CM Energy Tech Co., Ltd. - Proxy Solicitation & Information Statement 2015

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in 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 Group Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer, registered institution in securities, 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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TSC Group Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 206)

CONTINUING CONNECTED TRANSACTION

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

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Celestial Capital Limited

Terms used in this cover shall have the same meaning as defined in this circular.

A letter from the Board is set out from pages 4 to 9 of this circular. A letter from the Independent Board Committee is set out on page 10 of this circular. A letter from Celestial Capital, containing its advice to the Independent Board Committee and the Independent Shareholders, is set out from pages 11 to 20 of this circular.

A notice convening the EGM to be held at Falcon Room 1, Basement, Gloucester Luk Kwok, 72 Gloucester Road, Wanchai, Hong Kong on Friday, 5 June 2015 at 11:30 a.m. or immediately after the conclusion of the annual general meeting of the Company to be held at Falcon Room 1, Basement, Gloucester Luk Kwok, 72 Gloucester Road, Wanchai, Hong Kong on Friday, 5 June 2015 at 10:00 a.m. is set out from pages 27 to 28 of this circular.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s principal place of business in Hong Kong 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 EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting should you so wish.

20 May 2015

CONTENTS

			Page
Definitions	. .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the	Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from	the	Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Letter from	Celestial Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		11
Appendix	–	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
Notice of EGM		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27

– i –

DEFINITIONS

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

“Announcement”
the announcement of the Company dated 10 April 2015 in relation to the Transaction
“Annual Caps”

the proposed annual caps for the three years ending 31 December 2017 under the New Master Agreement

“associate(s)”
has the meaning ascribed to it under the Listing Rules
“Board”
the board of Directors
“Celestial Capital” or “Independent Financial Adviser”
Celestial Capital Limited, a licensed corporation to carry out type 1 (dealing in securities) and 6 (advising on corporate finance) regulated activities as defined under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the New Master Agreement and the Annual Caps
“CIMC Group”
China International Marine Containers (Group) Co., Limited, a company established in the PRC and the H shares of which are listed on the main board of the Stock Exchange and the A shares of which are listed on the Shenzhen Stock Exchange
“CIMC HK”
China International Marine Containers (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability and is wholly-owned by CIMC Group
“CIMC Raffles”
CIMC Raffles Offshore (Singapore) Limited (formerly known as Yantai Raffles Shipyard Limited), a company incorporated under the laws of Singapore with limited liability
“CIMC Raffles Group”
CIMC Raffles and its subsidiaries
“Commencement Date”
the date of which the conditions precedent under the New Master Agreement are fulfilled
“Company”
TSC Group Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Stock Exchange

– 1 –

DEFINITIONS

“connected person(s)”
“Directors”
“EGM”
“Equipment”
“Group”
“HK$”
“Hong Kong”
“Independent Board Committee”
“Independent Shareholders”
“Independent third party(ies)”
“Latest Practicable Date”
“Listing Rules”
has the meaning ascribed to it under the Listing Rules
the directors of the Company
the extraordinary general meeting of the Company to be held on 5 June 2015 to consider, and if thought fit, to approve the New Master Agreement and the transactions contemplated thereunder
the equipment used on offshore platforms including but not limited to power control package, jacking system, BOP handling and transport, burner boom, main deck crane, conductor tension unit, mechanical handling products, riser tension/riser handling system, bulk handling system, handling equipment and single drilling equipment
the Company and its subsidiaries
Hong Kong dollars, the lawful currency of Hong Kong
the Hong Kong Special Administrative Region of the PRC
the independent board committee of the Company formed to consider the terms of the New Master Agreement and the transactions contemplated thereunder
Shareholders other than CIMC Group, CIMC HK, Mr. Brian Chang, Mr. Yu Yuqun and their respective associates
a person(s) or entity(ies) who/which is(are) not a connected person(s) of the Company
19 May 2015, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

the Rules Governing the Listing of Securities on the Stock Exchange

– 2 –

DEFINITIONS

“New Master Agreement”

the master agreement entered into between the Company and CIMC Raffles on 10 April 2015 in relation to the Transaction

“Old Master Agreement” the master agreement entered into between the Company and CIMC Raffles on 24 April 2012 in relation to the sale of the Products by the Group to CIMC Raffles for the three years ended 31 December 2014
“PRC” the People’s Republic of China
“Products” the Equipment and the Turnkey Project(s)
“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 Shares
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Transaction” the sale of the Products by the Group to the CIMC Raffles Group as contemplated under the New Master Agreement
“Turnkey Project(s)” the project(s) or others related to offshore platforms including (i) cantilever and drill floor projects; (ii) rack material cutting projects; (iii) other material processing projects; (iv) design, engineering and consulting service projects; and (v) turnkey drilling and integrated solutions package
“USD” US dollars, the lawful currency of the United States of America
“%” per cent.

In this circular, unless otherwise specified, all amounts denominated in USD have been translated (for information only) into HK$ using the exchange rate of USD1.00: HK$7.8. Such translations should not be construed as a representation that the relevant amounts have been, could have been, or could be converted at that or any other rate or at all.

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LETTER FROM THE BOARD

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TSC Group Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 206)

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

Non-Executive Directors: Mr. Jiang Longsheng Mr. Brian Chang Mr. Yu Yuqun

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

Principal Place of Business in Hong Kong: Unit 910, 9th Floor China Merchants Tower Shun Tak Centre 200 Connaught Road Central Hong Kong

20 May 2015

To the Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION

INTRODUCTION

Reference is made to the Announcement.

The purpose of this circular is to provide you with, among other things, (i) details of the New Master Agreement and the transactions contemplated thereunder; (ii) the letter from the Independent Board Committee to the Independent Shareholders giving its recommendations in relation to the New Master Agreement and the Annual Caps; (iii) the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders containing its advice and recommendations on the New Master Agreement and the Annual Caps; and (iv) the notice of the EGM.

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LETTER FROM THE BOARD

CONTINUING CONNECTED TRANSACTION

In view of the expiry of the Old Master Agreement on 31 December 2014 and the intention of the Company to continue its business transactions with CIMC Raffles under the Old Master Agreement in the coming future, on 10 April 2015, the Company entered into the New Master Agreement with CIMC Raffles in relation to the sale of the Products (which include the Equipment and the Turnkey Project(s)) by the Group to the CIMC Raffles Group for the period from the Commencement Date to 31 December 2017.

Particulars of the New Master Agreement are described in the following section:

TERMS OF THE NEW MASTER AGREEMENT

Date: 10 April 2015 Effective period: From the Commencement Date to 31 December 2017 (both days inclusive)

Seller: The Company Buyer: CIMC Raffles

Nature of transaction:

Pursuant to the New Master Agreement, the Company agreed to sell and CIMC Raffles agreed to purchase the Products (which include the Equipment 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 CIMC Raffles 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 three years ending 31 December 2017 are USD100 million (equivalent to approximately HK$780 million).

Historical annual caps and usages:

The historical annual caps under the Old Master Agreement for the three years ended 31 December 2014 were USD200 million (equivalent to approximately HK$1,560 million) each year.

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LETTER FROM THE BOARD

The actual sale amounts under the Old Master Agreement for the three years ended 31 December 2014 were USD53.3 million (equivalent to approximately HK$415.74 million), USD44.2 million (equivalent to approximately HK$344.76 million) and USD29.2 million (equivalent to approximately HK$227.76 million) respectively.

Basis of the Annual Caps:

The Annual Caps were determined by the Company after taking into account of (i) the historical supply of the Products to the CIMC Raffles Group for the three years ended 31 December 2014; (ii) the estimated demand for the Products by the CIMC Raffles Group from the Commencement Date to 31 December 2017; and (iii) the expected selling price of the Products from the Commencement Date to 31 December 2017.

Pursuant to the terms of the New Master Agreement, the Transaction shall be conducted on normal commercial terms, in particular: (i) the 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 Transaction will be conducted in the ordinary and usual course of business of the Company and after arm’s length negotiations; and (iii) the Transaction will not exceed the Annual Caps for the period from the Commencement Date to 31 December 2017.

The Company has adequate internal control measures based on its trading database to ensure that the transactions under the New Master Agreement will be carried on terms no less favourable to the Company than the terms of other supply contracts to other purchasers who are independent third parties.

The Company maintains a trading database which contains the trading records including the prices of similar supply transactions since 2009 when the database was established. Further, the sales team and the marketing team of the Company conduct regular marketing research to investigate the prevailing market price of the same or substantially similar products offered by other competitors. The Company has established an internal approval procedure for comparing product quotation. After receiving an enquiry from the customer, the business unit of the Company would first assess the manufacturing or service costs of the products or service according to the technical specifications provided by the customer. The logistics department of the Company would also assess the shipping, handling, duties and other fees that would be incurred by the Company for supplying such products or services. The business unit of the Company would consolidate the said assessments and determine a recommended sales price. For the Equipment, as it is relatively standardised with slight customisation for different customers, the sales price is determined with reference to the (i) prevailing market price of the same or substantially similar products offered by other competitors and (ii) the average prices of the same or substantially similar products previously provided by the Company as recorded in the said trading database. For the Turnkey Projects, as they need more customisation to meet the customers’ needs, the price is determined with reference

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LETTER FROM THE BOARD

to (i) the costs for provision of equipment package and service; and (ii) the Company’s usual gross margin for the similar project subject to the Company’s review from time to time. In any event, as to the quotation to be provided to the CIMC Raffle Group, the business unit would ensure that the recommended sales price is no less favourable to the Company than those offered to independent third parties and are on an arm’s length basis under normal commercial terms. Upon the determination the recommended sales price, the said recommended sales price would then be passed to the Company’s management for approval. Depending on the amount of the quotation, the Company’s requisite approval level would range from the general manager of its regional office or business unit to the chief executive officer and two executive Directors as per the existing grant of authorization. During the quotation process, the Company’s sales department would update the price, payment terms and other relevant information (such as the date, the counterparty and the products or service provided for the relevant transaction) to the trading database. Therefore, the trading database contains the relevant information for each product quotation.

In view of the above, the Directors believe that adequate internal control measures of the Company are in place to compare the transaction records in the trading database with those of any proposed supply contracts under the New Master Agreement.

REASONS FOR THE TRANSACTION

The Company is a global product and service provider serving both the offshore and land drilling rig industry worldwide. 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), oilfield expendables and supplies, provision of rig turnkey solutions and engineering services.

CIMC Raffles is a limited liability company incorporated in Singapore. The CIMC Raffles Group operates offshore shipyard in the PRC and designs and builds facilities for the offshore oil and gas and the international marine industry. The CIMC Raffles Group also produces a wide range of offshore marine facilities, including but not limited to different types of rigs and vessels.

As mentioned in the foregoing paragraph of this circular, the 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 based on the Company’s trading database and internal control measures.

In addition, the Directors expected that the Transaction will provide a stable source of revenue to the Group in the future, which is in line with the Company’s long-term strategy of becoming a cost competitive provider of integrated solutions to the oil and gas drilling industry. In view of the above, the Directors (including the independent non-executive Directors) believe that the terms of the New Master Agreement (including the Annual Caps) are fair and reasonable so far as the Independent Shareholders are concerned, and the Transaction is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

As at the Latest Practicable Date, CIMC Group and CIMC HK own approximately 88.58% of CIMC Raffles through their wholly-owned subsidiary, CIMC Offshore Holdings Limited. CIMC Group, through its wholly-owned subsidiary, namely, CIMC HK, owns approximately 13.12% of the issued share capital of the Company. Mr. Yu Yuqun, being a non-executive Director, is a director of CIMC Raffles. Mr. Brian Chang, an ex-director and ex-shareholder of CIMC Raffles, is a non-executive Director who is also deemed to be interested in an aggregate of 66,072,800 Shares, representing approximately 9.34% of the issued share capital of the Company, through his wholly-owned companies which are Shareholders. CIMC Group, CIMC HK, Mr. Brian Chang and Mr. Yu Yuqun together with their respective associates are connected persons of the Company and the Transaction constitutes a continuing connected transaction for the Company under Chapter 14A of the Listing Rules.

Since the applicable percentage ratios as defined under Rule 14.07 of the Listing Rules for each of the Annual Caps exceed 25%, the Transaction constitutes non-exempt continuing connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the reporting, annual review, announcement and independent shareholders’ approval requirements. The Company will seek the Independent Shareholders’ approval of the New Master Agreement, the Transaction and the Annual Caps at the EGM by way of poll whereby any shareholder with a material interest in the Transaction shall abstain from voting. Accordingly, CIMC Group, CIMC HK, Mr. Brian Chang, Mr.Yu Yuqun and their respective associates shall abstain from voting. As Mr. Yu Yuqun and Mr. Brian Chang have material interest in the Transaction, they have also abstained from voting in the meeting of the Board approving the Transaction.

EGM

An ordinary resolution as set out in the notice of the EGM will be put to the vote of the Independent Shareholders by way of poll. An announcement will be made by the Company following the conclusion of the EGM to inform you of its results.

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LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider that the terms of the New Master Agreement (including the Annual Caps) are entered into in the ordinary and usual course of business of the Group, on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the New Master Agreement and the transactions contemplated thereunder.

The Independent Board Committee has been established to advise the Independent Shareholders on the terms of the New Master Agreement and the transactions contemplated thereunder. Celestial Capital has been appointed as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in this regard. The respective letters from the Independent Board Committee and Celestial Capital are set out on page 10 and from pages 11 to 20 of this circular respectively. You are advised to read the letters carefully before making your voting decision.

ADDITIONAL INFORMATION

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

Yours faithfully, For and on behalf of the Board of TSC Group Holdings Limited Jiang Bing Hua Executive Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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TSC Group Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 206)

20 May 2015

To the Independent Shareholders

Dear Sir or Madam,

CONTINUING CONNECTED TRANSACTION

We refer to the circular of the Company dated 20 May 2015 (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 as members of the Independent Board Committee to advise the Independent Shareholders on the terms of the New Master Agreement and the transactions contemplated thereunder. Celestial Capital has been appointed as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in this regard.

Having taken into account the advice and recommendations of Celestial Capital as set out from pages 11 to 20 of the Circular, we are of the opinion that the terms of the New Master Agreement and the transactions contemplated thereunder are entered into in the ordinary and usual course of business of the Group, on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the New Master Agreement and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of the

Independent Board Committee

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

– 10 –

LETTER FROM CELESTIAL CAPITAL

The following is the full text of the letter from Celestial Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders regarding the terms of the New Master Agreement and the transactions contemplated thereunder (including the Annual Caps) for the purpose of inclusion in this circular.

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Celestial Capital Limited 21st Floor, Low Block, Grand Millennium Plaza 181 Queen’s Road Central Hong Kong

20 May 2015

To the Independent Board Committee and the Independent Shareholders

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 terms of the New Master Agreement and the transactions contemplated thereunder (including the Annual Caps), particulars of which have been set out in the letter from the Board (the “Letter from the Board”) as contained in the circular dated 20 May 2015 (the “Circular”) issued by the Company to the Shareholders, of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

In view of the expiry of the Old Master Agreement on 31 December 2014 and the intention of the Company to continue its business transactions with CIMC Raffles under the Old Master Agreement in the coming future, the Company entered into the New Master Agreement with CIMC Raffles on 10 April 2015 in relation to the sale of the Products (which include the Equipment and the Turnkey Project(s)) by the Group to the CIMC Raffles Group for the period from the Commencement Date to 31 December 2017.

As at the Latest Practicable Date, CIMC Group and CIMC HK own approximately 88.58% of CIMC Raffles through their wholly-owned subsidiary, CIMC Offshore Holdings Limited. CIMC Group, through its wholly-owned subsidiary, namely, CIMC HK, owns approximately 13.12% of the issued share capital of the Company. Mr. Yu Yuqun, being a non-executive Director, is a director of CIMC Raffles. Mr. Brian Chang, an ex-director and ex-shareholder of CIMC Raffles, is a non-executive Director who is also deemed to be interested in an aggregate of 66,072,800 Shares, representing approximately 9.34% of the issued share capital of the Company, through his wholly-owned companies which are Shareholders. The Transaction constitutes non-exempt continuing connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the reporting,

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LETTER FROM CELESTIAL CAPITAL

annual review, announcement and independent shareholders’ approval requirements. CIMC Group, CIMC HK, Mr. Brian Chang, Mr. Yu Yuqun and their respective associates shall abstain from voting at the EGM.

The Independent Board Committee, comprising all of the independent non-executive Directors, namely Mr. Chan Ngai Sang, Kenny, Mr. Bian Junjiang, Mr. Guan Zhichuan and Mr. Robert William Fogal Jr., has been established to advise the Independent Shareholders as to whether the terms of the New Master Agreement and the transactions contemplated thereunder (including the Annual Caps) were entered into in the ordinary and usual course of business of the Group on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and whether such terms are in the interests of the Company and the Shareholders as a whole, and to advise the Independent Shareholders whether to vote in favour of the resolution to be proposed at the EGM to approve the New Master Agreement and the transactions contemplated thereunder (including the Annual Caps). In this regard, we have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders.

As at the Latest Practicable Date, Celestial Capital did not have any relationships or interests with the Company or CIMC Raffles that could reasonably be regarded as relevant to the independence of Celestial Capital. In the last two years, there was no engagement between the Group and Celestial Capital. Apart from normal professional fees paid or payable to us in connection with this appointment as the Independent Financial Adviser, no arrangements exist whereby we have received or will receive any fees or benefits from the Company or CIMC Raffles. Accordingly, we are qualified to give independent advice in respect of the New Master Agreement and the transactions contemplated thereunder (including the Annual Caps).

BASIS OF OUR OPINION

In formulating our opinion and recommendation in relation to the terms of the New Master Agreement and the transactions contemplated thereunder (including the Annual Caps), we have relied on the information, facts and representations provided by, and the opinions expressed by, the Directors and the management of the Company and its subsidiaries. We have also relied on the information, facts and representations contained or referred to in the Circular and have assumed that all information, facts, opinions and representations made or referred to in the Circular were true, accurate and complete at the time they were made and continue to be true and accurate on the date of the Circular. We have also assumed that all statements of beliefs, and opinions made by the Directors in the Circular were reasonably made after due enquiry and the expectations and intentions made by the Directors and the management of the Group will be met or carried out as the case may be. We consider that we have reviewed sufficient information to form a reasonable basis for our opinion and have no reason to doubt the truth, accuracy and completeness of the information, facts and representations provided to us by the Directors and the management of the Group. The Directors have confirmed to us that no material facts have been omitted from the information supplied and opinions expressed. We have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular or the reasonableness of the opinions and representations provided to us by the Directors and the management of the Group.

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LETTER FROM CELESTIAL CAPITAL

The Directors collectively and individually accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading.

We have relied on such information and opinions and have not, however, carried out any independent verification of the information provided by the Company, nor have we conducted any independent investigation into the business, affairs, operations, financial position or future prospects of the Company, CIMC Raffles or any of their respective subsidiaries or associates.

This letter is issued for the information of the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the terms of the New Master Agreement and the transactions contemplated thereunder. Except for its inclusion in the Circular, this letter is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation, we have considered the following principal factors and reasons:

1. Background of and reasons for entering into the New Master Agreement

Information on the Group

The Group’s turnover for the year ended 31 December 2014 had increased from approximately USD201.9 million to approximately USD270.6 million, representing an increase of approximately 34.0% as compared with the preceding year. As set out in the Company’s annual report for the year ended 31 December 2014, such increase was primarily due to (i) a 47.9% increase in the capital equipment and packages recognised revenue, which in turn mainly came from the rig turnkey package for the R-550D jack-up drilling rig; and (ii) 16.1% increase in oilfield expendables and supplies sales. The 40.9% increase in net profit attributable to equity shareholders was primarily due to the said increased revenue from the capital equipment and packages business segment and the improvements in overall operational efficiency and cost reduction measures.

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LETTER FROM CELESTIAL CAPITAL

Information on CIMC Raffles

Reasons for and benefits of entering into the New Master Agreement

The Group has been selling and supplying the Products to the CIMC Raffles Group since 2007. In 2010, the Old Master Agreement was entered into between Company and CIMC Raffles in relation to sale the Products (which include the Equipment and the Turnkey Project(s)) by the Group to the CIMC Raffles Group. It was agreed that each sale and purchase of the Equipment and the Turnkey Project(s) would be performed by the respective subsidiaries of the Company and CIMC Raffles under separate contracts in accordance with the terms and conditions of the Old Master Agreement. The Old Master Agreement expired on 31 December 2014.

As stated in the Letter from the Board, the actual sales amount under the Old Master Agreement for each of the three years ended 31 December 2014 amounted to approximately USD53.3 million (equivalent to approximately HK$415.7 million), USD44.2 million (equivalent to approximately HK$344.8 million) and USD29.2 million (equivalent to approximately HK$227.8 million) respectively, which accounted for approximately 29.0%, 21.9% and 10.8% of the turnover of the Group for the respective years. The Directors also expected the Transaction will provide a stable source of turnover to the Group in the future.

In light of the long-established business relationship between the Group and the CIMC Raffles Group, which is one of the major contributors to the Group’s turnover, the Directors are of the view that the entering into of the New Master Agreement will maintain a stable and substantial source of turnover to the Group and is in line with the Company’s long-term strategy of becoming a cost competitive provider of integrated solutions to the oil and rig drilling industry.

Having considered that (i) the Group’s long-term strategy of becoming a cost competitive provider of integrated solutions to the oil and gas drilling industry; (ii) the Group‘s long-established business relationship with the CIMC Raffles Group; and (iii) the Transaction is expected to provide a stable source of turnover to the Group in the future, we consider that the entering into of the New Master Agreement is in the ordinary and usual course of business of the Group and concur with the view of the Directors that it is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM CELESTIAL CAPITAL

2. Principal terms of the New Master Agreement

The New Master Agreement is essential a renewal of the Old Master Agreement, save for the revision of the Annual Caps from USD200 million (equivalent to approximately HK$1,560 million) to USD100 million (equivalent to approximately HK$780 million), we did not note any material change on the terms of the Old Master Agreement. As extracted from the Letter from the Board, the principal terms of the New Master Agreement are set out below:

Date: 10 April 2015

Effective period:

From the Commencement Date to 31 December 2017 (both days inclusive)

Seller: The Company Buyer: CIMC Raffles Nature of transaction: Pursuant to

Annual Caps:

The Annual Caps under the New Master Agreement for each of the three years ending 31 December 2017 are USD100 million (equivalent to approximately HK$780 million).

Pursuant to the terms of the New Master Agreement, the Transaction shall be conducted on normal commercial terms, in particular: (i) the Transaction will be on terms no less favourable to the Company than terms available to or from (as appropriate) independent third parties based on the Group’s trading database and internal control measures; (ii) the Transaction will be conducted in the ordinary and usual course of business of the Company and after arm’s length negotiations; and (iii) the Transaction will not exceed the Annual Caps for the period from the Commencement Date to 31 December 2017.

– 15 –

LETTER FROM CELESTIAL CAPITAL

According to the Letter from the Board, the Company maintains a trading database since 2009 when the database was established. Further, the sales team and the marketing team of the Company conduct regular marketing research to investigate the prevailing market price of the same or substantially similar products offered by other competitors. During the approval process, the Company’s sales department would update the price, payment terms and other relevant information (such as the date, the counterparty and the products or services provided for the relevant transaction) to the trading database. Therefore, the trading database will contain the relevant information for each product quotation.

We have been advised by the Company that all of their products being sold (including both the Products (including both the Equipment and the Turnkey Projects) being sold to the CIMC Raffles Group and all other products of the Company being sold to independent third parties) are subject to an internal quotation procedure. After receiving enquiry from the customers, the business unit of the Company would first assess the manufacturing or service costs of the products or services according to the technical specifications provided by the customer. The logistics department of the Company would also assess the shipping, handling, duties and other fees that would be incurred by the Company for supplying such products or services. The business unit of the Company would consolidate the said assessments and determine a recommended sales price.

For the Equipment, as it is relatively standardised with slight customisation for different customers, the sales price is determined with reference to the (i) prevailing market prices of the same or substantially similar products offered by other suppliers; and (ii) the average prices of the same or substantially similar products previously provided by the Company as recorded in the said trading database. For the Turnkey Projects, as they need customisation to meet the customers’ needs, the price is determined with reference to (i) the costs for provision of services; and (ii) the Company’s usual gross margin for the similar project subject to the Company’s review from time to time. In any event, as to the quotation to be provided to the CIMC Raffles Group, the sales department of the Company will determine the prevailing market price of the said same or substantially similar products and services by conducting continuous market research and the business unit will ensure that the recommended sales price and the margin are no less favourable to the Company than those offered to independent third parties and are on an arm’s length basis under normal commercial terms. Upon the determination the recommended sales price, the said recommended sales price would then be passed to the Company’s management for approval. Depending on the amount of the quotation, the Company’s requisite approval level would range from the general manager of its regional office or business unit to the chief executive officer and two executive Directors.

We have discussed with the management of the Company in respect of the abovementioned internal quotation procedures. We are given to understand that the abovementioned internal quotation procedure are in line with normal market practice within the offshore and land drilling rig industry. In addition, the continuing connected transaction under the New Master Agreement is subject to the

– 16 –

LETTER FROM CELESTIAL CAPITAL

measures as set out in the section headed “4. Annual review of the continuing connected transaction” below.

Considering that the Company will make references to market prices and historical selling prices when determining the price of the Transaction in accordance with the aforesaid internal quotation procedures and that proper measures are adopted to ensure the Company maintains an updated trading database and records of market prices, we consider that the said internal quotation procedures adopted by the Company can ensure that the Transaction will be conducted on normal commercial terms and not prejudicial to the interests of the Company and the Independent Shareholders.

We have also obtained and reviewed, on a sample basis, in aggregate 20 samples of supply contracts of the past transactions entered into between (i) the Group and the CIMC Raffles Group under the Old Master Agreement and (ii) the Group and independent third parties for the sale and purchase of similar products to the Products. In reviewing the sample sales contracts, we have selected samples that were (i) entered into during the period from 2012 to 2014; (ii) material in terms of sales amount; and (iii) similar in terms of products supplied. We noted that, for all the selected samples reviewed, the terms of the supply contracts entered under the Old Master Agreement are on normal commercial terms and on terms no less favourable to the Company than the terms of other supply contracts to other purchasers who are independent third parties.

We have reviewed the terms of the New Master Agreement and are not aware of any terms which are exceptional to normal market practice.

On the above basis, we are of the opinion that the terms of the New Master Agreement are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned.

3. The Annual Caps

Review of the historical transaction amounts

The annual caps under the Old Master Agreement for each of the three years ended 31 December 2014 was USD200 million (equivalent to approximately HK$1,560 million) (the “Old Annual Caps”). The actual sales amount under the Old Master Agreement for each of the three years ended 31 December 2014 amounted to approximately USD53.3 million (equivalent to approximately HK$415.7 million), USD44.2 million (equivalent to approximately HK$344.8 million) and USD29.2 million (equivalent to approximately HK$227.8 million) respectively, representing an utilisation rate of approximately 26.7%, 22.1% and 14.6% of the Old Annual Caps respectively.

We have discussed with the management of the Company in respect of the decrease in the actual sales amount under the Old Master Agreement and were informed that the Company recognised the turnover from the Products on a percentage of completion method. The said decrease in the actual sales amount was due to the fact that there were only 2 units of packages (for sales recognition) carried forward to 2014 while there were 3 units and 4 units of packages carried forward to 2013 and 2012, respectively. We have also been

– 17 –

LETTER FROM CELESTIAL CAPITAL

informed by the management of the Company that the plunge in the oil price in the second half of 2014 triggered widespread slow-downs in the exploration and production activities and cut-backs in capital expenditures in the oil and gas industry, which in turn induced the lower sales of the Products and utilisation rate of the annual cap in 2014.

Assessment of the proposed Annual Caps

The proposed Annual Caps under the New Master Agreement for each of the three years ending 31 December 2017 is USD100 million (equivalent to approximately HK$780 million). As set out in the Letter from the Board, the Annual Caps were determined by the Company after taking into account of (i) the historical supply of the Products to the CIMC Raffles Group for the three years ended 31 December 2014; (ii) the estimated demand for the Products by the CIMC Raffles Group from the Commencement Date to 31 December 2017; and (iii) the expected selling prices of the Products from the Commencement Date to 31 December 2017.

In order to consider and assess the fairness and reasonableness of the proposed Annual Caps, we have discussed with the Company the bases and assumptions underlying the determination of the estimated demand for and the expected selling prices of the Products for the period from the Commencement Date to 31 December 2017 and have been advised that the estimations were determined with general reference to the actual historical selling prices and purchase amount of the Products by the CIMC Raffles Group and the anticipated market conditions and economic outlook in the following years.

In addition, for our due diligence purpose, we have requested the Company to provide us with relevant indication and/or proposal from the CIMC Raffles Group regarding its estimated demand for and expected selling prices of the Products for the period from the Commencement Date to 31 December 2017 and we have obtained from the Company a procurement plan, which was prepared and estimated by the Company according to quotation requests issued by the CIMC Raffles Group and the project conferences conducted between the Group and CIMC Raffles Group, with the breakdown of the estimated sales amounts of each Equipment and Turnkey Project(s) expected to be sold to the CIMC Raffles Group for the period from the Commencement Date to 31 December 2017 (the “Procurement Plan”). We noted that, from the Procurement Plan, the aggregate of the estimated sales amount of the Equipment and Turnkey Project(s) expected to be sold to the CIMC Raffles Group is slightly below USD100 million (equivalent to approximately HK$780 million) for each of the three years ending 31 December 2017.

We have also obtained and reviewed, on a sample basis, (i) the expected selling prices for the Products contained in the Procurement Plan; and (ii) the quotations issued by the Group to independent third parties for the sale and purchase of products similar to the Products contained in the Procurement Plan and noted that the expected selling prices contemplated under the Procurement Plan are no less favourable to the Company than the prices offered to other purchasers who are independent third parties.

Taking into account the above, we consider the Annual Caps in respect of the New Master Agreement is fair and reasonable so far as the Company and the Independent Shareholders are concerned.

– 18 –

LETTER FROM CELESTIAL CAPITAL

However, Shareholders should note that the Annual Caps relate to future events and they do not represent a forecast of turnover to be generated from the Transaction. Consequently, we express no opinion as to how closely the actual amounts to be generated under the Transaction correspond with the Annual Caps.

4. Annual review of the continuing connected transaction

Pursuant to Rules 14A.55 and 14A.56 of the Listing Rules, the continuing connected transaction under the New Master Agreement is subject to the following requirements:

(i) the independent non-executive Directors must confirm in the annual reports and accounts that the continuing connected transaction has been entered into:
in the ordinary and usual course of business of the Group;
on normal commercial terms or better; and
according to the agreement governing it on terms that are fair and reasonable and in the interests of the Company and the Shareholders as a whole; and
(ii) the Company must engage its auditors to report on the continuing connected transaction for each financial year of the Company and that the Company’s auditors must provide a letter to the Board confirming whether anything has come to their attention that causes them to believe that the continuing connected transaction:
has not been approved by the Board;
was not, in all material respects, in accordance with the pricing policy of the Group if the transaction involves the provision of goods or services by the Group;
was not entered into, in all material respects, in accordance with the relevant agreement governing the transaction; and
has exceeded the Annual Caps.

– 19 –

LETTER FROM CELESTIAL CAPITAL

In view of the continuing connection transaction will be subject to review by the independent non-executive Directors and the auditors of the Company, we are of the view that appropriate measures will be in place to govern the conduct of the continuing connected transaction and safeguard the interests of the Independent Shareholders.

RECOMMENDATION

Having considered the above principal factors and reasons, we are of the view that the New Master Agreement has been entered into within the ordinary and usual course of the Group’s businesses based on normal commercial terms, and the terms thereof together with the Annual Caps are fair and reasonable so far as the Company and the Independent Shareholders are concerned, and are in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Shareholders and the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to approve the New Master Agreement and the adoption of the Annual Caps at the EGM.

Yours faithfully, For and on behalf of Celestial Capital Limited Michael Lam Managing Director & Head of Investment Banking

Mr. Michael Lam is a licensed person and responsible officer of Celestial Capital registered with the SFC to carry out type 6 (advising on corporate finance) regulated activities under the SFO since 2009 and has participated in the provision of independent financial advisory services for various transactions involving companies listed in Hong Kong.

– 20 –

APPENDIX

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(I) Directors and Chief Executive of the Company

As at the Latest Practicable Date, the interests or short position of the Directors and the chief executive of the Company and each of their respective associates, in the Shares, underlying Shares and debentures of the Company or any associated corporations (within the meaning of Part XV of the SFO) which are required (a) 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 in which they are deemed or taken to have under such provisions of the SFO); or (b) pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules to be notified to the Company and the Stock Exchange, were as follows:

						Number of
						underlying
						Shares (in
						respect of
						share options
						granted	Approximate
						under the	percentage of
						refreshment		the
	Number of issued ordinary		Shares of HK$0.10	each in the Company		of the	Company’s
	Personal	Family	Corporate	Other		Post-IPO	issue share
	interests	interests	interests	interests	Total	Scheme)		capital
Mr. Zhang Menggui
(Note 1)	4,656,000	–	118,451,200	–	123,107,200	–		17.41%
Mr. Jiang Bing Hua
(Note 1)	4,656,000	–	118,451,200	–	123,107,200	–		17.41%
Mr. Jiang
Longsheng	–	–	–	–	–	400,000		0.06%
Mr. Brian Chang
(Note 2)	–	–	66,072,800	–	66,072,800	–		9.34%
Mr. Chan Ngai
Sang, Kenny	500,000	–	–	–	500,000	–		0.07%
Mr. Bian Junjiang	–	–	–	–	–	350,000		0.05%
Mr. Guan Zhichuan	300,000	–	–	–	300,000	–		0.04%

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APPENDIX

GENERAL INFORMATION

Notes:

(1) Global Energy Investors, LLC. is the beneficial owner of 118,451,200 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. Accordingly, both Mr. Zhang Menggui and Mr. Jiang Bing Hua are deemed to be interested in the 118,451,200 Shares beneficially owned by Global Energy Investors, LLC. under Part XV of the SFO.
(2) Mr. Brian Chang indirectly holds 66,072,800 Shares through Windmere International Limited which is his wholly-owned Company. Accordingly, he is deemed to be interested in the Shares held by Windmere International Limited under Part XV of the SFO.

Other than as disclosed above, none of the Directors or the chief executive of the Company or their respective associates had any interests or short positions in any Shares, underlying Shares or debentures of the Company or any of its associated corporations as at the Latest Practicable Date.

(II) Substantial Shareholders

So far as is known to the Directors and the chief executive of the Company, as at the Latest Practicable Date, the following persons (other than a Director or chief executive of the Company) had an interest or short position in the Shares and underlying Shares which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who are, directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at a general meeting of any member of the Group, or held any option in respect of such capital:

			Approximate
		Number of	% of the
	Capacity	Shares/	Company’s
	and nature	underlying	issued share
Name of Shareholder	of interest	Shares held	capital
Madam Chen Fengying	Interest of	123,107,200	17.41%
(Note 1)	the spouse	Shares
Madam Zhang Jiuli (Note 2)	Interest of	123,107,200	17.41%
	the spouse	Shares
Global Energy Investors,	Corporate	118,451,200	16.75%
LLC. (Note 3)		Shares
Windmere International	Corporate	66,072,800	9.34%
Limited (Note 4)		Shares

– 22 –

APPENDIX

GENERAL INFORMATION

			Approximate
		Number of	% of the
	Capacity	Shares/	Company’s
	and nature	underlying	issued share
Name of Shareholder	of interest	Shares held	capital
CIMC Group (Note 5)	Corporate	92,800,000	13.12%
		Shares
CIMC HK (Note 5)	Corporate	92,800,000	13.12%
		Shares
Harmony Master Fund	Corporate	63,444,800	8.97%
(Note 6)		Shares

Notes:

(1) These interests represent the same block of Shares and share options held by Mr. Zhang Menggui, an executive Director, as shown in the above section headed “Directors and Chief Executive of the Company”. 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, an executive Director, as shown in the above section headed “Directors and Chief Executive of the Company”. 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. both being executive Directors and directors of Global Energy Investors, LLC., as shown in the above section headed “Directors and Chief Executive of the Company”.
(4) Mr. Brian Chang, a non-executive Director and a director of Windmere International Limited, indirectly holds 66,072,800 Shares through Windmere International Limited respectively which is his wholly-owned Company. Accordingly, he is deemed to be interested in the Shares held by Windmere International Limited under Part XV of the SFO. Mr. Brian Chang is shown in the above section headed “Directors and Chief Executive of the Company”.
(5) Mr. Yu Yuqun is a non-executive Director and a secretary to the board of CIMC Group. CIMC HK is the beneficial owner of 92,800,000 Shares. CIMC HK is a wholly-owned subsidiary of CIMC Group. Therefore, CIMC Group is deemed to be interested in the 92,800,000 Shares held by CIMC HK under Part XV of the SFO.
(6) Harmony Master Fund (“Harmony Fund”) is a long-only equity fund registered in the Cayman Islands. Harmony Fund is managed by DM Jiang Bing Hua, Fund Management Limited, a company registered in the Cayman Islands and a subsidiary of DM Capital Limited, a company incorporated in the British Virgin Islands. DM Capital Limited is principally engaged in equity research and investment, venture investment and merger & acquisition advisory with offices located in the PRC, Hong Kong and New York.

– 23 –

APPENDIX

GENERAL INFORMATION

3. SERVICE CONTRACT

As at the Latest Practicable Date, none of the Directors nor proposed Directors had any existing or proposed service contracts 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 ARRANGEMENT SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors, directly or indirectly, had any interest in any assets which had since 31 December 2014 (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 were proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested, directly or indirectly, and which was significant in relation to the business of the Group.

5. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2014, being the date to which the latest published consolidated audited financial statements of the Group were made up.

6. COMPETING INTEREST

As at the Latest Practicable Date, none of the Directors and their respective associates had any direct or indirect interest in a business which competes or may compete with the business 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).

7. EXPERT AND CONSENT

The following is the qualification of the expert who has given its advice and recommendation which are included in this circular:

Name		Qualification type
Celestial	Capital	a licensed corporation to carry out type 1 (dealing in
		securities) and 6 (advising on corporate finance)
		regulated activities under the SFO

– 24 –

APPENDIX

GENERAL INFORMATION

Celestial Capital 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, Celestial Capital was not beneficially interested in the share capital of any member of the Group nor did it 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, Celestial Capital did not, directly or indirectly, had any interest in any assets which had since 31 December 2014 (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 share registrar and transfer agent of the Company in Hong Kong is Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(d) 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 14 years of company secretarial and corporate affairs experience.
(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 normal business hours 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 from the date of this circular up to and including the date of the EGM:

(i) the memorandum of association and articles of association of the Company;

– 25 –

APPENDIX

GENERAL INFORMATION

(ii) the New Master Agreement;
(iii) the annual report of the Company for the two financial years ended 31 December 2013 and 2014;
(iv) the written consent as referred to in the paragraph under the heading “Expert and consent” in this appendix;
(v) the letter from the Independent Board Committee as set out on page 10 of this circular;
(vi) the letter from Celestial Capital as set out from pages 11 to 20 of this circular; and
(vii) this circular.

– 26 –

NOTICE OF EGM

==> picture [115 x 60] intentionally omitted <==

TSC Group Holdings Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 206)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “Meeting”) of TSC Group Holdings Limited (the “Company”) will be held at Falcon Room 1, Basement, Gloucester Luk Kwok, 72 Gloucester Road, Wanchai, Hong Kong on Friday, 5 June 2015 at 11:30 a.m. or immediately after the conclusion of the annual general meeting of the Company to be held at Falcon Room 1, Basement, Gloucester Luk Kwok, 72 Gloucester Road, Wanchai, Hong Kong on Friday, 5 June 2015 at 10:00 a.m., if earlier, for the purpose of considering and, if thought fit, passing, with or without modification, the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

(a) “ THAT the new master agreement dated 10 April 2015 (the “New Master Agreement”), a copy of which has been produced to this meeting marked “A” and signed by the chairman of the Meeting for the purposes of identification, and the terms and conditions thereof, its proposed annual cap amounts, the transactions contemplated thereunder and the implementation thereof be and are hereby confirmed, ratified and approved.”
(b) “ THAT any one of the directors be authorised for and on behalf of the Company, among other matters, to sign, seal, execute, perfect, deliver or to authorise signing, executing, perfecting and delivering all such documents and deeds, to do or authorise doing all such acts, matters and things as they may in their discretion consider necessary, expedient or desirable to give effect to and implement the New Master Agreement and to waive compliance from or make and agree such variations of a non-material nature to any of the terms of the New Master Agreement as they may in their discretion consider to be desirable and in the interests of the Company and all the director’s acts as aforesaid be hereby confirmed, ratified and approved.”

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

Hong Kong, 20 May 2015

– 27 –

NOTICE OF EGM

Notes:

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.
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.
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.
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.
Shareholders are advised to read the circular to the shareholders of the Company dated 20 May 2015 which contains information concerning the resolution(s) to be proposed in this notice.

– 28 –

AI assistant

CM Energy Tech Co., Ltd. — Proxy Solicitation & Information Statement 2015

49033_rns_2015-05-20_44ba05a7-b983-42e7-ab72-04baa7fee7d9.pdf

TSC Group Holdings Limited

CONTINUING CONNECTED TRANSACTION

Celestial Capital Limited

DEFINITIONS

TSC Group Holdings Limited

CONTINUING CONNECTED TRANSACTION

INTRODUCTION

CONTINUING CONNECTED TRANSACTION

TERMS OF THE NEW MASTER AGREEMENT

REASONS FOR THE TRANSACTION

LISTING RULES IMPLICATIONS

EGM

RECOMMENDATION

ADDITIONAL INFORMATION

TSC Group Holdings Limited

CONTINUING CONNECTED TRANSACTION

Yours faithfully, For and on behalf of the

Independent Board Committee

CONTINUING CONNECTED TRANSACTION

INTRODUCTION

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of and reasons for entering into the New Master Agreement

Information on CIMC Raffles

Reasons for and benefits of entering into the New Master Agreement

2. Principal terms of the New Master Agreement

3. The Annual Caps

Assessment of the proposed Annual Caps

4. Annual review of the continuing connected transaction

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(I) Directors and Chief Executive of the Company

(II) Substantial Shareholders

3. SERVICE CONTRACT

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

5. MATERIAL ADVERSE CHANGE

6. COMPETING INTEREST

7. EXPERT AND CONSENT

8. GENERAL

9. DOCUMENTS AVAILABLE FOR INSPECTION

TSC Group Holdings Limited

NOTICE OF EXTRAORDINARY GENERAL MEETING

ORDINARY RESOLUTION

NOTICE OF EGM

More from CM Energy Tech Co., Ltd.

CM Energy Tech Co., Ltd. Proxy Solicitation & Information Statement 2015