Dufu Liquor Group Limited - Proxy Solicitation & Information Statement 2016

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 you should take, 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 of your shares in China Environmental Energy Investment Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee, or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

China Environmental Energy Investment Limited

(Incorporated in Bermuda with limited liability)

(Stock Code: 986)

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION AND

NOTICE OF SPECIAL GENERAL MEETING

Capitalised terms used in this cover page shall have the same meaning as those defined in this circular.

A notice convening the SGM to be held on Saturday, 30 January 2016 at 9:00 a.m. at Falcon Room I, Gloucester Luk Kwok Hong Kong, 72 Gloucester Road, Wanchai, Hong Kong is set out on pages 54 to 55 of this circular. A form of proxy for use at the SGM is enclosed with this circular. Such form of proxy is also published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.986.com.hk).

Whether or not you are able to attend the SGM, please complete and sign the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the meeting if they so wish and, in such event, the form of proxy shall be deemed to be revoked.

14 January 2016

For identification purposes only

CONTENT

			Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			4
Appendix I	–	Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Appendix II	–	Financial information of the Target Group . . . . . . . . . . . . . . . . . . . . .	25
Appendix III	–	The unaudited pro forma financial information
		of the Remaining Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35
Appendix IV	–	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	47
Notice of Special General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			54

– i –

DEFINITIONS

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

‘‘Acquisition’’ the acquisition of the Target Company under the Previous Agreement
‘‘associate(s)’’ has the same meaning ascribed to it under the Listing Rules
‘‘Board’’ the board of Directors ‘‘Business Day(s)’’ a day (other than a Saturday, Sunday or public holiday in Hong Kong) on which commercial banks are generally open for business in Hong Kong
‘‘Company’’ China Environmental Energy Investment Limited（中國環保能源投資有限公司*）, a company incorporated in Bermuda whose shares are listed on the Stock Exchange
‘‘Completion’’ the completion of the Disposal
‘‘Completion Date’’ the first Business Day after the fulfillment or waiver of the Conditions or such other date as the Company and the Purchaser may agree in writing
‘‘connected person(s)’’ has the meaning ascribed to it under the Listing Rules
‘‘Consideration’’ the total consideration in the sum of HK$58,000,000 payable by the Purchaser to the Company for the Disposal under the SPA
‘‘Director(s)’’ director(s) of the Company
‘‘Disposal’’ the disposal of the Sale Shares by the Company to the Purchaser pursuant to the SPA

‘‘Disputes’’ disagreements between the Company and the management of the Target Subsidiary, on the business model of the Target Subsidiary for the shift of focus from online shopping platform to provision of website consultancy services, and non-cooperation of the management of the Target Group in carrying out the Group’s policies

– 1 –

DEFINITIONS

‘‘Group’’

the Company and its subsidiaries

‘‘Henderson’’
Henderson Company Holdings Limited, a company incorporated under the laws of Hong Kong with limited liability and wholly owned by the Purchaser as at the Latest Practicable Date
‘‘Hong Kong’’
the Hong Kong Special Administrative Region of the PRC
‘‘HK$’’
Hong Kong dollar, the lawful currency of Hong Kong
‘‘Independent Shareholders’’
Shareholders other than those who have material interest in the SPA and the transactions contemplated thereunder and are required to abstain from voting at the SGM
‘‘Latest Practicable Date’’
13 January 2016, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular
‘‘Listing Rules’’
the Rules Governing the Listing of Securities on the Stock Exchange
‘‘PRC’’
the People’s Republic of China, for the purpose of this circular, excluding Hong Kong, Macau Special Administration Region of the PRC and Taiwan
‘‘Previous Agreement’’

the sale and purchase agreement dated 18 September 2014 and entered into by the Company and the Purchaser in respect of the acquisition of entire issued share capital of the Target Company

‘‘Purchaser’’ Ms. Chow Yan Ping
‘‘Remaining Group’’

the Company and its subsidiaries, excluding the Target Group after the Disposal

‘‘RMB’’ Renminbi, the lawful currency of the PRC
‘‘Sale Shares’’
50,000 issued and fully-paid ordinary shares of US$1 each in the share capital of the Target Company, representing the entire share capital of the Target Company
‘‘SFO’’

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

– 2 –

DEFINITIONS

‘‘SGM’’ the special general meeting to be convened by the Company for the Shareholders to consider and, if thought fit, approve the SPA and the transactions contemplated thereunder ‘‘Share(s)’’ ordinary share(s) of HK$0.01 each in the share capital of the Company ‘‘Shareholder(s)’’ holder(s) of Share(s) ‘‘SPA’’ the conditional sale and purchase agreement dated 27 November 2015 and entered into by the Company and the Purchaser in respect of the Disposal ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Target Company’’ Asian Champion Limited, a company incorporated under the laws of the British Virgin Islands with limited liability, which is a wholly-owned subsidiary of the Company as at the date of this circular ‘‘Target Group’’ the Target Company and the Target Subsidiary ‘‘Target Subsidiary’’ HKOMall Limited, a company incorporated under the laws of Hong Kong with limited liability which is owned 90% by the Target Company ‘‘US$’’ United States dollars, the lawful currency of the United States of America ‘‘Vendor’’ the Company ‘‘%’’ per cent.

– 3 –

LETTER FROM THE BOARD

China Environmental Energy Investment Limited

(Incorporated in Bermuda with limited liability)

(Stock Code: 986)

Executive Directors: Registered office: Ms. Chen Tong (Chairman) Clarendon House Mr. Xiang Liang 2 Church Street Hamilton HM11 Independent non-executive Directors: Bermuda Ms. Zhang Ruisi Mr. Tse Kwong Chan Head Office and principal Ms. Zhou Jue place of business: Room 910, 9/F Harbour Centre 25 Harbour Road, Wanchai Hong Kong 14 January 2016

To the Shareholders Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION AND NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 27 November 2015 in relation to the Disposal, whereby on 27 November 2015 (after trading hours), the Company, as vendor, entered into the SPA with the Purchaser, pursuant to which the Company has conditionally agreed to sell and the Purchaser has conditionally agreed to acquire the Sale Shares at the Consideration of HK$58,000,000 payable by the Purchaser in accordance with the terms and conditions of the SPA.

For identification purposes only

– 4 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with information regarding the resolution to be proposed at the SGM in relation to the SPA and the transactions contemplated thereunder.

THE SPA

Date

27 November 2015

Parties

(i) Vendor: the Company; and (ii) Purchaser: Ms. Chow Yan Ping

Assets to be disposed

Pursuant to the SPA, the Company has conditionally agreed to sell and the Purchaser has conditionally agreed to acquire the Sale Shares, representing the entire equity interest of the Target Company.

Consideration

The Consideration is HK$58,000,000 payable in cash and shall be satisfied in the following manner:

(i) the first instalment in the sum of HK$20,000,000 shall be paid on the Completion Date;
(ii) the second instalment in the sum of HK$20,000,000 shall be paid on 31 March 2016; and
(iii) the third instalment in the sum of HK$18,000,000 shall be paid on 30 June 2016.

– 5 –

LETTER FROM THE BOARD

The Consideration was determined after arm’s length negotiation between the Company and the Purchaser which was exactly equal to the total consideration paid by the Company under the Previous Agreement. Also, the future financial performance of the Target Group may suffer from the operational and management deadlocks arising from the Disputes which had a high impact on the day-to-day running of business and had drained a lot of time, effort and costs of the management of the Target Subsidiary. Although the Target Subsidiary was in profit position for the year ended 2014, given the Disputes, it is expected that there will be insufficient support and collaboration between the Company and the Target Subsidiary in the on-going operations and strategic development of the Target Subsidiary, and the Company considers that this may significantly impact the future performance of the Target Subsidiary negatively.

In view of the above, the Directors (including the independent non-executive Directors) consider that the Consideration is fair and reasonable and in the interest of the Company and the Shareholders as a whole.

Escrow

The share certificates and relevant escrow documents in respect of the Sale Shares will be released to the Purchaser (or her nominee(s)) upon the Company’s receipt of full payment of the Consideration.

Conditions precedent

Completion is conditional upon satisfaction of the following conditions precedent:

(i) the Company having obtained the approval by the Shareholders (or Independent Shareholders, if required) for the sale of the Sale Shares and all other transactions contemplated under the SPA, if required, in compliance with the requirements of the Listing Rules; and
(ii) the Company complying with all applicable laws, regulations and rules in Hong Kong or elsewhere including but not limited to those under the Listing Rules and the requirements, instructions and indications, etc. of the Stock Exchange in relation to the SPA and the transactions contemplated under the SPA.

None of the above conditions can be waived. If all the conditions have not been fulfilled on or before 31 January 2016, the SPA shall be terminated forthwith and each party to the SPA shall have no liability to the other party save and except for any antecedent breaches of the terms thereof.

– 6 –

LETTER FROM THE BOARD

Completion

Completion shall take place on the Completion Date.

Upon Completion, the Company shall cease to hold any interest in the Target Company and the Target Group will cease to be subsidiaries of the Company.

INFORMATION ON THE TARGET GROUP

The Target Company, a wholly-owned subsidiary of the Company, is a company incorporated in the British Virgin Islands with limited liability and has an authorised share capital of US$50,000 divided into 50,000 ordinary shares of US$1 each, of which 50,000 ordinary shares have been issued and fully paid-up. The Target Company was incorporated on 1 July 2014 and its principal activity is investment holding.

The Target Subsidiary is a company incorporated in Hong Kong with limited liability which has issued 10,000 ordinary shares with total amount of paid up capital of HK$10,000. The Target Subsidiary is owned as to 90% by the Target Company.

The Target Subsidiary is principally engaged in the business of online products sales, web design and maintenance services. Its business model is one of business-to-customer online retail store providing O2O (Online to Offline) solutions in Hong Kong and web design and consultancy services.

References are made to the announcements of the Company dated 18 September 2014 and 6 October 2014. According to the Previous Agreement, the Company has acquired the entire issued share capital of the Target Company from the Purchaser and is effectively interested in 90% of the issued share capital of the Target Subsidiary on 6 October 2014 and such acquisition was completed on even date. The consideration paid by the Company for such acquisition under the Previous Agreement was HK$58,000,000, which was satisfied by way of issue of a promissory note on 6 October 2014. Such promissory note was fully repaid by the Company on 28 January 2015.

The Target Group comprises the Target Company which in turn holds 90% equity interest in the Target Subsidiary. Each of their financial information are illustrated below separately.

According to the unaudited management accounts of the Target Company, for the period from 1 July 2014, being the date of incorporation of the Target Company, up to the year ended 31 December 2014, it has not recorded any profit or loss before and after taxation and extraordinary items. The net asset value of the Target Company as at 30 September 2015 according to its unaudited management accounts was approximately HK$0.38 million.

– 7 –

LETTER FROM THE BOARD

Set out below are financial information of the Target Subsidiary as extracted from its audited financial statements for the two financial years ended 31 December 2013 and 2014 and unaudited financial statements for the periods ended 31 March 2014 and 2015:

	4 July 2012
	(date of
	incorporation) –	1 January 2014 –
	31 December 2013	31 December 2014
Net profit/(loss) before taxation and
extraordinary items	HK$(1,576,326)	HK$4,236,702
Net profit/(loss) after taxation and
extraordinary items	HK$(1,576,326)	HK$3,817,741
	1 April 2013 –	1 April 2014 –
	31 March 2014	31 March 2015
Net profit/(loss) before taxation and
extraordinary items	HK$(773,684)	HK$4,531,793
Net profit/(loss) after taxation and
extraordinary items	HK$(773,684)	HK$3,975,420

The profit for the year ended 31 December 2014 was mainly attributable to the significant increase in web design and maintenance services. The net asset value of the Target Subsidiary as at 30 September 2015 according to its unaudited management accounts was approximately HK$3.23 million.

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

Given the net asset value of the Target Group as at 30 September 2015 was approximately HK$4.82 million and the goodwill amounted approximately HK$57.28 million, which included HK$1.2 million and HK$56.08 million arising from the Target Group and the Group respectively. It is estimated that the loss attributable to the Disposal is approximately HK$3.17 million (before tax) after deducting expenses of approximately HK$600,000. Shareholders should note that the actual amount of the loss on the Disposal to be recognized in the consolidated financial statements of the Company depends on the net asset value of the Target Group as at the Completion Date and therefore may be different from the amount mentioned above.

Upon Completion, the Company will cease to hold any equity interest of the Target Company and the results of the Target Group will no longer be consolidated into the consolidated financial statements of the Group.

The Board intends to apply the net proceeds from the Disposal to repay debts of the Company.

– 8 –

LETTER FROM THE BOARD

REASONS AND BENEFITS OF THE DISPOSAL

Reference is made to the announcement of the Company dated 18 September 2014 for the acquisition of the Target Company under the Previous Agreement (the ‘‘Acquisition’’). As stated in the section ‘‘Reasons for and Benefits of the Acquisition’’ in the said announcement, the Directors were of the view that, the Acquisition provided a prime opportunity for the Group to enter online retailing business and diversify the revenue stream of the Group which was expected to increase the Shareholders’ value and benefit the Company and the Shareholders as a whole. The Group has relied on the management of the Target Group to operate the business of the Target Group. However, during the process of merging the operation of the Target Group into the Group, there were disagreements between the Company and the management of the Target Subsidiary, on the business model of the Target Subsidiary for the shift of focus from online shopping platform to provision of website consultancy services, and non-cooperation of the management of the Target Group in carrying out the Group’s policies (the ‘‘Disputes’’). During the said process, the Company and the management of the Target Subsidiary had held several rounds of negotiation to try to resolve the Disputes. However, it was far less likely to succeed as the Purchaser and the management of the Target Company insisted on their own perspective and standpoints. Consequently, both parties failed to reach any consensus on, including but not limited to, the assignment of a staff in charge of operation and management of the Target Subsidiary or the buying out of the 10% minority interest in the Target Company from the Purchaser. Despite the Target Subsidiary was profit-making for the year ended 31 December 2014, having taken into account (i) the Disputes and the inability of the Company and the management of the Target Group to resolve the Disputes despite the Company’s efforts; and (ii) the potential operational risk imposed on the Company resulting from the non-cooperation of the management of the Target Group should the Target Group remain as a subsidiary of the Company, the Directors consider that the Disposal represents a good opportunity for the Group to exit its investment from a dispute situation at the same price. As such the Company and the Purchaser resolved to reverse the Acquisition by entering into the SPA.

As stated in the 2014 annual report of the Company, the revenue of the Group from continuing operations for the year ended 31 March 2014 was approximately HK$59.8 million, representing a 39.98% decrease as compared with approximately HK$99.7 million for the year ended 31 March 2013. The net loss of the Group for the year ended 31 March 2014 was approximately HK$1,414.6 million and the net loss of the Group for the year ended 31 March 2013 was approximately HK$378.8 million. Moreover, as stated in the 2015 annual report of the Company, the revenue of the Group from continuing operations for the year ended 31 March 2015 was approximately HK$52.7 million, representing a 11.87% decrease as compared with approximately HK$59.8 million for the year ended 31 March 2014. The net loss of the Group for the year ended 31 March 2015 was approximately HK$147.9 million and the net loss of the Group for the year ended 31 March 2014 was approximately HK$1,414.6 million. Due to the weakening performance of the existing business segments, the Company is seeking potential investment opportunities to enhance the results of the Company.

– 9 –

LETTER FROM THE BOARD

References are made to (i) the announcement of the Company dated 4 September 2015 for the acquisition of the entire share capital of Elite Honest Inc. (‘‘Elite Honest’’); (ii) the announcement of the Company dated 16 October 2015 for the acquisition of the entire share capital of Great Luck Finance Limited (‘‘Great Luck Finance’’); (iii) the announcement of the Company dated 16 November 2015 for the acquisition of the entire share capital of STI Securities & Wealth Management Limited (‘‘STI’’); and (iv) the announcement of the Company dated 20 November 2015 for the acquisition of further equity interest of Pure Power Holdings Limited (‘‘Pure Power’’), the Board considered the acquisitions of Elite Honest, Great Luck Finance, STI and Pure Power provided prime opportunities for the Group to enter/expand the trading of gold and diamond industry, the money lending industry, the financial services industry and the oil and natural gas exploration and extraction industry. Moreover, the entry/expansion of these industries provides attractive opportunities for the Group to broaden the Group’s income base and diversify the revenue stream. Save for the above, the Company has not identified any potential investment opportunities as at the Latest Practicable Date.

The Directors also consider that the Disposal will enable the Group to focus its resources in pursuing development opportunities on, including but not limited to, the newly developed and developing business segments of the Group.

Having considered the reasons for and benefits of the Disposal as mentioned above, the Directors (including the independent non-executive Directors) are of the view that the terms of the SPA are fair and reasonable and the Disposal is the interest of the Company and the Shareholders as a whole.

INFORMATION ON THE REMAINING GROUP

The Group is principally engaged in the businesses of waste paper, scrap metal and consumable wastes recycling, trading of petrochemical products, online products sales, provision of marketing, web design and maintenance services, trading of gold and diamond industry and money lending.

As the Group has another subsidiary in PRC which is also engaged in the business of online product sales, provision of marketing, web design and maintenance services, the Group (excluding the Target Group) will continue to engage in the afore-mentioned principal businesses after Completion.

– 10 –

LETTER FROM THE BOARD

THE LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined in the Listing Rules) in respect of the Disposal are 75% or more, the Disposal constitutes a very substantial disposal of the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement and Shareholders’ approval requirements.

As at the Latest Practicable Date, Henderson, a company wholly owned by the Purchaser, holds 10% equity interest in the Target Subsidiary. The Target Subsidiary is an indirect nonwholly owned subsidiary of the Company, and hence, the Purchaser is a connected person of the Company under the Listing Rules. Accordingly, the Disposal also constitutes a connected transaction for the Company under Chapter 14A of the Listing Rules and is subject to the reporting, announcement and Independent Shareholders’ approval requirements under the Listing Rules.

The Disposal is however only a connected transaction between the Company and a connected person at the subsidiary level on normal commercial terms, therefore such connected transaction is exempted from the circular, independent financial advice and Independent Shareholders’ approval requirements under rule 14A.101 of the Listing Rules given that (i) the Directors have approved the Disposal; and (ii) the independent non-executive Directors have confirmed that the terms of the Disposal are fair and reasonable, the Disposal in normal commercial terms and in the interests of the Company and its Shareholders as a whole.

GENERAL

– 11 –

LETTER FROM THE BOARD

The SGM will be convened and held for the Shareholders to consider and, if thought fit, approve the SPA and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder or any of its close associates has any material interest in the SPA and the transactions contemplated thereunder, and no Shareholder is required to abstain from voting on the resolution(s) in respect of the SPA at the SGM.

Completion is conditional upon the satisfaction or, if applicable, waiver of the conditions set out in the section headed ‘‘Conditions Precedent’’ under the SPA. Accordingly, the Disposal may or may not proceed. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

RECOMMENDATION

The Board considers that the transactions contemplated under the SPA are on normal commercial terms and the terms of the SPA are fair and reasonable and are in the interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM to approve the SPA and the transactions contemplated thereunder.

ADDITIONAL INFORMATION

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

Yours faithfully By Order of the Board

China Environmental Energy Investment Limited Chen Tong Chairman

– 12 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. THREE YEARS’ SUMMARY OF FINANCIAL RESULTS

Financial information of the Group for each of the three years ended 31 March 2013, 2014 and 2015 and the six months ended 30 September 2013, 2014 and 2015 are disclosed in the following documents which have been published on the websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.986.com.hk) respectively:

annual report of the Company for the year ended 31 March 2013 published on 30 July 2013 (pages 37 to 146);
annual report of the Company for the year ended 31 March 2014 published on 28 July 2014 (pages 39 to 150);
annual report of the Company for the year ended 31 March 2015 published on 30 July 2015 (pages 38 to 154);
interim report of the Company for the six months ended 30 September 2013 published on 10 December 2013 (pages 14 to 48);
interim report of the Company for the six months ended 30 September 2014 published on 12 December 2014 (pages 16 to 46); and
interim report of the Company for the six months ended 30 September 2015 published on 17 December 2015 (pages 17 to 48).
STATEMENT OF INDEBTEDNESS AND CONTINGENT LIABILITIES AS AT 30 NOVEMBER 2015

Indebtedness statement of the Group

As at the close of business on 30 November 2015, being the Latest Practicable Date for the purpose of this statement of indebtedness prior to the printing of this circular, the Group had outstanding borrowings of approximately HK$139,196,000, comprising (1) unsecured promissory notes of HK$93,750,000; (2) unsecured unconvertible bonds of HK$20,000,000; (3) unsecured bank loan of approximately HK$23,023,000 (equivalent to RMB19,000,000) guaranteed by a subsidiary of the Group and independent third parties; and (4) secured bills payable of approximately HK$2,423,000 (equivalent to RMB2,000,000).

General

For the purpose of the above indebtedness statement, foreign currency denominated amounts has been translated into Hong Kong dollar at the rates of exchange prevailing at the close of business on 30 November 2015.

– 13 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Save as aforesaid and apart from intra-group liabilities and normal trade payables, the Group did not have: (a) any other debt securities issued and outstanding, and authorised or otherwise created but unissued; (b) any other term loans (whether guaranteed, unguaranteed, secured or unsecured); (c) any other borrowings or indebtedness in the nature of borrowing including bank overdrafts and liabilities under acceptances (other than normal trade bills) or acceptance credits or hire purchase commitments; (d) any other mortgages or charges; or (e) any other material guarantees or contingent liabilities as at 30 November 2015. The Directors have confirmed that there have been no material changes in the indebtedness and contingent liabilities of the Group since 30 November 2015, up to and including the Latest Practicable Date.

3. WORKING CAPITAL

The Directors, after due and careful enquiry, are of the opinion that following Completion, after taking into account the financial resources available to the Group, including internally generated funds and the available banking facilities, the Group has sufficient working capital for its present requirements for at least the next 12 months from the date of this circular, in the absence of unforeseeable circumstances.

4. MATERIAL ADVERSE CHANGE

The Group published a profit warning announcement on 26 November 2015 regarding the expected substantial loss for the six months period ended 30 September 2015. The Board believed that such substantial loss was primarily attributable to the non-cash impairment loss on the available-for-sale investment arisen from the Company’s existing investment in Pure Power Holdings Limited of approximately HK$68.97 million. The above-said loss was non-cash in nature and had no effect on the Group’s business operations where such loss did not constitute a material adverse effect on the business, financial condition of the Group taken as a whole.

As at the Latest Practicable Date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 March 2015, being the date to which the latest published audited consolidated financial statements of the Company were made up.

5. FINANCIAL AND TRADING PROSPECTS OF THE REMAINING GROUP

The Remaining Group is principally engaged in the businesses of waste paper, scrap metal and consumable wastes recycling, trading of petrochemical products, online products sales, provision of marketing, web design and maintenance services, trading of gold and diamond industry and money lending.

The Directors will continue to enhance the Group’s businesses through review of its existing business portfolio from time to time and also seek suitable investment opportunities in the long run so as to broaden the source of income of the Group and diversify the Group’s business portfolio. For its existing businesses, the Group will allocate more resources to develop those businesses with high growth potential and will consider to divest those businesses with losses or

– 14 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

facing intensive competition. In any potential acquisition, the Group will evaluate the management of the target to be acquired as well as the intrinsic value of the acquisition, with an overall goal and strategy to acquire businesses with high intrinsic value at attractive prices. The Company believes that the acquisition of STI is the prime opportunity to enter financial services industry. The Group will closely monitor the acquisition progress of the completion of STI in the coming months. The Company believes that this acquisition shall build a stronger business foundation and enlarge the source of income of the Group, thereby creating value for the Shareholders.

6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Set out below is the management discussion and analysis on the Remaining Group.

(i) For the six months ended 30 September 2015

Business and Financial Review

The Remaining Group recorded a turnover of approximately HK$25.78 million, representing an increase of approximately 71.29% as compared with the turnover of approximately HK$15.05 million of the corresponding period of 2014. The increase in turnover was mainly attributable to the contribution from the newly acquired businesses of internet sales and services as well as the trading of petrochemical products.

For the six months ended 30 September 2015, the revenues from the wastes recycling business and trading of petrochemical products business were approximately HK$16.40 million (2014: approximately HK$15.05 million) and HK$7.99 million (2014: Nil) respectively.

The Remaining Group’s unaudited net loss for the period under review was approximately HK$105.94 million (2014: approximately HK$31.88 million). The increase in unaudited net loss was mainly due to (i) impairment loss on available-forsale investment in respect of the Company’s investment in Pure Power Holdings Limited (‘‘Pure Power’’) of approximately HK$68.97 million (2014: Nil); and (ii) goodwill impairment loss of approximately HK$17.28 million recognized for the six months ended 30 September 2015 (2014: Nil). However, the Group recorded an unrealized gain of approximately HK$680.81 million on investments in equity securities listed in Hong Kong at fair value through other comprehensive income in profit or loss for the six months ended 30 September 2015.

Liquidity and Financial Resources

As at 30 September 2015, the Remaining Group had total assets of approximately HK$1,592,935,000 and liabilities of approximately HK$251,341,000.

– 15 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Cash Position

As at 30 September 2015, the Remaining Group’s cash and bank balances were approximately HK$158,627,000.

Gearing ratio

As at 30 September 2015, the Remaining Group’s gearing ratio (calculated as net debt (being total debts including borrowings, trade and bills payables, other payables and accruals less the aggregate of cash deposits held by securities brokers and cash and bank balances) divided by total shareholders’ equity and net debt) was 2.49%.

Borrowings

As at 30 September 2015, the Remaining Group’s total bank and other borrowings, unconvertible bonds, financial liabilities designated at fair value through profit or loss and promissory notes payable was HK$140,690,000.

Charge on Assets

As at 30 September 2015, the Remaining Group did not have any charge on assets.

Capital Expenditures

As at 30 September 2015, the Remaining Group did not have any significant capital commitments.

Contingent Liabilities

As at 30 September 2015, the Remaining Group did not have any significant contingent liabilities.

Exchange Risk Exposure

The Remaining Group mainly operates in Hong Kong and the Mainland China, with revenues and expenditures denominated in RMB. During the six months ended 30 September 2015, the Group did not enter into any derivative contracts aimed at minimizing exchange rate risks and no financial instrument has been used for hedging purposes.

The Group’s foreign currency net investments had not been hedged by currency borrowings or any other hedging instruments.

– 16 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Significant Investments and Material Acquisition and Disposals

In order to diversify the business of the Remaining Group for maximizing returns to the shareholders of the Company, the Remaining Group has been actively seeking various investment opportunities, and entered into the following transactions.

On 4 September 2015, the Company as purchaser and Mr. Wong Him Shun Philip as vendor entered into a sale and purchase agreement, pursuant to which the vendor has conditionally agreed to sell and the Company has conditionally agreed to acquire the entire equity interest in Elite Honest Inc. (‘‘Elite Honest’’), at a consideration of HK$30 million by way of issue of promissory note by the Company. Elite Honest was incorporated under the laws of the British Virgin Islands with limited liability and it owns 100% equity interest in H & S Creation Limited (‘‘H&S’’). H&S is principally engaged in the business of trading of gold and diamond. Upon completion of the acquisition on 18 September 2015, Elite Honest and H&S have become wholly-owned subsidiaries of the Company. Details of which are set out in the announcement of the Company dated 4 September 2015.

Save for the above disclosed, the Remaining Group did not have any material acquisition or disposal of subsidiaries and associated companies during the period.

Staff and Remuneration Policy

As at 30 September 2015, the Remaining Group had approximately 43 employees in Hong Kong and in the PRC. The staff cost (including directors’ remunerations) of the Remaining Group was approximately HK$5.16 million. Remunerations are commensurate with the nature of job, staff experience and market conditions.

(ii) For the year ended 31 March 2015

Business and Financial Review

During the financial year ended 31 March 2015, the Remaining Group’s turnover amounted to approximately HK$41,889,000, representing a decrease of 29.96% as compared with the financial year ended 31 March 2014. The decrease in revenue was mainly due to the wastes recycling business, which was approximately HK$29,773,000, representing a 50.22% decrease as compared with the previous financial year. However, the revenue contributed by the new line of business of trading of petrochemical products was approximately HK$11,692,000 (2014: Nil). The Remaining Group recorded a gross profit for the financial year of around HK$1,274,000.

The Remaining Group’s result for the financial year ended 31 March 2015 was a consolidated net loss of approximately HK$151,722,000, against a consolidated net loss of approximately HK$1,414,607,000 for the financial year ended 31 March 2014.

– 17 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The improved financial results was primarily attributable to the fact that the non-cash substantial loss of HK$1,202,602,000 on change in fair value of financial liabilities designated at fair value through profit or loss caused by the significant increase in the Company’s share price as at the date of conversion of convertible notes as compared to the share price as at 1 April 2013 was recognised for the year ended 31 March 2014 while such loss for the year ended 31 March 2015 was relatively minimal.

Liquidity and Financial Resources

As at 31 March 2015, the Remaining Group had total assets of approximately HK$924,075,000 and liabilities of approximately HK$352,509,000.

Cash Position

As at 31 March 2015, the Remaining Group’s cash position was approximately HK$256,781,000. Restricted bank deposits were also included as a component of cash position amounted to HK$5,877,000.

Gearing ratio

As at 31 March 2015, the Remaining Group’s gearing ratio (calculated as net debt (being total debts including borrowings, trade and bills payables, other payables and accruals less the aggregate of restricted bank deposits, cash deposits held by securities brokers and cash and bank balances) divided by total shareholders’ equity and net debt) was 5.21%.

Borrowings

As at 31 March 2015, the Remaining Group’s total bank and other borrowings, unconvertible bonds, financial liabilities designated at fair value through profit or loss and promissory notes payable were HK$247,891,000.

Charge on Assets

As at 31 March 2015, the Remaining Group did not have any charge on assets.

Capital Expenditures

As at 31 March 2015, the Remaining Group did not have any significant capital commitments.

Contingent Liabilities

As at 31 March 2015, the Remaining Group did not have any significant contingent liabilities.

– 18 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Exchange Risk Exposure

The Group generates most of the revenue and incurs most of the costs in RMB. The Remaining Group does not foresee significant risk in exchange rate fluctuations and no financial instrument has been used for hedging purposes.

The Group’s foreign currency net investments had not been hedged by currency borrowings or any other hedging instruments.

Significant Investments and Material Acquisition and Disposals

On 12 May 2014, the Company and Main Global Group Limited entered into an agreement pursuant to which Main Global Group Limited has conditionally agreed to sell and the Company has conditionally agreed to acquire shares representing 9.9% equity interest in Starfame Investments Limited which is an investment holding company and indirectly wholly owned 北京吉仁弘暉商貿有限公司 (Beijing Jirenhonghui Trading Company Limited[note] , the ‘‘Beijing Company’’) which is principally engaged in wholesale and distribution products encompassing various aspects of production and livelihood, for a consideration of HK$30,000,000, which was settled by way of the issue of the promissory note. The acquisition was completed on 20 May 2014. As informed by the management of the Beijing Company, the Beijing’s Company’s audited turnover for the year 2014 was RMB295,999,000 and operating profit after tax was RMB24,301,000.

On 4 June 2014, the Company entered into a sale and purchase agreement with Lucky East International Limited, pursuant to which Lucky East International Limited has agreed to acquire and the Company has agreed to sell shares representing 9.9% of the entire issued share capital of Swift Profit International Limited, at a consideration of HK$66,000,000 which was settled in instalments. The disposal of Swift Profit International Limited which operated electric car battery business of the Remaining Group, was completed on 30 September 2015.

On 21 January 2015, the Company and Mr. Lu Qinglu entered into an agreement pursuant to which Mr. Lu Qinglu has conditionally agreed to sell and the Company has conditionally agreed to acquire the entire equity interest in Platinum Plus International Limited which through its wholly owned subsidiary, Ritz Trading (Shanghai) Company Limited, is principally engaged in the business of online products sales, provision of marketing, web design and maintenance services in the PRC, for a consideration of

Note: The English name referred herein represents management’s best efforts at translating the Chinese name of the company, as no English name has been registered.

– 19 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

HK$63,750,000, which was settled by way of the issue of the promissory note. The acquisition was completed on 30 January 2015. Following the completion of the said acquisition, Platinum Plus International Limited and Ritz Trading (Shanghai) Company Limited have become wholly owned subsidiaries of the Company. Since the acquisition, the revenue and the operating profit before tax generated from such subsidiaries were HK$0.42 million and HK$0.16 million respectively.

In March 2015, the Remaining Group adopted a diversified investment strategy including investing in quality stock and other financial products with a view to achieve better shareholders’ return. As at 31 March 2015, the Remaining Group held 12,670,000 shares of Jicheng Umbrella Holdings Limited (a company listed on the Stock Exchange; stock code: 1027) at purchase cost of HK$13,938,000 and 63,000,000 shares of WLS Holdings Limited (a company listed on the Growth Enterprise Market of the Stock Exchange; stock code: 8021) at purchase cost of HK$18,900,000 for long term investment. However, the Remaining Group recorded an unrealized gain of approximately HK$80,588,000 on investments in equity securities listed in Hong Kong at fair value though other comprehensive income in profit or loss for the year ended 31 March 2015.

Save for the above disclosed, the Remaining Group did not have any material acquisition or disposals of subsidiaries and associated companies during the year.

Staff and Remuneration Policy

As at 31 March 2015, the Remaining Group had approximately 41 employees in Hong Kong and in the PRC. The staff cost (including directors’ remunerations) of the Remaining Group was approximately HK$9.64 million. Remunerations are commensurate with the nature of job, staff experience and market conditions.

(iii) For the year ended 31 March 2014

Business and Financial Review

The turnover of the Remaining Group from continuing operations for the year ended 31 March 2014 was HK$59,808,000, representing a 39.98% decrease as compared with HK$99,655,000 of the financial year ended 31 March 2013. Gross profit from continuing operations was HK$5,404,000 and gross margin was 9.04%. The increase in gross profit was attributable to the written down of inventories amounted to HK$5,937,000 in the previous year and the increase in the selling price of recycled paper.

– 20 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Operating loss from continuing operations after tax of the Remaining Group was HK$1,449,697,000 which included a loss of HK$1,202,602,000 on change in fair value of financial liabilities designated at fair value through profit or loss caused by significant increases in the Company’s share price as at dates of conversion of convertible notes as compared to share price at the beginning of the year, impairment loss of HK$17,257,000 on investment in electric car battery business, impairment loss of HK$133,162,000 on goodwill arising from acquisition of recycling business and impairment loss recognised in respect of other receivables amounting to HK$46,059,000. The above said impairment loss recognised in respect of receivables included an amount of HK$35,515,000 belonged to a party who has an outstanding amount of RMB42,452,719 due to a subsidiary, Suzhou Baina Renewable Resources Co., Ltd, as at 31 March 2014 which is secured by the pledge of 13.3% equity interests in Ideal Market Holdings Limited, a subsidiary of the Company, held by a minority shareholder. Due to the reduction of the underlying value of recycling business, the said outstanding amount could not be fully covered by the security of pledge of shares and then be impaired.

Liquidity and Financial Resources

As at 31 March 2014, the Remaining Group had total assets of approximately HK$351,863,000 and liabilities of approximately HK$201,550,000.

Cash Position

As at 31 March 2014, the Remaining Group’s cash position was approximately HK$22,370,000. Restricted bank deposits were also included as a component of each position amounted to HK$11,767,000.

Gearing ratio

As at 31 March 2014, the Remaining Group’s gearing ratio (calculated as net debt (being total debts including borrowings, trade and bills payables, other payables and accruals less the aggregate of restricted bank deposits and cash and bank balances) divided by total shareholders’ equity and net debt) was 49.29%.

Borrowings

As at 31 March 2014, the Remaining Group’s total bank and other borrowings, unconvertible bonds, financial liabilities designated at fair value through profit or loss and promissory notes payable were HK$101,029,000.

– 21 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Charge on Assets

As at 31 March 2014, the Remaining Group did not have any charge on assets.

Capital Expenditures

As at 31 March 2014, the Remaining Group did not have any significant capital commitments.

Contingent Liabilities

As at 31 March 2014, the Remaining Group did not have any significant contingent liabilities.

Exchange Risk Exposure

The Group’s foreign currency net investments had not been hedged by currency borrowings or any other hedging instruments.

Significant Investments and Material Acquisition and Disposals

On 20 January 2014, the Company entered into a sale and purchase agreement with Fortune Glow Limited pursuant to which the Company has conditionally agreed to acquire and Fortune Glow Limited has conditionally agreed to dispose of shares representing 10% equity interest in Pure Power Holdings Limited which is principally engaged in the exploration and exploitation of natural resources in the United States of America, for the consideration of HK$125,000,000, which was settled as to HK$123,200,000 by way of delivery of promissory notes and as to HK$1,800,000 by way of delivery of convertible bonds. The acquisition was completed on 29 April 2014.

Save for the above disclosed, the Remaining Group did not have any material acquisition or disposal of subsidiaries and associated companies during the year.

Staff and Remuneration Policy

As at 31 March 2014, the Remaining Group had approximately 35 employees. The staff cost (including directors’ remunerations) of the Remaining Group was approximately HK$7.36 million. Remunerations are commensurate with the nature of job, staff experience and market conditions.

– 22 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(iv) For the year ended 31 March 2013

Business and Financial Review

The turnover of the Remaining Group for the year ended 31 March 2013 was HK$99,655,000, representing a 26.74% decrease as compared with HK$136,028,000 of the financial year ended 31 March 2012. Gross profit from continuing operations was HK$1,181,000 and gross margin was 1.19%. The decrease in gross profit was attributable to the writing down of inventories amounted to HK$5,937,000 during the year and keen competition in the market. Operating loss from continuing operations after tax of the Group was HK$377,292,000 which included a loss of HK$40,583,000 on change in fair value of financial liabilities designated at fair value through profit or loss and impairment loss of HK$47,616,000 on investment in electric car battery business and HK$203,849,000 on goodwill arising from acquisition of recycling business respectively.

Liquidity and Financial Resources

As at 31 March 2013, the Remaining Group had total assets of approximately HK$555,468,000 and liabilities of approximately HK$393,490,000.

Cash Position

As at 31 March 2013, the Remaining Group’s cash and bank balances were approximately HK$3,603,000.

Gearing ratio

As at 31 March 2013, the Remaining Group’s gearing ratio (calculated as net debt (being total debts including borrowings, trade and bills payables, other payables and accruals net of cash and bank balances) divided by total shareholders’ equity and net debt) was 67.89%.

Borrowings

As at 31 March 2013, the Remaining Group’s total bank and other borrowings, unconvertible bonds, financial liabilities designated at fair value through profit or loss and promissory notes payable were HK$301,864,000.

Charge on Assets

As at 31 March 2013, the Remaining Group did not have any charge on assets.

– 23 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Capital Expenditures

As at 31 March 2013, the Remaining Group did not have any significant capital commitments.

Contingent Liabilities

As at 31 March 2013, the Remaining Group did not have any significant contingent liabilities.

Exchange Risk Exposure

The Group’s foreign currency net investments had not been hedged by currency borrowings or any other hedging instruments.

Significant Investments and Material Acquisition and Disposals

On 28 March 2013, the Company has entered into a sale and purchase agreement to dispose of the entire equity interests in Nam Hing (B.V.I.) Limited and its subsidiaries, being the Company’s subsidiaries mainly engaged in trading and manufacturing of printed circuit boards and trading of industrial laminates. The disposal was completed on 10 April 2013.

Save for the above disclosed, the Remaining Group did not have any material acquisition or disposal of subsidiaries and associated companies during the year.

Staff and Remuneration Policy

As at 31 March 2013, the Remaining Group had approximately 230 employees. The staff cost (including directors’ remunerations) of the Remaining Group was approximately HK$14.88 million. Remunerations are commensurate with the nature of job, staff experience and market conditions.

– 24 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

Set out below are the unaudited financial information of Asian Champion Limited and its subsidiary (the ‘‘Target Group’’) which comprises the unaudited consolidated statements of financial position of the Target Group as at 31 March 2015 and 30 September 2015 and the related unaudited consolidated statements of profit or loss and other comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for the period from 1 July 2014 (date of incorporation) to 31 March 2015, the period from 6 October 2014 (date of completion of acquisition of the Target Company by the Company) to 31 March 2015 and six months ended 30 September 2015 and certain explanatory notes (altogether the ‘‘Unaudited Financial Information’’).

The Company’s independent reporting accountant, Cheng & Cheng Limited, has reviewed the Unaudited Financial Information of the Target Group in accordance with Hong Kong Standard on Review Engagements 2400 (Revised) ‘‘Engagement to Review Financial Statements’’ issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’) and with reference to Practice Note 750 ‘‘Review of Financial Information under the Hong Kong Listing Rules for a Very Substantial Disposal’’ issued by the HKICPA. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable the reporting accountant to obtain assurance that they would become aware of all significant matters that might be identified in an audit. Based on their review, nothing has come to their attention that causes them to believe that the Unaudited Financial Information of the Target Group is not prepared, in all material respects, in accordance with the basis of preparation as set out in Note 2 below.

– 25 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

NON CURRENT ASSET Goodwill CURRENT ASSETS Trade receivables Other receivables, prepayments and deposits paid Amount due from the holding company Cash and cash equivalents CURRENT LIABILITIES Trade payables Other payables and accruals Tax payable NET CURRENT ASSETS TOTAL ASSETS LESS LIABILITIES CAPITAL AND RESERVES Share capital Retained profits Non-controlling interests TOTAL EQUITY	As at 31 March 2015 HK$’000 1,203 11,816 1 388 – 12,205 6,057 2,273 556 8,886 3,319 4,522 388 3,840 4,228 294 4,522	As at 30 September 2015 HK$’000 1,203
		6,181 4 381 2,519
		9,085
		2,565 2,302 605
		5,472
		3,613
		4,816
		388 4,104
		4,492 324
		4,816

– 26 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

6 October 2014

Turnover Cost of sales Gross profit Other income Administrative expenses Finance costs Profit/(loss) before taxation Taxation Total comprehensive income/(expense) for the period Profit/(loss) for the period attributable to: Owners of the Company Non-controlling interests Total comprehensive income/(expense) attributable to: Owners of the Company Non-controlling interests	1 July 2014 (date of incorporation) – 31 March 2015 HK$’000 10,822 (5,713) 5,109 – (286) – 4,823 (556) 4,267 3,840 427 4,267 3,840 427 4,267	(date of completion of acquisition of the Target Company by the Company) – 31 March 2015 HK$’000 10,821 (5,707) 5,114 – (195) – 4,919 (556) 4,363 3,926 437 4,363 3,926 437 4,363	1 April 2015 – 30 September 2015 HK$’000 5,493 (4,613) 880 3 (540) – 343 (49) 294 264 30 294 264 30 294

– 27 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Attributable to shareholders of

	Attributable to shareholders of	Attributable to shareholders of
Issue of shares on 1 July 2014 (date of incorporation) Total comprehensive income for the period Non-controlling interests arising on acquisition of a subsidiary Total equity as at 31 March and 1 April 2015 Total comprehensive income for the period Total equity as at 30 September 2015 Issue of shares on 1 July 2014 (date of incorporation) Total comprehensive loss for the period Non-controlling interests arising on acquisition of a subsidiary Total equity as at 6 October 2014 (date of completion of acquisition of the Target Company by the Company) Total comprehensive income for the period Total equity as at 31 March 2015	the Target Company Share Capital Retained profits/ (accumulated losses) Total HK$’000 HK$’000 HK$’000 388 – 388 – 3,840 3,840 – – – 388 3,840 4,228 – 264 264 388 4,104 4,492 388 – 388 – (86) (86) – – – 388 (86) 302 – 3,926 3,926 388 3,840 4,228		Non- controlling interests HK$’000 – 427 (133) 294 30 324 – (10) (133) (143) 437 294	Total HK$’000 388 4,267 (133)
	Share Capital HK$’000 388 – – 388 – 388 388 – – 388 – 388	Retained profits/ (accumulated losses) HK$’000 – 3,840 – 3,840 264 4,104 – (86) – (86) 3,926 3,840
				4,522 294
				4,816
				388 (96) (133)
				159 4,363
				4,522

– 28 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash flows from operating activities Profit/(loss) before taxation for the period and operating cash flows before movements in working capital (Increase)/decrease in trade and other receivables (Increase)/decrease in amount due from the holding company Increase/(decrease) in trade and other payables Net cash (used in)/generated from operating activities Cash flows from investing activities Acquisition of a subsidiary, net of cash acquired Net cash generated from investing activities Cash flows from financing activities Proceeds from issue of new shares Net cash generated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the period Cash and cash equivalents at end of the period	1 July 2014 (date of incorporation) – 31 March 2015 HK$’000 4,823 (10,816) (388) 5,972 (409) 21 21 388 388 – – –	6 October 2014 (date of completion of acquisition of the Target Company by the Company) – 31 March 2015 HK$’000 4,919 (9,815) – 4,875 (21) 21 21 – – – – –	1 April 2015 – 30 September 2015 HK$’000 343 5,632 7 (3,463) 2,519 – – – – 2,519 – 2,519

– 29 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

NOTES TO THE UNAUDITED FINANCIAL INFORMATION

1. General Information

Asian Champion Limited (the ‘‘Target Company’’) was incorporated in the British Virgin Islands with limited liability and principally engaged in investment holding. The Target Company is a wholly-owned subsidiary of China Environmental Energy Investment Limited (the ‘‘Company’’), a company incorporated in Bermuda with limited liability with its shares listed on the Main Board of the Stock Exchange of Hong Kong Limited.

HKOMall Limited (the ‘‘Target Subsidiary’’), is a company incorporated in Hong Kong with limited liability and the Target Company acquired 90% of issued share capital of the Target Subsidiary on 26 August 2014. The Target Subsidiary is principally engaged in the business of online products sales, web design and maintenance services.

On 18 September 2015, the Company entered into a sale and purchase agreement with Ms. Chow Yan Ping (the ‘‘Purchaser’’), pursuant to which the Company agreed to sell and the Purchaser agreed to purchase the entire issued share capital of the Target Company subject to the terms and conditions of the sale and purchase agreement (the ‘‘Disposal’’). The unaudited financial information of the Target Company and Target Subsidiary (collectively the ‘‘Target Group’’) is presented in Hong Kong dollars (‘‘HK$’’) and all values are rounded to the nearest thousand except when otherwise indicated.

2. Basis of preparation and presentation of the financial information

The unaudited financial information of the Target Group for the period from 1 July 2014 (date of incorporation) to 31 March 2015, the period from 6 October 2014 (date of completion of acquisition of the Target Company by the Company) to 31 March 2015 and the six months ended 30 September 2015, and the unaudited financial information of the Target Subsidiary for each of the three years ended 31 March 2013, 2014 and 2015 and the six months ended 30 September 2014 and 2015 as set out in note 3, (the ‘‘Unaudited Financial Information’’) has been prepared in accordance with paragraph 68(2)(a)(i) of Chapter 14 of the Listing Rules, and solely for the purposes of inclusion in this circular to be issued by the Company in connection with the Disposal. The Unaudited Financial Information has been prepared using the same accounting policies adopted by the Company in the preparation of the consolidated financial statements of the Company and its subsidiaries for the period from 1 July 2014 to 31 March 2015, the period from 6 October 2014 (date of completion of acquisition of the Target Company by the Company) to 31 March 2015, for each of the three years ended 31 March 2013, 2014 and 2015 and the six months ended 30 September 2014 and 2015, which conform with the Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’). The Unaudited Financial Information of the Target Group does not contain sufficient information to constitute a complete set of financial statements as defined in Hong Kong Accounting Standard 1 (Revised) ‘‘Presentation of Financial Statements’’ issued by the HKICPA nor an interim report as defined in Hong Kong Accounting Standard 34 ‘‘Interim Financial Reporting’’ issued by the HKICPA.

– 30 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

3. Financial information of the Target Subsidiary

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

CURRENT ASSETS Trade receivables Other receivables, prepayments and deposits paid Amount due from a related company Amount due from a director Amount due from shareholders Cash and cash equivalents CURRENT LIABILITIES Trade payables Other payables Accruals Amount due to a related company Interest-bearing borrowings Tax payable NET CURRENT (LIABILITIES)/ASSETS CAPITAL AND RESERVES Share capital (Accumulated loss)/retained profits TOTAL EQUITY	Unaudited As at 31 March 2013 2014 HK$’000 HK$’000 – 1,000 – 1 16 – – 22 11 2 2 4 29 1,029 240 1,793 – – 19 71 – 209 40 – – – 299 2,073 (270) (1,044) 10 10 (280) (1,054) (270) (1,044)	2015 HK$’000 11,816 1 – – – – 11,817 6,057 2,197 76 – – 556 8,886 2,931 10 2,921 2,931	Unaudited As at 30 September 2015 HK$’000 6,181 4 – – – 2,519
			8,704
			2,565 2,271 31 – – 605
			5,472
			3,232
			10 3,222
			3,232

– 31 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Turnover Cost of sale Gross profit Other income Administrative expenses Finance costs (Loss)/profit before taxation Taxation (Loss)/profit for the year/period	4 July 2012 (date of incorporation) – 31 March 2013 HK$’000 688 (482) 206 – (486) – (280) – (280)	Unaudited 1 April 2013 – 31 March 2014 HK$’000 1,242 (1,205) 37 – (811) – (774) – (774)	1 April 2014 – 31 March 2015 HK$’000 10,931 (5,842) 5,089 – (558) – 4,531 (556) 3,975	Unaudited Period ended 30 September 2014 2015 HK$’000 HK$’000 111 5,493 (130) (4,613) (19) 880 – 3 (273) (533) – – (292) 350 – (49) (292) 301	Unaudited Period ended 30 September 2014 2015 HK$’000 HK$’000 111 5,493 (130) (4,613) (19) 880 – 3 (273) (533) – – (292) 350 – (49) (292) 301
					880 3 (533) –
					350 (49)
					301

– 32 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Issue of shares on 4 July 2012 (date of incorporation) Total comprehensive loss for the period Total equity as at 31 March and 1 April 2013 Total comprehensive loss for the year Total equity as at 31 March and 1 April 2014 Total comprehensive income for the year Total equity as at 31 March and 1 April 2015 Total comprehensive income for the period Total equity as at 30 September 2015 Total equity as at 1 April 2014 Total comprehensive loss for the period Total equity as at 30 September 2014	Share Capital HK$’000 10 – 10 – 10 – 10 – 10 10 – 10	Retained profits/ (accumulated losses) HK$’000 – (280) (280) (774) (1,054) 3,975 2,921 301 3,222 (1,054) (292) (1,346)	Total HK$’000 10 (280) (270) (774) (1,044) 3,975 2,931 301 3,232 (1,044) (292) (1,336)

– 33 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

Cash flows from operating activities (Loss)/profit before taxation for the year/period and operating cash flows before movements in working capital (Increase)/decrease in trade and bills receivables Increase in other receivables, prepayments and deposits paid Increase/(decrease) in trade and bills payables (Increase)/decrease amount due from a related company Increase/(decrease) amount due to a related company (Increase)/decrease amount due from a director (Increase)/decrease amount due from shareholders Increase/(decrease) in other payables and accruals Net cash (used in)/generated from operating activities Net cash used in investing activities Cash flows from financing activities Proceeds from issue of new shares Net increase/(decrease) of bank overdrafts Net cash generated from financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year/period Cash and cash equivalents at end of the year/period	4 July 2012 (date of incorporation) – 31 March 2013 HK$’000 (280) – – 240 (16) – – (11) 19 (48) – 10 40 50 2 – 2	Unaudited 1 April 2013 – 31 March 2014 HK$’000 (774) (1,000) (1) 1,553 16 209 (22) 9 52 42 – – (40) (40) 2 2 4	1 April 2014 – 31 March 2015 HK$’000 4,531 (10,816) – 4,264 – (209) 22 2 2,202 (4) – – – – (4) 4 –	Unaudited Period ended 30 September 2014 2015 HK$’000 HK$’000 (292) 350 – 5,634 – (2) 221 (2,047) – – 88 – 22 – 2 – (24) (1,416) 17 2,519 – – – – – – – – 17 2,519 4 – 21 2,519	Unaudited Period ended 30 September 2014 2015 HK$’000 HK$’000 (292) 350 – 5,634 – (2) 221 (2,047) – – 88 – 22 – 2 – (24) (1,416) 17 2,519 – – – – – – – – 17 2,519 4 – 21 2,519
					2,519
					–
					– –
					–
					2,519 –
					2,519

– 34 –

APPENDIX III THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

The following is the text of a report, prepared for the sole purpose of inclusion in this circular, received from the independent reporting accountants, Cheng & Cheng Limited, Certified Public Accountants, Hong Kong, in respect of the unaudited pro forma financial information of the Remaining Group.

INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF PRO FORMA FINANCIAL INFORMATION

To the Directors of China Environmental Energy Investment Limited

(Incorporated in Bermuda with limited liability)

We have completed our assurance engagement to report on the compilation of pro forma financial information of China Environmental Energy Investment Limited (the ‘‘Company’’) and its subsidiaries (hereinafter collectively referred to as the ‘‘Group’’) by the directors of the Company (the ‘‘Directors’’) for illustrative purposes only. The pro forma financial information consists of the pro forma consolidated statement of financial position as at 30 September 2015 and the pro forma consolidated statement of profit or loss and other comprehensive income and the pro forma consolidated statement of cash flows for the year ended 31 March 2015 and related notes as set out on pages 38 to 46 of the circular dated 14 January 2016 (the ‘‘Circular’’) issued by the Company (the ‘‘Pro Forma Financial Information’’). The applicable criteria on the basis of which the Directors have compiled the unaudited Pro Forma Financial Information are described in Section A of Appendix III to the Circular. The Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of a very substantial disposal (hereinafter referred to as the ‘‘Disposal’’) by the Group, including proposed disposal of the entire issued share capital of Asian Champion Limited (‘‘Target Company’’, together with its subsidiary collectively referred to as the ‘‘Target Group’’), on the Group’s financial position as at 30 September 2015 and the Group’s financial performance and cash flows for the year ended 31 March 2015 as if the Disposal had taken place at 30 September 2015 and 6 October 2014 (date of completion of the acquisition of the Target Company by the Company) respectively. As part of this process, information about the Group’s financial position has been extracted by the Directors from the Group’s consolidated financial statements for the six months ended 30 September 2015, on which an interim report has been published. Information about the Group’s financial performance and cash flows have been extracted from the Group’s consolidated financial statements for the year ended 31 March 2015, on which an annual report has been published. Information about the Target Group’s financial position, financial performance and cash flows have been extracted by the Directors from the Target Group’s consolidated financial statements for the periods ended 31 March 2015 and 30 September 2015, on which financial information has been published in Appendix II to the Circular.

– 35 –

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

Directors’ responsibility for the Pro Forma Financial Information

The Directors are responsible for compiling the Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and with reference to Accounting Guideline 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars’’ (‘‘AG 7’’) issued by the Hong Kong Institute of Certified Public Accountants (the ‘‘HKICPA’’).

Reporting Accountant’s responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 ‘‘Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus’’ issued by the HKICPA. This standard requires that the reporting accountant comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the Pro Forma Financial Information, in accordance with paragraph 4.29 of the Listing Rules and with reference to AG7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Pro Forma Financial Information.

The purpose of Pro Forma Financial Information included in the Circular is solely to illustrate the impact of the Disposal on unadjusted financial information of the Group as if the Disposal had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Disposal would have been as presented.

– 36 –

APPENDIX III

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

A reasonable assurance engagement to report on whether the Pro Forma Financial Information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the Pro Forma Financial Information provide a reasonable basis for presenting the significant effects directly attributable to the transaction, and to obtain sufficient appropriate evidence about whether:

The related pro forma adjustments give appropriate effect to those criteria; and
The Pro Forma Financial Information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the Group, the Disposal in respect of which the Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Pro Forma Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

(a) the Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Cheng & Cheng Limited

Certified Public Accountants Hong Kong

14 January 2016

– 37 –

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

A. BASIS OF PREPARATION OF THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

The following is a summary of illustrative unaudited pro forma consolidated statement of financial position, unaudited pro forma consolidated statement of profit or loss and other comprehensive income, and unaudited pro forma consolidated statement of cash flows (collectively referred to as the ‘‘Pro Forma Financial Information’’), in connection with the proposed disposal of Asian Champion Limited (the ‘‘Target Company’’, together with its subsidiary collectively referred to as the ‘‘Target Group’’) (the ‘‘Disposal’’). The unaudited Pro Forma Financial Information presented below is prepared to illustrate (i) the financial position of the Group immediately after completion of the Disposal (collectively referred to as the ‘‘Remaining Group’’) as at 30 September 2015 as if the Disposal had been completed on 30 September 2015; and (ii) the results and cash flows of the Remaining Group for the period ended 31 March 2015 as if the Disposal had been completed on 6 October 2014 (date of completion of the acquisition of the Target Company by the Company). The unaudited Pro Forma Financial Information is prepared based on the published annual report of the Company for the year ended 31 March 2015 and published interim report of the Company for the six months ended 30 September 2015, after giving effect to the pro forma adjustments described in the notes.

The unaudited Pro Forma Financial Information is prepared in accordance with Paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and has been prepared by the Directors for illustrative purposes only.

Narrative descriptions of the unaudited pro forma adjustments that are directly attributable to the Disposal and factually supportable are summarised in the accompanying notes to the unaudited Pro Forma Financial Information.

The unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the financial results, cash flows and financial position of the Remaining Group had the Disposal been completed as of the specified dates or any other dates.

The unaudited Pro Forma Financial Information should be read in conjunction with the historical financial information of the Group as set out in the published annual report of the Company for the year ended 31 March 2015, the published interim report of the Company for the six months ended 30 September 2015 and other financial information included elsewhere in this circular.

– 38 –

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

B. UNAUDITED PRO FORMA FINANCIAL INFORMATION

UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

NON-CURRENT ASSETS Property, plant and equipment Goodwill Intangible assets Available-for-sale investments CURRENT ASSETS Inventories Trade and bills receivables Other receivables, prepayments and deposits paid Cash deposits held by securities brokers Bank balances and cash CURRENT LIABILITIES Trade and bills payables Other payables and accruals Promissory notes payable Bank and other borrowings Income tax payable NET CURRENT (LIABILITIES)/ASSETS	Unaudited consolidated statement of financial position of the Group as at 30 September 2015 HK$’000 Note (a) 19,497 270,235 25,199 1,137,846 1,452,777 388 13,130 31,862 55,217 48,529 149,126 7,925 49,381 97,245 23,148 22,273 199,972 (50,846) 1,401,931	Pro Forma Adjustments HK$’000 HK$’000 HK$’000 Note (b) Note (c) Note (d) (1,203) (56,080) (1,203) (6,181) (385) (2,519) 57,400 (9,085) (2,565) (2,302) (605) (5,472) (3,613) (4,816)	Unaudited pro forma consolidated statement of financial position of the Remaining Group HK$’000 19,497 212,952 25,199 1,137,846
			1,395,494
			388 6,949 31,477 55,217 103,410
			197,441
			5,360 47,079 97,245 23,148 21,668
			194,500
			2,941
			1,398,435

– 39 –

APPENDIX III

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

CAPITAL AND RESERVES Share capital Share premium and reserves Equity attributable to: Shareholders of the Company Non-controlling interests TOTAL EQUITY NON-CURRENT LIABILITIES Unconvertible bonds Deferred tax liabilities TOTAL EQUITY	Unaudited consolidated statement of financial position of the Group as at 30 September 2015 HK$’000 Note (a) 37,423 1,314,675 1,352,098 (7,008) 1,345,090 20,297 36,544 56,841 1,401,931	Pro Forma Adjustments HK$’000 HK$’000 HK$’000 Note (b) Note (c) Note (d) – – (3,172) – – (324) – – – – –	Unaudited pro forma consolidated statement of financial position of the Remaining Group HK$’000 37,423 1,311,503
			1,348,926 (7,332)
			1,341,594
			20,297 36,544
			56,841
			1,398,435

– 40 –

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Revenue Cost of sales Gross profit Investment and other income Other gains and losses Selling and distribution expenses Administrative expenses Estimated loss on disposal Finance costs Loss before taxation Taxation Loss for the year Other comprehensive income/(expense), net of income tax Items that may be reclassified subsequently to profit or loss Exchange difference arising from translation of foreign operations Exchange differences arising during the year Increase in fair value of available- for-sale investments Other comprehensive income for the year, net of income tax Total comprehensive expense for the year	Audited consolidated statement of profit or loss and other comprehensive income of the Group for the year ended 31 March 2015 HK$’000 Note (e) 52,710 (46,327) 6,383 1,813 (79,704) (836) (30,421) – (48,795) (151,560) 392 (151,168) (348) (348) 80,588 80,240 (70,928)	Pro Forma Adjustments HK$’000 HK$’000 HK$’000 Note (f) Note (c) Note (d) (10,821) 5,707 (5,114) – – – 195 – (3,172) – (4,919) 556 (4,363) – – – – (4,363)	Unaudited consolidated statement of profit or loss and other comprehensive income of the Remaining Group HK$’000 41,889 (40,620)
			1,269 1,813 (79,704) (836) (30,226) (3,172) (48,795)
			(159,651) 948
			(158,703)
			(348)
			(348) 80,588
			80,240
			(78,463)

– 41 –

APPENDIX III

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

Loss for the year attributable to: Shareholders of the Company Non-controlling interests Total comprehensive expense attributable to: Shareholders of the Company Non-controlling interests	Audited consolidated statement of profit or loss and other comprehensive income of the Group for the year ended 31 March 2015 HK$’000 Note (e) (147,882) (3,286) (151,168) (67,637) (3,291) (70,928)	Pro Forma Adjustments HK$’000 HK$’000 HK$’000 Note (f) Note (c) Note (d) (3,926) (3,172) (437) (4,363) (3,926) (3,172) (437) (4,363)	Unaudited consolidated statement of profit or loss and other comprehensive income of the Remaining Group HK$’000 (154,980) (3,723)
			(158,703)
			(74,735) (3,728)
			(78,463)

– 42 –

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS

Cash flows from operating activities Loss for the year Adjustments for: Income tax credit recognised in profit or loss Finance costs Interest on financial liabilities designated at fair value through profit or loss Depreciation of property, plant and equipment Amortisation of intangible assets Loss on disposal of property, plant and equipment Loss on change in fair value of financial liabilities designated at fair value through profit or loss Impairment loss recognised in respect of: – goodwill – available-for-sale investments – other receivables Bank interest income Reversal of impairments loss on other receivables Loss on disposal of the Target Group Gain on early repayment of promissory notes payable Net foreign exchange gains	Audited consolidated statement of cash flows for the year ended 31 March 2015 HK$’000 Note (e) (151,168) (392) 48,795 133 4,047 4,257 1,592 133 48,216 11,208 11,705 (170) (21) – (3,093) (1,609)	Pro Forma Adjustments HK$’000 HK$’000 HK$’000 Note (g) Note (c) Note (d) (4,363) (3,172) (556) – – – – – – – – – – – – 3,172 – –	Unaudited consolidated statement of profit or loss and other comprehensive income of the Remaining Group HK$’000 (158,703) (948) 48,795 133 4,047 4,257 1,592 133 48,216 11,208 11,705 (170) (21) 3,172 (3,093) (1,609)

– 43 –

APPENDIX III

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

Operating cash flows before movements in working capital Increase in inventories (Increase)/decrease in trade and bill receivables (Increase)/decrease in other receivables, prepayments and deposits paid Decrease in trade and bills payables Increase/(decrease) in other payables and accruals Net cash (used in)/generated from operating activities Cash flows from investing activities Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of subsidiaries Disposal of subsidiaries Acquisition of available-for-sale investments Deposits received on disposal of assets classified as held for sale Bank interest received Decrease in restricted bank deposits Net cash (used in)/generated from investing activities	Audited consolidated statement of cash flows for the year ended 31 March 2015 HK$’000 Note (e) (26,367) (121) (11,684) (3,851) (16,234) 2,968 (55,289) (5,356) 8 209 – (34,310) 20,600 170 5,890 (12,789)	Pro Forma Adjustments HK$’000 HK$’000 HK$’000 Note (g) Note (c) Note (d) (4,919) – 9,815 – (4,616) (259) 21 – – (21) – 57,400 – – – – (21)	Unaudited consolidated statement of profit or loss and other comprehensive income of the Remaining Group HK$’000 (31,286) (121) (1,869) (3,851) (20,850) 2,709
			(55,268)
			(5,356) 8 188 57,400 (34,310) 20,600 170 5,890
			44,590

– 44 –

APPENDIX III

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

Cash flows from financing activities Proceeds from issue of new shares Share issue expenses Proceeds from bank and other borrowings Repayments of bank and other borrowings Repayments of promissory notes payable Interest paid Net cash generated from/(used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of the year Effects of exchange rate changes Cash and cash equivalents at end of the year	Audited consolidated statement of cash flows for the year ended 31 March 2015 HK$’000 Note (e) 502,129 (5,681) 15,881 (68,000) (88,000) (47,794) 308,535 240,457 10,603 (156) 250,904	Pro Forma Adjustments HK$’000 HK$’000 HK$’000 Note (g) Note (c) Note (d) – – – – – – – – – – –	Unaudited consolidated statement of profit or loss and other comprehensive income of the Remaining Group HK$’000 502,129 (5,681) 15,881 (68,000) (88,000) (47,794)
			308,535
			297,857 10,603 (156)
			308,304

Notes:

a. The amounts are extracted from the unaudited consolidated statement of financial position of the Group as at 30 September 2015; as set out in the published interim report of the Company for the six months ended 30 September 2015.
b. The adjustment, which is extracted from the unaudited consolidated statement of financial position of Asian Champion Limited and its subsidiary (the ‘‘Target Group’’) as at 30 September 2015 as set out in Appendix II of the Circular, represents the exclusion of assets and liabilities of the Target Group, assuming that the Disposal had been completed on 30 September 2015.

– 45 –

APPENDIX III

THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

c. The adjustment represents the estimated net amount to be paid for the Disposal and the estimated loss on the Disposal as if the Disposal had been completed on 30 September 2015 as follows:

Calculation of pro forma loss on the Disposal: Net assets of the Target Group as at 30 September 2015 Goodwill eliminated in the Group upon completion of the Disposal Less: Non-controlling interests attributable to Target Group Less: Total consideration Estimated direct expenses in relation to the Disposal Pro forma loss on the Disposal as at 30 September 2015	HK$’000 4,816 56,080 (324)
	60,572 (58,000) 600
	3,172

d. The adjustment represents the net cash inflow as if the Disposal had been completed on 30 September 2015 as follows:

Total consideration Less: Estimated direct expenses in relation to the Disposal	HK$’000 58,000 (600)
	57,400

e. The amounts are extracted from the audited consolidated statement of profit or loss and other comprehensive income and the audited consolidated statement of cash flows of the Group for the year ended 31 March 2015 as set out in the published annual report of the Company for the year ended 31 March 2015.
f. The adjustment, which is extracted from the unaudited consolidated statement of profit or loss and other comprehensive income of the Target Group for the period from 6 October 2014 (date of completion of acquisition of the Target company by the Company) to 31 March 2015 as set out in Appendix II of the Circular, represents the exclusion in full of the income and expenses of the Target Group, assuming that the Disposal had been completed on 6 October 2014 (date of completion of the acquisition of the Target Company by the Company).
g. The adjustment, which is extracted from the unaudited consolidated statement of cash flow of the Target Group for the period from 6 October 2014 (date of completion of acquisition of the Target company by the Company) to 31 March 2015 as set out in Appendix II of the Circular, represents the exclusion in full of the cash flows of the Target Group as if the Disposal had been completed on 6 October 2014 (date of completion of the acquisition of the Target Company by the Company).

– 46 –

GENERAL INFORMATION

APPENDIX IV

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY

As at the Latest Practicable Date, none of the directors or chief executive of the Company had any interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporation (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 and short positions which he/she was deemed or taken to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers, to be notified to the Company and the Stock Exchange.

As at the Latest Practicable Date, none of the Directors was a director or employee of a company which 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.

3. DIRECTORS’ SERVICE CONTRACTS

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

– 47 –

GENERAL INFORMATION

APPENDIX IV

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

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 March 2015 (being the date to which the latest published audited accounts of the Company were made up), acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

None of the Directors was materially interested in any contract or arrangement, subsisting at the Latest Practicable Date, which is significant to the business of the Group.

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors or their respective close associates (as defined under the Listing Rules) had any interest in the businesses, other than being a Director, which compete or are likely to compete, either directly or indirectly, with the businesses of the Group pursuant to Rule 8.10 of the Listing Rules.

6. QUALIFICATION AND CONSENT OF EXPERT

The following is the qualification of the expert who has provided its advice for inclusion in this circular:

Name Qualification Cheng & Cheng Limited Certified Public Accountants

Cheng & Cheng Limited has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letters and references to its name in the form and context in which they appear herein.

– 48 –

GENERAL INFORMATION

APPENDIX IV

As at the Latest Practicable Date, Cheng & Cheng Limited did not have any shareholding in any member of the Group or any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group and it did not have any direct or indirect interest in any assets which have been since 31 March 2015 (being the date to which the latest published audited accounts of the Company were made up) acquired or disposed of by or leased to by any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

7. MATERIAL CONTRACTS

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

(i) a placing agreement entered into between the Company as issuer and an Independent Third Party as placing agent dated 17 December 2015 in relation to the placing of unconvertible bonds in the maximum principal amount of HK$100,000,000 at a coupon rate of 8% per annum;
(ii) the SPA;
(iii) a sale and purchase agreement entered into between the Company as purchaser, and Soar Power Limited, Loyal Charm Limited and Hover Max Limited as vendors dated 20 November 2015 in relation to the acquisition of 39.41% of the entire issued share capital of Pure Power Holdings Limited at the consideration of HK$163,000,000;
(iv) a deed of termination entered into between the Company, Mighty Smart Limited, Soar Power Limited, Loyal Charm Limited, Hover Max Limited and Fortune Glow Limited on 20 November 2015 in relation to the sale and purchase agreement dated 13 November 2015;
(v) a sale and purchase agreement entered into between Gold Castle Group Limited, as purchaser, the Company as guarantor and STI Financial Group Limited as vendor dated 16 November 2015 in relation to the acquisition of the entire issued share capital of STI Securities & Wealth Management Limited at the consideration of HK$16,914,035;
(vi) a sale and purchase agreement entered into between the Company as purchaser and Mighty Smart Limited, Soar Power Limited, Loyal Charm Limited, Hover Max Limited and Fortune Glow Limited as vendors dated 13 November 2015 in relation to the acquisition of 48.38% of the entire issued share capital of Pure Power Holdings Limited at the consideration of HK$200,000,000;

– 49 –

GENERAL INFORMATION

APPENDIX IV

(vii) a sale and purchase agreement entered into between Pacific Wise Investments Limited as purchaser and Mr. Wan Tak Choi as vendor dated 16 October 2015 in relation to the acquisition of the entire issued share capital of Great Luck Finance Limited at the consideration of HK$1,000,000;
(viii) a sale and purchase agreement entered into between the Company as purchaser and Mr. Wong Him Shun Philip as vendor dated 4 September 2015 in relation to the acquisition of the entire issued share capital of Elite Honest Inc. at the consideration of HK$30,000,000;
(ix) a placing agreement entered into between the Company as issuer and Southwest Securities (HK) Brokerage Limited as placing agent dated 19 August 2015 in relation to the placing of up to 620,000,000 new shares of the Company at the placing price of HK$0.134 per placing share;
(x) a placing agreement entered into between the Company as issuer and Southwest Securities (HK) Brokerage Limited as placing agent dated 20 April 2015 in relation to the placing of up to 520,000,000 new shares of the Company at the placing price of HK$0.245 per placing share;
(xi) a placing letter entered into between Orient Time Investment Limited as subscriber and Tanrich Securities Company Limited as placing agent dated 18 March 2015 in relation to the subscription for shares in WLS Holdings Limited for an aggregate consideration of HK$18,900,000 at the subscription price of HK$0.3 per subscribed share;
(xii) a sale and purchase agreement entered into between the Company as purchaser and Mr. Lu Qinglu as vendor dated 21 January 2015 in relation to the acquisition of the entire issued share capital of Platinum Plus International Limited at the consideration of RMB51,000,000;
(xiii) a supplemental placing agreement entered into between the Company as issuer and Wing Fung Securities Limited as placing agent dated 27 November 2014, pursuant to which the placing price specified in the placing agreement entered into between the parties dated 12 November 2014 and amended by supplemental agreement dated 19 November 2014 was changed from HK$0.97 per placing share to HK$0.66 per placing share;
(xiv) a supplemental placing agreement entered into between the Company as issuer and Wing Fung Securities Limited as placing agent dated 19 November 2014, pursuant to which, among others, the placing price specified in the placing agreement entered into between the parties dated 12 November 2014 was changed from HK$0.96 per placing share to HK$0.97 per placing share;

– 50 –

GENERAL INFORMATION

APPENDIX IV

(xv) a share placing agreement entered into between the Company as issuer and Wing Fung Securities Limited as placing agent dated 12 November 2014 in relation to the placing of up to 48,190,489 new shares of the Company at the placing price of HK$0.96 per placing share;
(xvi) an underwriting agreement entered into between the Company as issuer and Wing Fung Securities Limited as underwriter dated 12 November 2014 in relation to rights issue on the basis of eight ordinary shares of HK$0.01 in the capital of the Company to be issued and allotted for every one existing ordinary share in issue and held on 29 December 2014 at HK$0.195 per rights share;
(xvii) a sale and purchase agreement entered into between the Company as purchaser and Ms. Chow Yan Ping as vendor dated 18 September 2014 in relation to the acquisition of the entire share capital of Asian Champion Limited at the consideration of HK$58 million;
(xviii) a sale and purchase agreement entered into between the Company as vendor and Lucky East International Limited as purchaser dated 4 June 2014 in relation to the disposal of 9.9% of the entire issued share capital of Swift Profit International Limited at the consideration of HK$66,000,000;
(xix) a share placing agreement entered into between the Company as issuer and Tanrich Securities Company Limited as placing agent dated 27 May 2014 in relation to the placing of up to 180,000,000 new shares of the Company at the placing price of HK$0.107 per placing share;
(xx) a sale and purchase agreement entered into between the Company as purchaser and Main Global Group Limited as vendor dated 12 May 2014 in relation to the acquisition of 9.9% of the entire issued share capital of Starfame Investments Limited at the consideration of HK$30 million;
(xxi) a sale and purchase agreement entered into between the Company as purchaser and Fortune Glow Limited as vendor dated 20 January 2014 in relation to the acquisition of 10% of the entire issued share capital of Pure Power Holdings Limited at the consideration of HK$125 million;
(xxii) a termination agreement entered into between the Company as issuer and KGI Asia Limited as placing agent dated 9 January 2014 in relation to the placing agreement dated 6 January 2014; and
(xxiii) a placing agreement entered into between the Company as issuer and KGI Asia Limited as placing agent dated 6 January 2014 in relation to the placing of convertible notes with principal amounts up to HK$800 million of the Company by a maximum of five tranches.

– 51 –

GENERAL INFORMATION

APPENDIX IV

8. LITIGATIONS

So far as the Directors are aware, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and no litigation or arbitration of material importance was pending or threatened against the Company or any of its subsidiaries as at the Latest Practicable Date.

9. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirmed that they were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2015, the date to which the latest audited financial statements of the Group were made up.

10. GENERAL

The registered office of the Company is situated at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda.

The head office and principal place of business of the Company in Hong Kong is situated at Room 910, 9/F, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong.

The Company’s branch share registrar in Hong Kong is Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

The secretary of the Company is Ms. Cheng Suk Kuen, who is a member of the Hong Kong Institute of Certified Public Accountants and the CPA Australia.

The English text of this circular shall prevail over the Chinese text, in the event of inconsistency.

– 52 –

GENERAL INFORMATION

APPENDIX IV

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the head office and principal place of business of the Company in Hong Kong at Room 910, 9/F, Harbour Centre, 25 Harbour Road, Wanchai, Hong Kong from the date of this circular up to and including the date of the SGM:

a. the memorandum of association and bye-laws of the Company;
b. the material contracts referred to in the paragraph headed ‘‘Material Contracts’’ in this appendix;
c. the financial information of the Target Group as set out in Appendix II of this circular;
d. the unaudited pro forma financial information of the Remaining Group as set out in Appendix III to this circular;
e. the written consent referred to in the paragraph headed ‘‘Qualification and Consent of Expert’’ in this appendix;
f. the annual reports of the Company for the three years ended 31 March 2013, 31 March 2014 and 31 March 2015; and
g. this circular.

– 53 –

NOTICE OF SPECIAL GENERAL MEETING

China Environmental Energy Investment Limited

(Incorporated in Bermuda with limited liability)

(Stock Code: 986)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the ‘‘SGM’’) of China Environmental Energy Investment Limited (the ‘‘Company’’) will be held on Saturday, 30 January 2016 at 9:00 a.m. at Falcon Room I, Gloucester Luk Kwok Hong Kong, 72 Gloucester Road, Wanchai, Hong Kong for the purpose of considering and, if thought fit, passing the following resolution:

ORDINARY RESOLUTION

‘‘THAT

(a) the sale and purchase agreement dated 27 November 2015 (the ‘‘SPA’’) entered into between the Company and Ms. Chow Yan Ping (the ‘‘Purchaser’’) in relation to the disposal by the Company of its entire interest in the share capital of Asian Champion Limited to the Purchaser (a copy of the SPA is marked ‘‘A’’ and produced to this meeting and signed by the chairman of the meeting for identification purposes) and the transactions contemplated thereunder be and are hereby ratified, confirmed and approved; and
(b) any one or more of the directors of the Company (the ‘‘Directors’’) be and is/are hereby authorised to execute all documents, under hand or under the common seal of the Company (or otherwise as a deed) as appropriate, singly on behalf of the Company, and to do all such acts as he/she may in his/her discretion consider necessary, desirable or expedient and appropriate to effect and implement the SPA and transactions contemplated thereunder or incidental thereto.’’

Yours faithfully By Order of the Board

China Environmental Energy Investment Limited Chen Tong

Chairman

Hong Kong, 14 January 2016

For identification purposes only

– 54 –

NOTICE OF SPECIAL GENERAL MEETING

As at the date of this notice, the board of Directors of the Company comprises two executive Directors, namely Ms. Chen Tong (Chairman) and Mr. Xiang Liang; and three independent non-executive Directors, namely Ms. Zhang Ruisi, Mr. Tse Kwong Chan and Ms. Zhou Jue.

In the case of inconsistency, the English text of this notice shall prevail over the Chinese text.

Notes:

A form of proxy for use at the SGM is enclosed herewith.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of any officer or attorney duly authorised.
Any shareholder of the Company entitled to attend and vote at the SGM convened by the above notice shall be entitled to appoint another person as his proxy to attend and vote instead of him. A proxy need not be a shareholder of the Company. A shareholder of the Company who is the holder of two or more shares of the Company may appoint more than one proxy to represent him/her/it to attend and vote on his/her/its behalf. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.
The form of proxy and (if required by the board of directors) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof at which the person named in the form of proxy proposes to vote or, in the case of a poll taken subsequently to the date of the SGM or any adjournment thereof, not less than 24 hours before the time appointed for the taking of the poll and in default the form of proxy shall not be treated as valid.
Completion and return of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the SGM convened or at any adjourned meeting (as the case may be) and in such event, the form of proxy will be deemed to be revoked.
Where there are joint holders of any share of the Company, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she/it were solely entitled thereto, but if more than one of such joint holders are present at the SGM, whether in person or by proxy, priority shall be determined by the order in which the names stand on the register of members of the Company in respect of the joint holding.

– 55 –

AI assistant

Dufu Liquor Group Limited — Proxy Solicitation & Information Statement 2016

49605_rns_2016-01-13_091d3534-c249-4b40-8a9d-3f5bdbe416a0.pdf

China Environmental Energy Investment Limited

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION AND

NOTICE OF SPECIAL GENERAL MEETING

DEFINITIONS

DEFINITIONS

DEFINITIONS

China Environmental Energy Investment Limited

(Stock Code: 986)

VERY SUBSTANTIAL DISPOSAL AND CONNECTED TRANSACTION AND NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

THE SPA

Date

Parties

Assets to be disposed

Consideration

LETTER FROM THE BOARD

Escrow

Conditions precedent

Completion

INFORMATION ON THE TARGET GROUP

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

LETTER FROM THE BOARD

REASONS AND BENEFITS OF THE DISPOSAL

LETTER FROM THE BOARD

INFORMATION ON THE REMAINING GROUP

LETTER FROM THE BOARD

THE LISTING RULES IMPLICATIONS

GENERAL

LETTER FROM THE BOARD

RECOMMENDATION

ADDITIONAL INFORMATION

1. THREE YEARS’ SUMMARY OF FINANCIAL RESULTS

Indebtedness statement of the Group

General

APPENDIX I

3. WORKING CAPITAL

4. MATERIAL ADVERSE CHANGE

5. FINANCIAL AND TRADING PROSPECTS OF THE REMAINING GROUP

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

(i) For the six months ended 30 September 2015

Business and Financial Review

Liquidity and Financial Resources

Cash Position

Gearing ratio

Borrowings

Charge on Assets

Capital Expenditures

Contingent Liabilities

Exchange Risk Exposure

Significant Investments and Material Acquisition and Disposals

Staff and Remuneration Policy

(ii) For the year ended 31 March 2015

Business and Financial Review

Liquidity and Financial Resources

Cash Position

Gearing ratio

Borrowings

Charge on Assets

Capital Expenditures

Contingent Liabilities

Exchange Risk Exposure

Significant Investments and Material Acquisition and Disposals

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Staff and Remuneration Policy

(iii) For the year ended 31 March 2014

Business and Financial Review

APPENDIX I

Liquidity and Financial Resources

Cash Position

Gearing ratio

Borrowings

Charge on Assets

Capital Expenditures

Dufu Liquor Group Limited Proxy Solicitation & Information Statement 2016