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 or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Asia Tele-Net and Technology Corporation Limited , you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

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ASIA TELE-NET AND TECHNOLOGY CORPORATION LIMITED 亞洲聯網科技有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 679)

AMENDMENT OF TERMS IN RELATION TO A VERY SUBSTANTIAL DISPOSAL AND NOTICE OF THE EGM

A letter from the Board is set out on pages 4 to 19 of this circular.

A notice convening the EGM to be held at 2/F, 11 Dai Hei Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong on Thursday, 2 March 2017 at 11:00 a.m. is set out on pages 42 to 43 of this circular. Whether or not you intend to attend and vote at the EGM in person, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as practicable and in any event not less than 48 hours before the time appointed for holding the EGM (or any adjournment thereof). Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM (or any adjournment thereof) should you so wish and, in such event, the relevant proxy form shall be deemed to be revoked.

15 February 2017

* For identification purpose only

Definitions Letter from the Board Appendix I – Financial Information of the Group Appendix II – Valuation Report Appendix III – General Information Notice of the EGM				Page 1 4 20 29 35 42

– i –

DEFINITIONS

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

“Actual Net Sales Proceed”

is equal to actual gross proceed to be received by the Project Company in respect of the Relevant Property during the pre-sales period and after netting off value-added taxes, urban maintenance and construction tax, educational surtax, share of sales and marketing expenses and decoration expenses (if any)

“Agreement”

an agreement dated 7 August 2011 entered into between PASL and Shenzhen Warmsun in relation to the Arrangement

“Arrangement”
the arrangement contemplated under the Agreement, pursuant to which PASL shall vacate from the Land, demolish the Buildings and deliver the Land to Shenzhen Warmsun for Re-development, in consideration of which, Shenzhen Warmsun (or the Project Company) shall pay the Consideration to PASL
“Board”
the board of Directors
“Buildings”

the buildings and structures built or erected on the Land which were subsequently demolished in 2015

“Company”
Asia Tele-Net and Technology Corporation Limited, a company incorporated under the laws of Bermuda with limited liability and the Shares of which are listed on the main board of the Stock Exchange
“Consideration”
comprises (i) a relocation compensation of RMB50 million (equivalent to approximately HK$56 million), paid by Shenzhen Warmsun and/ or the Project Company to PASL; and (ii) the title to the Relevant Property to be transferred to PASL
“Director(s)”
the director(s) of the Company
“EGM”
the extraordinary general meeting of the Company to be convened and held at 11:00 a.m. on 2 March 2017 for the Shareholders to consider and, if thought fit, approve the Supplemental Agreements and the transactions contemplated thereunder
“Group”

the Company and its subsidiaries

“HK$”

Hong Kong dollars, the lawful currency of Hong Kong

– 1 –

DEFINITIONS

“Hong Kong” the Hong Kong Special Administrative Region of the PRC “Land” two parcels of industrial land numbered A824-26 and A824-8 located at Northwest of interjunction of Bayi Road and Donghuangyi Road, No. 8 Industrial Zone, Lung Hua Street, Bao An District, Shenzhen “Latest Practicable Date” 13 February 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange “PASL” 寶龍自動機械 ( 深圳 ) 有限公司 (Process Automation (Shenzhen) Limited), a company established in the PRC with limited liability and an indirect wholly-owned subsidiary of the Company

“PRC” the People’s Republic of China “Project Company” a project company established in the PRC by Shenzhen Warmsun, for the purpose of undergoing the Re-development pursuant to the Redevelopment Contract

“Property” the Land

“Re-developed Property” the properties, buildings or structures to be built by the Project Company on the Land pursuant to the Re-development

“Re-development” the re-development work (including but not limited to application to relevant responsible bodies of the PRC government, provision of all required funding, design and construction of the Re-developed Property) to be procured on the Land pursuant to the Re-development Contract, upon which the Land will be converted from industrial land into residential and commercial properties for re-sale
“Re-development Contract” a contract entered into between PASL and the Project Company in relation to the Re-development in September 2011
“Relevant Property” a 41,000 sq.m. of the Re-developed Property
“Relevant Shareholders” a closely allied group of Shareholders, being Karfun Investments Limited, Medusa Group Limited and Mr. Lam Kwok Hing holding 47.37%, 11.38% and 0.81% interests in the Company, respectively

– 2 –

DEFINITIONS

“Relocation Compensation an agreement entered into between PASL and the Project Company Agreement” in relation to compensation payable and the Relevant Property in September 2011 “Revised Consideration” comprises (i) a relocation compensation of RMB50 million (equivalent to approximately HK$56 million); and (ii) guaranteed cash consideration of RMB1.23 billion “RMB” Renminbi, the lawful currency of the PRC

“SFO” the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time “Share(s)” share(s) of the Company “Shareholder(s)” holder(s) of the Share(s) “Shenzhen Warmsun” 深圳市華盛房地產開發有限公司 (Shenzhen Warmsun Real Estate Development Company Limited), a company established in the PRC with limited liability principally engaged in property development business in the PRC “sq.m.” square metre “Stock Exchange” The Stock Exchange of Hong Kong Limited

“Supplemental Agreement A” a supplemental agreement entered into between PASL and the Project Company dated 4 January 2017 to amend certain terms to the Relocation Compensation Agreement as more particularly described in this circular
“Supplemental Agreement B” a supplemental agreement entered into between PASL, Shenzhen Warmsun and the Project Company dated 4 January 2017 to amend certain terms in relation to the Agreement as more particularly described in this circular
“Supplemental Agreements” Supplemental Agreement A and B

“%”

per cent

For illustration purposes, amounts in RMB in this circular have been translated into HK$ at HK$1.00 = RMB0.89.

– 3 –

LETTER FROM THE BOARD

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ASIA TELE-NET AND TECHNOLOGY CORPORATION LIMITED 亞洲聯網科技有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 679)

Executive Directors: Registered Office: Lam Kwok Hing (Chairman) Clarendon House Nam Kwok Lun (Deputy Chairman) 2 Church Street Hamilton HM11 Independent non-executive Directors: Bermuda

Independent non-executive Directors:

Cheung Kin Wai Kwan Wang Wai Alan Ng Chi Kin David

Principal Place of Business in Hong Kong:

11 Dai Hei Street Tai Po Industrial Estate Tai Po New Territories Hong Kong

15 February 2017

To the Shareholders

Dear Sir/Madam,

AMENDMENT OF TERMS IN RELATION TO A VERY SUBSTANTIAL DISPOSAL AND NOTICE OF THE EGM

INTRODUCTION

References are made to the announcements of Asia Tele-Net and Technology Corporation Limited (the “ Company ”) dated 22 August 2011, 25 October 2013, 16 October 2014, 26 October 2015 and 30 November 2015 and the circular of the Company dated 19 September 2011 in relation to the Agreement.

* For identification purpose only

– 4 –

LETTER FROM THE BOARD

The Company issued an announcement on 4 January 2017 pursuant to Rule 14.36 of the Listing Rules as the entering of the supplemental agreements constitutes a variation to the terms of the transactions previously approved by the Shareholders of the Company on 13 October 2011. In addition, as the amendments set out in the supplemental agreements constitute material changes to the terms of the Arrangement, accordingly, pursuant to Rules 14.36 and 14.49 of the Listing Rules, the supplemental agreements should be subject to Shareholders’ approval.

STATUS OF THE ARRANGEMENT

Pursuant to the Agreement, PASL agreed to vacate from the Land, demolish the Buildings and deliver the Land to Shenzhen Warmsun for Re-development. In consideration of the Arrangement, Shenzhen Warmsun and/or the Project Company shall (i) pay a relocation compensation of RMB50 million (equivalent to approximately HK$56 million) to PASL; and (ii) transfer the title of the Relevant Property to PASL. Relevant Property refers to 41,000 sq.m. marketable residential or commercial properties which do not include subsidized apartments and any floor area reserved for public facilities usage. Shenzhen Warmsun will be responsible for the Re-development. All cost of construction and Re-development will be borne by Shenzhen Warmsun and/or Project Company.

As at the date of this circular, PASL has already vacated from the Land, demolished the Buildings and has received the said relocation compensation of RMB50 million from Shenzhen Warmsun. Shenzhen Warmsun together with the Project Company has completed the following tasks since the signing of the Agreement:

1) Shenzhen Warmsun has established the Project Company in August 2011.
2) The Project Company has applied to re-develop the Land in September 2011.
3) On 16 October 2014, a notice was published by Urban Planning Land and Resources Commission of Shenzhen Municipality to confirm the Land having been listed under “2014 Lot 4 Town re-development formulated plan of Shenzhen – Draft Plan” for redevelopment. The first task associated with the Agreement, being the Completion of Registration, has been completed.
4) On 27 November 2015, the Project Company received an approval letter dated 25 November 2015 confirming that the Construction and Environment Review Committee had approved the planning proposal submitted by the Project Company. Based on the approved planning, the Land shall be re-developed into a comprehensive development site which can build up to a maximum floor area of 196,800 sq.m., out of which the Group will receive titles and benefits of 41,000 sq.m. upon completion.

– 5 –

LETTER FROM THE BOARD

5) The Project Company has received an investment registration certificate dated 1 February 2016 and a letter regarding the energy saving assessment dated 10 March 2016 from Shenzhen Long Hua New District Development and Finance Bureau.
6) The Project Company has received a letter dated 9 May 2016 regarding environmental assessement from Shenzhen Bao’an District Environmental Protection and Water Bureau.
7) The Project Company has received a land planning permit dated 10 August 2016 from the Urban Planning Land and Resources Commission of Shenzhen Municipality confirming that the Land shall be re-developed into a comprehensive development site comprising an office building, shops, public facilities required by local government and four to six blocks of residential buildings. Maximum floor area to be built is 196,800 sq.m. under which 172,627 sq.m. are marketable residential or commercial properties and 24,173 sq.m. are public facilities and subsidised residential units built on behalf of the local government.

According to the terms of the Agreement, Shenzhen Warmsun and the Project Company have yet to complete the following tasks:

Project Company shall agree on the land premium payable to the local government as the usage of Land will be converted from industrial to residential and commercial and the plot ratio will also be increased. Once the land premium is agreed upon and is paid for, the Project Company shall enter into the “Sale of land use rights contract” with the relevant responsible body of the PRC government on or before 31 January 2017.
Project Company shall complete the Re-development and the Re-developed Property shall have met the pre-sale conditions and obtained the relevant “Pre-Sales Certificate” on or before December 2018.
Project Company shall have (i) completed construction of the Re-developed Property; and (ii) obtained the relevant completion (or acceptance) of construction certificate from the responsible body of the PRC government on or before January 2021.
On or before June 2021, the title of the Relevant Property shall have been registered under the name of PASL.

Shenzhen Warmsun and the Project Company are currently negotiating the land premium with the government.

– 6 –

LETTER FROM THE BOARD

CURRENT STATUS OF THE PROPERTY

As at latest practicable date, the Property comprises of two parcels of adjoining bare land with a total site area of approximately 42,075.40 sq.m. It used to be an industrial land but through the effort of the Shenzhen Warmsun, the uses of the Property has been changed. The Project Company has received a land planning permit dated 10 August 2016 from the Urban Planning Land and Resources Commission of Shenzhen Municipality confirming that the Land shall be re-developed into a comprehensive development site comprising an office building, shops, public facilities required by local government and four to six blocks of residential buildings. Maximum floor area to be built is 196,800 sq.m. under which 172,627 sq.m. are marketable residential or commercial properties and 24,173 sq.m. are public facilities and subsidised residential units built on behalf of the local government.

Shareholders are advised to read the valuation report as per Appendix II of this circular.

The Property is free from any encumbrances, pending litigation, investigations or any notices for beaches of law including the environmental regulations.

Company shall from time to time issue announcement to update the Shareholders for any major development in relation to the Property.

The Board wishes to announce that on 4 January 2017 and after trading hours, PASL, Shenzhen Warmsum and the Project Company entered into two supplemental agreements (the “ Supplemental Agreements ”) to amend certain terms associated with the Arrangement.

The principal terms of the two Supplemental Agreements are set forth below:

THE SUPPLEMENTAL AGREEMENT TO THE RELOCATION COMPENSATION AGREEMENT (the “Supplemental Agreement A”)

Date : 4 January 2017

The Parties : (i) PASL and

(ii) Project Company

Guarantors : Shenzhen Warmsun Holdings Co Ltd Shenzhen Warmsun Zhi-di Investment Co Ltd

– 7 –

LETTER FROM THE BOARD

Instead of receiving Consideration comprising (i) a relocation compensation of RMB50 million (equivalent to approximately HK$56 million) and (ii) the title to the Relevant Property, ie 41,000 sq.m. of residential or commercial properties, PASL will receive Revised Consideration comprising (i) a relocation compensation of RMB50 million (equivalent to approximately HK$56 million) and (ii) guaranteed cash consideration of RMB1.23 billion. The guaranteed cash consideration will be payable by six tranches within fifteen days eighteen (18) months after the issue of the Pre-Sales Certificate without waiting for the completion of the Re-development. The first tranche will be payable fifteen day three months after the issue of the Pre-Sales Certificate and the next tranche will be payable three months thereafter and so on. Specific sum to be repaid will be as follows:-

Repayment amount on Repayment time cumulative basis Fifteen days three months after the issue of Pre-Sales Certificate RMB369,000,000 Fifteen days six months after the issue of Pre-Sales Certificate RMB738,000,000 Fifteen days nine months after the issue of Pre-Sales Certificate RMB861,000,000 Fifteen days twelve months after the issue of Pre-Sales Certificate RMB984,000,000 Fifteen days fifteen months after the issue of Pre-Sales Certificate RMB1,107,000,000 Fifteen days eighteen months after the issue of Pre-Sales Certificate RMB1,230,000,000

Repayment time

The guaranteed cash consideration represents an expected average selling price of RMB30,000 (net of value-added taxes) for the 41,000 sq.m. of residential or commercial properties.

Although the Supplemental Agreement A stipulated a maximum payable periods of eighteen (18) months, PASL will receive the Revised Consideration in full and earlier if all Relevant Property is sold out earlier than the said eighteen (18) months. For example, if the Relevant Property is all sold out during the first 6 months, PASL will receive the Revised Consideration in full on or before fifteen days six months after the issue of Pre-Sales Certificate.

Save for the above, all other terms and conditions of the Relocation Compensation Agreement shall remain unchanged and continue in full force and effect.

THE SUPPLEMENTAL AGREEMENT TO THE AGREEMENT (the “Supplemental Agreement B”)

Date : 4 January 2017

The Parties : (i) PASL (ii) Shenzhen Warmsun and (iii) Project Company

Guarantors : Shenzhen Warmsun Holdings Co Ltd Shenzhen Warmsun Zhi-di Investment Co Ltd

– 8 –

LETTER FROM THE BOARD

Subject Matter

PASL, Shenzhen Warmsum and the Project Company agreed to amend certain terms associated with the Agreement as follows:-

Effectiveness of the Supplemental Agreement B

The Supplemental Agreement B will be effective only if the actual average selling price exceeds RMB30,000 per sq.m. (net of value-added taxes) at the time of pre-sales.

Additional Consideration

Apart from the receipt of guaranteed minimum cash consideration of RMB1.23 billion as per the Relocation Compensation Agreement, PASL will receive additional cash consideration representing the difference between the actual net sales proceed less RMB1.23 billion. Actual net sales proceed is equal to actual gross proceed to be received by the Project Company in respect the Relevant Property during the pre-sales period and after netting off value-added taxes, urban maintenance and construction tax, educational surtax, share of sales and marketing expenses and decoration expenses (if any) (the “ Actual Net Sales Proceed ”).

In essence, instead of receiving the Consideration mainly in the form of property, PASL will be selling the Relevant Property at the then market prices and receive the Revised Consideration and Additional Consideration in the form of cash. The Revised Consideration and Additional Consideration were determined after arm’s length negotiation with reference to (i) the net book value of the Land and Buildings; (ii) the tightened polices and regulations over the property development sector in the PRC; and (iii) the prevailing market prices of residential properties in Bao An District, Shenzhen, the PRC.

Timing to receive the Additional Consideration

Pursuant to the terms of the Agreement, PASL will receive the title to the Relevant Property only after Project Company has completed the construction of the Re-developed Property, obtained the relevant completion (or acceptance) of construction certificate from the responsible body of the PRC government and applied to transfer the title of the Relevant Property from the Project Company to PASL.

Further to the Supplemental Agreement B, PASL will receive the Additional Consideration in the form of cash by tranches and after the issue of the Pre-Sales Certificate without waiting for the completion of the Re-development. Additional Consideration in relation to residential properties will be payable within thirty-six (36) months after the issue of the Pre-Sales Certificate and the Additional Consideration in relation to commercial properties will be payable within seventy-two (72) months after the issue of the Pre-Sales Certificate. Payment for Additional Consideration will be settled every three months. The first tranche will be payable fifteen day three months after the issue of the Pre-Sales Certificate and the next tranche will be payable three months thereafter and so on.

– 9 –

LETTER FROM THE BOARD

For avoidance of doubt, Additional Consideration to be received by PASL for each tranche represents the difference between the Actual Net Sales Proceed less any tranche payment(s) already received under the Supplemental Agreement A and B calculated on cumulative basis. In other words, actual amount of Additional Consideration will fluctuate and will depend on the sales conditions during the pre-sales period. Although the Supplemental Agreement B stipulated maximum payable periods of thirty-six (36) to seventy-two (72) months, PASL will receive the Additional Consideration in full and earlier if all Relevant Property is sold out earlier than the said thirty-six (36) to seventy-two (72) months. For example, if the Relevant Property is all sold out during the first 6 months, PASL will receive the Additional Consideration in full on or before fifteen days six months after the issue of PreSales Certificate.

The repayment period in the Supplemental Agreement B is longer than the repayment period agreed in the Supplemental Agreement A because it is expected that a longer pre-sales period is necessary if a higher pre-sales price is set at time of pre-sales.

In essence, pursuant to the terms of Supplemental Agreement A and B, PASL will in effect receive Actual Net Sales Proceed or guaranteed cash consideration whichever is higher on cumulative basis . PASL is not required to compensate any shortfall to Shenzhen Warmsun nor to the Project Company if the Actual Net Sales Proceed is less than the guaranteed cash consideration amount.

For illustrative purpose, assuming the Pre-Sales Certificate is issued on 30 June 2019. There is no pre-sale activity three months following the issue of Pre-Sales Certificate, PASL will receive the first tranche of guarantee cash consideration which is RMB369,000,000. If as at 30 September 2019, the Actual Net Sales Proceed is RMB1,200,000,000. On or before 15 October 2019, PASL will receive the second tranche of guarantee cash consideration which is RMB369,000,000, ie RMB738,000,000 on cumulative basis. PASL will receive also the Additional Consideration of RMB462,000,000 which represents Actual Net Sales Proceed RMB1,200,000,000 less guarantee cash consideration received on cumulative basis RMB738,000,000.

Milestones to be completed

Shenzhen Municipal Government has launched various policies and regulations in late October and early November 2016 to support central government’s decision to regulate the property markets. Amongst the changes are (i) the change of governing department and (ii) the requirement to increase the proportion of residential units with floor area equal to or below 90 sq.m.

Before the change of the policies, all re-development project will be approved by Shenzhen Municipal Government. The approving authority is now moved to Long Hua District Government for our case. It is understandable that additional time is required for Long Hua District Government to form relevant team and workflow before they can actually take on the new role. In addition, the latest policies also require all developers to ensure that each development site will provide not less than 70% residential units with floor area equal to or below 90 sq.m. out of the approved floor area for residentail units. Shenzhen Warmsun is therefore required to modify their design in order to fulfill this latest requirement.

– 10 –

LETTER FROM THE BOARD

In view of the launch of the new requirements as illustrated above and the additional time spent in negotiating these Supplemental Agreements, PASL, Shenzhen Warmsun and Project Company, after consulting with each other, have agreed to enter into the Supplemental Agreement B to further extend the completion dates in relation to the entering of the “Sale of land use rights contract” and the issue of Pre-Sales Certificate. Since the nature of consideration has now changed from title deeds of Relevant Property to cash, the rest of other milestones are no longer relevant or applicable.

The table below shows the changes to the milestones to be completed by the Project Company and Shenzhen Warmsun:-

Milestone(s)	Original deadlines agreed under the Agreement and Relocation Compensation Agreement	Revised deadlines agreed upon signing of the Supplemental Agreement A and B
Project Company shall agree on the land premium payable to the local government as the usage of Land will be converted from industrial to residential and commercial and the plot ratio will also be increased. Once the land premium is agreed upon and is paid for, the Project Company shall enter into the “Sale of land use rights contract” with the relevant responsible body of the PRC government	on or before 31 January 2017	on or before 30 April 2017
Project Company shall complete the Re-development and the Re-developed Property shall have met the pre- sale conditions and obtained the relevant “Pre-Sales Certificate”	on or before December 2018	on or before June 2019
Project Company shall have (i) completed construction of the Re-developed Property; and (ii) obtained the relevant completion (or acceptance) of construction certificate from the responsible body of the PRC government	on or before January 2021	Not applicable (for reference only, it will be postponed to June 2021)
The title of the Relevant Property shall have been registered under the name of PASL	on or before June 2021	Not applicable (for reference only, it will be postponed to December 2021)

– 11 –

LETTER FROM THE BOARD

In case where not all Relevant Property are sold out within the agreed timeframe

If not all Relevant Property are sold out within the agreed timeframe (ie 36 months for residential properties and 72 months for commercial properties), PASL, Shenzhen Warmsun and Project Company will consult with each other and, depending on the then market situation, take one of the following actions :-

a) Project Company shall buy out the remaining Relevant Property from PASL based on actual average price sold during the pre-sales period; or
b) Project Company shall buy out the remaining Relevant Property from PASL based on prices to be negotiated and agreed upon between PASL, Shenzhen Warmsun and Project Company; or
c) PASL, Shenzhen Warmsun and Project Company agree to further extend the timeframe due to the then market situation; or
d) Any other reasonable and practicable alternatives to be negotiated and agreed upon between PASL, Shenzhen Warmsun and Project Company

Whatever option PASL may take from the choices listed above, the Company will re-comply with the notifiable transaction requirements of the Listing Rules.

In any event, Project Company undertakes to pay the Revised Consideration to PASL in full and within fifteen days eighteen (18) months after the issue of Pre-Sales Certificate.

Save for the above, all other terms and conditions of the Agreement shall remain unchanged and continue in full force and effect.

CONDITIONS PRECEDENT

The effective date of the Supplemental Agreements is conditional upon obtaining approval from Shareholders of the Company approving the transactions contemplated under the Supplemental Agreements in the EGM. If such approval is not obtained, the Supplemental Agreements shall become null and void and the Arrangement which was previously approved by the Shareholders will remain in effect.

The Relevant Shareholders, holding approximately 59.56% interest in the Company as at the date of this circular, have indicated to the Company that they will vote for the Supplemental Agreements and the transactions contemplated thereunder at the EGM.

To the best knowledge of the Directors, no specific approvals, consents, licenses and/or permits in relation to the transactions contemplated under the Supplemental Agreements are required.

– 12 –

LETTER FROM THE BOARD

REASONS AND BENEFITS FOR ENTERING INTO SUPPLEMENTAL AGREEMENT A AND B

(a) Time to receive the consideration will be earlier

If PASL did not enter into the Supplemental Agreements, by the time it receives the title deeds of the Relevant Property, it will be December 2021. PASL will then form a sales team and to engage a marketing company to launch a marketing campaign for the sales of Relevant Property. It is expected that PASL will receive its first sales proceed around mid 2022. By entering the Supplemental Agreements, PASL will receive its first sales proceed within fifteen (15) days three months after the issue of the Pre-Sales Certificate ie around September or October 2019. It will be two and a half years earlier than originally anticipated.

(b) Able to share the experienced sales and marketing team currently engaged by Shenzhen Warmsun

As mentioned above, if PASL did not enter into the Supplemental Agreements, it would have to set up a sales team and to launch a marketing campaign for the sales of Relevant Property and for which PASL have no experience of. Instead, by paying a shared sales and marketing expenses on pro-rata basis, PASL will be able to share the existing sales and marketing resources of Shenzhen Warmsun. Shenzhen Warmsun has developed nearly 4,500,000 sq.m. floor area in last ten years and has solid and proven experience in selling and marketing a property site successfully and within the required legislative requirements.

(c) Safeguard downside risks

The minimum guaranteed cash payment of RMB1.23 billion represents an expected average selling price of RMB30,000 (net of value-added taxes) for the 41,000 sq.m. of residential or commercial properties in year 2019. If value-added taxes is included, the minimum guaranteed cash should be revised to approximately RMB1.38 billion representing an average selling price of approximately RMB33,710 (inclusive of value-added taxes) in year 2019. The valuation result of RMB1.975 billion as stated in Appendix II represents an average selling price of approximately RMB48,170 (inclusive of value-added taxes) which intends to reflect the current market value of the Property as at 6 January 2017. The expected average selling price for the minimum guaranteed cash payment is about 30% lower than the current market price because it is the maximum risk Shenzhen Warmsun and the Project Company are prepared to take given the downward trend seen in December 2016.

– 13 –

LETTER FROM THE BOARD

Since the implementation of various policies and regulations in late October and early November 2016 by Shenzhen Municipal Government to support central government’s decision to regulate the property markets, the average selling price per sq.m. in Shenzhen has dropped by 8-12% as reported by local newspapers in December. Given that the Project Company shall require two and a half year to complete the Re-development and to obtain the relevant Pre-Sales Certificate, it is difficult to assess what directions the property market may go and whether there will be further regulatory controls over the property markets. By securing a minimum guaranteed cash payment of RMB1.23 billion from Shenzhen Warmsun and the Project Company, PASL is safeguarded from any unforeseeable but dramatic downside risks. On the other hands, if the market condition in year 2019 is not as bad as one is worrying now, i.e. if the then average selling price in year 2019 is higher than RMB30,000 (net of value-added taxes) or RMB33,710 (inclusive of value-added taxes), PASL will receive the Additional Consideration under Supplemental Agreement B and it will still enjoy the upside of any positive market changes while being protected against any downward market changes.

(d) A longer sales period is set to encourage setting of a higher selling price

As mentioned in point (c) above, it is difficult to assess what directions the property market may go in next two and a half year. It is obvious that if a lower selling price is set, the sales of properties will go a quicker pace than if a higher selling price is set. In 2016, when the property development industry was still blooming, a property site could be all sold out between 12-18 months. Given the present tightening policies and the determination of the Central Government to reduce the number of pure investors, if a higher selling price is set, the sales process will take a longer time. That is why in the Supplemental Agreement B, a thirty-six (36) months period is set for the sales of residential properties as it is the intention of PASL, Shenzhen Warmsun and the Project Company to set a higher selling price where possible. For the sales of commercial properties, under the general practice, investors will consider to invest only after the property site as a whole is fully developed ie when the title deeds are issued. It is because on the one hands, they could actually see the design of the shops and on the other hands, it will be too costly to lock up the investment fund for two and a half year (the period from Pre-Sales to the issue of title deed which is explained in point (a) above) before the shops could be put in use. That is the reason why a seventy-two (72) months is set for the sale of commercial properties in Supplemental Agreement B. In brief, by setting a longer sales period, PASL increases its chance to receive the Additional Consideration.

Based on the foregoing, the Directors consider that the entering of the Supplemental Agreements and the transactions contemplated thereunder is entered into on normal commercial terms, and the terms of which are fair and reasonable and in the interests of the Company and its shareholders as a whole.

– 14 –

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE ARRANGEMENT

During the year ended 31 December 2015, PASL has vacated from the Land, demolished the Buildings and has received the said relocation compensation of RMB50 million from Shenzhen Warmsun. As a result, the Group derecognised the cost of the Buildings with carrying amount of HK$40,803,000 and recorded the relocation compensation of RMB50 million as income. A net gain of HK$19,175,000 was reported as other gains and loss in the profit or loss statement for the year ended 31 December 2015.

As part of the standard process under the “Town re-development formulated plan of the State”, the certificate of land use right was returned to the local government so that once the land premium is agreed upon, the Project Company can enter into the “Sale of land use right contract” with the local government. As at the date of this circular, the local government owns the title to the Land. In the financial statements for the year 2016 which are yet to be released, the Group will derecognize the carrying value of the Land to consolidated statement of profit or loss and other comprehensive income. Based on the terms of the Agreement, the Group will recognize the fair value of the Relevant Property as an “other asset” and credit the gain on the fair value to consolidated statement of profit or loss and other comprehensive income also in the financial statement for the year 2016. The carrying amount of the Relevant Property will be subject to annual impairment review. The carrying value of the Land as at 30 June 2016 was approximately HK$7,148,000.

If and when the Supplemental Agreements become unconditional (ie if the Supplemental Agreements are approved in the EGM), the Group will recognize a fair value (if any) for the guarantee given by the Project Company ie payment for the Revised Consideration and another fair value for the right to receive the net proceeds from selling the Relevant Property earlier (ie receipt of Revised Consideration and Additional Consideration) in the profit or loss statement for the year ending 31 December 2017.

Assuming all Relevant Property is disposed of during the pre-sales period, it is estimated that, the Group will record a further gain after taxes ranging from approximately RMB0.91 billion to RMB1.08 billion (equivalent to approximately HK$1.02 billion to HK$1.21 billion). Such gain is estimated based on the Revised Consideration and Additional Consideration to be received, being an amount ranging from RMB1.23 billion to RMB1.64 billion net of value-added taxes (equivalent to approximately HK$1.38 billion to HK$1.84 billion), less (i) carrying value of the other asset which represents the remaining value of the Land; (ii) estimated sales and marketing expenses of RMB49.2 million; (iii) estimated decoration expenses; (iv) the estimated professional fees and expenses and (v) associated PRC taxes in connection with the Arrangement.

Using the same basis of calculation, assuming all Relevant Property is disposed but at the valuation result of RMB1.975 billion as stated in Appendix II, PASL will receive sales proceed of RMB1.76 billion net of value-added taxes (equivalent to approximately HK$1.97 billion). It is estimated that the Group will then record a further gain after taxes of approximately RMB1.17 billion (equivalent to approximately HK$1.31 billion) compared to RMB0.91 billion and RMB1.08 billion as calculated above.

– 15 –

LETTER FROM THE BOARD

When calculating the financial effect of the Arrangement, the Board did not use the valuation result (i.e. RMB1.76 billion net of value-added taxes) as the expected sales proceed but instead the Board used its own estimations ranging from RMB30,000 per sq.m. to RMB40,000 per sq.m. net of value-added taxes. It is because the valuation result represents the market value now while the expected sales proceed should reflect the market value in year 2019. The Board is expecting a downward trend for the expected sales proceed in coming two and a half year due to the tightening policies and the determination of the Central Government to reduce the number of pure investors as elaborated point (c) and (d) under the section “Reasons and benefits for the entering into Supplemental Agreement A and B”.

The associated PRC taxes refer to (a) urban maintenance and construction tax plus educational surtax which are 12% of the value-added taxes, (b) stamp duty which is 0.05% of actual gross proceed and (c) profit tax which is 25% of the net gain. Value-added taxes is 11% of the actual sales amount and is payable by the buyers of the Property.

As it will take two and a half year from now before pre-sales is commenced, the estimated gain illustrated above represents the best estimates made by the Directors and are subject to change in view of the then market conditions, any change in exchange rates or any further changes in tax regime. The financial effect of the Arrangement is also subject to potential changes in the related accounting standards in the future.

USE OF PROCEED

The net proceeds from the Arrangement are estimated to be ranging from approximately RMB1.07 billion to RMB1.26 billion (equivalent to approximately HK$1.20 billion to HK$1.41 billion) on the assumption that all the Relevant Property will be disposed of by PASL at market price which is estimated to range from approximately RMB30,000 per sq.m. to RMB40,000 per sq.m. based on the best estimates from the Directors.

The net proceeds may be used for (i) the acquisition of a new parcel of land, building of a new factory or renting of a ready-for-use factory; (ii) general working capital purpose; and/or (iii) suitable future investment(s) which may or may not be in the principle line of business of the Group. Given that (a) the Company has not identified any suitable land or ready-for-use factory ; (b) the net proceeds will not be realized until after the disposal of the Relevant Property which may only take place in around two to three years’ time; and (c) the Company has not identified any investment opportunities and is not in discussion for any investment projects, the Company is unable to ascertain the specific proportion of the net proceeds to be allocated to each of such purposes as stated above as at the date of this circular. The Company will make announcement once specific allocation of use of the net proceeds has been identified by the Board, and in compliance with the requirements of the Listing Rules.

– 16 –

LETTER FROM THE BOARD

INFORMATION ON THE COMPANY, PASL, SHENZHEN WARMSUN AND GUARANTORS

The Company is an investment holding company holding investments in various disciplines with particular strength in electroplating technologies. Its subsidiaries are principally engaged in, amongst others, the design, manufacture and sale of electroplating machines and other automated equipment, money lending and securities trading, property investment and development.

PASL was previously the production arm of the Group and engaged in the design and manufacturing of electroplating equipment. The production function has now been taken up by another wholly-owned subsidiary of the Group, Process Automation (China) Limited. Currently, PASL is an investment holding company holding the interest of the Arrangement.

Shenzhen Warmsun is a company principally engaged in the business of property development and management. It was incorporated in 2005. In past ten years, it has completed twelve projects and has built nearly 4,500,000 sq.m. floor area. It is currently managing seven estates, two shopping malls and one hotel. Shenzhen Warmsun is a subsidiary of Shenzhen Warmsun Holdings Co Ltd.

Project Company is a limited company incorporated under the laws of PRC and is the approved developer for the Re-development. It is a subsidiary of Shenzhen Warmsun.

Shenzhen Warmsun Holdings Co Ltd and Shenzhen Warmsun Zhi-di Investment Co Ltd, being the ultimate parent companies of Shenzhen Warmsun and the Project Company, will be the guarantors and agree to provide an undertaking in favour of PASL for the due and complete performance of the Shenzhen Warmsun and the Project Company under the Supplemental Agreements.

Shenzhen Warmsun Holdings Co Ltd is a limited company incorporated under the laws of PRC since 1993 and is an investment holding company. Businesses principally engaged by its subsidiaries are construction, property development and property management. As far as construction is concerned, it has completed over 300 projects with total construction area of approximately 16,300,000 sq.m. including three key government projects in Guangdong Province.

Shenzhen Warmsun Zhi-di Investment Co Ltd is a limited company incorporated under the laws of PRC. It is an investment holding company. Between Shenzhen Warmsun Zhi-di Investment Co Ltd and Shenzhen Warmsun Holdings Co Ltd, they own Shenzhen Warmsun and Project Company 100%.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, Shenzhen Warmsun, Project Company, Shenzhen Warmsun Holdings Co Ltd, Shenzhen Warmsun Zhi-di Investment Co Ltd and its ultimate beneficial owners are third parties independent of and not connected with the Company and its connected persons.

– 17 –

LETTER FROM THE BOARD

LISTING RULES IMPLICATION

The Company issued an announcement on 4 January 2017 pursuant to Rule 14.36 of the Listing Rules as the entering into of the Supplemental Agreements constitutes a variation to the terms of the transactions previously approved by the Shareholders of the Company on 13 October 2011. In addition, as the amendments set out in the Supplemental Agreements constitute material changes to the terms of the Arrangement, accordingly, pursuant to Rules 14.36 and 14.49 of the Listing Rules, the Supplemental Agreements should be subject to Shareholders’ approval.

As the applicable percentage ratios calculated in accordance with Rule 14.07 of the Listing Rules in respect of the Arrangement, after taking into accounts of the proposed amendments, exceeds 75%, the Arrangement constitutes a very substantial disposal on the part of the Company and is subject to reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

EGM

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Supplemental Agreements and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, having made reasonable enquiries, no Shareholder has a material interest in the Supplemental Agreements and the transactions contemplated thereunder and is required to abstain from voting at the EGM. The Relevant Shareholders, holding 253,991,167 Shares representing approximately 59.56% interest in the Company as at the date of this circular, have indicated to the Company that they will vote for the Supplemental Agreements and the transactions contemplated thereunder at the EGM. A notice of the EGM is set out on pages 42 to 43 of this circular. Voting at the EGM on the resolution will be taken by poll.

A proxy form for the EGM is enclosed together with this circular. Whether or not you intend to attend and vote at the EGM in person, you are requested to complete the enclosed proxy form in accordance with the instructions printed thereon and return it to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as practicable and in any event not less than 48 hours before the time appointed for holding the EGM (or any adjournment thereof). Completion and return of the proxy form will not preclude you from attending and voting in person at the EGM (or any adjournment thereof) should you so wish and, in such event, the relevant proxy form shall be deemed to be revoked.

– 18 –

LETTER FROM THE BOARD

RECOMMENDATION

The Directors (including the independent non-executive Directors) are of the view that the terms of the Supplemental Agreements and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the resolution to be proposed at the EGM.

ADDITIONAL INFORMATION

Your attention is drawn to additional information set out in the appendices of this circular and the notice of the EGM.

Yours faithfully, By Order of the Board Asia Tele-Net and Technology Corporation Limited Lam Kwok Hing Chairman and Managing Director

– 19 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The audited consolidated financial statements, together with the accompanying notes to the financial statements, of the Company for the years ended 31 December 2013, 2014 and 2015 are disclosed on pages 37 to 102, pages 37 to 104 and pages 45 to 114 of the annual reports of the Company for the years ended 31 December 2013, 2014 and 2015 respectively. The unaudited consolidated financial statements, together with the accompanying notes, of the Company for the six months ended 30 June 2016 are disclosed on pages 28 to 44 of the 2016 interim report. The management discussion and analysis of the Company for the years ended 31 December 2013, 2014 and 2015 and the six months ended 30 June 2016 are disclosed in the published annual report and interim report respectively of the Company for the relevant years.

Annual report of the Company for the year ended 31 December 2013:

http://www.hkexnews.hk/listedco/listconews/SEHK/2014/0424/LTN20140424277.pdf

Annual report of the Company for the year ended 31 December 2014:

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0427/LTN20150427415.pdf

Annual report of the Company for the year ended 31 December 2015:

http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0428/LTN201604282056.pdf

Interim report of the Company for the period ended 30 June 2016:

http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0926/LTN20160926149.pdf

All of the above information have been published on the websites of the Stock Exchange (http:// www.hkex.com.hk) and the Company (http://www.atnt.biz).

2. INDEBTEDNESS STATEMENT

(i) Borrowings and debts

As at the close of business on 31 December 2016, being the latest practicable date for the purpose of this statement of indebtedness prior to the printing of this circular, the Group had bank borrowing of nil. As at 31 December 2016, the Group pledged deposits of approximately HK$30,516,000 to a bank for the issuance of bank guarantees under which customers retain right to claim refund of purchase deposits received by the Group.

– 20 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(ii) General debt structure

Save as otherwise disclosed herein and apart from intra-group liabilities, the Group did not have any debt securities issued and outstanding, and authorised or otherwise created but unissued, bank overdrafts, charges or debentures, mortgages, loans or other similar indebtedness or any finance lease commitments, hire purchase commitments, liabilities under acceptances (other than normal trade bills), acceptance credits or any guarantees.

(iii) Contingent liabilities

As at 31 December 2016, the Group had granted corporate guarantees of approximately HK$137,500,000 to banks in respect of banking facilities of approximately HK$132,300,000 granted to the subsidiaries of the Company. The amount utilized by the subsidiaries was approximately HK$42,539,000 being HK$30,516,000 in relation to the issuance of bank guarantees and HK$12,023,000 in relation to the issuance of import letters of credit to suppliers.

3. WORKING CAPITAL

After taking into account (i) the effect of the Supplemental Agreements; and ( ii) the financial resources presently available to the Group including our internally generated funds, the Directors, after due and careful enquiry, are of the opinion that the Group has sufficient working capital to satisfy its present requirements and at least the next 12 months from the date of publication of this circular, in the absence of unforeseeable circumstances.

4. CAPITAL STRUCTURE, LIQUIDITY AND FINANCIAL RESOURCES

As at 31st December, 2015, the Group had equity attributable to owners of the Company of approximately HK$299,247,000. The gearing ratio was 5.2%. The gearing ratio is calculated by dividing the aggregate amount of bank borrowings of approximately HK$15,500,000 and other interest-bearing loans over the amount of equity attributable to the equity holders of the Company.

As at 31st December, 2015, the Group had approximately HK$146,200,000 of cash on hand.

As at 31st December, 2015, the Group pledged deposits of HK$17,598,000 to banks to secure the issuance of bank guarantees of the same amount. Total banking facilities available to the Group is HK$82,300,000. Out of the facilities available, the Group has utilized (i) approximately HK$17,598,000 for the issuance of bank guarantees under which customers retain right to claim refund of purchase deposits received by the Group as at 31st December, 2015, (ii) approximately HK$9,892,000 for the issuance of import letters of credit to suppliers and (iii) approximately HK$15,500,000 in relation to discounted export bills.

– 21 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Most of the bank borrowing is charged at inter-bank offer rate plus a spread in the countries where the Company’s subsidiaries are operating in.

5. PLEDGE OF ASSETS

As at 31st December, 2015, apart from the cash of HK$17,598,000 pledged to the banks for the issuance of bank guarantees as disclosed above, the Group did not pledge any other asset to any third party.

6. EMPLOYEE AND REMUNERATION POLICIES

As at 31st December, 2015, the Group employs a total of 656 employees, including 36 employees hired by our associated company. Total staff cost for the Period Under Review was approximately HK$101,445,000. Employees are remunerated based on performance, experience and industry practice. Performance related bonuses are granted on discretionary basis. The Group maintains a mandatory provident fund schemes for its employees in Hong Kong and participates in the state-managed retirement benefit schemes for its employees in PRC. The Group also maintained appropriate insurances and medical cover for its employees.

The Company has adopted a share option scheme, details of which are set out on pages 27 to 29 of the 2015 Annual Report. No option was granted during the Period Under Review.

7. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material change in the financial or trading position or outlook of the Group since 31 December 2015, the date to which the latest audited consolidated financial statements of the Group were made up, up to and including the Latest Practicable Date.

– 22 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

8. FINANCIAL AND TRADING PROSPECTS

During the period ended 30 June, 2016 (“ Period Under Review ”), the Group recorded profit attributable to owners of the Company of approximately HK$5,620,000 compared to the profit attributable to owners of the Company of approximately HK$27,722,000 for the period ended 30 June, 2015 (“ Previous Period ”). The significant drop in Group’s profit attributable to owners of the Company during the Period Under Review was primarily due to (i) the change from a net positive change recorded in the Previous Period to a net negative change recorded in the Period Under Review in the fair value of investments held for trading and (ii) reduced profit margin from 26% to 21%. As far as the sales of electroplating equipment is concerned, the revenue recorded in the Period Under Review was in fact higher than that of the Previous Period. However, this positive impact was offset by a decrease in gross profit margin as recorded in the Period Under Review. The performance of the Group is further reviewed and elaborated in the following sections.

The basic earnings per share for the Period Under Review was HK1.32 cents compared to the basic earnings per share of HK6.50 cents for the Previous Period.

BUSINESS REVIEW ON ELECTROPLATING EQUIPMENT (UNDER THE TRADE NAME OF “PAL”)

Electroplating Equipment-Printed Circuit Boards (“PCB”) Sector

This sector is traded through our subsidiary Process Automation International Ltd (“ PAL ”).

During the Period Under Review, the revenue in this business area increased to HK$139,903,000 from HK$88,986,000 in Previous Period, representing 57% rise. Out of this total revenue, nearly 44% were shipment made to PRC.

Key drivers for demand of PCBs are mobile devices, car electronics and internet-of-things. Consumers crave advanced technology and that drives the demands. On the other hands, price erosion is severe as there is no sign of strong recovery in economy. This explains why most of the PCB players were busy but were not making substantial profit in first half of 2016. Worldwide PCB output has shrunk in 2015 in terms of dollars and is expected a moderate increase only in 2016.

– 23 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Major Region	2012	2013	2014	2015	2016 (F)
Americas	3,156	3,100	3,078	2,928	3,000
Germany	1,075	1,090	1,097	917	980
Other Europe	1,840	1,720	1,640	1,485	1,720
China	25,530	26,551	28,200	28,605	29,100
Japan	8,624	6,300	5,930	5,430	5,400
Taiwan	7,995	8,155	7,850	7,810	7,850
S. Korea	7,992	8,870	7,597	6,720	6,890
Thailand	1,298	1,747	2,209	2,470	2,830
Other Asia	2,287	2,247	2,622	2,582	2,470
World Total	59,797	59,780	60,223	58,947	60,240

Source: New Technology Information Ltd[1]

The June leading indicators published by Markit Economics and ISM provided a snapshot of the global electronic market conditions:–

With the exception of China and Japan most countries’ manufacturing activity increased.
The global manufacturing PMI[2] although weighed down by China and Japan, still increased modestly on a world basis.
The USA rebounded.
The Eurozone saw a significant increase but it should be noted that most of the June survey was done prior to the UK’s Brexit vote. However, with the exception of France, all major European countries reported a manufacturing expansion (PMI>50) in June.
Asia was mixed with China and Japan contracting but Taiwan, S Korea, India, Vietnam and Indonesia expanding.

1 New Technology Information Ltd is a consulting company specialized in PCB industry.

2 The Global Manufacturing PMI is compiled by Markit Economics based on the results of surveys covering over 10,000 purchasing executives in over 30 countries. Together these countries account for an estimated 89% of global manufacturing output.

– 24 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Europe felt the pain of Brexit as the UK PMI dropped sharply and many other European countries saw weaker July PMIs. In addition global terrorism and political unrest remain major issues but world manufacturing activity seems to be growing.

During the Period Under Review, PAL sold mainly to premium smartphone PCB makers. Since the lines on smartphone PCB are getting thinner and thinner, industrial players have to invest in highend electroplating equipment in order to support the most advanced smartphone models. Regrettably, although the sales of high-end smartphone is still growing, Gartner[3] said sale of smartphone is expected to grow 7% only in 2016. The era of double digits growth has gone. It is mainly because smartphone markets has reached 90% penetration in the mature markets of North America, Western Europe, Japan and mature Asian countries. Based on the figures released by Gartner, sales of smartphone in 2016 grew 3.9% in quarter one and 4.3% in quarter two on year-on-year basis.

Worldwide Smartphone Sales to End Users by Vendor in 2Q16 (Thousands of Units)

Company Samsung Apple Huawei Oppo Xiaomi Others Total	2Q16 Units 76,743.5 44,395.0 30,670.7 18,489.6 15,530.7 158,530.3 344,359.7	2Q16 Market Share (%) 22.3 12.9 8.9 5.4 4.5 46.0 100.0	2Q15 Units 72,072.5 48,085.5 26,454.4 8,073.8 15,464.5 160,162.1 330,312.9	2Q15 Market Share (%) 21.8 14.6 8.0 2.4 4.7 48.5 100.0

Source: Gartner Inc (August 2016)

3 Gartner Inc (NYSE: IT) is an information technology research and advisory company.

– 25 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Due to this moderate sales improvement in smartphone, the Group was under price pressure to support our customers and the gross profit margin has dropped by 5% for the Period Under Review.

Electroplating Equipment-Surface Finishing (“SF”) Sector

This sector is traded through our subsidiary PAL Surface Treatment Systems Ltd (“ PSTS ”).

The revenue of SF sector has increased by 510% from approximately HK$23,159,000 in the Previous Period to approximately HK$141,269,000 for the Period Under Review.

While the increased revenue streamed from European and US customers in automobile sector, a majority of their newly established production base was in China in view of the up-rising sales of passenger cars in China. In July 2016, sales were up 26.3% year-on-year to 1.6 million units, the highest monthly growth in 30 months, according to the China Association of Automobile Manufacturers. Sales over the first seven months of the year were up 11% to 12.64 million cars. Vehicle sales, passenger cars plus commercial vehicles, were up 9.84% to 14.68 million units in the first seven months. The possible drawback for any further expansion in China is the difficulty in getting an approval over the environmental assessment when a new plant is being set up.

Another trend we seen in automobile sector is there are more and more auto makers building their new factories in Mexico. Volkswagen AG was the first to set its footprint in Mexico in 2008. At least seven Asian and European auto makers have opened Mexican assembly plants by now, among them are Nissan Motor Co., General Motors Co., Ford Motor Co. and Fiat Chrysler Automobiles NV. Audi is now finishing a $1.3 billion factory in a Mexico town called San José Chiapa and is expecting to produce the Audi Q5 in 2016. The Mexico’s low wages and improved logistics were part of the draw. But what tipped the scales was Mexico’s unrivaled trade relationships. Mexico had more than 40 different free-trade agreements which provides exporters from Mexico duty-free access to markets that contain 60% of the world’s economic output. Our customers who are the downstream parts-suppliers to these auto makers are following the trend and setting out plan to expand their production capacity in Mexico. During the Period Under Review, the Group has also shipped to and installed equipment in Mexico. Quite a number of quotes were issued for enquires in relation to Mexico sites.

Electroplating Equipment – Photo Voltaic (“PV” or “Solar”) Sector

This sector is traded through our subsidiary Process Automation International Ltd (“ PAL ”).

Sales to PV sector in the Period Under Review has decreased by 99% from approximately HK$46,420,000 in the Previous Period to approximately HK$394,000 for the Period Under Review.

– 26 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

In March 2016, we wrote in our 2015 Annual Report “according to a forecast released by GTM Research in March 2016, GTM said US solar market will grow by 119% in 2016.” Originally, we were expecting increased orders from our US customers in PV sector for the Period Under Review but then came the headwind:–

In the first quarter of 2016, US has only installed 1,665MW of solar PV. With 14.5GW of installations forecast by GTM Research for 2016, the actual performance was down by 1.5GW than was previously predicted. GTM Research analyst Colin Smith explained that this shortfall is largely due to the tax credit extension. Upon the extension, developers have no rush to complete their production facilities.
SunEdison Inc., once the fastest-growing U.S. renewable energy company, filed for Chapter 11 bankruptcy protection in April 2016.
Most of the big solar players reported wider losses in first half of 2016.

The economics of renewable energy are a balance between public policies (e.g. subsidies, legislation, etc.), the availability and pricing of alternative energy sources (e.g. crude oil, natural gas, coal, etc.). The fact that the price of crude oil (Brent) fell by 50 percent from approximately $110 per barrel in July 2014 to $50-55 per barrel now would not help sales of renewable energy. The recent undergoing change in the public policies will only add further pressure on the solar players. Authorities are now moving away from making fixed subsidy payments for clean energy and toward a system of auctions. The new system forces solar companies to compete for contracts to sell electricity and has resulted in offers to supply photo voltaic power at record-low rates this year. Bigger markets including Germany and Japan will start the practice next year. Under this new public policies, there are concerns that many of the projects won’t make money but companies are still eager to win the bids in order to get new funding to keep their companies going. Thincapitalized developers will easily go bust under such circumstances and this is not a healthy development as far as the industry is concerned.

– 27 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Outlook

Although the Group’s recorded profit after taxes was significantly lower year-on-year basis, the key factor attributable to this result was the change from a net positive change recorded in the Previous Period to a net negative change recorded in the Period Under Review in the fair value of investments held for trading. If one ignores the financial impact of this factor, the Group would in fact made a profit of approximately HK$19,000,000 for the Period Under Review. Net negative change in the fair value of investment held for trading was an unrealized losses and brought no impact at all to the cash flow position of the Group.

Performance of next half year will mainly rest on next round of investment in relation to the new smartphone models and the continuation of the car sales growth. PCBs for new smartphone models are switching from high-density interconnect (“ HDI ”) board to substrate-like HDI. Our customers are working diligently to get qualifications over this new process in order to capture the 2017 smartphone shipment orders. If global automobile production continues to gain momentum in the second half of 2016 as in the first half 2016, we are conservatively confident that the Group will continue to report an operating profit throughout this year.

– 28 –

VALUATION REPORT

APPENDIX II

The following is the text of a letter and valuation certificate, prepared for the purpose of incorporation in this circular received from RHL Appraisal Limited., an independent valuer, in connection with its valuation as at 6 January 2017 of the Property held by Asia Tele-Net and Technology Corporation Ltd.

==> picture [58 x 58] intentionally omitted <==

永利行評值顧問有限公司 RHL Appraisal Limited Corporate Valuation & Advisory

T +852 2730 6212 F +852 2736 9284 Room 1010, 10/F, Star House, Tsimshatsui, Hong Kong

15 February 2017

The Board of Directors

Asia Tele-Net and Technology Corporation Ltd

11 Dai Hei Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong

Dear Sir / Madam,

INSTRUCTIONS

We refer to your instruction for us to value the property interest (the “ Property ”) to be disposed by Asia Tele-Net and Technology Corporation Ltd (the “ Company ”) located in the People’s Republic of China (“ PRC ”). We confirm that we have carried out property inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the Property as at 6 January 2017 (the “ Valuation Date ”).

This letter which forms part of our valuation report explains the basis and methodologies of valuation, clarifying assumptions, valuation considerations, title investigations and limiting conditions of this valuation.

– 29 –

VALUATION REPORT

APPENDIX II

BASIS OF VALUATION

The valuation is our opinion of the market value (“ Market Value ”) which we would define as intended to mean the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s–length transaction after proper marketing wherein the parties had each acted knowledgeably prudently and without compulsion.

Market Value is understood as the value of an asset or liability estimated without regard to costs of sale or purchase and without offset for any associated taxes or potential taxes.

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, joint ventures, management agreements, special considerations or concessions granted by anyone associated with the sale, or any element of special value.

VALUATION METHODOLOGY

We have valued the Property interest by using the Direct Comparison Approach by making reference to the comparable market transactions/asking cases as available. Comparable properties of similar size, scale, nature, character and location are analysed and carefully weighed against all the respective advantages and disadvantages of each property in order to arrive at a fair comparison of market value.

VALUATION CONSIDERATIONS

In valuing the property interest, we have complied with all the requirements contained in Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards 2012 Edition.

VALUATION ASSUMPTION

In our valuation, unless otherwise stated, we have assumed that:

i. transferable land use rights in respect of the Property for specific terms at nominal annual land use fees have been granted and that any premium payable has already been fully paid; and
ii. the Property is connected to main services and sewers which are available on normal terms.

– 30 –

VALUATION REPORT

APPENDIX II

TITLE INVESTIGATION

We have been shown copies of various documents relating to the Property. However, we have not examined the original documents to verify the existing titles to the Property or any amendment which does not appear on the copies handed to us. We have relied considerably on the information given by the Company’s PRC legal advisers, Zhong Lun Law Firm, concerning the validity of the titles to the Property.

LIMITING CONDITIONS

We have conducted on-site inspections to the Property on 6 January 2017 by our staff Mr. Kevin Mok (BSc in Civil Engineering).

During the course of our inspections, we did not note any serious defects. However, we must point out that we have not carried out a structural survey nor have we inspected parts of the structures which are covered, unexposed or inaccessible, we are therefore unable to report and any such part of the Property are free from rot, infestation or any other defects.

However, we have not carried out any site investigation to determine the suitability of the ground conditions or the services for any property development erected or to be erected thereon. Nor did we undertake archaeological, ecological or environmental surveys for the Property. Our valuation is prepared on the assumptions that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during the construction period. Should it be discovered that contamination, subsidence or other latent defects exists in the Property or on adjoining or neighboring land or that the Property had been or are being put to contaminated use, we reserve right to revise our opinion of value.

We have relied very considerable extent on the information provided by the Group and have accepted advices given to us on such matters, in particular, but not limited to tenure, planning approvals, statutory notices, easements, particulars of occupancy, size and floor areas and all other relevant matters in the identification of the Property. The plans including but not limited to location plan, site plan, lot index plan, outline zoning plan, building plan if any, in the report are included to assist the reader to identify the Property for reference only and we assume no responsibility for their accuracy.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We have also been advised by the Group that no material fact has been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and we have no reason to suspect that any material information has been withheld.

– 31 –

VALUATION REPORT

APPENDIX II

We do not accept a liability for any interpretation which we have placed on such information which is more properly the sphere of the legal advisers of the Group. Neither have we verified the correctness of any information supplied to us concerning the Property.

REMARKS

We have valued the property interest in Renminbi (RMB).

We enclose herewith the valuation certificate.

Serena S. W. Lau

FHKIS, AAPI, MRICS, RPS(GP), MBA(HKU) Managing Director

Jessie X. Chen

MRICS, MSc (Real Estate), BEcon Associate Director

Ms. Serena S. W. Lau is a Registered Professional Surveyor (GP) with over 20 years of experience in valuation of properties in Hong Kong, Macau, the PRC and overseas including US, Canada, the United Kingdom, Australia and the Asia Pacific Region. Ms. Lau is a Professional Member of The Royal Institution of Chartered Surveyors, an Associate of Australian Property Institute, a Fellow of The Hong Kong Institute of Surveyors as well as a registered real estate appraiser in the PRC.

Ms. Jessie X. Chen is a Registered Professional Surveyor (GP) with over 5 years of experience in valuation of properties in Hong Kong, Macau, the PRC and overseas including US, Canada, the United Kingdom, Australia and the Asia Pacific Region. Ms. Chen is a Professional Member of The Royal Institution of Chartered Surveyors.

– 32 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Market value Particulars of as at Property Description occupancy 6 January 2017 RMB Two parcels of land numbered The Property comprise of two The Property is No A824-26 and A824-8 located at parcels of adjoining bare land with currently under Commercial Northwest of interjunction of Bayi a total site area of approximately preliminary stage Value Road and Donghuangyi Road, 42,075.40 sq.m. of development. No.8 Industrial Zone, Lung Hua Street, Bao An District, Shenzhen, Pursuant to Shenzhen Construction Guangdong Province, the PRC Land Planning Permit, the Property has a maximum gross floor area of 廣東省深圳市寶安區龍華街 196,800 sq.m. for residential and 道辦第八工業區，八一路與 commercial uses.

廣東省深圳市寶安區龍華街道辦第八工業區，八一路與東環一路交匯處西北角編號為A824-26 及A824-8 之兩地地塊

Notes:

The Property has been approved by Shenzhen government as one of the urban renewal project. According to statutory procedure, the original land use right certificate of the Property has been returned to the government for change of land usage (ie. from industrial to residential and commercial). Therefore, as at the Valuation Date, the Group does not have any valid land certificate for the Property. As the Property cannot be freely transferred, leased or disposed of in the market as at Valuation Date, we have attributed no commercial value to the Property.
Pursuant to the Shenzhen Construction Land Planning Permit (the “Planning”) – Shen Gui Tu Xu No. LA-2016-0038, the Property have been approved for below development:

Usage: Residential and commercial Height Restriction: 180 meter Plot Ratio: ≦ 5.8 Total Permitted Maximum Gross Floor Area: 196,800 sq.m. among which 172,627 sq.m. are marketable residential or commercial properties and 24,173 sq.m. are public facilities and subsidised residential units built on behalf of the local government.

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VALUATION REPORT

APPENDIX II

The Property is currently vacant. The development is under preliminary stage thus no construction cost was incurred up to the Valuation Date. As advised by the Company, the development is expected to be completed in December 2021 and there is no sales arrangement and/or letting arrangement for the Property as at Valuation Date.
Pursuant to the Agreement, the Property shall be re-developed into a comprehensive development site, out of which the Group will receive titles and benefits of 41,000 sq.m. upon completion. For your reference, the gross development value of the 41,000 sq.m. is RMB1.975 billion as at the Valuation Date (“Gross Development Value”). The expected gross development value was dereived by comparison approach by making reference to comparable transactions or asking of similar property in the relevant market.

Gross Development Value is defined as “the market value of property assuming it has been completed as the valuation date, has obtained all necessary consents, is vacant and available for sale in the market”.

The estimated Gross Development Value is inclusive of value-added taxes and any associated taxes applicable in the property industry.

The Property is situated at the southeastern of Lung Hua Sub-district ( 龍華街道 ) in Bao’an District, within a walking distance from the Long Hua Metro Station ( 龍華地鐵站 Developments nearby are residential and commercial buildings of various ages and traditional industrial complexes.
We have been provided with a legal opinion by the Group’s PRC legal adviser, Zhong Lun Law Firm, regarding the legal title of the Property, which contains, inter alia, the followings:
i. The Project Company is entitled to develop the Property upon signing the “Sales of land use rights contract” with the government, settlement of land premium and obtain all necessary planning and construction permits. There is no restriction on the development apart from the Planning as listed in point (2) above;
ii. The Property as at the Valuation Date is subject to a restriction on disposal;
iii. The Project Company is the authorized developer to develop the Property in accordance with the Planning; and
iv. The Property is free from any mortgage or third party’s encumbrance.

– 34 –

GENERAL INFORMATION

APPENDIX III

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 Group. 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. DIRECTORS’ INTERESTS

a. Director’s Interest in the securities of the Company

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company and any of its associated corporations (within the meaning of Part XV of the SFO) which 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 which the Directors and chief executive were taken or deemed to have under such provisions of the SFO), or were required, pursuant to section 352 of the SFO, to be recorded in the register required to be kept by the Company, or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the “Model Code”) of the Listing Rules to be notified to the Company and the Stock Exchange were as follows:

Long position

	Number of issued	Number of issued		Percentage of the
	ordinary shares held			issued share
	Personal	Corporate		capital of
Name of director	interest	interest	Total	the Company
Mr. Lam Kwok Hing	3,474,667	250,516,500	253,991,167	59.56%
		(Note)

Note : The amount composed of 48,520,666 and 201,995,834 Shares that were held by Medusa Group Limited and Karfun Investments Limited respectively. Medusa Group Limited is a company wholly-owned by Mr. Lam Kwok Hing. Karfun Investments Limited is substantially owned by J & A Investment Limited, a company in which Mr. Lam Kwok Hing is a controlling shareholder. As such, Karfun Investments Limited and Medusa Group Limited are interested in 47.37% and 11.38% interests in the Company respectively.

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GENERAL INFORMATION

APPENDIX III

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and the chief executive of the Company, had an interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which 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 which the Directors and chief executive were taken or deemed to have under such provisions of the SFO), or were required, pursuant to section 352 of the SFO, to be recorded in the register required to be kept by the Company, or were required, pursuant to the Model Code of the Listing Rules to be notified to the Company and the Stock Exchange.

b. Directors’ competing interests

As at the Latest Practicable Date, none of the Directors or their respective associates was interested in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group as required to be disclosed pursuant to the Listing Rules.

c. Directors’ interests in assets

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since the date to which the latest published audited accounts of the Group were made up, acquired or disposed of by, or leased to the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by, or leased to, the Company or any of its subsidiaries.

d. Directors’ interests in contract or arrangement

As at the Latest Practicable Date, none of the Directors is materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries which contract or arrangement is subsisting at the date of this circular and which is significant in relation to the business of the Group.

e. Directors’ service contracts

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

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GENERAL INFORMATION

APPENDIX III

3. SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, according to the register kept by the Company under section 336 of the SFO, the persons other than a Director or chief executive of the Company who had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO were as follows:

Long position

		Number of	Company’s issued
Name of shareholder	Capacity	Shares held	share capital
Medusa Group Limited	Beneficial owner	48,520,666	11.38%
Karfun Investments Limited	Beneficial owner	201,995,834	47.37%

Save as disclosed above, the Directors and the chief executive of the Company were not aware that there was any person (other than a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, 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 general meeting of any other member of the Group or had any share options in respect of such capital.

As at the Latest Practicable Date, none of the Directors is a director or employee of a company which has an interest in the shares and underlying shares of the Company which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO.

– 37 –

GENERAL INFORMATION

APPENDIX III

4. MATERIAL CONTRACTS

As at the Latest Practicable Date, the following contracts, not being contracts entered into in the ordinary course of business, were entered into by members of the Group within the two years immediately preceding the Latest Practicable Date which are, or may be material:

(a) the sale and purchase agreement dated 29 October 2014 for a consideration of RMB79,225,000 in relation to the acquisition of the entire equity interest in Yu Man Limited as disclosed in the Company’s circular dated 3 July 2015 ( “ Acquisition Agreement ”);
(b) the first supplemental agreement dated 4 December 2014 entered into between Gold Beat Investments Limited, Trillion Ocean Limited and Ms. Zhong Qiuxia pursuant to which the parties to the Acquisition Agreement agreed to extend certain deadlines under the Acquisition Agreement and to increase the consideration by not more than RMB7,000,000 in exchange for the retained cash held in PRC;
(c) the second supplemental agreement dated 30 July 2015 entered into between Gold Beat Investments Limited, Trillion Ocean Limited and Ms. Zhong Qiuxia pursuant to which the parties to the Acquisition Agreement agreed to extend certain deadlines under the Acquisition Agreement;
(d) the consultancy service agreement dated 9 October 2015 entered into between Gold Beat Investments Limited and Trillion Ocean Limited, under which Gold Beat Investments Limited agreed to retain Trillion Ocean Limited as its agent at a fee of RMB4,200,000 to coordinate, monitor and responsible for the necessary application procedures with the local government for matters in relation to the change of usage of two parcels of land located at the north of Songbai Road, Gongmin Subdistrict Office, Guangming New District, Shenzhen, PRC;
(e) the third supplemental agreement dated 9 October 2015 entered into between Gold Beat Investments Limited, Trillion Ocean Limited and Ms. Zhong Qiuxia pursuant to which the parties to the Acquisition Agreement agreed to amend certain terms to the Acquisition Agreement;
(f) rental agreements dated 22 February 2016 for a ready built factory located in Datianyan Industrial Zone, Songgan Street Committee, Baoan District, PRC for the period from 1 September 2016 to 31 August 2018;

– 38 –

GENERAL INFORMATION

APPENDIX III

(g) the first supplemental agreement dated 30 April 2016 entered into between Gold Beat Investments Limited and Trillion Ocean Limited pursuant to which the parties to the Consultancy Service Agreement agreed to amend certain terms to the Consultancy Service Agreement;
(h) the fourth supplemental agreement dated 30 April 2016 entered into between Gold Beat Investments Limited, Trillion Ocean Limited and Ms. Zhong Qiuxia pursuant to which the parties to the Acquisition Agreement agreed to amend certain terms to the Acquisition Agreement;
(i) the service agreement dated 4 July 2016 with an independent third party to help the Group in searching for a suitable site in Shenzhen for an engagement of 18-months period commencing from 1 July 2016 for a total service fee of RMB1,200,000;
(j) the fifth supplemental agreement dated 5 July 2016 entered into between Gold Beat Investments Limited, Trillion Ocean Limited and Ms. Zhong Qiuxia pursuant to which the parties to the Acquisition Agreement agreed to enter into a closure arrangement by amending certain terms to the Acquisition Agreement;
(k) the second supplemental agreement dated 5 July 2016 entered into between Gold Beat Investments Limited and Trillion Ocean Limited pursuant to which the parties to the Consultancy Service Agreement agreed to enter into a closure arrangement by amending certain terms to the Consultancy Service Agreement; and the fees paid was reduced to RMB2,100,000;
(l) the sale and purchase agreement dated 5 July 2016 for a consideration of HK$181,950,000 in relation to the disposal of the entire equity interest in PAL Properties Investment Limited together with any outstanding shareholder loan as disclosed in the Company’s circular dated 14 October 2016;
(m) the loan facility agreement dated 31 October 2016 entered into between PAL Finance Limited and Karl Thomson Financial Group Ltd pursuant to which the former agreed to provide a revolving loan facility up to HK$130 million to the latter from 6 January 2017 to 30 October 2019 as disclosed in the Company’s circular dated 20 December 2016;
(n) the Supplemental Agreement A;
(o) the Supplemental Agreement B.

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GENERAL INFORMATION

APPENDIX III

5. EXPERT’S QUALIFICATION AND CONSENT

The following is the qualification of the expert whose name and report are contained in this circular:

Name

Qualification

RHL Appraisal Limited Chartered Surveyors

As at the Latest Practicable Date, the above expert did not have any direct or indirect interest in any asset which had been acquired, disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group, since 31 December 2015, the date to which the latest audited consolidated financial statements of the Group was made up; and was not beneficially interested in the share capital of any member of the Group and did not 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.

The above expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears.

6. LITIGATION

At the Latest Practicable Date, there was no litigation or claim of material importance that is known to the Directors to be pending or threatening against the Company or any of its subsidiaries.

7. GENERAL

a. The company secretary of the Company is Ms. Yung Wai Ching, who is a member of Association of Chartered Certified Accountants, Hong Kong Institute of Certified Public Accountants and Hong Kong Institution of Chartered Secretaries.
b. The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda and the head office and principal place of business of the Company in Hong Kong is at 11 Dai Hei Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong.
c. The share registrar and transfer office of the Company in Hong Kong is Tricor Secretaries Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
d. The English text of this circular shall prevail over the Chinese text in case of any inconsistency.

– 40 –

GENERAL INFORMATION

APPENDIX III

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at 11 Dai Hei Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong during normal business hours from the date of this circular up to and including the date of the EGM:

a) the bye-laws of the Company;
b) the valuation report from RHL Appraisal Limited, the text of which is set out in Appendix II to this circular;
c) the written consent referred to in the paragraph headed “Expert’s qualification and consent” in this Appendix;
d) the annual reports of the Company for the two years ended 31 December 2014 and 2015 and the interim report of the Company for the period ended 30 June 2016;
e) each of the material contracts set out under the paragraph headed “Material Contracts” in this Appendix; and
f) this circular.

– 41 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [114 x 47] intentionally omitted <==

ASIA TELE-NET AND TECHNOLOGY CORPORATION LIMITED 亞洲聯網科技有限公司 *

(Incorporated in Bermuda with limited liability)

(Stock Code: 679)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Asia Tele-Net and Technology Corporation Limited (the “ Company ”) will be held at 2/F, 11 Dai Hei Street, Tai Po Industrial Estate, Tai Po, New Territories, Hong Kong on Thursday, 2 March 2017 at 11:00 a.m. (the “ EGM ”) 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

“ THAT :

(a) the Supplemental Agreement A and B for the amendment of terms in relation to a very substantial disposal (as defined in the circular of the Company dated 15 February 2017 of which this notice forms part) (copies of which have been produced to the EGM marked “A” and “B” and initialed by the Chairman of the meeting for identification purpose) and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;
(b) any one of the directors of the Company (the “ Directors ”) be and are hereby authorized to do all such acts and things, and to sign and execute all such documents and to take all steps as the Directors may in their absolute discretion consider necessary, appropriate, desirable or expedient to implement and/or give full effect to or in connection with the Supplemental Agreements; and
(c) any one of the Directors be and are hereby further authorized to agree to any amendment to any of the terms of the Supplemental Agreements which in the opinion of the Directors is not of a material nature and is in the interests of the Company and to do all such acts and things, and to sign and execute any further documents and to take all steps to take effect of such changes and/or amendments.”

By Order of the Board Asia Tele-Net and Technology Corporation Limited Lam Kwok Hing Chairman and Managing Director

Hong Kong, 15 February 2017

* For identification purpose only

– 42 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Registered Office: Head Office and Principal Place of Clarendon House Business in Hong Kong: 2 Church Street 11 Dai Hei Street Hamilton HM11 Tai Po Industrial Estate Bermuda Tai Po, New Territories Hong Kong

Notes :

Any member entitled to attend and vote at the EGM is entitled to appoint another person as his proxy to attend and vote instead of him/her. A member who is the holder of two or more shares of the Company may appoint one or more proxies to attend and vote instead of him. A proxy need not be a member of the Company.
A form of proxy for use at the EGM is enclosed herewith.
The form of proxy must be signed by the member or member’s attorney duly authorized in writing or, in the case of a corporation, must be under its seal or the hand of an officer, attorney or other person duly authorized.
Where there are joint holders of any share, any one of such holders may vote at the EGM, either in person or by proxy, in respect of such share as if he were solely entitled to vote, but if more than one of such joint holders be present at the EGM, 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 in respect of the joint holding.
To be valid, the form of proxy together with the power of attorney or other authority (if any) under which it is signed or a certified copy of such power of attorney or authority must be deposited at the Company’s Hong Kong branch share registrar and transfer office, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM (or any adjournment thereof).
Completion and delivery of the form of proxy will not preclude a member from attending and voting at the EGM if the member so desires and in such event, the form of proxy shall be deemed to be revoked.
The resolution as set out in this notice will be taken by poll.
As at the date of this notice, the executive directors of the Company are Messrs. Lam Kwok Hing and Nam Kwok Lun, and the independent non-executive directors of the Company are Messrs. Cheung Kin Wai, Kwan Wang Wai Alan and Ng Chi Kin David.

– 43 –

AI assistant

Da Sen Holdings Group Limited — Proxy Solicitation & Information Statement 2017

50017_rns_2017-02-14_94b32e2b-6e67-4f15-baab-84b6b6f25528.pdf

ASIA TELE-NET AND TECHNOLOGY CORPORATION LIMITED 亞洲聯網科技有限公司 *

AMENDMENT OF TERMS IN RELATION TO A VERY SUBSTANTIAL DISPOSAL AND NOTICE OF THE EGM

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

ASIA TELE-NET AND TECHNOLOGY CORPORATION LIMITED 亞洲聯網科技有限公司 *

AMENDMENT OF TERMS IN RELATION TO A VERY SUBSTANTIAL DISPOSAL AND NOTICE OF THE EGM

INTRODUCTION

STATUS OF THE ARRANGEMENT

CURRENT STATUS OF THE PROPERTY

THE SUPPLEMENTAL AGREEMENT TO THE RELOCATION COMPENSATION AGREEMENT (the “Supplemental Agreement A”)

Repayment time

THE SUPPLEMENTAL AGREEMENT TO THE AGREEMENT (the “Supplemental Agreement B”)

Subject Matter

Effectiveness of the Supplemental Agreement B

Additional Consideration

Timing to receive the Additional Consideration

LETTER FROM THE BOARD

Milestones to be completed

In any event, Project Company undertakes to pay the Revised Consideration to PASL in full and within fifteen days eighteen (18) months after the issue of Pre-Sales Certificate.

CONDITIONS PRECEDENT

REASONS AND BENEFITS FOR ENTERING INTO SUPPLEMENTAL AGREEMENT A AND B

(a) Time to receive the consideration will be earlier

(b) Able to share the experienced sales and marketing team currently engaged by Shenzhen Warmsun

(c) Safeguard downside risks

LETTER FROM THE BOARD

(d) A longer sales period is set to encourage setting of a higher selling price

FINANCIAL EFFECT OF THE ARRANGEMENT

LETTER FROM THE BOARD

USE OF PROCEED

INFORMATION ON THE COMPANY, PASL, SHENZHEN WARMSUN AND GUARANTORS

LISTING RULES IMPLICATION

EGM

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS STATEMENT

(i) Borrowings and debts

(ii) General debt structure

(iii) Contingent liabilities

3. WORKING CAPITAL

4. CAPITAL STRUCTURE, LIQUIDITY AND FINANCIAL RESOURCES

5. PLEDGE OF ASSETS

6. EMPLOYEE AND REMUNERATION POLICIES

7. MATERIAL ADVERSE CHANGE

8. FINANCIAL AND TRADING PROSPECTS

BUSINESS REVIEW ON ELECTROPLATING EQUIPMENT (UNDER THE TRADE NAME OF “PAL”)

Electroplating Equipment-Printed Circuit Boards (“PCB”) Sector

APPENDIX I

Source: New Technology Information Ltd[1]

Electroplating Equipment-Surface Finishing (“SF”) Sector

Electroplating Equipment – Photo Voltaic (“PV” or “Solar”) Sector

Outlook

The Board of Directors

Asia Tele-Net and Technology Corporation Ltd

INSTRUCTIONS

BASIS OF VALUATION

VALUATION METHODOLOGY

VALUATION CONSIDERATIONS

VALUATION ASSUMPTION

TITLE INVESTIGATION

LIMITING CONDITIONS

REMARKS

Serena S. W. Lau

Jessie X. Chen

VALUATION CERTIFICATE

1. RESPONSIBILITY STATEMENT

2. DIRECTORS’ INTERESTS

a. Director’s Interest in the securities of the Company

Long position

b. Directors’ competing interests

c. Directors’ interests in assets

d. Directors’ interests in contract or arrangement

e. Directors’ service contracts

3. SUBSTANTIAL SHAREHOLDERS

Long position

Da Sen Holdings Group Limited Proxy Solicitation & Information Statement 2017