China Silver Group Limited — Proxy Solicitation & Information Statement 2015

Mar 18, 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 a licensed securities dealer, a 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 and the enclosed form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or 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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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)

PROPOSALS FOR

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, ADOPTION OF A NEW SHARE OPTION SCHEME, RE-ELECTION OF RETIRING DIRECTORS, AND

NOTICE OF ANNUAL GENERAL MEETING

A letter from the board of directors of China Silver Group Limited is set out on pages 5 to 10 of this circular.

Resolutions will be proposed at the annual general meeting of China Silver Group Limited to be held at 35/F, Central Plaza, Regus Conference Center, 18 Harbour Road, Hong Kong on Tuesday, 21 April 2015, at 2:30 p.m. or any adjournment thereof to approve the matters referred to in this circular.

The notice convening the annual general meeting together with the form of proxy for use at the annual general meeting are enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to Computershare Hong Kong Investor Services Limited, the Company’s branch share registrar in Hong Kong, of Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the annual general meeting. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the meeting or any adjourned meeting should you so wish.

18 March 2015

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
2.	Issue Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
3.	Share Repurchase Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
4.	Adoption of the New Share Option Scheme. . . . . . . . . . . . . . . . . . . . . . . .	7
5.	Re-election of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
6.	Voting by Poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
7.	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
8.	Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
9.	Closure of Register of Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
10.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
**Appendix **	I – Explanatory Statement on Share Repurchase Mandate. . . .	11
**Appendix **	II – Further Information and Summary of the Principal Terms
	of the New Share Option Scheme . . . . . . . . . . . . . . . . . . .	14
**Appendix **	III – Details of Retiring Directors Proposed for Re-election . . . .	25
**Notice of **	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	26

– i –

DEFINITIONS

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

• “Adoption Date”

the date on which the New Share Option Scheme is conditionally adopted by an ordinary resolution of the Shareholders;

• “Annual General Meeting” the annual general meeting of the Company to be held at 35/F, Central Plaza, Regus Conference Center, 18 Harbour Road, Hong Kong on Tuesday, 21 April 2015 at 2:30 p.m. or any adjournment thereof and notice of which is set out on pages 26 to 31 of this circular;

• “Articles of Association” the articles of association of the Company, as amended, modified or otherwise supplemented from time to time, and “Article” shall mean an Article of the Articles of Association;

• “Associate” shall have the meaning ascribed to it under the Listing Rules;

• “Auditors” the auditors of the Company at the relevant time;

• “Board” the board of the Directors;

• “Business Day” any day (excluding a Saturday and Sunday) on which banks are generally open for business in Hong Kong;

• “Companies Law” the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands;

• “Company” China Silver Group Limited, an exempted company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange;

• “Connected Persons” shall have the meaning ascribed to it under the Listing Rules;

• “Controlling Shareholder” shall have the meaning ascribed to it under the Listing Rules;

• “Core Connected Persons” shall have the meaning ascribed to it under the Listing Rules;

– 1 –

DEFINITIONS

• “Date of Grant” in respect of an Option, the Business Day on which the Board resolves to make an Offer, or the grant of an Option to a Participant, whether or not the Offer is subject to Shareholders’ approval on the terms of the New Share Option Scheme;

• “Director(s)” the director(s) of the Company;

• “Existing Share Option Scheme” the share option scheme adopted by the Company on 5 December 2012;

• “Grantee” any Participant who accepts an Offer in accordance with the terms of the New Share Option Scheme, or (where the context so permits) a person entitled to any such Option in consequence of the death of the original Grantee, or the personal representative of such person;

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong;

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

• “Individual Limit” shall have the meaning ascribed to it under paragraph (v)(cc) of Appendix II of this circular;

• “Issue Mandate” the general mandate proposed to be granted to the Directors at the Annual General Meeting to allot, issue and otherwise deal with additional Shares of up to a maximum of 20% of the issued share capital of the Company at the date of the passing of the relevant resolution approving such grant;

• “Latest Practicable Date” 12 March 2015, being the latest practicable date for ascertaining certain information referred to in this circular prior to the printing of this circular;

• “Listing Rules” the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, as amended from time to time;

• “New Share Option Scheme”

• the share option scheme proposed to be adopted by the Company, further information and summary of the principal terms of which are set out in Appendix II of this circular;

– 2 –

DEFINITIONS

• “Offer” the offer of the grant of an Option;

• “Option”

• an option to subscribe for Shares pursuant to the New Share Option Scheme and for the time being subsisting;

• “Option Period” in respect of any particular Option, the period to be determined and notified by our Board to the Grantee at the time of making an Offer which shall not expire later than 10 years from the Date of Grant;

• “Participants” directors (including executive Directors, non-executive Directors and independent non-executive Directors), employees and consultant of the Company or any of its subsidiaries whom the Board considers, in its sole discretion, have contributed or will contribute to our Group;

• “PRC” the People’s Republic of China;

• “Scheme Mandate Limit” shall have the meaning ascribed to it under paragraph (v)(aa) of Appendix II of this circular;

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

• “Share(s)” ordinary share(s) of HK$0.01 each in the capital of the Company;

• “Share Repurchase Mandate” the general mandate proposed to be granted to the Directors at the Annual General Meeting to repurchase Shares up to a maximum of 10% of the issued share capital of the Company at the date of the passing of the relevant resolution approving such grant;

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

• “Stock Exchange” The Stock Exchange of Hong Kong Limited;

• “Subscription Price”

• the price per Share at which a Grantee may subscribe for Shares on the exercise of an Option pursuant to paragraph (iv) of Appendix II of this circular;

– 3 –

	DEFINITIONS
“Substantial Shareholder”	shall have the meaning ascribed to it under the Listing
	Rules;
“Takeovers Code”	the Code on Takeovers and Mergers issued by the
	Securities and Futures Commission, as amended from
	time to time;
“%”	per cent.

– 4 –

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

18 March 2015

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, ADOPTION OF A NEW SHARE OPTION SCHEME, RE-ELECTION OF RETIRING DIRECTORS, AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to provide you with information relating to the proposed grant of the Issue Mandate and Share Repurchase Mandate, the adoption of a New Share Option Scheme, the re-election of retiring Directors who are going to retire and offer themselves for re-election at the Annual General Meeting, and to give you the notice of the Annual General Meeting.

– 5 –

LETTER FROM THE BOARD

2. ISSUE MANDATE

At the Annual General Meeting, it will be proposed, by way of an ordinary resolution, that the Directors be granted a general and unconditional mandate to exercise all the powers of the Company to allot, issue and deal with new Shares up to a maximum of 20% of the issued share capital of the Company as at the date of the passing of such ordinary resolution. As at the Latest Practicable Date, there were 1,086,186,000 Shares in issue. Subject to the passing of the relevant ordinary resolution to approve the Issue Mandate and on the basis that no further Shares are issued or repurchased between the Latest Practicable Date and the date of the Annual General Meeting, the Company will be authorised to allot, issue and deal with up to a maximum of 217,237,200 Shares under the Issue Mandate.

In addition, it is further proposed, by way of a separate ordinary resolution, that the Issue Mandate be extended so that the Directors be given a general mandate to issue further Shares of an aggregate nominal value equal to the aggregate nominal value of the share capital of the Company repurchased under the Share Repurchase Mandate.

The Issue Mandate, if granted, will continue in force until the earliest of (a) the conclusion of the next annual general meeting of the Company after the Annual General Meeting; (b) the expiration of the period within which the next annual general meeting of the Company is required to be held under its Articles of Association or the laws applicable to the Company; and (c) the date upon which such authority is revoked or varied by an ordinary resolution passed at a general meeting of the Company.

3. SHARE REPURCHASE MANDATE

At the Annual General Meeting, it will also be proposed, by way of an ordinary resolution, that the Directors be granted a general and unconditional mandate to exercise all the powers of the Company to repurchase Shares on the Stock Exchange up to a maximum of 10% of the issued share capital at the date of passing of such ordinary resolution. As at the Latest Practicable Date, there were 1,086,186,000 Shares in issue. Subject to the passing of the relevant ordinary resolution approving the Share Repurchase Mandate and on the basis that no further Shares are issued or repurchased by the Company between the Latest Practicable Date and the date of the Annual General Meeting, the Company will be authorised to repurchase a maximum of 108,618,600 Shares under the Share Repurchase Mandate.

The Share Repurchase Mandate, if granted, will continue in force until the earliest of (a) the conclusion of the next annual general meeting of the Company after the Annual General Meeting; (b) the expiration of the period within which the next annual general meeting of the Company is required to be held under its Article of Association or the laws applicable to the Company; and (c) the date upon which such authority is revoked or varied by an ordinary resolution passed at a general meeting of the Company.

– 6 –

LETTER FROM THE BOARD

An explanatory statement containing information relating to the Share Repurchase Mandate as required pursuant to the Listing Rules is set out in Appendix I on pages 11 to 13 of this circular.

4. ADOPTION OF THE NEW SHARE OPTION SCHEME

The Company proposes to adopt the New Share Option Scheme which complies with Chapter 17 of the Listing Rules. The purpose of the New Share Option Scheme is to provide incentives to participants thereunder who contribute to the Group and to enable the Group to recruit high caliber employees. Save for the Existing Share Option Scheme, as at the Latest Practicable Date, the Company does not have any other share option scheme involving the issue of Shares.

New Share Option Scheme

As at the Latest Practicable Date, there were in issue an aggregate of 1,086,186,000 existing Shares. Assuming that there is no change in the issued share capital between the period from the Latest Practicable Date and the date of the adoption of the New Share Option Scheme, the maximum number of new Shares allowed to be issued under the New Share Option Scheme and any other share option schemes of the Company on the Adoption Date will be 108,618,600 new Shares, representing approximately 10% of the total issued ordinary share capital of the Company. Pursuant to Note (2) to Rule 17.03(3) of the Listing Rules, the limit on the number of Shares which may be issued upon exercise of all outstanding options granted and yet to be exercised under the New Share Option Scheme and any other schemes must not exceed 30% of the number of Shares in issue from time to time. No options may be granted under any schemes of the Company if this will result in this 30% limit being exceeded.

Restriction on the time of grant of options

Pursuant to Rule 17.05 of the Listing Rules, a grant of options may not be made after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been published in accordance with Rule 2.07C of the Listing Rules. In particular, during the period commencing one month immediately preceding the earlier of:

• (1) the date of the board meeting (as such date is first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of the Company’s interim or annual results; and

• (2) the deadline for the Company to publish its interim or annual results announcement under the Listing Rules, and ending on the date of the results announcement.

At the Annual General Meeting, an ordinary resolution will be proposed for the Company to approve and adopt the New Share Option Scheme, pursuant to which the Participants may be granted the Options to subscribe for Shares upon and subject to the terms and conditions of the New Share Option Scheme.

– 7 –

LETTER FROM THE BOARD

The adoption of the New Share Option Scheme is conditional upon, inter alia, (1) the approval of the Shareholders in the Annual General Meeting; and (2) the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the Shares to be issued pursuant to the exercise of the options granted under the New Share Option Scheme.

A summary of the principal terms of the New Share Option Scheme is set out in Appendix II to this circular. A copy of the New Share Option Scheme is available for inspection at the Company’s head office and principal place of business in Hong Kong at 18/F, United Centre, 95 Queensway, Admiralty, Hong Kong during normal business hours from the date hereof up to and including the date of the Annual General Meeting.

General

There is no general requirement of any minimum period for which an option must be held before it can be exercised although the Board will be empowered under the New Share Option Scheme to impose at its discretion any such minimum period at the time of grant of any particular option. The Board has the discretion to require a particular Grantee to achieve certain performance targets specified at the time of grant before any option granted under the New Share Option Scheme can be exercised. In addition, the Board will be empowered to determine the exercise price of a Share in respect of any particular option granted under the New Share Option Scheme on the basis set out in Appendix II. This level of discretion retained by the Board at the time of grant provides flexibility and allows the Board to tailor the terms of the grants to suit different Participants so that such Participants will be encouraged to subscribe for the Shares pursuant to the options granted by the Company as incentives and rewards for their contribution to the Group. The subscription of Shares by the Participants will further contribute towards the profitability and success of the Group. None of the Directors are trustees of the New Share Option Scheme and the Company does not at present intend to appoint a trustee to the New Share Option Scheme. An application will be made to the Listing Committee of the Stock Exchange for granting approval for the listing of, and permission to deal in, the Shares which may fall to be issued pursuant to the exercise of any options that may be granted under the New Share Option Scheme.

5. RE-ELECTION OF RETIRING DIRECTORS

As at the Latest Practicable Date, Mr. Chen Wantian, Mr. Song Guosheng and Mr. Chen Guoyu are the executive Directors; and Dr. Jiang Tao, Dr. Li Haitao and Dr. Zeng Yilong are the independent non-executive Directors.

Pursuant to Article 84 of the Articles of Association, Mr. Chen Guoyu and Dr. Zeng Yilong will retire at the Annual General Meeting by rotation. All retiring Directors, being eligible, will offer themselves for re-election at the forthcoming annual general meeting.

Details of the Directors proposed to be re-elected at the Annual General Meeting are set out in Appendix III on page 25 of this circular.

– 8 –

LETTER FROM THE BOARD

6. VOTING BY POLL

All the resolutions set out in the notice of the Annual General Meeting will be decided by poll in accordance with the Listing Rules. The poll results will be published on the Company’s website at www.chinasilver.hk and the Stock Exchange’s website at www.hkexnews.hk after the conclusion of the Annual General Meeting.

7. ANNUAL GENERAL MEETING

Notice of the Annual General Meeting is set out on pages 26 to 31 of this circular. A form of proxy for use at the Annual General Meeting is enclosed with this circular. Whether or not you are able to attend the meeting, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to Computershare Hong Kong Investor Services Limited, the Company’s branch share registrar in Hong Kong, of Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Annual General Meeting. Completion and return of the form of proxy will not prevent you from attending and voting at the Annual General Meeting or any adjourned meeting if you so wish.

8. ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in Appendix I (Explanatory Statement on the Share Repurchase Mandate), Appendix II (Further Information and Summary of the Principal Terms of the New Share Option Scheme) and Appendix III (Details of Retiring Directors Proposed for Re-election) to this circular.

9. CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed during the following periods:

• (i) From 17 April 2015 to 21 April 2015 (both days inclusive), during which period no transfer of Shares will be effected. In order to qualify for the right to attend and vote at the Annual General Meeting, all transfers accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on 16 April 2015 for registration of transfer.

• (ii) From 27 April 2015 to 29 April 2015 (both days inclusive), during which period no transfer of Shares will be effected. In order to establish entitlement to the proposed final dividend (payable on or about 29 May 2015), all transfers accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on 26 April 2014 for registration of transfer.

– 9 –

LETTER FROM THE BOARD

10. RECOMMENDATION

The Board considers that (i) the grant of the Issue Mandate; (ii) the grant of the Share Repurchase Mandate; (iii) the adoption of the New Share Option Scheme and (iv) the re-election of retiring Directors as set out respectively in the notice of the Annual General Meeting are all in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of all such resolutions to be proposed at the Annual General Meeting.

Yours faithfully, For and on behalf of China Silver Group Limited Chen Wantian

Chairman

– 10 –

EXPLANATORY STATEMENT ON SHARE REPURCHASE MANDATE

APPENDIX I

The following is the explanatory statement required to be sent to the Shareholders under the Listing Rules to enable them to make an informed decision on whether to vote for or against the ordinary resolution in relation to the Share Repurchase Mandate to be proposed at the Annual General Meeting.

1. SHARE REPURCHASE PROPOSAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 1,086,186,000 fully paid-up Shares. It is proposed that up to a maximum of 10% of the fully paid-up Shares in issue at the date of passing of the relevant resolution to approve the Share Repurchase Mandate may be repurchased by the Directors. Subject to the passing of the relevant ordinary resolution to approve the Share Repurchase Mandate and on the basis that no further Shares are issued between the Latest Practicable Date and the date of the Annual General Meeting, the Company would be allowed under the Share Repurchase Mandate to repurchase up to a maximum of 108,618,600 fully paid-up Shares.

2. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its Shareholders as a whole to have a general authority from the Shareholders to enable the Company to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and its Shareholders as a whole.

3. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Articles of Association and the applicable laws of the Cayman Islands.

The Directors propose that such repurchases of Shares be appropriately financed by the Company’s internal resources and/or available banking facilities. There might be a material adverse impact on the working capital or gearing position of the Company as compared with the position disclosed in the audited consolidated financial statements contained in the annual report of the Company for the year ended 31 December 2014 and taking into account the financial position of the Company as at the Latest Practicable Date, in the event that the proposed share repurchases were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Share Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

– 11 –

EXPLANATORY STATEMENT ON SHARE REPURCHASE MANDATE

APPENDIX I

4. DIRECTORS’ UNDERTAKING AND CORE CONNECTED PERSONS

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, the exercise of the power of the Company to make repurchases pursuant to the Share Repurchase Mandate will be in accordance with the Listing Rules and the applicable laws of the Cayman Islands.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their Associates have a present intention, in the event that the Share Repurchase Mandate is approved by the Shareholders, to sell any Shares to the Company.

No Core Connected Persons have notified the Company of a present intention to sell any Shares to the Company, or such Core Connected Persons have undertaken not to do so, in the event that the Company is authorised to make repurchases of its Shares.

5. EFFECT OF THE TAKEOVERS CODE

If a Shareholder’s proportionate interest in the voting rights of the Company increases as a result of a share repurchase, any such increase will be treated as an acquisition for the purpose of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert (depending on the level of increase of Shareholders’ interests) could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code. As at the Latest Practicable Date, Rich Union Enterprises Limited was directly or indirectly interested in 397,080,000 Shares as disclosed under the SFO, which constituted approximately 36.6% of the voting rights attaching to the issued share capital of the Company. If the Share Repurchase Mandate is exercised in full, which is considered to be unlikely in the current circumstances, Rich Union Enterprises Limited will (assuming that there is no change in the relevant facts and circumstances) hold approximately 40.6% of the voting rights attaching to the issued share capital of the Company. To the best knowledge and belief of the Directors, such increase will not give rise to an obligation to make a mandatory offer under the Takeovers Code.

Save as aforesaid, the Directors are not aware of any consequences which would arise under the Takeovers Code as a consequence of any repurchases made pursuant to the Share Repurchase Mandate. Nevertheless, the Directors have no present intention to exercise the Share Repurchase Mandate and will not effect repurchase to such an extent which would result in the Company failing to comply with Rule 8.08 of the Listing Rules which requires a public float of 25%.

6. SHARE REPURCHASES MADE BY THE COMPANY

There was no repurchase by the Company of the Shares during the previous six months preceding the Latest Practicable Date.

– 12 –

EXPLANATORY STATEMENT ON SHARE REPURCHASE MANDATE

APPENDIX I

7. MARKET PRICES

The highest and lowest prices at which the Shares were traded on the Stock Exchange during the 12 calendar months preceding the Latest Practicable Date are as follows:

		Shares	Shares
		Highest Price	Lowest Price
Year	Month	per Share	per Share
		HK$	HK$
2014	March	1.27	0.96
	April	1.03	0.90
	May	0.97	0.87
	June	1.02	0.85
	July	1.29	0.94
	August	2.45	1.22
	September	2.70	1.47
	October	1.95	1.46
	November	1.90	1.65
	December	2.00	1.57
2015	January	2.00	1.74
	February	2.09	1.77
	March (up to the Latest Practicable Date)	2.50	1.96

– 13 –

APPENDIX II FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

SUMMARY OF TERMS

The New Share Option Scheme contains the following terms:

(i) Purpose

The purpose of the New Share Option Scheme is to reward the Participants who have contributed to our Group and to encourage the Participants to work towards enhancing the value of our Company and its Shares for the benefit of our Company and its Shareholders as a whole.

(ii) Who may join

Our Directors may, at their discretion, invite the Participants to take up the Options at a price calculated in accordance with paragraph (iv) below. An Offer shall remain open for acceptance by the Participant concerned for a period of 28 days from the Date of Grant provided that no such Offer shall be open for acceptance after the expiry of the Option Period or after the New Share Option Scheme is terminated or after the Participant has ceased to be a Participant. An Offer is deemed to be accepted when the Company receives from the Grantee the Offer letter signed by the Grantee specifying the number of Shares in respect of which the Offer is accepted, and a remittance to the Company of HK$1.00 as consideration for the grant of Option. Such remittance is not refundable in any circumstances. The Offer shall specify the terms on which the Option is granted. Such terms may at the discretion of our Board, include, among other things, (aa) the minimum period for which an Option must be held before it can be exercised; and/or (bb) a performance target that must be reached before the Option can be exercised in whole or in part; and (cc) any other terms, all of which may be imposed (or not imposed) either on a case-by-case basis or generally.

Any Offer may be accepted in respect of less than the number of Shares in respect of which it is offered provided that it is accepted in respect of a whole board lot for dealing in Shares on the Stock Exchange or an integral multiple thereof. To the extent that the Offer is not accepted within 28 days from the date on which the letter containing the Offer is delivered to that Participant in the manner indicated above, it shall be deemed to have been irrevocably declined.

No Offer shall be made to, nor shall any Offer be capable of acceptance by, any Participant at a time when the Participant would or might be prohibited from dealing in the Shares by the Listing Rules or by any other applicable rules, regulations or law.

The Directors may or may not set performance targets that must be achieved before the options can be exercised, but no such performance targets are presently prescribed under the New Share Option Scheme.

The rules of the New Share Option Scheme enable the Directors to determine the terms and conditions of any option based in each case on relevant factors as they consider appropriate. The Directors believe that the authority given to them under the New Share Option

– 14 –

APPENDIX II

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

Scheme to set any minimum holding period and/or performance targets as conditions in any option granted and the requirement for a minimum subscription price as well as the selection criteria prescribed by the rules of the New Share Option Scheme will serve to protect the value of the Company and any of its subsidiaries as well as to achieve the purpose of the New Share Option Scheme.

(iii) Grant of Options to connected persons or any of their associates

Any grant of Options to any Director, chief executive or substantial shareholder (as such term is defined in the Listing Rules) of the Company, or any of their respective associates under the New Share Option Scheme or any other share option schemes of the Company or any of its Subsidiaries shall be subject to the prior approval of the independent non-executive Directors (excluding independent non-executive Directors who are the proposed Grantees of the Options in question). Where any grant of Options to a substantial shareholder or an independent non-executive Director, or any of their respective associates, would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled or outstanding) to such person in the 12 month period up to and including the date of such grant:

• (aa) representing in aggregate over 0.1 per cent of the Shares in issue on the date of such grant; and

• (bb) having an aggregate value, based on the closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange on the Date of Grant, in excess of HK$5 million, such further grant of Options shall be subject to prior approval by resolution of the Shareholders (voting by way of poll). The Company shall send a circular to the Shareholders in accordance with the Listing Rules and all connected persons of our Company shall abstain from voting in favor of the resolution at such general meeting of the Shareholders.

(iv) Subscription Price

The Subscription Price shall be determined by the Board in its absolute discretion but in any event shall not be less than the higher of:

• (aa) the closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange on the Date of Grant which must be a Business Day;

• (bb) the average closing price of the Shares as stated in the daily quotations sheets issued by the Stock Exchange for the five Business Days immediately preceding the Date of Grant; and

• (cc) the nominal value of the Shares.

– 15 –

APPENDIX II

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

(v) Maximum number of Shares

• (aa) The maximum number of Shares which may be issued upon exercise of all Options to be granted under the New Share Option Scheme and any other share option schemes of the Company shall not, in the absence of Shareholders’ approval, in aggregate exceed 10% in nominal amount of the aggregate of Shares in issue (the “Scheme Mandate Limit”). Options lapsed in accordance with the terms of the New Share Option Scheme and (as the case may be) such other share option schemes of the Company will not be counted for the purpose of calculating the Scheme Mandate Limit.

The Company may renew the Scheme Mandate Limit at any time subject to prior Shareholders’ approval but in any event, the total number of Shares which may be issued upon exercise of all Options to be granted under the New Share Option Scheme and any other share option schemes of the Company under the limit as refreshed must not exceed 10% of the Shares in issue as at the date of the Shareholders’ approval of the renewed limit. Options previously granted under the New Share Option Scheme and any other share option schemes of the Company (including those outstanding, cancelled, lapsed in accordance with the terms or exercised options) will not be counted for the purpose of calculating the limit as renewed.

• (bb) Notwithstanding the foregoing, the Company may grant Options beyond the Scheme Mandate Limit to Participants if:

• 1 separate Shareholders’ approval has been obtained for granting Options beyond the Scheme Mandate Limit to Participants specifically identified by the Company before such Shareholders’ approval is sought; and

• 2 the Company, in connection with the seeking of such separate Shareholders’ approval, has first sent a circular to Shareholders containing such information as may be required by the Listing Rules then prevailing to be included in such circular.

• (cc) Subject to paragraph (dd) below, the maximum number of Shares issued and to be issued upon exercise of the Options granted to each Grantee under the New Share Option Scheme (including both exercised and outstanding Options) in any 12-month period shall not (when aggregated with any Shares subject to options granted during such period under any other share option scheme(s) of the Company other than those options granted pursuant to specific approval by the Shareholders in a general meeting) exceed 1% of the Shares in issue for the time being (the “Individual Limit”).

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APPENDIX II

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

• (dd) Where any further grant of Options to a Participant would result in the Shares issued and to be issued upon exercise of all Options granted and to be granted to such person (including exercised, cancelled and outstanding Options) in the 12-month period up to and including the date of such further grant representing in aggregate over 1% of the Shares in issue, such further grant must be separately approved by Shareholders in general meeting with such Participant and his associates abstaining from voting. The Company must send a circular to the Shareholders disclosing the identity of the Participant in question, the number and terms of the Options to be granted (and Options previously granted to such Participant) and such other information required under the Listing Rules.

• (ee) At any time, the maximum number of Shares which may be issued upon exercise of all Options which then have been granted and have yet to be exercised under the New Share Option Scheme and any other share option schemes of the Company shall not, in the absence of Shareholders’ approval, in aggregate exceed 30% of the Shares in issue from time to time.

(vi) Time of exercise of option

An Option may be exercised in accordance with the terms of the New Share Option Scheme at any time during the Option Period. After the expiration of the Option Period, no further Options shall be offered or granted but the provisions of the New Share Option Scheme shall remain in full force and effect in all other respects. Options granted during the life of the New Share Option Scheme shall continue to be exercisable in accordance with their terms of grant after the end of the ten-year period.

(vii) Rights are personal to grantees

An Option is personal to the Grantee and shall not be assignable or transferable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favor of any other person over or in relation to any Option.

(viii)(aa) Rights on termination of employment by dismissal

• 1 If the Grantee ceases to be a Participant by reason of the termination of his employment or directorship on the grounds of serious misconduct, or appears either to be unable to pay or to have no reasonable prospect of being able to pay his debts or has committed any act of bankruptcy or, has become insolvent or has made any arrangements or compromise with his creditors generally, or has been convicted of any criminal offense involving his integrity or honesty or on any other grounds on which an employer would be entitled to terminate his employment summarily, his Option will lapse automatically and not be exercisable (to the extent not already exercised) on or after the date of termination of his employment. To the extent that the Grantee has exercised the

– 17 –

APPENDIX II

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

Option in whole or in part pursuant to paragraph (xxiii) below, but the Shares have not been allotted to him, the Grantee shall be deemed not to have so exercised such Option and our Company shall return to the Grantee the amount of the Subscription Price for the Shares received by the Company in respect of the purported exercise of such Option.

• 2 If the Grantee who is an employee or a Director or another member of our Group ceases to be a Participant for any reason other than his death or termination of his employment or directorship on one or more of the grounds specified in paragraph (viii)(aa)(1) above, the Option shall lapse (to the extent not already exercised) on the date of cessation or termination of his employment (which date shall be the Grantee’s last actual working day with the Company or the relevant subsidiary whether salary is paid in lieu of notice or not) and shall on that day cease to be exercisable;

(bb) Rights on death

If the Grantee ceases to be a Participant by reason of his death before exercising his Option in full and none of the events which would be a ground for termination of his employment as described in paragraph (viii)(aa)(1) above have arisen, his personal representative(s) may exercise the Option up to the Grantee’s entitlement as at the date of death (to the extent not already exercised) within a period of twelve months following the date of his death provided that where any of the events set out in paragraphs (x), (xi), (xii) and (xiii) occurs prior to his death or within such period of 6 months following his death, then his personal representative(s) may so exercise the Option only within such of the various periods set out in such paragraphs provided further that if within a period of 3 years prior to the Grantee’s death, the Grantee had committed any of the acts specified in paragraph (vii)(aa)(1) which would have entitled the Company to terminate his employment prior to his death, the Board may at any time forthwith terminate the Option (to the extent not already exercised) by written notice to the Grantee’s legal personal representative(s) and/or to the extent the Option has been exercised in whole or in part by his legal personal representative(s), but Shares have not been allotted, he shall be deemed not to have so exercised such Option and the Company shall return to him the amount of the Subscription Price for the Shares received by our Company in respect of the purported exercise of such Option.

– 18 –

APPENDIX II

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

(ix) Effect of alterations to share capital

In the event of an alteration in the capital structure of our Company, whilst any Option remains exercisable, by way of capitalization of profits or reserves, bonus issue, rights issue, open offer, subdivision or, consolidation of shares, or reduction of the share capital of our Company in accordance with legal requirements and requirements of the Stock Exchange (other than any alteration in the capital structure of our Company as a result of an issue of Shares as consideration in a transaction to which our Company is a party), such corresponding adjustments (if any) shall be made to:

• (aa) the number or nominal amount of Shares subject to the Option so far as unexercised; or

• (bb) the Subscription Price,

or any combination thereof, provided that:

• 1 any such adjustments give a Grantee the same proportion of the equity capital of our Company as that to which that Grantee was previously entitled; and

• 2 notwithstanding paragraph (ix)(1) above, any adjustments as a result of an issue of securities with a price-dilutive element, such as a rights issue, open offer or capitalization issue shall be made in accordance with the provisions of Chapter 17 of the Listing Rules and the notes thereto and the supplementary guidance on the interpretation of the Listing Rules issued by the Stock Exchange from time to time (including the supplemental guidance attached to the letter from the Stock Exchange dated 5 September 2005 to all issuers relating to share option schemes),

but no such adjustments shall be made to the extent that a Share would be issued at less than its nominal value. In respect of any such adjustments, an independent financial advisor or auditor must confirm to the Directors in writing that the adjustments are in their opinion fair and reasonable.

(x) Rights on a general offer by way of takeover

In the event of a general offer by way of takeover (other than by way of scheme of arrangement) being made to all the Shareholders (or all such Shareholders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror) and such offer becomes or is declared unconditional prior to the expiry date of the relevant Option, the Company shall forthwith notify all the Grantees and any Grantee (or his legal personal representative) shall be entitled to exercise the Option in full (to the extent not already exercised) or to the extent as notified by the Company at any time within such period as shall be notified by the Company.

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APPENDIX II

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

(xi) Rights on a general offer by way of scheme of arrangement

In the event of a general offer by way of scheme of arrangement being made to all the Shareholders and has been approved by the necessary number of Shareholders at the requisite meetings, the Company shall forthwith notify all the Grantees and any Grantee (or his legal personal representative) may at any time thereafter, (but before such time as shall be notified by our Company) exercise the Option either to its full extent or to the extent notified by our Company.

(xii) Rights on winding up

In the event a notice is given by our Company to the Shareholders to convene a Shareholders’ meeting to consider and, if thought fit, approve a resolution to voluntarily wind up the Company, the Company shall forthwith give notice thereof to all Grantees and any Grantee (or his legal personal representative) may at any time thereafter (but before such time as shall be notified by the Company) exercise the Option either to its full extent or to the extent notified by the Company, and the Company shall as soon as possible and in any event no later than three days prior to the date of the proposed Shareholders’ meeting, allot and issue and register in the name of the Grantee such number of Shares to the Grantee which fall to be issued on such exercise.

(xiii) Rights on a compromise or arrangement

In the event a compromise or arrangement (other than a scheme of arrangement) between the Company and its members or creditors is proposed in connection with a scheme for the reconstruction or amalgamation of the Company, the Company shall give notice to all the Grantees on the same date as it gives notice of the meeting to its members or creditors to consider such a compromise or arrangement, and any Grantee (or his legal personal representative) may at any time thereafter (but before such time as shall be notified by the Company) exercise the Option either to its full extent or to the extent notified by the Company and the Company shall as soon as possible and in any event no later than three days prior to the date of the proposed Shareholders’ meeting, allot and issue and register in the name of the Grantee such number of Shares which fall to be issued on such exercise.

(xiv) Rights of Grantee ceasing to be Participant

In the event of a Grantee who is not an employee or a director of the Company or another member of the Group ceasing to be a Participant as and when determined by the Board by resolution for any reason other than his death our Board may by written notice to such Grantee within one month from the date of such cessation determine the period within which the Option (or such remaining part thereof) shall be exercisable following the date of such cessation.

(xv) Ranking of Shares

The Shares to be allotted upon the exercise of an Option shall be subject to all the provisions of the Memorandum of Association and Articles of Association of the Company for the time being in force and shall rank pari passu in all respects with the existing fully paid

– 20 –

APPENDIX II

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

Shares in issue on the date on which these Shares are allotted on exercise of the Option and accordingly shall entitle the holders to participate in all dividend or other distributions paid or made after the date on which the Shares are allotted other than any dividends or distributions previously declared or recommended or resolved to be paid or made if the record date thereof shall be on or before the date on which the Shares are allotted.

(xvi) Period of the New Share Option Scheme

The New Share Option Scheme was adopted for a period of ten years commencing from the Adoption Date. Our Company may, by ordinary resolution in a general meeting or, our Board, on such date as our Board determines, terminate the New Share Option Scheme at any time without prejudice to the exercise of Options granted prior to such termination.

(xvii) Alterations to the New Share Option Scheme

Those specific provisions of the New Share Option Scheme which relate to the matters set out in Rule 17.03 of the Listing Rules cannot be altered to the advantage of Participants, and changes to the authority of the Board in relation to any alteration of the terms of the New Share Option Scheme shall not be made, in either case, without the prior approval of Shareholders in general meeting. Any alterations to the terms and conditions of the New Share Option Scheme which are of a material nature, or any change to the terms of Options granted, must be approved by the Shareholders in general meeting, except where the alterations take effect automatically under the existing terms of the New Share Option Scheme. The New Share Option Scheme so altered must comply with Chapter 17 of the Listing Rules and the notes thereto and the supplementary guidance on the interpretation of the Listing Rules issued by the Stock Exchange from time to time (including the supplemental guidance attached to the letter from the Stock Exchange dated 5 September 2005 to all issuers relating to share option schemes).

(xviii) Conditions of the New Share Option Scheme

The New Share Option Scheme shall take effect subject to:

• (aa) the passing of the resolution by the Shareholders to approve and adopt the New Share Option Scheme and to authorize the Board to grant Options thereunder and to allot and issue Shares pursuant to the exercise of any Options;

• (bb) the Listing Committee (as defined in the Listing Rules) of the Stock Exchange granting the approval of the listing of and permission to deal in the Shares which fall to be issued pursuant to the exercise of Options; and

• (cc) the commencement of trading of the Shares on the Main Board of the Stock Exchange.

– 21 –

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX II

(xix) Lapse of Option

An Option shall lapse automatically and shall not be exercisable, to the extent not already exercised, on the earliest of:

• (aa) the expiry of the Option Period;

• (bb) the expiry of the periods referred to in paragraphs (viii)(aa), (viii)(bb), (x), (xi), (xii), (xiii) and (xiv) above respectively;

• (cc) the expiry of the period referred to in paragraph (x) above, subject to any court of competent jurisdiction not making an order to prohibit the offeror from acquiring the remaining Shares in the Offer, the relevant period within which Options may be exercised shall not begin to run until the discharge of the order in question or unless the Offer lapses or is withdrawn before that date;

• (dd) subject to the scheme of arrangement becoming effective, the expiry of the period referred to in paragraph (xi) above;

• (ee) the date of commencement of the winding-up of our Company;

• (ff) the date on which the Grantee ceases to be a Participant as referred to in paragraph (viii)(aa)(1) above;

• (gg) the date on which the Grantee commits a breach by selling, transferring, charging, mortgaging, encumbering or creating any interest in favor of any third party over or in relation to any Option; and

• (hh) subject to paragraph (viii)(aa)(2), the date the Grantee ceases to be a Participant for any other reason.

(xx) Termination of the New Share Option Scheme

The Company by ordinary resolution in general meeting or the Board may at anytime terminate the New Share Option Scheme and in such event no further Options may be granted but in all other respects the New Share Option Scheme shall remain in full force and effect in respect of Options which are granted during the life of the New Share Option Scheme and which remain unexpired immediately prior to termination of the operation of the New Share Option Scheme.

– 22 –

APPENDIX II

FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

(xxi) Restriction on Grant of Option

In addition, a grant of Options may not be made after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been published in the newspapers or in such other manner as prescribed by the Listing Rules. In particular, during the period commencing one month immediately preceding the earlier of:

• (aa) the date of the Board meeting of our Company (as such date is first notified to the Stock Exchange in accordance with the Listing Rules) for the approval of the Company’s results for any year, half-year, quarterly or, any other interim period (whether or not required under the Listing Rules); and

• (bb) the deadline for the Company to publish an announcement of its results for any year or half-year under the Listing Rules, or quarterly or any other interim period (whether or not required under the Listing Rules);

and ending on the date of the results announcement, no Option may be granted.

(xxii) Cancellation

Any Options granted but not exercised may be cancelled if the Participant so agrees and new Options may be granted to the Grantee provided that such new Options fall within the limits prescribed by paragraph (v), excluding the cancelled Options, and are otherwise granted in accordance with the terms of the New Share Option Scheme.

(xxiii) Exercise of Options

• (aa) An Option may, subject to the provisions of paragraph (v), be exercised in whole or in part (but if in part only, in respect of a board lot in which the Shares are traded on the Stock Exchange from time to time or an integral multiple thereof) in the manner set out in paragraphs (vi), (viii), (x), (xi), (xii), (xiii) and (xiv) by the Grantee (or, as the case may be, his legal personal representative(s)) by giving notice in writing to our Company stating that the Option is thereby exercised and the number of Shares in respect of which it is exercised. Each such notice must be accompanied by a remittance for the full amount of the Subscription Price multiplied by the number of Shares in respect of which the notice is given. Within 10 Business Days after receipt of the notice and the remittance of the full amount of the relevant aggregate Subscription Price and, where appropriate, receipt of the Auditors’ certificate or the certificate from the independent financial advisor to the Company pursuant to paragraph (v), the Company shall accordingly allot and issue the relevant number of Shares to the Grantee (or, as the case may be, his legal personal representative(s)) credited as fully paid and issue to the Grantee (or, as the case may be, his legal personal representative(s)) share certificates in respect of the Shares so allotted.

– 23 –

APPENDIX II FURTHER INFORMATION AND SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

• (bb) The exercise of any Option shall be subject to the members of the Company in general meeting approving any necessary increase in the authorized share capital of the Company. Subject thereto our Board shall make available sufficient authorized but unissued share capital of the Company to meet subsisting requirements on the exercise of Options.

• (cc) The Options do not carry any right to vote in general meeting of the Company, or any right, dividend, transfer or any other rights, including those arising on the liquidation of the Company.

• (dd) No Grantee shall enjoy any of the rights of a shareholder by virtue of the grant of an Option pursuant to the New Share Option Scheme, unless and until Shares are actually issued to the Grantee pursuant to exercise of such Option.

Values of all options that can be granted under the New Share Option Scheme

The Board considers that it is not appropriate or helpful to the Shareholders to state the value of all options that can be granted pursuant to the New Share Option Scheme as if they had been granted at the Latest Practicable Date. The Board believes that any statement regarding the value of the options as at the Latest Practicable Date will not be meaningful to the Shareholders, since the options to be granted shall not be assignable, and no holder of the option shall in any way sell, transfer, charge, mortgage or create any interest (legal or beneficial) in favour of any third party over or in relation to any option. In addition, the calculation of the value of the options is based on a number of variables such as the exercise price, the exercise period, interest rate, expected volatility and other relevant variables. The Board believes that any calculation of the value of the options as at the Latest Practicable Date based on a great number of speculative assumptions would not be meaningful and would be misleading to the Shareholders.

– 24 –

DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX III

Mr. Chen Guoyu (陳國裕) , aged 66, is the vice president and an executive Director of the Company. Mr. Chen joined the Group in 2011 and was appointed to the Board on August 16, 2012. He is responsible for strategic and development planning, management and human resources development of the Group.

Mr. Chen graduated at Zhejiang University (淅江大學) with a master’s degree in philosophy.

The Company has entered into a letter of appointment with Mr. Chen for a term of three years commencing from 5 December 2012 and either he or the Company may terminate such appointment at any time by giving at least three months’ notice in writing to the other. Save as disclosed, there is no other service contract entered into between Mr. Chen and the Company. Mr. Chen is entitled to a salary of HK$800,000 per annum. The remuneration of all Directors are determined by the Board having regard to the recommendation of the remuneration committee of the Company and with reference to the Director’s contributions, experience and relevant duties and responsibilities within the Company.

As at the Latest Practicable Date, Mr. Chen did not have any interest in the shares of the Company. Mr. Chen did not hold any directorship in other listed public companies.

Save as disclosed above, Mr. Chen confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his appointment and there is no other information that should be disclosed pursuant to paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

Dr. Zeng Yilong (曾一龍) , aged 43, was appointed as an independent non-executive Director on December 5, 2012. Dr. Zeng has over 18 years of experience in accounting, auditing and financial management. Dr. Zeng is the vice chief accountant of Datang Telecom Technology & Industry Group (大唐電信科技產業集團), a state-owned enterprise principally engaged in the production of high technology electronic information system components.

Dr. Zeng obtained his master’s degree in Business Administration and a doctoral degree in Business Administration (Accounting) from Xiamen University (廈門大學) in July 2000 and December 2006, respectively.

The Company has entered into a letter of appointment with Dr. Zeng for a term of three years commencing from 5 December 2012 and either he or the Company may terminate such appointment at any time by giving at least three months’ notice in writing to the other. Save as disclosed, there is no other service contract entered into between Dr. Zeng and the Company. Dr. Zeng is entitled to a Director fee of HK$200,000 per annum. The remuneration of all Directors are determined by the Board having regard to the recommendation of the remuneration committee of the Company and with reference to the Director’s contributions, experience and relevant duties and responsibilities within the Company.

As at the Latest Practicable Date, Dr. Zeng did not have any interest in the shares of the Company. Dr. Zeng did not hold any directorship in other listed public companies.

Save as disclosed above, Dr. Zeng confirmed that there are no other matters that need to be brought to the attention of the Shareholders in connection with his appointment and there is no other information that should be disclosed pursuant to paragraphs 13.51(2)(h) to 13.51(2)(v) of the Listing Rules.

– 25 –

NOTICE OF ANNUAL GENERAL MEETING

==> picture [121 x 86] intentionally omitted <==

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)

NOTICE IS HEREBY GIVEN that the annual general meeting of China Silver Group Limited (the “Company”) will be held at 35/F, Central Plaza, Regus Conference Center, 18 Harbour Road, Hong Kong on 21 April 2015 at 2:30 p.m. for the following purposes:

1. To receive and consider the audited financial statements and the reports of the directors of the Company (the “ Directors ”) and the auditors of the Company (the “ Auditors ”) for the year ended 31 December 2014;

2. To re-elect Mr. Chen Guoyu as executive Director, to re-elect Dr. Zeng Yilong as independent non-executive Director and to authorise the board of the Directors (the “ Board ”) to fix the remuneration of the Directors;

3. To re-appoint Deloitte Touch Tohmatsu as Auditors and to authorise the Board to fix their remuneration;

4. To declare a final dividend of HK$0.05 per share of the Company for the year ended 31 December 2014;

5. As special business to consider and, if thought fit, pass the following resolutions as ordinary resolutions with or without amendments:

ORDINARY RESOLUTIONS

• A. “ THAT :

• (a) subject to paragraph (c) below and in substitution for all previous authorities, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional share of the Company (the “Shares”) and to make or grant offers, agreements, options and other rights, or issue warrants and other securities including bonds, debentures and notes convertible into Shares, which would or might require the exercise of such powers, be and is hereby generally and unconditionally approved;

– 26 –

NOTICE OF ANNUAL GENERAL MEETING

• (b) the approval in paragraph (a) above shall authorise the Directors during the Relevant Period to make or grant offers, agreements, options and other rights, or issue warrants and other securities, which would or might require the exercise of such powers after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital allotted or to be allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) above, otherwise than pursuant to or in consequence of:

• (i) a Rights Issue (as defined below); or

• (ii) the exercise of any option under any share option scheme or similar arrangement for the time being adopted for the grant or issue to option holders of Shares; or

• (iii) any scrip dividend or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Articles of Association of the Company; or

• (iv) any adjustment, after the date of grant or issue of any options, rights to subscribe or other securities referred to above, in the price at which Shares shall be subscribed, and/or in the number of Shares which shall be subscribed, on exercise of relevant rights under such options, warrants or other securities, such adjustment being made in accordance with, or as contemplated by, the terms of such options, rights to subscribe or other securities; or

• (v) a specified authority granted by the shareholders of the Company (the “ Shareholders ”) in general meeting,

shall not exceed the aggregate of:

• (aa) 20 percent of the issued share capital of the Company in issue at the date of passing of this Resolution; and

• (bb) (if the Directors are so authorised by a separate ordinary resolution of the Shareholders) the nominal amount of any share capital of the Company repurchased by the Company subsequent to the passing of this Resolution (up to a maximum equivalent to 10 percent of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this Resolution),

and the said approval shall be limited accordingly; and

– 27 –

NOTICE OF ANNUAL GENERAL MEETING

• (d) for the purposes of this Resolution:

“ Relevant Period ” means the period from the passing of this Resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiry of the period within which the next annual general meeting of the Company is required by the Articles of Association of the Company or any other applicable laws of the Cayman Islands to be held; or

• (iii) the revocation, variation or renewal of this Resolution by an ordinary resolution of the Shareholders in general meeting.

“ Rights Issue ” means an offer of Shares, or an offer of warrants, options or other securities giving rights to subscribe for Shares, open for a period fixed by the Directors to holders of Shares on the registers of members of the Company on a fixed record date in proportion to their then holdings of such Shares (subject in all cases to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong).”

B. “ THAT :

• (a) subject to paragraph (b) below, the exercise by the Directors during the Relevant Period (as defined below) of all powers of the Company to repurchase its own Shares on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) or on any other stock exchange on which the Shares may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, be and is hereby generally and unconditionally approved;

• (b) the aggregate nominal amount of Shares to be repurchased by the Company pursuant to paragraph (a) above during the Relevant Period shall not exceed 10 percent. of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this Resolution and the authority pursuant to paragraph (a) above shall be limited accordingly; and

– 28 –

NOTICE OF ANNUAL GENERAL MEETING

• (c) for the purposes of this Resolution:

“ Relevant Period ” means the period from the passing of this Resolution until whichever is the earliest of:

  - (i) the conclusion of the next annual general meeting of the Company;

  - (ii) the expiry of the period within which the next annual general meeting of the Company is required by the Articles of Association of the Company or any other applicable laws of the Cayman Islands to be held; or

  - (iii) the revocation, variation or renewal of this Resolution by an ordinary resolution of the Shareholders in general meeting.”

• C. “ THAT , conditional upon the passing of Resolution No. 5B, the general mandate granted to the Directors (pursuant to Resolution No. 5A or otherwise) and for the time being in force to exercise the powers of the Company to allot Shares be and is hereby extended by the addition to the aggregate nominal amount of the share capital which may be allotted or agreed conditionally or unconditionally to be allotted by the Directors pursuant to such general mandate of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted by the resolution set out as Resolution No. 5B.”

• D. “ THAT , subject to and conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the new Shares of HK$0.01 each to be issued pursuant to the exercise of options which may be granted under the new share option scheme (“New Share Option Scheme”, the rules of which are summarised in the circular of the Company dated 18 March 2015 and contained in the document marked “A” produced to the meeting and initialed by the Chairman of the meeting for the purpose of identification only), the rules of the New Share Option Scheme be and are hereby approved and adopted and that the Directors be and are hereby authorised to:

• (i) administer the New Share Option Scheme under which the options will be granted to eligible participants under the New Share Option Scheme to subscribe for Shares;

• (ii) modify and/or amend the rules of the New Share Option Scheme from time to time subject to the provisions of such rules;

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NOTICE OF ANNUAL GENERAL MEETING

• (iii) issue and allot from time to time such number of Shares as may be required to be issued pursuant to the exercise of the options under the New Share Option Scheme; and

• (iv) make application at the appropriate time to the Stock Exchange, and any other stock exchange upon which the Shares may for the time being be listed, for the listing of, and permission to deal in, the Shares which may thereafter from time to time issued and allotted pursuant to the exercise of the options under the New Share Option Scheme.”

By Order of the Board China Silver Group Limited Moy Yee Wo Matthew Company Secretary

Hong Kong, 18 March 2015

Principal Place of Business in Hong Kong:

18th Floor United Centre 95 Queensway Admiralty Hong Kong

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Every member entitled to attend and vote at the above meeting (or at any adjournment thereof) (the “ AGM ”) is entitled to appoint another person as his proxy. Any member who holds 2 or more Shares may appoint more than one proxy. A proxy need not be a member of the Company. The number of proxies appointed by a clearing house (or its nominee) is not subject to the aforesaid limitation.

2. Where there are joint holders of any Share, any one of such persons may vote at the AGM, either personally or by proxy, in respect of such share as if he were solely entitled thereto; but if more than one of such joint holders be present at the AGM 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 will alone be entitled to vote in respect thereof.

3. To be valid, a form of proxy, together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy of that power or authority), must be deposited at the Company’s share registrar 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 not less than 48 hours before the time appointed for the holding of the AGM. Completion and return of the form of proxy will not be preclude a member from attending the AGM and voting in person if he so wishes.

4. The register of members of the Company will be closed during the following periods:

5. (i) From 17 April 2015 to 21 April 2015 (both days inclusive), during which period no transfer of Shares will be effected. In order to qualify for the right to attend and vote at the AGM, all transfers accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on 16 April 2015 for registration of transfer.

6. (ii) From 27 April 2015 to 29 April 2015 (both days inclusive), during which period no transfer of Shares will be effected. In order to establish entitlement to the proposed final dividend (payable on or about 29 May 2015), all transfers accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on 26 April 2015 for registration of transfer.

7. All the resolutions set out in this notice shall be decided by poll.

As at the date hereof, the Board comprises Mr. Chen Wantian, Mr. Song Guosheng and Mr. Chen Guoyu as executive Directors; Dr. Jiang Tao, Dr. Li Haitao and Dr. Zeng Yilong as independent non-executive Directors.

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