Long Investment Corp — Proxy Solicitation & Information Statement 2012

Feb 1, 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your stockbroker or other licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Financial Leasing Group Limited (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale was effected for transmission to the purchaser or transferee.

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

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(Incorporated in Cayman Islands with limited liability)

(Stock code: 2312)

PROPOSED SHARE CONSOLIDATION

A notice convening an extraordinary general meeting (“ EGM ”) of the Company to be held at 10:00 a.m. on Friday, 17 February 2012 at Seminar Hall, 2/F., Soho Tower, 110-118 Caine Road, Central, Hong Kong is set out on pages 25 to 26 of this circular. A form of proxy for use at the EGM is also enclosed with this circular.

Whether or not you are able to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company’s share registrar in Hong Kong, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjourned meeting. Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

2 February 2012

* For identification purpose

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
APPENDIX I – ADDITIONAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25

– i –

DEFINITIONS

In this circular, unless the context requires otherwise, the expressions as stated below will have the following meanings:

“Articles”	the articles of association of the Company as may be amended
	from time to time
“Board”	the board of Directors
“CCASS”	the Central Clearing and Settlement System established and
	operated by HKSCC
“Company”	China Financial Leasing Group Limited, a company
	incorporated in the Cayman Islands with limited liability and
	the Shares of which are listed on the Stock Exchange
“Consolidated Share(s)”	ordinary share(s) of HK$0.2 each in the share capital of the
	Company upon the Share Consolidation becoming effective
“Director(s)”	the director(s) of the Company
“EGM”	an extraordinary general meeting of the Company to be held at
	Seminar Hall, 2/F., Soho Tower, 110-118 Caine Road, Central,
	Hong Kong, on Friday, 17 February 2012 at 10:00 a.m. to
	approve the Share Consolidation
“Group”	the Company and its subsidiaries
“Hong Kong”	the Hong Kong Special Administration Region of the People’s
	Republic of China
“HKSCC”	Hong Kong Securities Clearing Company Limited
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange of Hong Kong Limited
“Latest Practicable Date”	1 February 201 2, being the latest practicable date prior to the
	printing of this circular for ascertaining certain information
	contained herein
“Net Asset Value”	the net asset value of the Company calculated in accordance
	with the provisions of the Articles

– 1 –

DEFINITIONS

“Region”	the Asian Pacific region, mainly Greater China, member
	countries of Association of Southeast Asian Nations (including
	Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia,
	Philippines, Singapore, Thailand and Vietnam) and Japan
“Share(s)”	existing ordinary share(s) of nominal value of HK$0.01 each in
	the share capital of the Company
“Share Consolidation”	the proposed consolidation of every twenty (20) Shares into
	one (1) Consolidated Share
“Share Option Scheme”	the share option scheme adopted by the Company on 13
	January 2012 pursuant to the resolution passed at the
	extraordinary general meeting held on 12 January 2012
“Shareholders”	registered holders of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“RMB”	Renminbi, the lawful currency of the PRC
“%”	per cent

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EXPECTED TIMETABLE

Set out below is an indicative timetable for the implementation of the Share Consolidation. The timetable is subject to the results of the EGM and other changes. The Company will notify the Shareholders of any significant changes to the expected timetable by way of announcement(s) as and when appropriate.

2012

Despatch of circular with notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Thursday, 2 February Latest time for lodging forms of proxy for the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Wednesday, 15 February Expected date and time of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Friday, 17 February Publication of announcement of the result of the EGM. . . . . . . . . . . . . . . . . . . . . Friday, 17 February Effective time and date of the Share Consolidation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 20 February First day for free exchange of existing share certificates for new share certificates for the Consolidated Shares. . . . . . . . . . . . . . . . . . Monday, 20 February Original counter for trading in Shares in board lot size of 20,000 Shares temporarily closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 20 February Temporary counter for trading in Consolidated Shares in board lots of 1,000 Consolidated Shares (in the form of existing share certificates) opens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 20 February Parallel trading in Consolidated Shares in the form of new share certificates and existing share certificates commences . . . . . . . . . . . . . . 9:00 a.m. on Monday, 5 March Original counter for trading in Consolidated Shares in board lot size of 20,000 Shares (in the form of new share certificates) re-opens . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 5 March Designated broker starts to stand in the market to provide matching services for odd lots of Consolidated Shares . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 5 March

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EXPECTED TIMETABLE

Temporary counter for trading in Consolidated Shares in board lot size of 1,000 Consolidated Shares (in the form of existing share certificates) closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 23 March Parallel trading in Consolidated Shares in the form of new share certificates and existing share certificates ends. . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 23 March Designated broker ceases to stand in the market to provide matching services for odd lots of Consolidated Shares . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 23 March Last day for free exchange of existing share certificates for new share certificates for the Consolidated Shares. . . . . . . . . . . . . . . . . . Wednesday, 28 March

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LETTER FROM THE BOARD

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(Incorporated in Cayman Islands with limited liability)

(Stock code: 2312)

Executive Directors:

Mr. Choy Kwok Hung, Patrick (Chairman) Mr. Chan Chi Hung (Managing Director)

Non-Executive Director :

Mr. Yang Nai Jiang (Deputy Chairman)

Registered Office:

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent non-executive Directors:

Mr. Yue Man Yiu, Matthew Mr. Chung Koon Yan Mr. Chung Shu Kun, Christopher

Head Office and Principal Place

of Business in Hong Kong: Room 4209, Office Tower Convention Plaza 1 Harbour Road, Wan Chai Hong Kong

2 February 2012

To the Shareholders

Dear Sir or Madam,

PROPOSED SHARE CONSOLIDATION

INTRODUCTION

The purpose of this circular is to provide you with information on the Share Consolidation and to give you a notice of the EGM at which resolution will be proposed to consider and, if thought fit, approve the Share Consolidation.

* For identification purpose

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LETTER FROM THE BOARD

PROPOSED SHARE CONSOLIDATION

The Company proposes to effect the Share Consolidation pursuant to which every twenty (20) issued and unissued Shares of HK$0.01 each in the share capital of the Company will be consolidated into one (1) Consolidated Share of HK$0.2 each.

The Share Consolidation will become effective upon the fulfillment of the conditions set out in the paragraph headed “CONDITIONS OF THE SHARE CONSOLIDATION” below.

EFFECTS OF THE SHARE CONSOLIDATION

As at the Latest Practicable Date, the authorised share capital of the Company is HK$300,000,000 divided into 30,000,000,000 Shares of HK$0.01 each, of which 4,927,865,100 Shares have been allotted and issued as fully paid or credited as fully paid. Upon the Share Consolidation becoming effective, on the basis that the Company does not allot, issue or purchase any Shares prior thereto, the authorised share capital of the Company shall become HK$300,000,000 divided into 1,500,000,000 Consolidated Shares of HK$0.2 each, of which 246,393,255 Consolidated Shares will have been allotted and issued as fully paid or credited as fully paid.

Fraction of Consolidated Shares that arise from the Share Consolidation will not be allotted to the Shareholders otherwise entitled thereto and will be aggregated and sold for the benefit of the Company.

DEALINGS OF THE CONSOLIDATED SHARES

The Consolidated Shares will be identical in all respects and rank pari passu in all respects with each other as to all future dividends and distributions which are declared, made or paid. Subject to the granting of the listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange, the Consolidated Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated Shares on Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. Other than the expenses to be incurred in relation to the Share Consolidation, the implementation thereof will not alter the underlying assets, business operations, management or financial position of the Company or the proportionate interests or rights of the Shareholders, save for any fractional Consolidated Shares to which the Shareholders may be entitled.

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LETTER FROM THE BOARD

CONDITIONS OF THE SHARE CONSOLIDATION

The Share Consolidation is conditional on:

• (i) the passing of an ordinary resolution by the Shareholders to approve the Share Consolidation at the EGM;

• (ii) the Listing Committee of the Stock Exchange granting approval for the listing of, and the permission to deal in, the Consolidated Shares in issue; and

• (iii) the approval of the relevant regulatory authority, if any.

LISTING APPLICATION

An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and the permission to deal in, the Consolidated Shares to be in issue upon the Share Consolidation becoming effective.

None of the securities of the Company is listed or dealt in on any other stock exchange other than the Stock Exchange and no such listing or permission to deal is being or is proposed to be sought.

BOARD LOT SIZE

Currently, the Shares are traded on the Stock Exchange in the board lot size of 20,000 Shares. Upon the Share Consolidation becoming effective, the board lot size for trading in the Consolidated Shares will remain as 20,000 Consolidated Shares.

ARRANGEMENT ON ODD LOT TRADING

In order to facilitate the trading of odd lots (if any) of the Consolidated Shares, the Company has appointed Metro Capital Securities Limited to provide matching service, on a best effort basis, for the sale and purchase of odd lots of Consolidated Shares arising from the Share Consolidation. Shareholders who wish to take advantage of this facility either to dispose of their odd lots of the Consolidated Shares or to top-up their odd lots to a full new board lot should contact Mr. Keith Vong of Metro Capital Securities Limited at Room 3806, 38/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong at telephone number (852) 2511 2880 during office hours during the period as stated in the section headed “EXPECTED TIMETABLE” on pages 3 to 4 of this circular. Shareholders should note that successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed.

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LETTER FROM THE BOARD

REASONS FOR THE SHARE CONSOLIDATION

Pursuant to Rule 13.64 of the Listing Rules, where the market price of the securities of an issuer approaches the extremities of HK$0.01 or HK$9,995.00, the issuer may be required either to change the trading method or to proceed with a consolidation or splitting of its securities. In view of the recent trading price of the Shares, the Board proposes to implement the Share Consolidation. The Share Consolidation will enable the Company to comply with the trading requirements under the Listing Rules. The Share Consolidation will increase the nominal value of the Shares of the Company, and is expected to bring about a corresponding increase in the trading price of the Consolidated Shares. Accordingly, the Directors are of the view that the Share Consolidation is in the interests of the Company and the Shareholders as a whole.

EXCHANGE OF SHARE CERTIFICATES

The new share certificates will be in the colour of yellow in order to distinguish them from the existing share certificates which are light green in colour. Subject to the Share Consolidation becoming effective, which is expected to be on 9:00 a.m. on Monday, 20 February 2012, Shareholders may, on or after Monday, 20 February 2012 until 4:00 p.m. on Wednesday, 28 March 2012 (both days inclusive), submit their share certificates for the Shares to the Company’s share registrar in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, to exchange, at the expense of the Company, for certificates of the Consolidated Shares . Thereafter, share certificates for the Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such other amount as may from time to time be specified by the Stock Exchange) by the Shareholders for each share certificate issued or cancelled, whichever is higher. Share certificates for the Shares will remain effective as documents of title but will not be accepted for delivery, trading and settlement purpose and may be exchanged for share certificates for Consolidated Shares at any time. It is expected that new share certificates for the Consolidated Shares will be available for collection on or after the 10th business day following the date of submission of the share certificates for existing Shares to the Company’s share registrar in Hong Kong for exchange.

SHARE OPTION SCHEME

Reference is made to the circular of the Company dated 16 December 2011 in relation to, amongst others, the adoption of the Share Option Scheme and the announcement of the Company dated 12 January 2012 in relation to the results of the extraordinary general meeting held on 12 January 2012.

At the extraordinary general meeting held on 12 January 2012, an ordinary resolution was passed to adopt the Share Option Scheme. The Share Option Scheme shall be valid and effective until the close of business of the Company on the date which falls ten (10) years after the date on which the Share Option Scheme was adopted i.e. 1 3 January 2012.

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LETTER FROM THE BOARD

Under the Share Option Scheme, options to subscribe for 492,786,510 Shares can be issued. As at the Latest Practicable Date, no option has been granted under the Share Option Scheme and the Company has no other outstanding convertible securities, options or warrants in issue which confer any right to subscribe for, convert or exchange into Shares. Upon the Share Consolidation becoming effective, options to subscribe for 24,639,325 Consolidated Shares can be issued under the Share Option Scheme.

EGM

The Share Consolidation is subject to the Shareholders’ approval at the EGM and no Shareholders are required to abstain from voting on the resolution in relation to the Share Consolidation.

A notice convening the EGM is set out on pages 25 to 26 of this circular. A form of proxy for the EGM is enclosed with this circular. Whether or not you are able to attend and vote at the EGM in person, you are encouraged to complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the share registrar of the Company, Tricor Tengis Limited, 26/F., Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish and in such event the instrument appointing the proxy shall be deemed to be revoked.

Pursuant to Rule 13.39 (4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. Therefore, the resolution proposed at the EGM will be voted by poll. No Shareholders are required to abstain from voting at the EGM. Further announcement on the results of the poll vote will be made by the Company after the EGM.

RECOMMENDATION

The Directors are of the opinion that the proposed Share Consolidation is in the interests of the Company and the Shareholders as a whole and so recommend you to vote in favour of the resolution to be proposed at the EGM.

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LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

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

By Order of the Board China Financial Leasing Group Limited Tse Kam Fai Company Secretary

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ADDITIONAL INFORMATION

APPENDIX I

This appendix includes particulars given in compliance with the Listing Rules for the purpose of giving information to the public with regard to the Company.

INVESTMENT MANAGEMENT INFORMATION

Investment Manager

Wealth Assets Management Limited (the “Investment Manager”) at Unit B, 12/F, Lucky Plaza, 315-321 Lockhart Road, Wanchai, Hong Kong is an investment adviser registered under the Securities and Futures Ordinance and was incorporated in Hong Kong with limited liability on 6 May 2002. The Board delegated authority and responsibility for day-to-day portfolio management of the Group to the Investment Manager, and the Investment Manager is responsible for making investment proposals in accordance with the Investment Management Agreement, the Articles and the investment policies of the Company.

The following are the particulars of the directors of the Investment Manager:

Name	Business/residential address
Chan Chi Hung	Room 4209
	Office Tower, Convention Plaza
	1 Harbour Road
	Wanchai
	Hong Kong
Chan Yiu Pun, Clement	Unit B, 12/F
	Lucky Plaza
	315-321 Lockhart Road
	Wanchai
	Hong Kong

Mr. Chan Chi Hung, is an executive Director. The particulars of Mr. Chan are set out on page 23 of this circular.

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ADDITIONAL INFORMATION

APPENDIX I

Mr. Chan Yiu Pun, Clement has accumulated over 20 years’ of experience in the local securities and investment services industry particular in areas of investment advisory and portfolio management of mutual funds and securities. In his past services with the international fund management companies and independent financial advisory firms, Mr. Chan has acquired solid experiences covering investment dealings, global investment analysis, mutual fund investment advisory and portfolio management of funds for clients. Currently, Mr. Chan is also an executive director of China International Capital Limited. He is a registered person under Types 4 and 9 regulated activities with The Securities and Futures Commission, Hong Kong. Mr. Chan is a Certified Financial Planner and a member of the Institute of Financial Planners of Hong Kong and holds a M.Sc. degree in Corporate Governance and Directorship from the Hong Kong Baptist University.

Custodian

DBS Vickers (Hong Kong) Limited (the “Custodian”) at 18/F., Man Yee Building, 68 Des Voeux Road Central, Hong Kong was appointed as the custodian of the Company in relation to the investments which the Company may from time to time deposit with the custodian.

The Directors confirm that none of the Directors, the Investment Manager, any investment adviser or any distribution company, or any associate of any of those persons, is or will become entitled to receive any part of any brokerage charged to the Company, or any re-allowance of other types on purchases charged to the Company.

SPECIFIC RISKS RELATING TO THE COMPANY

The Company is an investment company and its funds will be invested in listed and unlisted companies in Hong Kong, PRC and other main markets around the world. These investments will be subject to market fluctuations and to the risks inherent in all investments. Investors should also be aware that the Company’s income and its Net Asset Value are liable to be adversely affected by external factors beyond the control of the Company. As a result, income of the fund and its Net Asset Value may therefore go down as well as go up, subject to the prevailing market conditions.

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ADDITIONAL INFORMATION

APPENDIX I

INVESTMENT OBJECTIVES AND POLICIES

The Company is an investment company with the principal investment objective of achieving short to medium term (i.e. less than one year to five years) capital appreciation by mainly investing in a diversified portfolio of investments in listed and unlisted companies in the Region.

The Company has adopted the following investment policies:

• (i) the Company’s investments will normally be made in the form of equity or equity related securities and/or debt securities in listed and unlisted companies engaged in different industries including (but not limited to) information technology, manufacturing, life sciences and environmental services, telecommunications, infrastructure, pharmaceuticals and property sectors aiming at maintaining a balance in the Company’s exposure to different industries sectors in order to minimize the impact on the Company of any downturn in any particular sector;

• (ii) the Company may invest in other fields in which the Board believes that there are prospects of earnings growth and/or capital appreciation. In particular, the Company will seek to identify businesses or entities with a potential or record of profit growth, strong management, high levels of technical expertise and research and development capabilities as well as management commitment to the long-term growth of such companies;

• (iii) the Company may invest in companies or other entities which are considered by the Board and/or the Investment Manager as being special or in recovery situations on a case by case basis (e.g., the Company may invest in companies under restructuring or liquidation), which may have extensive growth in shorter period and provide attractive returns;

• (iv) up to a maximum of 90% of the Group’s assets can be invested in:

• (a) equity securities, convertible notes, preference shares, options, warrants or debt securities issued by listed companies;

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ADDITIONAL INFORMATION

APPENDIX I

• (b) equity securities, convertible notes, preference shares, options, warrants or debt securities issued by unlisted companies in the Region; and

• (c) options and futures which are traded on recognized securities or futures exchanges for trading and hedging purposes;

• (v) the Board and the Investment Manager will, where possible, seek to identify investments where there is a certain degree of synergy with other investee companies and where cooperation between such companies would be of mutual benefit to each other;

• (vi) the Company’s investments are intended to be held for short to medium term (i.e. less than one year to five years) capital appreciation. Subject to the foregoing, the Company will realise investments from time to time where to do so is in the opinion of the Board to be in the best interests of the Company or where the terms on which such realisation can be achieved are in the opinion of the Board to be particularly favourable to the Company;

• (vii) before suitable investment projects are identified, the Company may seek to protect the capital value of the Company’s cash assets by placing the same in bank deposits in any currency, bonds, treasury securities issued by the government of the United States or the government of Hong Kong or their respective agencies or securities or other instruments denominated in any currency issued by various governments or international development agencies;

• (viii) before suitable investment projects are identified, the Company may enter into forward interest rate agreements, forward currency agreements, interest rates and bond futures contracts and interest rate swaps and purchase and write (sell) put or call options on interest rates and put or call options on futures on interest rates; and

• (ix) a minimum of 10% of the Group’s assets will be maintained in cash or cash equivalents.

Investors should note that while it is the intention of the Company to invest its funds in accordance with the investment objectives and policies outlined above as far as practicable, due to market and other investment considerations, it may take some time before the funds of the Company are fully invested. The Company currently has no intention to change the investment objectives and policies. However, Shareholders should note that the investment objectives and policies can be changed by the Company without approval from the Shareholders.

– 14 –

ADDITIONAL INFORMATION

APPENDIX I

INVESTMENT RESTRICTIONS

Under the Articles and the Listing Rules relating to the listing of investment companies, certain restrictions on investments are imposed on the Company. To abide by such restrictions, the Board has resolved that the Company may not:

• (i) either itself or through its wholly owned subsidiaries, if any, or in conjunction with any connected person (as defined in the Listing Rules) take legal, or effective, management control of underlying investments and in no event will the Company itself or through its wholly-owned subsidiaries, if any, own or control more than 30% (or such other percentage as may from time to time be specified in the Takeovers Code as being the level for triggering a mandatory general offer) of the voting rights in such company or other entity, except in relation to such wholly-owned subsidiaries of the Company formed solely for the purpose of investment holding; and

• (ii) invest in any company or entity other than wholly-owned subsidiaries of the Company if such investment will result in more than 20% of the Net Asset Value being invested in such company or entity as at the date the investment is made in such company or entity.

The Company has to comply with investment restrictions (i) and (ii) above at all times while it remains listed as an investment company under Chapter 21 of the Listing Rules, and these restrictions are also contained in the Articles and any change of such is subject to Shareholders’ approval.

The Board has no present intention to change any of the above-mentioned investment restrictions.

BORROWING POWER

Pursuant to the Articles, the Company may exercise its borrowing power to borrow up to an aggregate principal amount representing not more than 50% of the latest available Net Asset Value at the time the borrowing is made. In the event that the borrowing should exceed 50% of the latest available Net Asset Value, the Company must obtain prior approval of the Shareholders at a general meeting. The Company’s assets may be charged or pledged as security for borrowings. Subject to the provisions of the memorandum of association , the Articles and the investment management agreement entered with the Investment Manager, the Company may from time to time borrow for the purposes of providing liquidity or taking advantage of investment opportunities.

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ADDITIONAL INFORMATION

APPENDIX I

DISTRIBUTION POLICY

Interest income, dividend income and other incomes of the Company will be used first to meet expenses. The Investment Manager will then assess whether it is reasonable to make provisions for future expenses and/or any possible impairment of investments, and will consider the amount of cash which should be retained by the Company for future investments. It is the Board’s intention to distribute any surplus by way of dividend to the extent permitted by law and the Articles. Dividends will only be paid to the extent that they are covered by net income received from underlying investments. Distributions (if any) will be made annually after the annual audited financial statements of the Company are approved by the Shareholders at the annual general meeting but interim distributions may be made from time to time to the Shareholders if it appears to the Board to be justified by the financial position of the Company. Distributions by way of cash dividends will be made in Hong Kong Dollars.

FOREIGN CURRENCY MANAGEMENT

As at the Latest Practicable Date, the Company has invested in 北京愛爾益地照明工程有限公 司 (Beijing LED Lighting Engineering Company Limited) which is denominated in RMB and save as disclosed above, the Company did not have investment which denominated in foreign currencies. In the event that the Company’s investments denominated in currencies other than Hong Kong Dollars, the Company may expose to the risk relating to exchange rate fluctuations. The Company will keep monitor if such possible risk arise and take prudent measures such as using forward or hedging contracts to manage the associated foreign currency risk.

TAXATION

The taxation of income and capital gains of the Company are subject to the fiscal law and practice of Hong Kong. Prospective investors should consult their own professional advisers on the tax implications of investing, holding or disposing of Shares under the laws of the jurisdiction in which they are liable to taxation.

FEES AND EXPENSES

The Company will pay the fees of the Investment Manager and the custodian as described below. In addition, the Company will pay certain other costs and expenses incurred in its operation, including taxes, expenses for legal, auditing and consulting services, promotional expenses, registration fees and other expenses due to supervisory authorities in various jurisdictions, insurance, interest and brokerage cost.

– 16 –

ADDITIONAL INFORMATION

APPENDIX I

Investment management fees

Pursuant to the investment management agreement dated 7 October 2002 (the “Investment Management Agreement”) entered into between the Company and the Investment Manager, the Investment Manager has agreed to provide the Company with investment management services (excluding general administrative services) for a three-year period commencing on 28 October 2002, the date of the commencement of the trading of the Company’s shares on the Stock Exchange. The Investment Management Agreement will continue for successive periods of three years, unless terminated at any time by either the Company or the Investment Manager serving not less than six month’s notice in writing to the other party, and will expire on the last day of the three-year period or any of the relevant successive periods.

With effect from 1 January 2009, the monthly management fee had been changed from HK$30,000 to HK$55,000 per month. The management fee to the Investment Manager is a de minimis transaction under Rule 14A.33(3)(b) of the Listing Rules which is exempt from the reporting, announcement and independent shareholders’ approval requirement.

Custodian fees

DBS Vickers (Hong Kong) Limited acts as the Custodian, the Company will pay the Custodian such reasonable fees, costs and expenses in respect of the custodian account as may from time to time be prescribed by the Custodian which are varied between the markets of the securities held through the Custodian, as for Hong Kong stock, the fee is 0.25% of the market value of the shares as at the date of purchase; for Australian stock, the fee is 0.5% of the market value of the shares as at the date of purchase. Other fees and expenses to be payable including on dividend collection, bonus issue etc.

INVESTMENT PORTFOLIO

As at 30 June 2011

The following are the details of the ten largest investments of the Group as at 30 June 2011, which include all listed investments and all other investments with a value of more than 5% of the Group’s gross assets as at 30 June 2011. Save for the investments disclosed herein, there are no other listed investments and all other investments with a value of more than 5% of the Company’s gross assets as at 30 June 2011. There were only nine securities held as at 30 June 2011.

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APPENDIX I

ADDITIONAL INFORMATION

							Percentage	Percentage
							to the	to the
				Market			Company’s	Company’s
				value/	Unrealised	Dividend	net asset	gross asset
				fair value	holding	received/	value as at	value as at
		Effective	Cost as at	as at	gain (loss)	receivable	30 June	30 June
Name of investee	Number of	shareholding	30 June	30 June	arising on	during	2011	2011
company	shares held	interest	2011	2011	revaluation	the year	(unaudited)	(unaudited)
			HK$	HK$	HK$	HK$
(i)北京愛爾益地 照明工程有限
公司* (Beijing
LED Lighting
Engineering
Company			RMB2,400,000	RMB2,400,000
Limited)*	N/A	12.000%	(Note 1)	(Note 2)	–	–	25.18%	24.78%
(ii) China Dongxiang
(Group) Company
Limited (3818)	500,000	0.009%	1,330,000	1,235,000	(95,000)	58,000	11.44%	11.26%
(iii) United Energy
Group Limited
(467)	784,000	0.006%	901,600	909,440	7,840	–	7.76%	7.63%
(iv) China Agrotech
Holdings Limited
(1073)	814,000	0.108%	756,140	402,930	(353,210)	–	6.51%	6.40%
(v) HSBC Holdings
PLC (5)	10,000	0.000%	751,500	770,500	19,000	–	6.47%	6.36%
(vi) Net2Gather
(China) Holdings
Limited (1049)	2,100,000	0.057%	493,500	474,600	(18,900)	–	4.25%	4.18%
(vii)Greater China
Holdings Limited
(431)	752,000	0.251%	315,840	274,480	(41,360)	–	2.72%	2.67%
(viii)King Stone
Energy Group
Limited (663)	100,000	0.008%	344,000	208,000	(136,000)	–	2.96%	2.91%
(ix) Build King
Holdings Limited
(240)	250,000	0.020%	51,210	43,250	(7,960)	–	0.44%	0.43%

• non-listed

Notes:

• (1) The exchange rate RMB1 to HK$1.2195.

• (2) The fair value was determined by the Directors’ assessment.

Principal activities of the investee companies

• (i) 北京愛爾益地照明工程有限公司 (Beijing LED Lighting Engineering Company Limited) was incorporated in Beijing and principally engaged in providing professional LED Lighting design, advices and solution globally, as well as responsible for the public lighting infrastructure maintenance.

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ADDITIONAL INFORMATION

APPENDIX I

• (ii) China Dongxiang (Group) Company Limited (“China Dongxiang”) was incorporated in Cayman Islands and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 3818). China Dongxiang was principally engaged in brand development, design and sales of sport-related apparel, footwear and accessories in Mainland of PRC and Macau.

• (iii) United Energy Group Limited (“United Energy”) was incorporated in Bermuda and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 467). United Energy was principally engaged in the production of crude oil, and provision of patented technology supporting services to oilfields.

• (iv) China Agrotech Holdings Limited (“China Agrotech”) was incorporated in Cayman Islands and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 1073). China Agrotech was principally engaged in trading of fertilizers, pesticides, other agricultural & nonagricultural resources products; manufacture & sale of pesticides & fertilizers; provision of plant protection technical services, nursing, planting & sale of landscaping seedings.

• (v) HSBC Holdings PLC (“HSBC”) was incorporated in England and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 5). HSBC was principally engaged in the provision of a comprehensive range of banking and related financial services through an international network in the Asia-Pacific region, Europe, the Americas, the Middle East and Africa.

• (vi) Net2Gather (China) Holdings Limited (“Net2Gather”) was incorporated in Bermuda and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 1049). Net2Gather was principally engaged in the provision of financial services; retailing of furniture and household items; provision of online game services, sales of online game auxiliary products and licensing services; and investment holding.

• (vii) Greater China Holdings Limited (“Greater China”) was incorporated in Bermuda and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 431). Greater China was principally engaged in the production and sale of fertilizers and chemicals, operation of warehouse and development of industrial property.

• (viii) King Stone Energy Group Limited (“King Stone”) was incorporated in Hong Kong and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 663). King Stone was principally engaged in manufacturing and trading of phosphorus products; trading of optical products; mining and selling of coal.

• (ix) Build King Holdings Limited (“Build King”) was incorporated in Bermuda and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 240). Build King was principally engaged in civil engineering work.

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ADDITIONAL INFORMATION

APPENDIX I

As at 31 December 2011

As at 31 December 2011, there were seven securities held by the Group and the details are set out as follow:

						Percentage
				Market		to the
				value/	Unrealised	Company’s
				fair value	holding	net asset
		Effective	Cost as at	as at	gain (loss)	value as at
Name of investee	Number of	shareholding	31 December	31 December	arising on	31 December
company	shares held	interest	2011	2011	revaluation	2011(unaudited)
			HK$	HK$
(i)北京愛爾益地照明工程
有限公司(Beijing LED
Lighting Engineering			RMB2,400,000	RMB2,400,000
Company Limited)*	N/A	12.000%	(Note 1)	(Note 2)	–	8.07%
(ii) The Hong Kong and
China Gas Company
Limited (3)	170,000	0.002%	3,054,960	3,060,000	5,040	8.42%
(iii)SMI Corporation Limited
(198)	24,000,000	0.296%	7,478,300	5,256,000	(2,222,300)	20.61%
(iv)Datronix Holdings
Limited (889)	186,000	0.058%	536,680	531,960	(4,720)	1.48%
(v) Sinopharm Group
Company Limited (1099)	50,000	0.006%	1,000,000	933,000	(67,000)	2.76%
(vi) Seamless Green China
(Holdings) Limited
(8150)	2,000,000	0.945%	1,767,100	1,880,000	112,900	4.87%
(vii) Ming Kei Holdings
Limited (8239)	10,000,000	5.924%	5,931,560	7,700,000	1,768,440	16.35%

• non-listed

• ( 1) The exchange rate is RMB1 to HK$1.2195

• (2) This is a preliminary fair value which was determined by the Directors’ assessment as the final results of the Company for the year ended 31 December 2011 is still in preparation and not yet be finalised.

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ADDITIONAL INFORMATION

APPENDIX I

Notes:

Principal activities of the investee companies

• (i) 北京愛爾益地照明工程有限公司 (Beijing LED Lighting Engineering Company Limited) (“Beijing LED”) was incorporated in Beijing and principally engaged in providing professional LED Lighting design, advices and solution globally, as well as responsible for the public lighting infrastructure maintenance.

• (ii) The Hong Kong And China Gas Company Limited (“Hong Kong and China Gas”) was incorporated in Hong Kong and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 3). Hong Kong and China Gas was principally engaged in the production, distribution and marketing of gas, water and related activities

• (iii) SMI Corporation Limited (“SMI Corporation”) was incorporated in Bermuda and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 198). SMI Corporation was principally engaged in the production, distribution and licensing of entertainment related content for movies, television drama series, documentary and information or entertainment programs, and movie theater business.

• (iv) Datronix Holdings Limited (“Datronix”) was incorporated in Bermuda and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 889). Datronix was principally engaged in manufacturing and trading of electronic components

• (v) Sinopharm Group Company Limited (“Sinopharm”) was incorporated in PRC and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 1099). Sinopharm was a distributor of, and a provider of supply chain services for, pharmaceutical and healthcare products and operate the national pharmaceutical distribution network in China.

• (vi) Seamless Green China (Holdings) Limited (“Seamless Green”) was incorporated in Bermuda and the shares of which are listed on the Stock Exchange (stock code: 8150). Seamless Green was principally engaged in the manufacture and sale of synthetic sapphire watch crystals and optoelectronic products, and in the trading of liquor.

• (vii) Ming Kei Holdings Limited (“Ming Kei”) was incorporated in Bermuda and the shares of which are listed on the Stock Exchange (stock code: 8239). Ming Kei was principally engaged in coal trading, general trading, and property investment.

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ADDITIONAL INFORMATION

APPENDIX I

DIRECTORS

Particulars of Directors

Name

Business address

Executive Directors

Mr. Choy Kwok Hung, Patrick

Mr. Chan Chi Hung

Room 4209 Office Tower, Convention Plaza 1 Harbour Road Wanchai Hong Kong Room 4209 Office Tower, Convention Plaza 1 Harbour Road Wanchai Hong Kong

Non-executive Director

Mr. Yang Nai Jiang

Factory D2/E2/E4/E6 Sanyang New Industrial Area 2 Nanhuan Road, Shajing Jie Dao Baoan District Shenzhen City, China

Independent Non-executive Directors

Mr. Yue Man Yiu, Matthew

Mr. Chung Koon Yan

Mr. Chung Shu Kun, Christopher

20A World Trust Tower 50 Stanley Street Central, Hong Kong

Unit A, 5/F CKK Commercial Centre 289-295 Henness y Road Wanchai, Hong Kong

24, Yue On House Yue Wan Estate Chai Wan, Hong Kong

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ADDITIONAL INFORMATION

APPENDIX I

Mr. Choy Kwok Hung, Patrick , aged 68, was appointed as the Chairman and a non-executive Director of the Company on 14 June 2007, and he has been redesignated as an executive Director of the Company with effect from 18 December 2008. He is responsible for strategic development of the Group. He is the founder and chairman of Global Strategy Group Limited and a Trustee of Majulah Connection Limited in Singapore. He is a member of the National Committee of the Chinese People’s Political Consultative Conference.

Mr. Chan Chi Hung , aged 38, was appointed as an executive Director of the Company on 26 April 2007 and was appointed as the Managing Director of the Company on 12 April 2010. He is the sole director of each of the subsidiaries of the Company. He is also a member of the Remuneration Committee. He is responsible for setting out the business development strategy of and identifying investment opportunities for the Group. Mr. Chan was the managing director of a leading foreignowned leasing company in China. His expertise includes structuring of leveraged leasing and crossbroader leasing for overseas-listed State – owned Enterprises. Before his active participation in the financial leasing industry, Mr. Chan was previously the investment manager of Springfield Financial in charge of its private equity, fund-of-funds, and fixed-income investments portfolio. Prior to that, he was with J.P. Morgan Chase.

Mr. Yang Nai Jiang , aged 47, was appointed as a non-executive Director of the Company on 31 August 2011 and has over 16 years’ experience in ironware industry. He is the founder and an executive director of 金正江大五金塑膠製品有限公司 (Jinzheng Jiangda Ironware and Plastic Products Company Limited). He is a member of the National Committee of Mei County in the People’s Republic of China.

Mr. Yue Man Yiu, Matthew , aged 50, was appointed as an independent non-executive Director of the Company on 4 June 2002. He graduated from the Chinese University of Hong Kong with a Bachelor’s Degree of Business Administration in 1984. He is a fellow member of the Association of Chartered Certified Accountants, a fellow member of the Hong Kong Institute of Certified Public Accountants and a member of the Hong Kong Securities Institute. He has extensive experience in the financial control, project analysis and management functions.

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ADDITIONAL INFORMATION

APPENDIX I

Mr. Chung Koon Yan , aged 47, was appointed as an independent non-executive Director of the Company on 30 September 2004. Mr. Chung is a fellow member of The Hong Kong Institute of Certified Public Accountants and The Association of Chartered Certified Accountants, and a member of The Institute of Chartered Accountants in England and Wales. He graduated from The Hong Kong Polytechnic University with a Master of Professional Accounting. Mr. Chung is a Director of an accounting firm, Chiu, Choy & Chung CPA Ltd., and has more than 20 years’ experience in accounting, auditing and taxation.

Mr. Chung Shu Kun, Christopher , aged 54, was appointed as an independent nonexecutive Director of the Company on 1 February 2009. Mr. Chung has extensive experience in cultural development, computer operation and civil affairs. He is presently a member of the board of governors of Hong Kong Art Centre and Hong Kong Sinfonietta and also a Director of Hong Kong Repertory Theatre Limited, Public Art Hong Kong Limited and Hong Kong Art Development Council. He is also currently the vice chairman and an elected member of Eastern District Council and was previously an elected member of Urban Council, a member of Liquor License Board, the chairman of Performing Companies Working Group Committee and the vice chairman of Libraries Select Committee. Besides, Mr. Chung engages in advisory and statutory consultative bodies. He is a member of Municipal Services Appeals Board, Advisory Committee on Agriculture and Fisheries and Engineering, Development & Maintenance SCS Drafting Subcommittee. Mr. Chung is also the full member of The Hong Kong Institute of Directors, Hong Kong Computer Society and Internet Professional Association Limited. He holds master degrees of Science (e-business) in Glasgow Caledonia University and MBA of University of Wales. Mr. Chung was awarded Medal of Honor and Bronze Bauhinia Star in 1999 and 2009, respectively. The Hong Kong SAR Government appointed Mr. Chung to be a Justice of the Peace in 2003.

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NOTICE OF EGM

==> picture [218 x 96] intentionally omitted <==

(Incorporated in Cayman Islands with limited liability)

(Stock code: 2312)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “Meeting”) of China Financial Leasing Group Limited (the “Company”) will be held at Seminar Hall, 2/F., Soho Tower, 110-118 Caine Road, Central, Hong Kong on Friday, 17 February 2012 at 10:00 a.m., for the purpose of considering and, if thought fit, passing the following resolution, with or without amendments, as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT conditional upon The Stock Exchange of Hong Kong Limited granting approval for the listing of, and permission to deal in, the Consolidated Shares (as defined below) in issue and to be issued, every twenty (20) issued and unissued ordinary shares of HK$0.01 each in the share capital of the Company be consolidated into one (1) consolidated share of HK$0.2 each (each a “Consolidated Share ”), and such Consolidated Share(s) shall rank pari passu in all respects with each other and have the rights and privileges and be subject to the restrictions in respect of ordinary shares contained in the articles of association of the Company, and any one or more of the directors of the Company be and is/are hereby authorised to do all such acts, deeds and things and to effect all necessary actions as they may consider necessary or desirable in order to effect, implement and complete any and all of the aforesaid matters.”

By Order of the Board China Financial Leasing Group Limited Tse Kam Fai Company Secretary

Hong Kong, 2 February 2012

Registered Office: Head Office and Principal Place Cricket Square of Business in Hong Kong: Hutchins Drive Room 4209, Office Tower P.O. Box 2681 Convention Plaza Grand Cayman KY1-1111 1 Harbour Road, Wan Chai Cayman Islands Hong Kong

* For identification purpose

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NOTICE OF EGM

Notes:

1. A form of proxy for use at the Meeting is being despatched to the shareholders of the Company together with a copy of this notice.

2. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.

3. Any shareholder of the Company entitled to attend and vote at the Meeting convened by the above notice shall be entitled to appoint one proxy or, if he is the holder of two or more Shares, more than one proxy to attend and vote instead of him. A proxy need not be a shareholder of the Company.

4. In order to be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a notarially certified copy of such power or authority, must be deposited at the Company’s share registrar in Hong Kong, Tricor Tengis Limited, at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the Meeting or any adjournment thereof.

5. Completion and return of the form of proxy will not preclude a shareholder of the Company from attending and voting in person at the Meeting convened or any adjourned meeting and in such event, the form of proxy will be deemed to be revoked.

6. Where there are joint registered holders of any share of the Company, any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he/she were solely entitled thereto, but if more than one of such joint holders are present at the Meeting personally or by proxy, that one of the said persons so present whose name stands first on the register in respect of such shares shall alone be entitled to vote.

7. As at the date of this notice, the board of Directors of the Company comprises Mr. Choy Kwok Hung, Patrick (Chairman) and Mr. Chan Chi Hung (Managing Director) as executive Directors, Mr. Yang Nai Jiang as Deputy Chairm an and non-executive Director , and Mr. Yue Man Yiu, Matthew, Mr. Chung Koon Yan and Mr. Chung Shu Kun, Christopher as independent non-executive Directors.

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