Moody Technology Holdings Limited — Proxy Solicitation & Information Statement 2018

Dec 13, 2018

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 you should take, 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 securities in Moody Technology Holdings Limited , you should at once hand this circular and the accompanying 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.

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

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Moody Technology Holdings Limited 滿地科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1400)

(1) PROPOSED CHANGE OF DOMICILE; (2) PROPOSED ADOPTION OF NEW MEMORANDUM OF CONTINUANCE AND NEW BYE-LAWS;

(3) PROPOSED CANCELLATION OF SHARE PREMIUM ACCOUNT;

(4) PROPOSED CAPITAL REORGANISATION;

(5) PLACING OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE; AND

(6) NOTICE OF EXTRAORDINARY GENERAL MEETING

Placing Agent

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A notice convening an extraordinary general meeting of the Company to be held at Suites 903–905, 9th Floor, Shun On Centre, 6–8 Harbour Road, Wanchai, Hong Kong, on Monday, 7 January 2019 at 10:00 a.m. or any adjournment thereof is set forth on pages 67 to 71 of this circular. A form of proxy for use at the meeting is enclosed. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as practicable and in any event not less than 48 hours before the time fixed (i.e. Saturday, 5 January 2019) for holding the extraordinary general meeting (or any adjournment thereof) to the office of the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or any adjourned meeting if you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

13 December 2018

CONTENTS

	Page
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX — SUMMARY OF THE NEW MEMORANDUM OF
CONTINUANCE AND THE NEW BYE-LAWS AND
DIFFERENCES WITH THE MEMORANDUM
AND THE ARTICLES AND OTHER RELEVANT
MATTER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	41
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	67

– i –

EXPECTED TIMETABLE

The expected timetable for the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-laws, the Cancellation of Share Premium Account and the Capital Reorganisation is set out below:

Date of dispatch of the circular, proxy form

and notice of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday, 13 December 2018 Latest time for lodging transfer documents of the Existing Shares to attend and vote at the EGM . . . . . . . . . . . . . . . . 4:30 p.m. on Monday, 31 December 2018 Closure of register of members of the Company for determining the identity of the Shareholders entitled to attend and vote at the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 2 January 2019 to Monday, 7 January 2019 (both days inclusive)

Latest time for lodging proxy forms to qualify for attendance and voting at the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Saturday, 5 January 2019 Expected date and time of the EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10:00 a.m. on Monday, 7 January 2019 Announcement of results of the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 7 January 2019

The following events are conditional on the fulfilment of the conditions for the implementation of the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-laws, the Cancellation of Share Premium Account and the Capital Reorganisation:

Expected effective date of Cancellation of

Share Premium Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 7 January 2019 Expected effective date of the Change of Domicile and the Adoption of New Memorandum of Continuance and New Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . on or after Tuesday, 29 January 2019 (Bermuda time)/ on or after Wednesday, 30 January 2019 (Hong Kong time) Expected effective date of the Capital Reorganisation . . . . . . . . . . . . Monday, 25 February 2019 (Hong Kong time) First day for free exchange of existing share certificates for new share certificates for the Adjusted Shares commences. . . . . . . Monday, 25 February 2019

– ii –

EXPECTED TIMETABLE

Commencement of dealings in Adjusted Shares . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 25 February 2019 Original counter for trading in the Existing Shares (in the form of existing Certificates and in board lots size of 5,000) temporarily closes . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 25 February 2019 Temporary counter for trading in the Adjusted Shares in board lot size of 500 (in the form of existing share certificates) opens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 25 February 2019 Original counter for trading in the Adjusted Shares in board lot size of 5,000 (in the form of new shares certificate) re-opens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 11 March 2019 Parallel trading in the Adjusted Shares (in the form of new share certificates and existing share certificates) commences. . . . . . . . . . . . . . 9:00 a.m. on Monday, 11 March 2019 Designated broker starts to stand in the market to provide matching services for odd lots of Adjusted Shares . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 11 March 2019 Temporary counter for trading in the Adjusted Shares (in the form of existing share certificates and in board lot size 500) closes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 29 March 2019 Parallel trading in the Adjusted Shares (in the form of new share certificates and existing share certificates) ends. . . . . . . . . . . . 4:00 p.m. on Friday, 29 March 2019 Designated broker ceases to stand in the market to provide matching services for odd lots of the Adjusted Shares . . . . . . . . . . . . . . . 4:00 p.m. on Friday, 29 March 2019 Last day for free exchange of existing share certificates for new share certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tuesday, 2 April 2019

All times and dates stated in this circular refer to Hong Kong local times and dates unless otherwise specified. Dates or deadlines specified in the expected timetable above are indicative only and may be extended or varied by the Company. Any changes to the expected timetable will be announced by the Company as and when appropriate.

– iii –

DEFINITIONS

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

• “Adjusted Share(s)”

• ordinary share(s) of HK$0.01 each in the issued and unissued share capital of the Company upon the Capital Reorganisation becoming effective;

• “Adoption of New Memorandum of Continuance and the New Bye-laws”

• the proposed adoption of the New Memorandum of Continuance and the New Bye-laws in compliance with the laws of Bermuda to replace the existing memorandum of association and the Articles, respectively;

• “Articles”

• the existing articles of association of the Company, as amended from time to time;

• “associate(s)”

has the meaning ascribed to it under the Listing Rules;

• “Board”

• the board of Directors;

• “Business Day(s)”

• a day (excluding Saturday, Sunday, public holiday and any day on which a tropical cyclone warning No. 8 or above is hoisted or remains hoisted between 9:00 a.m. and 12:00 noon and is not lowered at or before 12:00 noon or on which a “black” rainstorm warning signal is hoisted or remains in effect between 9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon) on which licensed banks in Hong Kong are open for business throughout their normal business hours;

• “Cancellation of Share Premium Account”

• the proposed cancellation of the entire amount standing to the credit of the share premium account of the Company and transfer of credits arising therefrom to an account designated as the contributed surplus account of the Company before the Change of Domicile becomes effective;

• “Capital Reduction”

• the proposed reduction of the nominal value of the issued Consolidated Shares from HK$1.00 to HK$0.01 each by cancelling the paid-up capital to the extent of HK$0.99 on each of the issued Consolidated Shares;

• “Capital Reorganisation”

• the Share Consolidation, the Capital Reduction and the Share Subdivision;

– 1 –

DEFINITIONS

• “CB Announcement”

the announcement of the Company dated 12 November 2018 in relation to the Placing;

• “CCASS”

the Central Clearing and Settlement System established and operated by HKSCC;

• “Change of Domicile”

• the proposed change of domicile of the Company from the Cayman Islands to Bermuda;

• “Companies Act”

the Companies Act 1981 of Bermuda;

• “Company”

• Moody Technology Holdings Limited, a company incorporated in Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange;

• “connected person(s)” has the meaning ascribed to it under the Listing Rules;

• “Consolidated Shares”

• ordinary share(s) of HK$1.00 each in the issued and unissued share capital of the Company immediately after the Share Consolidation becoming effective;

• “Conversion Price”

HK$0.36 per Conversion Share (assuming the Capital Reorganisation has become effective), subject to adjustments as set out and in accordance with the terms and conditions of the Convertible Bonds;

• “Conversion Shares”

• a maximum of 277,777,777 new Adjusted Shares (assuming the Capital Reorganisation has become effective) to be allotted and issued by the Company upon exercise in full of the conversion rights attaching to the Convertible Bonds;

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

• “EGM”

an extraordinary general meeting of the Company to be convened and held at which resolution(s) will be proposed to consider, and, if thought fit, to approve, among other things, the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-laws, the Cancellation of Share Premium Account, the Capital Reorganisation, the grant of the Specific Mandate, the Placing Agreement and the transactions contemplated thereunder;

– 2 –

DEFINITIONS

• “Existing Share(s)”

ordinary share(s) of par value of HK$0.10 each in the share capital of the Company prior to the Capital Reorganisation becoming effective;

• “Group”

the Company and its subsidiaries;

• “HKSCC”

Hong Kong Securities Clearing Company Limited;

• “Hong Kong”

• The Hong Kong Special Administrative Region of the PRC;

• “Independent Third Party(ies)”

• any person(s) or company(ies) and their respective ultimate beneficial owner(s) whom, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are independent of, not connected with and not acting in concert (as defined in the Takeovers Code) with (i) any of the Placees and (ii) the Company or any director, chief executive, substantial shareholder (as defined under the Listing Rules) or connected persons of the Company or any of their respective subsidiaries or any of their respective associates;

• “Latest Practicable Date”

• 10 December 2018, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein;

• “Listing Committee”

• the listing committee of the Stock Exchange for consideration applications for listing and the granting of listing;

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

• “Maturity Date” the date falling on the 24th month from the date of issue of the Convertible Bonds;

• “Memorandum”

• the existing memorandum of association of the Company, as amended from time to time;

• “New Bye-laws”

• a new set of bye-laws of the Company proposed to be adopted by the Company and to take effect upon continuation of the Company in Bermuda;

– 3 –

DEFINITIONS

• “New Memorandum of Continuance”

a new memorandum of continuance of the Company proposed to be adopted by the Company and to take effect upon continuation of the Company in Bermuda;

“Placees” any person or entity to whom the Placing Agent or its agents shall procure or, as the case may be, shall have procured to subscribe for the Convertible Bonds pursuant to the Placing Agent’s obligations under the Placing Agreement; “Placing” the proposed placing of the Convertible Bonds by or on behalf of the Placing Agent to the Placees pursuant to the Placing Agreement;

• “Placing Agent” PC Securities Limited;

• “Placing Agreement”

the placing agreement dated 12 November 2018 and entered into among the Company and the Placing Agent in respect of the Placing;

• “Placing Completion” the completion of the Placing in accordance with the terms and conditions of the Placing Agreement;

“Placing Completion Date” the day falling on the third Business Day after fulfilment of all conditions precedent or such other date as agreed in writing by the Company and the Placing Agent in respect of Placing as stipulated under the Placing Agreement;

“Placing Period” the period commencing upon the execution of the Placing Agreement and ending on 11 November 2020, unless terminated earlier pursuant to the terms of the Placing Agreement;

• “PRC” The People’s Republic of China;

• “RMB” Renminbi, the lawful currency of the People’s Republic of China;

“Share(s)” the Existing Share(s), Consolidated Share(s), or Adjusted Share(s) (as the context shall require);

“Share Consolidation” the proposed consolidation of every ten (10) issued and unissued Existing Shares of HK$0.10 each into one (1) Consolidated Share of HK$1.00 each;

– 4 –

DEFINITIONS

“Share Subdivision” the proposed sub-division of each authorised but unissued Consolidated Share of HK$1.00 (including those arising from the Capital Reduction) into one hundred (100) Adjusted Shares of HK$0.01 each; “Shareholder(s)” the shareholder(s) of the Company; “Specific Mandate” the specific mandate to be sought from the Shareholders at the EGM to authorise the Directors to allot and issue the Conversion Shares under the Placing; “Stock Exchange” The Stock Exchange of Hong Kong Limited;

• “substantial shareholder” has the meaning ascribed to it under the Listing Rules; “Takeovers Code” the Code on Takeovers and Mergers issued by the Securities and Futures Commission of Hong Kong;

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong; and

• “%” per cent.

HK$/RMB=0.88 is adopted in calculation for illustrative purpose only.

– 5 –

LETTER FROM THE BOARD

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Moody Technology Holdings Limited 滿地科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1400)

Executive Directors: Ms. Li Jia Yin (Acting Chairlady) Mr. Wu Jianxiong Mr. Lin Qingxiong

Independent Non-executive Directors: Mr. Chan Sui Wa Mr. Liu Shungang Mr. Lin Yugang

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

Principal place of business in Hong Kong: Unit 1104A, 11/F. Kai Tak Commercial Building No. 317–319 Des Voeux Road Central Sheung Wan Hong Kong 13 December 2018

To the Shareholders

Dear Sir or Madam,

(1) PROPOSED CHANGE OF DOMICILE;

(2) PROPOSED ADOPTION OF NEW MEMORANDUM OF CONTINUANCE AND NEW BYE-LAWS;

(3) PROPOSED CANCELLATION OF SHARE PREMIUM ACCOUNT;

(4) PROPOSED CAPITAL REORGANISATION;

(5) PLACING OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE; AND

(6) NOTICE OF EXTRAORDINARY GENERAL MEETING

– 6 –

LETTER FROM THE BOARD

INTRODUCTION

Reference is made to the announcement of the Company dated 12 November 2018 in relation to, among other things, the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-Laws, the Cancellation of Share Premium Account and the Capital Reorganisation.

Reference is also made to the announcement of the Company dated 12 November 2018 in relation to the Placing, whereby on 12 November 2018 (after trading hours), the Company entered into the Placing Agreement with the Placing Agent pursuant to which the Company has conditionally agreed to issue and the Placing Agent has conditionally agreed to procure the Placees to subscribe for the Convertible Bonds of up to an aggregate principal amount of HK$100,000,000 on a best-effort basis during the Placing Period.

The purpose of this circular is to provide you with, among other matters, (i) further details of the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-Laws, the Cancellation of Share Premium Account and the Capital Reorgansation; (ii) further details of the Placing; and (iii) notice convening the EGM.

1. PROPOSED CHANGE OF DOMICILE

The Board proposes to change the domicile of the Company from the Cayman Islands to Bermuda by way of de-registration in the Cayman Islands and continuation as an exempted company under the laws of Bermuda. The Board also proposes to implement the Capital Reorganisation after the Change of Domicile becoming effective, details of which are set out in the section headed “Proposed Capital Reorganisation” below.

Effect of Change of Domicile

Other than the expenses and professional fees to be incurred, the Change of Domicile will not alter the underlying assets, investments, management or financial position of the Company nor the proportionate interests of the Shareholders. The Company’s legal advisers as to the laws of the Cayman Islands and Bermuda are of the view that the continuation of the Company in Bermuda does not create a new legal entity or prejudice or affect the continuity of the Company. The Company will continue to maintain a principal place of business in Hong Kong.

The Change of Domicile will not involve the formation of a new holding company, the withdrawal of listing of the Existing Shares, any issue of new Existing Shares, any transfer of assets of the Company or any change in the existing shareholding of the Company. The implementation of the Change of Domicile will not affect the continuity of the Company and its listing status on the Stock Exchange.

– 7 –

LETTER FROM THE BOARD

Reasons for the Change of Domicile

As advised by the Company’s legal advisers as to the laws of the Cayman Islands, if the Company proceeds with the Capital Reorganisation, which include, amongst other things, the Capital Reduction in the Cayman Islands, the sanction by the Grand Court of the Cayman Islands would be required and it will take three to four months counting from the date of the EGM to complete the court process. On the other hand, the Change of Domicile can be effected within not more than two weeks after the date of the EGM and the Capital Reduction in the Bermuda can be completed within one month after the Change of Domicile became effective. The Directors considered that such Cayman Islands Court sanction cannot be obtained in a commercially expedient time frame. If the Capital Reorganisation will be effected following a change of domicile of the Company from the Cayman Islands to Bermuda through de-registration in the Cayman Islands and continuation in Bermuda, the legal advisers of the Company as to the laws of the Cayman Islands and Bermuda advised that no court order is required in the Cayman Islands or Bermuda for the Change of Domicile and the Capital Reorganisation after de-registration of the Company in the Cayman Islands and its continuation in Bermuda. The Board considers that it would save at least one month for carrying out the Capital Reorganisation in Bermuda by first implementing the Change of Domicile.

The Board believes that the Change of Domicile is beneficial to and in the interests of the Company and the Shareholders as a whole.

Conditions of the Change of Domicile

The Change of Domicile is conditional upon:

• (1) the passing of the necessary special resolution(s) by the Shareholders at the EGM to approve (i) the Change of Domicile; and (ii) the Adoption of New Memorandum of Continuance and New Bye-laws;

• (2) compliance with the relevant requirements under the Listing Rules and the relevant legal procedures and requirements under the laws of the Cayman Islands and the laws of Bermuda in respect of the Change of Domicile; and

• (3) the obtaining of all necessary approvals from the relevant regulatory authorities or otherwise as may be required in respect of the Change of Domicile.

The Change of Domicile is not conditional upon the Capital Reorganisation becoming effective. However, the Capital Reorganisation is conditional upon the Change of Domicile becoming effective.

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LETTER FROM THE BOARD

2. PROPOSED ADOPTION OF NEW MEMORANDUM OF CONTINUANCE AND NEW BYE-LAWS

In connection with the Change of Domicile, it is proposed that the New Memorandum of Continuance and the New Bye-laws be adopted by the Company to replace the existing Memorandum and the Articles, respectively, in order to comply with the laws of Bermuda.

As confirmed by the Company’s Hong Kong and Bermuda legal advisers, the New Memorandum of Continuance and New Bye-laws conform with the relevant requirements of Appendix 3 and Part A of Appendix 13 to the Listing Rules, and the Companies Act respectively. The Company also confirms that there is nothing unusual about the New Memorandum of Continuance and the New Bye-laws for a company listed in Hong Kong.

A summary of the New Memorandum of Continuance and the New Bye-laws and differences with the Memorandum and the Articles are set out in the Appendix to this circular.

Condition of the Adoption of New Memorandum of Continuance and New Bye-laws

The Adoption of New Memorandum of Continuance and New Bye-laws is conditional upon the passing of a special resolution by the Shareholders to approve the Adoption of New Memorandum of Continuance and New Bye-laws at the EGM. After passing the said special resolution, the New Memorandum of Continuance will be filed with the Bermuda Registrar of Companies and if the Bermuda Registrar of Companies is satisfied that all applicable Bermuda continuance requirements have been complied with, he will register the New Memorandum of Continuance whereupon it will become effective.

3. PROPOSED CANCELLATION OF SHARE PREMIUM ACCOUNT

The Board proposes to cancel the entire amount standing to the credit of the share premium account of the Company and to transfer the credits arising from such cancellation to an account designated as the contributed surplus account of the Company before the Change of Domicile becoming effective. The cancellation of the share premium account is conditional upon passing of the special resolution approving the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-laws.

As at 31 December 2017, the Company had a credit balance of approximately RMB737,285,000 (equivalent to approximately HK$837,824,000) standing in its share premium account.

The account designated as the contributed surplus account of the Company, subject to the approval of the Shareholders at the EGM by way of special resolution, shall be the contributed surplus account of the Company within the meaning of the Companies Act upon the Change of Domicile becoming effective.

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LETTER FROM THE BOARD

Conditions of the Cancellation of Share Premium Account

The Cancellation of Share Premium Account is conditional upon passing of a special resolution by the Shareholders approving the Cancellation of Share Premium Account at the EGM and to transfer the credits arising therefrom to an account designated as the contributed surplus account of the Company and that such designated contributed surplus account of the Company shall be the contributed surplus account of the Company within the meaning of the Companies Act upon the Change of Domicile becoming effective.

4. PROPOSED CAPITAL REORGANISATION

The Board proposes to implement the Capital Reorganisation after the Change of Domicile becoming effective which comprises the following:

• (1) the Share Consolidation on the basis of every ten (10) issued and unissued Existing Shares of par value HK$0.10 each into one (1) Consolidated Share of par value HK$1.00 each;

• (2) the Capital Reduction involving a reduction of the issued share capital of the Company through a cancellation of the paid-up capital of the Company to the extent of HK$0.99 on each of the issued Consolidated Shares so that the nominal value of each issued Consolidated Share will be reduced from HK$1.00 to HK$0.01; and

• (3) the Share Subdivision of each authorised but unissued Consolidated Share of HK$1.00 (including those arising from the Capital Reduction) into one hundred (100) Adjusted Shares of HK$0.01 each.

The authorised share capital of the Company is HK$1,000,000,000 divided into 10,000,000,000 Existing Shares of HK$0.10 each as at the Latest Practicable Date. Following the Capital Reorganisation becoming effective, the authorised share capital would be HK$1,000,000,000 divided into 100,000,000,000 Adjusted Shares of HK$0.01 each.

Following the Capital Reorganisation becoming effective, the issued share capital of the Company would be reduced from HK$186,000,000 divided into 1,860,000,000 Existing Shares of HK$0.10 each to HK$1,860,000 divided into 186,000,000 Adjusted Shares of HK$0.01 each.

The credit of HK$184,140,000 arising from the Capital Reduction will be credited to the contributed surplus account of the Company, and the Board will be authorised to utilise credits in the contributed surplus account together with the amount already in the contributed surplus account as a result of the Cancellation of Share Premium Account in such manner as permissible under the New Bye-laws and all applicable laws of Bermuda, including to set off accumulated losses of the Company. The total accumulated loss of the Company was approximately RMB1,098,390,000 (equivalent to approximately HK$1,248,170,000) as shown in the audited consolidated financial statements of the Company for the year ended 31 December 2017.

– 10 –

LETTER FROM THE BOARD

Shareholders and potential investors of the Company should note that the credits arising in the books from the Capital Reduction will be subject to change depending on the number of the Existing Shares in issue immediately prior to the Capital Reduction becoming effective.

Under the laws of Bermuda, the Directors may apply the contributed surplus in any manner permitted by the laws of Bermuda and the bye-laws of the Company in effect from time to time.

Conditions of the Capital Reorganisation

The Capital Reorganisation is conditional upon:

• (1) the Change of Domicile becoming effective;

• (2) the passing of the necessary resolutions by the Shareholders approving the Capital Reorganisation and the transactions contemplated thereunder at the EGM;

• (3) the Stock Exchange granting the listing of, and permission to deal in, the Adjusted Shares in issue arising from the Capital Reorganisation;

• (4) compliance with section 46(2) of the Companies Act, including (a) the publication of notice in relation to the Capital Reduction in an appointed newspaper in Bermuda on a date not more than 30 days and not less than 15 days before the effective date of the Capital Reduction, and (b) the Board being satisfied on the effective date of the Capital Reduction, there are no reasonable grounds for believing the Company is, or after the Capital Reduction would be, unable to pay its liabilities as they become due; and

• (5) the obtaining of all necessary approvals from the regulatory authorities or otherwise as may be required in respect of the Capital Reorganisation.

Effects of the Capital Reorganisation

The authorised share capital of the Company is HK$1,000,000,000 divided into 10,000,000,000 Existing Shares of HK$0.10 each as at the Latest Practicable Date. As at the Latest Practicable Date, the Company has no outstanding warrants, options or convertible securities or other similar rights which are convertible or exchangeable into Shares.

Other than the expenses to be incurred, the Capital Reorganisation will not alter the underlying assets, business operations, management or financial position of the Company nor the proportionate equity interests of the Shareholders. The Directors believe that the Capital Reorganisation will not have any adverse effect on the financial position of the Group and that on the date the Capital Reorganisation becoming effective, there are no reasonable grounds for believing that the Company is, or after the Capital Reorganisation would be, unable to pay its liabilities as they become due. No capital will be lost as a

– 11 –

LETTER FROM THE BOARD

result of the Capital Reorganisation and, except for the expenses to be incurred which is expected to be insignificant in the context of the net asset value of the Company, the net asset value of the Company will remain unchanged before or after the Capital Reorganisation becoming effective. The Capital Reorganisation will not result in any change in the relative rights of the Shareholders.

Upon the Capital Reorganisation becoming effective and assuming that there is no change in the number of issued Share Capital from the Latest Practicable Date until the effective date of the Capital Reorganisation, the share capital structure of the Company will be as follows:

		Immediately
		following the Share
		Consolidation
		becoming effective
		but prior to the
		Capital Reduction	Immediately
		and Share	following the Capital
	As at the Latest	Subdivision	Reorganisation
	Practicable Date	becoming effective	becoming effective
Par value	HK$0.10	HK$1.00	HK$0.01
Number of authorised Shares	10,000,000,000	1,000,000,000	100,000,000,000
Authorised share capital	HK$1,000,000,000	HK$1,000,000,000	HK$1,000,000,000
Number of issued Shares	1,860,000,000	186,000,000	186,000,000
Number of unissued Shares	8,140,000,000	814,000,000	99,814,000,000
Issued share capital	HK$186,000,000	HK$186,000,000	HK$1,860,000

Reasons for the Capital Reorganisation

Pursuant to the New Bye-laws which will be adopted by the Company and become effective upon continuation of the Company in Bermuda, the Company shall not issue any shares at a price below par value. The lower par value of the Adjusted Shares will also allow the Company greater flexibility in setting the issue price for future equity fund raising exercises. Furthermore, the credits in the contributed surplus account within the meaning of the Companies Act arising from the Capital Reorganisation will enable the Company to reduce its accumulated losses.

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LETTER FROM THE BOARD

On 12 November 2018, the Company has entered into the Placing Agreement with the Placing Agent regarding the Placing. Please refer to the section headed “Placing of Convertible Bonds Under Specific Mandate – The Placing Agreement” in this circular for further details. Completion of the Placing will be conditional upon the completion of the Capital Reorganisation. Save for the Placing, as at the Latest Practicable Date, the Company has no concrete plan to undertake any equity fund raising activities or other corporate action or arrangement that may affect the trading in the Shares in the next 12 months. Nevertheless, the Company does not obviate the possibility of conducting equity fund raising activities in the future to finance its business development and expansion as and when necessary.

The Board has also considered other non-equity fund raising alternatives including but not limited to debt financing. However, debt financing will result in additional interest burden, higher gearing ratio of the Group and subject the Group to repayment obligations. In addition, debt financing may not be achievable on favourable terms on a timely basis under volatile market conditions. Nevertheless, the Company may also consider the possibility of debt financing as and when necessary.

Under 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. Further, pursuant to the requirements set out in “Guide on Trading Arrangements for Selected Types of Corporate Actions” issued by Hong Kong Exchanges and Clearing Limited on 28 November 2008, which was last updated on 3 July 2018 (the “ Guidelines ”), the expected board lot value per board lot should be greater than HK$2,000 taking into account the minimum transaction costs for a securities trade. In view that the Shares had been traded below HK$0.10 at certain time in the past six months (based on the closing price per Share as quoted on the Stock Exchange), the Board proposes to implement the Capital Reorganisation in order to comply with the trading requirements of the Listing Rules and for the purpose of reducing transaction and registration costs.

Brokers charge their clients a fee per board lot, i.e. the handling costs of dealings in more board lots are higher than those for less board lots. After the Share Consolidation, the number of new board lots will be reduced. It is expected that the Share Consolidation would bring about a corresponding upward adjustment in the trading price of the Consolidated Shares on the Stock Exchange, and will reduce the overall transaction and handling costs of dealings in the Shares of the Company.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, the closing price of the Shares was HK$0.039 and the board lot size was 5,000 Shares and therefore the Shares are trading at under HK$2,000 per board lot. The highest and lowest prices at which the Shares were traded on the Stock Exchange during each of the previous six months were as follows:

2018							Highest	Lowest
							HK$	HK$
May							0.179	0.100
June							0.120	0.085
July							0.130	0.085
August							0.130	0.080
September							0.120	0.073
October							0.089	0.045
November							0.078	0.030
December	(up	to	the	Latest	Practicable	Date)	0.049	0.031

The existing board lots of 5,000 Shares will remain unchanged upon the Capital Reorganisation becoming effective. Based on the closing price of HK$0.039 per Existing Share (equivalent to HK$0.39 per Adjusted Share) as quoted on the Stock Exchange as at the Latest Practicable Date, the market value of each board lot of 5,000 Adjusted Shares, assuming the Capital Reorganisation had already become effective, is expected to be HK$1,950.

The Company considers that although increasing the board lot size could also achieve a similar effect as the Share Consolidation, it cannot provide any upward adjustment to the share price of the Company. Certain brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced shares or tend to discourage individual brokers from recommending low-priced shares to their customers. Certain investment banks and financial institutions also have internal guidelines stipulating that no margin credit will be offered to customers for low-priced shares. Accordingly, potential investors will find investing in the Shares which currently trades below HK$0.10 less attractive. Therefore, with a higher trading price of the Consolidated Shares and reduction in the transaction and handling costs as a proportion of the market value of each board lot, the Company believes that the Share Consolidation will enhance the corporate image of the Company so as to make investing in the Consolidated Shares more attractive to a broader range of institutional and professional investors and other members of the investing public.

Having decided not to adjust the board lot size on the above considerations and based on the recent average trading price per Share, the Company considered that consolidating ten Shares into one Consolidated Share will at the same time satisfy the board lot value requirement under the Guideline while creating the minimal number of odd lots.

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LETTER FROM THE BOARD

Given the above reasons, the Company considers the proposed Share Consolidation is justifiable in light of the potential costs and negative impact arising from the creation of odd lots to shareholders. Accordingly, the Directors consider that the Share Consolidation is beneficial to and in the interests of the Company and the Shareholders as a whole.

The Capital Reorganisation will not, of itself, alter the underlying assets, business operations, management or financial position of the Group except for the payment of related expenses.

In view of the above, the Board considers that the Capital Reorganisation is in the best interests of the Company and the Shareholders as a whole.

Listing and dealings

Application will be made to the Stock Exchange for the listing of, and permission to deal in, the Adjusted Shares arising from the Capital Reorganisation.

Subject to the granting of listing of, and permission to deal in, the Adjusted Shares on the Stock Exchange, the Adjusted 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 Adjusted Shares on the 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 settlement day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time. The Capital Reorganisation will not result in any change in the rights of the Shareholders. The Adjusted 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. All necessary arrangements will be made for the Adjusted Shares to be admitted into CCASS.

Save that the Shares are listed and dealt in on the Stock Exchange, none of the Shares and the Company’s debt securities are listed or dealt in on any other stock exchange, and at the time the Capital Reorganisation becoming effective, save that the Adjusted Shares will be listed and dealt in on the Stock Exchange, the Adjusted Shares and the Company’s debt securities in issue will not be listed or dealt in on any other stock exchange, and no such listing or permission to deal is being or is proposed to be sought.

Free exchange of share certificates

Subject to the Capital Reorganisation becoming effective, which is expected to be on Monday, 25 February 2019, Shareholders may on or after Monday, 25 February 2019 and until Tuesday, 2 April 2019 (both dates inclusive) submit their existing share certificates for the Existing Shares to the Registrar for exchange for share certificates for the Adjusted Shares at the expense of the Company. Thereafter, share certificates for the Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such higher amount as may from time to time be specified by the Stock Exchange) for each share certificate

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LETTER FROM THE BOARD

issued for the Adjusted Shares or each existing share certificate for the Existing Shares submitted for cancellation, whichever the number of certificates issued or cancelled is higher.

After 4:00 p.m. on Tuesday, 2 April 2019, existing share certificates for the Existing Shares will continue to be good evidence of legal title and may be exchanged for share certificates for Adjusted Shares at any time but are not acceptable for trading, settlement and registration purposes.

The colour of the new share certificates for the Adjusted Shares will remain the same.

Trading arrangements for the Adjusted Shares

Subject to the Capital Reorganisation becoming effective, the arrangements proposed for dealings in the Adjusted Shares are expected to be as follows:

• (1) from 9:00 a.m. on Monday, 25 February 2019, the original counter for trading in the Existing Shares in board lots of 5,000 Existing Shares will be temporarily closed and a temporary counter for trading in the Adjusted Shares in board lots of 500 Adjusted Shares will be set up and opened;

• (2) with effect from 9:00 a.m. on Monday, 11 March 2019, the original counter for trading in the Adjusted Shares will be re-opened in board lots of 5,000 Adjusted Shares;

• (3) during the period from 9:00 a.m. on Monday, 11 March 2019 to 4:00 p.m. on Friday, 29 March 2019 (both dates inclusive), there will be parallel trading at the above two counters; and

• (4) the temporary counter for trading in the Adjusted Shares in board lots of 500 Adjusted Shares will be removed after the close of trading at 4:00 p.m. on Friday, 29 March 2019. Thereafter, trading will only be in board lots of 5,000 Adjusted Shares with new share certificates and the existing share certificates for the Existing Shares will cease to be marketable and will not be acceptable for dealing and settlement purposes. However, such certificates will remain as documents of title on the basis of ten (10) Existing Shares for one (1) Adjusted Share.

Fractional Shares, odd lot arrangements and matching services

Fractional Adjusted Shares will not be issued by the Company to the Shareholders. Any fractional entitlements of the Adjusted Shares will be aggregated and sold for the benefit of the Company. In order to facilitate the trading of odd lots (if any) of the Adjusted Shares arising from the Capital Reorganisation, the Company has appointed PC Securities Limited as the designated broker to match the purchase and sale of odd lots of

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LETTER FROM THE BOARD

the Adjusted Shares at the relevant market price per Adjusted Share on a best effort basis, to those Shareholders who wish to acquire odd lots of the Consolidated Shares to make up a full board lot, or to dispose of their holding of odd lots of the Consolidated Shares for the period from 9:00 a.m. on Monday, 11 March 2019 to 4:00 p.m. on Friday, 29 March 2019 (both dates inclusive). Shareholders who wish to use this matching service may contact Mr. Ronald Cheung of PC Securities Limited at Unit A 11/F, Lee Garden Five, 18 Hysan Avenue, Causeway Bay, Hong Kong or at (852) 39503288 during office hours of such period.

Holders of odd lots of the Adjusted Shares should note that successful matching of the sale and purchase of odd lots of the Adjusted Shares is not guaranteed. Any Shareholder who is in any doubt about the odd lot arrangement is recommended to consult his, or her, or its own professional advisers.

The Company considers that the above odd lot arrangements and matching services are in line with the market practice and therefore it does not provide additional service for procuring the sale of odd lots and fractional entitlement in the market. The Company needs to balance the costs involved in providing the matching service in determining the length of the period for such service. Taking into account the above and the period for the matching service above is in line with the trading arrangement of the Existing Shares and the Adjusted Shares which was suggested in the Guideline, the Company considers that the above arrangement are in the interest of the Company and the Shareholders as a whole.

5. PLACING OF CONVERTIBLE BONDS UNDER SPECIFIC MANDATE

The Placing Agreement

Date : 12 November 2018

Parties : (a) the Company

(b) PC Securities Limited, as the Placing Agent

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Placing Agent and its ultimate beneficial owner(s) are Independent Third Parties.

Placing of the Convertible Bonds

Pursuant to the Placing Agreement, the Placing Agent has conditionally agreed to procure, on a best effort basis, not less than six Placees to subscribe for the Convertible Bonds of up to an aggregate principal amount of HK$100,000,000 due on the 24th month from the date of issue, with the conversion rights to convert at the Conversion Price of HK$0.36 (subject to adjustments) per Conversion Share (assuming the Capital Reorganisation has become effective). The Convertible Bonds shall be offered in principal

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LETTER FROM THE BOARD

amount of any multiple of HK$1,000,000, provided that the minimum principal amount of each Convertible Bond shall not be less than HK$10,000,000.

Placees

The Placing Agent shall use its best endeavours to ensure that the Placees and their ultimate beneficial owners shall be Independent Third Parties.

Placing Commission

The Placing Agent will receive a placing commission for the Placing of 5.0% of the principal amount of the Convertible Bonds being successfully placed. The placing commission for Placing was determined after arm’s length negotiations between the Company and the Placing Agent.

Principal Terms of the Convertible Bonds

The principal terms of the Convertible Bonds are summarised below:

Principal amount : Up to an aggregate principal amount of HK$100,000,000 Issue price : 100% of the principal amount of the Convertible Bonds Maturity Date : The date falling on the 24th month from the date of issue Interest : 8.0% per annum and payable in two installments, with the first interest payment to be made on the date falling on the first anniversary from the date of issue and the second interest payment to be made on the Maturity Date

Conversion Price : HK$0.36 per Conversion Share (assuming the Capital Reorganisation has become effective), subject to adjustments as set out and in accordance with the terms and conditions of the Convertible Bonds

The Conversion Price of HK$0.36 per Conversion Share (assuming the Capital Reorgansation has become effective) represents:

• (i) a discount of 20% on the closing price of HK$0.45 per Adjusted Share (after taking into account the effect of the Capital Reorganisation) (i.e. HK$0.045 per Existing Share before the Capital Reorganisation) as quoted on the Stock Exchange on the date of signing of the Placing Agreement;

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LETTER FROM THE BOARD

• (ii) a discount of approximately 18.2% on the average closing price of HK$0.44 per Adjusted Share (after taking into account the effect of the Capital Reorganisation) (i.e. HK$0.044 per Existing Share before the Capital Reorganisation) as quoted on the Stock Exchange for the last five consecutive trading days immediately prior to the date of signing of the Placing Agreement;

• (iii) a discount of approximately 21.7% on the average closing price of HK$0.46 per Adjusted Share (after taking into account the effect of the Capital Reorganisation) (i.e. HK$0.046 per Existing Share before the Capital Reorganisation) as quoted on the Stock Exchange for the last ten consecutive trading days immediately prior to the date of signing of the Placing Agreement; and

• (iv) a discount of approximately 7.7% on the closing price of HK$0.39 per Adjusted Share (i.e. HK$0.039 per Existing Share before the Capital Reorganisation) as quoted on the Stock Exchange on the Latest Practicable Date.

The Conversion Price was determined after arm’s length negotiations between the Company and the Placing Agent, with reference to the recent performance of the Adjusted Shares and the adjustment as a result of the Capital Reorganisation.

Adjustment events : The Conversion Price shall from time to time be subject to adjustment upon the occurrence of certain events, including but not limited to the followings:

• (i) consolidation or subdivision of Adjusted Shares;

If and whenever the Shares by reason of any consolidation or sub-division become of a different nominal amount, the Conversion Price in force immediately prior thereto shall be adjusted by multiplying it by the revised nominal amount and dividing the result by the former nominal amount.

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LETTER FROM THE BOARD

(ii) capitalisation of profits or reserves;

If and whenever the Company shall issue (other than in lieu of a cash dividend) any Shares credited as fully paid to the Shareholders by way of capitalisation of profits or reserves (including any share premium account or capital redemption reserve fund), the Conversion Price in force immediately prior to such issue shall be adjusted by multiplying it by the aggregate nominal amount of the issued Shares immediately before such issue and dividing the result by the sum of such aggregate nominal amount and the aggregate nominal amount of the Shares issued in such capitalisation.

(iii) capital distribution;

If and whenever the Company shall make any capital distribution (whether by capital reduction or other ways) to the Shareholders (in their capacity as such) or grant the rights to the Shareholders to acquire the cash assets held by the Company or any of its subsidiaries, the Conversion Price in force immediately prior to such distribution or grant shall be reduced by multiplying it by the following fraction:

==> picture [30 x 22] intentionally omitted <==

where:

• A = the market price on the date on which the Capital Distribution is publicly announced or (failing any such announcement) the date preceding the capital distribution; and

• B = the fair market value on the day of such announcement or (as the case may require) the date preceding the capital distribution or grant, as determined in good faith by a reputable commercial bank, of the portion of the capital distribution which is attributable to one Share.

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LETTER FROM THE BOARD

Provided that if in the opinion of a reputable commercial bank, the use of the fair market value as aforesaid produces a result which is significantly inequitable, such reputable commercial bank may instead determine (and in such event the above formula shall be construed as if B meant) the amount of the said market price.

Each such adjustment shall be effective (if appropriate retroactively) from the commencement of the day next following the capital distribution or the record date for the capital distribution.

• (iv) offer of new Adjusted Shares for subscription by way of rights issue or open offer, or a grant of options or warrants to subscribe for new Adjusted Shares, at a price which is less than 80% of the market price per Adjusted Share to Shareholders;

If and whenever the Company shall offer to the Shareholders to subscribe for any new Shares by way of rights or public offering, or shall grant to the Shareholders to subscribe for any new Shares by way of any options or warrants, in each case at a price which is less than 80 per cent. of the market price on the last dealing day preceding the date of the announcement of the terms of the offer or grant, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately on the last dealing day preceding the date of the announcement by the following fraction:

==> picture [30 x 23] intentionally omitted <==

where:

• A is the number of Shares in issue immediately before such announcement;

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LETTER FROM THE BOARD

• B is the number of Shares which the aggregate amount (if any) payable for the rights, or for the options or warrants or other rights issued by way of rights, and for the total number of Shares comprised therein would purchase at such market price per Share; and

• C is the aggregate number of Shares for subscription issued by the Company by way of offer, options or warrants.

Such adjustment shall become effective (if appropriate, retroactively) from the commencement of the next day following the offer or the record date for such offer or grant.

• (v) issue wholly for cash being made by the Company of securities convertible into or exchangeable for or carrying rights of subscription for new Adjusted Shares, if in any case the total effective consideration per new Adjusted Share receivable is less than 80% of the market price, or the conversion, exchange or subscription rights of any such issue are altered so that the said total effective consideration receivable is less than 80% of the then market price; and

If and whenever the Company shall issue wholly for cash any securities (other than the Bonds pursuant to the Bond Instrument) which by their terms are convertible into or exchangeable for or carry rights of subscription for new Shares, and the total Effective Consideration (as defined below) per Share initially receivable for such securities is less than 80 per cent. of the market price on the last dealing day preceding the date of the announcement of the terms of issue of such securities, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to the issue by the following fraction:

==> picture [30 x 23] intentionally omitted <==

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LETTER FROM THE BOARD

where:

• A is the number of Shares in issue immediately before such issue;

• B is the number of Shares which the total Effective Consideration receivable by the Company for the Shares to be issued upon exercise of the right of subscription at such market price per Share; and

• C is the number of Shares to be issued upon conversion into or exchange of such securities or upon the exercise of such rights of subscription at the initial conversion, exchange or subscription price.

Such adjustment shall become effective (if appropriate, retroactively) from the close of business in Hong Kong on the day preceding the date of such announcement or the date determining the conversion, exchange or subscription price by the Company (whichever is earlier).

If and whenever the rights of conversion or exchange or subscription attached to any such securities as are mentioned in section (aa) of this sub-paragraph (v) are modified so that the total Effective Consideration per Share initially receivable for such securities shall be less than 80 per cent. of the market price on the last dealing day preceding the date of announcement of the proposal to modify such rights of conversion or exchange or subscription, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately prior to such modification by the following fraction:

==> picture [30 x 22] intentionally omitted <==

where:

• A is the number of Shares in issue immediately before such modification;

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LETTER FROM THE BOARD

• B is the number of Shares which the total Effective Consideration receivable by the Company for the Shares to be issued upon conversion or exchange, or upon exercise of the right of subscription attached to the securities so modified, would purchase at such market price per Share or, if lower, the existing conversion, exchange or subscription price; and

• C is the maximum number of Shares to be issued upon conversion or exchange of such securities or upon the exercise of such rights of subscription attached thereto at the modified conversion, exchange or subscription price or rate.

Such adjustment shall become effective as at the date upon which such modification shall take effect. A right of conversion or exchange or subscription shall not be treated as modified for the foregoing purposes where it is adjusted to take account of rights or capitalisation issues and other events normally giving rise to adjustment of conversion or exchange terms.

For the purposes of this sub-paragraph (v), the “ total Effective Consideration ” receivable for the securities issued shall be deemed to be the consideration receivable by the Company for any such securities plus the additional minimum consideration (if any) to be received by the Company upon (and assuming) the conversion or exchange thereof or the exercise of such subscription rights, and the total Effective Consideration per Share initially receivable for such securities shall be such aggregate consideration divided by the number of Shares to be issued upon (and assuming) such conversion or exchange at the initial conversion or exchange rate or the exercise of such subscription rights at the initial subscription price, in each case without any deduction for any commissions, discounts or expenses paid, allowed or incurred in connection with the issue.

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LETTER FROM THE BOARD

• (vi) issue of Adjusted Shares being made wholly for cash or for acquisition of assets at a price less than 80% of the market price per Adjusted Share.

If and whenever the Company shall issue (otherwise than as mentioned in (iv) above) wholly for cash any Shares (other than Shares issued on the exercise of conversion rights or on the exercise of any other rights of conversion into, or exchange or subscription for, Shares) or issue or grant (otherwise than as mentioned in (iv) above) options, warrants or other rights to subscribe for or purchase Shares, in each case at a price per Share which is less than 80 per cent. of the market price on the last dealing day preceding the date of the announcement of the terms of such issue, the Conversion Price shall be adjusted by multiplying the Conversion Price in force immediately before the date of such announcement by the following fraction:

==> picture [30 x 22] intentionally omitted <==

where:

• A is the number of Shares in issue immediately before the date of the relevant announcement;

• B is the number of Shares which the aggregate consideration receivable for the issue of such additional Shares would purchase at such market price per Share; and

• C is the number of additional Shares to be issued immediately after the date of the relevant announcement.

Such adjustment shall become effective on the date of the issue of such Shares or, as the case may be, the issue or grant of such options or warrants.

In the event of the occurrence of any adjustment event above, the Company shall instruct the auditors for the time being or an independent financial adviser to the Company to certify such adjustment in writing.

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LETTER FROM THE BOARD

Conversion Shares : Based on the initial Conversion Price of HK$0.36 per Conversion Share (assuming the Capital Reorganisation has become effective), a maximum number of 277,777,777 Conversion Shares (assuming the Capital Reorganisation has become effective) shall be allotted and issued upon exercise in full of the conversion rights attaching to the Convertible Bonds, which represent:

• (i) approximately 149.3% of the existing issued share capital of the Company; and

• (ii) approximately 59.9% of the issue share capital of the Company as enlarged by the issue of the Conversion Shares upon exercise in full of the conversion right attaching to the Convertible Bonds.

The Conversion Shares shall be allotted and issued pursuant to the Specific Mandate.

Conversion Period : The period commencing from the day immediately following six months after the date of issue of the Convertible Bonds and ending on the Maturity Date.

Conversion rights : Each holder of the Convertible Bonds shall have the right, exercisable during the Conversion Period by giving not less than seven days’ notice (the “ Conversion Notice ”) to the Company, to convert the whole or any part (in multiples of HK$1,000,000) of the outstanding principal amount of the Convertible Bonds held by such holder of the Convertible Bonds into such number of Conversion Shares as will be determined by dividing the principal amount of the Convertible Bonds to be converted by the Conversion Price in effect on the date of conversion.

No fraction of an Adjusted Share shall be issued on conversion and in lieu thereof the Company shall pay a cash amount equal to such amount of the Convertible Bond that is not converted.

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LETTER FROM THE BOARD

• Conversion : The Company shall not be required to issue any restrictions Conversion Shares, if, as a result of the relevant exercise of the conversion rights attached to the Convertible Bonds:

• (i) the holder of the Convertible Bonds and parties acting in concert with it will trigger a mandatory offer obligation under the Takeovers Code; or

• (ii) less than 25% or the minimum prescribed percentage as set out in the Listing Rules of the Company’s issued Shares would be held by the public immediately after the relevant exercise of such conversion rights.

Redemption : Redemption at request

The Company may at any time before the Maturity Date, by giving not less than two Business Days’ notice to the holders of the Convertible Bonds, redeem all or part of the outstanding Convertible Bonds together with interest accrued up to the date fixed for redemption.

Redemption at maturity

Any principal amount of the Convertible Bonds which has not been redeemed or converted in accordance with the terms and conditions of the bond instrument of the Convertible Bonds by the Maturity Date shall be redeemed by the Company on the Maturity Date at a redemption amount equal to 100% of the principal amount of the Convertible Bonds.

Ranking :

Conversion Shares issued upon exercise of conversion rights attached to the Convertible Bonds shall rank pari passu in all respects with all other existing Adjusted Shares outstanding at the date of the Conversion Notice and all Conversion Shares shall include rights to participate in all dividends and other distributions the record date of which falls on or after the date of the Conversion Notice.

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LETTER FROM THE BOARD

• Transferability

• : The Convertible Bonds may be transferred to any person with the Company’s consent provided that such transfer shall comply with the Listing Rules and relevant laws and regulations.

In the event the Convertible Bonds are transferred to the connected persons of the Company, the Company’s consent will need to be obtained and the Company will ensure that such transfer shall comply with the Listing Rules and relevant laws and regulations.

• Application for : No application will be made for the listing of the listing Convertible Bonds on the Stock Exchange or any other stock exchange.

Application will be made by the Company for the listing of, and permission to deal in, the Conversion Shares to be issued upon the exercise of the conversion rights attached to the Convertible Bonds.

Conditions Precedent

The Placing Completion shall be conditional upon:

• (a) the passing by the Shareholders who are entitled to vote and not required to abstain from voting under the Listing Rules and other applicable regulations of resolutions to approve the Placing Agreement and the transactions contemplated thereunder, including the grant of the Specific Mandate for the Placing and the issue and allotment of the Conversion Shares at the EGM;

• (b) the Listing Committee granting or agreeing to grant (subject to allotment) and not having withdrawn or revoked the listing of and permission to deal in all the Conversion Shares which may fall to be allotted and issued upon the exercise of the conversion right attaching to the Convertible Bonds;

• (c) the Change of Domicile of the Company from the Cayman Islands to Bermuda having been completed;

• (d) the proposed Capital Reorganisation of the Company having been effective;

• (e) the Company having obtained all necessary consents and approvals in respect of the Placing Agreement and the transactions contemplated thereunder; and

• (f) if necessary, all other necessary consents and approval for the issue of the Convertible Bonds having been obtained.

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LETTER FROM THE BOARD

If any of the conditions precedent above is not fulfilled at or before 5:00 p.m. (Hong Kong time) on 27 March 2019 or such later time or date as may be agreed between the Placing Agent and the Company in writing, the Placing Agent may, at any time thereafter, terminate its obligations under the Placing Agreement by notice in writing to the Company, whereupon the obligations of the Placing Agent under the Placing Agreement shall forthwith cease and terminate and neither the Company nor the Placing Agent shall have any claim against any of the others, save for any antecedent breach thereof.

Completion of the Placing

The Placing can be completed provided that, inter alia , (i) the Placing Completion shall take place on or before the Placing Completion Date; and (ii) the conditions as set out in the section headed “Conditions Precedent” above are fulfilled.

Subject to termination of the Placing Agreement, the Placing Completion shall take place on the Placing Completion Date (unless otherwise agreed between the Placing Agent and the Company in writing) provided that the conditions precedent have been fulfilled on the third Business Day immediately before the Placing Completion (or such later date as may be agreed between the Company and the Placing Agent in writing).

Use of Proceeds and the Group’s indebtedness

Subject to the outcome of the Placing, the maximum gross and net proceeds (after deducting related expenses) from the Placing are estimated to be HK$100,000,000 and approximately HK$94,800,000, respectively. They will be used as repayment of outstanding indebtedness and general working capital of the Group. The net price per Conversion Share based on the above net proceeds is approximately HK$0.34.

As at 30 June 2018, the Group had short term borrowings of approximately RMB418.8 million (equivalent to approximately HK$475.9 million), which includes secured bank borrowings of approximately RMB222.2 million (equivalent to approximately HK$252.5 million), unsecured bank borrowings of approximately RMB21.5 million (equivalent to approximately HK$24.4 million) and unsecured bonds of approximately RMB175.1 million (equivalent to approximately HK$207.6 million).

The Group’s secured bank borrowings of approximately RMB222.2 million (equivalent to approximately HK$252.5 million) as at 30 June 2018 consist of the term loans of approximately RMB106.9 million and the revolving loans of approximately RMB115.3 million borrowed from seven financial institutions in the PRC, which was secured by the Group’s property, plant and equipment, leasehold land and land use right and such borrowings were used for general working capital of fabrics business in the PRC. As at the date of this announcement, the outstanding principal and interest for the said secured bank borrowings are approximately RMB213.1 million (equivalent to approximately HK$242.2 million) and approximately RMB7.1 million (equivalent to approximately HK$8.1 million) respectively, and repayable on demand. The Group’s unsecured bank borrowings of

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approximately RMB21.5 million (equivalent to approximately HK$24.4 million) as at 30 June 2018 were the revolving loans borrowed from two local banks in the PRC and such borrowings were used for general working capital of fabrics business in the PRC. As at the date of this announcement, the outstanding principal and interest for the said unsecured bank borrowings are approximately RMB21.5 million (equivalent to approximately HK$24.4 million) and approximately RMB0.7 million (equivalent to approximately HK$0.8 million) respectively, and repayable on demand.

The Company has negotiated with local banks in the PRC for the repayment schedule and the Group intends to use its internal resource in the PRC for the repayment of secured bank borrowings and unsecured bank borrowings. Set out below is the agreed repayment schedule of the outstanding amount for the bank borrowings as at 31 October 2018:

Repayment within 3 months Repayment over 3 months and within 6 months Repayment over 6 months and within 9 months Repayment over 9 months and within 12 months Repayment over 12 months and within 2 years Repayment over 2 years and within 5 years Total	HK$’000 10,568.8 6,022.7 6,022.7 6,022.7 104,204.5 134,846.5
	267,687.9

As at 30 June 2018, the Group had approximately RMB28.6 million of bank and cash balance. The Directors consider that the Group’s existing cash together with the cash generated from the Group’s operation in the PRC is sufficient to meet the repayment schedule for the bank borrowings in the next 12 months and therefore it is not necessary to allocate the proceeds of the Placing for repayment of bank borrowings.

As at 30 June 2018, the Group’s short term unsecured bonds of approximately RMB175.1 million (equivalent to approximately HK$207.6 million) in aggregate which was issued to one corporate bondholder and 57 individual bondholders and the proceeds of such bonds were used for general working capital in Hong Kong. As at the date of this announcement, the outstanding principal and interest for such unsecured bonds are approximately HK$143.0 million (out of which approximately of HK$32.0 million had already been due and approximately of HK$111.0 million will be due within the next 12 months) and approximately HK$1.5 million respectively. As at the date of maturity of these bonds, it is expected that the total outstanding principal and interest will be approximately HK$143.0 million and approximately HK$6.1 million respectively. The said outstanding amount includes the outstanding amount of approximately HK$92.6 million under the settlement deed (the “ Settlement Deed ”) in respect of a bond as mentioned in the Company’s announcement of 19 April 2018, which the final instalment will be on 29 June 2019 and the outstanding amount as at the date of this announcement is approximately

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LETTER FROM THE BOARD

HK$72.0 million. Set out below is the repayment schedule of the outstanding amount for the short term unsecured bonds as at 31 October 2018:

Overdue Repayment within 3 months Repayment over 3 months and within 6 months Repayment over 6 months and within 9 months Repayment over 9 months and within 12 months Total	HK$’000 32,000 39,950 43,680 33,280 150
	149,060

The Company expects the funding needs for the next 12 months will be approximately HK$160.0 million, which mainly comprises (i) repayment of short term unsecured bonds and relevant interests of approximately HK$149.1 million and (ii) general working capital of the Group in Hong Kong of approximately HK$10.9 million. The funding needs of the Group for the next 12 months is proposed to be satisfied by (i) issue of bonds of approximately HK$65.2 million and (ii) net proceeds from the placing of the Convertible Bonds of approximately HK$94.8 million. The Company plans to issue the bonds from time to time and it is expected the Company can issue the bonds of approximately HK$65.2 million by 30 June 2019. Such proceeds will mainly be used for settlement of the part of the unsecured bonds which is not settled by the proceeds of the Placing.

After the completion of the Placing, the proceeds for the Placing will be utilised for (i) settlement of the overdue unsecured short term bonds of approximately HK$32.0 million immediately after the completion of the Placing and (ii) settlement of the part of the unsecured bonds of approximately HK$51.9 million at the maturity dates of the bonds (including the remaining balance of approximately HK$40.0 million due under the Settlement Deed) ((i) and (ii) are collectively defined as “ Repayment Bonds ”) and (iii) general working capital purpose in respect of the remaining proceeds of HK$10.9 million, out of which approximately HK$3.5 million will be used for salaries expenses (including directors’ emoluments), approximately HK$2.1 million will be used for rental expenses in Hong Kong premises and approximately HK$5.3 million will be used for legal and professional expenses and other administrative expenses.

The proceeds will not be allocated to the repayment of other borrowings. It is expected that the completion date of the Placing will be in March 2019 and the Company had successfully negotiated with the bondholder of the bond which is overdue as at the date hereof for the repayment after the completion of the Placing.

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LETTER FROM THE BOARD

Reasons for the Placing

The Company is an investment holding company and its subsidiaries are principally engaged in the design, manufacturing and sales of fabrics and yarns and trading of polyetherimide.

The Directors are of the view that the Placing represents a good opportunity to raise additional funds for the Company. The Placing will provide immediate funding without immediate dilution of the shareholding of the existing Shareholders, and, on exercise of the conversion rights attaching to the Convertible Bonds, benefit the long-term development of the Company by broadening the capital base of the Company.

As disclosed in the interim report of the Company for the six months ended 30 June 2018, the Group recorded a net loss of approximately RMB62.9 million (equivalent to approximately HK$71.5 million) for such year. As at 30 June 2018, the Group also recorded (i) total debts of approximately RMB798.1 million (equivalent to approximately HK$906.9 million) of which approximately RMB418.8 million (equivalent to approximately HK$475.9 million) was short-term borrowings being repayable on demand or due within one year; (ii) bank and cash balances of approximately RMB28.6 million (equivalent to approximately HK$32.5 million); and (iii) net liabilities of approximately RMB166.1 million (equivalent to approximately HK$188.7 million). As further disclosed in the Company’s annual report for the year ended 31 December 2017, and with reference to the announcements of the Company dated 8 March 2018, 9 March 2018, 19 April 2018, and 24 May 2018, the Company received a petition in March 2018 claiming for the repayment of a bond with outstanding amount of approximately HK$92.6 million. Such petition was subsequently withdrawn in May 2018 after the Group and the petitory agreed with a new settlement schedule. Therefore, the Group intends to apply the net proceeds from the Placing to repay the existing debt and as its general working capital.

As at 30 September 2018, the interest rate for the outstanding short-term unsecured bond (including the Repayment Bonds) was with the range from 2% to 17% with the weighted average interest rate of approximately 11.75%, whereas the average interest rate of the Repayment Bonds is approximately 12% per annum.

In addition, the Directors considered that the Placing is in the interest of the Company and the Shareholders as a whole and the Placing represents a good opportunity to raise additional funds for the Company, given that (i) the average interest rate of the Repayment Bonds is approximately 12% per annum and therefore the interest for Convertible Bonds is lower than the interest for the aforementioned bonds to be repaid; (ii) in the event that the Convertible Bonds are converted into Shares, the Company can improve its indebtedness position; and (iii) the Placing will provide immediate funding without immediate dilution of the shareholding of the existing Shareholders and, on exercise of the conversion rights attaching to the Convertible Bonds, benefit the long-term development of the Company by broadening the capital base of the Company. The Directors also consider that there is positive impact for the financial position or liabilities position of the Company, as (i) most

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LETTER FROM THE BOARD

of the proceeds of the Placing will be used for repayment of short term unsecured bonds such that such short term indebtedness will become long term indebtedness and improve net current liabilities position of the Company; and (ii) the interest costs will be lower than the interest for the aforementioned bonds to be repaid. In addition to the difference in the interest rates and the conversion rights attaching to the Convertible Bonds, the main difference for the terms and conditions between the Convertible Bonds and the Repayment Bonds is that the Repayment Bonds are due within 12 months from issue whereas the Convertible Bonds are due on the 24 months from the date of issue. Both Repayment Bond and the Convertible Bonds are unsecured. In view of this, the Directors consider that the repayment of the Repayment Bonds by the proceeds of the Placing is in the interest of the Company and the shareholders. The Directors have conducted research through reviewing companies listed on the Stock Exchange which announced issue and amend terms of convertible bonds to independent third parties for a term between one to three years (excluding those issue as consideration for acquisition), during the period between 1 August 2018 and the date of the Placing Agreement, being an approximate three-month period, details of which are set out below:

						Premium/	Premium/
						(discount)	(discount)
						of	of
						conversion	conversion
						price	price
						over/to	over/to
					Premium/	average	average
					(discount)	closing	closing
					of	price of	price of
					conversion	five	ten
					price	trading	trading
					over/to	days up	days up
					closing	to and	to and
					price on	including	including
				Annual	the last	the last	the last
Date of			Principal	interest	trading	trading	trading
announcement	**Term **	Company name	amount	rate	day	day	day
			(Approx.
			HK$	(%)	(%)	(%)	(%)
Month/Date/Year	(years)		million)	(approx.)	(approx.)	(approx.)	(approx.)
10/29/2018	3	Asia Investment Finance	50.0	5.00	51.50	61.30	61.03
		Group Limited
10/29/2018	2	Heng Tai Consumables	80.0	8.00	(51.68)	(51.60)	(52.98)
		Group Limited
9/28/2018	3	Freeman Fintech	429.2	7.00	(17.72)	(19.15)	(19.55)
		Corporation Limited

– 33 –

LETTER FROM THE BOARD

						Premium/	Premium/
						(discount)	(discount)
						of	of
						conversion	conversion
						price	price
						over/to	over/to
					Premium/	average	average
					(discount)	closing	closing
					of	price of	price of
					conversion	five	ten
					price	trading	trading
					over/to	days up	days up
					closing	to and	to and
					price on	including	including
				Annual	the last	the last	the last
Date of			Principal	interest	trading	trading	trading
announcement	**Term **	Company name	amount	rate	day	day	day
			(Approx.
			HK$	(%)	(%)	(%)	(%)
Month/Date/Year	(years)		million)	(approx.)	(approx.)	(approx.)	(approx.)
10/18/2018	3	Freeman Fintech	772.2	4.00	38.30	41.30	12.26
		Corporation Limited
9/4/2018	3	Asia Energy Logistics	46.0	2.50	2.42	0.00	1.08
		Group Ltd
11/7/2018	1	LongiTech Smart Energy	195.4	3.50	17.65	16.65	16.71
		Holding Limited
8/31/2018	3	China Shanshui Cement	2,501.5	20.00	0.00	1.75	6.63
		Group Limited
10/12/2018	3	China Singyes Solar	37.8	12.00	20.00	14.90	13.30
		Technologies Holdings
		Limited
10/24/2018	1	Prosperity International	30.0	8.00	17.65	15.83	12.15
		Holdings (H.K.) Limited
9/2/2018	3	Lamtex Holdings Ltd	648.0	4.00	1.89	6.72	7.57
10/19/2018	3	Ozner Water International	230.0	6.80	10.33	10.57	11.72
		Holding Limited
10/30/2018	3	Ozner Water International	215.0	6.80	13.41	13.41	11.42
		Holding Ltd
9/28/2018	3	Huarong Investment Stock	437.0	7.00	(83.30)	(83.50)	(83.50)
		Corporation Limited
10/9/2018	1	Tempus Holdings Limited	30.0	7.00	14.95	0.00	1.03
10/29/2018	2	Global Mastermind	80.0	8.00	15.00	15.50	12.30
		Holdings Limited

– 34 –

LETTER FROM THE BOARD

						Premium/	Premium/
						(discount)	(discount)
						of	of
						conversion	conversion
						price	price
						over/to	over/to
					Premium/	average	average
					(discount)	closing	closing
					of	price of	price of
					conversion	five	ten
					price	trading	trading
					over/to	days up	days up
					closing	to and	to and
					price on	including	including
				Annual	the last	the last	the last
Date of			Principal	interest	trading	trading	trading
announcement	**Term **	Company name	amount	rate	day	day	day
			(Approx.
			HK$	(%)	(%)	(%)	(%)
Month/Date/Year	(years)		million)	(approx.)	(approx.)	(approx.)	(approx.)
8/17/2018	1	Trillion Grand Corporate	45.0	4.00	2.11	2.65	(0.26)
		Company Limited
10/25/2018	2	Code Agriculture Holdings	130.0	8.00	(39.02)	(40.76)	(42.59)
		Ltd
		Average		7.15	0.79	0.33	(1.86)
		Median		7.00	10.33	6.72	7.57
		Convertible Bonds		8.00	(20.00)	(18.20)	(21.70)

Although the interest rate for the Convertible Bonds is a little bit higher than the average and median interest rate for the above comparable transactions and the discount of Conversion Price is higher than the average or median discount of conversion price for the above transactions, the Directors are of the view that the Conversion Price and interest rate of the Convertible Bonds are fair and reasonable and in the interest of the Company and Shareholders as a whole for the following reasons:

1. The Company has approached and negotiated with a number of potential placing agents to seek the best terms available for the issue of the convertible bonds before the Company entered into the Placing Agreement and noted that the terms of the Convertible Bonds are the best terms available at this moment. Given that the Company has net liabilities since 31 December 2016 and the auditor expressed disclaimer of opinion for the financial statement for 31 December 2017, the Company has a relatively lower bargaining power to negotiate the terms and conditions for the fund raising.

– 35 –

LETTER FROM THE BOARD

1. The interest rate of the Convertible Bonds falls within the range of the above comparable transactions and the Conversion Price over the closing price of the Adjusted Shares falls within the range of the above comparable transactions.

2. In determining the conversion price of the Convertible Bonds, the Board also took into account that both the share price and the trading volume movement of the Shares of the Company are generally on a downward trend for the three months preceding the date of the Placing Agreement. The weighted average price of the Shares for the three months preceding the date of the Placing Agreement was HK$0.089, whereas the weighted average price of the Shares for the one month preceding the date of the Placing Agreement decreased to HK$0.047. In view of the overall market sentiment and the recent downward performance of the price of the Shares, the Directors are not confident for the share price of the Company in the short run. With benefit of hindsight, the Directors noted that the closing price of Shares dropped further from HK$0.045 per Share on the date of the Placing Agreement to HK$0.039 per Share on the Latest Practicable Date. Set out below is the chart showing the share price and the trading volume movement of the Shares for the three months preceding the date of the Placing Agreement:

==> picture [378 x 242] intentionally omitted <==

----- Start of picture text -----

Stock price and trading volume
Stock price Trading volume
(in HK$) (Existing Shares)
0.140 120,000,000
0.120
100,000,000
0.100
Stock price 80,000,000
0.080
60,000,000
0.060
40,000,000
0.040
Trading volume
0.020 20,000,000
0.000 0
2018/08/13 2018/08/16 2018/08/21 2018/08/24 2018/08/29 2018/09/03 2018/09/06 2018/09/11 2018/09/14 2018/09/19 2018/09/24 2018/09/28 2018/10/04 2018/10/09 2018/10/12 2018/10/18 2018/10/23 2018/10/26 2018/10/31 2018/11/05 2018/11/08 2018/11/12
----- End of picture text -----

1. The Company has imminent short-term cash requirements to repay the indebtedness which will be due shortly and as general working capital, details of which are set out in this circular.

– 36 –

LETTER FROM THE BOARD

The Company has considered a number of funds raising alternatives including bank borrowings, placing of new Shares and rights issue.

The Company has approached a number of banks in attempt to obtain bank borrowings to redeem and repay the outstanding liabilities. However, following various discussions among the banks and after the banks have reviewed the recent published financial statements of the Company, they rejected to advance bank borrowings to the Company mainly because (i) the Group has no active operating subsidiary in Hong Kong; (ii) the Group was loss making for the year ended 31 December 2017; and (iii) the Group has no asset in Hong Kong for pledge as security.

The Company has approached a number of financial institutions regarding the feasibility of the placing of Shares but as at the date of this announcement, the Company cannot agree on the terms of placing of the Shares which the Directors consider to be in the interest of the Company and the Shareholders as a whole. Further, the placing of Shares will lead to immediate dilution in shareholding interest of existing Shareholders without offering them the opportunity to participate in the enlargement of the capital base of the Company.

The Directors also considered the feasibility of the rights issue. The Company has negotiated with a number of the prospective underwriters for the proposed right issue but the Company has not yet been able to reach a consensus for the terms for the right issue as at the Latest Practicable Date.

As such, the Directors are of the view that the terms of the Placing Agreement, which were arrived at after arm’s length negotiations between the Company and the Placing Agent, are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 37 –

LETTER FROM THE BOARD

Effect of the Placing on the shareholding structure of the Company

Assuming that other than the Capital Reorganisation, there is no change in the share capital of the Company from the Latest Practicable Date up to the Placing Completion, the shareholding structure of the Company (a) as at the Latest Practicable Date (assuming the Capital Reorganisation has become effective); and (b) as a result of full conversion of the Convertible Bonds at the initial Conversion Price (assuming the Capital Reorganisation has become effective) are as follows:

Merit Lead Investments Limited (Note) Lin Qingxiong Qiu Zhiqiang Placee(s) Public Shareholders Total	As at the Latest Practicable Date No. of Adjusted Shares Approximate per cent. 27,960,000 15.03 1,084,000 0.58 12,684,000 6.82 – – 144,272,000 77.57 186,000,000 100.00	Immediately after Placing Completion No. of Adjusted Shares Approximate per cent. 27,960,000 6.03 1,084,000 0.23 12,684,000 2.74 277,777,777 59.89 144,272,000 31.11 463,777,777 100.00	Immediately after Placing Completion No. of Adjusted Shares Approximate per cent. 27,960,000 6.03 1,084,000 0.23 12,684,000 2.74 277,777,777 59.89 144,272,000 31.11 463,777,777 100.00
			100.00

Note: 27,960,000 Adjusted Shares (assuming the Capital Reorganisation has become effective) were beneficially owned by Merit Lead Investments Limited, which is solely owned by Mr. Lin Qingxiong, an executive Director. Therefore, Mr. Lin Qingxiong is deemed or taken to be interested in all the Adjusted Shares beneficially owned by Merit Lead Investments Limited by virtue of the Securities and Futures Ordinance.

– 38 –

LETTER FROM THE BOARD

Fund raising activities of the Company during the past twelve months

Save as disclosed below, the Company has not undertaken any equity fund raising activities in the past twelve months immediately preceding the date of the CB Announcement:

Date of		Net proceeds	Intended use
announcement	Event	received	of proceeds	Actual use of proceeds
17 May 2018	Placing of	Approximately	General	Approximately HK$4.9
	Shares under	HK$30.528	working	million was used for
	general	million	capital	salaries expenses,
	mandate			rental expenses, legal
				and professional
				expense and other
				administrative
				expenses and of
				approximately
				HK$25.6 million was
				used for repayment
				of debts.

6. EGM

A notice convening the EGM to be held at Suites 903–905, 9th Floor, Shun On Centre, 6–8 Harbour Road, Wanchai, Hong Kong at 10:00 a.m. on Monday, 7 January 2019 is set forth on pages 67 to 71 of this circular.

To the best of the knowledge, information and belief of the Directors, no Shareholder has a material interest in the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-laws, the Cancellation of Share Premium Account, the Capital Reorganisation and the transactions contemplated under the Placing Agreement. Accordingly, no Shareholder would be required to abstain from voting on the resolutions to approve the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-laws, the Cancellation of Share Premium Account, the Capital Reorganisation, the Placing Agreement and the transactions contemplated thereunder at the EGM.

A form of proxy for use at the meeting is enclosed. Whether or not you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as practicable and in any event not less than 48 hours before the time fixed (i.e. Saturday 5 January 2019) for holding the extraordinary general meeting (or any adjournment thereof) to the office of the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from

– 39 –

LETTER FROM THE BOARD

attending and voting in person at the extraordinary general meeting or any adjourned meeting if you so wish and in such event, the instrument appointing a 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 except where the chairman of the general meeting, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted by a show of hands. Accordingly, each of the resolutions as put to vote at the EGM will be taken by way of poll.

7. CLOSURE OF BOOKS

The register of members of the Company will be closed from Wednesday, 2 January 2019 to Monday, 7 January 2019 (both days inclusive) during which period no transfer of Shares of the Company will be registered. In order to be qualified to attend and vote at the above meeting, all properly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Monday, 31 December 2018.

8. 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 regards 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.

9. RECOMMENDATION

The Directors consider that the Change of Domicile, the Adoption of New Memorandum of Continuance and New Bye-laws, the Cancellation of Share Premium Account, the Capital Reorganisation, the Placing Agreement and the transactions contemplated thereunder are in the best interests of the Company and the Shareholders as a whole and therefore recommend the Shareholders to vote in favor of the relevant resolutions to be proposed at the EGM as set out in the notice of the EGM at the end of this circular.

By order of the Board Moody Technology Holdings Limited Li Jia Yin

Acting Chairlady and Executive Director

– 40 –

APPENDIX

SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

Set out below is a summary of the provisions of the New Memorandum of Continuance and the New Bye-laws which will become effective upon continuation of the Company in Bermuda and their differences with the Memorandum and the Articles.

1. THE MEMORANDUM AND THE NEW MEMORANDUM OF CONTINUANCE

The Memorandum states, inter alia , that the liability of each member of the Company is limited to the amount from time to time unpaid on such member’s shares, that the objects for which the Company is established are unrestricted and that the Company shall have and be capable of exercising all the functions of a natural person of full capacity, irrespective of any question of corporate benefit provided that the Company shall only carry on the businesses for which a licence is required under the laws of the Cayman Islands when so licensed under the terms of such laws.

Upon continuance of the Company in Bermuda, the Company will adopt the New Memorandum of Continuance which, upon filing with and registration by the Bermuda Registrar, will in effect be the Company’s new memorandum of association. The New Memorandum of Continuance states, inter alia , that the liability of members of the Company is limited to the amount, if any, for the time being unpaid on the shares respectively held by them and that the Company is an exempted company as defined in the Companies Act. The New Memorandum of Continuance also sets out the objects of the Company from the date of continuance are unrestricted and that the Company has the capacity, rights, powers and privileges of a natural person. As an exempted company, the Company will be carrying on business outside Bermuda.

In accordance with and subject to section 42A of the Companies Act, the New Memorandum of Continuance empowers the Company to purchase its own shares and pursuant to its New Bye-laws, this power is exercisable by the Board upon such terms and subject to such conditions as it thinks fit.

2. THE ARTICLES AND THE NEW BYE-LAWS

(a) Directors

(i) Power to allot and issue shares and warrants

Summary

Subject to the Companies Act, the New Memorandum of Continuance and the New Bye-laws and any special rights conferred on the holders of any shares or class of shares, any share in the Company (whether forming part of the present capital or not) may be issued with or have attached thereto such rights, or such restrictions, whether with regard to dividend, voting, return of capital, or otherwise, as the Company may by ordinary resolution determine or, if there has

– 41 –

APPENDIX

SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

not been any such determination or so far as the same shall not make specific provision, as the Board may determine. Subject to the Companies Act, the New Memorandum of Continuance and the New Bye-laws and any special rights conferred on the holders of any shares or attaching to any class of shares, any preference shares may be issued or converted into shares that are liable to be redeemed at a determinable date or at the option of the Company or the holder, on such terms and in such manner as the Company before the issue or conversion may by ordinary resolution of the members of the Company determine. The Board may issue warrants conferring the right upon the holders thereof to subscribe for any class of shares or securities in the capital of the Company on such terms as it may from time to time determine.

Subject to the provisions of the Companies Act, the New Bye-laws, any direction that may be given by the Company in general meeting and, where applicable, the rules of any Designated Stock Exchange (as defined in the New Bye-laws) and without prejudice to any special rights or restrictions for the time being attached to any shares or any class of shares, the unissued shares in the Company (whether forming part of the original or any increased capital) shall be at the disposal of the Board, which may offer, allot, grant options over or otherwise dispose of them to such persons, at such times, for such consideration and upon such terms and conditions as the Board may in its absolute discretion determine, but so that no shares shall be issued at a discount.

Neither the Company nor the Board shall be obliged, when making or granting any allotment of, offer of, option over or disposal of shares, to make, or make available, any such allotment, offer, option or shares to members of the Company or others with registered addresses in any particular territory or territories being a territory or territories where, in the absence of a registration statement or other special formalities, this would or might, in the opinion of the Board, be unlawful or impracticable. Members affected as a result of the foregoing sentence shall not be, or be deemed to be, a separate class of members for any purpose whatsoever.

Material differences

The Articles contain substantially the same provisions.

(ii) Power to dispose of the assets of the Company or any of its subsidiaries

Summary

There are no specific provisions in the New Bye-laws relating to the disposal of the assets of the Company or any of its subsidiaries.

– 42 –

APPENDIX

SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

Note: The Directors may, however, exercise all powers and do all acts and things which may be exercised or done or approved by the Company and which are not required by the New Bye-laws or the laws of Bermuda to be exercised or done by the Company in general meeting.

Material differences

The Articles do not contain any prohibition or restriction on the disposal of the assets of the Company or any of its subsidiaries.

(iii) Compensation or payments for loss of office

Summary

Payments to any Director or past Director of any sum by way of compensation for loss of office or as consideration for or in connection with his retirement from office (not being a payment to which the Director is contractually entitled) must be approved by the Company in general meeting.

Material differences

The Articles contain the same provision.

(iv) Loans and provision of security for loans to Directors

Summary

There are no provisions in the New Bye-laws relating to the making of loans to Directors. However, the Companies Act contains restrictions on companies making loans or providing security for loans to their directors.

Material differences

There are provisions in the Articles prohibiting the making of a loan, directly or indirectly, to a Director or his close associate(s) if and to the extent it would be prohibited by the Companies Ordinance (Chapter 622 of the laws of Hong Kong) if the Company were a company incorporated in Hong Kong.

(v) Financial assistance to purchase shares of the Company

Summary

Subject to compliance with the rules and regulations of the Designated Stock Exchange (as defined in the New Bye-laws) and any other relevant

– 43 –

SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

APPENDIX

regulatory authority, the Company may give financial assistance for the purpose of or in connection with a purchase made or to be made by any person of any shares in the Company. Pursuant to such power, the Company may, for example, provide a guarantee in connection with a purchase of shares of the Company by a third party purchaser, provided that the directors of the Company may only exercise such power in compliance with applicable laws and regulations, and that the exercise of such power shall be for a proper purpose and in the best interest of the Company and shareholders as a whole.

Material differences

The Company is also empowered under the Articles to give financial assistance subject to compliance with the rules and regulations of the Designated Stock Exchange (as defined in the Articles) and any other relevant regulatory authority.

(vi) Disclosure of interests in contracts with the Company or any of its subsidiaries

Summary

A Director may hold any other office or place of profit with the Company (except that of auditor of the Company) in conjunction with his office of Director for such period and, subject to the Companies Act, upon such terms as the Board may determine, and may be paid such remuneration (whether by way of salary, commission, participation in profits or otherwise) in respect of any such other office or place of profit in addition to any remuneration provided for by or pursuant to any other New Bye-laws. A Director may be or become a director or other officer of, or a member of, any company promoted by the Company or any other company in which the Company may be interested as a vendor, shareholder or otherwise, and shall not be liable to account for any remuneration, profits or other benefits received by him as a director, officer or member of, or from his interest in, such other company. Subject as otherwise provided by the New Bye-laws, the Directors may exercise or cause to be exercised the voting powers conferred by the shares in any other company held or owned by the Company, or exercisable by them as directors of such other company in such manner in all respects as they think fit, including the exercise thereof in favour of any resolution appointing the Directors or any of them to be directors or officers of such other company, or voting or providing for the payment of remuneration to the directors or officers of such other company.

Subject to the Companies Act and to the New Bye-laws, no Director or proposed or intending Director shall be disqualified by his office from contracting with the Company, either with regard to his tenure of any office or

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place of profit or as vendor, purchaser or in any other manner whatsoever, nor shall any such contract or any other contract or arrangement in which any Director is in any way interested be liable to be avoided, nor shall any Director so contracting or being so interested be liable to account to the Company or the members of the Company for any remuneration, profit or other benefits realised by any such contract or arrangement by reason of such Director holding that office or the fiduciary relationship thereby established provided that such Director shall disclose the nature of his interest in any contract or arrangement in which he is interested in accordance with the New Bye-laws. A Director who to his knowledge is in any way, whether directly or indirectly, interested in a contract or arrangement or proposed contract or arrangement with the Company shall declare the nature of his interest at the meeting of the Board at which the question of entering into the contract or arrangement is first considered, if he knows his interest then exists, or in any other case at the first meeting of the Board after he knows that he is or has become so interested.

A Director shall not vote (nor be counted in the quorum) on any resolution of the Board approving any contract or arrangement or any other proposal in which he or any of his close associates (as defined in the New Bye-laws) is materially interested but this prohibition shall not apply to any of the following matters, namely:

• (aa) any contract or arrangement for the giving to such Director or his close associate(s) (as defined in the New Bye-laws) any security or indemnity in respect of money lent by him or any of his close associate(s) (as defined in the New Bye-laws) or obligations incurred or undertaken by him or any of his close associate(s) (as defined in the New Bye-laws) at the request of or for the benefit of the Company or any of its subsidiaries;

• (bb) any contract or arrangement for the giving of any security or indemnity to a third party in respect of a debt or obligation of the Company or any of its subsidiaries for which the Director or his close associate(s) (as defined in the New Bye-laws) has himself/themselves assumed responsibility in whole or in part whether alone or jointly under a guarantee or indemnity or by the giving of security;

• (cc) any contract or arrangement concerning an offer of shares or debentures or other securities of or by the Company or any other company which the Company may promote or be interested in for subscription or purchase, where the Director or his close associate(s) (as defined in the New Bye-laws) is/are or is/are to be interested as a participant in the underwriting or sub-underwriting of the offer;

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• (dd) any contract or arrangement in which the Director or his close associate(s) (as defined in the New Bye-laws) is/are interested in the same manner as other holders of shares or debentures or other securities of the Company by virtue only of his/their interest in shares or debentures or other securities of the Company; or

• (ee) any proposal or arrangement concerning the adoption, modification or operation of a share option scheme, a pension fund or retirement, death or disability benefits scheme or other arrangement which relates both to Directors, their close associate(s) (as defined in the New Bye-laws) and employees of the Company or of any of its subsidiaries and does not provide in respect of any Director, or his close associate(s) (as defined in the New Bye-laws), as such any privilege or advantage not accorded generally to the class of persons to which such scheme or fund relates.

Material differences

The Articles contain substantially the same provisions.

(vii) Remuneration

Summary

The ordinary remuneration of the Directors shall from time to time be determined by the Company in general meeting, and such remuneration (unless otherwise directed by the resolution by which it is voted) shall be divided amongst the Board in such proportions and in such manner as the Board may agree or, failing agreement, equally, except that any Director who shall hold office for part only of the period in respect of which such remuneration is payable shall be entitled only to rank in such division for a proportion of remuneration related to the period during which he has held office. The Directors shall also be entitled to be prepaid or repaid all travelling, hotel and incidental expenses reasonably incurred or expected to be incurred by them in attending any Board meetings, meetings of committees of the Board or general meetings or separate meetings of any class of shares or of debentures of the Company or otherwise in connection with the discharge of their duties as Directors.

Any Director who, by request, goes or resides abroad for any purpose of the Company or who performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine and such extra remuneration shall be in addition to or in

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substitution for any ordinary remuneration provided for by or pursuant to any other New Bye-laws.

A Director appointed to be a managing director, joint managing director, deputy managing director or to hold any other employment or other executive office of the Company shall receive such remuneration (whether by way of salary, commission or participation in profits or otherwise or by all or any of those modes) and such other benefits (including pension and/or gratuity and/or other benefits on retirement) and allowances as the Board may from time to time decide. Such remuneration may be either in addition to or in lieu of his remuneration as a Director.

The Board may establish or concur or join with other companies (being subsidiary companies of the Company or companies with which it is associated in business) in establishing and making contributions out of the Company’s monies to any schemes or funds for providing pensions, sickness or compassionate allowances, life assurance or other benefits for employees (which expression as used in this and the following paragraph shall include any Director or ex-Director who may hold or have held any executive office or any office of profit with the Company or any of its subsidiaries) and ex-employees of the Company and their dependants or any class or classes of such persons.

The Board may pay, enter into agreements to pay or make grants of revocable or irrevocable, and either subject or not subject to any terms or conditions, pensions or other benefits to employees and ex-employees and their dependants, or to any of such persons, including pensions or benefits additional to those, if any, to which such employees or ex-employees or their dependants are or may become entitled under any such scheme or fund as is mentioned in the previous paragraph. Any such pension or benefit may, as the Board considers desirable, be granted to an employee either before and in anticipation of, or upon, or at any time after, his actual retirement.

Material differences

The Articles contain substantially the same provisions.

(viii) Retirement, appointment and removal

Summary

At each annual general meeting, one-third of the Directors for the time being (or if their number is not a multiple of three (3), then the number nearest to but not less than one-third) will retire from office by rotation provided that

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every Director shall be subject to retirement at least once every three (3) years. The Directors to retire by rotation shall include (so far as necessary to ascertain the number of directors to retire by rotation) any Director who wishes to retire and not to offer himself for re-election. Any further Directors so to retire shall be those who have been longest in office since their last re-election or appointment but as between persons who became or were last reelected Directors on the same day those to retire will (unless they otherwise agree among themselves) be determined by lot.

Note: There are no provisions relating to retirement of Directors upon reaching any age limit.

The Directors shall have the power from time to time and at any time to appoint any person as a Director either to fill a casual vacancy on the Board or, subject to authorisation by the members of the Company in general meeting, as an addition to the existing Board but so that the number of Directors so appointed shall not exceed any maximum number determined from time to time by the members of the Company in general meeting. Any Director appointed by the Board to fill a casual vacancy shall hold office only until the first general meeting of members of the Company after his appointment and be subject to re-election at such meeting and any Director appointed by the Board as an addition to the existing Board shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election. Neither a Director nor an alternate Director is required to hold any shares in the Company by way of qualification.

A Director may be removed by an ordinary resolution of the Company before the expiration of his period of office (but without prejudice to any claim which such Director may have for damages under any agreement between him and the Company) provided that the notice of any such meeting convened for the purpose of removing a Director shall contain a statement of the intention to do so and be served on such Director fourteen (14) days before the meeting and, at such meeting, such Director shall be entitled to be heard on the motion for his removal. Unless otherwise determined by the Company in general meeting, the number of Directors shall not be less than two (2). There is no maximum number of Directors unless otherwise determined from time to time by members of the Company in general meeting.

The Board may from time to time appoint one or more of its body to be managing director, joint managing director, or deputy managing director or to hold any other employment or executive office with the Company for such period (subject to their continuance as Directors) and upon such terms as the Board may determine and the Board may revoke or terminate any of such appointments (but without prejudice to any claim for damages that such Director may have against

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the Company or vice versa). The Board may delegate any of its powers, authorities and discretions to committees consisting of such Director or Directors and other persons as the Board thinks fit, and it may from time to time revoke such delegation or revoke the appointment of and discharge any such committees either wholly or in part, and either as to persons or purposes. Any committee so formed shall, in the exercise of the powers, authorities and discretions so delegated, conform to any regulations that may from time to time be imposed upon it by the Board.

Material differences

The Articles contain similar provision relating to the rotation of Directors at least once every three years. Any person appointed by the Board as a Director (whether to fill a casual vacancy or as an addition to the Board) shall hold office until the next following annual general meeting. There is no requirement to serve any notice on the Director who will be removed nor is there any provision allowing such Director to be heard on the motion for his removal as these are requirements under the Companies Act only. There is also no provision requiring Shareholders’ approval in case of appointment of a person as an addition to the existing Board.

(ix) Disqualification

Summary

The office of a Director shall be vacated if the Director: (i) resigns his office by notice in writing delivered to the Company at the registered office of the Company or tendered at a meeting of the Board; (ii) becomes of unsound mind or dies; (iii) without special leave of absence from the Board, is absent from meetings of the Board for six (6) consecutive months, and his alternate Director, if any, shall not during such period have attended in his stead and the Board resolves that his office be vacated; (iv) becomes bankrupt or has a receiving order made against him or suspends payment or compounds with his creditors; (v) is prohibited by law from being a Director; or (vi) ceases to be a Director by virtue of any provision of the Statutes (as defined in the New Bye-laws) or is removed from office pursuant to the New Bye-laws.

Material differences

The Articles contain the same provisions relating to disqualification of Directors.

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(x) Borrowing powers

Summary

The Board may from time to time at its discretion exercise all the powers of the Company to raise or borrow money, to mortgage or charge all or any part of the undertaking, property and assets (present and future) and uncalled capital of the Company and, subject to the Companies Act, to issue debentures, bonds and other securities of the Company, whether outright or as collateral security for any debt, liability or obligation of the Company or of any third party.

Note: These provisions, in common with the New Bye-laws in general, can be varied with the sanction of a special resolution of the Company.

Material differences

The Articles contain substantially the same provision.

(xi) Quorum of meetings

Summary

The quorum necessary for the transaction of the business of the Board may be fixed by the Board and, unless so fixed at any other number, shall be two (2). An alternate Director shall be counted in a quorum in the case of the absence of a Director for whom he is the alternate provided that he shall not be counted more than once for the purpose of determining whether or not a quorum is present.

Material differences

The Articles contain the same provision.

(b) Alterations to constitutional documents

Summary

The New Bye-laws may be rescinded, altered or amended by the Directors subject to the approval by a resolution of the Directors and the confirmation by a special resolution of the members of the Company. The New Bye-laws state that a special resolution shall be required to alter the provisions of the New Memorandum of Continuance or to change the name of the Company.

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Material differences

Under the Articles, any alteration to the Memorandum and the Articles requires the sanction of a special resolution of the Company.

(c) Alteration of capital

Summary

The Company may from time to time by ordinary resolution in accordance with the relevant provisions of the Companies Act:

• (i) increase its capital by such sum, to be divided into shares of such amounts as the resolution shall prescribe;

• (ii) consolidate and divide all or any of its capital into shares of larger amount than its existing shares;

• (iii) divide its shares into several classes and without prejudice to any special rights previously conferred on the holders of existing shares attach thereto any preferential, deferred, qualified or special rights, privileges, conditions or restrictions which, in the absence of any such determination by the Company in general meeting, as the Directors may determine;

• (iv) sub-divide its shares or any of them into shares of smaller amount than is fixed by the New Memorandum of Continuance (subject, nevertheless, to the Companies Act), and may by such resolution determine that, as between the holders of the shares resulting from such sub-division, one or more of the shares may have any such preferred rights or be subject to any such restrictions as compared with the other or others as the Company has power to attach to unissued or new shares;

• (v) change the currency denomination of its share capital;

• (vi) make provision for the issue and allotment of shares which do not carry any voting rights; and

• (vii) cancel any shares which, at the date of passing of the resolution, have not been taken, or agreed to be taken, by any person, and diminish the amount of its capital by the amount of the shares so cancelled.

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The Company may, by special resolution, subject to any confirmation or consent required by law, reduce its authorised or issued share capital or, save for the use of share premium as expressly permitted by the Companies Act, any share premium account or other undistributable reserve.

Material differences

The Articles contain similar provisions save and except that there is no express provision in the Articles authorising the Company to do (v) or (vi) by way of ordinary resolution. However, it does not necessarily mean that the Company may not do (v) or (vi) as the Directors have general power under the Articles to do all such acts and things that are not by the Articles or by the Companies Law required to be exercised or done in general meeting. The Articles also similarly provide that the Company may also by special resolution reduce its share capital or any capital redemption reserve or other undistributable reserve.

(d) Variation of rights of existing shares or classes of shares

Summary

Subject to the Companies Act, all or any of the special rights attached to the shares or any class of shares may (unless otherwise provided for by the terms of issue of that class) be varied, modified or abrogated either with the consent in writing of the holders of not less than three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a separate general meeting of the holders of the shares of that class. To every such separate general meeting the provisions of the New Bye-laws relating to general meetings will mutatis mutandis apply, but so that (i) the necessary quorum (other than at an adjourned meeting) shall be two (2) persons (or in the case of a member of the Company being a corporation, its duly authorised representative) holding or representing by proxy not less than one-third in nominal value of the issued shares of that class and at any adjourned meeting two (2) holders present in person or (in the case of a member of the Company being a corporation) its duly authorised representative or by proxy (whatever the number of shares held by them) shall be a quorum; and (ii) every holder of shares of the class shall be entitled to one (1) vote for every such share held by him.

Material differences

The Articles contain substantially the same provisions.

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(e) Special resolution–majority required

Summary

A special resolution of the Company must be passed by a majority of not less than three-fourths of the votes cast by such members of the Company as, being entitled so to do, vote in person or, in the case of such members of the Company as are corporations, by their respective duly authorised representatives or, where proxies are allowed, by proxy at a general meeting of which notice of not less than fourteen (14) clear days and not less than ten (10) clear business days has been duly given. Provided that if permitted by the Designated Stock Exchange (as defined in the New Bye-laws), except in the case of an annual general meeting, if it is so agreed by a majority in number of the members of the Company having the right to attend and vote at such meeting, being a majority together representing not less than ninety-five per cent. (95%) of the total voting rights at the meeting of all members of the Company and, in the case of an annual general meeting, if so agreed by all members of the Company entitled to attend and vote thereat, a resolution may be proposed and passed as a special resolution at a meeting of which notice of less than fourteen (14) clear days and less than ten (10) clear business days has been given.

Material differences

The definition of special resolution under the Articles is similar save and except that the notice period for passing special resolution is twenty-one (21) clear days and in case of general meeting other than annual general meeting, the notice period can be shortened if it is agreed by a majority in number of the members of the Company having the right to attend and vote at such meeting, being a majority together holding not less than ninety-five per cent. (95%) in nominal value of the issued shares giving that right.

(f) Voting rights

Summary

Subject to any special rights or restrictions as to voting for the time being attached to any shares by or in accordance with the New Bye-laws, at any general meeting on a poll every member of the Company present in person or by proxy or (being a corporation) by its duly authorised representative shall have one (1) vote for every fully paid share of which he is the holder but so that no amount paid up or credited as paid up on a share in advance of calls or installments is treated for the foregoing purposes as paid up on the share.

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At any general meeting, a resolution put to the vote of the meeting is to be decided by way of a poll save that the chairman of the meeting may in good faith, allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands.

If a recognised clearing house (or its nominee(s)) is a member of the Company it may authorise such persons as it thinks fit to act as its representative(s) at any meeting of the Company or at any meeting of any class of members of the Company provided that the authorisation shall specify the number and class of shares in respect of which each such representative is so authorised. Each person authorised pursuant to this provision shall be deemed to have been duly authorised without further evidence of the facts and be entitled to exercise the same rights and powers on behalf of the recognised clearing house (or its nominee(s)) as if such person was the registered holder of the shares held by that clearing house (or its nominee(s)) in respect of the number and class of shares specified in the relevant authorisation including, where a show of hands is allowed, the right to vote individually on a show of hands.

Where the Company has any knowledge that any Shareholder is, under the rules of the Designated Stock Exchange (as defined in the New Bye-laws), required to abstain from voting on any particular resolution of the Company or restricted to voting only for or only against any particular resolution of the Company, any votes cast by or on behalf of such Shareholder in contravention of such requirement or restriction shall not be counted.

Material differences

The Articles contain substantially the same provisions.

(g) Requirements for annual general meetings

Summary

An annual general meeting of the Company must be held in each year other than the year in which its statutory meeting is convened at such time (within a period of not more than fifteen (15) months after the holding of the last preceding annual general meeting unless a longer period would not infringe the rules of any Designated Stock Exchange (as defined in the New Bye-laws), if any) and place as may be determined by the Board.

Material differences

Similarly, the Company must hold a general meeting as its annual general meeting in each year and not more than fifteen (15) months (unless a longer period

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would not infringe the rules of the Designated Stock Exchange (as defined in the Articles)) shall elapse between the date of one annual general meeting and the next.

(h) Accounts and audit

Summary

The Board shall cause true accounts to be kept of the sums of money received and expended by the Company, and the matters in respect of which such receipt and expenditure take place, and of the property, assets, credits and liabilities of the Company and of all other matters required by the provisions of the Companies Act or necessary to give a true and fair view of the Company’s affairs and to explain its transactions.

The accounting records shall be kept at the registered office of the Company or, subject to the Companies Act, at such other place or places as the Board decides and shall always be open to inspection by any Director. No member of the Company (other than a Director) shall have any right of inspecting any accounting record or book or document of the Company except as conferred by law or authorised by the Board or the Company in general meeting.

Subject to the Companies Act and the New Bye-laws, a printed copy of the Directors’ report, accompanied by the balance sheet and profit and loss account, including every document required by law to be annexed thereto, made up to the end of the applicable financial year and containing a summary of the assets and liabilities of the Company under convenient heads and a statement of income and expenditure, together with a copy of the auditors’ report, shall be sent to each person entitled thereto at least twenty-one (21) days before the date of the general meeting and at the same time as the notice of annual general meeting and laid before the members at the annual general meeting in accordance with the requirements of the Companies Act provided that this provision shall not require a copy of those documents to be sent to any person whose address the Company is not aware of or to more than one of the joint holders of any shares or debentures; however, to the extent permitted by and subject to due compliance with all applicable laws, including, without limitation, the rules of the Designated Stock Exchange (as defined in the New Bye-laws), the Company may send to such persons summarised financial statements derived from the Company’s annual accounts and the Directors’ report instead provided that any such person may by notice in writing served on the Company, demand that the Company sends to him, in addition to summarised financial statements, a complete printed copy of the Company’s annual financial statement and the Directors’ report thereon.

Subject to the Companies Act, at the annual general meeting or at a subsequent special general meeting in each year, the members of the Company shall appoint an

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auditor to audit the accounts of the Company and such auditor shall hold office until the members of the Company appoint another auditor. Such auditor may be a member of the Company but no Director or officer or employee of the Company shall, during his continuance in office, be eligible to act as an auditor of the Company. The remuneration of the auditor shall be fixed by the Company in general meeting or in such manner as the members of the Company may determine. The members of the Company may, at any general meeting, by special resolution remove the auditor at any time before the expiration of his term of office and shall by ordinary resolution at that meeting appoint another auditor in his stead for the remainder of his term in accordance with the requirements under the New Bye-laws.

The financial statements of the Company shall be audited by the auditor in accordance with generally accepted auditing standards. The auditor shall make a written report thereon in accordance with generally accepted auditing standards and the report of the auditor shall be submitted to the members of the Company in general meeting. The generally accepted auditing standards referred to herein may be those of a country or jurisdiction other than Bermuda. If the auditing standards of a country or jurisdiction other than Bermuda are used, the financial statements and the report of the auditor should disclose this fact and name such country and jurisdiction.

Material differences

The Articles contain substantially the similar provisions save and except that auditor shall hold office until the next annual general meeting. Under the Articles, the members of the Company may, at any general meeting, by special resolution remove the auditor at any time before the expiration of his term of office and the approval threshold for passing a special resolution under the Articles, being a majority of not less than three-fourths of votes cast by such members of the Company entitled to vote, is the same under the New Bye-laws. The Directors believe that removal of auditors by a special resolution (instead of an ordinary resolution) is in line with current market practice. As advised by the Company’s Bermuda legal adviser, section 89(5) of the Bermuda Companies Act provided that a resolution passed by at least two-thirds of the votes cast at a general meeting of which notice specifying the intention to pass such resolution was given, is required for removal of the auditors and therefore it is not permissible to remove the auditors by an ordinary resolution under the laws of Bermuda. In view of the above, the Directors consider that this arrangement is in the interest of the Company and its shareholders.

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(i) Convening of general meetings

Summary

The Board may whenever it thinks fit call special general meetings, and member or members of the Company holding at the date of deposit of the requisition not less than one-tenth of the paid up capital of the Company carrying the right of voting at general meetings of the Company shall at all times have the right, by written requisition to the Board or the secretary of the Company, to require a special general meeting to be called by the Board for the transaction of any business specified in such requisition; and such meeting shall be held within two (2) months after the deposit of such requisition.

Material differences

The Articles contain the same provision.

(j) Notices of meetings and business to be conducted thereat

Summary

An annual general meeting shall be called by notice of not less than twenty-one (21) clear days and not less than twenty (20) clear business days. All other general meeting (including a special general meeting) shall be called by notice of not less than fourteen (14) clear days and not less than ten (10) clear business days (in each case exclusive of the day on which the notice is given or deemed to be given and of the day for which it is given or on which it is to take effect). The notice must specify the time and place of the meeting and, in the case of special business, the general nature of that business. The notice convening an annual general meeting shall specify the meeting as such.

Material differences

The Articles contain similar provisions, but there is no clear business day notice requirement. Further, a notice convening a meeting to pass a special resolution shall be called by not less twenty-one (21) clear days’ notice.

(k) Transfer of shares

Summary

All transfers of shares may be effected by an instrument of transfer in the usual or common form or in a form prescribed by the Designated Stock Exchange (as

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defined in the New Bye-laws) or in any other form as the Board may approve and which may be under hand or, if the transferor or transferee is a clearing house or its nominee(s), by hand or by machine imprinted signature or by such other manner of execution as the Board may approve from time to time. The instrument of transfer shall be executed by or on behalf of the transferor and the transferee provided that the Board may dispense with the execution of the instrument of transfer by the transferee in any case which it thinks fit, in its discretion, to do so and the transferor shall be deemed to remain the holder of the share until the name of the transferee is entered in the register of members in respect thereof. The Board may also resolve, either generally or in any particular case, upon request by either the transferor or the transferee, to accept mechanically executed transfers.

The Board in so far as permitted by any applicable law may, in its absolute discretion, at any time and from time to time transfer any share upon the principal register to any branch register or any share on any branch register to the principal register or any other branch register.

Unless the Board otherwise agrees, no shares on the principal register shall be transferred to any branch register nor shall shares on any branch register be transferred to the principal register or any other branch register. All transfers and other documents of title shall be lodged for registration and registered, in the case of shares on a branch register, at the relevant Registration Office (as defined in the New Bye-laws) and, in the case of shares on the principal register, at the registered office of the Company in Bermuda or such other place in Bermuda at which the principal register is kept in accordance with the Companies Act.

The Board may, in its absolute discretion, and without giving any reason therefor, refuse to register a transfer of any share (not being a fully paid up share) to a person of whom it does not approve, or any share issued under any share incentive scheme for employees upon which a restriction on transfer imposed thereby still subsists, and it may also refuse to register any transfer of any share to more than four (4) joint holders or any transfer of any share (not being a fully paid up share) on which the Company has a lien.

The Board may decline to recognise any instrument of transfer unless a fee of such maximum sum as any Designated Stock Exchange (as defined in the New Bye-laws) may determine to be payable or such lesser sum as the Directors may from time to time require is paid to the Company in respect thereof, the instrument of transfer, if applicable, is duly and properly stamped, is in respect of only one (1) class of share and is lodged at the relevant Registration Office (as defined in the New Bye-laws) or registered office or such other place in Bermuda at which the principal register is kept in accordance with the Companies Act accompanied by the relevant share certificate(s) and such other evidence as the Board may reasonably require to

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SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

show the right of the transferor to make the transfer (and if the instrument of transfer is executed by some other person on his behalf, the authority of that person so to do).

The registration of transfers may be suspended after notice has been given by advertisement in any newspapers in accordance with the requirements of any Designated Stock Exchange (as defined in the New Bye-laws) or by any means in such manner as may be accepted by the Designated Stock Exchange (as defined in the New Bye-laws) to that effect, at such times and for such periods as the Board may determine and either generally or in respect of any class of shares. The registration of transfers of shares shall not be suspended for periods exceeding in the whole thirty (30) days in any year.

Material differences

The Articles contain substantially the same provisions.

(l) Power for the Company to purchase its own shares

Summary

The New Bye-laws supplement the Company’s New Memorandum of Continuance (which gives the Company the power to purchase its own shares) by providing that the power is exercisable by the Board upon such terms and conditions as it thinks fit, subject to the Companies Act, the New Memorandum of Continuance and, where applicable, the rules of any Designated Stock Exchange (as defined in the New Bye-Laws) and/or any competent regulatory authority.

Material differences

The Articles provide that subject to the provisions of the Law (as defined in the Articles), the Memorandum and the Articles and, where applicable, the rules of the Designated Stock Exchange (as defined in the Articles) and/or any competent regulatory authority, the Company’s power to repurchase shares shall be exercisable by the Directors.

(m) Power for any subsidiary of the Company to own shares in the Company

Summary

There are no provisions in the New Bye-laws relating to ownership of shares in the Company by a subsidiary.

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SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

APPENDIX

Material differences

Similarly, the Articles do not contain any such provision.

(n) Power for the Company to pay commission in relation to issue of shares

Summary

The Company may in connection with the issue of any shares exercise all powers of paying commission and brokerage conferred or permitted by the Companies Act. Subject to the Companies Act, the commission may be satisfied by the payment of cash or by the allotment of fully or partly paid shares or partly in one and partly in the other.

Material differences

The Articles contain the same provision.

(o) Dividends and other methods of distribution

Summary

Subject to the Companies Act, the Company in general meeting may declare dividends in any currency to be paid to the members of the Company but no dividend shall be declared in excess of the amount recommended by the Board. The Company in general meeting may also make a distribution to its members out of any contributed surplus (as ascertained in accordance with the Companies Act). No dividend shall be paid or distribution made out of contributed surplus if to do so would render the Company unable to pay its liabilities as they become due or the realisable value of its assets would thereby become less than its liabilities.

Except in so far as the rights attaching to, or the terms of issue of, any share may otherwise provide, (i) all dividends shall be declared and paid according to the amounts paid up on the shares in respect of which the dividend is paid but no amount paid up on a share in advance of calls shall for this purpose be treated as paid up on the share; and (ii) all dividends shall be apportioned and paid pro rata according to the amount paid up on the shares during any portion or portions of the period in respect of which the dividend is paid. The Directors may deduct from any dividend or other monies payable to a member of the Company by the Company on or in respect of any shares all sums of money (if any) presently payable by him to the Company on account of calls or otherwise.

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SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

Whenever the Board or the Company in general meeting has resolved that a dividend be paid or declared on the share capital of the Company, the Board may further resolve either (i) that such dividend be satisfied wholly or in part in the form of an allotment of shares credited as fully paid up, provided that the Shareholders entitled thereto will be entitled to elect to receive such dividend (or part thereof) in cash in lieu of such allotment, or (ii) that Shareholders entitled to such dividend will be entitled to elect to receive an allotment of shares credited as fully paid up in lieu of the whole or such part of the dividend as the Board may think fit. The Company may also upon the recommendation of the Board by an ordinary resolution resolve in respect of any one particular dividend of the Company that it may be satisfied wholly in the form of an allotment of shares credited as fully paid up without offering any right to Shareholders to elect to receive such dividend in cash in lieu of such allotment.

Whenever the Board or the Company in general meeting has resolved that a dividend be paid or declared the Board may further resolve that such dividend be satisfied wholly or in part by the distribution of specific assets of any kind.

All dividends or bonuses unclaimed for one (1) year after having been declared may be invested or otherwise made use of by the Board for the benefit of the Company until claimed and the Company shall not be constituted a trustee in respect thereof. All dividends or bonuses unclaimed for six (6) years after having been declared may be forfeited by the Board and shall revert to the Company.

Material differences

The Articles contain substantially similar provisions save and except that there is no reference to contributed surplus which is distributable under the law of Bermuda only.

(p) Proxies

Summary

Any member of the Company entitled to attend and vote at a meeting of the Company is entitled to appoint another person as his proxy to attend and vote instead of him. A member of the Company who is the holder of two (2) or more shares may appoint more than one (1) proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member of the Company. In addition, a proxy or proxies representing either a member who is an individual or a member which is a corporation shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.

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SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

APPENDIX

Material differences

The Articles contain the same provision.

(q) Call on shares and forfeiture of shares

Summary

Subject to the New Bye-laws and to the terms of allotment, the Board may from time to time make calls upon the members of the Company in respect of any monies unpaid on the shares held by them respectively (whether on account of the nominal value of the shares or by way of premium). A call may be made payable either in one lump sum or by installments. If the sum payable in respect of any call is not paid on or before the day appointed for payment thereof, the person or persons from whom the sum is due shall pay interest on the same from the day appointed for the payment thereof to the time of actual payment at such rate not exceeding twenty per cent. (20%) per annum as the Board may determine, but the Board may waive payment of such interest wholly or in part. The Board may, if it thinks fit, receive from any member of the Company willing to advance the same, either in money or money’s worth, all or any part of the monies uncalled and unpaid or installments payable upon any shares held by him, and upon all or any of the monies so advanced the Company may pay interest at such rate (if any) as the Board may decide.

If a member of the Company fails to pay any call on the day appointed for payment thereof, the Board may serve not less than fourteen (14) clear days’ notice on him requiring payment of so much of the call as is unpaid, together with any interest which may have accrued and which may still accrue up to the date of actual payment and stating that, in the event of non-payment at or before the time appointed, the shares in respect of which the call was made will be liable to be forfeited.

If the requirements of any such notice are not complied with, any share in respect of which the notice has been given may at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Board to that effect.

Such forfeiture will include all dividends and bonuses declared in respect of the forfeited share and not actually paid before the forfeiture.

A person whose shares have been forfeited shall cease to be a member of the Company in respect of the forfeited shares but shall, notwithstanding, remain liable to pay to the Company all monies which, at the date of forfeiture, were payable by him to the Company in respect of the shares, together with (if the Board shall in its discretion so require) interest thereon from the date of forfeiture until the date of

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SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

actual payment at such rate not exceeding twenty per cent. (20%) per annum as the Board determines.

Material differences

The Articles contain the same provision.

(r) Inspection of register of members

Summary

The principal register and branch register of members of the Company shall be open to inspection between 10:00 a.m. and 12:00 noon during business hours by members of the public without charge at the registered office or such other place in Bermuda at which the register is kept in accordance with the Companies Act, unless the register is closed in accordance with the New Bye-laws and the Companies Act. The principal register and branch register may be closed for inspection at such times or for such periods not exceeding in the whole thirty (30) days in each year as the Board may determine and either generally or in respect of any class of shares.

Material differences

The Articles contain similar provision save and except that inspection of the register of members by the public (not being a member of the Company) is subject to maximum payment of $2.50 (for inspection in the Cayman Islands) or $1.00 or such lesser sum specified by the Directors (for inspection at the Registration Office (as defined in the Articles)).

(s) Quorum for meetings and separate class meetings

Summary

For all purposes the quorum for a general meeting shall be two (2) members of the Company present in person or (in the case of a member of the Company being a corporation) by its duly authorised representative or by proxy and entitled to vote. In respect of a separate class meeting (other than an adjourned meeting) convened to sanction the modification of class rights the necessary quorum shall be two (2) persons (or in the case of a member of the Company being a corporation, its duly authorised representative) holding or representing by proxy not less than one-third in nominal value of the issued shares of that class and at any adjourned meeting of such holders, two (2) holders present in person or (in the case of a member of the Company being a corporation) its duly authorised representative or by proxy (whatever the number of shares held by them) shall be a quorum.

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SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

APPENDIX

Material differences

The Articles contain the same provision.

(t) Rights of the minorities in relation to fraud or oppression

Summary

There are no provisions in the New Bye-laws relating to rights of minority Shareholders in relation to fraud or oppression. However, certain remedies are available to Shareholders under the law of Bermuda.

Material differences

The Articles contain no provisions specifically dealing with such rights of minority Shareholders.

(u) Procedures on liquidation

Summary

A resolution that the Company be wound up by the court or be wound up voluntarily shall be a special resolution.

If the Company shall be wound up (whether the liquidation is voluntary or by the court) the liquidator may, with the authority of a special resolution and any other sanction required by the Companies Act, divide among the members of the Company in specie or kind the whole or any part of the assets of the Company whether the assets shall consist of property of one kind or shall consist of properties of different kinds and the liquidator may, for such purpose, set such value as he deems fair upon any one or more class or classes of property to be divided as aforesaid and may determine how such division shall be carried out as between the members of the Company or different classes of members of the Company. The liquidator may, with the like authority, vest any part of the assets in trustees upon such trusts for the benefit of members of the Company as the liquidator, with the like authority, shall think fit, and the liquidation of the Company shall be closed and the Company dissolved but so that no contributory shall be compelled to accept any shares or other property in respect of which there is a liability.

Material differences

The Articles contain the same provision.

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SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

(v) Untraceable members

Summary

The Company may sell any of the shares of a member of the Company who is untraceable if (i) all cheques or warrants (being not less than three (3) in total number) for any sum payable in cash to the holder of such shares have remained uncashed for a period of twelve (12) years before the date of publication of the advertisement referred to in (iii) in this paragraph; (ii) upon the expiry of the period of twelve (12) years before the date of publication of the advertisement referred to in (iii) in this paragraph, so far as it is aware at the end of such period, the Company has not during that time received any indication of the existence of the member of the Company by death, bankruptcy or operation of law; and (iii) the Company has caused an advertisement to be published in accordance with the rules of the Designated Stock Exchange (as defined in the New Bye-laws) giving notice of its intention to sell such shares and a period of three (3) months, or such shorter period as may be permitted by the Designated Stock Exchange (as defined in the New Bye-laws), has elapsed since such advertisement and the Designated Stock Exchange (as defined in the New Bye-laws) has been notified of such intention. The net proceeds of any such sale shall belong to the Company and upon receipt by the Company of such net proceeds, it shall become indebted to the former member of the Company for an amount equal to such net proceeds.

Material differences

The Articles contain the same provision.

(w) Indemnity

Summary

The Directors, secretary and other officers and every auditor for the time being of the Company and the liquidator or trustees (if any) for the time being acting in relation to any of the affairs of the Company and every one of them, and every one of their heirs, executors and administrators, shall be indemnified and secured harmless out of the assets and profits of the Company from and against all actions, costs, charges, losses, damages and expenses which they or any of them, their or any of their heirs, executors or administrators, shall or may incur or sustain by or by reason of any act done, concurred in or omitted in or about the execution of their duty, or supposed duty, in their respective offices or trusts.

Material differences

The Articles contain the same provision.

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SUMMARY OF THE NEW MEMORANDUM OF CONTINUANCE AND THE NEW BYE-LAWS AND DIFFERENCES WITH THE MEMORANDUM AND THE ARTICLES AND OTHER RELEVANT MATTER

(x) Voluntary withdrawal from listing

Summary

Given that the Company shall comply with the Listing Rules and other applicable laws and regulations from time to time regarding the voluntary withdrawal of listing, the Company does not add all such relevant rules and regulations to the New Bye-laws such that in case there is any amendment to the Listing Rules or other applicable laws and regulations in this regard, it is not necessary to amend the bye-laws.

Material differences

The Articles also does not have such provision.

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NOTICE OF EGM

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Moody Technology Holdings Limited 滿地科技股份有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1400)

NOTICE OF EGM

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (“ EGM ”) of Moody Technology Holdings Limited (the “ Company ”) will be held at Suites 903–905, 9th Floor, Shun On Centre, 6–8 Harbour Road, Wanchai, Hong Kong on Monday, 7 January 2019 at 10:00 a.m. to consider and, if thought fit, approving the following resolutions:

SPECIAL RESOLUTIONS

1. “ THAT :

2. (a) subject to (i) compliance with the relevant requirements under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and the relevant legal procedures and requirements under the laws of the Cayman Islands and the laws of Bermuda in respect of the change of domicile of the Company (the “ Change of Domicile ”); and (ii) the obtaining of all necessary approvals from the relevant regulatory authorities or otherwise as may be required in respect of the Change of Domicile, the Change of Domicile from the Cayman Islands to Bermuda by way of de-registration in the Cayman Islands and continuation of the Company as an exempted company under the laws of Bermuda be and is hereby approved;

3. (b) the memorandum of continuance, a copy of which has been produced at the EGM marked “A” and initialled by the chairman of the EGM (the “ Chairman ”) for the purpose of identification, be and is hereby adopted by the Company to replace the existing memorandum of association of the Company, effective from the date that the memorandum of continuance is approved and registered by the Bermuda Registrar of Companies; and

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NOTICE OF EGM

• (c) conditional upon the continuance of the Company in Bermuda as an exempted company under the laws of Bermuda, the bye-laws of the Company, a copy of which has been produced at the EGM marked “B” and initialled by the Chairman for the purpose of identification, be and is hereby adopted to replace the existing articles of association of the Company, effective from the date that the memorandum of continuance is approved and registered by the Bermuda Registrar of Companies.”

• “ THAT subject to the passing of special resolution numbered 1 above:

• (a) the entire amount standing to the credit of the share premium account of the Company as at the date of passing this resolution be and is hereby cancelled and transferred to an account designated as the contributed surplus account of the Company (the “ Cancellation of Share Premium Account ”);

• (b) upon the Change of Domicile (as defined in special resolution numbered 1 above) becoming effective, the account designated as the contributed surplus account of the Company shall become the contributed surplus account of the Company within the meaning of the Companies Act 1981 of Bermuda (the “ Contributed Surplus Account ”) and the amount standing to the credit of such designated account shall continue to stand to the credit of the Contributed Surplus Account; and

• (c) the Directors be and are hereby authorised to do all such acts and things and execute all such documents on behalf of the Company, including under seal where applicable, as they may consider necessary or expedient to give effect to or in connection with the implementation of the Cancellation of Share Premium Account.”

• “ THAT subject to: (i) the passing of special resolution numbered 1 above and conditional upon the Change of Domicile (as defined in special resolution numbered 1 above) becoming effective; (ii) The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) granting the listing of, and permission to deal in, the Adjusted Shares (as defined below) arising from the Capital Reorganisation (as defined below); (iii) the compliance with section 46(2) of the Companies Act 1981 of Bermuda, including (a) the publication of notice in relation to the Capital Reduction (as defined below) in an appointed newspaper in Bermuda on a date not more than 30 days and not less than 15 days before the effective date of the Capital Reduction, and (b) the Board being satisfied on the effective date of the Capital Reduction, there are no reasonable grounds for believing the Company is, or after the Capital Reduction would be, unable to pay its liabilities as they become due; and (iv) the obtaining of all necessary approvals from the regulatory authorities or otherwise as may be required to effect the Capital Reorganisation, with effect from 9:00 a.m. (Hong Kong time) on the day (“ Effective Date ”) being (I) the 26th day after the effective date of the Change of

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NOTICE OF EGM

Domicile (based on Hong Kong time), or (II) the day next following the date that the above conditions are fulfilled, whichever is the later (if such day is not a business day in Hong Kong, the immediately following business day in Hong Kong):

• (a) every ten (10) issued and unissued ordinary share(s) of par value of HK$0.10 each in the share capital of the Company (the “ Existing Shares ”) be consolidated into one (1) ordinary share of par value of HK$1.00 each (the “ Consolidated Shares ”) (the “ Share Consolidation ”);

• (b) immediately following the Share Consolidation, each of the issued Consolidated Shares be and is hereby reduced from par value of HK$1.00 each to par value of HK$0.01 each (the “ Issued Adjusted Shares ”) by cancelling the paid-up capital of the Company thereon to the extent of HK$0.99 on each of the issued Consolidated Shares (the “ Capital Reduction ”);

• (c) immediately following the Capital Reduction, each authorised but unissued Consolidated Share (including those arising from the Capital Reduction) be subdivided into one hundred (100) ordinary shares of par value of HK$0.01 each (together with the Issued Adjusted Shares, the “ Adjusted Shares ”) (the “ Share Subdivision ”, together with the Share Consolidation and the Capital Reduction, the “ Capital Reorganisation ”);

• (d) the amount of the issued share capital of the Company cancelled pursuant to the Capital Reduction be made available for the issue of the Adjusted Shares so that immediately following the Capital Reorgansation, the authorised share capital of the Company shall be HK$1,000,000,000 divided into 100,000,000,000 Adjusted Shares of par value of HK$0.01 each;

• (e) the credits arising from the Capital Reduction be transferred to the Contributed Surplus Account (as defined in special resolution numbered 2 above) and the Directors or a committee thereof be and are hereby authorised to use the amount then standing to the credit of the Contributed Surplus Account to eliminate or to set off the accumulated losses of the Company and/or to eliminate or to set off the other accumulated losses of the Company which may arise from time to time and/or to pay dividend and/or to make any other distribution out of the Contributed Surplus Account from time to time without further authorisation from the shareholders of the Company and/or to use the credit in such other manner as may be permitted under the bye-laws of the Company in effect from time to time and all applicable laws without any further authorisation from the shareholders of the Company and all such actions in relation thereto be and are approved, ratified and confirmed;

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NOTICE OF EGM

• (f) all fractional Adjusted Shares resulting from the Capital Reorganisation will not be issued to holders of the same but all such fractional entitlements of the Adjusted Shares will be aggregated and sold for the benefit of the Company in such manner and on such terms as the directors of the Company (the “ Directors ”) may think fit; and

• (g) the Directors be and are hereby authorised to do all such acts and things and execute all such documents on behalf of the Company, including under seal where applicable, as they may consider necessary or expedient to give effect to or in connection with the matters contemplated in this resolution.”

ORDINARY RESOLUTION

1. “ THAT

2. (a) the placing agreement dated 12 November 2018 (the “ Placing Agreement ”) entered into between the Company and PC Securities Limited (the “ Placing Agent ”) as the placing agent, pursuant to which the Company has conditionally agreed to issue and the Placing Agent has conditionally agreed to procure placee(s) to subscribe for the convertible bonds of up to an aggregate principal amount of HK$100,000,000 (the “ Convertible Bonds ”) on a best-effort basis at the issue price equal to 100% of the principal amount of the Convertible Bonds due on date falling on the 24th month from the date of issue, with the conversion rights to convert the principal amount thereof into Adjusted Shares (as defined in special resolution number 3 above) (the “ Conversion Shares ”) at the initial conversion price of HK$0.36 (assuming the Capital Reorganisation has become effective) (subject to adjustment) per Conversion Share and all the transactions contemplated thereunder be and are hereby approved, confirmed and ratified;

3. (b) subject to the fulfillment and/or waiver of the conditions (including but not limited to the Capital Reorganisation) as set out in the Placing Agreement, the Directors be and are hereby authorised to allot and issue the Convertible Bonds in accordance with the terms and conditions of the Placing Agreement;

4. (c) subject to the listing committee of the Stock Exchange granting the listing of, and permission to deal in, the Conversion Shares to be allotted and issued, the Directors be and are hereby granted a specific mandate to exercise the powers of the Company to allot and issue the Conversion Shares in accordance with and subject to the terms and conditions of the Convertible Bonds; and

5. (d) the Directors be and are hereby authorised to do all such acts and things and execute all such documents on behalf of the Company, including under seal where applicable, as they may consider necessary or expedient to give effect to or in connection with the implementation of the transactions contemplated under

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NOTICE OF EGM

the Placing Agreement, the allotment and issue of the Convertible Bonds, and allotment and issue of the Conversion Shares which may fall to be issued upon exercise of the conversion rights attaching to the Convertible Bonds.”

By order of the Board Moody Technology Holdings Limited Li Jia Yin

Acting Chairlady and Executive Director

Hong Kong, 13 December 2018

Notes:

1. Any shareholder entitled to attend and vote at the meeting is entitled to appoint one or, if he is holder of more than one share, more proxies to attend and vote instead of him. A proxy need not be a shareholder of the Company.

2. In order to be valid, a form of proxy in the prescribed form together with the power of attorney or other authority (if any) under which it is signed must be deposited at the branch share registrar of the Company in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed (i.e. Saturday, 5 January 2019) for holding the meeting (or any adjournment thereof).

3. The register of members of the Company will be closed from Wednesday, 2 January 2019 to Monday, 7 January 2019 (both days inclusive), during which period no transfer of shares in the Company will be registered, for the purpose of determining the identity of the shareholders entitled to attend and vote at the EGM. In order to qualify for attending and voting at the EGM to be held at 10:00 a.m. on Monday, 7 January 2019 all transfers of shares accompanied by the relevant share certificates and transfer forms, must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Monday, 31 December 2018.

4. 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 common seal or under the hand of an officer or attorney or other person duly authorised.

5. Delivery of the form of proxy will not preclude a member from attending and voting in person at the meeting convened and in such event, the form of proxy shall be deemed to be revoked.

As of the date of this notice, the executive Directors are Ms. Li Jia Yin, Mr. Wu Jianxiong, and Mr. Lin Qingxiong; and the independent non-executive Directors are Mr. Chan Sui Wa, Mr. Liu Shungang and Mr. Lin Yugang.

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