China Information Technology Development Limited — Proxy Solicitation & Information Statement 2020

Dec 22, 2020

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in China Information Technology Development Limited, you should at once hand this circular and the accompanying form of proxy 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.

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 8178)

PROPOSED CAPITAL REORGANISATION, PROPOSED CHANGE IN BOARD LOT SIZE AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial adviser to the Company

INCU Corporate Finance Limited

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

A notice convening the EGM of the Company to be held at Unit 3308, 33/F., Millennium City 6, 392 Kwun Tong Road, Kwun Tong, Hong Kong on Friday, 15 January 2021 at 11:00 a.m. is set out on pages EGM-1 to EGM-4 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy to the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event no later than 48 hours before the time appointed for holding the EGM (i.e. 11:00 a.m. on Wednesday, 13 January 2021 (Hong Kong time)) 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 of the Company or any adjourned meeting thereof should you so wish, and in such event, the form of proxy shall be deemed to be revoked.

This circular with a form of proxy will remain on the “Latest Listed Company Announcements” page of the GEM website at www.hkgem.com for at least 7 days from the date of its posting and on the website of the Company at www.citd.com.hk.

23 December 2020

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . .	EGM-1

– i –

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a high investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

– ii –

DEFINITIONS

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

“Board” the board of Directors “Business Day(s)” day(s) (excluding Saturdays, Sundays and public holidays) on which banks are open for business in Hong Kong “Capital Reduction” the proposed reduction of the par value of each of the then issued Consolidated Shares from HK$2.40 to HK$0.01 by cancelling the paid-up capital to the extent of HK$2.39 on each of the then issued Consolidated Shares “Capital Reorganisation” the proposed reorganisation of the share capital of the Company involving the Share Consolidation, the Capital Reduction and the Share Sub-division “CCASS” Central Clearing and Settlement System, a securities settlement system used within the Hong Kong Exchanges and Clearing Limited market system “CCASS Operational Procedures” the Operational Procedures of HKSCC in relation to CCASS, containing the practices, procedures and administrative requirements relating to operations and functions of CCASS, as from time to time “Change in Board Lot Size” the proposed change in board lot size for trading in the Shares on the Stock Exchange from 24,000 Existing Shares to 10,000 Consolidated Shares upon the Share Consolidation becoming effective “Companies Law” the Companies Act, Cap. 22 (Act 3 of 1961), of the Cayman Islands as consolidated and revised

“Company”

China Information Technology Development Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the GEM (stock code: 8178)

– 1 –

DEFINITIONS

“Consolidated Share(s)” the ordinary share(s) of par value of HK$2.40 each in the share capital of the Company immediately after the Share Consolidation but before the Capital Reduction and the Share Sub-division becoming effective “Court” the Grand Court of the Cayman Islands “Director(s)” director(s) of the Company “EGM” the extraordinary general meeting of the Company to be convened for the purpose of considering and, if thought fit, approving the Capital Reorganisation “Existing Share(s)” the ordinary share(s) of par value of HK$0.10 each in the share capital of the Company prior to the Capital Reorganisation becoming effective “GEM” the GEM of the Stock Exchange “GEM Listing Committee” the GEM listing sub-committee of the board of the Stock Exchange “GEM Listing Rules” the Rules Governing the Listing of Securities on GEM “General Rules of CCASS” the terms and conditions regulating the use of CCASS, as may be amended or modified from time to time and where the context so permits, shall include the CCASS Operational Procedures “Group” the Company and its subsidiaries “HKSCC” Hong Kong Securities Clearing Company Limited “HK$” Hong Kong dollars, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China

– 2 –

DEFINITIONS

• “Latest Practicable Date”

• 17 December 2020, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “New Share(s)”

• the ordinary share(s) of par value of HK$0.01 each in the share capital of the Company immediately upon the Capital Reorganisation becoming effective

• “Registrar”

the branch share registrar and transfer office of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited of Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong

• “Share(s)”

• the Existing Share(s), the Consolidated Share(s) and/or the New Share(s), as the case may be

• “Share Consolidation”

• the proposed consolidation of every twenty-four (24) issued and unissued Existing Shares of par value of HK$0.10 each in the share capital of the Company into one (1) Consolidated Share of par value of HK$2.40 each and the cancellation of any fraction in the issued share capital of the Company arising as a result of the Share Consolidation (if applicable)

• “Share Sub-division”

• the proposed sub-division of each of the authorised but unissued Consolidated Share of par value of HK$2.40 each into two hundred and forty (240) New Shares of par value of HK$0.01 each

• “Shareholder(s)” holder(s) of the issued Share(s)

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

– 3 –

EXPECTED TIMETABLE

The expected timetable for the implementation of the Capital Reorganisation is set out below:

Event(s)	**Time and **	date
Latest date and time for lodging transfers documents in order to
qualify for attendance and voting at the EGM . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Monday,
	11 January	2021
Closure of register of members for determining the entitlement
to attend and vote at the EGM for the Capital Reorganisation
(both dates inclusive) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 12 January 2021 to
	Friday, 15 January	2021
Latest date and time for lodging forms of proxy for the EGM . . . . . . . . 11:00 a.m. on Wednesday,
	13 January	2021
Expected date and time of the EGM . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . 11:00 a.m. on Friday,
	15 January	2021
Announcement of poll results of the EGM for
the Capital Reorganisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . Friday, 15 January	2021
The following events are conditional on the fulfilment	of the conditions for	the
implementation of the Share Consolidation:
Effective date of the Share Consolidation. . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 19 January		2021
First day for free exchange of existing share certificates for
share certificates of the Consolidated Shares . . . . . . . . . . . . . . . . . . . Tuesday, 19 January		2021
Dealings in the Consolidated Shares commence . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday,
	19 January	2021
Original counter for trading in the Existing Shares in board lots of
24,000 Existing Shares (in the form of Existing Share
certificates) temporarily closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday,
	19 January	2021

– 4 –

EXPECTED TIMETABLE

Temporary counter for trading in the Consolidated Shares in board lots of 1,000 Consolidated Shares (in the form of existing share certificates) opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 19 January 2021 Original counter for trading in the Consolidated Shares in board lots of 10,000 Consolidated Shares (in the form of new share certificates) re-opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 2 February 2021 Parallel trading in the Consolidated Shares (in the form of new share certificates in board lots of 10,000 Consolidated Shares and existing share certificates in board lots of 1,000 Consolidated Shares) commences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Tuesday, 2 February 2021 Designated broker starts to stand in the market to provide matching services for odd lots of the Consolidated Shares . . . . . . . . . . . . 9:00 a.m. on Tuesday, 2 February 2021 Temporary counter for trading in the Consolidated Shares in board lots of 1,000 Consolidated Shares (in the form of existing share certificates) closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:10 p.m. on Wednesday, 24 February 2021 Parallel trading in the Consolidated Shares (in the form of new share certificates in board lots of 10,000 Consolidated Shares and existing share certificates in board lots of 1,000 Consolidated Shares) ends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:10 p.m. on Wednesday, 24 February 2021 Designated broker ceases to stand in the market to provide matching services for odd lots of the Consolidated Shares. . . . . . . . . . 4:10 p.m. on Wednesday, 24 February 2021 Last day for free exchange of existing share certificates for the share certificates of the Consolidated Shares . . . . . . . . . . . . . . . . . . . . Friday, 26 February 2021

– 5 –

EXPECTED TIMETABLE

The following events are conditional on the fulfilment of the conditions for the implementation of the Capital Reduction and Share Sub-division:

Expected effective date of the Capital Reduction and

the Share Sub-division . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . before 9:00 a.m. on Monday,

29 March 2021

Commencement of dealings in the New Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 29 March 2021

All times and dates specified in this circular refer to the Hong Kong times and dates. This timetable is indicative only and any subsequent changes to the expected timetable will be announced by the Company as and when appropriate.

– 6 –

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8178)

Executive Directors:

• Mr. Wong King Shiu, Daniel

• (Chairman and Chief Executive Officer)

• Mr. Wong Kui Shing, Danny

• Mr. Chan Kai Leung

Independent non-executive Directors:

Registered office:

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

• Mr. Hung Hing Man

• Mr. Wong Hoi Kuen

• Dr. Chen Shengrong

Head office and principal place of business in Hong Kong: Unit 3308, 33/F. Millennium City 6 392 Kwun Tong Road Kwun Tong, Hong Kong

23 December 2020

To the Shareholders of the Company

Dear Sir or Madam,

PROPOSED CAPITAL REORGANISATION, PROPOSED CHANGE IN BOARD LOT SIZE AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 10 December 2020 in relation to, among other things, the Capital Reorganisation and Change in Board Lot Size. The purpose of this circular is to provide you among other things, details of (i) Capital Reorganisation, (ii) Change in Board Lot Size and (iii) the notice of the EGM to be convened.

– 7 –

LETTER FROM THE BOARD

PROPOSED CAPITAL REORGANISATION

The Board proposes to implement the Capital Reorganisation which will involve the Share Consolidation, the Capital Reduction and the Share Sub-division, details of which are as follows:

(1) Share Consolidation

Every twenty four (24) issued and unissued Existing Shares of par value HK$0.10 each in the share capital of the Company will be consolidated into one (1) Consolidated Share of par value HK$2.40 each in the share capital of the Company and the total number of Consolidated Shares in the issued share capital of the Company immediately following the Share Consolidation will be rounded down to a whole number by cancelling any fraction in the issued share capital of the Company arising from the Share Consolidation.

(2) Capital Reduction

The Capital Reduction will be implemented subsequent to the Share Consolidation becoming effective, pursuant to which the par value of each of the then issued Consolidated Shares will be reduced from HK$2.40 to HK$0.01 by cancelling the paid-up capital of the Company to the extent of HK$2.39 on each of the then issued Consolidated Shares.

(3) Share Sub-division

Immediately following the Capital Reduction, each of the authorised but unissued Consolidated Shares of par value of HK$2.40 each will be sub-divided into two hundred and forty (240) New Shares of par value of HK$0.01 each.

Effects of the Capital Reorganisation

As at the Latest Practicable Date, the authorised share capital of the Company is HK$1,200,000,000 divided into 12,000,000,000 Existing Shares of par value HK$0.10 each of which 5,744,191,908 Existing Shares have been issued and are fully paid or credited as fully paid. Assuming there will be no change in the issued share capital of the Company from the Latest Practicable Date until the effective date of the Capital Reorganisation, the authorised share capital of the Company will be HK$1,200,000,000 divided into 120,000,000,000 New Shares of par value of HK$0.01 each, of which 239,341,329 New Shares will be in issue and the aggregate par value of the issued share capital of the Company will be HK$2,393,413.29 upon the Capital Reorganisation becoming effective.

– 8 –

LETTER FROM THE BOARD

Based on the 5,744,191,908 Existing Shares in issue as at the Latest Practicable Date, a credit of approximately HK$572,025,777.51 will arise as a result of the Capital Reduction. It is proposed that the total credit arising from the Capital Reduction will be applied towards setting off the accumulated losses of the Company upon the Capital Reduction becoming effective. Any excess of such credits will be transferred to the distributable reserve account of the Company which will be utilised by the Company in any manner as the Board may deem fit and permitted under all applicable laws and the memorandum and articles of association of the Company.

Shareholders and potential investors of the Company should note that the credits arising in the books from the Capital Reorganisation will be subject to change depending on the number of the Existing Shares in issue immediately prior to the Capital Reorganisation becoming effective.

Assuming no further Existing Shares will be issued or repurchased from the Latest Practicable Date up to the effective date of the Capital Reorganisation, the effect of the Capital Reorganisation on the share capital structure of the Company is summarised as follows:

		Immediately after
	As at the Latest	the Capital
	Practicable Date	Reorganisation
Par value	HK$0.10 per	HK$0.01 per
	Existing Share	New Share
Amount of authorised share capital	HK$1,200,000,000	HK$1,200,000,000
Number of authorised shares	12,000,000,000	120,000,000,000
	Existing Shares	New Shares
Number of issued shares	5,744,191,908	239,341,329
	Existing Shares	New Shares
Amount of the issued share capital	HK$574,419,190.80	HK$2,393,413.29

All New Shares in issue immediately following the Capital Reorganisation becoming effective will rank pari passu in all respects with each other and the Capital Reorganisation will not result in any change in the relative rights of the Shareholders.

Other than the relevant expenses, including but not limited to professional fees and printing charges to be incurred, the implementation of the Capital Reorganisation will have no material effect on the consolidated net asset value of the Group, nor will they alter the underlying assets, business, operations, management or financial position of the Company or the proportionate interests of the Shareholders, save for any fractional New Shares to which Shareholders may be

– 9 –

LETTER FROM THE BOARD

entitled. The Directors are of the view that the Capital Reorganisation will not have any material adverse effect on the financial position of the Group and are in the interest of the Company and the Shareholders as a whole.

Fractional entitlement to New Shares

Any fractional Shares arising from the Share Consolidation will not be allocated to the Shareholders. Any fractional entitlement to the Consolidated Shares will be aggregated, sold and retained for the benefit of the Company.

Conditions of the Capital Reorganisation

The Share Consolidation is conditional upon:

• i. the passing of an ordinary resolution by the Shareholders to approve the Share Consolidation at the EGM;

• ii. the GEM Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Consolidated Shares upon the Share Consolidation becoming effective; and

• iii. the compliance with the relevant procedures and requirements under the applicable laws of Cayman Islands and the GEM Listing Rules to effect the Share Consolidation.

The Share Consolidation will become effective on the second Business Day immediately following the fulfilment of the above conditions.

The Capital Reduction and the Share Sub-division are conditional upon:

• i. the Share Consolidation becoming effective;

• ii. the passing of a special resolution by the Shareholders to approve the Capital Reduction and the Share Sub-division at the EGM;

• iii. the GEM Listing Committee of the Stock Exchange granting the listing of, and the permission to deal in, the New Shares arising from the Capital Reduction and the Share Sub-division;

• iv. the Court granting an order confirming the Capital Reduction;

– 10 –

LETTER FROM THE BOARD

• v. compliance with any conditions which the Court may impose in relation to the Capital Reduction;

• vi. registration by the Registrar of Companies in the Cayman Islands of a copy of the order of the Court confirming the Capital Reduction and the minute approved by the Court containing the particulars required under the Companies Law with respect to the Capital Reduction; and

• vii. the compliance with the relevant procedures and requirements under the applicable laws of Cayman Islands and the GEM Listing Rules to effect the Capital Reduction and the Share Sub-division.

The Capital Reduction and the Share Sub-division will become effective when the conditions mentioned above are fulfilled. Upon the approval by the Shareholders of the Capital Reorganisation at the EGM, the legal advisers to the Company (as to Cayman Islands Law) will apply to the Court for hearing date(s) to confirm the Capital Reduction and further announcement(s) will be made by the Company as soon as practicable after the Court hearing date(s) is confirmed.

Listing and dealings

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

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

None of the share capital or debt securities of the Company is listed or dealt in on any other stock exchange other than the Stock Exchange and no such listing or permission to deal is being or is proposed to be sought.

– 11 –

LETTER FROM THE BOARD

PROPOSED CHANGE IN BOARD LOT SIZE

As at the Latest Practicable Date, the Existing Shares are traded on the Stock Exchange in board lot size of 24,000 Existing Shares. The Board proposes to change the board lot size for trading in Shares on the Stock Exchange from 24,000 Existing Shares to 10,000 Consolidated Shares conditional upon the Share Consolidation becoming effective.

Based on the closing price of HK$0.022 per Existing Share (equivalent to the theoretical closing price of HK$0.528 per Consolidated Share) as at the Latest Practicable Date, the value of each existing board lot of the Existing Shares is HK$528 and the theoretical market value of each new board lot of the Consolidated Shares, assuming the Share Consolidation had become effective, would be HK$5,280.

Upon the Capital Reduction and Share Sub-division becoming effective, the board lot size for trading in Shares will remain at 10,000 New Shares.

ADJUSTMENTS IN RELATION TO OTHER SECURITIES OF THE COMPANY

As at the Latest Practicable Date, the Company did not have any other derivatives, options, warrants, other securities or conversion rights or other similar rights which are convertible or exchangeable into, any Shares.

REASONS FOR THE CAPITAL REORGANISATION AND CHANGE IN BOARD LOT SIZE

Pursuant to Rule 17.76 of GEM Listing Rules, where the market price of the securities of an issuer approaches the extremities of HK$0.01 or HK$9,995.00, the issuer may be required either to change the trading method or to proceed with a consolidation or splitting of its securities. The “Guide on Trading Arrangements for Selected Types of Corporate Actions” issued by the Hong Kong Exchanges and Clearing Limited on 28 November 2008 and last updated on 30 August 2019 has stated that (i) market price of the shares at a level less than HK$0.1 will be considered as trading at extremity as referred to under Rule 17.76 of the GEM Listing Rules; and (ii) taking into account the minimum transaction costs for a securities trade, the expected board lot value should be greater than HK$2,000.

Taking into account of the closing price of HK$0.022 per Existing Share as at the Latest Practicable Date, the Capital Reorganisation and Change in Board Lot Size would enable the Company to comply with the trading requirements under the GEM Listing Rules.

– 12 –

LETTER FROM THE BOARD

The Share Consolidation will reduce the total number of Existing Shares currently in issue and is expected to bring about a corresponding upward adjustment to the trading price per Share on the Stock Exchange, and hence the transaction costs as a proportion of the market value of each board lot will be lower.

Further, under the Companies Law, the Company is restricted in its ability to issue Shares at a price lower than their par value. The Capital Reduction will reduce the par value of the Consolidated Shares, which will provide the Company with greater flexibility to accommodate the issue of new Shares in the future when necessary.

Moreover, the Change in Board Lot Size from 24,000 Existing Shares to 10,000 Consolidated Shares will keep the new board lot value of the Consolidated Shares after the Share Consolidation the same as the existing board lot value of the Existing Shares and bring the least impact on the Shareholders due to the Share Consolidation.

The Capital Reorganisation and the Change in Board Lot Size will help maintain the transaction amount for each board lot at a reasonable level and attract more investors, provide flexibility for equity fund raising of the Company in the future and eliminate a substantial amount of the Company’s accumulated losses, hence, allowing greater flexibility for the Company to pay dividends in the future. Accordingly, the Directors consider that the Capital Reorganisation and Change in Board Lot Size are in the interests of the Company and the Shareholders as a whole.

As at the Latest Practicable Date, the Company has no intention to carry out other corporate actions in the next 12 months which may affect the trading in the Shares, and the Company does not have any concrete plan to conduct any fund-raising activities in the next 12 months. However, the Board cannot rule out the possibility that the Company will conduct debt and/or equity fund raising exercises when suitable fund-raising opportunities arise in order to support future development of the Group. The Company will make further announcement in this regard in accordance with the GEM Listing Rules as and when appropriate.

OTHER ARRANGEMENTS

Exchange of share certificates

Subject to the Share Consolidation becoming effective, Shareholders may, on or after Tuesday, 19 January 2021 until Friday, 26 February 2021 (both days inclusive), submit share certificates for the Existing Shares (in blue colour) to the Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong at the expense of the Company, for new share certificates for the Consolidated Shares (in yellow colour) (on the basis of twenty four (24) Existing Shares for one

– 13 –

LETTER FROM THE BOARD

(1) Consolidated Share). Thereafter, certificates of Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 each (or such other amount as may from time to time be specified by the Stock Exchange) by the Shareholders for each share certificate for the Existing Shares submitted for cancellation or each new share certificate issued for the Consolidated Shares, whichever the number of certificates cancelled/issued is higher. After 4:10 p.m. on Wednesday, 24 February 2021, existing share certificates for the Existing Shares will only remain effective as documents of title and may be exchanged for certificates for Consolidated Shares at any time but will not be accepted for delivery, trading and settlement purposes.

As the Court hearing dates have yet to be fixed, the effective date of the Capital Reduction and the Share Sub-division is not ascertainable at present. Should the Capital Reduction and the Share Sub-division become effective, Shareholders may submit share certificates for the Consolidated Shares (in yellow colour) to the Registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong to exchange for new share certificates for the New Shares (in pink colour) at the expense of the Company within the relevant free exchange period from the effective date of the Capital Reduction and the Share Sub-division. Details of such free exchange of share certificates will be announced as soon as practicable.

Arrangement on odd lot trading

In order to facilitate the trading of odd lots of Consolidated Shares, the Company has appointed Supreme China Securities Limited as an agent to provide matching services on a best-efforts basis regarding the sale and purchase of odd lots of the Consolidated Shares from Tuesday, 2 February 2021 to Wednesday, 24 February 2021 (both days inclusive). Shareholders should note that matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed. Any Shareholder who is in any doubt about the odd lots arrangement is recommended to consult his/her/its own professional advisers.

EGM

A notice convening the EGM to be held at Unit 3308, 33/F., Millennium City 6, 392 Kwun Tong Road, Kwun Tong, Hong Kong, on Friday, 15 January 2021 at 11:00 a.m. is set out on pages EGM-1 to EGM-4 of this circular. At the EGM, an ordinary resolution in respect of proposed Share Consolidation and a special resolution in respect of the proposed Capital Reduction and Share Sub-division will be proposed to the Shareholders.

To the best knowledge of the Directors, no Shareholders have a material interest in the proposed Capital Reorganisation and accordingly, no Shareholders will have to abstain from voting at the EGM.

– 14 –

LETTER FROM THE BOARD

Whether or not you are able to attend the EGM, you are requested to complete and return the form of proxy accompanying this circular in accordance with the instructions printed thereon as soon as possible and in any event no later than 48 hours before the time appointed for the holding of the EGM (i.e. 11:00 a.m. on Wednesday, 13 January 2021 (Hong Kong time)) or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournment thereof should you so wish, and in such event, the form of proxy shall be deemed to be revoked.

Pursuant to Rule 17.47(4) of the GEM Listing Rules, any votes of the shareholders at a general meeting must be taken by poll. Accordingly, all resolutions set out in the EGM notice to be considered and, if thought fit, passed at the EGM shall be voted by way of poll by the Shareholders. The Company will announce the results of the poll in the manner prescribed under Rule 17.47(5) of the GEM Listing Rules.

RESPONSIBILITY STATEMENT

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

RECOMMENDATION

The Directors consider that the Capital Reorganisation and Change in Board Lot Size are in the interests of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of the resolutions at the EGM.

MISCELLANEOUS

The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

By order of the Board

China Information Technology Development Limited Wong King Shiu, Daniel

Chairman and Chief Executive Officer

– 15 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

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(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8178)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ Meeting ”) of China Information Technology Development Limited (the “ Company ”) will be held at Unit 3308, 33/F., Millennium City 6, 392 Kwun Tong Road, Kwun Tong, Hong Kong on Friday, 15 January 2021 at 11:00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions of the Company:

ORDINARY RESOLUTION

1. “ THAT subject to and conditional upon (i) the granting of approval by the GEM Listing Committee of The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) of the listing of, and permission to deal in, the Consolidated Shares (as defined below); and (ii) compliance with the relevant procedures and requirements under the applicable laws of Cayman Islands and the Rules Governing the Listing of Securities on GEM of the Stock Exchange to effect the Share Consolidation (as defined below):

2. (a) with effect from the second business day immediately following the date on which this resolution is passed or the above condition is fulfilled (whichever is later):

   • (i) every twenty-four (24) issued and unissued ordinary shares of par value of HK$0.10 each in the share capital of the Company be consolidated into one (1) consolidated share (each a “ Consolidated Share ”) of par value of HK$2.40 each (the “ Share Consolidation ”), such Consolidated Shares shall rank pari passu in all respects with each other and have the rights and privileges and be subject to the restrictions as contained in the memorandum and articles of association of the Company;

   • (ii) the total number of Consolidated Shares in the issued share capital of the Company immediately following the Share Consolidation be and is hereby rounded down to a whole number by cancelling any fraction in the issued share capital of the Company arising from the Share Consolidation (if applicable);

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (iii) immediately following the Share Consolidation, the authorised share capital of the Company be changed from HK$1,200,000,000 divided into 12,000,000,000 ordinary shares of par value of HK$0.10 each to HK$1,200,000,000 divided into 500,000,000 ordinary shares of par value of HK$2.40 each; and

• (iv) any one or more of the directors of the Company be and is/are hereby authorised to do all such acts and things and execute all such documents, which are ancillary to the Share Consolidation and of administrative nature, on behalf of the Company, including under seal where applicable, as he/they consider necessary, desirable or expedient to give effect to the foregoing arrangements for the Share Consolidation.”

SPECIAL RESOLUTION

1. “ THAT subject to and conditional upon (i) the Share Consolidation becoming effective; (ii) approval from the Grand Court of the Cayman Islands (“ Court ”) of the Capital Reduction (as defined below); (iii) registration by the Registrar of Companies of Cayman Islands of the order of the Court confirming the Capital Reduction and the minute approved by the Court containing the particulars required under the Companies Act of the Cayman Islands in respect of the Capital Reduction (as defined below) and compliance with any conditions the Court may impose; (iv) compliance with the relevant procedures and requirements under the applicable laws of Cayman Islands and the Rules Governing the Listing of Securities on GEM of the Stock Exchange to effect the Capital Reduction (as defined below) and the Share Sub-division (as defined below); and (v) the GEM Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, the New Shares (as defined below), with effect from the date on which these conditions are fulfilled:

2. (a) the par value of each issued Consolidated Share of par value of HK$2.40 each in the share capital of the Company be reduced to HK$0.01 each (each a “ New Share ”) (the “ Capital Reduction ”) by cancelling the paid up capital to the extent of HK$2.39 on each of the then issued Consolidated Shares;

3. (b) the credit arising from the Capital Reduction be transferred to a distributable reserve account of the Company which may be utilized by Company as the board of directors of the Company may deem fit and permitted in accordance with the memorandum and articles of association of the Company and all applicable laws, including, without limitation, eliminating or setting off any accumulated losses of the Company from time to time;

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (c) immediately following the Capital Reduction, each of the authorised but unissued Consolidated Shares of par value HK$2.40 each be sub-divided into two hundred and forty (240) New Shares of par value of HK$0.01 each (the “ Share Sub-division ”);

• (d) immediately following the Capital Reduction and the Share Sub-division, the authorised share capital of the Company be changed from HK$1,200,000,000 divided into 500,000,000 ordinary shares of par value of HK$2.40 each to HK$1,200,000,000 divided into 120,000,000,000 New Shares of par value of HK$0.01 each;

• (e) each of the New Shares arising from the Capital Reduction and the Share Subdivision shall rank pari passu in all respects with each other and shall have the rights and privileges and be subject to the restrictions as contained in the memorandum and articles of association of the Company; and

• (f) any one or more of the directors of the Company be and is/are hereby authorised to do all such acts and things and execute all such documents, which are ancillary to the Capital Reduction and the Sub-division and of administrative nature, on behalf of the Company, including under seal where applicable, as he/they consider necessary, desirable or expedient to give effect to the foregoing arrangements for the Capital Reduction and the Sub-division and (where applicable) to aggregate all fractional New Shares and sell them for the benefits of the Company.”

By order of the Board

China Information Technology Development Limited Wong King Shiu, Daniel Chairman and Chief Executive Officer

Hong Kong, 23 December 2020

Head office and principal place of business in Hong Kong: Unit 3308, 33/F. Millennium City 6 392 Kwun Tong Road Kwun Tong, Hong Kong

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

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NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. Any member of the Company (the “ Member ”) entitled to attend and vote at the Meeting or its adjourned meeting (as the case may be) is entitled to appoint one (or, if he/she/it holds two or more shares of the Company (the “ Shares ”), more than one) proxy to attend and, on a poll, vote on his/her/its behalf subject to the provisions of the articles of association. A proxy need not be a Member but must be present in person at the Meeting to represent the Member. If more than one proxy is so appointed, the appointment shall specify the number of Shares in respect of which each such proxy is so appointed.

2. A form of proxy for use in connection with the Meeting is enclosed. If you are not able to attend and vote at the Meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon. Completion and return of a form of proxy will not preclude a Member from attending in person and voting at the Meeting or its adjournment should he/she/it so wish. In such event, the form of proxy shall be deemed to be revoked.

3. In order to be valid, the form of proxy must be deposited together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, at the offices of the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not later than 48 hours before the time appointed for holding the Meeting (i.e. by 11:00 a.m. on Wednesday, 13 January 2021) or its adjourned meeting. Completion and return of a form of proxy will not preclude a Member from attending in person and voting at the Meeting or its adjournment should he/she/it so wish.

4. Where there are joint holders of any Share, any one of such joint holders may vote at the Meeting, either in person or by proxy, in respect of such Share as if he/she/it was solely entitled thereto; but should more than one of such joint holders be present at the Meeting in person or by proxy, that one of the said joint holders so present whose name stands first on the register of Members in respect of such Share(s) shall alone be entitled to vote in respect thereof.

5. For determining Members’ entitlement to attend and vote at the Meeting, the register of Members will be closed from Tuesday, 12 January 2021 to Friday, 15 January 2021 (both days inclusive), during which period no transfer of Shares will be effected. In order to qualify for attending and voting at Meeting, shareholders must lodge all transfer documents, accompanied by the relevant share certificates, with the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration not later than 4:30 p.m. on Monday, 11 January 2021.

6. In compliance with Rule 17.47(4) of the GEM Listing Rules, voting on all proposed resolutions set out in the notice will be taken by a poll.

7. If tropical cyclone warning signal no. 8 or above or “extreme conditions” caused by super typhoons or a black rainstorm warning signal is in force at 7:00 a.m. on Friday, 15 January 2021, the Meeting will be adjourned and further announcement for details of alternative meeting arrangements will be made. The Meeting will be held as scheduled even when tropical cyclone warning signal no. 3 or below is hoisted, or an amber or red rainstorm warning signal is in force. You should make your own decision as to whether you would attend the Meeting under bad weather conditions and if you should choose to do so, you are advised to exercise care and caution.

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