Hengxin Technology Ltd. - AGM Information 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

This Circular is issued by Hengxin Technology Ltd. (the ‘‘Company’’). If you are in any doubt as to the action you should take, you should consult your licensed securities dealer, registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser immediately.

If you have sold or transferred all your Shares in the capital of the Company, you should at once hand this Circular, the notice of the annual general meeting (the ‘‘AGM’’) and attached proxy form to the purchaser or to the stockbroker or to the bank or to the agent through whom you effected the sale for onward transmission to the purchaser or transferee.

The Singapore Exchange Securities Trading Limited assumes no responsibility for the correctness of any of the statements made, reports contained or opinions expressed in this Circular.

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.

This Circular appears for information purposes only and does not constitute an invitation or offer to acquire, purchase, or subscribe for securities of the Company.

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HENGXIN TECHNOLOGY LTD. 亨鑫科技有限公司[*]

(carrying on business in Hong Kong as HX Singapore Ltd.) (Incorporated in Singapore with limited liability)

(Singapore Registration No.: 200414927H) (Hong Kong Stock Code: 1085) (Singapore Stock Code: I85)

RENEWAL OF SHARE ISSUE MANDATE, RENEWAL OF SHARE PURCHASE MANDATE, AND RE-ELECTION OF RETIRING DIRECTORS AND

NOTICE OF ANNUAL GENERAL MEETING

A letter from the board of directors of the Company is set out from pages 4 to 7 of this Circular.

A notice convening the AGM (as defined herein) of the Company to be held at Jurong Country Club, Albizia Room (Level 2), 9 Science Centre Road, Singapore 609078 on Wednesday, 23 April 2014 at 9: 00 a.m. (or any adjournment thereof) is set out on pages 28 to 33 of this Circular. If you are unable to attend the AGM, you are requested to complete and return the proxy form accompanying this Circular in accordance with the instructions printed thereon to the Company’s Singapore Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd, at 50 Raffles Place, Singapore Land Tower #32-01, Singapore 048623 (for Singapore Shareholders), or to the Company’s Branch Share Registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong (which will be relocated to Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong with effect from 31 March 2014) (for Hong Kong Shareholders), as soon as possible, and in any event not later than forty-eight (48) hours before the time of the AGM (or any adjournment thereof). Completion and return of the proxy form will not preclude you from attending and voting in person at the AGM (or any adjournment thereof) should you so wish.

For identification purpose only

19 March 2014

			Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . .	1
LETTER	FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	4
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	4
2.	Re-election of Retiring Directors . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	5
3.	Renewal of Share Issue Mandate . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	5
4.	Renewal of Share Purchase Mandate . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	5
5.	Directors’ Recommendations . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	6
6.	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	6
7.	Actions to be taken by Shareholders . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	7
8.	Directors’ Responsibility Statement . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	7
9.	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX I — DETAILS OF DIRECTORS PROPOSED
	TO BE RE-ELECTED AT THE AGM	. . . . . . . . . . . . . . . . . . . . . . .	8
APPENDIX II — EXPLANATORY STATEMENT . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . .	10
NOTICE	OF ANNUAL GENERAL MEETING . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . .	28

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DEFINITIONS

In this Circular, the following definitions apply throughout unless otherwise stated:

‘‘Act’’ or The Companies Act (Chapter 50) of Singapore as amended, ‘‘Companies Act’’ modified or supplemented from time to time
‘‘AGM’’ The annual general meeting of the Company to be convened at Jurong Country Club, Albizia Room (Level 2), 9 Science Centre Road, Singapore 609078 on Wednesday, 23 April 2014 at 9: 00 a.m. (or any adjournment thereof), the notice of which is set out on pages 28 to 33 of this Circular

‘‘Annual Report’’ The annual report of the Company for the financial year ended 31 December 2013

‘‘Articles’’ The articles of association of the Company as amended, modified or supplemented from time to time
‘‘Board’’ or The board of directors of the Company
‘‘Board of Directors’’
‘‘CDP’’ The Central Depository (Pte) Limited
‘‘Circular’’ this circular
‘‘Company’’ Hengxin Technology Ltd., a company incorporated in Singapore with limited liability and the Shares of which are listed on the Main Board of the SGX-ST and the Main Board of the SEHK
‘‘Depositors’’ The term ‘‘Depositors’’ shall have the meaning ascribed to it by section 130A of the Act
‘‘Director(s)’’ The director(s) of the Company, including the non-executive directors of the Company
‘‘Group’’ The Company and its subsidiaries ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’ The Hong Kong Special Administration Region of the People’s Republic of China
‘‘Hong Kong Listing The Rules Governing the Listing of Securities on the SEHK, as Rules’’ amended, modified or supplemented from time to time
‘‘Latest Practicable 18 February 2014, being the latest practicable date prior to the Date’’ printing of this Circular
‘‘Listing Manual’’ The listing manual of the SGX-ST, as amended, modified or supplemented from time to time
‘‘Market Day’’ A day on which the SGX-ST is open for trading of securities

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DEFINITIONS

‘‘Memorandum’’
The memorandum of association of the Company as amended, modified or supplemented from time to time
‘‘M&A’’ The Memorandum and Articles
‘‘RMB’’ Renminbi, the lawful currency of the People’s Republic of China ‘‘Securities Accounts’’ The securities account maintained with CDP, but not including the securities accounts maintained with a Depository Agent (as defined in Section 130A of the Act)
‘‘SEHK’’ The Stock Exchange of Hong Kong Limited
‘‘SFO’’ The Securities and Futures Ordinance (Chapter 571) of the Laws of Hong Kong, as amended, modified or supplemented from time to time
‘‘SGX-ST’’ Singapore Exchange Securities Trading Limited
‘‘Share Issue Mandate’’ A Share Issue Mandate granted to the Directors at the annual general meeting of the Company on 24 April 2013 to exercise all the powers of the Company to allot, issue and deal with not more than the sum of 50% of the total number of issued shares excluding treasury shares, of which the aggregate number of shares to be issued other than on a pro rata basis to shareholders of the Company shall not exceed 20% of total number of issued shares excluding treasury shares
‘‘Share Purchase A general and unconditional Share Purchase Mandate granted to Mandate’’ the Directors at the annual general meeting of the Company on 24 April 2013 to exercise all the powers of the Company to purchase or acquire Shares with an aggregate nominal amount of not more than 10% of the total nominal amount of the Shares issued, in accordance with the terms and conditions thereof
‘‘Shareholder(s)’’ Registered holder(s) of Shares except that where the registered holder is CDP, the term ‘‘Shareholders’’ in relation to Shares held by CDP shall mean the persons named as Depositors in the Depository Register maintained by CDP and to whose securities accounts such Shares are credited
‘‘Share(s)’’
Ordinary shares in the capital of the Company
‘‘Singapore Listing Rules of the Listing Manual, as amended, modified or Rules’’ supplemented from time to time
‘‘S$’’, ‘‘SGD’’ Singapore dollars and cents respectively or ‘‘$’’ and ‘‘cents’’
‘‘%’’
Percentage and per centum

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DEFINITIONS

The terms ‘‘Depository’’ and ‘‘Depository Register’’ shall have the meanings ascribed to them respectively in Section 130A of the Act.

Any reference in this Circular to any enactment is a reference to that enactment as for the time being amended or re-enacted. Any word defined under the Companies Act, the Singapore Listing Rules, the Hong Kong Listing Rules, the SFO or any modification thereof and used in this Circular shall, where applicable, have the meaning assigned to it under the Companies Act, the Singapore Listing Rules, the Hong Kong Listing Rules, the SFO or any modification thereof, as the case may be.

Words importing the singular number shall include the plural number where the context admits and vice versa. Words importing the masculine gender shall include the feminine gender where the context admits. Reference to persons shall, where applicable, include corporations.

Any reference to a time of a day in this Circular is a reference to Singapore time.

Any discrepancy with the tables in this Circular between the listed amounts and the totals thereof is due to rounding.

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LETTER FROM THE BOARD

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HENGXIN TECHNOLOGY LTD. 亨鑫科技有限公司[*]

(carrying on business in Hong Kong as HX Singapore Ltd.)

(Incorporated in Singapore with limited liability)

(Singapore Registration No.: 200414927H)

(Hong Kong Stock Code: 1085)

(Singapore Stock Code: I85)

Directors:

Cui Genxiang

(Executive Chairman and Executive Director) Xu Guoqiang

(Executive Director) Zhang Zhong (Non-Executive Director) Tay Ah Kong Bernard

(Independent Non-Executive Director) Chee Teck Kwong Patrick

Registered Office: 10 Anson Road, #32-15 International Plaza, Singapore 079903

Head office and principal place of business in Singapore: 7 Temasek Boulevard, #04-02B Suntec Tower One, Singapore 038987

(Independent Non-Executive Director)

Tam Chi Kwan Michael

(Independent Non-Executive Director and Lead Independent Director)

19 March 2014

To: The Shareholders of Hengxin Technology Ltd.

Dear Sir/Madam,

RENEWAL OF SHARE ISSUE MANDATE, RENEWAL OF SHARE PURCHASE MANDATE, AND

RE-ELECTION OF RETIRING DIRECTORS AND

NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this Circular serves to provide you with information on the resolutions to be proposed at the AGM for the approval of the renewal of the Share Issue Mandate, the renewal of the Share Purchase Mandate, and the re-election of the retiring Directors.

For identification purpose only

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LETTER FROM THE BOARD

2. RE-ELECTION OF RETIRING DIRECTORS

In accordance with Article 89 of the Articles, Ms. Zhang Zhong and Mr. Tam Chi Kwan Michael shall retire at the AGM and, being eligible, offer themselves for re-election at the AGM. The information required to be disclosed under the Hong Kong Listing Rules in relation to the retiring Directors proposed for re-election are set out in Appendix I of this Circular.

3. RENEWAL OF SHARE ISSUE MANDATE

3.1 At the annual general meeting of the Company held on 24 April 2013, the Directors have been granted a Share Issue Mandate to allot, issue and deal with not more than the sum of 50% of the total number of issued Shares excluding treasury shares, of which the aggregate number of Shares (including Shares to be issued in pursuance of instruments (as defined in the Company’s resolutions dated 24 April 2013) made or granted pursuant to the resolution) to be issued other than on a pro rata basis to Shareholders of the Company shall not exceed 20% of the total number of issued Shares excluding treasury shares. The 50% limit in the foregoing sentence may be increased to 100% for issues of Shares and/or instruments by way of a renounceable rights issue where Shareholders of the Company are entitled to participate in the same on a pro rata basis.
3.2 The Share Issue Mandate will expire at the conclusion of the AGM, or at the expiration of the period within which the Company is required by the rules of the SGX-ST or any applicable laws of Singapore to hold its next annual general meeting, whichever occurs first.
3.3 The Hong Kong Listing Rules provide that the Share Issue Mandate shall be subject to a restriction that the aggregate number of Shares allotted or agreed to be allotted under the Share Issue Mandate must not exceed 20% of the existing issued share capital of the Company. Going forward, we will comply with the requirements under the Hong Kong Listing Rules or the Listing Manual for matters relating to the Share Issue Mandate, whichever is more onerous.

4. RENEWAL OF SHARE PURCHASE MANDATE

4.1 At the annual general meeting of the Company held on 24 April 2013, the Directors have been granted a general and unconditional Share Purchase Mandate to exercise all the powers of the Company to purchase or acquire Shares with an aggregate nominal amount of not more than 10% of the total nominal amount of the Shares issued at the date of the last annual general meeting held before the resolution authorising such share purchase mandate is passed or as at the date of the resolution authorising the share purchase mandate is passed, whichever is higher, at such price or prices as may be determined by the Directors from time to time, up to the price (excluding brokerage, commissions, stamp duties, applicable goods and services tax and other related expenses) which shall not exceed (i) in the case of a market purchase, one hundred and five per cent. (105%) of the average closing market price of the Shares transacted on the SGX-ST over the last five (5) market days (on which transactions in the Shares are recorded) immediately preceding the date of the market purchase by the Company; and (ii) in the case of an off-market purchase, one hundred and twenty per cent. (120%) of the average

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LETTER FROM THE BOARD

closing market price of the Shares transacted on the SGX-ST over the last five (5) market days (on which transactions in the Shares are recorded) immediately preceding the date of the market purchase by the Company stating the purchase price and the relevant terms of the equal access scheme.

4.2 The Share Purchase Mandate was made in accordance with the Listing Manual. In the event that the Company shall purchase its own shares, it is required to comply with the more onerous requirements under both the Hong Kong Listing Rules and the Listing Manual.
4.3 Unless revoked or varied by the Company in AGM, the Share Purchase Mandate shall continue in force until the conclusion of the Company’s next annual general meeting or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier.
4.4 As at the Latest Practicable Date, the number of Shares in issue was 388,000,000. Accordingly, the exercise of the Share Purchase Mandate in full would enable the Company to repurchase a maximum of 38,800,000 Shares. The renewal of the Share Purchase Mandate will provide flexibility to the Directors to purchase or acquire Shares when it is in the interest of the Company. An explanatory statement setting out the details of the Share Purchase Mandate is attached as Appendix II of this circular.

IMPORTANT: Notwithstanding the renewal of the Share Issue Mandate and the Share Purchase Mandate, the Company shall from time to time comply with the relevant requirements under the Hong Kong Listing Rules in relation to issuance of securities, in particular Rules 7.19(6) and 13.36 thereof.

5. DIRECTORS’ RECOMMENDATIONS

5.1 The Board is pleased to recommend the retiring Directors, details of whom are set out in Appendix I to this Circular, for re-election at the AGM.
5.2 The Board considers that the renewal of the Share Issue Mandate, the renewal of Share Purchase Mandate and the re-election of retiring Directors are in the interests of the Group and are not prejudicial to the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the resolutions relating to the re-election of retiring Directors, the renewal of the Share Issue Mandate and the renewal of the Share Purchase Mandate as set out in the notice of AGM to be proposed at the AGM.

6. ANNUAL GENERAL MEETING

The AGM, notice of which is circulated with this Circular, to be held at Jurong Country Club, Albizia Room (Level 2), 9 Science Centre Road, Singapore 609078 on Wednesday, 23 April 2014 at 9: 00 a.m. (or any adjournment thereof) for the purpose of considering and, if thought fit, passing, with or without any modifications, the resolutions in relation to the re-election of retiring Directors, the renewal of the Share Issue Mandate and the renewal of the Share Purchase Mandate.

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LETTER FROM THE BOARD

Pursuant to Rule 13.39(4) of the Hong Kong Listing Rules, any vote of the Shareholders at a general meeting of the Company must be taken by way of poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, the resolutions to be considered and, if thought fit, approved at the AGM will be voted by way of a poll by the Shareholders.

7. ACTIONS TO BE TAKEN BY SHAREHOLDERS

Shareholders who are unable to attend the AGM and wish to appoint a proxy to attend and vote at the AGM on their behalf will find attached to this Circular a proxy form which they are requested to complete, sign and return in accordance with the instructions printed thereon as soon as possible and in any event so as to arrive at the Company’s Singapore Principal Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd., 50 Raffles Place, Singapore Land Tower #32-01, Singapore 048623 (for Singapore Shareholders), or to the Company’s Branch Share Registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong (which will be relocated to Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong with effect from 31 March 2014) (for Hong Kong Shareholders) as soon as possible and in any event not later than forty-eight (48) hours before the time fixed for the AGM (or any adjournment thereof). Completion and return of a proxy form by a Shareholder will not preclude a Shareholder from attending and voting in person at the AGM (or any adjournment thereof) if a Shareholder finds that he/she is able to do so. In such event, the relevant proxy form will be deemed to be revoked.

8. DIRECTORS’ RESPONSIBILITY STATEMENT

This Circular includes particulars given in compliance with the Hong Kong Listing Rules for the purpose of giving information with regard to the Company. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, there are no other material facts not contained in this Circular, the omission of which would make any statement in this Circular misleading. Where information contained in this Circular has been extracted from published or otherwise publicly available sources, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from these sources.

9. GENERAL INFORMATION

Your attention is drawn to the information as set out in Appendix I and Appendix II of this Circular.

Yours faithfully, For and on behalf of the Board of Hengxin Technology Ltd. Cui Genxiang Executive Chairman

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APPENDIX I

DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE AGM

Set out below are particulars of the Directors proposed to be re-elected at the AGM.

MS. ZHANG ZHONG (‘‘Ms. Zhang’’), Non-executive Director

Ms. Zhang Zhong (張鍾), aged 59, is our non-executive Director and was appointed on 23 June 2005. Ms. Zhang is one of the founders and directors of Jiangsu Hengxin Technology Co., Ltd. since its establishment in June 2003.

Currently, Ms. Zhang is also the consultant of Sichuan Jiawei Materials Co., Ltd. (四川省佳煒物資有限公司), a company engaged in the sales of metals and construction materials, machinery and electronics equipment, which had no business activities with our Group. From 1988 to 2004, she was the manager of the metals branch at Sichuan Science and Industrial Trade Agricultural Machinery Co. Ltd (四川省科工貿農機公司金屬材料分公司) and was responsible for sales and marketing in the company.

Prior to that, between 1982 and 1988, she was the manager of the metals branch at Sichuan Agricultural Machinery Supply and Sales Co. Ltd (四川省農機供銷總公司) and was responsible for market development and sales in the company. Between 1972 and 1982, she worked at Sichuan Chain Factory (四川省鏈條廠).

Save as disclosed above, Ms. Zhang does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company. Ms. Zhang has not held any directorship in the last three years in other public companies the securities of which are listed on the securities market in Hong Kong and overseas.

As at the Latest Practicable Date, Ms. Zhang was deemed to be interested in 28,082,525 Shares, representing approximately 7.24% of the Company’s entire issued share capital, through Wellahead Holdings Limited which is wholly owned by her. Please refer to paragraph 1.13 of Appendix II of this Circular for further detail. Ms. Zhang has entered into a letter of appointment with the Company on 10 December 2010, pursuant to which Ms. Zhang agreed to act as a non-executive Director for an initial term of three (3) years commencing on 10 December 2010, which may be terminated by either party giving not less. than three (3) months’ prior notice in writing to the other, or in accordance with other terms thereof. Ms. Zhang is subject to retirement by rotation and eligible for re-election at the AGM in accordance with the Articles.

As at the Latest Practicable Date, Ms. Zhang is entitled to an annual Director’s fee of S$50,000 which was determined with reference to her roles and responsibilities and the prevailing market conditions.

Save as disclosed above, Ms. Zhang has confirmed that there are no other matters that need to be brought to the attention of the shareholders in connection with his appointment and there is no other information that should be disclosed pursuant to paragraph 13.51(2)(h) to 13.51(2)(v) of the Hong Kong Listing Rules; and there are no other matters concerning Ms. Zhang that need to be brought to the attention of the Shareholders.

MR. TAM CHI KWAN MICHAEL (‘‘Mr. Tam’’), Independent Non-Executive Director

Mr. Tam Chi Kwan Michael (譚志昆), aged 50, is our independent non-executive Director and was appointed on 10 December 2010. Mr. Tam is currently the managing director of TLC CPA Limited, a firm of certified public accountants in Hong Kong and has

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APPENDIX I

DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE AGM

more than 20 years of experience in tax consulting and auditing. He holds an Honours Diploma in Accountancy from Lingnan University (formerly Lingnan College) in Hong Kong and a Bachelor of Laws (Hons) degree from the University of Wolverhampton in the United Kingdom. Mr. Tam is a Certified Public Accountant (practicing) and a Registered Certified Tax Advisor in Hong Kong. He is a member of the Hong Kong Institute of Certified Public Accountants, the Association of Chartered Certified Accountants, the Institute of Chartered Accountants (England and Wales) and the Taxation Institute of Hong Kong. He is currently a non-executive director of Singapore Windsor Holdings Limited, a company listed on the SGX-ST.

Save as disclosed above, Mr. Tam is not connected with any directors, senior management or substantial shareholders of the Company and did not hold any directorships in any other listed companies on the SEHK and the SGX-ST and any other stock exchange during the three years preceding the date of this Circular.

As at the Latest Practicable Date, Mr. Tam was deemed to be interested in 0 Shares, representing approximately 0% of the Company’s entire issued share capital. Mr. Tam was appointed as an independent non-executive Director for 3 years commencing from 10 December 2010 pursuant to the Letter of Appointment entered into between the Company and Mr. Tam, which is renewable automatically after the expiry of the initial term for successive terms or amended by way of subsequent written agreement between Mr. Tam and the Company. Mr. Tam is subject to retirement by rotation and eligible for re-election at the AGM in accordance with the Articles.

As at the Latest Practicable Date, Mr. Tam is entitled to an annual Director’s fee of S$50,000 which was determined with reference to his roles and responsibilities and the prevailing market conditions, subject to the approval by shareholders at the forthcoming AGM.

As far as the Directors are aware, there is no information of Mr. Tam to be disclosed pursuant to any of the requirements under paragraphs 13.51(2)(h) to 13.51(2)(v) of the Hong Kong Listing Rules; and there are no other matters concerning Mr. Tam that need to be brought to the attention of the Shareholders.

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APPENDIX II

EXPLANATORY STATEMENT

PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE

1. The Share Purchase Mandate

1.1 Background

At the annual general meeting of the Company held on 24 April 2013 (the ‘‘2013 AGM’’), the Shareholders had approved the renewal of the Share Purchase Mandate to enable the Company to purchase or to otherwise acquire the Shares.

The authority contained in the aforesaid Share Purchase Mandate was expressed to continue in force until the next AGM of the Company, and as such, would be expiring on 23 April 2014, being the date of the forthcoming AGM of the Company.

As the Share Purchase Mandate will expire on the date of the forthcoming AGM of the Company on 23 April 2014 at 9: 00 a.m., the Directors propose that the Share Purchase Mandate be renewed at the forthcoming AGM.

1.2 Rationale

The Companies Act allows a Singapore-incorporated company to purchase or otherwise acquire its issued shares, stocks and preference shares if it is expressly permitted to do so by the company’s articles of association. Any purchase or acquisition of shares by the Company would have to be made in accordance with, and in the manner prescribed by the Companies Act, the Listing Manual, the Hong Kong Listing Rules, and such other laws and regulations as may, for the time being, be applicable.

The Share Purchase Mandate will give the Directors the flexibility to purchase or acquire Shares if and when circumstances permit. Share purchases or acquisitions provide the Company and its Directors with an easy mechanism to facilitate the return of surplus cash over and above its ordinary capital requirements in an expedient and cost-efficient manner. The purchases or acquisitions of Shares may, depending on market conditions and funding arrangements, lead to an enhancement of the Earnings per Share (the ‘‘EPS’’) and/or the Net Tangible Assets (the ‘‘NTA’’) per Share, and will only be made when the Directors believe that such purchases or acquisitions of Shares will benefit the Company and the Shareholders as a whole.

Share purchases or acquisitions also allow the Directors to exercise control over the Company’s share capital structure with a view to enhance the EPS and/or the NTA per Share. The Share Purchase Mandate will further give the Company the opportunity to purchase or acquire Shares when such Shares are undervalued and help to buffer short-term share price volatility and offset the effects of share price speculation, thereby boosting Shareholders’ confidence and employees’ morale.

If and when circumstances permit, the Directors will decide whether to effect the Share purchases or acquisitions via Market Purchases or Off-Market Purchases (as defined below), after taking into account the amount of surplus cash available, the then prevailing market conditions and the most cost effective and efficient approach.

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APPENDIX II

EXPLANATORY STATEMENT

The Directors will only make purchases or acquisitions of Shares pursuant to the Share Purchase Mandate when they consider it to be in the interests of the Company and the Shareholders as a whole, and in circumstances which they believe from time to time will not result in any material adverse effect on the working capital or gearing position or financial position of the Company or the Group as compared with the positions disclosed in the audited consolidated financial statements set out in the Annual Report in the event that the Share Purchase Mandate is to be exercised in full at any time during the proposed share purchase period, or result in the Company being delisted from the SGX-ST or the SEHK or any other securities exchange or being insolvent. It should be noted that the purchases pursuant to the Share Purchase Mandate may not be carried out to the full limit as mandated.

Neither the Company nor any of its subsidiaries has purchased, sold or redeemed any of the Company’s shares during the twelve (12) months preceding the Latest Practicable Date.

1.3 Authority and Limits of the Share Purchase Mandate

The authority and limits placed on the Share Purchase Mandate are summarised as follows:

1.3.1 Maximum Number of Shares

Only Shares which are issued and fully paid-up may be purchased or acquired by the Company. The total number of Shares that may be purchased or acquired by the Company pursuant to the Share Purchase Mandate shall not exceed ten per cent. (10%) of the issued Shares of the Company as at the date of the last AGM held before the resolution authorising the Share Purchase Mandate is passed or as at the date of the resolution authorising the Share Purchase Mandate is passed (the ‘‘Approval Date’’), whichever is higher.

For illustration purposes only, on the basis of 388,000,000 Shares in issue as at the Latest Practicable Date, being 18 February 2014, not more than 38,800,000 Shares (representing 10% of the Shares in issue as at the Latest Practicable Date) may be purchased by the Company pursuant to the Share Purchase Mandate.

1.3.2 Duration of Authority

Purchases or acquisitions of Shares may be made, at any time and from time to time, on and from the Approval Date, up to:

(a) the date on which the next AGM of the Company is held or required by law to be held; or
(b) the date on which the Share purchases are carried out to the full extent mandated; or
(c) the date on which the authority conferred by the Share Purchase Mandate is revoked or varied by the Company in general meeting,

whichever is the earliest.

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APPENDIX II

EXPLANATORY STATEMENT

The Share Purchase Mandate may be renewed by Shareholders’ approval at each subsequent AGM or other general meeting of the Company.

1.3.3 Manner of Purchases or Acquisitions of Shares

Purchases or acquisitions of Shares may be made by way of:

(a) on-market purchases (the ‘‘Market Purchases’’), transacted on the SGXST or on any other securities exchange on which the Shares are listed and/or through one or more duly licensed dealers appointed by the Company for that purpose; and/or
(b) off-market purchases (the ‘‘Off-Market Purchases’’), in accordance with an equal access scheme for the purchase or acquisition of Shares from Shareholders.

The Directors may impose such terms and conditions which are not inconsistent with the Share Purchase Mandate, the Listing Manual and the Companies Act as they consider fit in the interests of the Company in connection with or in relation to any equal access scheme(s).

Under Section 76C of the Companies Act, an equal access scheme must satisfy all the following conditions:

(a) offers under the scheme must be made to every person who holds Shares to purchase or acquire the same percentage of their Shares;
(b) all of those persons shall be given a reasonable opportunity to accept the offers made to them; and
(c) the terms of all the offers are the same, except that there shall be disregarded:
(i) differences in consideration attributable to the fact that the offers relate to Shares with different accrued dividend entitlements;
(ii) differences in consideration attributable to the fact that the offers relate to Shares with different amounts remaining unpaid; and
(iii) differences in the offers introduced solely to ensure that each member is left with a whole number of Shares.

In addition, under the Listing Manual, in making an Off-Market Purchase in accordance with an equal access scheme, the Company must issue an offer document to all Shareholders containing at least the following information:

(a) the terms and conditions of the offer;
(b) the period and procedures for acceptances;
(c) the reasons for the proposed Share purchases;

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APPENDIX II

EXPLANATORY STATEMENT

(d) the consequences, if any, of the Share purchases by the Company that will arise under the Singapore Code on Take-overs and Mergers (the ‘‘Take-over Code’’) or other applicable take-over rules;
(e) whether the Share purchases, if made, could affect the listing of the Shares on the SGX-ST; and
(f) details of any Share purchases made by the Company in the previous twelve (12) months (whether the Market Purchases or the Off-Market Purchases), giving the total number of Shares purchased, the purchase price per Share or the highest and lowest prices paid for the purchases, where relevant, and the total consideration paid for the purchases.

1.3.4 Maximum Purchase Price

The purchase price (excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses) to be paid for Shares purchased or acquired pursuant to the Share Purchase Mandate will be determined by the Directors.

However, the purchase price to be paid for the Shares purchased or acquired pursuant to the Share Purchase Mandate as determined by the Directors must not exceed:

(a) in the case of a Market Purchase, one hundred and five per cent. (105%) of the Average Closing Price (as defined below) of the Shares; and
(b) in the case of an Off-Market Purchase, one hundred and twenty per cent. (120%) of the Average Closing Price (as defined below) of the Shares,

in either case, excluding related expenses of the purchase or acquisition (the ‘‘Maximum Price’’).

For the above purposes:

‘‘Average Closing Price’’ means the average of the closing market prices of the Shares over the last five (5) Market Days, on which transactions in the Shares were recorded, immediately preceding the date of the Market Purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the Off-Market Purchase pursuant to the equal access scheme, and deemed to be adjusted for any corporate action that occurs after the relevant five (5) Market Days period; and

‘‘date of the making of the offer’’ means the date on which the Company announces its intention to make an offer for the purchase or acquisition of the Shares to holders of Shares, stating the purchase price (which shall not be more than the Maximum Price determined on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase.

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APPENDIX II

EXPLANATORY STATEMENT

1.4 Source of Funds

In purchasing or acquiring Shares pursuant to the Share Purchase Mandate, the Company may only apply funds legally available for such purchase or acquisition in accordance with the Articles, the Listing Manual, the Hong Kong Listing Rules and any other applicable laws and regulations. Under the Companies Act, any payment made by the Company in consideration of the purchase or acquisition of its own Shares may be made out of the Company’s capital and/or retained profits, so long as the Company is solvent. For this purpose, a company is ‘‘solvent’’ if:

(i) the company is able to pay its debts in full at the time of payment for the purchase of Shares and will be able to pay its debts as they fall due in the normal course of business during the period of twelve (12) months immediately following the date of the purchase; and
(ii) the value of the company’s assets, at the time of the purchase of shares and after such purchase, is not less than the value of its liabilities (including contingent liabilities), having regard to the most recent financial statements of the company and all other circumstances that the directors or managers of the company know or ought to know affect, or may affect, such values.

The Company intends to use internal resources, or external borrowings, or a combination of both to fund purchases of Shares pursuant to the Share Purchase Mandate. However, in considering the option of external financing, the Directors will consider particularly the prevailing gearing level of the Group. The Directors will only make purchases or acquisitions of Shares pursuant to the Share Purchase Mandate in circumstances which they believe will not result in any material adverse effect to the financial position of the Company or the Group.

1.5 Status of Purchased Shares

Under the Companies Act, the Company may choose to hold the purchased Shares as treasury shares or to cancel them. The Articles also allows the Company to hold purchased Shares as treasury shares. Accordingly, the Company has the discretion to hold the purchased Shares as treasury shares or to cancel them.

However, as the Company also has a primary listing on the SEHK, it has to comply with the Hong Kong Listing Rules. Under Rule 10.06(5) of the Hong Kong Listing Rules, the listing of all shares which are purchased by the Company (whether on the SEHK or otherwise) shall be automatically cancelled upon purchase and the Company must apply for listing of any further issues of that type of shares in the normal way. The Company shall ensure that the documents of title of purchased shares are cancelled and destroyed as soon as reasonably practicable following settlement of any such purchase. Shares purchased or acquired by the Company are deemed cancelled immediately on purchase or acquisition (and all rights and privileges attached to the Shares will expire on such cancellation). The total number of issued Shares will be diminished by the number of Shares purchased or acquired by the Company.

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EXPLANATORY STATEMENT

APPENDIX II

Any Shares purchased or acquired by the Company and cancelled will be automatically delisted by the SGX-ST. Certificates in respect of purchased or acquired Shares that are cancelled by the Company will be cancelled by the Company as soon as reasonably practicable following settlement of any purchase or acquisition of such Shares.

1.6 Reporting Requirements

1.6.1 Within thirty (30) days of the passing of the Shareholders’ ordinary resolution to approve any purchase or acquisition of Shares by the Company, the Company shall lodge a copy of such ordinary resolution with the Accounting & Corporate Regulatory Authority (the ‘‘ACRA’’).
1.6.2 The Company shall notify the ACRA within thirty (30) days of a purchase or acquisition of Shares on the SGX-ST or otherwise. Such notification shall include details of the date of the purchase or acquisition, the total number of Shares purchased or acquired by the Company, the number of Shares cancelled, the Company’s issued share capital before the purchase or acquisition of Shares, the Company’s issued share capital after the purchase or acquisition of Shares, the amount of consideration paid by the Company for the purchase or acquisition, whether Shares were purchased or acquired out of profits or capital of the Company, and such other particulars as may be required by the ACRA.
1.6.3 Rule 886 of the Listing Manual specifies that a listed company shall report all purchases or acquisitions of its shares to the SGX-ST not later than 9: 00 a.m. (a) in the case of a Market Purchase, on the Market Day following the day of purchase or acquisition of any of its shares; and (b) in the case of an Off-Market Purchase under an equal access scheme, on the second Market Day after the close of acceptances of the offer. The notification of such purchases or acquisitions to the SGX-ST shall be in such form and shall include such details as may be prescribed by the SGX-ST in the Listing Manual. The Company shall make arrangements with its stockbrokers to ensure that they provide the Company in a timely fashion with the necessary information which will enable the Company to make the notifications to the SGX-ST.
1.6.4 While the Listing Manual do not expressly prohibit any purchase of shares by a listed company during any particular time or times, because the Company would be regarded as an ‘‘insider’’ in relation to any proposed purchase or acquisition of its Shares, the Company will not undertake any purchase or acquisition of Shares pursuant to the proposed Share Purchase Mandate at any time after a price sensitive development has occurred or has been the subject of a decision until the price sensitive information has been publicly announced. In particular, to comply with Rule 1207(19) of the Listing Manual, the Company will not purchase or acquire any Shares through Market Purchase during the period commencing two weeks before the announcement of the Company’s financial statements for each of the first three quarters of its financial year, or one month before the announcement of the Company’s full year results, and ending on the date of the relevant results.

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APPENDIX II

EXPLANATORY STATEMENT

1.6.5 For an Off-Market Purchase, the Listing Manual requires that the listed company issue an offer document to all shareholders containing the information as set out in paragraph 1.3.3 above.

1.7 Financial Effects

The financial effects on the Group arising from the purchases or acquisitions of Shares which may be made pursuant to the Share Purchase Mandate will depend on, inter alia, whether the Shares are purchased or acquired out of capital and/or retained profits of the Company, the number of Shares purchased or acquired, the consideration paid for such Shares and the number of Shares purchased or acquired which are to be cancelled. It is therefore not possible to realistically calculate or quantify the impact at this point of time.

1.7.1 Purchase or Acquisition out of Profits and/or Capital

Under the Companies Act, purchases or acquisitions of Shares by the Company may be made out of the capital and/or retained profits of the Company.

Where the purchased Shares are cancelled, a reduction by the total amount of the purchase price paid by the Company for the Shares cancelled will be made to:

(a) the share capital of the Company where the Shares were purchased out of the capital of the Company;
(b) the profits of the Company where the Shares were purchased out of the retained profits of the Company; or
(c) the share capital and profits of the Company proportionately where the Shares were purchased out of both the capital and profits of the Company.

Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of retained profits, such consideration (excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses) will correspondingly reduce the amount available for the distribution of cash dividends by the Company.

Where the consideration paid by the Company for the purchase or acquisition of Shares is made out of capital, the amount available for the distribution of cash dividends by the Company will not be reduced.

1.7.2 Number of Shares Acquired or Purchased

Purely for illustration purposes only, on the basis of 388,000,000 issued and paid-up Shares as at the Latest Practicable Date, and assuming no further Shares are issued or repurchased by the Company, on or prior to the AGM, the purchase or acquisition by the Company of up to the maximum limit often per cent. (10%) of its issued Shares will entail a purchase or acquisition of 38,800,000 Shares.

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APPENDIX II

EXPLANATORY STATEMENT

1.7.3 Maximum Price Paid for Shares Acquired or Purchased

In the case of the Market Purchases by the Company, based on the existing issued and paid-up capital of the Company as at the Latest Practicable Date and the assumption that, pursuant to the Share Purchase Mandate, the Company purchases the maximum number of 38,800,000 Shares at the Maximum Price of S$0.18 per Share (being the price equivalent to five per cent. (5%) above the average of the closing market prices of the Shares for the five (5) Market Days on which the Shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase of 38,800,000 Shares is approximately S$6,984,000, excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses.

In the case of the Off-Market Purchases by the Company, based on the existing issued and paid-up capital of the Company as at the Latest Practicable Date and the assumption that, pursuant to the Share Purchase Mandate, the Company purchases the maximum number of 38,800,000 Shares at the Maximum Price of S$0.20 per Share (being the price equivalent to twenty per cent. (20%) above the average of the closing market prices of the Shares for the five (5) Market Days on which the Shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase of 38,800,000 Shares is approximately S$7,760,000, excluding brokerage, stamp duties, commission, applicable goods and services tax and other related expenses.

1.7.4 Illustrative Financial Effects

For illustrative purposes only, on the basis of the assumptions set out above and the following:

(a) the Share Purchase Mandate had been effective on the Latest Practicable Date and the Company had purchased the maximum of 38,800,000 Shares representing ten per cent. (10%) of the Shares in issue as at the Latest Practicable Date and cancelled;
(b) the consideration for the purchase or acquisition of the Shares is funded by external borrowings;
(c) the Shares have been purchased at the Maximum Price; and
(d) the SGD:RMB exchange rate as at 31 December 2013 is 4.79 and the average SGD:RMB exchange rate for the 2013 financial year (‘‘FY2013’’) is 4.92,

– 17 –

EXPLANATORY STATEMENT

APPENDIX II

an illustration of the financial impact of Share purchases or acquisitions by the Company pursuant to the Share Purchase Mandate on the Group and the Company’s audited financial statements for FY2013 is set out below:

(A) Market purchases made entirely out of external borrowings and cancelled

As at 31 Dec 2013 Shareholders’ Funds NTA(1) Total Liabilities Current Assets Current Liabilities Working Capital Number of Shares (’000) Financial Ratios EPS (S$ cents) NTA per Share (S$ cents) Gearing (times)(2) Current Ratio (times)(3)	Group (S$ ’000) Before Share Purchase After Share Purchase 226,312 219,328 225,740 218,756 72,980 79,980 261,619 261,635 70,691 77,691 190,928 183,944 388,000 349,200 4.13 4.59 58.18 62.64 0.32 0.36 3.70 3.37	Company Before Share Purchase 103,965 103,965 1,639 23,654 1,639 22,014 388,000 4.24 26.80 0.02 14.43	(S$ ’000) After Share Purchase 96,981 96,981 8,639 23,670 8,639 15,030
			349,200 4.71 27.77 0.09 2.74

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APPENDIX II

EXPLANATORY STATEMENT

(B) Off-Market Purchases made entirely out of external borrowings and cancelled

As at 31 Dec 2013 Shareholders’ Funds NTA(1) Total Liabilities Current Assets Current Liabilities Working Capital Number of Shares (’000) Financial Ratios EPS (S$ cents) NTA per Share (S$ cents) Gearing (times)(2) Current Ratio (times)(3)	Group (S$ ’000) Before Share Purchase After Share Purchase 226,312 218,552 225,740 217,980 72,980 80,980 261,619 261,859 70,691 78,691 190,928 183,168 388,000 349,200 4.13 4.59 58.18 62.42 0.32 0.37 3.70 3.33	Company Before Share Purchase 103,965 103,965 1,639 23,654 1,639 22,014 388,000 4.24 26.80 0.02 14.43	(S$ ’000) After Share Purchase 96,205 96,205 9,639 23,894 9,639 14,254
			349,200 4.71 27.55 0.10 2.48

NOTES:

(1) NTA equals Shareholders’ funds less intangible assets.
(2) Gearing equals total liabilities divided by Shareholders’ funds.
(3) Current ratio equals current assets divided by current liabilities.

Shareholders should note that the financial effects set out above, based on the respective aforementioned assumptions, are for illustration purposes only. In particular, it is important to note that the above analysis is based on the historical numbers of FY2013 (save for the number of Shares, which are based on the number of Shares as at the Latest Practicable Date), and is not necessarily representative of future financial performance.

The Company will take into account both financial and non-financial factors (for example, share market conditions and the performance of the Shares) in assessing the relative impact of a Share purchase or acquisition before execution. Although the Share Purchase Mandate would authorise the Company to purchase or acquire up to ten per cent. (10%) of its issued Shares, the Company may not necessarily purchase or acquire or be able to purchase or acquire the entire ten per cent. (10%) of its issued Shares

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APPENDIX II

EXPLANATORY STATEMENT

1.8 Taxation

Section 10J of the Income Tax Act stipulates that when a company purchases or acquires its own shares from a shareholder using funds other than contributed capital of the company, the payment by the company shall be deemed to be a dividend paid by the company to the shareholder. Accordingly, the Company will, in repurchasing its own Shares out of profits, be deemed to have paid a dividend to its Shareholders from whom the Shares are purchased.

Shareholders who are in doubt as to their respective tax positions or tax implications of Share purchases by the Company, or who may be subject to tax whether in or outside Singapore, should consult their own professional advisers.

1.9 Listing Status

The Company is required under Rule 723 of the Listing Manual to ensure that at least ten per cent. (10%) of its Shares are in the hands of the public. The ‘‘public’’, as defined under the Listing Manual, are persons other than (a) the directors, chief executive officer, substantial shareholders, or controlling shareholders of the Company or its subsidiaries, and (b) the associates of such persons named in (a).

The Company is required under Rule 8.08 of the Hong Kong Listing Rules to ensure that at least twenty-five per cent. (25%) of its Shares are in the hands of the public. According to the Hong Kong Listing Rules, the SEHK will not regard any connected person of the Group as a member of ‘‘the public’’ or Shares held by a connected person as being ‘‘in public hands’’. In addition, the SEHK will not recognise as a member of ‘‘the public’’: (a) any person whose acquisition of securities has been financed directly or indirectly by a connected person; and/or (2) any person who is accustomed to take instructions from a connected person in relation to the acquisition, disposal, voting or other disposition of securities of the Company registered in his/her name or otherwise held by him/her.

Note: The Company shall comply with both the Listing Manual and the Hong Kong Listing Rules. In the event of any conflict between them, the Company shall have to comply with the more onerous rules, subject to approvals from the relevant stock exchange(s) where is necessary.

As at the Latest Practicable Date, there are 269,622,813 Shares in the hands of the public, representing sixty-nine point forty-nine per cent. 69.49% of the issued Shares of the Company. Assuming that the Company purchases its Shares through Market Purchases up to the full ten per cent. (10%) limit pursuant to the Share Purchase Mandate, the number of Shares in the hands of the public would be reduced to 230,822,813 Shares, representing fifty-nine point forty-nine per cent. 59.49% of the remaining issued Shares of the Company (on the assumption that the purchased Shares are not cancelled).

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APPENDIX II

EXPLANATORY STATEMENT

In undertaking any purchases of its Shares, the Directors will use their best efforts to ensure that a sufficient number of Shares remain in public hands so that the Share purchases will not:

(a) adversely affect the listing status of the Shares on both the SGX-ST and the SEHK;
(b) cause market illiquidity; or
(c) adversely affect the orderly trading of the Shares.

1.10 Suspension of Purchase

1.10.1 The Company will not effect or undertake any Share purchases or acquisitions prior to the announcement of any price-sensitive information by the Company, until such time as the price-sensitive information has been publicly announced or disseminated in accordance with the requirements of the Listing Manual.
1.10.2 The Company will not effect or undertake any Share purchases or acquisitions on the SGX-ST or the SEHK during the period commencing one (1) month immediately preceding the earlier of (i) the date of the board meeting (as such date is first notified to the SGX-ST or the SEHK) for the approval of the results announcement for the financial year, half-year, quarterly or any other interim period, and (ii) the deadline for the Company to publish an announcement of its results for any year or half-year or quarterly or any other interim period (whether or not required under the Listing Manual or the Listing Rules), and ending on the date of the results announcement.

1.11 (A) Implications under the Take-over Code

The resultant increase in the percentage of voting rights held by a Shareholder and persons acting in concert with him, following the purchase of Shares by the Company, will be treated as an acquisition for the purposes of Rule 14 of the Take-over Code (‘‘Rule 14’’). Consequently, depending on the number of Shares purchased by the Company and the total number of Shares in the capital of the Company at that time, a Shareholder or group of Shareholders acting in concert with each other could obtain or consolidate control of the Company and could become obliged to make an offer under Rule 14.

– 21 –

EXPLANATORY STATEMENT

APPENDIX II

Under the Take-over Code, persons acting in concert comprise individuals or companies who, pursuant to an agreement or understanding (whether formal or informal), cooperate, through the acquisition by any of them of shares in a company, to obtain or consolidate effective control of that company. Unless the contrary is established, the following persons, inter alia, will be presumed to be acting in concert:

(i) a company with any of its directors (together with their close relatives, related trusts as well as companies controlled by any of the directors, their close relatives and related trusts);
(ii) a company, its parent, subsidiaries and fellow subsidiaries, and their associated companies and companies of which such companies are associated companies, all with each other;
(iii) an individual with his close relatives, related trusts, any person who is accustomed to act in accordance with his instructions and companies controlled by these persons, all with each other; and
(iv) any person who has provided financial assistance (other than a bank in the ordinary course of business) to any of the above for the purchase of voting rights.

For this purpose, ownership or control of twenty per cent. (20%) but not more than fifty per cent. (50%) of the voting rights of a company will be regarded as the test of associated company status.

The circumstances under which Shareholders (including Directors) and persons acting in concert with them respectively will incur an obligation to make a general offer under Rule 14 after a purchase or acquisition of Shares by the Company are set out in Rule 14 and Appendix 2 of the Take-over Code.

In general terms, the effect of Rule 14 and Appendix 2 of the Take-over Code is that, unless exempted, the Directors and persons acting in concert with them will incur an obligation to make a general offer under Rule 14 if, as a result of the Company purchasing or acquiring Shares, the voting rights of such Directors and their concert parties would increase to thirty per cent. (30%) or more, or if the voting rights of such Directors and their concert parties fall between thirty per cent. (30%) and fifty per cent. (50%) of the Company’s voting rights, the voting rights of such Directors and their concert parties would increase by more than one per cent. (1%) in any period of six (6) months.

Under Appendix 2 of the Take-over Code, a Shareholder not acting in concert with the Directors will not be required to make a general offer under Rule 14 if, as a result of the Company purchasing or acquiring its Shares, the voting rights of such Shareholder in the Company would increase to thirty per cent. (30%) or more, or, if such Shareholder holds between thirty per cent. (30%) and fifty per cent. (50%) of the Company’s voting rights, the voting rights of such Shareholder would increase by more than one per cent. (1%) in any period of six (6) months. Such Shareholder need not abstain from voting in respect of the resolution authorising the proposed Share Purchase Mandate.

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EXPLANATORY STATEMENT

APPENDIX II

As at the Latest Practicable Date as set out in paragraph 1.13 below, none of the substantial Shareholders would become obliged to make a take-over offer for the Company under Rule 14 as a result of the purchase by the Company of the maximum limit of 10% of its issued Shares as at the Latest Practicable Date.

Shareholders who are in any doubt as to whether they would incur any obligations to make a take-over offer as a result of any purchase of Shares by the Company pursuant to the Share Purchase Mandate are advised to consult their professional advisers and/or the Securities Industry Council before they acquire any Shares in the Company during the period when the Share Purchase Mandate is in force.

(B) Implications under the Hong Kong Takeovers Code

If, on the exercise of the power to purchase or acquire the Shares pursuant to the Share Purchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of Rule 32 of the Hong Kong Code on Takeovers and Mergers (the ‘‘Hong Kong Takeovers Code’’). As a result, a Shareholder or a group of Shareholders acting in concert (as defined in the Hong Kong Takeovers Code), depending on the level of such increase, could obtain or consolidate control of the Company and may become obliged to make a mandatory offer in accordance with Rule 26 and Rule 32 of the Hong Kong Takeovers Code.

As at the Latest Practicable Date and to the best knowledge and belief of the Directors, Kingever Enterprises Limited (which is wholly owned by Mr. Cui Genxiang) has an interest in 90,294,662 Shares, representing twenty-three point twenty-seven per cent. 23.27% of the issued capital of the Company, and Mr Cui Genxiang is deemed to be a Controlling Shareholder by reason of the 90,294,662 Shares held by Kingever Enterprises Limited. In the event that the Directors should exercise in full the power to purchase or acquire Shares under the Share Purchase Mandate and if there is no other change in the issued share capital of the Company, the shareholding of Kingever Enterprises Limited in the Company will be increased to approximately twenty-five point eighty-six per cent 25.86% of the issued share capital of the Company.

The Directors are not aware of any consequence which may arise under the Hong Kong Takeovers Code as a result of any repurchases made under the Share Purchase Mandate.

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APPENDIX II

EXPLANATORY STATEMENT

The Directors do not have present intention to exercise the power to repurchase the Shares to the extent which will trigger off the mandating offer requirement pursuant to the rules of the Hong Kong Takeovers Code.

1.12 Share Purchase made and Share Price on the SEHK

1.12.1 The Company has not made any Market Purchases on the SGX-ST or the SEHK or Off-Market Purchases in the twelve (12) months preceding the date of this Circular.
1.12.2 Under the Hong Kong Listing Rule 10.06(1)(b)(x) of the SEHK, the Company is required to state the share prices traded on the SEHK during each of the previous twelve (12) months in the Explanatory Statement. The highest and lowest prices at which the Shares were traded on the SEHK in each of the following months:

Month	Share	price
	Highest	Lowest
	HK$	HK$
2013
March	0.99	0.82
April	0.85	0.74
May	0.95	0.77
June	0.84	0.74
July	1.26	0.65
August	1.12	0.91
September	1.18	1.00
October	1.17	1.00
November	1.60	1.00
December	1.46	1.12
2014
January	1.28	1.01
February (up to the Latest Practicable Date)	1.25	1.06

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APPENDIX II

EXPLANATORY STATEMENT

1.13 Directors’ and Substantial Shareholders’ Interests

As at the Latest Practicable Date, the shareholdings of the Directors and the substantial Shareholders in the Company before and after the purchase of Shares (assuming that the purchased Shares are cancelled) pursuant to the Share Purchase Mandate, based on the Register of Director’s Shareholdings and the Register of Substantial Shareholders, are as follows:

	Before	Share Purchase		After	Share Purchase
	Direct	Deemed	Total	Direct	Deemed	Total
	Interest	Interest	Interest	Interest	Interest	Interest
	(No. of	(No. of		(No. of	(No. of
	Shares)	Shares)	(%)	Shares)	Shares)	(%)
Directors
Cui Genxiang(1)	—	90,294,662	23.27	—	90,294,662	25.86
Xu Guoqiang	—	—	—	—	—	—
Zhang Zhong(2)	—	28,082,525	7.24	—	28,082,525	8.04
Tay Ah Kong
Bernard	—	—	—	—	—	—
Chee Teck Kwong
Patrick	—	—	—	—	—	—
Tam Chi Kwan
Michael	—	—	—	—	—	—
Substantial
Shareholders
Kingever
Enterprises
Limited	90,294,662	—	23.27	90,294,662	—	25.86
Wellahead
Holdings
Limited	28,082,525	—	7.24	28,082,525	—	8.04

NOTES:

(1) Mr. Cui Genxiang holds 100% of the total issued share capital of Kingever Enterprises Limited. Pursuant to section 7 of the Companies Act, Mr. Cui Genxiang is deemed interested in the Shares held by Kingever Enterprises Limited.
(2) Ms. Zhang Zhong holds 100% of the total issued share capital of Wellahead Holdings Limited. Pursuant to section 7 of the Companies Act, Ms. Zhang Zhong is deemed interested in the Shares held by Wellahead Holdings Limited.

Shareholders should note that the figures in the above table are set out for illustrative purposes only and calculated on the assumption that (i) the maximum amount of ten per cent. (10%) of the Shares of the Company purchased under the Share Purchase Mandate will be cancelled and (ii) there is no change in the number of Shares held or deemed to be held by the Directors and the substantial Shareholders.

At the Latest Practicable Date, Kingever Enterprises Limited has an interest in 90,294,662 Shares, representing twenty-three point twenty-seven per cent. 23.27% of the issued capital of the Company. Mr. Cui Genxiang is deemed to be a controlling Shareholder by reason of the 90,294,662 Shares held by Kingever Enterprises Limited. Wellahead Holdings Limited has an interest in 28,082,525 Shares, representing seven point twenty four per cent. 7.24% of the issued capital of the Company. Ms. Zhang

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APPENDIX II

EXPLANATORY STATEMENT

Zhong is deemed to be a substantial Shareholder by reason of the 28,082,525 Shares held by Wellahead Holdings Limited. In the event that the Company purchases a maximum of 38,800,000 Shares, being ten per cent. (10%) of the total number of Shares in issue, from Shareholders other than Kingever Enterprises Limited and Mr. Cui Genxiang, the resultant shareholding interest of Kingever Enterprises Limited and Mr. Cui Genxiang in the Company would increase from twenty-three point twentyseven per cent. 23.27% to approximately twenty-five point eighty-six per cent. 25.86% respectively. As such the Share Purchase Mandate, even if fully utilized, would not trigger the provisions of the Take-over Code requiring Kingever Enterprises Limited or Mr. Cui Genxiang to incur an obligation to make a take-over offer under Rule 14 of the Take-over Code.

Based on the above information, as at the Latest Practicable Date, none of the Directors will become obligated to make a general offer in the event that the Company purchases the maximum number of 38,800,000 Shares under the Share Purchase Mandate. Based on the Register of Substantial Shareholders of the Company as at the Latest Practicable Date, the Directors are not aware of any substantial Shareholder who may become obligated to make a mandatory offer in the event that the Company purchases the maximum number of 38,800,000 Shares.

1.14 Directors, substantial shareholders, their associates and connected persons

None of the Directors nor substantial shareholders, to the best of their knowledge having made all reasonable enquiries, any of their associates, have any present intention, in the event that the Share Purchase Mandate is approved by the Shareholders at the AGM, to sell Shares to the Company under the Share Purchase Mandate.

No connected persons of the Company has notified the Company that he or she has a present intention to sell any Shares to the Company or its subsidiaries, or that he or she has undertaken not to sell any Shares held by him or her to the Company, in the event that the Share Purchase Mandate is granted by the Shareholders at the AGM.

1.15 Directors’ Undertaking

The Directors have undertaken to the SEHK and the SGX-ST that they will exercise the power of the Company pursuant to the Share Purchase Mandate in accordance with the Listing Manual, the Hong Kong Listing Rules, the Articles, the Companies Act and the applicable laws of the Republic of Singapore so far as the same may be applicable.

1.16 Directors’ Recommendation

The Directors are of the opinion, for the reasons set out in paragraph 1.2 above, that the renewal of the Share Purchase Mandate is in the best interests of the Company. They accordingly recommend the Shareholders to vote in favour of the renewal of the Share Purchase Mandate to be proposed at the AGM.

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APPENDIX II

EXPLANATORY STATEMENT

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates currently intends to sell the Shares to the Company or its subsidiaries in the event that the Share Purchase Mandate is approved by the Shareholders.

No connected person has notified the Company that he or she or it has a present intention to sell his or her or its Shares to the Company, nor has he or she or it undertaken not to do so, in the event that the Company is authorised to make purchases of the Shares.

1.17 Directors’ Responsibility Statement

The Directors collectively and individually accept full responsibility for the accuracy of the information given in this Circular and confirm after making all reasonable enquiries that, to the best of their knowledge and belief, this Circular constitutes full and true disclosure of all material facts about the adoption of the Share Purchase Mandate, the Company and its subsidiaries, and the Directors are not aware of any facts the omission of which would make any statement in this Circular misleading. Where information in this Circular has been extracted from published or otherwise publicly available sources or obtained from a named source, the sole responsibility of the Directors has been to ensure that such information has been accurately and correctly extracted from those sources and/or reproduced in this Circular in its proper form and context.

Yours faithfully For and on behalf of the Board of Hengxin Technology Ltd. Cui Genxiang Executive Chairman

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NOTICE OF ANNUAL GENERAL MEETING

==> picture [145 x 46] intentionally omitted <==

HENGXIN TECHNOLOGY LTD. 亨鑫科技有限公司[*]

(carrying on business in Hong Kong as HX Singapore Ltd.)

(Incorporated in Singapore with limited liability)

(Singapore Registration No.: 200414927H)

(Hong Kong Stock Code: 1085) (Singapore Stock Code: I85)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting of Hengxin Technology Ltd. (the ‘‘Company’’) will be held at Jurong Country Club, Albizia Room (Level 2), 9 Science Centre Road, Singapore 609078 on Wednesday, 23 April 2014 at 9: 00 a.m. and at any adjournment thereof for the following purposes:

AS ORDINARY BUSINESS

To receive and adopt the Directors’ Report and the Audited Financial Statements of the Company and the Group for the year ended 31 December 2013 together with the Auditors’ Report thereon.

(Resolution 1)

To declare a first and final dividend of S$0.0042 per share (one-tier tax exempt) for the year ended 31 December 2013 (2012: Nil).

(Resolution 2)

To re-elect the following Directors of the Company retiring pursuant to the Article 89 of the Articles of Association of the Company:

Ms. Zhang Zhong Mr. Tam Chi Kwan Michael

(Resolution 3) (Resolution 4)

[See Explanatory Note (i)]

To approve the payment of Directors’ fees of S$356,000 for the financial year ending 31 December 2014 (2013: S$320,000).

(Resolution 5)

To re-appoint Messrs Deloitte & Touche LLP as the Auditors of the Company and to authorise the Directors of the Company to fix their remuneration.

(Resolution 6)

To transact any other ordinary business which may be properly transacted at an Annual General Meeting.
For identification purpose only

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NOTICE OF ANNUAL GENERAL MEETING

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following resolutions as Ordinary Resolutions, with or without any modifications:

Authority to issue shares in the capital of the Company pursuant to Section 161 of the Singapore Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited.

That pursuant to Section 161 of the Singapore Companies Act, Cap. 50 and Rule 806 of the Listing Manual of the Singapore Exchange Securities Trading Limited, the Directors of the Company be authorised and empowered to:

(a) (i) issue shares in the Company (the ‘‘shares’’) whether by way of rights, bonus or otherwise; and/or
(ii) make or grant offers, agreements or options (collectively, the ‘‘Instruments’’) that might or would require shares to be issued, including but not limited to the creation and issue of (as well as adjustments to) options, warrants, debentures or other instruments convertible into shares, at any time and upon such terms and conditions and for such purposes and to such persons as the Directors of the Company may in their absolute discretion deem fit; and
(b) (notwithstanding the authority conferred by this Resolution may have ceased to be in force) issue shares in pursuance of any Instrument made or granted by the Directors of the Company while this Resolution was in force,

(the ‘‘Share Issue Mandate’’)

provided that:

(1) the aggregate number of shares (including shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution) and Instruments to be issued pursuant to this Resolution shall not exceed fifty per centum (50%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with subparagraph (2) below), of which the aggregate number of shares and Instruments to be issued other than on a pro rata basis to existing shareholders of the Company shall not exceed twenty per centum (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as calculated in accordance with sub-paragraph (2) below);

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NOTICE OF ANNUAL GENERAL MEETING

(2) (subject to such calculation as may be prescribed by the Singapore Exchange Securities Trading Limited) for the purpose of determining the aggregate number of shares and Instruments that may be issued under sub-paragraph (1) above, the percentage of issued shares and Instruments shall be based on the number of issued shares (excluding treasury shares) in the capital of the Company at the time of the passing of this Resolution, after adjusting for:
(a) new shares arising from the conversion or exercise of the Instruments or any convertible securities;
(b) new shares arising from exercising share options or vesting of share awards outstanding and subsisting at the time of the passing of this Resolution; and
(c) any subsequent consolidation or subdivision of shares;
(3) in exercising the Share Issue Mandate conferred by this Resolution, the Company shall comply with the provisions of the Listing Manual of the Singapore Exchange Securities Trading Limited for the time being in force (unless such compliance has been waived by the Singapore Exchange Securities Trading Limited) and the Articles of Association of the Company; and
(4) unless revoked or varied by the Company in a general meeting, the Share Issue Mandate shall continue in force (i) until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier or (ii) in the case of shares to be issued in pursuance of the Instruments, made or granted pursuant to this Resolution, until the issuance of such shares in accordance with the terms of the Instruments, whichever is earlier. [See Explanatory Note (ii)]

(Resolution 7)

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NOTICE OF ANNUAL GENERAL MEETING

8. Renewal of Share Purchase Mandate

That for the purposes of Sections 76C and 76E of the Singapore Companies Act, Cap. 50, the Directors of the Company be and are hereby authorised to make purchases or otherwise acquire issued shares in the capital of the Company from time to time (whether by way of market purchases or off-market purchases on an equal access scheme) of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company (as ascertained as at the date of Annual General Meeting of the Company) at the price of up to but not exceeding the Maximum Price as defined in paragraph 1.3.4 of the Company’s Letter to Shareholders dated 19 March 2014 (the ‘‘Letter’’), in accordance with the ‘‘Authority and Limits of the Share Purchase Mandate’’ set out in the Letter, and this mandate shall, unless revoked or varied by the Company in general meeting, continue in force until the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is earlier.

[See Explanatory Note (iii)]

(Resolution 8)

9. Authority to issue shares under the Hengxin Share Option Scheme

That pursuant to Section 161 of the Singapore Companies Act, Cap. 50, the Directors of the Company be authorised and empowered to offer and grant options (the ‘‘Options’’) under the Hengxin Share Option Scheme (the ‘‘Scheme’’) and to allot and issue from time to time such number of shares in the capital of the Company as may be required to be transferred or issued pursuant to the exercise of the Options granted by the Company under the Scheme, whether granted during the subsistence of this authority or otherwise, provided always that the aggregate number of additional ordinary shares to be issued pursuant to the Scheme shall not exceed fifteen per centum (15%) of the total number of issued shares (excluding treasury shares) in the capital of the Company from time to time and that such authority shall, unless revoked or varied by the Company in a general meeting, continue in force until the conclusion of the next Annual General Meeting of the Company or the date by which the next Annual General Meeting of the Company is required by law to be held, whichever is earlier. [See Explanatory Note (iv)]

(Resolution 9)

By Order of the Board of Hengxin Technology Ltd.

Shirley Lim Guat Hua Company Secretary Singapore, 19 March 2014

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NOTICE OF ANNUAL GENERAL MEETING

Explanatory Notes:

(i) Ms. Zhang Zhong will, upon re-election as a Director of the Company, remain as a member of the Audit Committee, Remuneration Committee and Nominating Committee and she will be considered non-independent.

Mr. Tam Chi Kwan Michael will, upon re-election as a Director of the Company, remain as a Lead Independent Non-executive Director, a member of the Audit Committee, Remuneration Committee and Nominating Committee and he will be considered independent.

(ii) The Ordinary Resolution 7 above, if passed, will empower the Directors of the Company from the date of this Meeting until the date of the next annual general meeting of the Company, or the date by which the next annual general meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares, make or grant instruments convertible into shares and to issue shares pursuant to such instruments, up to a number not exceeding, in total, 50% of the total number of issued shares (excluding treasury shares) in the capital of the Company, of which up to 20% may be issued other than on a pro-rata basis to existing shareholders of the Company.

For determining the aggregate number of shares that may be issued, the percentage of issued shares in the capital of the Company will be calculated based on the total number of issued shares (excluding treasury shares) in the capital of the Company at the time this Ordinary Resolution is passed after adjusting for new shares arising from the conversion or exercise of the Instruments or any convertible securities, the exercise of share options or the vesting of share awards outstanding or subsisting at the time when this Ordinary Resolution is passed and any subsequent consolidation or subdivision of shares.

(iii) The Ordinary Resolution 8 above, if passed, will empower the Directors of the Company from the date of the above Meeting until the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held, whichever is the earlier, to repurchase ordinary shares of the Company by way of market purchases or off-market purchases of up to ten per centum (10%) of the total number of issued shares (excluding treasury shares) in the capital of the Company at the Maximum Price as defined in paragraph 1.3.4 of the Company’s Letter. The rationale for, the authority and limitation on, the sources of funds to be used for the purchase or acquisition including the amount of financing and the financial effects of the purchase or acquisition of ordinary shares by the Company pursuant to the Share Purchase Mandate on the audited consolidated financial accounts of the Group for the financial year ended 31 December 2013 are set out in greater detail in the Letter.
(iv) The Ordinary Resolution 9 above, if passed, will empower the Directors of the Company from the date of the above Meeting until the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held or such authority is varied or revoked by the Company in a general meeting, whichever is the earlier, to issue shares in the Company pursuant to the exercise of options granted or to be granted under the Scheme up to a number not exceeding in total (for the entire duration of the Scheme) fifteen per centum (15%) of the issued shares in the capital of the Company from time to time.

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NOTICE OF ANNUAL GENERAL MEETING

IMPORTANT: Notwithstanding the passing of the Ordinary Resolution Nos. 7, 8 and 9, the Company shall from time to time comply with the relevant requirements under the Hong Kong Listing Rules in relation to issuance of securities, repurchase of shares and issuance of shares under share option scheme.

Notes:

A Member entitled to attend and vote at the Annual General Meeting (the ‘‘Meeting’’) is entitled to appoint more than one proxy to attend and vote in his/her stead. A proxy need not be a Member of the Company. Where a Member appoints more than one proxy, the Member shall specify the proportion of his shares to be represented by each such proxy, failing which the nomination shall be deemed to be alternative.
The instrument appointing a proxy must be deposited at the Principal Share Registrar of the Company, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, Singapore Land Tower #32-01, Singapore 048623 (for Singapore Shareholders), or at the office of the Company’s Branch Share Registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong (which will be relocated to Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong with effect from 31 March 2014) (for Hong Kong Shareholders), not less than forty-eight (48) hours before the time appointed for holding the Meeting.
If the member is a corporation, the instrument appointing a proxy must be executed under seal or the hand of its duly authorized officer or attorney.
A depositor whose name appears in the Depository Register (as defined in Section 130A of the Singapore Companies Act) of the Company and who is unable to attend personally but wishes to appoint a nominee to attend and vote on his behalf, or if such depositor is a corporation, should complete the depositor proxy form under seal or the hand of its duly authorized officer or attorney and lodge the same at the office of the Company’s Singapore Principal Share Registrar, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, Singapore Land Tower #32-01, Singapore 048623, not later than 48 hours before the time appointed for the Meeting.
The Principal Share Registrar and Branch Share Registrar of the Company will be closed from 14 April 2014 to 23 April 2014 (both days, inclusive), during which period no transfer of Shares will be effected. In order to qualify for attending the Meeting, all transfers accompanied by the relevant share certificates and transfer forms must be lodged with the Principal Share Registrar of the Company, Boardroom Corporate & Advisory Services Pte. Ltd. at 50 Raffles Place, Singapore Land Tower #32-01, Singapore 048623 (for Singapore Shareholders), or at the office of the Company’s Branch Share Registrar, Tricor Investor Services Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Hong Kong (which will be relocated to Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong with effect from 31 March 2014) (for Hong Kong Shareholders) not later than 4: 30 p.m. on 11 April 2014.

– 33 –

AI assistant

Hengxin Technology Ltd. — AGM Information 2014

49674_rns_2014-03-18_f0f7ae0e-791e-4cff-a128-4b19f44fad74.pdf

HENGXIN TECHNOLOGY LTD. 亨 鑫 科 技 有 限 公 司[*]

CONTENTS

DEFINITIONS

DEFINITIONS

HENGXIN TECHNOLOGY LTD. 亨 鑫 科 技 有 限 公 司[*]

RENEWAL OF SHARE ISSUE MANDATE, RENEWAL OF SHARE PURCHASE MANDATE, AND

RE-ELECTION OF RETIRING DIRECTORS AND

NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

2. RE-ELECTION OF RETIRING DIRECTORS

3. RENEWAL OF SHARE ISSUE MANDATE

4. RENEWAL OF SHARE PURCHASE MANDATE

LETTER FROM THE BOARD

5. DIRECTORS’ RECOMMENDATIONS

6. ANNUAL GENERAL MEETING

LETTER FROM THE BOARD

7. ACTIONS TO BE TAKEN BY SHAREHOLDERS

8. DIRECTORS’ RESPONSIBILITY STATEMENT

9. GENERAL INFORMATION

MS. ZHANG ZHONG (‘‘Ms. Zhang’’), Non-executive Director

MR. TAM CHI KWAN MICHAEL (‘‘Mr. Tam’’), Independent Non-Executive Director

PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE

1. The Share Purchase Mandate

1.2 Rationale

APPENDIX II

EXPLANATORY STATEMENT

1.3 Authority and Limits of the Share Purchase Mandate

1.3.1 Maximum Number of Shares

1.3.2 Duration of Authority

1.3.4 Maximum Purchase Price

1.4 Source of Funds

1.5 Status of Purchased Shares

APPENDIX II

1.6 Reporting Requirements

1.7 Financial Effects

1.7.1 Purchase or Acquisition out of Profits and/or Capital

1.7.2 Number of Shares Acquired or Purchased

APPENDIX II

EXPLANATORY STATEMENT

1.7.3 Maximum Price Paid for Shares Acquired or Purchased

1.7.4 Illustrative Financial Effects

APPENDIX II

(A) Market purchases made entirely out of external borrowings and cancelled

1.8 Taxation

1.9 Listing Status

1.10 Suspension of Purchase

1.11 (A) Implications under the Take-over Code

APPENDIX II

APPENDIX II

(B) Implications under the Hong Kong Takeovers Code

1.12 Share Purchase made and Share Price on the SEHK

1.13 Directors’ and Substantial Shareholders’ Interests

APPENDIX II

EXPLANATORY STATEMENT

1.14 Directors, substantial shareholders, their associates and connected persons

1.15 Directors’ Undertaking

1.16 Directors’ Recommendation

1.17 Directors’ Responsibility Statement

HENGXIN TECHNOLOGY LTD. 亨 鑫 科 技 有 限 公 司[*]

NOTICE OF ANNUAL GENERAL MEETING

AS ORDINARY BUSINESS

AS SPECIAL BUSINESS

(the ‘‘Share Issue Mandate’’)

8. Renewal of Share Purchase Mandate

[See Explanatory Note (iii)]

9. Authority to issue shares under the Hengxin Share Option Scheme

(Resolution 9)

Notes:

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Hengxin Technology Ltd. AGM Information 2014

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HENGXIN TECHNOLOGY LTD. 亨鑫科技有限公司[*]

HENGXIN TECHNOLOGY LTD. 亨鑫科技有限公司[*]