Long Investment Corp — Proxy Solicitation & Information Statement 2014

May 5, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, 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 together with the form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer 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.

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CHINA FINANCIAL LEASING GROUP LIMITED 中國金融租賃集團有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2312)

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders Qilu International Capital Limited

A letter from the independent board committee is set out on pages 10 to 11 of this circular. A letter from the independent financial adviser to the independent board committee and the independent shareholders of the Company, is set out on pages 12 to 17 of this circular.

A notice convening an extraordinary general meeting of the Company to be held at Room A-C, 3/F, Golden Sun Centre, 59 Bonham Strand West, Sheung Wan, Hong Kong on Wednesday, 21 May 2014 at 11:00 a.m. (the “ EGM ”), at which, among other things, the above proposals will be considered, is set out on pages 18 to 20 of this circular.

Whether or not you are able to attend the EGM, you are advised to read the notice and to complete and return the accompanying form of proxy, in accordance with the instructions printed thereon and deposit the same at the Hong Kong branch share registrar and transfer office of the Company, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjourned meeting should you so wish.

5 May 2014

• for identification purpose only

CONTENTS

		Page
Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		ii
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**Letter from **	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
**Letter from **	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
**Letter from **	the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Notice of EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		18

– i –

RESPONSIBILITY STATEMENT

This circular, for which the Directors (as defined herein) of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules (as defined herein) for the purpose of giving information with regard to the Company. The Directors (as defined herein), having made all reasonable enquires, 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.

– ii –

DEFINITIONS

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

• “AGM”

the annual general meeting of the Company held on 29 May 2013 at which the Shareholders had approved, among other matters, the Existing General Mandate

• “associate(s)”

has the meaning ascribed to this term under the Listing Rules

• “Board”

the board of Directors

• “Company”

China Financial Leasing Group Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on the Stock Exchange

• “Director(s)” the director(s) of the Company

• “EGM”

the extraordinary general meeting of the Company to be convened and held at Room A-C, 3/F, Golden Sun Centre, 59 Bonham Strand West, Sheung Wan, Hong Kong on Wednesday, 21 May 2014 at 11 a.m. to consider and, if appropriate, to approve the refreshment of the Existing General Mandate

• “Existing General Mandate”

the general mandate approved at the AGM to grant to the Directors to allot and issue Shares of up to 88,695,976 Shares, i.e. 20% of the share capital of the Company in issue on the date of the passing of the relevant ordinary resolution

• “Group” the Company and its subsidiaries

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “Independent Board Committee”

• an independent committee of the Board, comprising all the independent non-executive Directors, to advise the Independent Shareholders as to the fairness and reasonableness of the grant of the New General Mandate

– 1 –

DEFINITIONS

• “Independent Financial Adviser”

• Qilu International Capital Limited, a corporation licensed to carry out business in type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the refreshment of the Existing General Mandate

• “Independent Shareholders”

• any Shareholders other than controlling Shareholders and their associates or, which there are no controlling Shareholders, any Shareholders other than Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates

• “Latest Practicable Date”

• 29 April 2014, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained in this circular

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “New General Mandate”

• the general mandate proposed to be granted to the Directors at the EGM to allot, issue and otherwise deal with additional Shares not exceeding 20% of the share capital of the Company in issue on the date of the passing of the relevant ordinary resolution

• “PRC”

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

• “SFO”

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

• “Share(s)”

• ordinary share(s) of HK$0.02 each in the share capital of the Company

• “Shareholder(s)”

• holder(s) of the Share(s)

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

• “%”

per cent.

– 2 –

LETTER FROM THE BOARD

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CHINA FINANCIAL LEASING GROUP LIMITED 中國金融租賃集團有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2312)

Directors: Mr. John YEN Jong Ling Mr. TANG Yiu Wing* Mr. William Keith JACOBSEN[#] Ms. CHAN Man Yi[#] Ms. KWONG Ka Ki[#]

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

Head Office and Principal Place of Business in Hong Kong: Room A-C, 3/F Golden Sun Centre 59 Bonham Strand West Sheung Wan Hong Kong

• Non-executive Director

# Independent Non-executive Director

5 May 2014

To the Shareholders

Dear Sir or Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES

INTRODUCTION

The purpose of this circular is to provide you with information relating to (i) the proposed grant of the New General Mandate; (ii) the recommendation from the Independent Board Committee to the Independent Shareholders on the proposed grant of the New General Mandate; (iii) the recommendation from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, on the proposed grant of the New General Mandate; and (iv) the notice of EGM.

• for identification purpose only

– 3 –

LETTER FROM THE BOARD

REFRESHMENT OF EXISTING GENERAL MANDATE

At the AGM, Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Existing General Mandate to allot, issue and deal with up to 88,695,976 new Shares, being 20% of the issued share capital of the Company of 443,479,882 Shares as at the date of passing of the resolution.

During the period from the grant of the Existing General Mandate to the Latest Practicable Date, a total of 88,600,000 Shares were issued at HK$0.26 per Share by utilizing the Existing General Mandate on 4 March 2014 pursuant to the placing agreement and revised placing agreement entered into between the Company and Orient Securities Limited on 20 and 21 February 2014, respectively. The net amount of proceeds raised was approximately HK$22,300,000. As at the Latest Practicable Date, a total of approximately HK$14,000,000 has been utilised to invest in two investees, i.e., Newtree Group Holdings Limited (stock code: 1323)(invested approximately HK$8,100,000) and China Assurance Finance Group Limited (stock code: 8090) (invested approximately HK$5,900,000); another approximately HK$6.5 million is prepared to be utilised when any investment opportunities will be identified shortly. The remaining approximately HK$1.8 million has been allocated for supporting daily operating expenses. In addition, the Company has identified a listed securities for investment. Depending on the price movement of the target securities, it is possible that the investment amount will be considerably large compared with the Company’s net asset value.

Apart from the placing of Shares completed on 4 March 2014, there were no other fund raising activities in the past 12 months.

Since the AGM and except for the proposed grant of the New General Mandate herein, the Company has not refreshed its Existing General Mandate.

As at the Latest Practicable Date, the Company had an aggregate of 532,079,882 Shares in issue. Subject to the passing of the ordinary resolution for the approval of the New General Mandate and on the basis that no further Shares are issued and/or repurchased by the Company between the Latest Practicable Date and the date of the EGM, the Company would be allowed under the New General Mandate to allot and issue 106,415,976 new Shares, being 20% of the issued share capital of the Company as at the Latest Practicable Date. The New General Mandate is valid until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company, the Companies Law of the Cayman Islands or any other applicable laws of the Cayman Islands to be held; or

• (iii) the passing of an ordinary resolution by the Shareholders in general meeting revoking or varying the authority given to the Directors under the New General Mandate.

– 4 –

LETTER FROM THE BOARD

Reasons for the New General Mandate

The Company is principally engaged in short to medium term capital appreciation by investing in a diversified portfolio of investments in listed securities in Hong Kong. The Group is also engaged in investment in the PRC.

Although the Company does not have any immediate plans for any new issue of Shares under the New General Mandate as at the Latest Practicable Date, in view of (i) the Existing General Mandate having been fully utilized in March 2014; (ii) net proceeds from the equity fund raising exercise over the past 12 months immediately preceding the Latest Practicable Date were either utilized or reserved for investments and general working capital; and (iii) a sign of economic recovery is shown which may provide more investment opportunities, the Board believes that the proposed grant of the New General Mandate on or before the date of the next annual general meeting is in the interests of the Company and the Shareholders as a whole by maintaining the flexibility for any future allotment and issue of Shares by the Board necessary for the Group’s future business development. Should any future funding needs arise or attractive terms of investment become available via potential investors, the Board will be able to respond to the market and such investment opportunities promptly due to the less time consuming process of a general mandate. A general mandate may also avoid the uncertainties under which a specific mandate may not be obtained in a timely manner.

The Company considers the recent general recovery of global economy which is evidenced by the tapering of bonds purchased by the Federal Reserve of the United States, the continuous improvement in unemployment in both the United States and Europe, indicating the global economic fundamental has improved. It is therefore beneficial for the Company and the Shareholders as a whole that the Company has the flexibility to raise funds by issuing Shares at all times in order to grasp the investment opportunities whenever they may immediately appear. While preparation of the circular for 2014 annual general meeting (the “ Next AGM ”) is still in progress, the Company will hold the Next AGM on 27 June 2014. Moreover, as the notice period for holding an annual general meeting is longer than an extraordinary general meeting, a refreshment of the Existing General Mandate by holding the EGM urgently is required.

– 5 –

LETTER FROM THE BOARD

The portfolio of the Company as at the Latest Practicable Date and the analysis of movement of which in 2014 up to the Latest Practicable Date are as follows:

			Percentage
		Number of	of interest		Market	Market
Name of Investee	Principal activities	Shares	held	Cost	prices	Value
				(HK$)	(HK$)	(HK$)
Ming Kei Holdings Limited	Coal trading and property	4,000,400	0.610%	801,838	0.41	1,640,164
(8239)	investment
Datronix Holdings Limited	Manufacturing and trading	126,000	0.039%	364,866	1.25	157,500
(0889)	of electronic components
Newtree Group Holdings	Manufacturing and trading	5,350,000	0.735%	15,184,971	2.80	14,980,000
Limited (1323)	of hygienic disposables for
	household and clinical
	uses; agent of MTBE
	products; wholesale and
	retail of household
	consumables
Long Success International	Manufacturing and sale of	13,450,000	0.916%	8,105,611	0.405	5,447,250
Holdings Limited (8017)	paper products
China Assurance Finance	Providing corporate credit	9,610,000	0.606%	13,752,891	1.41	13,550,100
Group Limited (8090)	guarantee services,
	performance guarantee
	services and relevant
	consultancy services to
	small and medium
	enterprises in the PRC
JC Group Holdings Limited	Operation of full-service	15,840,000	3.960%	8,889,805	2.10	33,264,000
(8326)	restaurants and cake shops

– 6 –

LETTER FROM THE BOARD

Analysis of shares sold in 2014

Stock
code	Name of securities	Cost	Proceeds	Gain/(Loss)
		HK$	HK$	HK$
8239	Ming Kei Holdings Ltd	500,938.62	768,735.82	267,797.20
2218	Yantai North Andre Juice Co Ltd	22,204.96	18,252.53	(3,952.43)
1323	Newtree Group Holdings Ltd	434,169.43	478,752.00	44,582.57
8269	Wealth Glory Holdings Ltd	912,765.17	884,898.93	(27,866.24)
8047	Rising Power Group Holdings	4,707,005.31	3,606,598.40	(1,100,406.91)
	Ltd
0810	Opes Asia Development Ltd.	4,632,012.00	5,068,788.44	436,776.44

Analysis of shares purchased in 2014

**Stock **	code	Name of securities	Cost
			HK$
8326		JC Group Holdings Ltd.	6,403,357.37
1323		Newtree Group Holdings Ltd	9,997,344.08
8090		China Assurance Finance Group Ltd	5,844,440.30

EGM

Pursuant to Rule 13.36(4) of the Listing Rules, the New General Mandate requires the approval of the Independent Shareholders at the EGM at which any of the controlling Shareholders and their associates or, where there are no controlling Shareholders, the Directors and the chief executive of the Company and their respective associates shall abstain from voting in favour of the relevant resolution. As at the Latest Practicable Date, since the Company has no controlling Shareholders, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the relevant ordinary resolution.

The resolution proposed to be approved at the EGM will be taken by way of poll pursuant to the Listing Rules and an announcement on the results of the EGM will be made by the Company after the EGM in the manner prescribed under Rule 13.39(4) of the Listing Rules.

– 7 –

LETTER FROM THE BOARD

The notice convening the EGM is set out on pages 18 to 20 of this circular. At the EGM, an ordinary resolution will be proposed to approve the proposed grant and extension of the New General Mandate. 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 enclosed form of proxy in accordance with the instruction printed thereon and return it, together with the power of attorney or other authority (if any) under which it is signed or a certified copy of the power of attorney or authority, to the Hong Kong share registrar and transfer office of the Company, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjourned meeting if you so wish and in such event, the proxy form shall be deemed to be revoked.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprises Mr. William Keith Jacobsen, Ms. Chan Man Yi and Ms. Kwong Ka Ki, all being independent non-executive Directors. It has been established to advise the Independent Shareholders on the grant of the New General Mandate.

Qilu International Capital Limited has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the grant of the New General Mandate.

RECOMMENDATIONS

The Directors consider the granting and extension of the New General Mandate are in the interest of the Company and the Shareholders as a whole and accordingly recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM.

The Independent Board Committee, having taken into account the advice of Independent Financial Adviser, considers that the granting of the New General Mandate is fair and reasonable so far as the Independent Shareholders are concerned and accordingly recommends the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the EGM for approving the grant of the New General Mandate.

– 8 –

LETTER FROM THE BOARD

GENERAL INFORMATION

Your attention is drawn to the Letter from the Independent Financial Adviser set out on pages 12 to 17 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in connection with the grant of the New General Mandate and the Letter from the Independent Board Committee set out on pages 10 to 11 of this circular which contains its recommendation to the Independent Shareholders in relation to the grant of the New General Mandate.

By Order of the Board China Financial Leasing Group Limited John Yen Jong Ling Executive Director

– 9 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in relation to the proposed refreshment of the Existing General Mandate:

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CHINA FINANCIAL LEASING GROUP LIMITED 中國金融租賃集團有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2312)

5 May 2014

To the Independent Shareholders

Dear Sir or Madam,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES

We have been appointed as the Independent Board Committee to consider and advise you in connection with the proposed refreshment of the Existing General Mandate, details of which are set out in the circular dated 5 May 2014 issued by the Company to the Shareholders (the “ Circular ”), of which this letter forms part. Terms defined in the Circular will have the same meanings when used herein unless the context otherwise requires.

We wish to draw your attention to the Letter from the Board and the Letter from the Independent Financial Adviser set out on pages 3 to 9 and pages 12 to 17 of the Circular respectively.

The business nature of the Company is investment making which needs prompt reaction to the fast paced capital markets in order to seize any investment opportunities when they arise, and the current bullish stock market sentiment, the Company would be able to seize such investment opportunities due to sufficient internal resources, and it is in the interest of the Company and the Shareholders as a whole.

Having taken into account the principal factors and reasons considered by the Independent Financial Adviser, its conclusion and advice, we concur with the view of the Independent Financial Adviser and consider the terms of the refreshment of the Existing General Mandate fair and reasonable so far as the Independent Shareholders are concerned and the New General Mandate is in the interests of the Company and the Shareholders as a whole.

• for identification purpose only

– 10 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend you to vote in favour of the ordinary resolution to be proposed at the EGM to approve the refreshment of the Existing General Mandate and the transactions contemplated thereunder.

Yours faithfully,

For and on behalf of the Independent Board Committee Mr. William Keith Jacobsen Ms. Chan Man Yi Ms. Kwong Ka Ki

Independent non-executive Directors

– 11 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Qilu International Capital Limited 7/F Li Po Chun Chambers 189 Des Voeux Road Central Hong Kong

5 May 2014

To the independent board committee and the independent shareholders of China Financial Leasing Group Limited

Dear Madams and Sirs,

PROPOSED REFRESHMENT OF GENERAL MANDATE TO ALLOT AND ISSUE SHARES

INTRODUCTION

We refer to our appointment as independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the granting of the New General Mandate, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the circular to the Shareholders dated 5 May 2014 (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires otherwise.

At the EGM, an ordinary resolution will be proposed to the Independent Shareholders that the Directors be granted the New General Mandate to allot and issue Shares not exceeding 20% of the share capital of the Company in issue as at the date of passing the relevant ordinary resolution.

Pursuant to Rule 13.36(4)(a) of the Listing Rules, the New General Mandate requires the approval of the Independent Shareholders at the EGM at which any of the controlling Shareholders and their associates or, where there are no controlling Shareholders, Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the relevant resolution. Since the Company has no controlling Shareholder, the Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates shall abstain from voting in favour of the relevant ordinary resolution.

As at the Latest Practicable Date, the Company does not have any controlling Shareholder. Moreover, none of the Directors nor the chief executive of the Company and their respective associates, hold any Shares and none of the Shareholders are required to abstain from voting in favour of the proposed resolution approving the New General Mandate at the EGM pursuant to the Listing Rules and/or the Articles of Association. Further, pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Independent Shareholders at the EGM will be taken by poll for the resolution in relation to the granting and extension of the New General Mandate.

– 12 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprising Mr. William Keith Jacobsen, Ms. Chan Man Yi and Ms. Kwong Ka Ki (all being the independent non-executive Directors) has been established to advise the Independent Shareholders as to whether the New General Mandate is fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole. We have been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders to advise on the New General Mandate.

BASIS OF OUR OPINION

In formulating our opinion, we have relied on the information and facts provided to us by the Company. We have reviewed, among other things, (i) the Circular; (ii) certain accounting records of the Company; and (iii) all announcements published by the Company in the past 12 months immediately preceding the Latest Practicable Date. We have assumed that all information, opinions and representations contained or referred to in the Circular are true, complete and accurate in all material respects and we have relied on the same. Also, we have relied on the representations made by the Directors and management of the Company that having made all reasonable enquiries and careful decisions, and to the best of their information, knowledge and belief, there is no other fact or representation or the omission of which would make any statement contained in the Circular, including this letter, misleading. We have also assumed that all information, statements and representations made or referred to in the Circular, which have been provided to us by the Company, are true, complete and accurate in all material respects at the time they were made and continue to be so at the date of dispatch of the Circular.

We consider that we have received sufficient information to enable us to reach an informed view and to justify reliance on the accuracy of the information contained in this Circular to provide a reasonable basis for our opinion and recommendation. Having made all reasonable enquiries, the Directors have further confirmed that, to the best of their knowledge, they believe that there are no other facts or representations the omission of which would make any statement in this Circular, including this letter, misleading. We have not, however, carried out any independent verification of the information provided by the Directors and management of the Company, nor have we conducted any independent investigation into the business and affairs of the Company.

The Directors have jointly and severally accepted full responsibility for the accuracy of the information contained in the Circular and have confirmed, having made all reasonable enquires, which to the best of their knowledge and belief, there are no other facts the omission of which would make any statement in the Circular misleading. We consider that we have been provided sufficient information to reach an informed view and to provide a reasonable basis for our recommendation. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company or its subsidiaries or associates as a result of the granting and extension of the New General Mandate.

– 13 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion to the Independent Board Committee and the Independent Shareholders in respect of the granting of the New General Mandate, we have taken into consideration the following principal factors and reasons:

1. Background to the New General Mandate

The Company is an investment company listed under Chapter 21 of the Listing Rules and its principal activity is investment in listed and unlisted companies.

According to the Board Letter, at the annual general meeting of the Company held on the AGM, the Shareholders approved, among other things, an ordinary resolution to grant the Directors the Existing General Mandate to allot up to 88,695,976 Shares, being 20% of the entire issued share capital of the Company as at the date of the AGM where the said resolution was passed.

As at the Latest Practicable Date, pursuant to a placing agreement entered into between the Company and a placing agent on 4 March 2014 (the “ Placing ”), the Existing General Mandate had been utilised as to 88,600,000 Shares, representing approximately 100% of the aggregate number of Shares which were issued and allotted under the Existing General Mandate. Based on the information provided by the Company, out of the net proceeds raised of HK$22.3 million from the issuing of the Placing Shares, HK$14 million had been utilized in the investment of listed securities. Another HK$6.5 million has been assigned for investment in a listed securities shortly. The remaining net proceeds of HK$1.8 million will be applied as working capital. Based on the Company’s management accounts which contained a cash flow statement for the year ended 31 December 2013, the net cash used in operating activities was an outflow of approximately HK$2 million. Accordingly, we concur with the management decision of the Directors to reserve HK$1.8 million as working capital.

The Company has not refreshed the Existing General Mandate since the AGM. Subsequent to the Placing, the number of issued share capital has been increased and the Company has an aggregate of 532,079,882 Shares in issue as at the Latest Practicable Date.

The Board proposes the granting of the New General Mandate to allow the Directors to issue and allot new Shares not exceeding 20% of the issued share capital of the Company as at the date of the EGM. Based on 532,079,882 Shares in issue as at the Latest Practicable Date and assuming that no further Shares changes in the issued share capital until the date of the EGM, subject to the passing of the relevant ordinary resolution to approve the granting of the New General Mandate at the EGM, the Directors will be authorised to allot and issue up to 106,415,976 Shares under the New General Mandate, being 20% of the total number of Shares in issue as at the Latest Practicable Date.

– 14 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The New General Mandate will expire at the earliest of: (a) the conclusion of the next annual general meeting of the Company following the EGM; (b) the date by which the next annual general meeting is required by the applicable laws of the Cayman Islands or the Articles of Association to be held; or (c) when the authority given to the Directors thereunder is revoked or varied by ordinary resolution(s) of the Shareholders in a general meeting prior to the next annual general meeting of the Company.

2. Reasons for the granting of the New General Mandate

Having discussed with the Directors, we were advised that the Company’s principal activity is investment in listed securities in Hong Kong aiming at short to medium term capital appreciation. The Group is also engaged in investment in the PRC. In view of the gradually recovering capital markets, investment or fund raising opportunities may appear within a short period of time. The Company needs to seize such opportunities promptly when they arise. The New General Mandate will empower the Directors to issue new Shares under the refreshed limit speedily as and when necessary, and without the need to seek further approval from the Shareholders. This could provide the Company with flexibility and ability to capture any appropriate capital raising or investment opportunities promptly when they arise.

Moreover, we are advised by the Directors that the Company intends to invest a considerably larger amount in listed securities, subject to the availability of funding and the then market conditions. The business nature of the Company is investment making which needs prompt reaction to the fast paced capital markets in order to seize any investment opportunities when they arise; and amid the current bullish stock market sentiment, the Company would be able to seize such investment opportunities if there are sufficient promptly available internal resources. Accordingly, it is in the interest of the Company and the Shareholders as a whole if the New General Mandate is available.

3. Flexibility in financing

The Directors are of the view that the Company may not have sufficient financial resources to seize any future investment opportunities when they arise given the fact that the net proceeds from the Placing, approximately HK$22,300,000 had been utilized in the investment of listed securities and reserved for general working capital of the Group. The Directors expected that more financing flexibility is required for working capital of the Company and for investment in listed securities, which is the principal source of income for the Company.

We understand from the management that apart from equity financing, the Directors will also consider other financing alternatives such as debt financing as possible fund raising method for the Group to meet its financial requirements, depending on the then financial position, capital structure and cost of funding of the Group as well as the then market condition. However, additional debt financing shall inevitably increase the interest burden to the Group and it may be subject to lengthy due diligence and negotiations between the Group and any potential financiers. Hence, the New General Mandate provides a speedily extra flexibility of financing.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Given that the Company has limited borrowing pursuant to its Articles of Association, which is limited to 50% of the then net asset value of the Company and that; equity financing (i) does not incur any interest paying obligations on the Company as compared with bank financing, which would affect the cashflow of the Company; (ii) is less costly and time consuming than raising funds by way of rights issue or open offer; and (iii) provides the Company with the capability to capture any capital raising or prospective investment opportunity (such as listed securities investments) as and when it arises, it is fair and reasonable to infer that it is not unreasonable for the Directors to propose the granting of the New General Mandate in the EGM in order to give the Company greater flexibility in the issuance of new Shares and/or convertible instruments in future as and when the Company considers desirable for the benefit of the development of the Company. The sole purpose of the refreshment of the general mandate is to provide extra flexibility of equity financing scheme to the Company in accordance with the provisions set forth in Chapter 21 of the Listing Rules.

We consider that the granting of the New General Mandate is in the interests of the Company and the Shareholders as a whole in this regard. It would be in the interest of the Company to obtain Independent Shareholders’ approval for the New General Mandate.

4. Potential dilution to shareholding interests of the Independent Shareholders

The following table sets out the shareholding structure of the Company as at (i) the Latest Practicable Date; and (ii) the date upon the full utilisation of the New General Mandate:

Name of Shareholders Public Shareholders Shares to be issued under the New General Mandate	As at the Latest Practicable Date No. of Shares % 532,079,882 100.00% – – 532,079,882 100.00%	Upon full utilisation of the New General Mandate No. of Shares % 532,079,882 83.33% 106,415,976 16.67% 638,495,858 100.00%	Upon full utilisation of the New General Mandate No. of Shares % 532,079,882 83.33% 106,415,976 16.67% 638,495,858 100.00%
			100.00%

Assuming that (i) the grant of the New General Mandate is approved at the EGM; (ii) no Shares will be repurchased and no new Shares will be issued from the Latest Practicable Date up to the date of the EGM (both dates inclusive); and (iii) upon full utilisation of the New General Mandate, 106,415,976 Shares are to be issued, which represents 20% and approximately 16.67% of the existing issued share capital of the Company as at the Latest Practicable Date and the enlarged issued share capital of the Company respectively. The aggregate shareholding of the existing public Shareholders will be diluted from approximately 100.00% to approximately 83.33% upon full utilisation of the New General Mandate, which represents a decrease in percentage of 16.67%.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having taken into account that the New General Mandate (i) will provide an alternative to increase the amount of capital which may be raised under the New General Mandate; (ii) provides more options of financing to the Group for further development of its business as well as in potential investment and/or acquisitions when such opportunities arise; and (iii) the fact that the shareholding of all the Shareholders will be diluted proportionally to their respective shareholdings upon any utilisation of the New General Mandate, we consider such potential maximum dilution to shareholdings of the Independent Shareholders to be justifiable.

RECOMMENDATION

Having considered the above principal factors and reasons in connection with the New General Mandate, we are of the opinion that the granting of the New General Mandate is on normal commercial term and is fair and reasonable so far as the Independent Shareholders are concerned and the granting of the New General Mandate is in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Shareholders, and also recommend the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the resolution approving the Granting of the New General Mandate at the forthcoming EGM.

Yours faithfully, For and on behalf of Qilu International Capital Limited Frankie Yan Deputy Managing Director

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NOTICE OF EGM

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CHINA FINANCIAL LEASING GROUP LIMITED 中國金融租賃集團有限公司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2312)

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting of China Financial Leasing Group Limited (the “ Company ”) will be held at Room A-C, 3/F, Golden Sun Centre, 59 Bonham Strand West, Sheung Wan, Hong Kong on Wednesday, 21 May 2014 at 11:00 a.m. for the following purposes:

1. “ THAT , to the extent not already exercised, the mandate to allot and issue shares of the Company given to the Directors at the annual general meeting of the Company held on 29 May 2013 be and is hereby revoked and replaced by the mandate THAT :

2. (a) subject to paragraph (c) below, pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the exercise by the directors of the Company (the “ Directors ”) during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with new shares in the capital of the Company (the “ Shares ”) and to make or grant offers, agreements and options, including warrants to subscribe for Shares, which might require the exercise of such powers be and the same is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) above shall authorise the Directors during the Relevant Period (as defined below) to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period (as defined below);

4. (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to options or otherwise) by the Directors pursuant to the approval in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as defined below); or (ii) the exercise of any options granted under the existing share option scheme of the Company; or (iii) any scrip dividend or similar arrangements providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association (the “ Articles ”) of the Company in force from

• for identification purpose only

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NOTICE OF EGM

time to time; or (iv) any issue of Shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into Shares, shall not exceed the aggregate of: 20% of the aggregate nominal amount of the share capital of the Company in issue on the date of the passing of this resolution;

• (d) for the purposes of this resolution:

“ Relevant Period ” means the period from the date of the passing of this resolution until whichever is the earliest of:

• (i) the conclusion of the next annual general meeting of the Company;

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Articles, the Companies Law of the Cayman Islands or any other applicable laws of the Cayman Islands to be held; or

• (iii) the passing of an ordinary resolution by the shareholders of the Company in general meeting revoking or varying the authority given to the Directors by this resolution;

“ Rights Issue ” means an offer of Shares, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares open for a period fixed by the Directors to holders of Shares on the register on a fixed record date in proportion to their then holdings of Shares (subject to such exclusion or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements, or having regard to any restrictions or obligations under the laws of, or the requirements of, or the expense or delay which may be involved in determining the existence or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction outside Hong Kong or any recognised regulatory body or any stock exchange outside Hong Kong).”

For and on behalf of the Board China Financial Leasing Group Limited Tsang Hing Bun Company Secretary

Hong Kong, 5 May 2014

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NOTICE OF EGM

Notes:

1. A member of the Company entitled to attend and vote at the Meeting is entitled to appoint one or, if he is the holder of two or more shares, more proxies to attend and vote instead of him. A proxy need not be a member of the Company.

2. In the case of joint holders of shares in the Company, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holder(s), seniority being determined by the order in which names stand in the register of members.

3. In order to be valid, the form of proxy must be in writing under the hand of the appointor or of his attorney duly authorized in writing, or if the appointor is a corporation, either under seal, or under the hand of an officer or attorney or other person duly authorized, and must be deposited with the Hong Kong share registrar of the Company, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong (together with the power of attorney or other authority, if any, under which it is signed or a certified copy thereof) not less than 48 hours before the time fixed for holding of the Meeting.

4. As at the date of this notice, the Board comprises Mr. John Yen Jong Ling as executive Director, Mr. Tang Yiu Wing as non-executive Director, and Mr. William Keith Jacobsen, Ms. Chan Man Yi and Ms. Kwong Ka Ki as independent non-executive Directors.

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