Innovax Holdings Limited — Proxy Solicitation & Information Statement 2017

Aug 8, 2017

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 your shares in Tesson Holdings Limited, you should at once hand this circular to the purchaser or the transferee or to the bank manager, licensed securities dealer or registered institution in securities or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

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

TESSON HOLDINGS LIMITED 天臣控股有限公司

(Incorporated in Bermuda with limited liability) (Stock code: 1201)

(1) MAJOR TRANSACTION – ESTABLISHMENT OF A JOINT VENTURE COMPANY; AND (2) NOTICE OF SPECIAL GENERAL MEETING

Financial Adviser to the Company

Capitalised terms used in this cover shall have the same meanings as defined in this circular.

A notice convening the SGM of the Company to be held at Room 1007, Tsim Sha Tsui Centre, West Wing, 66 Mody Road, Tsim Sha Tsui, Hong Kong at 11:00 a.m. on Tuesday, 29 August 2017 is set out on pages 21 to 22 of this circular. A form of proxy for use at the SGM is enclosed with this circular.

If you are not able to attend the SGM, please complete and sign the form of proxy in accordance with the instructions printed thereon and return it to the Company’s registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, 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 SGM or any adjournment thereof should you so wish.

9 August 2017

CONTENTS

		Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
Appendix I	– Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Appendix II	– General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
Notice of the	SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21

– i –

DEFINITIONS

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

• ‘‘associate(s)’’

has the meaning ascribed to it under the Listing Rules

• ‘‘Board’’

the board of Directors

• ‘‘Company’’

Tesson Holdings Limited (stock code: 1201), a company incorporated in Bermuda with limited liability, the issued Shares of which are listed on the Main Board of the Stock Exchange

• ‘‘connected person(s)’’

has the meaning ascribed to it under the Listing Rules

• ‘‘controlling shareholder(s)’’

has the meaning ascribed to it under the Listing Rules

• ‘‘Dalian Zhiyun’’

• 大 連 智 雲 自 動 化 裝 備 股 份 有 限 公 司 (Dalian Zhiyun Automatic Equipment Company Limited*), a company established under the laws of the PRC with limited liability, the issued shares of which are listed on the Shenzhen stock exchange

• ‘‘Director(s)’’ director(s) of the Company

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘Hong Kong’’

the Hong Kong Special Administrative Region of the PRC

• ‘‘HK$’’

Hong Kong dollar, the lawful currency of Hong Kong

• ‘‘Independent Third Party(ies)’’

a party(ies) independent of and not connected with the Company and its connected persons

• ‘‘JV Agreement’’

the joint venture agreement dated 16 June 2017 entered into between Tesson Shenzhen, Nanfang Black Sesame and Dalian Zhiyun in relation to the establishment of the JV Company

• ‘‘JV Company’’

• 天臣南方電源系統有限公司 (Tesson Nanfang Power System Company Limited*), the joint venture company to be established under the laws of the PRC with limited liability pursuant to the JV Agreement

– 1 –

DEFINITIONS

• ‘‘Latest Practicable Date’’

• 3 August 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘Lithium Ion Motive Battery one of the Group’s principal business activities, which is Business’’ the manufacturing and sale of lithium ion motive battery, lithium ion battery module, battery charging devices, battery materials machines and production lines, new energy solution and sale of relevant equipment, investments holding and import and export trading

• ‘‘Nanfang Black Sesame’’ 南方黑芝麻集團股份有限公司 (Nanfang Black Sesame Group Company Limited*), a company established under the laws of the PRC with limited liability, the issued shares of which are listed on the Shenzhen stock exchange

• ‘‘Packaging Printing Business’’

• one of the Group’s principal business activities, which is the printing and manufacturing of packaging products

• ‘‘PRC’’

• the People’s Republic of China, excluding Hong Kong, Macau Special Administration Region of the PRC and Taiwan for the purpose of this circular

• ‘‘RMB’’ Renminbi, the lawful currency of the PRC

• ‘‘Share(s)’’

• ordinary share(s) of HK$0.10 each in the share capital of the Company as at the Latest Practicable Date

• ‘‘Shareholder(s)’’ holder(s) of Share(s)

• ‘‘SGM’’

• the special general meeting of the Company to be convened and held to consider and, if thought fit, approve, the JV Agreement and the transaction contemplated thereunder

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

– 2 –

DEFINITIONS

• ‘‘Tesson Shenzhen’’

• ‘‘Voluntary Announcement’’

• ‘‘%’’

天 臣 新 能 源（ 深 圳 ）有 限 公 司 (Tesson New Energy (Shenzhen) Limited*), a company established under the laws of the PRC with limited liability and an indirect subsidiary of the Company

the voluntary announcement dated 21 June 2017 of the Company in relation to, among others, the establishment of the JV Company

per cent.

• for identification purpose only

– 3 –

LETTER FROM THE BOARD

TESSON HOLDINGS LIMITED 天臣控股有限公司

(Incorporated in Bermuda with limited liability) (Stock code: 1201)

Executive Directors: Ms. Cheng Hung Mui Mr. Tin Kong Mr. Zhou Jin Mr. Chen Dekun Mr. Tao Fei Hu Mr. Sheng Siguang Independent non-executive Directors: Mr. Wang Jinlin Mr. Ng Ka Wing Mr. See Tak Wah

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head office and principal place of business in Hong Kong: Room 1007 Tsim Sha Tsui Centre, West Wing 66 Mody Road Tsim Sha Tsui Hong Kong

9 August 2017

To the Shareholders

Dear Sir or Madam,

(1) MAJOR TRANSACTION – ESTABLISHMENT OF A JOINT VENTURE COMPANY; AND (2) NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

Reference is made to the Voluntary Announcement and the announcement of the Company dated 26 June 2017 in relation to, among others, the establishment of the JV Company.

The purpose of this circular is to provide you with, among others, (i) further information on the JV Agreement; and (ii) the notice of the SGM.

– 4 –

LETTER FROM THE BOARD

THE JV AGREEMENT

The principal terms of the JV Agreement are as follows:

Date:

16 June 2017

Parties:

• (i) Tesson Shenzhen;

• (ii) Nanfang Black Sesame; and

• (iii) Dalian Zhiyun.

As at the Latest Practicable Date, Mr. Wei Qingwen is (i) the spouse of Ms. Cheng Hung Mui, who is an executive Director and the controlling shareholder of the Company and is beneficially interested in approximately 61.36% of the issued Shares; and (ii) beneficially interested in less than 30% of the issued shares of Nanfang Black Sesame. Accordingly, Nanfang Black Sesame is not a connected person of the Company under the Listing Rules. Save for the aforementioned, to the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, Nanfang Black Sesame and Dalian Zhiyun and their ultimate beneficial owners are Independent Third Parties.

Shareholding structure and capital contribution

Pursuant to the JV Agreement, it is agreed by the parties thereto that, among other things:

• (i) The registered capital of the JV Company is RMB1,000 million which shall be contributed, on a pro rata basis, by Tesson Shenzhen, Nanfang Black Sesame and Dalian Zhiyun for the amounts of RMB600 million, RMB300 million and RMB100 million, representing 60%, 30% and 10% of their respective equity interests in the JV Company; and

• (ii) The parties under the JV Agreement shall pay 20% of their respective committed capital contribution at a time to be determined by the board of the JV Company based on the business development of the JV Company, which is currently expected to be around October 2017. The remaining 80% of their respective committed capital contribution shall be paid within two years following completion of the due registration of the JV Company. The registration of the JV Company is expected to be completed by September 2017, and therefore the remaining committed capital contribution is expected to be paid no later than September 2019.

– 5 –

LETTER FROM THE BOARD

The Company intends to satisfy its committed capital contribution by, among others, (i) its internal resource, including the cash inflow from its operating activities from time to time; (ii) bank borrowings; (iii) debt or equity financing; and/or (iv) financial support from Ms. Cheng Hung Mui, being the controlling shareholder of the Company who is beneficially interested in approximately 61.36% of the issued Shares.

The terms and conditions of the JV Agreement have been determined after arm’s length negotiation between the parties thereunder with reference to the capital requirement of the JV Company. The Directors consider that the terms of the JV Agreement and the transaction contemplated thereunder is fair and reasonable and in the interest of the Shareholders and the Company as a whole.

Conditions for the JV Agreement to become effective

The JV Agreement shall come into effect upon the parties thereto having obtained all necessary approvals, including:

• (i) the Company having obtained the approval from the Shareholders in relation to the JV Agreement and the transaction contemplated thereunder at the SGM;

• (ii) Nanfang Black Sesame having obtained the approval from its board of directors and its shareholders in relation to the JV Agreement; and

• (iii) Dalian Zhiyun having obtained the approval from its board of directors.

As at the Latest Practicable Date, conditions (ii) and (iii) as stated above had been satisfied and condition (i) had not yet been fulfilled.

Voting rights

The parties to the JV Agreement shall be entitled to exercise their respective voting rights in the JV Company in proportion to their respective equity interests therein.

Profit distribution

The parties under the JV Agreement shall be entitled to the distributable profits of the JV Company in proportion to their respective equity interests therein.

Management of the JV Company

The board of directors of the JV Company shall consist of five directors. Tesson Shenzhen shall nominate three directors, and each of Nanfang Black Sesame and Dalian Zhiyun shall nominate one director. The chairman of the board of directors of the JV Company (which is also the legal representative) shall be a director nominated by Tesson Shenzhen. The JV Company shall have one supervisor who shall be nominated by Tesson Shenzhen.

– 6 –

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE JV AGREEMENT

The JV Company will become a subsidiary of the Company and accordingly, the financial results of the JV Company will be consolidated into the accounts of the Group.

REASONS FOR AND BENEFITS OF THE ESTABLISHMENT OF THE JV COMPANY

The Group is principally engaged in the Packaging Printing Business and the Lithium Ion Motive Battery Business.

According to《節能與新能源汽車產業發展規劃(2012～2020)》(Energy saving and new energy vehicle industry development plan (2012～2020)) issued by the State Council of the PRC in July 2012, it is expected by the PRC government that the accumulated sales of the electric vehicles will reach over 5,000,000 units by year 2020. Further, according to《中國製造 2025》(China Manufacturing 2025) issued by the State Council of the PRC in May 2015, the PRC government has made a clear statement that it will support the development of the electric vehicle industry and it will focus its development effort in this industry in upcoming years, including but not limited to the continuous support in the development of electric vehicles and fuel-cell vehicles and the enhancement in the engineering and industrialization capabilities of vehicle motive batteries, in order to meet international standard. It is also expected by the PRC government that the annual sales of the new energy vehicles in the PRC will reach over 1,000,000 and 3,000,000 units by 2020 and 2025, representing a potential growth of approximately 93% and 479% respectively as compared with the annual sales of approximately 518,000 units of new energy vehicles in the PRC for the year 2016.

Having considered the above, the Company, Nanfang Black Sesame and Dalian Zhiyun are of the view that there will be huge market opportunities and demand in the electric vehicle industry as well as related automobile motive batteries, and thus gaining a foothold in such rapidly-developing industry will create enormous value for the investors.

With the substantial support and promotion from the PRC government, electric vehicles have become increasingly popular in the PRC, and therefore has offered a huge market potential for selling automobile motive batteries. The Group is of the view that the automobile motive batteries market will continue to undergo a strong growth trend in the coming years. It has been the Group’s intention to focus on and re-allocate its resources to further develop and capture the market potential of the Lithium Ion Motive Battery Business, so as to enhance the long-term growth potential of the Company and the Shareholders’ value.

The Directors are of the view that the JV Agreement and the transaction contemplated thereunder are on normal commercial terms, and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 7 –

LETTER FROM THE BOARD

INFORMATION OF THE JV COMPANY

The JV Company will be (i) a company established under law of the PRC with limited liability; and (ii) principally engaged in the Lithium Ion Motive Battery Business, including but not limited to the businesses of research and development on, production, operation and provision of services for, among others, motive batteries, battery packs and battery pack management system in the PRC.

It is currently contemplated by the Company that the registered capital of RMB1,000 million will be utilized by the JV Company in the following manner:

• (i) approximately RMB100 million will be used for the acquisition of land and related levelling work, which is expected to be completed by the fourth quarter of 2017;

• (ii) approximately RMB400 million will be used as deposits and progress payments for the construction of production plant, buildings, research and development center and logistic centers and for the purchase of machineries and equipment which are expected to be completed by the second half of 2018;

• (iii) approximately RMB400 million will be used as the second and/or final payments for the construction of production plant, buildings, research and development center and logistic centers and for the purchase of machineries and equipment which are expected to be completed by the first quarter of 2019; and

• (iv) approximately RMB100 million will be used for the general working capital of the JV Company.

It is expected that the JV Company will commence (i) debugging, i.e. mechanical adjustment procedures for the production equipment and machineries in the first quarter of 2019; (ii) trial production by April 2019; and (iii) full operation by May 2019.

INFORMATION OF THE PARTIES UNDER THE JV AGREEMENT

Tesson Shenzhen (i) is a company established under the laws of the PRC with limited liability; (ii) is an indirect subsidiary of the Company and owned as to 88.89% by the Company; and (iii) is principally engaged in the Lithium Ion Motive Battery Business.

Nanfang Black Sesame (i) is a company established under the laws of the PRC with limited liability; (ii) is listed on the Shenzhen stock exchange; and (iii) is principally engaged in the production and distribution of black sesame related products in the PRC. Although Nanfang Black Sesame has no relevant expertise in the Lithium Ion Motive Battery Business, the Company is of the view that Nanfang Black Sesame, being a company listed on the Shenzhen stock exchange, would have possessed sizeable financial resources to serve as one of the minority investors under the JV Agreement and support the development of the JV Company in the long term.

– 8 –

LETTER FROM THE BOARD

Dalian Zhiyun (i) is a company established under the laws of the PRC with limited liability; (ii) is listed on the Shenzhen stock exchange; and (iii) is principally engaged in the provision of and research and development of automation and integration system, design, manufacturing and technical consultation services.

DEVELOPMENT OF THE LITHIUM ION MOTIVE BATTERY BUSINESS

At present, the main products of the Lithium Ion Motive Battery Business are, among others, motive batteries, battery packs and battery management system. Motive batteries can be packed together into a battery pack, which is commonly applied, among others, to power electric vehicles. A battery management system is an electronic system to manage, control and monitor the performance of the battery packs.

The existing production base in Weinan, Shaanxi, the PRC

The Group currently has production base, comprises two phases, in Weinan, Shaanxi, the PRC, which (i) mainly focuses on the production of the motive batteries; and (ii) has an aggregate designed maximum production capacity of approximately 730,000 units of motive battery per day (representing an aggregate maximum energy output of approximately 3.06 GWh per year). The Group intends to further expand its existing production base by constructing a third phase development. Motive batteries produced in the existing production base will either be sold to the Group’s customers or supplied to the Group’s production facilities for the manufacturing of battery packs.

The existing research institute and the JV Company in Nanjing, the PRC

The Group currently has a research institute in Nanjing, the PRC, which mainly focuses on the research and development on, among others, the lithium-ion motive batteries, battery packs, battery management system, chargers and battery materials. Such research institute also possesses a production line for the production of battery packs and battery management system of the Group.

Going forward, the Group plans to shift all research and production capabilities with respect to battery management system and battery packs to the JV Company. Accordingly, the JV Company will primarily be responsible for the manufacturing of battery packs and battery management system, and will be the key research and development center for developing battery management system and battery packs.

– 9 –

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios (as defined in the Listing Rules) for the establishment of the JV Company exceeds 25% but are all below 100%, the transaction under the JV Agreement constitutes a major transaction of the Company under the Listing Rules and is subject to the reporting, announcement and shareholders’ approval requirements under the Listing Rules.

GENERAL

The SGM will be held and convened for the Shareholders to consider and, if thought fit, to approve the JV Agreement and the transaction contemplated thereunder. In view that Mr. Wei Qingwen is a substantial shareholder of Nanfang Black Sesame which is a party to the JV Agreement, Ms. Cheng Hung Mui being his spouse and the controlling shareholder of the Company, is considered to have material interest in the JV Agreement. Accordingly, Ms. Cheng Hung Mui and her associates shall abstain from voting on the resolution(s) to be proposed at the SGM. As at the Latest Practicable Date, Ms. Cheng Hung Mui controlled the voting rights of all the Shares owned by Double Key International Limited. For further details of the shareholding interest of Ms. Cheng Hung Mui and Double Key International Limited in the Company, please refer to the section headed ‘‘Disclosure of Interests’’ in Appendix II to this circular. To the best information, knowledge and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, no Shareholder other than Ms. Cheng Hung Mui and her associates has any material interest in the JV Agreement and the transaction contemplated thereunder. Therefore, no other Shareholder is required to abstain from voting on the resolution(s) to be proposed at the SGM.

A notice convening the SGM of the Company to be held at Room 1007, Tsim Sha Tsui Centre, West Wing, 66 Mody Road, Tsim Sha Tsui, Hong Kong at 11:00 a.m. on Tuesday, 29 August 2017 is set out on pages 21 to 22 of this circular. A form of proxy for use at the SGM is enclosed with this circular.

Whether or not you are able to attend the SGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, 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 you from attending and voting in person at the SGM or any adjournment thereof should you so wish.

– 10 –

LETTER FROM THE BOARD

As the JV Agreement is subject to the fulfillment of certain conditions and 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 terms of the JV Agreement are fair and reasonable, and the entering into of the JV Agreement is in the interest of the Company and the Shareholders as a whole. Accordingly, the Directors would recommend the Shareholders to vote in favour of the resolution(s) approving the JV Agreement and the transaction contemplated thereunder at the SGM.

ADDITIONAL INFORMATION

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

Yours faithfully By order of the Board Tesson Holdings Limited Tin Kong Chairman

– 11 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP FOR THE THREE FINANCIAL YEARS ENDED 31 DECEMBER 2016

Financial information of the Group for each of the three years ended 31 December 2014, 2015 and 2016 are disclosed in the following documents which have been published on the w e b s i t e s o f t h e S t o c k E x c h a n g e ( w w w . h k e x n e w s . h k ) a n d t h e C o m p a n y (www.tessonholdings.com) respectively:

• Annual Report 2016 (pages 44 to 104)

• Annual Report 2015 (pages 35 to 88)

• Annual Report 2014 (pages 35 to 94)

2. STATEMENT OF INDEBTEDNESS

As at the close of business on 30 June 2017, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Group had the following liabilities:

(a) Borrowings

The Group had outstanding (i) secured borrowings of approximately HK$63,353,000 and unsecured borrowings of approximately HK$78,247,000; (ii) amount due to the controlling shareholder of approximately HK$110,682,000; (iii) amount due to a related company of approximately HK$19,668,000; (iv) carrying amount of obligation under finance lease of approximately HK$56,902,000; and (v) carrying amount of convertible bonds of approximately HK$275,668,000.

(b) Contingent liabilities

The Group did not have any significant contingent liabilities.

Save as aforesaid and apart from intra-group liabilities, at the close of business on 30 June 2017, the Group had no other outstanding mortgages, charges, debentures or other loan capital or bank overdrafts or loans or other similar indebtedness, finance lease or hire purchase commitments, liabilities under acceptance or acceptance credits, debt securities, guarantees or other material contingent liabilities.

– 12 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. WORKING CAPITAL

The Directors are of the opinion that, in the absence of unforeseeable circumstances, assuming the completion of the establishment of the JV Company, and taking into account the internal financial resources and borrowings of the Group, the Group will have sufficient working capital for its present requirements and the requirements for the next twelve months from the date of this circular.

4. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2016, being the date to which the latest published audited financial statements of the Group were made up.

5. FINANCIAL AND TRADING PROSPECTS

The Group is principally engaged in the Packaging Printing Business and the Lithium Ion Motive Battery Business.

The Packaging Printing Business

In December 2016, the Company had disposed certain of its subsidiaries to an Independent Third Party. These subsidiaries were engaged in the Packaging Printing Business and had continually suffered losses. Given that these subsidiaries had minimal operations and assets in the past years and had ceased operations since April 2016, they did not represent a significant part of the Group’s overall operation in the Packaging Printing Business, and the disposal did not constitute a notifiable transaction under Chapter 14 of the Listing Rules. The Board believes that the Group will benefit from the disposal.

Turnover from the Packaging Printing Business for the year ended 31 December 2016 was approximately HK$781,023,000, representing a slight decrease of 1.8% from the year ended 31 December 2015. Gross profit margin remained steady at 29.3% as compared to 30.5% for the year ended 31 December 2015. Tobacco package printing is still the core product line of the Packaging Printing Business, which accounted for over 82.5% of the total turnover of the business. Other product lines of the Packaging Printing Business includes medicine package printing and liquor package printing.

The Lithium Ion Motive Battery Business

New energy vehicle is the industry that has been gaining tremendous support from the PRC government. It is also noted that the PRC government will further accelerate the promotion of new energy vehicles so as to alleviate the pressure on energy needs and the environment. Thus, it offers huge market potential for the sustainable development of automobile motive batteries, being the core of electric vehicles.

– 13 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group currently has production base, comprises two phases in Weinan, Shaanxi, the PRC for the production of the lithium ion motive batteries. In order to seize the upcoming opportunities, the Group intends to further expand its existing the production base by constructing its third phase development, in addition to the establishment of the JV Company.

In September 2016, the Group had also established a research institute in Nanjing and invested resources to develop the research and development technology as well as the skills for its battery sector for the long-term development of the Group. Meanwhile, the Group also invested resources in the research and development of packaging and arrangement of batteries and battery management system, paving the way for its further development.

With new energy vehicles becoming more and more popular and vigorous promotion carried out by the PRC government, vehicles with energy conservation, environmentallyfriendly, low carbon emission and zero pollution features will become the mainstream in the future. There is no doubt that the lithium ion battery, being the ‘‘heart’’ of new energy vehicles, will embrace infinite development opportunities. The Board believes that the Lithium Ion Motive Battery Business will be generating stable income and maximizing the return for the Company and the Shareholders as a whole in upcoming future.

– 14 –

GENERAL INFORMATION

APPENDIX II

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 respect and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

Interests of Directors and chief executive

As at the Latest Practicable Date, the interests and short positions of the Directors or the chief executive of the Company in the Shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required (i) 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 they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered into the register referred to therein; or (iii) are otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as set out in Appendix 10 to the Listing Rules were as follows:

			Approximate
			percentage of
			issued share
		Number of	capital of the
Name of Director	Capacity	Shares held	Company
Cheng Hung Mui (Note a)	Interest of controlled corporation	823,387,534	79.45%
Sheng Siguang (Note b)	Family interest	100,000,000	9.65%
Chen Dekun (Note c)	Beneficial owner	1,000,000	0.10%
Chen Weixi (Note c)	Beneficial owner	2,000,000	0.19%
Tin Kong (Note c)	Beneficial owner	2,000,000	0.19%
Chan Wei (Note c)	Beneficial owner	2,000,000	0.19%

Notes:

• a. The entire issued share capital of Double Key International Limited is wholly owned by Ms. Cheng Hung Mui, an executive Director. Therefore, Ms. Cheng Hung Mui is deemed to be interested in the Shares held by Double Key International Limited pursuant to the SFO. As at the Latest Practicable Date, Double Key International Limited held 635,887,534 Shares and 187,500,000 underlying Shares which may be issued upon the exercise of the conversion rights attaching to the convertible bonds in the principal amount of HK$300,000,000 (at the conversion price of HK$1.60 per conversion share).

– 15 –

GENERAL INFORMATION

APPENDIX II

• b. The Shares are held by Burgeon Max Holdings Limited which is owned as to 60% by Ms. Wang Jin and 40% by Ms. Wu Siqing, an Independent Third Party. Ms. Wang Jin is the spouse of Mr. Sheng Siguang, an executive Director.

• c. These Shares represent the underlying interest of the share options granted to the relevant Directors and chief executives of the Company under the share option scheme adopted by the Company on 13 June 2012. Please refer to the announcement of the Company dated 11 November 2016 for further details.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests or short positions in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) are otherwise required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies as set out in Appendix 10 to the Listing Rules.

Substantial Shareholders

As at the Latest Practicable Date, according to the register kept by the Company pursuant to section 336 of SFO, and so far as is known to the Directors or chief executive of the Company, the following persons (other than a Director or a chief executive of the Company) had, or was deemed or taken to have, an interest or short position in the Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO or who were directly or indirectly interested in 5% or more of the nominal value of any class of share capital, including options in respect of such capital, carrying voting rights to vote in all circumstances at general meeting of any member of the Group:

			Approximate
			percentage of
		Number of	issued share
		Shares in	capital of the
Name of Shareholder	Capacity or nature of interests	long position	Company
Cheng Hung Mui	Interest of controlled corporation	823,387,534	79.45%
		(Note 1)
Double Key International Limited	Beneficial owner	823,387,534	79.45%
		(Note 1)
Burgeon Max Holdings Limited	Beneficial owner	100,000,000	9.65%
		(Note 2)
Lankai Limited	Beneficial owner	100,000,000	9.65%
		(Note 3)

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APPENDIX II

GENERAL INFORMATION

			Approximate
			percentage of
		Number of	issued share
		Shares in	capital of the
Name of Shareholder	Capacity or nature of interests	long position	Company
Wang Jin	Interest of controlled corporation	100,000,000	9.65%
		(Note 2)
Sheng Siguang	Family interest	100,000,000	9.65%
		(Note 2)
Wu Siqing	Interest of controlled corporation	100,000,000	9.65%
		(Note 2)
Li Yujun	Interest of controlled corporation	100,000,000	9.65%
		(Note 3)

Notes:

1. The entire issued share capital of Double Key International Limited is wholly owned by Ms. Cheng Hung Mui, an executive Director. Therefore, Ms. Cheng Hung Mui is deemed to be interested in the Shares held by Double Key International Limited pursuant to the SFO. As at the Latest Practicable Date, Double Key International Limited held 635,887,534 Shares and 187,500,000 underlying Shares which may be issued upon the exercise of the conversion rights attaching to the convertible bonds in the principal amount of HK$300,000,000 (at the conversion price of HK$1.60 per conversion share).

2. The issued share capital of Burgeon Max Holdings Limited is owned as to 60% by Ms. Wang Jin and 40% by Ms. Wu Siqing. Therefore, Ms. Wang Jin and Ms. Wu Siqing are deemed to be interested in the Shares held by Burgeon Max Holdings Limited pursuant to the SFO. Besides, Mr. Sheng Siguang, an executive Director, is the spouse of Ms. Wang Jin and is accordingly deemed to be interested in the Shares beneficially owned by Ms. Wang Jin through her controlled corporation, Burgeon Max Holdings Limited pursuant to the SFO.

3. The entire issued share capital of Lankai Limited is wholly owned by Mr. Li Yujun. Therefore, Mr. Li Yujun is deemed to be interested in the Shares held by Lankai Limited pursuant to the SFO.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, there is no existing or proposed service contract between any of the Directors and any member of the Group other than service contracts that are expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation).

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GENERAL INFORMATION

APPENDIX II

4. INTERESTS IN CONTRACT OR ARRANGEMENT

Save for the JV Agreement, none of the Directors was materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group which was subsisting as at the Latest Practicable Date and which was significant in relation to the business of the Group.

5. INTERESTS IN ASSETS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 December 2016, the date to which the latest published audited financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

6. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or the controlling shareholders or their respective associates had any interests in businesses which compete or may compete with the business of the Group or had any other conflict of interests which any such person has or may have with the Group.

7. LITIGATION

As at the Latest Practicable Date, none of the members of the Group were engaged in any litigation or claims of material importance and no litigation or claims of material importance were known to the Directors to be pending or threatened against any member of the Group.

8. MATERIAL CONTRACTS

The following material contracts (not being contracts in the ordinary course of business) have been entered into by members of the Group within the two years preceding the date of this circular and up to the Latest Practicable Date and are or may be material:

• (i) the independent subscription agreement dated 26 October 2015 entered into between the Company and Lankai Limited in relation to the subscription of 100,000,000 subscription shares at the subscription price of HK$0.80 per subscription share;

• (ii) the connected subscription agreement dated 26 October 2015 entered into between the Company and Burgeon Max Holdings Limited in relation the subscription of 100,000,000 subscription shares at the subscription price of HK$0.80 per subscription share;

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APPENDIX II

GENERAL INFORMATION

• (iii) the acquisition agreement dated 31 December 2015 entered into between Tesson Shenzhen as purchaser and 陝西順乾能源科技有限公司 (Shaanxi Shunqian Energy Technology Co. Ltd.) and 陝西錦文新能源有限公司 (Shaanxi Jinwen New Energy Co. Ltd.) as vendors (both being Independent Third Parties) in relation to the sale and purchase of the entire issued share capital of 陝西力度電池有限公司 (Shaanxi Leaders Battery Co. Ltd.*) (the ‘‘ Shaanxi Company ’’ ) at a consideration of RMB19,495,524.60;

• (iv) the assignment of loan dated 31 December 2015 entered into between Tesson Shenzhen and China Cinda Asset Management Co. Ltd (Shaanxi Branch), an Independent Third Party, in relation to the settlement of approximately RMB88.8 million liability of the Shaanxi Company at a discount of approximately 50.7% to the settlement amount of RMB45 million which was completed on 28 January 2016;

• (v) the underwriting agreement dated 14 June 2016 entered into between the Company and Double Key International Limited in relation to the open offer of 444,135,300 offer Shares in the proportion of three offer Shares for every four Shares held at the issue price of HK$0.80 per Share;

• (vi) the capital injection agreement dated 29 November 2016 entered into between 陝西增 材製造創業投資基金（有限合夥）(Shaanxi Zengcai Manufacturing Venture Capital Fund (limited partnership)*) (‘‘Shaanxi Zengcai’’), Tesson Technology (Hong Kong) Limited (‘‘Tesson Technology’’), and Tesson Shenzhen, in relation to the subscription by Shaanxi Zengcai for approximately 6.67% of the enlarged equity interests in Tesson Shenzhen by way of capital injection at the consideration of RMB30,000,000 by cash;

• (vii) the capital injection agreement dated 29 November 2016 entered into between 深圳紫 金港新能源產業投資企業（有限合夥）(Shenzhen Zijin Port Energy Industry Investment Enterprise (limited partnership)*) (‘‘Shenzhen Zijin’’), Tesson Technology and Tesson Shenzhen, in relation to the subscription by Shenzhen Zijin for approximately 4.44% of the enlarged equity interests in Tesson Shenzhen by way of capital injection at the consideration of RMB20,000,000 by cash;

• (viii) the subscription agreement dated 17 January 2017 entered into between the Company, Double Key International Limited and the Cloud Apex Global Limited in relation to (i) the subscription of the convertible bonds of the Company in the principal amount of HK$300,000,000 by Double Key International Limited; and (ii) the assignment by Cloud Apex Global Limited in favour of Double Key International Limited of all rights, titles, benefits and interests in and to the outstanding interest-bearing loan owed by the Company to Cloud Apex Global Limited immediately prior to such assignment; and

• (ix) the JV Agreement.

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GENERAL INFORMATION

APPENDIX II

9. GENERAL

• (a) The registered office of the Company is situated at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The head office and principal place of business of the Company in Hong Kong is located at Room 1007, Tsim Sha Tsui Centre, West Wing, 66 Mody Road, Tsim Sha Tsui, Hong Kong.

• (b) The branch share registrar of the Company in Hong Kong is Computershare Hong Kong Investor Services Limited at Room 1712-1716, 17/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.

• (c) The company secretary of the Company is Mr. Chan Wei, a member of the Hong Kong Institute of Certified Public Accountants and a fellow member of Associate of Chartered Certified Accountants.

• (d) The English text of this circular and the accompanying proxy form shall prevail over the Chinese text in the case of any inconsistency.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the office of the Company at Room 1007, Tsim Sha Tsui Centre, West Wing, 66 Mody Road, Tsim Sha Tsui, Hong Kong during normal business hours 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 annual reports of the Company for the two years ended 31 December 2015 and 31 December 2016;

• (c) the material contracts referred to under the paragraph headed ‘‘Material Contracts’’ above in this appendix; and

• (d) this circular.

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NOTICE OF SGM

TESSON HOLDINGS LIMITED 天臣控股有限公司

(Incorporated in Bermuda with limited liability) (Stock code: 1201)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the ‘‘SGM’’) of Tesson Holdings Limited (the ‘‘Company’’) will be held at 11:00 a.m. on Tuesday, 29 August 2017 at Room 1007, Tsim Sha Tsui Centre, West Wing, 66 Mody Road, Tsim Sha Tsui, Hong Kong to consider and, if thought fit, approve, with or without modifications, the following resolution(s) as ordinary resolution(s):

ORDINARY RESOLUTION

‘‘THAT:

• (a) the joint venture agreement dated 16 June 2017 (the ‘‘JV Agreement’’) entered into between 天臣新能源（深圳）有限公司 (Tesson New Energy (Shenzhen) Limited) (‘‘Tesson Shenzhen’’), 南方黑芝麻集團股份有限公司 (Nanfang Black Sesame Group Company Limited) (‘‘Nanfang Black Sesame’’), and 大連智雲 自動化裝備股份有限公司 (Dalian Zhiyun Automatic Equipment Company Limited) (‘‘Dalian Zhiyun’’ together with Tesson Shenzhen, and Nanfang Black Sesame, the ‘‘JV Partners’’) in relation to, among other things, the establishment of 天臣南方電源系統有限公司 (Tesson Nanfang Power System Company Limited) (the ‘‘JV Company’’), the payment of capital commitment with respect to the registered capital of the JV Company, and the management of the JV Company, a copy of the JV Agreement has been produced to the SGM and marked ‘‘A’’ for the purpose of identification, and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and

• (b) any one director of the Company be and is hereby authorised to do all such acts and things, to sign and execute all such further documents and to take such steps as he may in his absolute discretion deems necessary or desirable to give effect to or in connection with the JV Agreement and the transactions contemplated thereunder.’’

Yours faithfully By order of the Board Tesson Holdings Limited Tin Kong Chairman

Hong Kong, 9 August 2017

– 21 –

NOTICE OF SGM

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head office and principal place of business in Hong Kong: Room 1007 Tsim Sha Tsui Centre, West Wing 66 Mody Road Tsim Sha Tsui Hong Kong

Notes:

• (1) Any shareholder entitled to attend and vote at the meeting is entitled to appoint another person as his/her/its proxy to attend and vote instead of him/her/it. A shareholder who is the holder of two or more shares may appoint more than one proxy to attend on the same occasion. A proxy need not be a shareholder of the Company but must be present in person at the meeting to represent the shareholder. Completion and return of the form of proxy will not preclude a shareholder from attending the meeting and voting in person. In such event, his/her/its form of proxy will be deemed to have been revoked.

• (2) Where there are joint holders of any share, any one of such joint holders may vote at the meeting, either personally or by proxy, in respect of such share as if he/she/it was solely entitled thereto, but if more than one of such joint holders be present at the meeting, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.

• (3) In order to be valid, the instrument appointing a proxy together with the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of that power or authority must be deposited at the offices of the Company’s Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited at 17M/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong not less than 48 hours before the time for holding the meeting or any adjournment thereof.

• (4) Entitlement to vote and attend the SGM: Shareholders who are entitled to attend and vote at the SGM are those whose names appear on the register of members of the Company as at the close of business on 23 August 2017. In order to qualify for attending the SGM, all transfer documents, accompanied by the relevant share certificates, have to be lodged for registration with the Company’s registrar, Computershare Hong Kong Investor Services Limited at Room 1712-1716, 17/F., Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong no later than 4:30 p.m. on Wednesday, 23 August 2017 (Hong Kong time).

• (5) The resolution(s) as set out above will be determined by way of a poll.

• for identification purpose only

As at the date of this notice, the executive directors of the Company are Ms. Cheng Hung Mui, Mr. Tin Kong, Mr. Zhou Jin, Mr. Chen Dekun, Mr. Tao Fei Hu and Mr. Sheng Siguang; and the independent non-executive directors of the Company are Mr. Wang Jinlin, Mr. Ng Ka Wing and Mr. See Tak Wah.

– 22 –