CM Energy Tech Co., Ltd. — Proxy Solicitation & Information Statement 2010

Mar 2, 2010

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in TSC Offshore Group Limited (the “ Company ”), you should at once hand this circular to the purchaser or the transferee or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sales or transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) 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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TSC Offshore Group Limited

(Incorporated in the Cayman Island with limited liability)

(Stock code: 206)

CONTINUING CONNECTED TRANSACTION

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

A letter from the board of directors of the Company is set out from pages 4 to 8 of this circular. A letter from the independent board committee of the Company is set out on page 9 of this circular. A letter from Guangdong Securities Limited containing its advice to the independent board committee and the independent shareholders of the Company is set out from pages 10 to 17 of this circular.

A notice convening the extraordinary general meeting of the Company to be held at Salon Room V, 5/F., Harbour Grand Hong Kong, 23 Oil Street, North Point, Hong Kong on Friday, 19 March 2010 at 10:00 a.m. or any adjournment is set out from pages 25 to 26 of this circular. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy to the Company’s principal place of business at Unit 910, 9/F., China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the extraordinary general meeting of the Company or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting at the extraordinary general meeting of the Company or any adjournment should you so wish.

3 March 2010

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**Letter from **	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
**Letter from **	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
**Letter from **	Guangdong Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix	– General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		25

DEFINITIONS

In this circular, the following terms shall have the meanings set out below unless the context requires otherwise:

• “Announcement”

the announcement of the Company dated 10 February 2010

• “Annual Caps”

• the proposed annual caps for the two years ending 31 December 2011 under the New Master Agreement

• “associate(s)”

• shall have the meaning as ascribed to it under the Listing Rules

• “Board”

the board of Directors

• “Commencement Date”

• the date of which the conditions precedent under the New Master Agreement are fulfilled

• “Company”

• TSC Offshore Group Limited, a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on main board of the Stock Exchange

• “connected person(s)”

• shall have the meaning as ascribed to it under the Listing Rules

• “Continuing Connected Transaction”

• the sale and purchase of the Products by the Group to the YRS Group as contemplated under the New Master Agreement

• “Director(s)”

• director(s) of the Company

• “EGM”

• an extraordinary general meeting of the Company to be convened on 19 March 2010 for the Independent Shareholders to consider and, if thought fit, to approve the New Master Agreement and the Annual Caps

• “Equipment”

• the equipment used on offshore platforms including but not limited to power control package, jacking control system, BOP handling and transport, burner boom, etc.

• “Group”

• the Company and its subsidiaries

– 1 –

DEFINITIONS

• “Guangdong Securities” or “Independent Financial Adviser”

• Guangdong Securities Limited, a licensed corporation to carry out type 1 (dealing in securities), type 2 (dealing in futures contracts), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities as defined under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the New Master Agreement and the Annual Caps

• “HK$”

• Hong Kong dollar(s), the lawful currency of Hong Kong

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “Independent Board Committee”

• the independent committee of the Board comprising the independent non-executive Directors, namely Mr. Chan Ngai Sang, Kenny, Mr. Bian Junjiang, Mr. Guan Zhichuan and Mr. Robert William Fogal Jr. to advise the Independent Shareholders in respect of the New Master Agreement and the Annual Caps

• “Independent Shareholders”

• Shareholders other than YRS and its associates

• “independent third party(ies)”

• shall have the meaning as ascribed to it under the Listing Rules

• “Latest Practicable Date”

• 1 March 2010, being the latest practicable date prior to the printing of this circular for ascertaining certain information herein

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

• “New Master Agreement”

• the master agreement entered into between the Company and YRS on 10 February 2010 in relation to the Continuing Connected Transaction

• “Old Master Agreement”

• the master agreement entered into between the Company and YRS on 4 June 2008 in relation to the sale of the Products (which include the Equipment and the Turnkey Project(s)) by the Group to the YRS Group for the two years ended 31 December 2009

• “PRC”

the People’s Republic of China

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DEFINITIONS

• “Products”

the Equipment and the Turnkey Project(s)

• “RMB” Renminbi, the lawful currency of the PRC

• “SFO”

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• “Share(s)”

• ordinary share(s) of HK$0.10 each in the share capital of the Company

• “Shareholder(s)” holder(s) of the Shares

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

• “substantial shareholder(s)”

• shall have the meaning as ascribed to it under the Listing Rules

• “Turnkey Project(s)”

• the project(s) related to offshore platforms including (i) cantilever and drill floor projects; (ii) rack material cutting projects; (iii) other material processing projects; and (iv) design, engineering and consulting service projects

• “USD” US dollars, the lawful currency of the United States of America

• “YRS”

• Yantai Raffles Shipyard Limited, a company incorporated under the laws of Singapore with limited liability and the shares of which are traded on the Oslo Over-the-Counter Market

• “YRS Group”

• YRS and its subsidiaries

• “YRSI”

• YRS Investments Limited, a wholly-owned subsidiary of YRS

• “%” per cent.

For the purpose of this circular, the amounts denominated in RMB have been translated (for information only) into HK$ using the exchange rates of RMB1.00:HK$0.8942 in 2008 and RMB1.00:HK$0.8826 in 2009 and all amounts denominated in USD have been translated (for information only) into HK$ using the exchange rate of USD1.00:HK$7.8. No representation is made that any amounts in RMB, USD or HK$ can be or could have been converted at the relevant dates at the above rates or any other rates at all.

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LETTER FROM THE BOARD

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TSC Offshore Group Limited

(Incorporated in the Cayman Island with limited liability)

(Stock code: 206)

Executive Directors: Mr. Jiang Bing Hua Mr. Zhang Menggui

Non-executive Directors: Mr. Jiang Longsheng Mr. Brian Chang

Independent non-executive Directors: Mr. Chan Ngai Sang, Kenny Mr. Bian Junjiang Mr. Guan Zhichuan Mr. Robert William Fogal Jr.

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

Head office and principal place of business in Hong Kong: Unit 910, 9/F. China Merchants Tower Shun Tak Centre 200 Connaught Road Central Hong Kong

3 March 2010

To the Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION

INTRODUCTION

Reference is made to the announcement of the Company dated 10 February 2010 regarding of the New Master Agreement and the Annual Caps.

The purpose of this circular is to provide you with, among other things, (i) further details of the of the New Master Agreement and the Annual Caps; (ii) the recommendation from the Independent Board Committee in relation to the New Master Agreement and the Annual Caps; (iii) a letter of advice from Guangdong Securities to the Independent Board Committee and the Independent Shareholders in relation to the New Master Agreement and the Annual Caps; and (iv) a notice of EGM at which resolution(s) will be proposed to consider and, if thought fit, approve the New Master Agreement and the Annual Caps.

In view of the expiry of the Old Master Agreement on 31 December 2009 and the intention of the Company to continue its business transactions with YRS under the Old Master Agreement in the coming future, on 10 February 2010, the Company (as seller)

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LETTER FROM THE BOARD

entered into the New Master Agreement with YRS (as buyer) in relation to the sale of the Products (which include the Equipment and the Turnkey Project(s)) by the Group to the YRS Group for the period from the Commencement Date to 31 December 2011.

Details of the terms of the New Master Agreement are as below:

Terms of the New Master Agreement

Date: 10 February 2010 Effective period: From the Commencement Date to 31 December 2011 (both days inclusive) Seller: The Company Buyer: YRS Nature of transaction: Pursuant to the New Master Agreement, the Company agreed to sell and YRS agreed to purchase the Products (which include the Equipments and the Turnkey Project(s)). It is agreed that each sale and purchase of the Equipment and the Turnkey Project(s) will be performed by the respective subsidiaries of the Company and YRS under separate contracts in accordance with the terms and conditions of the New Master Agreement.

Annual Caps: The Annual Caps under the New Master Agreement for each of the two years ending 31 December 2011 are both USD200 million (equivalent to approximately HK$1,560 million).

Historical annual caps and usages:

The historical annual caps under the Old Master Agreement for the two years ended 31 December 2009 were RMB589 million and RMB1,028 million respectively.

During the year ended 31 December 2008, the Group entered into four supply contracts with YRS under the Old Master Agreement. Those four contracts covered the supply of two burner booms and three bulk handling systems with total contract value of approximately RMB8 million (equivalent to approximately HK$8.95 million or approximately USD1,150,000) for the year ended 31 December 2008. The actual turnover from such sale represented approximately 0.34% of the Group’s audited total turnover of approximately USD160,113,000 for the said financial year.

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LETTER FROM THE BOARD

For the year ended 31 December 2009, the Group entered into one supply contract with YRS under the Old Master Agreement. This contract covered the supply of a BOP handling and transport system with the contract value of approximately RMB15.65 million (equivalent to approximately HK$17.73 million) for the year ended 31 December 2009.

Basis of the Annual Caps:

The Annual Caps were determined by the Company after taking into account of (i) the estimated demand for the Products by the YRS Group for the period from the Commencement Date to 31 December 2011; and (ii) the expected selling price of the Products during the period from the Commencement Date to 31 December 2011.

Pursuant to the terms of the New Master Agreement, the Continuing Connected Transaction shall be conducted on normal commercial terms, in particular: (i) the Continuing Connected Transaction will be on terms no less favourable to the Company than terms available to or from (as appropriate) independent third parties to the Company; (ii) the Continuing Connected Transaction will be conducted in the ordinary and usual course of business of the Company and after arm’s length negotiations; and (iii) the Continuing Connected Transaction will not exceed the Annual Caps for the period from the Commencement Date to 31 December 2011.

In relation to the above, the price of the Products will be set based on the estimated costs of the Equipments and the Turnkey Project(s) when separate contracts are entered into by the respective subsidiaries of the Company and YRS, and such cost-plus basis is a method which the Company would normally use to determine the selling price of its products (including those the Company sells to the independent third parties to the Company). The selling price is negotiated in arm’s length terms. As for the settlement terms, they will also be finalised when separate contracts are entered into by those respective subsidiaries of the Company and YRS. Such separate contracts shall be settled in cash in accordance with milestone payment term upon the satisfactory completion of different production stages.

INFORMATION ON THE YRS GROUP

The YRS Group is principally engaged in the construction of various marine and offshore rigs including jack-up drilling rigs, semi-submersible drilling rigs, platform supply vessels and luxury yachts.

As at the Latest Practicable Date, YRS was a substantial shareholder of the Company, which through its wholly-owned subsidiary, YRSI, owns approximately 6.51% of the issued share capital of the Company. YRS was also owned as to (i) approximately 31% by Mr. Brian Chang (a non-executive Director who, through his wholly-owned companies and YRS, is beneficially interested in approximately 16.55% of the issued share capital of the Company); and (ii) approximately 50.01% by China International Marine Containers (Group) Co., Limited (being a substantial shareholder of the Company which, through its indirect wholly-owned subsidiary and YRS, is beneficially interested in approximately 14.11% of the issued share capital of the Company) and its associates.

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LETTER FROM THE BOARD

REASONS FOR THE CONTINUING CONNECTED TRANSACTION

The principal activities of the Group are the construction, manufacturing and trading of rig products and technology (including rig electrical control system and other rig equipment) and oilfield expendables and supplies, the provision of rig turnkey solutions and the provision of consultancy services.

As mentioned in the foregoing, the Continuing Connected Transaction will be conducted in the ordinary and usual course of business of the Group and each transaction under the New Master Agreement will be negotiated on an arm’s length basis and be conducted on normal commercial terms or on terms no less favourable to the Company than terms available to or from (as appropriate) independent third parties to the Company. In addition, the Directors expected that the Continuing Connected Transaction will provide a stable source of revenue to the Group in the future. In view of all the above, the Directors believe that the terms of the New Master Agreement are fair and reasonable so far as the Independent Shareholders are concerned, and the Continuing Connected Transaction and the Annual Caps are in the interests of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATION

As at the Latest Practicable Date, YRS was a substantial shareholder of the Company, which through its wholly-owned subsidiary, YRSI, owns approximately 6.51% of the issued share capital of the Company. YRS is also owned as to (i) approximately 31% by Mr. Brian Chang (a non-executive Director who, through his wholly-owned companies and YRS, is beneficially interested in approximately 16.55% of the issued share capital of the Company); and (ii) approximately 50.01% by China International Marine Containers (Group) Co., Limited (being a substantial shareholder of the Company which, through its indirect wholly-owned subsidiary and YRS, is beneficially interested in approximately 14.11% of the issued share capital of the Company) and its associates. Accordingly, YRS is a connected person of the Company under Chapter 14 of the Listing Rules. Furthermore, as the applicable percentage ratios for the Annual Caps of the Continuing Connected Transaction exceed 2.5% and are more than HK$10 million, the Continuing Connected Transaction contemplated under the New Master Agreement constitutes non-exempt continuing connected transaction for the Company under Chapter 14A of the Listing Rules is subject to the reporting, announcement and independent shareholders’ approval (by way of poll at the EGM) requirements under the Listing Rules. YRS, Mr. Brian Chang, China International Marine Containers (Group) Co., Limited (who are interested in 42,800,000 Shares, 108,872,800 Shares and 92,800,000 Shares, being approximately 6.51%, 16.55% and 14.11% of the issued share capital of the Company respectively) and their respective associates shall abstain from voting on the approval of the New Master Agreement and the Annual Caps at the EGM.

An Independent Board Committee comprising Mr. Chan Ngai Sang, Kenny, Mr. Bian Junjiang, Mr. Guan Zhichuan and Mr. Robert William Fogal Jr. (all being independent non executive Directors) has been established to (i) advise the Independent Shareholders as to whether the terms of the New Master Agreement are fair and reasonable so far as the Independent Shareholders are concerned and whether the Continuing Connected Transaction and the Annual Caps are in the interests of the Company and the Shareholders as a whole; and (ii) advise the Independent Shareholders on how to vote in respect of the New Master Agreement and the Annual Caps after taking into account the recommendation of Guangdong Securities, the Independent Financial Adviser appointed by the Company.

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LETTER FROM THE BOARD

EGM

A notice convening the EGM to be held at Salon Room V, 5/F., Harbour Grand Hong Kong, 23 Oil Street, North Point, Hong Kong on Friday, 19 March 2010 at 10:00 a.m. or any adjournment is set out from pages 25 to 26 of this circular.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the meeting in person, you are requested to complete and return the accompanying form of proxy to the Company’s principal place of business at Unit 910, 9/F., China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong as soon as possible and in any event not less than 48 hours before the time for holding the EGM or adjourned meeting (as the case may be). Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or adjourned meeting (as the case may be) should you so wish.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee set out on page 9 of this circular which contains its recommendation to the Independent Shareholders in relation to the New Master Agreement and the Annual Caps. Your attention is also drawn to the letter of advice from Guangdong Securities set out from pages 10 to 17 of this circular which contains its advice and recommendation to the Independent Board Committee and the Independent Shareholders in relation to the New Master Agreement and the Annual Caps, and the principal factors and reasons taken into account in arriving at its recommendation.

The Board considers that the terms of the New Master Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and the Continuing Connected Transaction and the Annual Caps are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Independent Shareholders and Shareholders to vote in favour of the relevant ordinary resolution(s) regarding the New Master Agreement and the Annual Caps to be proposed at the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendix to this circular.

By order of the Board TSC Offshore Group Limited Jiang Bing Hua Executive Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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TSC Offshore Group Limited

(Incorporated in the Cayman Island with limited liability)

(Stock code: 206)

3 March 2010

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION

We refer to the circular dated 3 March 2010 issued by the Company (the “ Circular ”), of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

We have been appointed to advise the Independent Shareholders in connection with the New Master Agreement and the Annual Caps. Guangdong Securities has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

We are of the view that the terms of the New Master Agreement, after taking into account the advice of the Independent Financial Adviser as set out from pages 10 to 17 of the Circular, are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and that the Continuing Connected Transaction and the Annual Caps are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution(s) to be proposed at the EGM to approve the New Master Agreement and the Annual Caps.

Yours faithfully,

Independent Board Committee

Mr. Chan Ngai Sang, Mr. Bian Junjiang Mr. Guan Zhichuan Mr. Robert William Kenny Fogal Jr.

Independent non-Executive Directors

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LETTER FROM THE GUANGDONG SECURITIES

Set out below is the text of a letter received from Guangdong Securities, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders regarding the Continuing Connected Transaction for the purpose of inclusion in this circular.

Unit 2505-06, 25/F. Low Block of Grand Millennium Plaza 181 Queen’s Road Central Hong Kong 3 March 2010

• To: The independent board committee and the independent shareholders of TSC Offshore Group Limited

Dear Sirs,

CONTINUING CONNECTED TRANSACTION

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Continuing Connected Transaction, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the circular dated 3 March 2010 issued by the Company to the Shareholders (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

The Board announced on 10 February 2010 that on even date, the Company (as seller) entered into the New Master Agreement with YRS (as buyer) in relation to the sale of the Products (which include the Equipment and the Turnkey Project(s)) by the Group to YRS Group for the period from the Commencement Date to 31 December 2011 in view of the expiry of the Old Master Agreement on 31 December 2009 and the intention of the Company to continue its business transactions with YRS under the Old Master Agreement in the coming future.

As at the Latest Practicable Date, YRS was a substantial Shareholder, which through its wholly-owned subsidiary, YRSI, owned approximately 6.51% of the issued share capital of the Company. YRS was also owned as to (i) approximately 31% by Mr. Brian Chang (a non-executive Director who through his wholly-owned companies and YRS was beneficially interested in approximately 16.55% of the issued share capital of the Company); and (ii) approximately 50.01% by China International Marine Containers (Group) Co., Limited (being a substantial Shareholder which through its indirect wholly-owned subsidiary and YRS was beneficially interested in approximately 14.11% of the issued share capital of the Company) and its associates. Accordingly, YRS is a connected person of the Company under the Listing Rules. The Continuing Connected Transaction therefore constitutes a continuing connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to approval of the Independent Shareholders at the EGM.

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LETTER FROM THE GUANGDONG SECURITIES

An Independent Board Committee comprising Mr. Chan Ngai Sang, Kenny, Mr. Bian Junjiang, Mr. Guan Zhichuan and Mr. Robert William Fogal Jr. (all being independent non-executive Directors) has been formed to advise the Independent Shareholders on (i) whether the terms of the New Master Agreement are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the Continuing Connected Transaction and the Annual Caps are in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote in respect of the relevant resolution(s) to approve the New Master Agreement and the transactions contemplated thereunder and the Annual Caps at the EGM. We, Guangdong Securities Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

The Directors have collectively and individually accepted full responsibility for the accuracy of the information contained in the Circular and have confirmed, having made all reasonable enquiries, which to the best of their knowledge and belief, there are no other facts the omission of which would make any statement in the Circular misleading.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company and YRS or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Continuing Connected Transaction. In addition, we have no obligation to update this opinion to take into account events occurring after the issue of this letter. Nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, the sole responsibility of Guangdong Securities is to ensure that such information has been correctly extracted from the relevant sources.

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LETTER FROM THE GUANGDONG SECURITIES

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Continuing Connected Transaction and the Annual Caps, we have taken into consideration the following principal factors and reasons:

(1) Background of the Continuing Connected Transaction

Business overview of the Group

As referred to in the Board Letter, the principal activities of the Group are the construction, manufacturing and trading of rig products and technology (including rig electrical control system and other rig equipment) and oilfield expendables and supplies, the provision of rig turnkey solutions and the provision of consultancy services.

Set out below are the operating results of the Group for the six months ended 30 June 2009 and the two years ended 31 December 2008 as extracted from the Company’s interim report for the six months ended 30 June 2009 (the “ 2009 Interim Report ”) and its annual report for the year ended 31 December 2008 respectively:

Turnover – Rig products and technology – Rig turnkey solutions – Oilfield expendables and supplies – Consultancy services Total Gross profit Profit attributable to equity shareholders of the Company	For the six months ended 30 June 2009 US$’000 (unaudited) 8,222 53,636 7,066 765 69,689 21,870 5,891	For the year ended 31 December 2008 US$’000 (audited) 95,525 46,488 17,276 824 160,113 45,643 10,336	For the year ended 31 December 2007 US$’000 (audited) 19,652 – 13,944 731 34,327 13,833 3,933	Year on year change % 386.08 N/A 23.90 12.72
				366.43
				229.96 162.80

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LETTER FROM THE GUANGDONG SECURITIES

From the above table, we noted that the total turnover of the Group for the year ended 31 December 2008 increased by approximately 366.43% as compared to the prior year. As confirmed by the Directors, such improvement was mainly attributable to the considerable growth in the sale of rig products and technology as well as rig turnkey solutions, which in aggregate amounted to approximately 88.70% of the total turnover for the year ended 31 December 2008 as compared to the corresponding figure of approximately 57.25% for the prior year.

According to the 2009 Interim Report, the industry outlook was cautiously optimistic given the strong fundamentals underpinning the marine, oil and gas industries as well as the healthy order books of many major shipyards and the recent improvement in the price of crude oil to a level that was sustainable over the long term. The Directors confirmed that the Group will continue with its strategy to become a niche market leader in providing offshore rig solutions and rig expendables.

Information on YRS

As extracted from the Board Letter, YRS Group is principally engaged in the construction of various marine and offshore rigs including jack-up drilling rigs, semi-submersible drilling rigs, platform supply vessels and luxury yachts. As at the Latest Practicable Date, YRS was a substantial Shareholder, which through its wholly-owned subsidiary, YRSI, owned approximately 6.51% of the issued share capital of the Company. YRS was also owned as to (i) approximately 31% by Mr. Brian Chang (a non-executive Director who through his wholly-owned companies and YRS was beneficially interested in approximately 16.55% of the issued share capital of the Company); and (ii) approximately 50.01% by China International Marine Containers (Group) Co., Limited (being a substantial Shareholder which through its indirect wholly-owned subsidiary and YRS was beneficially interested in approximately 14.11% of the issued share capital of the Company) and its associates. Accordingly, YRS is a connected person of the Company under the Listing Rules.

Reasons for the Continuing Connected Transaction

According to in the Board Letter, the Directors expected that the Continuing Connected Transaction will provide a stable source of revenue to the Group in the future.

We have further enquired into the Directors regarding the reasons for the Continuing Connected Transaction and were advised by the Directors that the Group has been selling the Products to YRS Group since July 2007 while sales were recorded by the Group from the first quarter of the 2008 financial year. For the year ended 31 December 2009, the Group entered into one supply contract with YRS under the Old Master Agreement. This contract covered the supply of a BOP handling and transport system with the contract value of approximately RMB15.65 million (equivalent to approximately HK$17.73 million) for the year ended 31 December 2009. Given the expected substantial demand for the Products from YRS

– 13 –

LETTER FROM THE GUANGDONG SECURITIES

Group, the Directors are of the view that it is for the Group’s benefit to maintain continuing business relationship with YRS Group in order to secure a steady significant source of revenue.

Having considered that (i) it is the Group’s strategy to become a niche market leader and possess the global leading position on certain key products; (ii) YRS Group has been a purchaser of the Products since July 2007 and will be a repeated purchaser of the Products; and (iii) the Continuing Connected Transaction will likely to contribute steady significant source of revenue to the Group as represented by the Directors, we concur with the Directors that it would be beneficial for the Company to enter into the New Master Agreement with YRS and to carry out the Continuing Connected Transaction. For this reason, we consider the Continuing Connected Transaction to be in the interests of the Company and the Shareholders as a whole.

(2) Principal terms of the New Master Agreement

The following table tabulates a summary of the major terms of the New Master Agreement (details of which are contained under the section headed “Terms of the New Master Agreement” of the Board Letter):

Date: 10 February 2010 Effective period: From the Commencement Date to 31 December 2011 (both days inclusive) Seller: the Company Buyer: YRS Nature of transaction: Pursuant to the New Master the

Pursuant to the New Master Agreement, the Company agreed to sell and YRS agreed to purchase the Products (which include the Equipments and the Turnkey Project(s)). It is agreed that each sale and purchase of the Equipment and the Turnkey Project(s) will be performed by the respective subsidiaries of the Company and YRS under separate contracts in accordance with the terms and conditions of the New Master Agreement.

Annual Caps:

The Annual Caps under the New Master Agreement for each of the two years ending 31 December 2011 are both USD200 million (equivalent to approximately HK$1,560 million).

– 14 –

LETTER FROM THE GUANGDONG SECURITIES

Basis of the Annual Caps:

The Annual Caps were determined by the Company after taking into account of (i) the estimated demand for the Products by YRS Group for the period from the Commencement Date to 31 December 2011; and (ii) the expected selling price of the Products during the period from the Commencement Date to 31 December 2011.

Pursuant to the terms of the New Master Agreement, the Continuing Connected Transaction shall be conducted on normal commercial terms, in particular: (i) the Continuing Connected Transaction will be on terms no less favourable to the Company than terms available to or from (as appropriate) independent third parties to the Company; (ii) the Continuing Connected Transaction will be conducted in the ordinary and usual course of business of the Company and after arm’s length negotiations; and (iii) the Continuing Connected Transaction will not exceed the Annual Caps for the period from the Commencement Date to 31 December 2011.

For our due diligence purpose, we have reviewed (i) the separate contracts entered into among subsidiaries of the Company and YRS for the sale and purchase of the Products under the Old Master Agreement; and (ii) the contracts entered into among subsidiaries of the Company and independent third parties to the Group for the sale and purchase of similar products of the Group. We noted that the aforesaid contracts contain similar terms and clauses.

In addition, we have enquired into the Directors regarding the payment terms of the Continuing Connected Transaction (the “ Payment Terms ”) and were advised that the same will be set under those separate contracts to be entered into among respective subsidiaries of the Company and YRS for each sale and purchase of the Products. The Payment Terms will be determined in accordance with (i) the terms and conditions of the New Master Agreement; and (ii) the normal historical practice of the Group. We have also reviewed (i) the separate contracts entered into among subsidiaries of the Company and YRS for the sale and purchase of the Products under the Old Master Agreement; and (ii) the contracts entered into among subsidiaries of the Company and independent third parties to the Group for the sale and purchase of the similar products of the Group. We noted that YRS did not enjoy preferential arrangement regarding the Payment Terms under the aforementioned contracts. As such, we are of the view that the Payment Terms are fair and reasonable.

Based on the terms of the New Master Agreement as summarised above, in particular that the Continuing Connected Transaction will be conducted on normal commercial terms and will be on terms no less favourable to the Company than terms available to or from (as appropriate) independent third parties to the Company, we are of the view that the terms of the New Master Agreement are fair and reasonable so far as the Independent Shareholders are concerned.

– 15 –

LETTER FROM THE GUANGDONG SECURITIES

(3) Basis of the proposed Annual Caps

From the Board Letter and as outlined in the previous section, the Annual Caps were determined by the Company after taking into account of (i) the estimated demand for the Products by YRS Group for the period from the Commencement Date to 31 December 2011; and (ii) the expected selling price of the Products during the period from the Commencement Date to 31 December 2011.

In assessing the fairness and reasonableness of the Annual Caps, we have discussed with the Directors regarding the basis and assumptions underlying the projections of the estimated demand and the expected selling price of the Products. In this respect, the Directors confirmed that the Group’s plans to sell the Products to YRS Group for the two years ending 31 December 2011 were under negotiation between the Group and YRS Group. We have requested for copies of the relevant sales indication/proposals and found that YRS intended to build more rigs in various countries which would require the supply of the Products from the Group.

As for the expected selling price of the Products during the two years ending 31 December 2011, upon our enquiry, the Directors advised us that a cost-plus basis was applied for determining the expected selling price of the Products and as also confirmed by the Directors, such cost-plus basis is a method which the Company would normally use to determine the selling price of its products (including those the Company sells to the independent third parties to the Company). For our due diligence purpose, we have requested the Company to provide us with the relevant internal documents of the Company regarding the internal required minimum gross profit margin for each of the Products, and we noted from such documents that the selling price of each of the Products were set from those basis. In addition, we also noted from the internal documents of the Company that the expected gross profit margin of a project with YRS was the same as a project with an independent third party to the Group. As further advised by the Directors, there may or may not be material increase in the expected selling price of the Products subject to the then market condition when separate contracts are to be entered into among respective subsidiaries of the Company and YRS for each sale and purchase of the Products. The increase of the proposed annual cap for the period from the Commencement Date to 31 December 2010 as compared to the annual cap for the year ended 31 December 2009 is mainly attributable to the increase in expected demand for the Products from YRS Group based on the relevant sales indication/proposals between the Group and YRS Group.

In view of aforementioned basis and assumptions of determining the Annual Caps by referencing to the estimated demand for and expected selling price of the Products, we consider that the Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned.

– 16 –

LETTER FROM THE GUANGDONG SECURITIES

(4) Listing Rules implication

The Directors confirmed that the Company shall comply with the requirements of Rules 14A.37 to 14A.41 of the Listing Rules pursuant to which (i) the values of the transactions contemplated under the New Master Agreement must be restricted by way of cap amounts for the two years ending 31 December 2011; (ii) the terms of the transactions contemplated under the New Master Agreement must be reviewed by the independent non-executive Directors annually; (iii) details of independent non-executive Directors’ annual review on the terms of the transactions contemplated under the New Master Agreement must be included in the Company’s subsequent published annual reports and financial accounts. Moreover, it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming, amongst others, that the transactions contemplated under the New Master Agreement are carried out in accordance with the pricing policies of the Company and that the Annual Caps are not being exceeded, or that if there is any material amendment to the terms of the New Master Agreement, the Company, as confirmed by the Directors, shall comply with the applicable provisions of the Listing Rules governing continuing connected transactions. In view of the above stipulated requirements for the Continuing Connected Transaction pursuant to the Listing Rules, we are of the view that there are adequate measures in place to monitor the transactions contemplated under the New Master Agreement and hence the interest of the Independent Shareholders would be safeguarded.

RECOMMENDATION

Having considered the above factors and reasons, we are of the opinion that (i) the terms of the New Master Agreement are fair and reasonable so far as the Independent Shareholders are concerned; (ii) the Continuing Connected Transaction and the Annual Caps are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant resolution(s) to be proposed at the EGM to approve the New Master Agreement and the transactions contemplated thereunder and the Annual Caps and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully, For and on behalf of Guangdong Securities Limited Graham Lam Managing Director

– 17 –

APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries that to the best of their knowledge and belief, there are no other facts the omission of which would make any statement herein misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, the interests or short positions of the Directors and chief executive of the Company in the Shares, underlying Shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which any such Director and chief executive of the Company is taken or deemed to have under such provisions of the SFO); or which (b) were required to be entered into the register maintained by the Company, pursuant to Section 352 of the SFO; or which (c) were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules are set out below:

Long positions in ordinary Shares and underlying Shares of the Company:

							Number of
							underlying
						Number of	Shares
						underlying	(in respect of
						Shares	share options	Approximate
						(in respect of	granted	percentage of
		Number of issued ordinary Shares of				share options	under the	the
		HK$0.10 each in the Company				granted under	Refreshment	Company’s
	Personal	Family	Corporate	Other		the Pre-IPO	of the Post-	issued share
Name of Directors	interests	interests	interests	interests	Total	Scheme)	IPO Scheme)	capital
Mr. Zhang Menggui_(Note 1)_	2,832,000	–	136,871,200	–	139,703,200	864,000	960,000	21.51%
Mr. Jiang Bing Hua_(Note 1)_	2,832,000	–	136,871,200	–	139,703,200	864,000	960,000	21.51%
Mr. Jiang Longsheng	–	–	–	–	–	–	400,000	0.07%
Mr. Brian Chang_(Note 2)_	–	–	108,872,800	–	108,872,800	–	–	16.55%
Mr. Chan Ngai Sang, Kenny	–	–	–	–	–	–	500,000	0.09%
Mr. Bian Junjiang	–	–	–	–	–	–	350,000	0.06%
Mr. Guan Zhichuan	30,000	–	–	–	30,000	–	270,000	0.05%

– 18 –

APPENDIX

GENERAL INFORMATION

Notes:

1. Global Energy Investors, LLC. is the beneficial owner of 136,871,200 Shares. The entire share capital of Global Energy Investors, LLC. is beneficially owned as to 50% each by Mr. Zhang Menggui and Mr. Jiang Bing Hua, both are the executive Directors of the Company. Accordingly, both Mr. Zhang Menggui and Mr. Jiang Bing Hua are deemed to be interested in the 136,871,200 Shares beneficially owned by Global Energy Investors, LLC. under Part XV of the SFO.

2. YRS Investments Limited (“YRSI”) is ultimately wholly-owned by Yantai Raffles Shipyard Limited (“YRS”), a company incorporated in Singapore and the shares of which are traded on the Oslo Over-the-Counter Market. Accordingly, YRS is deemed to be interested in 42,800,000 Shares held by YRSI. YRS is owned as to approximately 31% by Mr. Brian Chang and his associates. Mr. Brian Chang is deemed to be interested in 42,800,000 Shares held by YRSI as he holds 31% interest of the issued share capital of YRSI and he currently serves as Deputy Chairman of YRS and also serves as director of certain subsidiaries of YRS. Mr. Brian Chang is also deemed to be interested in 16,072,800 Shares and 50,000,000 Shares held by his wholly-owned companies, Asian Infrastructure Limited and Windmere International Limited, respectively.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors, the chief executive of the Company nor their associates, had any other interests or short positions in the Shares, underlying Shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which any such Director or the chief executive of the Company is taken or deemed to have under such provisions of the SFO); or which (b) were required to be entered into the register maintained by the Company, pursuant to Section 352 of the SFO; or which (c) were required to be notified to the Company or the Stock Exchange, pursuant to the Model Code for Securities Transaction by Directors of Listed Companies contained in the Listing Rules.

(b) Persons who have interests or short positions which are discloseable under Divisions 2 and 3 of Part XV of the SFO

As at the Latest Practicable Date, the register of substantial shareholders maintained under section 336 of the SFO, shown that the Company has been notified of the following interests, being 5% or more of the Company’s issued share capital. These interests are in addition to those disclosed above in respect of the Directors and the chief executive of the Company.

– 19 –

APPENDIX

GENERAL INFORMATION

(i) Long positions in ordinary Shares and underlying Shares of the Company:

			Approximate
			percentage of
		Number of	the Company’s
	Capacity and nature	Shares/underlying	issued share
Name	of interest	Shares held	capital
Madam Chen Fengying	Interest of the	139,703,200 Shares and	21.51%
(Note 1)	spouse	1,824,000 share options
Madam Zhang Jiuli	Interest of the	139,703,200 Shares and	21.51%
(Note 2)	spouse	1,824,000 share options
Global Energy Investors,	Corporate	136,871,200 Shares	20.81%
LLC.(Note 3)
Mr. Brian Chang_(Note 4)_	Interest in controlled	108,872,800 Shares	16.55%
	entities
Windmere International	Corporate	50,000,000 Shares	7.60%
Limited_(Note 4)_
YRS Investments Limited	Corporate	42,800,000 Shares	6.51%
(Note 4)
Yantai Raffles Shipyard	Corporate	42,800,000 Shares	6.51%
Limited_(Note 4)_
Keywise Greater China	Corporate	33,747,000 Shares	5.13%
Opportunities Master
Fund_(Note 5)_
Keywise Capital	Corporate	33,747,000 Shares	5.13%
Management (HK)
Limited_(Note 5)_
China International	Corporate	92,800,000 Shares	14.11%
Marine Containers
(Group) Co., Ltd.
(Note 6)
China International	Corporate	50,000,000 Shares	7.60%
Marine Containers
(Hong Kong) Ltd.
(Note 6)
Sharp Vision Holdings	Corporate	50,000,000 Shares	7.60%
Limited_(Note 6)_

– 20 –

APPENDIX

GENERAL INFORMATION

Notes:

1. These interests represent the same block of Shares and share options held by Mr. Zhang Menggui as shown in the above section headed “DIRECTORS’ INTERESTS AND SHORT POSITIONS IN THE SECURITIES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS”. Since Madam Chen Fengying is the spouse of Mr. Zhang Menggui, she is deemed to be interested in the Shares and share options held by him under Part XV of the SFO.

2. These interests represent the same block of Shares and share options held by Mr. Jiang Bing Hua as shown in the above section headed “DIRECTORS’ INTERESTS AND SHORT POSITIONS IN THE SECURITIES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS”. Since Madam Zhang Jiuli is the spouse of Mr. Jiang Bing Hua, she is deemed to be interested in the Shares and share options held by him under Part XV of the SFO.

3. This interest represents the same block of corporate interest held by Mr. Zhang Menggui and Mr. Jiang Bing Hua as shown in the above section headed “DIRECTORS’ INTERESTS AND SHORT POSITIONS IN THE SECURITIES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS”.

4. YRS Investments Limited (“YRSI”) is ultimately wholly-owned by Yantai Raffles Shipyard Limited (“YRS”), a company incorporated in Singapore and the shares of which are traded on the Oslo Over-the-Counter Market. Accordingly, YRS is deemed to be interested in 42,800,000 Shares held by YRSI. YRS is owned as to approximately 31% by Mr. Brian Chang and his associates. Mr. Brian Chang is deemed to be interested in 42,800,000 Shares held by YRSI as he holds 31% interest of the issued share capital of YRSI and he currently serves as Deputy Chairman of YRS and serves as director of certain subsidiaries of YRS. Mr. Brian Chang is also deemed to be interested in 16,072,800 Shares and 50,000,000 Shares held by his wholly-owned companies, Asian Infrastructure Limited and Windmere International Limited, respectively.

5. Keywise Greater China Opportunities Master Fund is an investment fund registered in the Cayman Islands and is wholly-owned by Keywise Capital Management (HK) Limited, a company incorporated in Hong Kong.

6. Sharp Vision Holdings Limited (“Sharp Vision”) is the beneficial owner of 50,000,000 Shares. Sharp Vision is a wholly-owned subsidiary of China International Marine Containers (Hong Kong) Limited (“CIMC HK”), which in turn is a wholly-owned subsidiary of China International Marine Containers (Group) Company Limited (“CIMC Group”). Therefore, CIMC HK is deemed to be interested in the 50,000,000 Shares held by Sharp Vision under Part XV of the SFO. Besides, from the public available information and to the best of the Directors’ knowledge, YRS is being, directly or indirectly, held 50.01% by CIMC Group in January 2010, therefore CIMC Group is deemed to be interested in the 92,800,000 Shares of the Company.

7. (ii) Long positions in Shares of a subsidiary of the Company:

	Name of substantial	Percentage of
Name of subsidiary	shareholder	shareholding
TSC Deep Water System,	Mr. Dong E. Wheeler	29%
LLC.

– 21 –

APPENDIX

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, the Directors and the chief executive of the Company were not aware of any person (other than a Director or chief executive of the Company) who had any other interests or short positions in the Shares or underlying Shares and debentures of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or proposed Directors had any existing service contract or proposed service contract with any member of the Group which will not expire or is not determinable by the Company within one year without payment of compensation (other than statutory compensation).

4. DIRECTORS’ INTERESTS IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors or proposed Directors, directly or indirectly, had any interest in any assets which had since 31 December 2008 (being the date to which the latest published audited financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

There was no contract or arrangement subsisting as at the Latest Practicable Date, in which any of the Directors are materially interested and which is significant to the business of the Group.

5. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors and their respective associates had any interest in a business which competes or may compete with the businesses of the Group (as would be required to be disclosed under Rule 8.10 of the Listing Rules if each of them was a controlling shareholder).

6. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial and trading position of the Group since 31 December 2008 (being the date to which the latest published audited financial statements of the Group were made up) and up to the Latest Practicable Date.

– 22 –

APPENDIX

GENERAL INFORMATION

7. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has given opinion or advice which is contained in this circular:

Name Qualification Guangdong Securities a licensed corporation for type 1 (dealing in securities), type 2 (dealing in futures contracts), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO

Guangdong Securities has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and/or reference to its name or opinion in the form and context in which it appears.

As at the Latest Practicable Date, Guangdong Securities was not beneficially interested in the share capital of any member of the Group nor did they have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, Guangdong Securities did not, directly or indirectly, had any interest in any assets which had since 31 December 2008 (being the date to which the latest published audited financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

8. GENERAL

• (a) The registered address of the Company is at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

• (b) The head office and principal place of business of the Company in Hong Kong is at Unit 910, 9/F., China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong.

• (c) The company secretary of the Company is Ms. Cheung Wai Sze, Candy. Ms. Cheung graduated from Curtin University of Technology, Australia with a bachelor degree in commerce and obtained her master degree in professional accounting and information systems from City University of Hong Kong. She is an associate member of both The Institute Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries. Ms. Cheung has over 9 years of company secretarial and corporate affairs experience.

– 23 –

APPENDIX

GENERAL INFORMATION

• (d) The share registrar and transfer agent of the Company in Hong Kong is Tricor Investor Services Limited, at 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

• (e) In the event of any inconsistency, the English text of this circular shall prevail over the Chinese text.

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during business hours at the head office and principal place of business of the Company at Unit 910, 9/F., China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong from the date of this circular up to and including the date of EGM:

• (a) the agreements as referred to in this circular;

• (b) the letter of advice from Guangdong Securities; and

• (c) the letter of consent from Guangdong Securities.

– 24 –

NOTICE OF EGM

==> picture [115 x 61] intentionally omitted <==

TSC Offshore Group Limited

(Incorporated in the Cayman Island with limited liability)

(Stock code: 206)

NOTICE IS HEREBY GIVEN THAT the extraordinary general meeting (the “ Meeting ”) of TSC Offshore Group Limited (the “ Company ”) will be held at Salon Room V, 5/F., Harbour Grand Hong Kong, 23 Oil Street, North Point, Hong Kong on Friday, 19 March 2010 at 10:00 a.m. for the purpose of considering and, if thought fit, passing, with or without modification, the following resolutions as ordinary resolutions of the Company:

Terms used herein shall have the same meanings as defined in the circular of the Company dated 3 March 2010 unless the context otherwise requires.

ORDINARY RESOLUTIONS

“ THAT

• (1) the New Master Agreement (copy of which has been produced to this meeting marked “A” and signed by the chairman of the Meeting hereof for the purpose of identification) and the transactions contemplated thereunder and the Annual Caps of the Continuing Connected Transaction be and are hereby confirmed, ratified and approved; and

• (2) the Board be and is hereby authorised to take all such actions as it considers necessary or desirable to implement and give effect to the New Master Agreement and the Annual Caps.”

By order of the Board TSC Offshore Group Limited Jiang Bing Hua Executive Chairman

Hong Kong, 3 March 2010

Head office and principal place of business in Hong Kong: Unit 910, 9/F. China Merchants Tower Shun Tak Centre 200 Connaught Road Central Hong Kong

– 25 –

NOTICE OF EGM

Notes:

1. Any member of the Company entitled to attend and vote at the Meeting is entitled to appoint another person as his proxy to attend and vote in his stead. A member who is the holder of two or more shares may appoint more than one proxy to attend and vote on his behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed. A proxy need not be a member of the Company, but must attend the Meeting in person to represent you.

2. 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 thereof, must be deposited at the principal place of business of the Company in Hong Kong at Unit 910, 9/F., China Merchants Tower, Shun Tak Centre, 200 Connaught Road Central, Hong Kong not less than 48 hours before the time appointed for the holding of the Meeting or any adjourned meeting.

3. Completion and delivery of the form of proxy will not preclude a member from attending and voting in person at the Meeting if the member so desires and in such event, the instrument appointing a proxy shall be deemed to be revoked.

4. Where there are joint holders of any share, any one of such persons may vote at any meeting, either in person or by proxy, in respect of such share as if he was solely entitled thereto; but if more than one of such joint holders be present at any meeting the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding.

5. Shareholders are advised to read the circular to the Shareholders of the Company dated 3 March 2010 which contains information concerning the resolution(s) to be proposed in this notice.

– 26 –