxing Expressway, all finance costs arising from these Specific Borrowings were capitalized to the Group’s concession intangible asset. Upon the traffic opening and commencement of toll collection of Zhunxing Expressway on 21 November 2013, the Group ceased capitalizing such finance costs and recognized them directly in the Group’s consolidated income statement pursuant to HKAS 23, Borrowing Costs. The finance costs of approximately HK$1,748.75 million incurred for the year was entirely charged to the Group’s consolidated income statement, whereas for the finance costs of approximately HK$1,580.19 million of the last financial year, approximately HK$648.57 million was charged to the Group’s consolidated income statement and approximately HK$931.62 million was capitalized to the Group’s concession intangible asset. Besides, the increase in net loss was also driven by the loss of approximately HK$105.44 million as compared to a gain of approximately HK$54.26 million in 2014 incurred on settling the debt component of old convertible bonds when new convertible bonds were issued during the year.

For the year ended 31 March 2014

As disclosed in the annual report of the Company for the year ended 31 March 2014 (the “ AR 2014 ”), the Group recorded turnover of approximately HK$8,585.72 million for the year ended 31 March 2014, representing an increase of approximately 87.89% as compared to the turnover of approximately HK$4,569.57 million for the year ended 31 March 2013. As set out in the AR 2014, the turnover was recognized under the four reportable segments classified as continuing operations of the Group, namely construction and operation of expressway, petroleum and related products trading, timber logging and trading and other timber operation. The significant increase was mainly attributable to (i) a significant increase in construction revenue in respect of service concession arrangement amounted to approximately HK$8,148.64 million for the year ended 31 March 2014 as compared to approximately HK$4,562.04 million for the previous fiscal year; (ii) the toll income of approximately HK$307.67 million since the operation of Zhunxing Expressway on 21 November 2013; and (iii) the trading revenue of petroleum and related products of approximately HK$117.09 million from a new subsidiary.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Group recorded a loss attributable to owners of the Company of approximately HK$590.49 million for the year ended 31 March 2014, representing an increase in loss by approximately 117.36% from a loss attributable to owners of the Company of approximately HK$271.66 million for the year ended 31 March 2013. As set out in the AR 2014, the substantial increase in net loss was mainly attributable to the significant increase in finance costs of approximately HK$648.57 million as compared to approximately HK$56.02 million in last fiscal year, primarily arising from the Specific Borrowings to finance the construction of Zhunxing Expressway. During the construction phase of Zhunxing Expressway, all finance costs arising from these Specific Borrowings were capitalized to the Group’s concession intangible assets. Upon the traffic opening and commencement of toll collection of Zhunxing Expressway on 21 November 2013, the Group ceased capitalizing such finance costs and recognized them directly in the Group’s consolidated income statement pursuant to HKAS 23, Borrowing Costs. In addition, the increase in net loss was also contributed by an increase in selling and administrative expenses to approximately HK$263.37 million as compared to approximately HK$164.28 million in last fiscal year which was mainly due to the operating costs of Zhunxing Expressway amounted to approximately HK$49 million and the share options expenses of approximately HK$31.37 million during the year.

II. Reasons for the Rights Issue and use of proceeds

(i) approximately HK$780.0 million will be applied to repay the principal amount of Company’s loans and borrowings;
(ii) approximately HK$166.5 million will be applied to the interest payments of the Outstanding CBs and other borrowings;
(iii) approximately HK$60.0 million will be applied to invest in a new investment opportunity including the establishment of a joint venture with CNOOC for the investment, construction and operation of the partial oxidation coal-to-hydrogen plant under the Huizhou petrochemicals phase II project in the petrochemical area of Daya Bay technological and economic development zone, the PRC;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iv) approximately HK$40.0 million will be applied to the construction and installation of new compressed natural gas and/or liquefied natural gas dispensing stations in the PRC; and
(v) any amount above the minimum net proceeds will be applied to repay the remaining principal amount of the debts.

We have noted from the Board Letter and the relevant bond instruments and loan documents provided by the Company that the aggregate debts amount of the debts which are required to be repaid by the Company by the end of September 2016 i.e. due within 12 months from the Latest Practicable Date is approximately HK$3,711 million (the “ Current Debts ”) and approximately HK$592 million is required to be repaid by the end of December 2015, which is the principal amount of four straight bonds with interest rate of 9% per annum each. We also noted from the Board Letter that the aggregate debts amount of the debts which are required to be repaid from October 2016 to the year 2034 i.e. due after 12 months from the Latest Practicable Date is approximately HK$13,197 million. As disclosed in the announcements dated 14 August 2015 and 28 August 2015, the Company has successfully restructured a number of convertible bonds to extend the repayment dates. As noted from the announcements, the Company previously issued on 3 September 2013 (i) HK$1,300,000,000 9% convertible bonds due 2015 to Li Ka Shing (Canada) Foundation; (ii) HK$100,000,000 9% convertible bonds due 2015 to Dr. Lo Ka Shui; (iii) HK$160,000,000 9% convertible bonds due 2015 to Grand Version Investments Limited; and (iv) HK$32,000,000 9% convertible bonds due 2015 to Guotai Junan Investments (Hong Kong) Limited, which were transferred to Guotai Junan Finance (Hong Kong) Limited by on 4 November 2013, (such holders being the “ Bondholders ”), and such bonds (the “ Bonds ”). The Company has agreed with the Bondholders for repayment of the Bonds to be deferred so that (i) HK$400 million principal amount of the Bonds will become due on 3 December 2015; (ii) HK$192 million principal amount of the Bonds will become due on 31 December 2015; (iii) HK$500 million principal amount of the Bonds will become due on 3 March 2016; and (iv) HK$500 million principal amount of the Bonds will become due on 3 September 2016. As further noted from the aforesaid announcements, as part of the extension of the repayment date, the Bondholders have unconditionally and irrevocably waived their conversion rights attached to the Bonds with effect from the corresponding maturity date. With effect from the corresponding maturity date, the Bonds will become non-convertible debt securities.

As further noted from the Board Letter, the Board has been actively negotiating with the debts holders on the possibility of extending the repayment date. Based on the recent discussions, the Board estimates that a minimum of approximately HK$780 million of the principal and approximately HK$166.5 million of the interest payments will have to be repaid in the coming 5 months without delay. If additional funding can be raised above the minimum proceeds generated from the Rights Issue, it will also be applied to repay the remaining debts. The Board considers that it is crucial to cater for the above throat-cutting funding needs before it can take a next step to negotiate further with holders of the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

remaining debts falling due in the remaining 7 months. The Board considers that by repaying the above debts and interest, it will improve its gearing ratio and the overall financial position and relieve its interest burden, and thus facilitate it to negotiate with the debts holders for rescheduling the remaining debts. As noted from the AR 2015, the gearing ratio of the Group was 87.0% for the year ended 31 March 2015. Also, settling the debts by using the proceeds sourced from the Rights Issue will lubricate the negotiation process. The Board considers that only when the Rights Issue becomes materialized it can further formulate and finalize its strategy in satisfying its remaining funding needs in the remaining 7 months.

We have also obtained the management accounts of the Company and noted that the cash and cash equivalents of the Company as at 31 August 2015 amounted to approximately HK$129 million, which is not sufficient for the repayment of the Current Debts to be due by December 2015.

We are aware that the total debts amounts of the Group as at the Latest Practicable Date amounted to approximately HK$16,908 million while approximately HK$3,711 million will be due within 12 months from the Latest Practicable Date and the net proceeds from the Rights Issue together with the presently available financial resources of the Group will not be sufficient to settle all the outstanding debts of the Group. We are given to understand that the Directors will carry out all necessary plans to provide additional working capital to the Group to settle the Group’s outstanding loans and borrowings when they fall due, including: (1) renewing the existing banking facilities upon expiry; (2) rescheduling part of the loans and borrowings of the Group which will fall due within the next 12 months when they fall due; and (3) raising further equity funds in the coming year including but not limited to private placement, open offer or rights issue. Notwithstanding the successful outcomes of the settlement plans are uncertain, we are of the view that the Rights Issue is crucial to the Company’s settlement plan given that, if the Rights Issue can be proceeded, approximately 90% of net proceeds from the Rights Issue will be used for repayment of the debts with imminent due dates and the gearing ratio of the Group will be improved and thus strengthen the negotiation power for the Company to renew or obtain banking facilities, restructure the debts and approach underwriters for open offer and/or rights issue in the coming year, if necessary. Also, as evidenced by the successful restructuring and extending repayment dates of the Bonds as mentioned in the section headed “II. Reasons for the Rights Issue and use of proceeds” in this letter, we concur with the view of the Directors that the completion of the Rights Issue will strengthen the Group’s financial position which will (i) lubricate the negotiation process with other convertible bond holders for debt rescheduling and (ii) increase the capability of the Company to raise further equity funds in the coming year, if necessary.

Apart from the repayment of debts, part of the proceeds in the amount of HK$60 million and HK$40 million respectively is intended to be used for the investment, construction and operation of the POX Project and the CNG/LNG Projects.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As noted from the announcement of the Company dated 16 January 2015, Zitong Clean Energy, which is an 85% indirectly owned subsidiary of the Company in the PRC, has entered into a legally-binding letter of intent dated 16 January 2015 with CNOOC in relation to, among other things, the establishment of a joint venture for the investment, construction and operation of the partial oxidation coal-to-hydrogen plant under the Huizhou petrochemicals phase II project in the petrochemical area of Daya Bay technological and economic development zone, the PRC in order to enhance operation on the oxidation coal-to-hydrogen plant and to ensure stability in the supply of raw materials and leverage on the advantage of coal-to-hydrogen technology.

CNOOC is constructing the Huizhou petrochemicals phase II project, producing 22,000,000 tonnes/year of refined oil and 1,000,000 tonnes/year of ethylene, under which has been planned to commence operation in 2016. By leveraging the advanced technology within and outside the PRC, the partial oxidation coal-to-hydrogen plant of the project utilizes coal and oxygen as raw materials to produce 150,000 tonnes/year (200,000 Nm3/h in total) of hydrogen and 117,300 tonnes/year of oxo-synthesis gas for use in oil refinery and ethylene projects. The partial oxidation coal-to-hydrogen plant will require 1,640,000 tonnes of coal per year, with the plant consisting of nine units including coal storage and transportation, air separation, coal preparation, gasification, transformation, low-temperature methanol washing, PSA, recovery of sulphur and sour water stripping.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have performed research and noted that the “國家能源局召開煤炭清潔利用專家諮詢會” (National Energy Administration’s Expert Consultation of Clean Coal) (source: 中華人民共和國國家發展和改革委員會 (National Development and Reform Commission*), xwzx.ndrc.gov.cn) further details the objectives and plans for the development of coal-to-hydrogen. The PRC government expects to promote the use of hydrogen from coal during the refinery process to replace hydrogen refined from other sources. This helps saving the energy cost for the country and reducing the reliance and dependence on imported refined hydrogen as well.

Also, the State Council of the PRC released a document named《科技部：世界最大水煤漿氣化工業裝置投入試運行》“The Largest Equipment of Coal Gasification from Ministry of Science and Technology of the People’s Republic of China”, the PRC Government has been encouraging the industry to strengthen the leading position of large-scale coal gasification technology in the world stating that large-scale coal gasification technology is the core part of clean and efficient conversation of coal to gases for all sorts of chemicals and materials for different industries. Development of large coal gasification technology can promote efficiently use of coal which is a great significance in sustainable scientific development in chemical industry for the country.

As noted from the AR 2015, during the financial year ended 31 March 2015, the Company has formed a new energy business sector which is based on LNG, CNG and charging pile for vehicles. As noted from the announcements of the Company dated 28 August 2014 and 18 September 2014, the Company has entered into framework agreements with PetroChina Guangdong Marketing Company and PetroChina Henan Marketing Company under which the Company has obtained first rights for the installation and operation of electric vehicle charging and CNG and/or LNG dispensing stations in over 1,100 gas stations of PetroChina Guangdong in Guangdong province, the PRC and 840 gas stations of PetroChina Henan in Henan province, the PRC, respectively.

The State Council of the PRC released a document《能源發展戰略行動計劃（2014-2020年）》“Energy Development Plans for 2014 to 2020”, the PRC Government continues to increase the proportion of compressed natural gas and liquefied natural gas in order to reduce the reliance on consumption of coal and oil for energy production. The PRC government expects that consumption of natural gas will increase to more than 10 percent by 2020. Exploration of natural gas is highly encouraged especially in areas such as Sichuan Basin, Erdos Basin, the Tarim Basin and the South China Sea. The target is to build production bases which can provide up to ten billion cubic meters natural gas and by 2020, proven reserves of conventional natural gas will be anticipated to be at least 5.5 trillion cubic meters with an annual production of 185 billion cubic meters of natural gas. According to “August 2015 Natural Gas Data” by The State Council of the PRC, natural gas production recorded 10.6 billion cubic meters representing an increase of approximately 3.8 percent on year-to-year basis and the consumption of natural gas was 14.1 billion cubic meters that the growth rate is about approximately 3.5 percent.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered (i) the outstanding debts amount of the Company to be due by end of September 2016 in the amount of approximately HK$3,711 million; (ii) the outstanding debt amount of the Company to be due by end of December 2015 in the amount of HK$592 million and the cash and cash equivalents of the Company as at 31 August 2015 in the amount of HK$129 million; (iii) approximately 90% of the net proceeds from the Rights Issue will be used for the Group to repay the principal amount of the Company’s loans and borrowings and the interests of the Outstanding CBs and other borrowings which will lower the Group’s interest expenses as well as the gearing ratio and thus is beneficial to the ongoing development of the Group as well as the negotiation process with the debt holders in connection with the restructuring of the debts; (iv) the POX Project and the CNG/LNG Projects are in line with the principal business of the Group; (v) the prospects of partial oxidation of coal-to-hydrogen technology and natural gas; and (vi) the Rights Issue will enable the Qualifying Shareholders to maintain their proportionate interests in the Company and continue to participate in the future development of the Group, we are of the view that the Rights Issue is in the interests of the Company and the Shareholders as a whole.

Other financing alternatives

As set out in the Board Letter, after due and careful consideration, the Board considers that the current structure of the Rights Issue, as a form of equity financing available for all the existing shareholders to participate, is the best, if not the only alternative which the terms are acceptable to both the Company and the Underwriters in light of the Group’s current circumstance. There is about HK$1,046.5 million imminent funding needs for the Group after the Board’s assessment over its financial and operation position. The Group has taken various steps to address the funding needs of the Company.

The Group is in heavy debts. The Board considers that debt raising (including bank financing) would not be an option as it would worsen the gearing and debt position of the Group.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In view of that (i) debt financing and bank borrowing would result in additional interest burden and further deteriorate the gearing position of the Group; (ii) it is unlikely to obtain favourable terms from debt financing and bank borrowings given the continuous loss makings of the Company since 2009 and the heavy debts burden of the Company; (iii) even though an open offer is similar to a rights issue, the Rights Issue enables the Qualifying Shareholders who decide not to participate in the Rights Issue to have an alternative to trade in the nil-paid rights in the market for economic benefits; and (iv) the Rights Issue provides all Qualifying Shareholders the opportunities to participate in the enlargement of the capital base of the Company to support the Group’s continuing development and business growth, we are in the view that fund-raising by way of the Rights Issue is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

III. Principal terms of the Rights Issue

Basis of the Rights Issue

Qualifying Shareholders will be offered four (4) Rights Shares for every one (1) Consolidated Share held on the Record Date.

The Rights Shares, when allotted and fully paid, will rank pari passu in all respects, including the rights to dividends, voting and return of capitals with the Consolidated Shares then in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of allotment of the Rights Shares in their fully-paid form.

Subscription Price

The Subscription Price for the Rights Share is HK$0.20 per Rights Share, payable in full upon acceptance of the relevant provisional allotment of Rights Shares and, where applicable, application for excess Rights Shares under the Rights Issue or when a transferee of nil-paid Rights Shares applies for the Rights Shares,

The Subscription Price represents:

(a) a discount of approximately 82.8% to the equivalent closing price of HK$1.16 per Consolidated Share based on the closing price of HK$0.058 per Existing Share as quoted on the Stock Exchange on the Last Trading Day after taking into account the effect of the Share Consolidation;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(b) a discount of approximately 49.0% to the theoretical ex-rights price of approximately HK$0.392 per Consolidated Share based on the closing price of HK$0.058 per Existing Share as quoted on the Stock Exchange on the Last Trading Day after taking into account the effect of the Share Consolidation;
(c) a discount of approximately 82.5% to the equivalent average closing price of HK$1.144 per Consolidated Share based on the average closing price per Existing Share as quoted on the Stock Exchange for the five consecutive trading days up to and including the Last Trading Day after taking into account the effect of the Share Consolidation; and
(d) a discount of approximately 75.61% to the equivalent closing price of HK$0.82 per Consolidated Share based on the closing price of HK$0.041 per Existing Share as quoted on the Stock Exchange on the Latest Practicable Date.

As set out in the Board Letter, the Subscription Price was determined after arm’s length negotiations between the Company and the Underwriters with reference to the market price of the Existing Shares prior to the Last Trading Day and the prevailing market conditions and taking into account the effect of the Share Consolidation. The Directors consider that the terms of the Rights Issue, including the Subscription Price which has been set at a discount to the recent closing prices of the Existing Shares with an objective of encouraging the existing Shareholders to take up their entitlements so as to participate in the potential growth of the Company in the future, are fair and reasonable and in the best interests of the Company and the Shareholders as a whole. The net price per Rights Share upon full acceptance of the provisional allotment of all the Rights Shares will be approximately HK$0.194.

Historical trading prices

We have reviewed the historical trading prices of the Shares for the period commencing from 10 September 2014, being the 12 months period prior to 9 September 2015, being the date of the Last Trading Day, up to and including the date of the Last Trading day (the “ Review Period ”). We adopt a length of 12 month as we consider that this could illustrate a meaningful historical trend of the Company as the Review Period covers the publication of the Group’s 2015 financial results which reflect the recent performance of the Group. The chart below shows the daily adjusted closing price per Consolidated Share based on the closing price per Existing Shares as quoted on the Stock Exchange for the Review Period against the Subscription Price.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

==> picture [414 x 237] intentionally omitted <==

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Subscription Price = HK$0.2
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Source: The website of the Stock Exchange (www.hkex.com.hk) and Bloomberg

During the Review Period, the lowest adjusted closing price and highest adjusted closing price were HK$1.10 per Consolidated Share on 4 and 7 September 2015 and HK$6.40 per Consolidated Share on 9, 10 and 11 September 2014 respectively and the average closing price was HK$3.33 per Consolidated Share. The Subscription Price represents a discount to the adjusted closing price of the Consolidated Shares throughout the Review Period and represents a discount of approximately 93.99% to the average adjusted closing price of Consolidated Shares within the Review Period. In view of that (i) the downward trend demonstrated by the historical movement of the Consolidated Share prices within the Review Period; (ii) the continuous loss makings recorded by the Company since 2009; (iii) the heavy debts burden and high gearing ratio of the Group; (iv) it is common market practice to issue rights shares at a discount to the market price of the relevant shares in order to entice subscription by their shareholders; (v) the Rights Issue is available to all Qualifying Shareholders providing them with an equal chance in participating in the Rights Issue; (vi) the deep discount will allow each Qualifying Shareholder to have greater flexibility in determining the extent of participation; and (vii) the existence of excess application and nil-paid rights arrangement, we concur with the view of the Directors that the setting of the Subscription Price for the Rights Share at a discount is to be fair and reasonable.

Comparison with recent rights issues

To provide further analysis on the Subscription Price, we have identified all the rights issues (the “ Comparables ”) announced and conducted by other companies that are listed on the Stock Exchange from 10 June 2015 up to and including 9 September 2015, being the Last Trading Day

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(the “ Comparable Period ”) and have not been suspended for trading for more than 12 months before the dates of the respective announcements in relation to the rights issue transactions as these companies would make the closing price too distant in history and therefore bear little to no relevance to the relevant subscription price, for comparison purposes. To the best of our knowledge and as far as we are aware of, the Comparables represent an exhaustive list. Shareholders should note that the businesses, operations, proceeds, use of proceeds from the Rights Issue and financial performance of the Company are not the same as the Comparables and we have not conducted any in-depth investigation into their respective businesses, operations and financial performance.

In regardless, we consider the Comparables to be reliable, fair and representative samples as the Comparables (i) represent an exhaustive list; (ii) consist of recent rights issue samples conducted by companies that are also listed on the Stock Exchange in Hong Kong; and (iii) as the capital market changes rapidly, it better reflects the latest market conditions and sentiments of rights issue structures and transactions in Hong Kong. Furthermore, we are of the view that the Comparable Period (i.e. 3 months period) is sufficient and appropriate for our analysis as the market sentiment at the relevant time in general plays a more essential role in the determination of the subscription price and while reasonable number of samples could be included for comparison purposes. As such, the Comparables are used by us to make a comparison of the Rights Issue to the common market practice in rights issue transactions of companies listed on the Stock Exchange and the details of the Comparables are summarised in the following table:

			Discount of
			subscription	Discount of
			price to the	subscription
			closing price	price to the
			on the last	theoretical		Underwriting
Date of		Basis of	trading day	ex-entitlement	Maximum	commission
announcement	Company (Stock Code)	entitlement	(%)	price (%)	dilution (%)	(%)
					(Note 1)
2015/09/01	Fortune Sun (China)	1 for 5	(28.57)	(24.78)	16.67	0
	Holdings Limited (352)
2015/08/30	HNA International	9 for 5	(20.00)	(8.29)	64.29	0
	Investment Holdings
	Limited (521)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Discount of
			subscription	Discount of
			price to the	subscription
			closing price	price to the
			on the last	theoretical		Underwriting
Date of		Basis of	trading day	ex-entitlement	Maximum	commission
announcement	Company (Stock Code)	entitlement	(%)	price (%)	dilution (%)	(%)
					(Note 1)
2015/08/17	Chong Hing Bank Limited	1 for 2	(26.03)	(19.00)	33.33	2.4
	(1111)
2015/08/06	Easyknit Enterprises	20 for 1	(88.00)	(26.15)	95.24	1.0
	Holdings Limited (616)
2015/07/31	Celestial Asia Securities	1 for 2	(57.45)	(47.37)	33.33	2.5
	Holdings Limited (1049)
2015/07/22	Jia Meng Holdings Limited	3 for 1	(42.03)	(15.79)	75.00	3.5
	(8101)
2015/07/10	Rui Kang Pharmaceutical	4 for 1	(38.98)	(11.33)	80.00	3.5
	Group Investments
	Limited (8037)
2015/07/08	King Fook Holdings	2 for 5	(28.57)	(22.08)	28.57	2.5
	Limited (280)
2015/06/26	Gayety Holdings Limited	1 for 2	(46.43)	(36.75)	33.33	1.5
	(8179)
2015/06/25	Vanke Property (Overseas)	1 for 2	(19.92)	(14.19)	33.33	a flat fee of
	Limited (1036)					US$625,000
						(Note 2)
2015/06/23	AMCO United Holding	3 for 1	(41.22)	(14.71)	75.00	3.5
	Limited (630)
2015/06/22	Hua Xia Healthcare	1 for 5	(48.20)	(7.90)	16.67	2.75
	Holdings Limited (8143)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Discount of
			subscription	Discount of
			price to the	subscription
			closing price	price to the
			on the last	theoretical		Underwriting
Date of		Basis of	trading day	ex-entitlement	Maximum	commission
announcement	Company (Stock Code)	entitlement	(%)	price (%)	dilution (%)	(%)
					(Note 1)
2015/06/14	China Mobile Games and	1 for 2	(25.49)	(17.39)	33.33	3.5
	Cultural Investment
	Limited (8081)
2015/06/10	China Rare Earth Holdings	2 for 5	(58.60)	(50.30)	28.57	3.5
	Limited (769)
		Minimum	(19.92)	(7.90)
		discount
		Maximum	(88.00)	(50.30)
		discount
		Average	(40.68)	(22.57)
				Minimum	16.67	0.00
				Maximum	95.24	3.50
				Average	46.19	2.32
	Company	4 for 1	(82.80%)	(49.00%)	80.00	2.0

Notes:

Maximum dilution effect of each rights issue is calculated as: ((number of rights shares to be issued under the basis of entitlement)/(number of existing shares held for the entitlement for the rights shares under the basis of entitlement + number of rights shares to be issued under the basis of entitlement) x 100%), e.g. for an rights issue with basis of four (4) rights shares for every one (1) existing share, the maximum dilution effect is calculated as ((4)/(4+1))*100) = 80.00%.
This Comparable is excluded from the calculation of the maximum, minimum and average underwriting commission given a flat fee is charged.

As shown in the above table, the discounts represented by the subscription prices to the closing prices of shares of the Comparables on the last trading days prior to the release of the respective announcements ranged from approximately 19.92% to approximately 88.00% (the “ LTD Market Range ”) with average being a discount of approximately 40.68%. The discount of approximately 82.80% represented by the Subscription Price to the adjusted closing price per Consolidated Share based on the closing price per Existing Share on the Last Trading Day after taking into account the effect of the Share Consolidation falls within the LTD Market Range.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The discounts represented by the subscription prices to the theoretical ex-rights prices of the shares of the Comparables ranged from 7.90% to approximately 50.30% (the “ TEP Market Range ”) with average being a discount of approximately 22.57%. The discount of approximately 49.00% as represented by the Subscription Price to the theoretical ex-rights price per Consolidated Share based on the closing price per Existing Share on the Last Trading Day falls within the TEP Market Range.

We noted that the discount represented by the Subscription Price to the adjusted closing price per Consolidated Share on the Last Trading Day and the theoretical ex-rights price per Consolidated Share respectively is higher than the respective average of the Comparables. Having considered (i) the Subscription Price was determined at after arm’s length negotiations between the Company and the Underwriters; (ii) the same Subscription Price is offered to all Qualifying Shareholders and all Qualifying Shareholders are offered equal opportunities to subscribe for the Rights Shares; (iii) the discount represented by the Subscription Price to the adjusted closing price per Consolidated Share based on the closing price per Existing Share on the Last Trading Day falls within the LTD Market Range; (iv) the discount represented by the Subscription Price to the theoretical ex-rights price of the Consolidated Share based on the closing price per Existing Share on the Last Trading Day falls within the TEP Market Range; (v) it is common for the listed issuers in Hong Kong to issue right shares at a discount to market price in order to enhance the attractiveness of a rights issue transaction; (vi) the daily adjusted closing price per Consolidated Share during the Review Period as shown above demonstrated an overall declining trend and the drop of approximately 81.87% from the highest adjusted closing price of HK$6.40 per Consolidated Share to the adjusted closing price of HK$1.16 per Consolidated Share on Last Trading Day; (vii) the continuous loss makings recorded by the Company since 2009; and (viii) the heavy debts burden and high gearing ratio of the Group, we consider that a high discount on the Subscription Price is inevitable for the Company to increase attractiveness of the Rights Issue and the Subscription Price is fair and reasonable so far as the Independent Shareholders are concerned.

Application for excess Rights Shares

As stated in the Board Letter, Qualifying Shareholders may apply, by way of excess application, for any unsold entitlements of the Non-Qualifying Shareholders, any Rights Shares provisionally allotted but not accepted and any unsold fractions of Rights Shares not provisionally allotted.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

abuse such mechanism. We have compared the basis in allocating the excess Rights Shares with the arrangements of those Comparables in the above table and noted that the basis is common with the Comparables and hence are acceptable.

Underwriting Agreement

(i) Mr. Cao and Mr. Fung shall, jointly and severally, underwrite up to 400,000,000 Untaken Shares, on a pro rata basis in equal proportion and in the event that there is any fractional Untaken Share arising from the allocation between Mr. Cao and Mr. Fung, such fractional Untaken Share shall be taken up by VMS Securities; and
(ii) VMS Securities shall underwrite all the remaining balance of the Untaken Shares that are not taken up by Mr. Cao and Mr. Fung pursuant to (i) above up to (a) a minimum of 3,761,884,288 Rights Shares (assuming no further new Shares are issued (other than the Rights Shares) and no repurchase of Shares on or before the Record Date) and (b) a maximum of 7,423,184,288 Rights Shares (assuming new Shares are issued on or before the Record Date upon full exercise of Outstanding Share Options and Unlisted Warrants and full conversion of the Outstanding CBs but no other Shares (other than the Rights Shares) are issued and no repurchase of Shares on or before the Record Date).

For the avoidance of doubt, if the Untaken Shares available under the Rights Issue are less than 400,000,000, Mr. Cao and Mr. Fung shall take up all such Untaken Shares before VMS Securities.

The commission will be 2% of the aggregate subscription price in respect of the Underwritten Shares to be underwritten by VMS Securities (for avoidance of doubt, it shall mean the maximum number of the Underwritten Shares to be underwritten by VMS Securities, regardless whether or not it is called upon to subscribe or procure subscribers for any such Underwritten Shares). No commission will be paid to Mr. Cao and Mr. Fung.

As noted from the above table, the underwriting commission of the Comparables ranged from 0% to 3.5% with an average of 2.32%. The commission payable to VMS Securities and the nil commission of Mr. Cao and Mr. Fung are below the average and thus are fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Irrevocable undertakings

As at the Latest Practicable Date, (a) Mr. Cao and Champion Rise, a company wholly owned by him, hold 3,128,500,000 Existing Shares in aggregate (representing approximately 11.58% of the existing issued share capital of the Company); and (b) Mr. Fung and Ocean Gain, a company wholly owned by him, hold 3,071,662,449 Existing Shares in aggregate (representing approximately 11.37% of the existing issued share capital of the Company), have unconditionally and irrevocably undertaken respectively to the Company and the Underwriters that, among other things, he/it:

(a) will remain as the beneficial owner of the Shares as set out above at the close of business on the Record Date;
(b) will subscribe for the Rights Shares to which he/it will be provisionally allotted pursuant to the Rights Issue, representing their respective full entitlement under the Rights Issue, by lodging the duly completed and signed PAL in respect of all such Rights Shares with payment in full therefor with the Registrar before the Latest Time for Acceptance in accordance with the terms of the Prospectus Documents; and
(c) shall not, during the period from the date of the respective Irrevocable Undertaking to (and including) the Record Date, transfer or otherwise dispose of the Shares or acquire any Shares or any interests therein (except by taking up the Rights Shares under their respective entitlement), unless with the prior written consent of the Company and the Underwriters.

The irrevocable undertakings given by Mr. Cao and Mr. Fung, who are the substantial Shareholders, show the support to the Rights Issue and the confidence on the future development of the Company and thus is in the interests of the Company and the Independent Shareholders as a whole.

IV. Financial effects

Net tangible assets

According to the unaudited pro forma financial information of the Group as set out in Appendix II of the Circular, the audited consolidated net tangible liabilities of the Group attributable to owners of the Company as at 31 March 2015 was approximately HK$17,072.7 million. The unaudited pro forma adjusted consolidated net tangible liabilities of the Group attributable to owners of the Company immediately after the completion of the Rights Issue (i) would be approximately HK$16,026.2 million as a result of the inflow of the net proceeds from the estimated net proceeds from the Rights Issue (based on 5,401,916,776 Rights Shares); and (ii) would be approximately HK$15,293.9 million as a result of the inflow of the net proceeds from the estimated net proceeds from the Rights Issue (based on 9,063,216,776 Rights Shares).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Working capital and gearing ratio

Upon completion of the Rights Issue, the cash and bank balances of the Group will be increased as a result of the net proceeds received from the Rights Issue. Accordingly the working capital and liquidity position of the Group will be improved as a result of the Rights Issue. Also, the gearing ratio will be improved after the repayment of certain debts.

In light of the above, we consider the Rights Issue is fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole.

V. Potential dilution of the Rights Issue

As the Rights Issue is offered to all Qualifying Shareholders on the same basis, the Qualifying Shareholders will be able to maintain their proportional interests in the Company if they take up their allotments under the Rights Issue in full. As set out in the section headed “SHAREHOLDINGS STRUCTURE OF THE COMPANY” of the Board Letter, assuming no further issue of new Shares or repurchase of Shares on or before the Record Date, if the existing Shareholders (other than those who have provided the Irrevocable Undertakings) elect not to participate in the Rights Issue, their shareholdings in the Company diluted by up to a maximum of 80.00% upon completion of the Rights Issue. Assuming Shares are issued upon the exercise of the subscription rights attached to the Unlisted Warrants in full, and the exercise of Share Options and the conversion rights attached to the Outstanding CBs in full and no other issue or repurchase of Shares on or before the Record Date, if the existing Shareholders (other than those who have provided the Irrevocable Undertakings) elect not to participate in the Rights Issue, their shareholdings in the Company diluted by up to a maximum of 88.00% upon completion of the Rights Issue.

The factors considered by the Company in coming up with the current subscription ratio and the Subscription Price for the Rights Issue is detailed under the section headed “Reasons for the Rights Issue and use of proceeds” in the Board Letter.

According to the Comparables as set out under the section “Comparison with recent rights issues” in this letter, we noted that the maximum dilution of the Comparables ranged from approximately 16.67% to approximately 95.24%. The potential maximum dilution for the Qualifying Shareholders who do not elect to subscribe for their assured entitlements in full under the Rights Issue is up to 80.00% or 88.00%, which falls within the range of but lies above the average of that of the Comparables. Given that (i) the Rights Issue is subject to the Independent Shareholders’ approval at the EGM; (ii) the adjusted closing prices of the Consolidated Share have been declining during the Review Period such that the current form and structure of the Rights Issue which breed a high discount of the Subscription Price to the market price of the Shares (which means that Qualifying Shareholders can use a price lower than that of the market price of the Shares to

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

subscribe for the Rights Shares) would encourage Qualifying Shareholders to participate in the Rights Issue and the future development of the Company; (iii) although there will be a bigger dilution impact on the shareholding of those Qualifying Shareholders who do not take up in full their assured entitlement under the rights issue, they have the opportunity to realise their nil-paid Rights Shares on the Stock Exchange, subject to the then prevailing market conditions; and (iv) on the other hand, the Qualifying Shareholders who wish to increase their shareholdings in the Company through the Rights Issue may, subject to availability, acquire additional nil-paid Rights Shares in the market, we concur with the view of the Directors that the Subscription Price is fair and reasonable and the current subscription ratio is justifiable and are in the interests of the Shareholders as a whole.

In all cases of rights issues and open offers, the dilution on the shareholdings of those Qualifying Shareholders who do not take up in full their assured entitlements under the Rights Issue is inevitable. In fact, the dilution magnitude of any rights issues or open offer depends mainly on the extent of the basis of entitlement under such exercises since the higher offering ratio of new shares to existing shares is the greater the dilution on the shareholding would be.

Taking into account of (i) the inherent dilutive nature of Rights Issue in general; (ii) the potential maximum dilution of the Rights Issue of 80.00% or 88.00% falls within the range of the Comparables; (iii) the positive impact on the financial position of the Group as a result of the Rights Issue; (iv) the Company has imminent funding needs for repayment of heavy debts as discussed under the section headed “Reasons for the Rights Issue and use of proceeds” in this letter; (v) the Qualifying Shareholders have their choice whether to accept the Rights Issue or not; and (vi) the Rights Issue enables the Qualifying Shareholders to maintain their proportionate interests in the Company should they wish to at a lower price as compared to the historical and prevailing market price of the Shares, we are of the view that the potential dilution of the Rights Issue on the shareholdings of the Shareholders is acceptable.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

RECOMMENDATION

Taking into account the factors and reasons as mentioned in this letter, we consider that the terms of the Rights Issue are on normal commercial terms, and are fair and reasonable so far as the Independent Shareholders are concerned and the Rights Issue is in the interests of the Company and the Independent Shareholders as a whole. We would therefore advise the Independent Shareholders and the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to approve the Rights Issue to be proposed at the EGM.

Yours faithfully, For and on behalf of Veda Capital Limited Hans Wong Julisa Fong Chairman Managing Director

Note: Mr. Hans Wong is a licensed person under the SFO to engage in Type 6 (advising on corporate finance) regulated activity and has over 21 years of experience in investment banking and corporate finance.

Ms. Julisa Fong is a licensed person under the SFO to engage in Type 6 (advising on corporate finance) regulated activity and has over 19 years of experience in investment banking and corporate finance.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. SUMMARY OF FINANCIAL INFORMATION

The Company is required to set out in this circular the information for the last three financial years with respect to the profits and losses, financial record and position in a comparative table and the latest published audited balance sheet together with the notes on the annual report for the last financial year of the Group.

The audited consolidated financial statements of the Group prepared in accordance with all applicable Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants for the three financial years ended 31 March 2015 together with the relevant notes thereto can be found from pages 27 to 126 of the annual report of the Company for the year ended 31 March 2013, pages 32 to 140 of the annual report of the Company for the year ended 31 March 2014 and pages 36 to 148 of the annual report of the Company for the year ended 31 March 2015, respectively.

Each of the said audited consolidated financial statements of the Group for the three financial years ended 31 March 2015 is incorporated by reference to this circular and forms part of this circular. The said annual reports of the Company are available on the Company’s website at http://www.crtg.com.hk/html/index.php and the website of the Stock Exchange at http://www.hkexnews.hk/.

Please also see below the links to the annual reports of the Company:

Annual Report 2015:

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0715/LTN20150715268.pdf

Annual Report 2014:

http://www.hkexnews.hk/listedco/listconews/SEHK/2014/0724/LTN20140724249.pdf

Annual Report 2013:

http://www.hkexnews.hk/listedco/listconews/SEHK/2013/0722/LTN20130722219.pdf

2. STATEMENT OF INDEBTEDNESS

As at the close of business on 31 August 2015, being the latest practicable date for the purpose of this indebtedness statement prior to the dispatch of this circular, details of the Group’s indebtedness are as follow:

(a) Borrowings

As at 31 August 2015, the Group had outstanding bank borrowings of approximately HK$12,273,591,000, among which (i) HK$11,256,217,000 is secured and guaranteed and (ii) HK$1,017,374,000 is unsecured and guaranteed.

– 70 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

As at 31 August 2015, the Group had outstanding convertible bonds with carrying amount of approximately HK$5,053,531,000. These convertible bonds are unsecured and unguaranteed.

As at 31 August 2015, the Group had outstanding promissory note with carrying amount of approximately HK$304,246,000. This promissory note is unsecured and unguaranteed.

(b) Pledge of assets and guarantee

As at 31 August 2015, secured bank borrowings of the Group were secured by (a) Zhunxing’s receivables rights of toll income of the Zhunxing Expressway and (b) the Group’s available-for-sale investments with an aggregate carrying amount of HK$106,582,000. Secured bank borrowings of the Group at 31 August 2015 were also guaranteed by (a) the Company and (b) a non-controlling shareholder of Zhunxing.

At 31 August 2015, unsecured bank borrowings of the Group were guaranteed by (a) the Company and (b) a director of the Company.

(c) Contingent liabilities

As at 31 August 2015, the Group did not have any material contingent liabilities.

Save as aforesaid or otherwise disclosed herein, and apart from intra-group liabilities and normal trade payables, the Group did not have any outstanding mortgages, charges, debentures or other loan capital, bank drafts, loans, debt securities or other similar indebtedness, foreign exchange liabilities, liabilities under acceptance or acceptances credits, finance lease, or hire purchase commitments guarantees at the close of business on 31 August 2015.

For the purpose of this indebtedness statement, Renminbi amounts have been translated into Hong Kong dollars at the prevailing exchange rate of approximately 1.21.

The Directors have confirmed that there has been no material change in the indebtedness and contingent liabilities of the Group since 31 August 2015 up to the Latest Practicable Date.

– 71 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

3. BUSINESS TREND AND FINANCIAL AND TRADING PROSPECT

Business Trend

The Company is principally engaged in expressway operations, trading of petroleum and related products, CNG gas stations operations and timber operations. As disclosed in the annual report of the Company for the year ended 31 March 2015, the Group’s consolidated turnover was approximately HK$5,016.55 million (2014: HK$8,585.72 million), among which, HK$905.79 million toll income from expressway operations and HK$4,091.58 million income from trading of petroleum and related products constituted the main streams of the Group’s revenue. Driven by the increased toll income arising from expressway operations and increased revenue from trading of petroleum and related products, the Group recorded an enhanced positive EBITDA (defined as earnings before interest, tax, depreciation, amortization and non-cash changes in values of assets and liabilities) amounted to approximately HK$740.53 million (2014: HK$159.87 million).

A loss attributable to owners of the Company of approximately HK$1,765.90 million (2014: HK$590.49 million) was recorded for the year ended 31 March 2015. The substantial increase in loss was mainly attributable to the significant increase in finance cost arising from bank borrowings and convertible bonds issued by the Company (collectively the “ Specific Borrowings ”) to finance the construction of Zhunxing Expressway. Upon the traffic opening and commencement of toll collection of Zhunxing Expressway on 21 November 2013, the Group ceased capitalizing all the finance costs arising from these Specific Borrowings and recognized them directly in the Group’s consolidated income statement pursuant to HKAS 23, Borrowing Costs.

Operation of Zhunxing Expressway

The Group’s turnover is partly contributed by toll income from Zhunxing Expressway operated by Zhunxing which is indirectly held as to 86.87% by the Company. Upon traffic opening and commencement of toll collection of Zhunxing Expressway on 21 November 2013, the Group actively introduced measures and promotions to achieve steady rise in the average daily traffic volume of Zhunxing Expressway. The year ended 31 March 2015 was the first full financial year after the official opening of the Zhunxing Expressway. Based on the experience of other expressway operators, an expressway usually needs to undergo an incubation stage of two to three years after opening. The management of Zhunxing will continue to implement measures to attract more coal transport vehicles to use Zhunxing Expressway on a regular basis to improve both the traffic volume and toll income of Zhunxing Expressway.

– 72 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Petroleum and Related Products Business

The Company’s wholly owned subsidiary, Shenzhenshi Qianhai Zitong Energy Company Limited (深圳市前海資通能源有限公司) (“ Zitong Energy ”), is the Group’s intermediary holding company focusing on the overall development of the petroleum and related products business sector. The Group has three ancillary business sectors, namely (1) the traditional energy business sector based on refined petroleum trading, (2) the clean energy business sector based on contemporary coal chemicals, and (3) the new energy business sector based on liquefied natural gas (“ LNG ”), CNG and charging pile for vehicles.

(1) Refined Petroleum Trading Business:

Zitong Energy is the supplier of 14 provincial sales companies of the products of PetroChina Company Limited and Sinopec Corp. Its trading channels and market shares have been expanding rapidly and it has achieved a preliminary annual sales capability of 1 million to 1.5 million tons of refined petroleum. Zitong Energy will endeavor to further consolidate and expand the sources of resources, continue to optimize the client base and improve tracking services by providing tailor-made service to clients. At the same time, the Company by means of employing system formulation, design of business flows and comprehensive risk controls will strengthen the operational management level, control the operating costs strictly and strive to increase the gross profit per ton of petroleum, thus realizing the operational objectives of the Company.

(2) Clean Energy Business:

Zitong Clean Energy will continue to focus on technological coordination and business negotiation for the POX Project detailed under the section headed “REASONS FOR RIGHTS ISSUE AND USE OF PROCEEDS” in the Letter from the Board of this circular and actively facilitate the forming of the related joint venture. Zitong Clean Energy will also take proactive approach in the preliminary works including optimization of technologies, selection of equipment and construction.

(3) New Energy Business:

Zitong Energy has expanded into the natural gas dispensing business for commercial vehicles in late 2014. The Group’s first and second natural gas dispensing station in Sichuan of the PRC commenced operation in January 2015 and July 2015 respectively. With the operation and management experience acquired in these two stations, the management of the Company plans to establish more CNG/LNG stations in the coming year with the proceeds generated from the Rights Issue.

– 73 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Zitong Energy’s wholly-owned subsidiary, Shenzhenshi Qianhai Zitong New Energy Company Limited (深圳市前海資通新能源有限公司), will be responsible for the implementation of the cooperative frameworks agreements, site selection, upgrade and transformation of the respective PetroChina gas stations under the CNG/LNG Projects detailed under the section headed “REASONS FOR RIGHTS ISSUE AND USE OF PROCEEDS” in the Letter from the Board of this circular.

Timber Operations

With an aim to focus its resources and manpower on expressway operations and petroleum and related products of the Group, the Company will continue to look for opportunity to dispose its forestry related business.

Prospects

The Company will continue to look out for opportunities to enhance the competitive edge of Zhunxing Expressway and proactively push forward the expansion on the petroleum and related products business to achieve sustainable growth of the Group. Save for the business progresses mentioned herein and detailed under the section headed “REASONS FOR RIGHTS ISSUE AND USE OF PROCEEDS” in the Letter from the Board of this circular, the Board will proactively seek for other potential investment opportunities to broaden and diversify the income base of the Group, maximizing the benefits of the Shareholders as a whole.

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 March 2015, being the date to which the latest published audited consolidated financial statements of the Company were made up.

5. WORKING CAPITAL

After due and careful enquiry, based only on (i) the net proceeds from the Rights Issue and (ii) the presently available financial resources, including internally generated funds from operations and available banking facilities of the Group, the Directors are of the opinion that there will not be sufficient working capital for the Group’s requirements for the next 12 months from the date of publication of this circular.

– 74 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

As described in the section “REASONS FOR RIGHTS ISSUE AND USE OF PROCEEDS” in the Letter from the Board of this circular, the Directors will carry out all necessary plans to provide additional working capital to the Group to settle the Group’s outstanding loans and borrowings when they fall due, including:

(1) renewing the existing banking facilities upon expiry;
(2) rescheduling part of the loans and borrowings of the Group which will fall due within the next 12 months when they fall due (note 1); and
(3) raising further equity funds in the coming year including but not limited to private placement, open offer or rights issue (note 2).
(note 1) The Company maintains good relationship with its convertible bond holders and straight bond holders. As disclosed in the announcements dated 14 August 2015 and 28 August 2015, the Company has successfully restructured a number of convertible bonds to extend their repayment dates. Settling part of the convertible bonds and straight bonds by using the proceeds sourced from the Rights Issue will strengthen the Group’s financial position and lubricate the negotiation process with other convertible bond holders for debt rescheduling.
(note 2) The Directors are of the opinion that the completion of the Rights Issue will strengthen the Group’s financial position and increase the capability of the Company to raise further equity funds in the coming year, if necessary.

– 75 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(A) UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE LIABILITIES OF THE GROUP

The unaudited pro forma financial information of the Group (the “ Unaudited Pro Forma Financial Information ”) has been prepared in accordance with paragraph 4.29(1) of the Listing Rules set out below to illustrate the effect of the proposed Share Consolidation and the proposed Rights Issue on the consolidated net tangible liabilities of the Group as if they had taken place on 31 March 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 consolidated net tangible liabilities of the Group attributable to owners of the Company had the proposed Share Consolidation and the proposed Rights Issue been completed as at 31 March 2015 or at any future date.

The following Unaudited Pro Forma Financial Information of the adjusted consolidated net tangible liabilities of the Group attributable to owners of the Company is prepared based on the audited consolidated net tangible liabilities of the Group attributable to owners of the Company as at 31 March 2015, extracted from the published audited consolidated financial statements of the Group for the year ended 31 March 2015, with adjustment described below:

Taking into account 27,009,583,895 Existing Shares in issue as at the Latest Practicable Date, and assuming there will be no change in the issued share capital of the Company from the Latest Practicable Date to the Record Date, (1) not less than 5,401,916,776 Rights Shares (assuming no Outstanding Share Options, the conversion rights attached to the Outstanding CBs and the subscription rights attached to the Unlisted Warrants being exercised before the Share Consolidation) and (2) not more than 9,063,216,776 Rights Shares (assuming Outstanding Share Options, the conversion rights attached to the Outstanding CBs and the subscription rights attached to the Unlisted Warrants being exercised in full before the Share Consolidation) will be issued under the Rights Issue after the Share Consolidation becoming effective.

– 76 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

			Unaudited pro		Unaudited pro
	Audited		forma adjusted	Unaudited	forma adjusted
	consolidated net		consolidated net	consolidated net	consolidated net
	tangible liabilities		tangible liabilities	tangible liabilities	tangible liabilities
	attributable to		attributable to	per Consolidated	per Consolidated
	owners of the	Unaudited estimated	owners of	Share before	Share immediately
	Company as at	net proceeds from	the Company as at	the completion of	after the completion
	31 March 2015	the Rights Issue	31 March 2015	the Rights Issue	of the Rights Issue
	HK$’000	HK$’000	HK$’000	HK$	HK$
	(Note 1)	(Note 2)		(Note 3)	(Note 4)
(i) Based on 5,401,916,776
Rights Shares at subscription
price of HK$0.20 per Rights
Share (“Scenario 1”)	(17,072,663)	1,046,490	(16,026,173)	(12.64)	(2.37)
(ii) Based on 9,063,216,776
Rights Shares at
subscription price of
HK$0.20 per Rights Share
(“Scenario 2”)	(17,072,663)	1,778,750	(15,293,913)	(7.53)	(1.35)

Notes:

The audited consolidated net tangible liabilities attributable to owners of the Company as at 31 March 2015 has been extracted from the published audited consolidated financial statements of the Group for the year ended 31 March 2015, which is based on the consolidated net assets attributable to owners of the Company of HK$2,468,467,000 less concession intangible assets of HK$19,001,931,000, goodwill and other intangible assets of HK$400,782,000 and forest concession rights of HK$138,417,000.
The estimated net proceeds from the Rights Issue is approximately (i) HK$1,046,490,000 based on the 5,401,916,776 Rights Shares to be issued at the Subscription Price of HK$0.20 per Rights Share and (ii) HK$1,778,750,000 based on the 9,063,216,776 Rights Shares to be issued at the Subscription Price of HK$0.2 per Rights Share, both of which are after deducting estimated related expenses, including among others, underwriting commissions and legal and professional fees, which are directly attributable to the Rights Issue, of approximately HK$33,893,000.
The unaudited consolidated net tangible liabilities of the Group per Consolidated Share before the completion of the Rights Issue is determined based on the audited consolidated net tangible liabilities of the Group attributable to the owners of the Company as at 31 March 2015 of approximately HK$17,072,663,000 as disclosed in Note 1 above, divided by (i) 1,350,479,194 Consolidated Shares in Scenario 1 and (ii) 2,265,804,194 Consolidated Shares in Scenario 2 (both cases assuming that the Share Consolidation become effective on 31 March 2015) of the Company in issue as at 31 March 2015.
The unaudited pro forma adjusted consolidated net tangible liabilities per Consolidated Share after the completion of the Rights Issue is determined based on the unaudited pro forma adjusted consolidated net tangible liabilities of the Group attributable to the owners of the Company as at 31 March 2015 of approximately (i) HK$16,026,173,000 divided by 6,752,395,970 Consolidated Shares in Scenario 1 which comprise 1,350,479,194 Consolidated Shares (assuming the Share Consolidation become effective on 31 March 2015) in issue as at 31 March 2015 and 5,401,916,776 Rights Shares to be issued after the completion of the Rights Issue; and (ii) HK$15,293,913,000 divided by 11,329,020,970 Consolidated Shares in Scenario 2 which comprise 2,265,804,194 Consolidated Shares (assuming the Share Consolidation become effective on 31 March 2015) in issue as at 31 March 2015 and 9,063,216,776 Rights Shares to be issued after the completion of the Rights Issue.
No adjustment has been made to reflect any trading results or other transactions of the Group subsequent to 31 March 2015.

– 77 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(B) ACCOUNTANT’S REPORT ON THE UNAUDITED PRO FORMA STATEMENT OF ADJUSTED CONSOLIDATED NET TANGIBLE LIABILITIES OF THE GROUP

The following is the report on the unaudited pro forma financial information issued by BDO Limited for the purpose of inclusion in this circular.

The Board of Directors

China Resources and Transportation Group Limited

Room 1801-07, 18/F China Resources Building 26 Harbour Road Wanchai, Hong Kong

To the Directors of China Resources and Transportation Group Limited

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of China Resources and Transportation Group Limited (the “ Company ”) and its subsidiaries (hereinafter collectively referred to as the “ Group ”) by the directors of the Company for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma statement of adjusted consolidated net tangible liabilities of the Group as at 31 March 2015 and related notes (the “ Unaudited Pro Forma Financial Information ”) as set out on pages 76 to 77 of the Company’s circular dated 19 October 2015 (the “ Circular ”). The applicable criteria on the basis of which the directors have compiled the Unaudited Pro Forma Financial Information are described on pages 76 to 77.

The Unaudited Pro Forma Financial Information has been compiled by the directors to illustrate the impact of the proposed rights issue on the basis of four rights shares for every one Consolidated Share (as defined in the Circular) held on the Record Date (as defined in the Circular) (the “ Rights Issue ”) of the Company. As part of this process, information about the Group’s audited consolidated net liabilities has been extracted by the directors from the Group’s consolidated financial statements for the year ended 31 March 2015, on which an audit 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 paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” (“ AG 7 ”) issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”).

– 78 –

APPENDIX II

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the 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 owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 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 complies with ethical requirements and plans and performs procedures to obtain reasonable assurance about whether the directors have compiled the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 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 Unaudited Pro Forma Financial Information included in the circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Rights Issue at 31 March 2015 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 event or transaction, and to obtain sufficient appropriate evidence about whether:

The related unaudited 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.

– 79 –

APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

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 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 paragraph 4.29(1) of the Listing Rules.

BDO Limited

Certified Public Accountants

Alfred Lee

Practising Certificate number P04960

Hong Kong, 19 October 2015

– 80 –

APPENDIX III

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This document, for which the directors of the issuer collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the purpose of giving information with respect to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this document 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 document misleading.

2. SHARE CAPITAL

The authorised and issued share capital of the Company (i) as at the Latest Practicable Date; (ii) Upon completion of the Share Consolidation; (iii) Upon the completion of Share Consolidation and after the Increase in Authorised Share Capital; and (iv) immediately after completion of the Rights Issue is set out as follows:

2.1 Assuming no new Shares being issued or repurchased by the Company on or before the Record Date:

2.1.1 As at the Latest Practicable Date

Authorised: 70,000,000,000 Existing Shares Issued and fully paid: 27,009,583,895 Existing Shares Upon completion of Share Consolidation Authorised: 3,500,000,000 Consolidated Shares Issued and fully paid: 1,350,479,194 Consolidated Shares	HK$ 700,000,000

	270,095,838

	HK$ 700,000,000

	270,095,838

2.1.2 Upon completion of Share Consolidation

– 81 –

APPENDIX III

GENERAL INFORMATION

2.1.3 Upon completion of Share Consolidation and after the Increase in Authorised Share Capital

Authorised: 15,000,000,000 Consolidated Shares Issued and fully paid: 1,350,479,194 Consolidated Shares Immediately after completion of the Rights Issue Authorised: 15,000,000,000 Consolidated Shares Issued and fully paid: 1,350,479,194 Consolidated Shares 5,401,916,776 Rights Shares 6,752,395,970 Total	HK$ 3,000,000,000

	270,095,838

	HK$ 3,000,000,000

	270,095,838 1,080,383,355
	1,350,479,193

2.1.4 Immediately after completion of the Rights Issue

– 82 –

APPENDIX III

GENERAL INFORMATION

2.2 Assuming Shares are issued upon the exercise of the subscription rights attached to the Unlisted Warrants in full, and the exercise of Outstanding Share Options and the conversion rights attached to the Outstanding CBs in full and no other issue or repurchase of Shares on or before the Record Date:
2.2.1 As at the Latest Practicable Date

Authorised: HK$ 70,000,000,000 Existing Shares 700,000,000 Issued and fully paid: 27,009,583,895 Existing Shares 270,095,838

2.2.2 Shares issued upon the exercise of the subscription rights attached to the Unlisted Warrants in full, and the exercise of Outstanding Share Options and the conversion rights attached to the Outstanding CBs in full

Authorised: 70,000,000,000 Existing Shares Issued and fully paid: 45,316,083,895 Existing Shares Upon completion of Share Consolidation Authorised: 3,500,000,000 Consolidated Shares Issued and fully paid: 2,265,804,194 Consolidated Shares	HK$ 700,000,000

	453,160,838

	HK$ 700,000,000

	453,160,838

2.2.3 Upon completion of Share Consolidation

– 83 –

APPENDIX III

GENERAL INFORMATION

2.2.4 Upon completion of Share Consolidation and after the Increase in Authorised Share Capital

Authorised: HK$ 15,000,000,000 Consolidated Shares 3,000,000,000 Issued and fully paid: 2,265,804,194 Consolidated Shares 453,160,838

2.2.5 Immediately after completion of the Rights Issue

Authorised: 15,000,000,000 Consolidated Shares Issued and fully paid: 2,265,804,194 Consolidated Shares 9,063,216,776 Rights Shares 11,329,020,970 Total	HK$ 3,000,000,000

	453,160,838 1,812,643,356
	2,265,804,194

The Rights Shares, when allotted and fully paid, will rank pari passu in all respects, including the rights to dividends, voting and return of capitals with the Shares then in issue. Holders of fully-paid Rights Shares will be entitled to receive all future dividends and distributions which are declared, made or paid after the date of allotment of the Rights Shares in their fully-paid form.

Save as disclosed in the section headed “New Shares issuable” in the letter from the Board of this circular, the Company has no other outstanding options, warrants, derivatives or other convertible securities in issue which are convertible or exchangeable into Shares as at the Latest Practicable Date.

As at the Latest Practicable Date, there was no arrangement under which future dividends are waived or agreed to be waived.

– 84 –

APPENDIX III

GENERAL INFORMATION

3. DISCLOSURE OF INTERESTS

3.1 Director’s interest and short positions in shares, debentures or underlying shares of the Company and its associated corporations
3.1.1 As at the Latest Practicable Date, the interests and short positions of the Director and chief executive of the Company in the Shares or, underlying shares or debenture of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (i) 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) pursuant to section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or (iii) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

		Number of	Approximate %
		Share/underlying	of the issued
Name of Director	Capacity	shares held	shares
		(Note 5)	(Note 4)
Mr. Cao_(Note 1)_	Beneficial owner	135,200,000	0.50
	Held by controlled	2,993,300,000	11.08
	corporation
Mr. Fung_(Note 2)_	Beneficial owner	1,242,362,449	4.60
	Held by controlled	1,829,300,000	6.77
	corporation
Tsang Kam Ching,	Beneficial owner	51,624,499	0.19
David	Beneficial owner	28,000,000	0.10
		(Note 3)
Duan Jingquan	Beneficial owner	28,000,000	0.10
		(Note 3)
Gao Zhiping	Beneficial owner	28,000,000	0.10
		(Note 3)
Yip Tak On	Beneficial owner	5,000,000	0.01
		(Note 3)
Jing Baoli	Beneficial owner	5,000,000	0.01
		(Note 3)
Bao Liang Ming	Beneficial owner	5,000,000	0.01
		(Note 3)

– 85 –

APPENDIX III

GENERAL INFORMATION

Notes:

(1) Champion Rise being wholly owned by Mr. Cao was interested in 2,993,300,000 shares, representing approximately 11.08% in the issued share capital of the Company. Champion Rise is a substantial shareholder of the Company.
(2) Ocean Gain being wholly owned by Mr. Fung was interested in 1,829,300,000 shares, representing approximately 6.77% in the issued share capital of the Company. Ocean Gain is a substantial shareholder of the Company.
(3) The interests in underlying shares of the Company represent interests in options granted to the directors to subscribe for ordinary shares of HK$0.01 each of the Company at the subscription price of HK$0.45 per share.
(4) Based on 27,009,583,895 Existing Shares in issue as at the Latest Practicable Date.
(5) The effect of Rights Issue has not been taken into account.
3.1.2 Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest and short positions in the shares, underlying shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests and short positions which they were taken or deemed to have under such provisions of the SFO), or (ii) pursuant to section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or (iii) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

– 86 –

APPENDIX III

GENERAL INFORMATION

3.2 Substantial shareholders and other person’s interests in Shares and underlying Shares

As at the Latest Practicable Date, other than the interests disclosed above in respect of certain directors and chief executive of the Company, the interests and short positions of persons in the shares and underlying shares of the Company as recorded in the register required to be kept by the Company under Section 336 of the SFO, or who were, directly or indirectly, interested in 5% or more of the nominal value of any class of share capital or relevant securities of the Company or any member of the Group:

		Number of	Approximate %
		Share/underlying	of the issued
Name	Capacity	shares held	shares
		(Note 11)	(Note 10)
Champion Rise_(Note 1)_	Held by controlled	2,993,300,000	11.08
	corporation
Vivid Beyond Securities	Held by controlled	2,500,000,000	9.25
Limited_(Note 2)_	corporation
China Alliance International	Held by controlled	2,025,862,068	7.50
Holding Group Limited	corporation
(Note 3)
Ocean Gain_(Note 4)_	Held by controlled	1,829,300,000	6.77
	corporation
Turbo View Investment Limited	Held by controlled	1,500,000,000	5.55
(Note 5)	corporation
China Life_(Note 6)_	Held by controlled	8,630,000,000	31.95
	corporation
Strait Capital_(Note 7)_	Held by controlled	7,500,000,000	27.76
	corporation
Joint Gain Holdings Limited	Held by controlled	2,000,000,000	7.40
(Note 8)	corporation
Jiao Xuding_(Note 9)_	Beneficial owner	2,001,000,000	7.40

– 87 –

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GENERAL INFORMATION

Notes:

(1) Champion Rise is wholly owned by Mr. Cao, the Chairman and an executive Director of the Company.
(2) Vivid Beyond Securities Limited is wholly owned by Mr. Hu Wei.
(3) China Alliance International Holding Group Limited is wholly owned by Ms. Zhang Lei.
(4) Ocean Gain is wholly owned by Mr. Fung, an executive Director and the Vice-Chairman of the Company.
(5) Turbo View Investment Limited is wholly owned by Mr. Gao Xiao Rui.
(6) China Life was interested in an aggregate of HK$1,500,000,000 convertible bonds issued by the Company on 10 February 2015, of which (i) HK$800,000,000 convertible bonds maturing in February 2016 are convertible into 4,000,000,000 shares at HK$0.20 per share; and (ii) HK$700,000,000 convertible bonds maturing in February 2018 are convertible into 3,500,000,000 shares at HK$0.20 per share. Besides, China Life is further interested in 1,130,000,000 (4.18%) shares. China Life Insurance (Group) Company is the holding company of China Life and is deemed to be interest in the shares and underlying shares held by China Life.
(7) Strait Capital was interested in HK$1,500,000,000 convertible bonds issued on 10 February 2015 by the Company which are convertible into 7,500,000,000 shares at HK$0.20 per share. Strait Capital is the general partner of Strait Fund, and is deemed to be interested in the HK$700,000,000 convertible bonds issued on 10 February 2015 by the Company to Strait Fund which are convertible into 3,500,000,000 shares at HK$0.20 per share, representing approximately 12.95% in the issued share capital of the Company.
(8) Joint Gain Holdings Limited (“ Joint Gain ”) is interested in 2,000,000,000 conditional warrants issued by the Company on 19 April 2013 exercisable subject to certain conditions on or before 20 December 2015 at HK$0.48 per share. Joint Gain is held as to 50% by Success Pacific Holdings Limited (“ Success Pacific ”) and 50% by Billion Grant Limited (“ Billion Grant ”). Billion Grant is held as to 50% by each of Mr. Ho Kee Cheung Louis and Mr. Tsang Ka Lun as trustee and Mr. Jiao Xuding is the beneficiary of the trust. Success Pacific is wholly owned by Mr. Yang Yong. Thus Billion Grant, Mr. Ho Kee Cheung Louis, Mr. Tsang Ka Lun, Mr. Jiao Xuding, Success Pacific and Mr. Yang Yong are all deemed to be interested in the warrants held by Joint Gain.
(9) Mr. Jiao Xuding is the beneficial owner of 1,000,000 shares and is deemed to be interested in the warrants held by Joint Gain as a beneficiary of a trust under Billion Grant.
(10) Based on 27,009,583,895 Existing Shares in issue as at the Latest Practicable Date.
(11) The effect of Rights Issue has not been taken into account.

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GENERAL INFORMATION

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group (excluding contracts expiring or determinable within one year without payment of compensation, other than statutory compensation).

5. MATERIAL CONTRACTS

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

(a) the framework agreement dated 28 August 2014 entered into between the Company and PetroChina Guangdong which the Company has obtained first rights for the installation and operation of electric vehicle charging and compressed natural gas and/or liquefied natural gas dispensing stations in over 1,100 gas stations of PetroChina Guangdong in Guangdong Province.
(b) the framework agreement dated 18 September 2014 entered into between the Company and PetroChina Henan which the Company has obtained first rights for the installation and operation of electric vehicle charging and compressed natural gas and/or liquefied natural gas dispensing stations in over 840 gas stations of PetroChina Henan in Henan Province.
(c) the subscription agreement dated 27 September 2014 entered into between the Company and China Life for the issue of HK$600 million principal amount of 9% unlisted convertible bonds due 2017 to China Life.
(d) the subscription agreement dated 28 November 2014 entered into between the Company and China Life in relation to the subscription of the 9% unlisted convertible bonds in the aggregate principal amount of HK$800 million to be issued by the Company to China Life pursuant to the terms of the subscription agreement.
(e) the subscription agreement dated 28 November 2014 entered into between the Company and China Life in relation to the subscription of the 9% unlisted convertible bonds in the aggregate principal amount of HK$700 million to be issued by the Company to China Life pursuant to the terms of the subscription agreement.

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GENERAL INFORMATION

(f) the subscription agreement dated 28 November 2014 entered into between the Company and Strait Capital in relation to the subscription of the 9% unlisted convertible bonds in the aggregate principal amount of HK$800 million to be issued by the Company to Strait Capital pursuant to the terms of the subscription agreement.
(g) the subscription agreement dated 28 November 2014 entered into between the Company and Strait Fund in relation to the subscription of the 9% unlisted convertible bonds in the aggregate principal amount of HK$700 million to be issued by the Company to Strait Fund pursuant to the terms of the subscription agreement.
(h) the subscription agreement dated 28 November 2014 entered into between the Company and VMS Private Investment Partners III Limited (“ VMS Investment ”) in relation to the subscription of the 9% unlisted convertible bonds in the aggregate principal amount of HK$160 million to be issued by the Company to VMS Investment pursuant to the terms of the subscription agreement.
(i) the subscription agreement dated 28 November 2014 entered into between the Company and Cross-Strait Capital Limited (“ Cross-Strait Capital ”) in relation to the subscription of the 9% unlisted convertible bonds in the aggregate principal amount of HK$32 million to be issued by the Company to Cross-Strait Capital pursuant to the terms of the subscription agreement.
(j) the letter of intent dated 16 January 2015 entered into between Shenzhenshi Qianhai Zitong Clean Energy Company Limited, which is an 85% indirectly owned subsidiary of the Company in the PRC with CNOOC in relation to the establishment of a joint venture for the investment, construction and operation of the partial oxidation coal-to-hydrogen plant under the Huizhou petrochemicals phase II project in the petrochemical area of Daya Bay technological and economic development zone, the PRC.
(k) the Underwriting Agreement.

6. DIRECTORS’ INTEREST IN CONTRACTS AND ASSETS

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to any business of the Group. As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been since 31 March 2015 (being the date to which the latest published audited financial statements of the Group were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

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GENERAL INFORMATION

7. EXPERT AND CONSENT

The following is the qualification of the experts who have been named in this circular or have given opinions, letters or advice contained in this circular:

Name

Qualification

BDO Limited Certified Public Accountants Veda Capital a licensed corporation to carry out type 6 (advising on corporate finance) regulated activities as defined under the SFO

As at the Latest Practicable Date, each of BDO Limited and Veda Capital did not have any direct or indirect shareholdings in any member of the Group, or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, or any interests, directly or indirectly, in any assets which have been acquired, disposed of by or leased to or which are proposed to be acquired, disposed of by or leased to any member of the Group, respectively, since 31 March 2015, being the date to which the latest published audited consolidated financial statements of the Company were made up.

Each of BDO Limited and Veda Capital has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letters or reports and references to its name in the form and context in which they appear.

8. COMPETING BUSINESS INTEREST OF DIRECTORS

As at the Latest Practicable Date, none of the Directors nor their respective close associates was interested in any business apart from the business of the Group, which competes or is likely to compete, either directly or indirectly, with that of the Group.

9. LITIGATION

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

10. EXPENSES

The expenses in connection with the Rights Issue, including underwriting commission, financial advisory fees, printing, registration, translation, legal and accountancy charges are estimated to be approximately HK$33.9 million, which are payable by the Company.

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APPENDIX III

GENERAL INFORMATION

11. CORPORATE INFORMATION

Registered office Sterling Trust (Cayman) Limited Caledonian House, 69 Dr. Roy’s Drive, P.O. Box 1043, Grand Cayman, KY1-1102, Cayman Islands Principal place of business in Room 1801-07, 18/F., Hong Kong China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Authorised representatives Tsang Kam Ching, David Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Mr. Fung Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Company Secretary Miss Ngan Wai Kam, Sharon Legal advisers to the Company Sidley Austin Level 39, Two International Finance Centre 8 Finance Street Central, Hong Kong Louis K.Y. Pau & Company 4/F, The Chinese Club Building 21-22 Connaught Road Central, Hong Kong

– 92 –

APPENDIX III

GENERAL INFORMATION

Auditors and reporting	BDO Limited
accountants	25th Floor, Wing On Centre
	111 Connaught Road Central
	Hong Kong
Underwriters	VMS Securities
	49/F, One Exchange Square
	8 Connaught Place
	Central, Hong Kong
	Mr. Cao
	Mr. Fung
Share registrars and transfer	Tricor Progressive Limited
office	Level 22
	Hopewell Centre
	183 Queen’s Road East
	Hong Kong
Principal bankers	Bank of China (Hong Kong) Limited
	Bank of China Tower
	1 Garden Road
	Central, Hong Kong
	The Bank of East Asia Limited
	10 Des Voeux Road Central
	Central, Hong Kong
	The Hong Kong and Shanghai Banking
	Corporation Limited
	1 Queen’s Road Central,
	Central, Hong Kong
Independent Financial Adviser	Veda Capital
to the Independent Board	Suites 3711, 37/F., Tower Two
Committee and the	Times Square, 1 Matheson Street
Independent Shareholders	Causeway Bay, Hong Kong

– 93 –

APPENDIX III

GENERAL INFORMATION

12. PARTICULARS OF DIRECTORS AND SENIOR MANAGEMENT

(a) Name and address

Name

Correspondence Address

Executive Directors

Mr. Cao Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Mr. Fung Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Duan Jingquan Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Tsang Kam Ching, David Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Gao Zhiping Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong

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APPENDIX III

GENERAL INFORMATION

Name

Correspondence Address

Non-executive Director

Suo Suo Stephen Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong

Independent Non-executive Directors

Yip Tak On Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Jing Baoli Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong Bao Liang Ming Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong

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APPENDIX III

GENERAL INFORMATION

(b) Qualification and position held

Executive Directors

Mr. Cao , aged 55, has been appointed as an executive Director and the chairman of the Board of the Company since 19 November 2010. Mr. Cao was graduated from Zhejiang University and the Graduate School of the Chinese Academy of Social Sciences with a bachelor degree in engineering and a master degree in economics, respectively. Since 1988, Mr. Cao had served various institutions such as the National Development and Reform Commission of China, Guangdong Province Huizhou Municipal People’s Government, Beijing International Trust and Investment Company Limited, Shougang Corporation and the Development Research Centre of the State Council of China.

Mr. Cao is currently an executive director, chief executive officer and chairman of FDG Electric Vehicles Limited (Stock Code: 729), and an executive director and executive vice-chairman of CIAM Group Limited (Stock Code: 378), both being companies whose shares are listed on the Stock Exchange. From May 2010 to December 2012, Mr. Cao was a non-executive director and vice chairman of Shougang Concord International Enterprises Company Limited (Stock Code: 697), a company listed on the Stock Exchange. In addition, he was a non-executive director of Mount Gibson Iron Limited, a company listed on the Australian Securities Exchange (Stock Code: MGX), from December 2008 to February 2012.

Mr. Fung , aged 55, has been appointed as an executive Director since 22 September 2004. Mr. Fung has over 20 years of experience in property development, logistics, investment banking and company management. Mr. Fung has held senior management positions in various companies incorporated in Hong Kong, British Virgin Islands and Samoa.

Mr. Duan Jingquan , aged 59, has been appointed as an executive Director and the chief executive officer of the Company since 7 November 2011. He was the managing director of the Accounting Society of China, a member of the Specialist Advisory Committee of the China Association of Actuaries, an adjunct professor of The Peking University HSBC Business School and a member of the Steering and Consultation Committee for Innovative Development of Shenzhen Insurance Industry. Mr. Duan graduated from Dongbei University of Finance and Economics (formerly known as Liaoning Institute of Finance and Economics) in 1982. He served the Ministry of Finance for around 20 years and assumed different positions, including as the chief officer of the Commerce Bureau of the Finance Department, the deputy head and the head of the Central Planning Office from 1982 to 1994, the deputy head of the Supervision Department from 1994 to 1998, the head of the Finance Supervision Department and the Supervision and Inspection Department from 1998 to 2002. Between 2002 and 2005, he was

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APPENDIX III

GENERAL INFORMATION

positioned as the deputy general manager of China Export and Credit Insurance Corporation. From 2005 to 2009, he was appointed as the secretary of the party committees, general manager and director of Mingsheng Life Insurance Company Limited. In August 2009, Mr. Duan joined Sino Life Insurance Company Limited (“ Sino Life ”) and served as its general manager and director and he was then appointed as the vice chairman of Sino Life in October 2010. From October 2011 to April 2013, he took up the role as the Chairman of the Supervisory Committee of Sino Life. Mr. Duan was the major author of “Introduction to Financial and Political Supervision”《財政監督學概論》, his first treatise on finance and politic. He has been selected by China Insurance Journal as one of the “Top Ten Persons of 2009 in the Insurance Industry”. Mr. Duan has over 20 years’ experience in management of state agencies and enterprises. While he was with the Ministry of Finance, he developed and implemented various state finance management mechanisms which still exert significant influences nowadays. During his years with commercial enterprises, he pushed forward various reform programs, exercised assiduity at company management and operation, thus remarkably enhanced the performance of the enterprises.

Mr. Tsang Kam Ching, David , aged 58, has been appointed as an executive Director since 17 February 2004. Mr. Tsang has extensive financial management experience over the past 20 years which covers merchant banking, stock broking and corporate finance business. Mr. Tsang is also a fellow member of the Chartered Association of Certified Accountants in the United Kingdom and a member of the HKICPA.

Mr. Gao Zhiping , aged 53, has been appointed as an executive Director since 17 June 2013. Mr. Gao was graduated from China Europe International Business School (中歐國際工商學院) with a Master of Business Administration and is a Senior Economist certified by the State Grid Corporation of China (國家電網公司). He has received the awards of Distinctive Young Enterprise Management Personnel and Distinctive Pilot Project Construction Personnel of Henan Province. From 1979 to 1994, he served various departments in the local administrative office of Nanyang Prefecture in Henan as secretary of finance office as well as the chief officer of the finance office of Nanyang city government. From 1994 to 2009, he was positioned as the deputy general manager and the secretary of the party committees of Nanyang YaHeKou Electricity Company Limited (南陽鴨河口發電有限責任公司) and Nanyang Tianyi Power Generation Co., Ltd. (南陽天益發電有限責任公司), both being subsidiary of Henan Investment Group (河南投資集團). He also took up the post as the deputy general manager of Tianjin Hangfa (Jinji) Expressway Company Limited (天津航發（津薊）高速公路有限公司) and the chairman of the board of directors of Nan Yang WDX Expressway Construction Co., Ltd. (南陽宛達昕高速公路建設有限責任公司) in 2010. Since October 2010, he has been appointed as the general manager of Inner Mongolia Zhunxing Heavy Haul Expressway Company Limited (內蒙古准興重載高速公路有限責任公司) (“ Zhunxing ”), an indirect subsidiary of the Company, and has made great contribution to the management of Zhunxing and construction of the expressway of Zhunxing.

– 97 –

APPENDIX III

GENERAL INFORMATION

Non-executive Director

Mr. Suo Suo Stephen , aged 43, has been appointed as a non-executive Director since 2 July 2014. He is a Chartered Financial Analyst and an asset manager with over 18 years’ experience in banking, private equity and asset management sectors. Mr. Suo received his Master in Business Administration from University of Rochester in the United States in March 2000. During the period from June 2011 to 2014, he was the Asia Head and Executive Director of EIG Global Energy Partners (“ EIG ”), a global private equity fund. Before joining EIG, Mr. Suo was a portfolio manager of Trust Company of the West from 2005 to 2011. From late 1999 to 2005, Mr. Suo worked for Fortis Capital Corp. in the United States and had served as Group Head of its United States Leveraged Finance team.

Independent Non-executive Directors

Mr. Yip Tak On , aged 68, has been appointed as an independent non-executive Director since 22 September 2004. Mr. Yip is a fellow member of the Association of Chartered Certified Accountants, HKICPA, Taxation Institute of Hong Kong, and a full member of the Hong Kong Securities Institute. Mr. Yip has founded his own Certified Public Accountants firm for more than 20 years and he is the managing director of T. O. Yip & Co., Limited. Mr. Yip is the president of a charitable institution, the Neighborhood Advice-Action Council. Mr. Yip has not held directorships in other listed company in the last three years.

Mr. Jing Baoli , aged 50, has been appointed as an independent non-executive Director since 28 February 2006. Mr. Jing was graduated from Beijing University Law School with a Bachelor’s degree in Laws in 1987 and acquired a Master’s degree in Laws from Lanzhou University in 1997. After graduation from Beijing University, he was assigned to the High Court of Gansu Province and worked in various positions till 1997. In 1997, Mr. Jing joined Gansu Tianhe Law Firm as a partner and in 1999, he joined Beijing Shuang Cheng Law Firm as an attorney-at-laws. In August 2007, Mr. Jing joined China Commercial Law Company, Guangdong.

Mr. Bao Liang Ming , aged 59, has been appointed as an independent non-executive Director since 1 February 2007. Mr. Bao has vast executive and management experience. He has held various directorships in state owned enterprises in Tianjin and Beijing of the People’s Republic of China.

– 98 –

APPENDIX III

GENERAL INFORMATION

13. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the principal office of the Company at Room 1801-07, 18/F., China Resources Building, 26 Harbour Road, Wanchai, Hong Kong during normal business hours from 9:30 a.m. to 5:30 p.m. on any weekday, except public holidays, between the period from the date of this circular up to and including the date of the EGM:

(a) This circular.
(b) The memorandum and articles of association or equivalent documents of the Company.
(c) The material contracts referred to in the section headed “Material Contracts” in this appendix.
(d) The annual reports of the Group for the year ended 31 March 2014 and 31 March 2015.
(e) The interim reports of the Group for the six months ended 30 September 2013 and 30 September 2014.
(f) The letter from the Board, the text of which is set out on pages 14 to 44 of this circular.
(g) The letter from the Independent Board Committee, the text of which is set out on pages 45 to 46 of this circular.
(h) The letter from the Independent Financial Adviser, the text of which is set out on pages 47 to 69 of this circular.
(i) The accountant’s report on the unaudited pro forma financial information of the Group, the text of which as set out in Appendix II of this circular.
(j) The written consents referred to in the paragraph headed “Expert and Consent” in this Appendix.

– 99 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [176 x 61] intentionally omitted <==

CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 269)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of China Resources and Transportation Group Limited (the “ Company ”) will be held at 17th Floor, China Railway South Headquarters Building, No. 3333 Zhongxin Road (Shenzhen Bay Section), Nanshan District, Shenzhen, PRC (深圳市南山區中心路3333號（深圳灣段）中鐵南方總部大廈17樓) on Wednesday, 4 November 2015 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

(1) Rights Issue

“ THAT subject to the passing of ordinary resolutions number 2 to 3 and satisfaction of the conditions set out in the letter from the board under the heading “Conditions of the Rights Issue” included in the circular to shareholders of the Company dated 19 October 2015 (the “ Circular ”):

(a) the Rights Issue (as defined in the Circular) and the transactions contemplated thereunder (including the Underwriting Agreement) (as defined in the Circular) be and are hereby approved; and
(b) any one of the directors of the Company (the “ Directors ”) be and is/are hereby authorised to do all such acts and things, to sign and execute all such further documents and to take such steps as he/she may in his/her absolute discretion consider necessary, appropriate, desirable or expedient to carry out or to give effect to or in connection with the Rights Issue and the transactions contemplated thereunder (including the Underwriting Agreement).”

(2) Share Consolidation

“ THAT :

(a) every twenty existing issued and unissued ordinary shares of a par value of HK$0.01 each be consolidated into one ordinary share of a par value of HK$0.20 each (the “ Consolidated Share ”) in the capital of the Company (the “ Share Consolidation ”); and

– 100 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

(b) any one of the Directors be and is/are hereby authorised to do all such acts and things, to sign and execute all such further documents and to take such steps as he/she may in his/her absolute discretion consider necessary, appropriate, desirable or expedient to carry out or to give effect to or in connection with the Share Consolidation or any transactions contemplated thereunder, including without limitation, to aggregate fractional Consolidated Shares and sell them for the benefit of the Company.”

(3) Increase in Authorised Share Capital

“ THAT :

(a) subject to and following the Share Consolidation, the authorised share capital of the Company be and is hereby increased from HK$700,000,000 divided into 3,500,000,000 Consolidated Shares to HK$3,000,000,000 divided into 15,000,000,000 Consolidated Shares by the creation of an additional 11,500,000,000 new Consolidation Shares of HK$0.20 each.
(b) any director of the Company be and is hereby authorised to do all such acts and things and execute all such documents which he/she may consider necessary, desirable or expedient for the purpose of, or in connection with, the implementation of and giving effect to the Increase in Authorised Share Capital including to complete and effect any required filings or reports.”

By order of the Board China Resources and Transportation Group Limited Cao Zhong Chairman

Hong Kong, 19 October 2015

Registered Office: Principal Place of Business in Hong Kong: Sterling Trust (Cayman) Limited Room 1801-07, 18/F., Caledonian House, China Resources Building, 69 Dr. Roy’s Drive, 26 Harbour Road, P.O. Box 1043, Wanchai, Grand Cayman, Hong Kong KY1-1102, Cayman Islands

– 101 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

(a) The register of members of the Company will be closed from Tuesday, 3 November 2015 to Wednesday, 4 November 2015, both days inclusive. No transfer of shares of the Company will be registered during that period. In order to qualify to attend and vote at the EGM, all instruments of transfer together with the relevant share certificate(s) must be lodged with the Company’s branch share register in Hong Kong, Tricor Progressive Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30p.m. on Monday, 2 November 2015.
(b) A member entitled to attend and vote at the above meeting is entitled to appoint one or more than one proxies to attend and vote on his behalf. A proxy need not be a member of the Company but must be present in person to represent the member.
(c) If the appointer is a corporation, the form of proxy must be under its common seal, or under the hand of an officer or attorney duly authorized on its behalf.
(d) In order to be valid, a form of proxy must be deposited at the Company’s Hong Kong branch share registrar, Tricor Progressive Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, as soon as possible and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. The completion and delivery of the form of proxy will not preclude a member from attending and voting at the meeting if he so wishes. In the event that he attends the meeting after having lodged the form of proxy, the form of proxy will be deemed to have been revoked.
(e) Where there are joint registered holders of any Share, anyone of such persons may vote at the meeting, either personally or by proxy, in respect of such Shares as if he was solely entitled thereto; but if more than one of such joint holders be present at the meeting personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such Share shall alone be entitled to vote and will be accepted to the exclusion of other joint registered holders in respect hereof.
(f) The EGM is expected not to exceed half an hour, and all member and proxies shall be responsible for their own travelling expenses.

As at the date of this notice, the Board comprises five executive Directors, namely Messrs Cao Zhong, Fung Tsun Pong, Duan Jingquan, Tsang Kam Ching, David and Gao Zhiping; a non-executive Director namely Mr. Suo Suo Stephen; and three independent non-executive Directors, namely Messrs Yip Tak On, Jing Baoli and Bao Liang Ming.

– 102 –

AI assistant

Central Development Holdings Limited — Proxy Solicitation & Information Statement 2015

49236_rns_2015-10-18_6b29a773-15f8-4585-a250-02ffbbbcad97.pdf

CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

EXPECTED TIMETABLE

Effect of bad weather on the latest time for acceptance of and payment for the Rights Shares and for application and payment for excess Rights Shares

EXPECTED TIMETABLE

CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

(Stock Code: 269)

Non-Executive Director:

Independent Non-Executive Directors:

(4) PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE; AND

(5) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

PROPOSED SHARE CONSOLIDATION

Effects of the Share Consolidation

Application for Listing of the Consolidated Shares

Conditions and expected effective date of the Share Consolidation

Reasons for the Share Consolidation

Free exchange of Share certificates and Trading Arrangement

Odd lots arrangements and matching services

New Shares issuable

PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

PROPOSED CHANGE IN BOARD LOT SIZE

PROPOSED RIGHTS ISSUE

Issue statistics

Qualifying Shareholders

Closure of register of members

Basis of provisional allotments

Rights of Overseas Shareholders

Subscription Price

Status of the Rights Shares

Share certificates and refund cheques for the Rights Issue

Fractions of Rights Shares

Application for excess Rights Shares

Application for listing

THE UNDERWRITING AGREEMENT

The Underwriters

The Underwritten Shares

Termination of the Underwriting Agreement

LETTER FROM THE BOARD

Conditions of the Rights Issue

IRREVOCABLE UNDERTAKINGS

SHAREHOLDING STRUCTURE OF THE COMPANY

Scenario 1:

Scenario 2:

REASONS FOR THE RIGHTS ISSUE AND USE OF PROCEEDS

Use of Proceeds

Due within 12 months from the Latest Practicable Date

Due after 12 months from the Latest Practicable Date

LETTER FROM THE BOARD

Reasons for Rights Issue

FUND RAISING ACTIVITIES INVOLVING ISSUE OF SECURITIES IN THE PAST 12 MONTHS

LISTING RULES IMPLICATIONS

INFORMATION OF THE GROUP

EGM

CLOSURE OF THE SHAREHOLDERS’ REGISTER

RECOMMENDATION

WARNING OF THE RISKS OF DEALING IN EXISTING SHARES, CONSOLIDATED SHARES AND RIGHTS SHARES

ADDITIONAL INFORMATION

CHINA RESOURCES AND TRANSPORTATION GROUP LIMITED 中國資源交通集團有限公司

PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE

Yours faithfully,

(1) PROPOSED SHARE CONSOLIDATION ON THE BASIS OF EVERY TWENTY ISSUED AND UNISSUED EXISTING SHARES INTO ONE CONSOLIDATED SHARE;

(2) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (3) PROPOSED CHANGE IN BOARD LOT SIZE; (4) PROPOSED RIGHTS ISSUE ON THE BASIS OF FOUR RIGHTS SHARES FOR EVERY ONE CONSOLIDATED SHARE HELD ON THE RECORD DATE

INTRODUCTION

THE INDEPENDENT BOARD COMMITTEE

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

I. Financial performances of the Group

For the year ended 31 March 2014

II. Reasons for the Rights Issue and use of proceeds

Other financing alternatives

III. Principal terms of the Rights Issue

Basis of the Rights Issue

Central Development Holdings Limited Proxy Solicitation & Information Statement 2015