China Silver Group Limited — Proxy Solicitation & Information Statement 2015

Apr 30, 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult 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 Silver Group Limited, you should at once hand this circular with the accompanying form of election to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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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CHINA SILVER GROUP LIMITED 中國白銀集團有限公司 (Incorporated in the Cayman Islands with limited liability) (Stock Code: 815)

SCRIP DIVIDEND SCHEME IN RELATION TO THE FINAL DIVIDEND FOR THE YEAR ENDED 31 DECEMBER 2014

30 April 2015

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Particulars of the Scrip Dividend Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Basis of allotment of the Scrip Dividend Shares . . . . . . . . . . . . . . . . . . . . . . . .	4
4.	Advantages of the Scrip Dividend Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
5.	Effect of the Scrip Dividend Scheme. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
6.	Form of election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
7.	Book closure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
8.	Overseas Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
9.	Odd lot matching services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
10.	Stock Exchange listing and dealings and despatch of dividend
	warrants and/or share certificates for Scrip Dividend Shares . . . . . . . . . . . . .	7
11.	Recommendation and advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
12.	Disclosure of interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
13.	General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8

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DEFINITIONS

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

• “Board”

the board of Directors

• “Business Day”

• any day in which banks in Hong Kong are generally open for business, other than a Saturday or Sunday

• “Company” China Silver Group Limited

• “Directors” the directors of the Company

• “Final Dividend”

• the dividend of the Company for the year ended 31 December 2014 of HK5 cents per Share to be paid to Shareholders whose names appear in the register of members of the Company as at the Record Date

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Latest Practicable Date”

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

• “Listing Rules”

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

• “Overseas Shareholders”

• Shareholders whose registered addresses appearing on the register of members of the Company at the Record Date are outside Hong Kong

• “PRC”

• People’s Republic of China

• “Record Date”

• 29 April 2015

• “Scrip Dividend Scheme”

• the scheme proposed by the Directors on 16 March 2015 in relation to the Final Dividend to offer the Shareholders a scrip alternative to elect to receive the Final Dividend wholly or partly by allotment of new Shares credited as fully paid up Shares in lieu of cash

• “Scrip Dividend Shares”

new Shares to be allotted, issued and credited as fully paid up Shares under the Scrip Dividend Scheme

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DEFINITIONS

“Share(s)”	ordinary share(s) of HK$0.01 each in the share capital of
	the Company
“Shareholder(s)”	the holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$” and “HK cents”	Hong Kong dollars and cents, respectively, the lawful
	currency of Hong Kong
“%”	per cent

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LETTER FROM THE BOARD

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CHINA SILVER GROUP LIMITED 中國白銀集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 815)

Executive Directors: Mr. CHEN Wantian

(Chairman and Chief Executive Officer) Mr. SONG Guosheng Mr. CHEN Guoyu

Independent Non-executive Directors: Dr. JIANG Tao Dr. LI Haitao Dr. ZENG Yilong

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

Head Office and Principal Place of Business in the PRC: Rm 5A & 6 Floor Baolin International Gold Jewelry Trade Center 2nd Building 3 Shuitian Second Street Shuibei Louhu District Shenzhen PRC

Principal Place of Business in Hong Kong: 18th Floor United Centre 95 Queensway Admiralty, Hong Kong

30 April 2015

To the Shareholders

Dear Sirs,

SCRIP DIVIDEND SCHEME IN RELATION TO THE FINAL DIVIDEND FOR THE YEAR ENDED 31 DECEMBER 2014

1. INTRODUCTION

On 16 March 2015, the Board announced the final results of the Company and its subsidiaries for the year ended 31 December 2014 and recommended the Final Dividend. It was also announced that Shareholders might elect to receive the Final Dividend wholly or partly in Scrip Dividend Shares. Accordingly, the Shareholders may exercise their option to receive an allotment of Scrip Dividend Shares in lieu of cash dividend.

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LETTER FROM THE BOARD

The purpose of this circular is to set out information of the Scrip Dividend Scheme, the procedures which apply in relation to the election of Scrip Dividend Shares and the actions which Shareholders should take in relation thereto.

2. PARTICULARS OF THE SCRIP DIVIDEND SCHEME

Under the Scrip Dividend Scheme, each Shareholder whose name appears on the register of members of the Company as at the Record Date has the following choices in respect of the Final Dividend:-

• (1) to receive the Final Dividend of HK5 cents per Share in cash; or

• (2) to be allotted Scrip Dividend Shares having an aggregate market value (as described below), save for adjustment for fractions, equal to the total amount of the Final Dividend which such Shareholder would otherwise receive in cash; or

• (3) to receive the Final Dividend partly in cash and partly in Scrip Dividend Shares.

The Scrip Dividend Shares to be issued pursuant to the Scrip Dividend Scheme will rank pari passu in all respects with the existing Shares except that they will not be entitled to the Final Dividend. Final Dividend in cash will be paid out in Hong Kong dollars regardless of the place of residence of the Shareholders as at the Record Date.

3. BASIS OF ALLOTMENT OF THE SCRIP DIVIDEND SHARES

For the purposes of calculating the number of Scrip Dividend Shares to be allotted, the market value of the Scrip Dividend Shares has been fixed at HK$3.31, being the average closing price of one Share traded on the Stock Exchange for the five consecutive trading days up to and including the Latest Practicable Date, rounded down to the nearest two decimal places. Accordingly, the number of Scrip Dividend Shares which the Shareholders will receive in respect of the existing Shares registered in their names as at the Record Date and for which elections to receive the Scrip Dividend Shares are lodged with the Hong Kong branch share registrar of the Company, Computershare Hong Kong Investor Services Limited, at the address and before the time set out in paragraph 6 will be calculated as follows:-

Number of Scrip Dividend Shares to be received = Number of existing Shares held on the Record Date for which election is made under the Scrip Dividend Scheme x	HK5 cents (Final Dividend per Share)
	HK$3.31 (the average closing price per Share for the five consecutive trading days up to and including the Latest Practicable Date)

If all Shareholders elect to receive their Final Dividend in Scrip Dividend Shares, based on 1,089,786,000 Shares in issue as at the Latest Practicable Date, not more than 16,462,024 Scrip Dividend Shares will be issued under the Scrip Dividend Scheme. The number of Scrip Dividend Shares to be issued to each Shareholder will be rounded down to the nearest whole number. Fractional entitlements to Scrip Dividend Shares will not be allotted but will be aggregated and sold for the benefit of the Company.

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LETTER FROM THE BOARD

4. ADVANTAGES OF THE SCRIP DIVIDEND SCHEME

The Scrip Dividend Scheme will give the Shareholders the opportunity to increase their investment in the Company at market value without incurring brokerage fees, stamp duty and related dealing costs. The Scrip Dividend Scheme will also be to the advantage of the Company because, to the extent that the Shareholders do not elect to receive cash, in whole or in part, such cash as would otherwise have been paid to such Shareholders will be retained for use as working capital by the Company. The Directors therefore consider that the Scrip Dividend Scheme is in the best interests of the Company and the Shareholders as a whole.

5. EFFECT OF THE SCRIP DIVIDEND SCHEME

Based on 1,089,786,000 Shares in issue on the Record Date, if no elections for the Scrip Dividend Shares were received, the total cash dividend payable by the Company would be HK$54,489,300. If all Shareholders elected to receive all of their entitlement to the Final Dividend in the form of Scrip Dividend Shares, the maximum number of Scrip Dividend Shares to be issued would be 16,462,024 Shares representing approximately 1.51% of the number of Shares in issue as at the Latest Practicable Date and approximately 1.49% of the number of Shares in issue as enlarged by the issue of such Scrip Dividend Shares.

6. FORM OF ELECTION

If you do not elect to receive any of your Final Dividend in Scrip Dividend Shares, you do not need to take any action.

If you elect to receive your Final Dividend in Scrip Dividend Shares, or partly in cash and partly in Scrip Dividend Shares, you should use the enclosed form of election. If you complete the form of election but do not specify the number of Shares in respect of which you wish to receive Scrip Dividend Shares, or if you elect to receive Scrip Dividend Shares in respect of a greater number of Shares than your registered holding as at the Record Date, you will be deemed to have exercised your election to receive Scrip Dividend Shares in respect of all the Shares of which you were then registered as the holder.

The enclosed form of election should be completed in accordance with the instructions printed thereon, returned to and received by the Hong Kong branch share registrar of the Company, Computershare Hong Kong Investor Services Limited, of Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on Monday, 18 May 2015. No acknowledgment of receipt of the form of election will be issued.

The latest time for submission of the election forms will not be valid 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 Monday, 18 May 2015. Instead, the deadline for the submission of the election forms will be 5:00 p.m. on the same Business Day; or

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LETTER FROM THE BOARD

• (ii) in force in Hong Kong at any local time between 12:00 noon and 4:30 p.m. on Monday, 18 May 2015. Instead, the deadline for the submission of the election forms will be rescheduled to 4:30 p.m. on the next Business Day which does not have either of those warnings in force at any time between 9:00 a.m. and 4:30 p.m.

No elections in respect of the Final Dividend may, after the relevant election forms are signed and returned to the Hong Kong branch share registrar of the Company, be in any way withdrawn, revoked, superseded or altered.

7. BOOK CLOSURE

The register of members of the Company has been closed from Monday, 27 April 2015 to Wednesday, 29 April 2015 (both dates inclusive) in order to establish entitlements of Shareholders to the Final Dividend and the Scrip Dividend Scheme, during which period no transfer of Shares was registered. The latest time for lodging share transfers was 4:30 p.m. on Friday, 24 April 2015 in order to qualify for the Final Dividend.

8. OVERSEAS SHAREHOLDERS

None of this circular, the form of election and the Scrip Dividend Shares will be registered or filed under the securities laws or equivalent legislation of any jurisdiction other than, if applicable, Hong Kong and the Cayman Islands.

If you are resident outside Hong Kong, this circular and/or the form of election only constitute(s) an invitation to subscribe for Scrip Dividend Shares if such an invitation can be legally made to you without the Company having to meet any legal or registration requirements outside Hong Kong. Shareholders residing in a jurisdiction where it would be illegal for the Company to make such an invitation will be deemed to have received this circular and/or the form of election for information only.

At the Record Date, there was no Overseas Shareholder.

For the avoidance of doubt, the Scrip Dividend Shares are not offered to the public (other than the Shareholders) and the forms of election are non-transferable.

Notwithstanding the legal advice taken by the Company, it is the responsibility of anyone wishing to participate in the Scrip Dividend Scheme to satisfy themselves as to full observance of the laws of any relevant territory, including obtaining any governmental or other consents which may be required. Overseas Shareholders who are in doubt as to their position should consult their own professional advisers.

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LETTER FROM THE BOARD

9. ODD LOT MATCHING SERVICES

In order to alleviate the difficulties arising from the existence of odd lots of Scrip Dividend Shares arising from the Scrip Dividend Scheme, the Company has appointed Computershare Hong Kong Investor Services Limited to provide matching service for sale and purchase of odd lots of Scrip Dividend Shares at the relevant market price per Scrip Dividend Share, on a best effort basis, to those Shareholders who wish to acquire odd lots of the Scrip Dividend Shares to make up a full board lot, or to dispose of their holding of odd lots of the Scrip Dividend Shares. Shareholders who wish to utilise the service should contact Computershare Hong Kong Investor Services Limited at (852) 2862 8555, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong during the period from 9:00 a.m., Monday, 1 June 2015 to 4:00 p.m., Friday, 19 June 2015, both days inclusive.

Holders of odd lots of the Scrip Dividend Shares should note that successful matching of the sale and purchase of odd lots of the Scrip Dividend Shares is not guaranteed. If you are in any doubt as to the above arrangements, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

10. STOCK EXCHANGE LISTING AND DEALINGS AND DESPATCH OF DIVIDEND WARRANTS AND/OR SHARE CERTIFICATES FOR SCRIP DIVIDEND SHARES

The Scrip Dividend Scheme is conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Scrip Dividend Shares.

Application has been made to the Stock Exchange for the granting of the listing of, and permission to deal in, the Scrip Dividend Shares. The dividend warrants in relation to the Final Dividend and/or share certificates with respect to the Scrip Dividend Shares are expected to be despatched by ordinary mail at the risk of those entitled thereto on 29 May 2015. On this basis, dealings in the Scrip Dividend Shares are expected to commence on 1 June 2015 after the due despatch of the share certificates with respect to the Scrip Dividend Shares to the relevant Shareholders.

The Shares are only listed on the Stock Exchange. No part of the equity or debt securities of the Company is listed or dealt in on any other stock exchange and the Company is not currently seeking to list its securities on any other stock exchange.

Dealings in Shares may be settled through the Central Clearing and Settlement System and you should seek the advice of your stockbroker or other professional adviser for details of these settlement arrangements and how such arrangements will affect your rights and interests.

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LETTER FROM THE BOARD

11. RECOMMENDATION AND ADVICE

Whether or not it is to your advantage to receive cash or the Scrip Dividend Shares, in whole or in part, depends upon your own individual circumstances and the decision in this regard and all effects resulting therefrom are the responsibility of each Shareholder. If you are in any doubt as to what to do, you should consult your professional advisers as to whether or not you are permitted to receive the Final Dividend in scrip form or if any governmental or other consent is required. Shareholders who are trustees are recommended to take professional advice as to whether the choice of the Scrip Dividend Shares is within their powers and as to its effects having regard to the terms of the relevant trust instrument.

12. DISCLOSURE OF INTERESTS

Shareholders should note that an acquisition of Scrip Dividend Shares may give rise to notification requirements under the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong). Shareholders who are in any doubt as to how these provisions may affect them are recommended to seek their own professional advice.

13. GENERAL INFORMATION

As at the date of this circular, the executive Directors are Mr. Chen Wantian, Mr. Song Guosheng, and Mr. Chen Guoyu; and the independent non-executive Directors are Dr. Jiang Tao, Dr. Li Haitao and Dr. Zeng Yilong.

Yours faithfully, For and on behalf of

CHINA SILVER GROUP LIMITED Chen Wantian Chairman

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