Nanjing Sample Technology Company Limited - Proxy Solicitation & Information Statement 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

If you have sold or transferred all your shares in 南京三寶科技股份有限公司 (Nanjing Sample Technology Company Limited*) (the “Company”), you should at once hand this circular, together with the accompanying proxy forms and reply slips, to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

南京三寶科技股份有限公司 NANJING SAMPLE TECHNOLOGY COMPANY LIMITED*

(a joint stock limited company incorporated in the People’s Republic of China with limited liability)

(Stock Code: 1708)

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED CHANGES TO THE AMENDMENTS TO ARTICLES OF ASSOCIATION

AND NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

==> picture [192 x 31] intentionally omitted <==

A notice convening the EGM of the Company to be held at No. 10 Maqun Avenue, Maqun Technology Park, Qixia District, Nanjing City, Jiangsu Province, the PRC at 10:00 a.m. on Friday, 10 August 2012 is set out on pages 36 to 37 of this circular.

A proxy form for use at the EGM is enclosed with this circular. Whether or not you intend to attend the EGM, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the Company’s H Shares registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for the holders of the H Shares only) or the Company’s registered office at Building No. 1, Ruan Jian Chuang Ye Zhong Xin, High and New Technology Industrial Development Zone, Nanjing City, Jiangsu Province, the PRC (for the holders of the Domestic Shares only), as soon as possible but in any event not less than 24 hours before the respective time fixed for holding the EGM or any adjournment thereof. Completion and delivery of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

This circular will remain on the website of The Stock Exchange of Hong Kong Limited at http:// www.hkex.com.hk on the “Latest Company announcements” page for at least 7 days from the date of its posting.

For identification purposes only

22 June 2012

	Pages
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
The Equity Transfer Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Information of Nanjing City Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Reasons for the acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Listing Rules implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
Proposed changes to the amendments to Articles of Association . . . . . . . . . . . . .	8
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Voting by way of poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Additional information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
LETTER FROM INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . .	14
LETTER FROM GUANGDONG SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15
APPENDIX – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	30
NOTICE OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	36

– i –

DEFINITIONS

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

“A Share(s)” the share(s) with a nominal value of RMB1.00 each in the share capital of the Company to be issued and listed on the Shenzhen Stock Exchange
“Acquisition” the acquisition of the Target Interest by the Company from Nanjing Sample Digital pursuant to the Equity Transfer Agreement
“Articles of Association” the articles of association of the Company, as amended from time to time
“associate(s)” has the meaning ascribed thereto under the Listing Rules
“Board” the board of Directors
“Company”
Nanjing Sample Technology Company Limited*
（南京三寶科技股份有限公司）, a joint stock limited company incorporated in the PRC with limited liability and whose H Shares are listed on the main board of the Stock Exchange (Stock Code: 1708)
“Completion” completion of the Acquisition
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“controlling shareholder” has the meaning ascribed thereto under the Listing Rules
“CSRC” China Securities Regulatory Committee
“Director(s)” the director(s) of the Company, including the independent non-executive director(s)

“Domestic Share(s)” the ordinary domestic share(s) of nominal value of RMB1.00 each in the share capital of the Company, which are subscribed for in RMB, and all of such shares are not listed on the Stock Exchange

– 1 –

DEFINITIONS

“EGM”
“Equity Transfer Agreement”

the extraordinary general meeting of the Company to be convened and held at 10:00 a.m. on 10 August 2012 for the Shareholders to consider and, if thought fit, approve (i) the Equity Transfer Agreement and the transactions contemplated thereby; and (ii) the proposed changes to the amendments to the Articles of Association the equity transfer agreement for the Acquisition dated 24 May 2012 entered into between Nanjing Sample Digital as vendor and the Company as purchaser (as amended by a supplemental agreement dated 19 June 2012 made between the same parties)

“Group” the Company and its subsidiaries
“Guangdong Securities” or “Independent Financial Adviser”
Guangdong Securities Limited, a licensed corporation to carry out type 1 (dealing in securities), type 2 (dealing in futures contracts), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO, and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Equity Transfer Agreement and the transactions contemplated thereto
“HK$”
“Hong Kong”
Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC
“Independent Board Committee”
“Independent Shareholders”
an independent board committee of the Company comprising all the independent non-executive Directors Shareholders who have no material interest in the Equity Transfer Agreement and the transactions contemplated thereby
“Issue of A Shares”
the proposed allotment and issue of A Shares by the Company in the PRC
“Latest Practicable Date”
20 June 2012, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information for inclusion in this circular
“Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

– 2 –

DEFINITIONS

“Nanjing City Information” Nanjing City Information Investment Holding Co., Ltd.*（南京市信息化投資控股有限公司）, a limited liability company incorporated in the PRC
“Nanjing Sample Digital” Nanjing Sample Digital Technology Co., Ltd.* （南京三寶數碼科技有限公司）, a limited liability company incorporated in the PRC and which is a wholly-owned subsidiary of Sample Group
“percentage ratio(s)” has the same meaning as ascribed to this term under the Listing Rules, as applicable to a transaction
“PRC” the People’s Republic of China, for the purpose of this circular only, excludes Hong Kong, Macau Special Administrative Region of the PRC and Taiwan
“RMB” Renminbi, the lawful currency of the PRC “Sample Group” Nanjing Sample Technology Group Co., Ltd. *
Nanjing Sample Technology Group Co., Ltd. *
（南京三寶科技集團有限公司）, which holds approximately 29.33% equity interest in the Company as at the date hereof
“SFO” Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) for the time being in force
“Share(s)” share(s) of RMB1.00 each of the Company “Shareholder(s)” registered holder(s) of the Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “Target Interest” the 13.83% equity interest in Nanjing City Information owned by Nanjing Sample Digital, being the subject matter under the Equity Transfer Agreement
“%” per cent

– 3 –

LETTER FROM THE BOARD

南京三寶科技股份有限公司 NANJING SAMPLE TECHNOLOGY COMPANY LIMITED*

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1708)

Executive Directors: Mr. Sha Min Mr. Chang Yong Mr. Guo Ya Jun

Non-Executive Director: Mr. Ma Jun

Independent non-executive Directors: Mr. Xu Suming Mr. Li Haifeng Mr. Shum Shing Kei

Registered Office: Building No.1, Ruan Jian Chuang Ye Zhong Xin, High and New Technology Industrial Development Zone, Nanjing City, Jiangsu Province, PRC

Principal place of business in Hong Kong: Room 3112A, 31/F, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong

22 June 2012

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED CHANGES TO THE AMENDMENTS TO ARTICLES OF ASSOCIATION AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

On 24 May 2012, Nanjing Sample Digital as vendor and the Company as purchaser entered into the Equity Transfer Agreement for the Acquisition of 13.83% equity interest in Nanjing City Information at a total consideration of RMB24,400,000. On 19 June 2012, Nanjing Sample Digital and the Company entered into a supplemental agreement to amend

* For identification purposes only

– 4 –

LETTER FROM THE BOARD

the Equity Transfer Agreement for extending the long stop date for obtaining the Independent Shareholders’ approval in respect of the Acquisition from 31 July 2012 to 30 September 2012.

On the other hand, on 14 May 2012, the Company announced its proposal for certain changes to the amendments of the Articles of Association.

The purpose of this circular is to provide you with, among other things, (i) details of the Acquisition; (ii) the letter of the Independent Board Committee to the Independent Shareholders; (iii) the letter from Guangdong Securities to both the Independent Board Committee and the Independent Shareholders; (iv) details of the proposed changes to the amendments to the Articles of Association; and (v) a notice convening the EGM.

THE EQUITY TRANSFER AGREEMENT

The summary of the principal terms of the Equity Transfer Agreement is set out below:

Date: 24 May 2012 (as amended by a supplemental agreement dated 19 June 2012)

Parties:

(a) The Company, as purchaser; and
(b) Nanjing Sample Digital, as vendor.

Interest to be acquired:

Pursuant to the Equity Transfer Agreement, the Company has agreed to purchase from Nanjing Sample Digital 13.83% equity interest in Nanjing City Information, which is owned as to 13.83% by Nanjing Sample Digital before the Acquisition.

Condition precedent:

Completion of the Acquisition is conditional upon the passing of the resolution by the Independent Shareholders at the EGM to approve the Equity Transfer Agreement and the transactions contemplated thereby.

Completion will take place within 10 working days after the above condition precedent is satisfied. If the above condition precedent has not been satisfied on or before 30 September 2012, the Equity Transfer Agreement will lapse automatically and cease to have any legal effect, and each party to the Equity Transfer Agreement shall have no claims whatsoever against the other party, save and except any antecedent breach of the Equity Transfer Agreement.

– 5 –

LETTER FROM THE BOARD

Consideration

The total consideration of the acquisition of the Target Interest is RMB24,400,000, which was determined after arm’s length negotiations between the Company and Nanjing Sample Digital. The consideration is equivalent to the initial cost of Nanjing Sample Digital in its subscription of the 13.83% equity interest of Nanjing City Information.

Payment terms

The consideration of the Target Interest shall be paid by the Company to Nanjing Sample Digital at Completion. The Company intends to satisfy the above consideration in cash by its internal funding.

INFORMATION OF THE GROUP

The Group is mainly based on visual identification and radio frequency identification technology to provide total solutions for application to the sectors of intelligent transportation, customs logistics, medical and health.

INFORMATION OF NANJING CITY INFORMATION

As at the Latest Practicable Date, the registered capital of Nanjing City Information is RMB144,590,000, among which RMB20,000,000 (representing approximately 13.83% of the total equity interest of Nanjing City Information) was registered and owned by Nanjing Sample Digital. Nanjing City Information is a state-owned company mainly engaging in informationalization project investment, construction and project management and consulting services businesses. Nanjing Sample Digital is mainly engaging in sale and maintenance of hardware and electrical appliances and electrical machinery, as well as sale of office equipment and office supplies.

Set out below is the basic financial information of Nanjing City Information, which was prepared and audited in accordance with the PRC accounting standards:

	12 months	12 months
	ended	ended
	31 December	31 December
	2011	2010
	(Audited)	(Audited)
	RMB’000	RMB’000
Book value of the total assets	567,383	448,585
Book value of the net assets	219,125	140,747
Revenue	44,984	35,676
Net profits before taxation	3,195	418
Net profits after taxation	3,478	516

– 6 –

LETTER FROM THE BOARD

REASONS FOR THE ACQUISITION

The Board believes that the Acquisition will facilitate the Company to develop the information operation business and will bring positive financial and operation impact to the Company, both of which will be beneficial for the future development of the Company.

The terms of the Equity Transfer Agreement have been determined after arm’s length negotiations between the Company and Nanjing Sample Digital.

The Directors, including the Independent Board Committee, having taken into account the advice from Guangdong Securities, consider that the Equity Transfer Agreement is on normal commercial terms and the terms thereof are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Mr. Sha Min, Mr. Chang Yong and Mr. Guo Ya Jun (all being executive Directors who are also directors of the Sample Group) have a material interest in the transaction and they have abstained from voting on the resolution of the Board approving the Company’s entering into of the Equity Transfer Agreement and the transactions contemplated thereby.

LISTING RULES IMPLICATIONS

Nanjing Sample Digital is a wholly-owned subsidiary of Sample Group, a substantial shareholder of the Company holding in aggregate 65,720,000 Domestic Shares (equivalent to approximately 49.67% of the total number of Domestic Shares in issue). Accordingly, Nanjing Sample Digital is regarded as a connected person of the Company under the Listing Rules. The principal business of Nanjing Sample Digital is sale and maintenance of hardware and eletrical appliances and electrical machinery, as well as sale of office equipment and office supplies. As one of the relevant percentage ratios is more than 5% but less than 25% and the total consideration is more than HK$10,000,000, the Acquisition constitutes a discloseable and connected transaction of the Company which is subject to the reporting, announcement and the Independent Shareholders’ approval requirements under the Listing Rules. Pursuant to Rule 14A.18 of the Listing Rules, Sample Group and its associates are required to abstain from voting at the EGM on resolution approving the Acquisition.

An Independent Board Committee, comprising all the independent non-executive Directors, has been established to consider the terms of the Equity Transfer Agreement and advise the Independent Shareholders as to whether the terms of the Equity Transfer Agreement were agreed on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Guangdong Securities has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Equity Transfer Agreement were on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 7 –

LETTER FROM THE BOARD

The Company will seek the Independent Shareholders’ approval for the Equity Transfer Agreement and the transactions contemplated thereby at the EGM. Mr. Sha Min, Sample Group and their respective associates will abstain from voting on the resolution approving the Equity Transfer Agreement and the transactions contemplated thereby which will be proposed at the EGM.

As at the Latest Practicable Date, Sample Group directly held 60,770,000 Domestic Shares. Sample Group is also interested in 100% of the registered capital of Nanjing Sample Technology Commerce City Company Limited* （南京三寶科技商城有限公司） (“Sample Commerce City”) (who therefore is an associate of the Sample Group) which held 4,950,000 Domestic Shares. As such, Sample Group and Sample Commerce City in aggregate held 65,720,000 Domestic Shares (equivalent to approximately 49.67% of the total number of Domestic Shares in issue) as at the Latest Practicable Date. The Sample Group is also an associate of Mr. Sha Min (who is the Chairman of the Company) as 47.91% of the equity interest of Sample Group was held by Mr. Sha Min. As at the Latest Practicable Date, Mr. Sha Min directly held 1,350,000 Domestic Shares (equivalent to approximately 1.02% of the total number of Domestic Shares in issue).

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, save for Mr. Sha Min, Sample Group and their respective associates, no Shareholder has a material interest in the Equity Transfer Agreement and the transactions contemplated thereby. Therefore, save for Mr. Sha Min, Sample Group and their respective associates, no Shareholder is required to abstain from voting in relation to the resolution to be proposed for approving the Equity Transfer Agreement and the transactions contemplated thereby at the EGM.

PROPOSED CHANGES TO THE AMENDMENTS TO ARTICLES OF ASSOCIATION

Reference is made to the announcement of the Company dated 14 May 2012 and the circular of the Company dated 14 November 2011 in relation to the proposed amendments to the Articles of Association.

At the extraordinary general meeting of the Company held on 30 December 2011, a special resolution was passed by the Shareholders for approving certain amendments to the Articles of Association (the “ Amendments ”). Such Amendments shall become effective from (i) the completion of the Issue of A Shares; and (ii) obtaining the required approval or endorsement from or the registration with relevant regulatory authorities.

At the annual general meeting of the Company held on 25 May 2012, some changes to the Amendments, including Article 217 in the Articles of Association (“ Revised Article 217 ”) have been approved by the Shareholders. Details of the changes to the Amendments are contained in the Company’s circular dated 5 April 2012. The text of the Revised Article 217 is set out below:

– 8 –

LETTER FROM THE BOARD

“Article 217

The Company’s profit distribution policy shall be:

(1) Principle of profit distribution: The Company implements continuous and stable profit distribution policy. The Company’s profit distribution shall attach importance to the investors’ reasonable investment return while adhering to the following principles:
profit shall be distributed in accordance with the sequence of distribution;
profit shall not be available for distribution whenever loss has not been compensated;
domestic shares and foreign-invested shares shall entitle to the same rights and same dividend;
shares held by the Company are not entitled to any dividend.
(2) Means of profit distribution: The Company may distribute dividends in the form of cash or shares;
(3) Interval of profit distribution: The Company shall make distribution at least once a year if profit is recorded for the year. The Board could propose to declare an interim cash dividend with reference to the Company’s liquidity position;
(4) Conditions for profit distribution:
Distribution made by the Company in cash shall be no less than 20% distributable profits for the year if profit is recorded;
For distribution of more than 20% distributable profit for the year, the Company could distribute the profit in form of share for the remaining part of realized distributable profit. Independent Directors shall clearly advise on the necessity of share dividend distribution. Before the proposal relating to the share dividend distribution to be proposed to general meeting for consideration, the Board shall illustrate the purpose and necessity of such decision in the notice of general meeting;
Proportion of cash dividend distribution shall be maximized every year if the Company has good cash-flow situation and there is no investment project requiring material funding.
(5) Decision-making mechanism and procedure for dividend distribution policy:

The Board makes profit distribution proposal in accordance with the profit distribution policy of Articles of Association, implementation of which shall be subject to the consideration and approval of general meeting. Independent

– 9 –

LETTER FROM THE BOARD

Directors shall give independent advise on the rationality of profit distribution proposal before it is considered by the Board in a meeting of which the profit distribution proposal is considered.

While the Company makes decision on the dividend distribution policy and adjusts distribution policy as a result of material changes in external business environment or operation situation, it shall be first approved and confirmed by Independent Directors with independent advice; and then proposed to the Board and Supervisory Committee for consideration. After approved by the Board and Supervisory Committee, it shall be proposed to general meeting for consideration and approval with more than half of the votes held by the shareholders and public shareholders attending such meeting respectively. In case of a distribution policy adjustment proposal, the adjusted profit distribution policy shall not violate the relevant requirements of CSRC and stock exchanges.

(6) If a shareholder appropriates the Company’s funds against regulations, the Company shall deduct the cash distributed to such shareholder so as to reimburse the funds appropriated.
(7) The Board of the Company shall disclose the reasons of not making a proposal for cash dividend distribution in the periodic report and the usage of such retained fund.”

In early May 2012, CSRC has issued some rules amendments in relation to profit distribution policy. In order to comply with the legal and regulatory requirements for the proposed Issue of A Shares, the Company proposed that the following new Article 217 (“ New Article 217 ”) shall supersede the Revised Article 217. Therefore, at the EGM, a special resolution will be proposed for the Shareholders’ consideration and approval of the following New Article 217.

“Article 217

The Company’s profit distribution policy shall be:

(1) Principle of profit distribution: The Company implements continuous and stable profit distribution policy. The Company’s profit distribution shall attach importance to the investors’ reasonable investment return while adhering to the following principles:
profit shall be distributed in accordance with the sequence of distribution;
profit shall not be available for distribution whenever loss has not been compensated;
domestic shares and foreign-invested shares shall be entitled to the same rights and same dividend;
shares held by the Company are not entitled to any dividend.

– 10 –

LETTER FROM THE BOARD

(2) Means of profit distribution: The Company may distribute dividends in the form of cash or shares;
(3) Interval of profit distribution: The Company shall make distribution once a year if profit is recorded for the year. The Board could propose to declare an interim dividend with reference to the Company’s liquidity position;
(4) Conditions for profit distribution:
Distribution made by the Company in cash shall be no less than 20% distributable profits for the year if profit is recorded;
After distributing 20% distributable profit for the year, the Company could distribute the profit in form of share for the remaining part of realized distributable profit. Independent Directors shall clearly advise on the necessity of share dividend distribution. Before the proposal relating to the share dividend distribution to be proposed to general meeting for consideration, the Board shall illustrate the purpose and necessity of such decision in the notice of general meeting;
Proportion of cash dividend distribution shall be maximized every year if the Company has good cash-flow situation and there is no investment project requiring material funding.
(5) Decision-making procedure and mechanism for matters of dividend distribution:

When considering the annual report of the Company, the Board of the Company shall propose on whether there will be profit distribution in cash. During the process of making the proposal, the Company shall collect opinions of the public investors by the effective means of contact such as interactive platform for investor relations, website of the Company, by phone, facsimile and email. The proposal of the profit distribution of the Company shall only be submitted to the Board for discussion upon the approval of more than two-thirds of the Independent Directors. The Independent Directors shall express their opinion regarding the profit distribution proposal explicitly.

Implementation of the profit distribution proposal shall be subject to the consideration and approval of general meeting. Before convening the general meeting, the Independent Directors of the Company may solicit the voting rights at the general meeting from public shareholders of the Company.

If the Board recommends the Company to have interim cash dividend, it shall be implemented pursuant to the rules above.

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LETTER FROM THE BOARD

(6) Decision-making mechanism and procedure for adjustment in dividend distribution policy:

While the Company makes decision on the dividend distribution policy and adjusts distribution policy as a result of material changes in external business environment or operating situation, it shall be first approved and confirmed by Independent Directors with independent advice; and then proposed to the Board and Supervisory Committee for consideration. After that, it shall be proposed to general meeting for consideration and approval with more than two-thirds of the votes held by the shareholders and approval with more than two-thirds of the votes held by the public shareholders attending such meeting respectively.

The adjusted profit distribution policy shall not be in violation with the relevant requirements of CSRC and stock exchanges.

(7) If a shareholder appropriates the Company’s funds against regulations, the Company shall deduct the cash distributed to such shareholder so as to reimburse the funds appropriated.
(8) The Board of the Company shall disclose the reasons of not making a proposal for cash dividend distribution and the usage of such retained fund.”

The New Article 217 will only become effective from (i) the completion of the Issue of A Shares; and (ii) obtaining the required approval or endorsement from or the registration with relevant regulatory authorities.

The differences between the Revised Article 217 and the New Article 217 are in the decision-making mechanisms and procedures for dividend distribution policy and for adjustment in dividend distribution policy, and which in fact will become more stringent in the New Article 217.

Shareholders should be aware that the Articles of Association have been adopted by the Company in Chinese only and no official English translation is available. The English text of the proposed amendments to the Articles of Association as stated in this circular is only an unofficial translation prepared for reference only. The Chinese version of the Articles of Association and the amendments thereto shall prevail in case of any discrepancy or inconsistency between the Chinese and the English versions.

EGM

Set out on pages 36 to 37 is a notice convening the EGM to be held at No. 10 Maqun Avenue, Maqun Technology Park, Qixia District, Nanjing City, Jiangsu Province, the PRC on Friday, 10 August 2012 at 10:00 a.m. at which an ordinary resolution will be proposed to approve the Equity Transfer Agreement and the transactions contemplated thereby, and a special resolution will be proposed to approve the changes to the amendments to the Articles of Association.

– 12 –

LETTER FROM THE BOARD

A form of proxy for the EGM is enclosed with this circular. Whether or not you intend to attend the EGM, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the Company’s H Shares registrar in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (for the holders of the H Shares only) or the Company’s registered office at Building No. 1, Ruan Jian Chuang Ye Zhong Xin, High and New Technology Industrial Development Zone, Nanjing City, Jiangsu Province, the PRC (for the holders of the Domestic Shares only), as soon as possible but in any event not less than 24 hours before the respective time fixed for holding the EGM or any adjournment thereof. Completion and delivery of the proxy form will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

VOTING BY WAY OF POLL

Pursuant to Rule 13.39(4) of the Listing Rules, all votes at the EGM will be taken by poll and the Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATIONS

The Directors (including the independent non-executive Directors whose views are set out in the section headed “Letter from Independent Board Committee” in this circular) considers that the entering into of the Equity Transfer Agreement and the proposed amendments to the Articles of Association are in the best interests of the Company and the Shareholders as a whole. So the Board recommends the Shareholders to vote in favour of the resolutions to be proposed at the EGM.

Your attention is drawn to (i) the letter from the Independent Board Committee set out on page 14 of this circular which contains its recommendation to the Independent Shareholders in respect of the Acquisition; and (ii) the letter of advice from Guangdong Securities, which contains its advice to the Independent Board Committee and the Independent Shareholders in relation to the Acquisition and the principal factors and reasons considered by it in arriving at its opinions. The text of the letter from Guangdong Securities is set out on pages 15 to 29 of this circular.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendix to this circular.

Yours faithfully, For and on behalf of the Board

南京三寶科技股份有限公司

Nanjing Sample Technology Company Limited* Sha Min

Chairman

For identification purpose only

– 13 –

LETTER FROM INDEPENDENT BOARD COMMITTEE

南京三寶科技股份有限公司 NANJING SAMPLE TECHNOLOGY COMPANY LIMITED*

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1708)

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders in respect of the transactions under the Equity Transfer Agreement, details of which are set out in the letter from the Board in the circular dated 22 June 2012 (the “Circular”) to the Shareholders, of which this letter forms a part. Terms defined in the Circular shall have the same meaning when used in this letter unless otherwise requires.

Having taken into account the advice of Guangdong Securities contained in its letter set out on pages 15 to 29 of the Circular, we consider that the terms of the Equity Transfer Agreement and the transactions contemplated thereby are fair and reasonable so far as the Independent Shareholders are concerned and are on normal commercial terms, and in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Equity Transfer Agreement and the transactions contemplated thereby.

Yours faithfully, For and on behalf of

the Independent Board Committee

Mr. Xu Suming Mr. Li Haifeng Mr. Shum Shing Kei Independent non-executive Independent non-executive Independent non-executive Director Director Director

* For identification purposes only

– 14 –

LETTER FROM GUANGDONG SECURITIES

Set out below is the text of a letter received from Guangdong Securities, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Acquisition for the purpose of inclusion in this circular.

==> picture [191 x 31] intentionally omitted <==

Units 2505-06, 25/F. Low Block of Grand Millennium Plaza 181 Queen’s Road Central Hong Kong

22 June 2012

To: The independent board committee and the independent shareholders of Nanjing Sample Technology Company Limited*

Dear Sirs,

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Acquisition, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the circular dated 22 June 2012 issued by the Company to the Shareholders (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context requires otherwise.

The Board announced on 24 May 2012 that on even date, the Company (as purchaser) and Nanjing Sample Digital (as vendor) entered into the Equity Transfer Agreement, pursuant to which the Company has conditionally agreed to purchase and Nanjing Sample Digital has conditionally agreed to sell the Target Interest at a total consideration of RMB24.4 million. Subsequently on 19 June 2012, the Company and Nanjing Sample Digital entered into a supplemental agreement to amend the Equity Transfer Agreement for extending the long stop date for obtaining the Independent Shareholders’ approval in respect of the Acquisition from 31 July 2012 to 30 September 2012. The Target Interest represents approximately 13.83% equity interest in Nanjing City Information.

The Acquisition constitutes a discloseable and connected transaction for the Company under the Listing Rules and is therefore subject to the reporting, announcement and independent shareholders’ approval requirements under the Listing Rules. Mr. Sha Min, Sample Group and their respective associates are required to abstain from voting on the relevant resolution approving the Acquisition at the EGM.

An Independent Board Committee comprising Mr. Xu Suming, Mr. Li Haifeng and Mr. Shum Shing Kei (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the Equity Transfer Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the Acquisition is in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders

* For identification purposes only

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LETTER FROM GUANGDONG SECURITIES

should vote in respect of the relevant resolution to approve the Equity Transfer Agreement and the transactions contemplated thereunder at the EGM. We, Guangdong Securities Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion to the Independent Board Committee and the Independent Shareholders, we have relied on the statements, information, opinions and representations contained or referred to in the Circular and the information and representations as provided to us by the Directors. We have assumed that all information and representations that have been provided by the Directors, for which they are solely and wholly responsible, are true and accurate at the time when they were made and continue to be so as at the Latest Practicable Date. We have also assumed that all statements of belief, opinion, expectation and intention made by the Directors in the Circular were reasonably made after due enquiry and careful consideration. We have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and facts contained in the Circular, or the reasonableness of the opinions expressed by the Company, its advisers and/or the Directors, which have been provided to us. We consider that we have taken sufficient and necessary steps on which to form a reasonable basis and an informed view for our opinion in compliance with Rule 13.80 of the Listing Rules.

The Directors have collectively and individually accepted full responsibility for the accuracy of the information contained in the Circular and have confirmed, having made all reasonable enquiries, which to the best of their knowledge and belief, there are no other facts the omission of which would make any statement in the Circular misleading.

We consider that we have been provided with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have not, however, conducted any independent in-depth investigation into the business and affairs of the Company, Sample Group, Nanjing Sample Digital, Nanjing City Information or their respective subsidiaries or associated companies, nor have we considered the taxation implication on the Group or the Shareholders as a result of the Acquisition. Our opinion is necessarily based on the financial, economic, market and other conditions in effect and the information made available to us as at the Latest Practicable Date. Shareholders should note that subsequent developments (including any material change in market and economic conditions) may affect and/or change our opinion and we have no obligation to update this opinion to take into account events occurring after the Latest Practicable Date or to update, revise or reaffirm our opinion. Nothing contained in this letter should be construed as a recommendation to hold, sell or buy any Shares or any other securities of the Company.

Lastly, where information in this letter has been extracted from published or otherwise publicly available sources, the sole responsibility of Guangdong Securities is to ensure that such information has been correctly extracted from the relevant sources.

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LETTER FROM GUANGDONG SECURITIES

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the Acquisition, we have taken into consideration the following principal factors and reasons:

(1) Background of the Acquisition

Information on the Group

As referred to in the Board Letter, the Group is mainly based on visual identification and radio frequency identification technology to provide total solutions for application to the sectors of intelligent transportation, customs logistics, medical and health.

Set out below are the audited consolidated financial information on the Group for the two years ended 31 December 2011 as extracted from the Company’s annual report for the year ended 31 December 2011 (the “ Annual Report ”):

	For the year	For the year
	ended 31	ended 31	% change
	December	December	from 2010
	2011	2010	to 2011
	RMB’000	RMB’000	%
Operating income	542,389	508,016	6.77
– Intelligent traffic	371,950	373,532	(0.42)
– Customs logistics	82,297	81,391	1.11
– Sales of equipment	62,203	40,720	52.76
– Service	21,084	7,429	183.81
– Other	4,855	4,944	(1.80)
Operating profit	149,368	119,341	25.16
Net profit attributable to the
Shareholders	146,054	111,532	30.95

From the above table, we noted that the operating income from intelligent traffic constituted a major source of operating income of the Group for each of the two years ended 31 December 2011 and the operating income from intelligent traffic constituted approximately 68.58% of the Group’s total operating income for the year ended 31 December 2011. According to the Annual Report and as further confirmed by the Directors, the Company increased investment in the application of internet of things in the area of intelligent transportation during the year of 2011 by acquiring 65% equity interest in a project company (the “ Intelligent Transportation Company ”) engaged in the internet of vehicles operation. The Directors believed that there were both strategic and financial implications for the Company to enter into the aforementioned acquisition as this represented an opportunity to expand the intelligent transportation business of the Group in addition to its existing expressway and highway sector.

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LETTER FROM GUANGDONG SECURITIES

Regarding the information services provided by the Group, the Directors advised us that it is one of the Group’s strategies to further carry out the construction of technical platform, build up certain platform systems including supporting platform for operation, internet portal display platform and vehicle-mounted collection platform. Meanwhile, the Group will actively carry out certain operation services including real time traffic, parking, electronic medical records and expansion services of vehicle cards, etc.

Information on Nanjing City Information

As extracted from the Board Letter, Nanjing City Information is a state-owned company mainly engaging in informationalisation project investment, construction and project management and consulting services businesses. As at the Latest Practicable Date, the registered capital of Nanjing City Information was RMB144.59 million, among which RMB20 million (representing approximately 13.83% of the total equity interest of Nanjing City Information) was registered and owned by Nanjing Sample Digital.

Tabularised below is a summary of the audited financial information on Nanjing City Information for the two years ended 31 December 2011 which were prepared in accordance with the PRC accounting standards:

	As at 31	As at 31
	December	December
	2011	2010
	RMB’000	RMB’000
Total assets	567,383	448,585
Net assets	219,125	140,747
	For the year	For the year
	ended 31	ended 31
	December	December
	2011	2010
	RMB’000	RMB’000
Revenue	44,984	35,676
Net profits before taxation	3,195	418
Net profits after taxation	3,478	516

Reasons for the Acquisition

During our discussions with the Directors, we understood that Nanjing City Information was principally engaged in the investment in informationalisation projects and it had investments in a total of three informationalisation projects as at the Latest Practicable Date.

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LETTER FROM GUANGDONG SECURITIES

Upon our further enquiries, the Directors advised us that the major investment of Nanjing City Information is its 50% equity interest in a project company (the “ Citizen Card Company ”) principally engaged in the operation and maintenance of integrated circuit card payment systems for public utility affairs in Nanjing City, the PRC. The main product of the Citizen Card Company is the Nanjing Citizen Card（市民卡）, being a card integrated with various functions such as government public management, social security service, public utility service, small value payment, identification, electronic certificate and information search by way of (i) consolidating related cards such as the social security card, the City Card（金陵通卡）and the bank card which are available for use in Nanjing City, the PRC; and (ii) standardising technical standards and centralising the management mechanism for citizens’ convenience in transacting personal matters, enjoying public service and effecting electronic small value payment. The Nanjing Citizen Card（市民卡）can be applied in many fields in Nanjing City, the PRC and its peripheral cities. The Directors are of the opinion that the profitability of the Citizen Card Company will be enhanced in the foreseeable future.

As advised by the Directors, Nanjing City Information is interested in 35% equity interest in the Intelligent Transportation Company, which is principally engaged in the internet of vehicles operation in Nanjing City, the PRC. The Group was interested in the remaining 65% equity interest in the Intelligent Transportation Company as at the Latest Practicable Date. The Intelligent Transportation Company provides a variety of information services to the government, enterprises, institutions as well as the general public, including traffic management, public order management, payment for vehicles, parking, environmental monitoring, vehicle maintenance, electronic toll collection, travel induction, consumption involving vehicles and so on by processing, collating and integrating collected mass transportation information. During the year of 2011, the Intelligent Transportation Company built up the intelligent transportation information collection and sharing platform of Nanjing City, the PRC, which was a landmark project for development and application of internet of things and a core resource platform for intelligent transportation. The Intelligent Transportation Company also launched the project regarding e-card of radio frequency identification environmental logo for motor vehicles of Nanjing City, the PRC and undertook the issuance of electronic tags as well as the construction of base stations. The Directors considered the Acquisition to be an opportunity to expand the intelligent transportation business of the Group in addition to its existing expressway and highway sector.

In addition, as advised by the Directors, Nanjing City Information is interested in 90% equity interest in a project company (the “ Wireless Network Company ”) principally engaged in (i) the provision of mobile broadband wireless access service for the public management and public service in Nanjing City, the PRC; and (ii) the provision of standard specification testing for the next generation biology workbench (NGB-W) of the state radio film and television system by way of the construction of wireless broadband network covering Nanjing City, the PRC. The Wireless Network Company also targets to explore opportunities in the social commercial application. The Directors were optimistic on the prospects of the Wireless Network Company.

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LETTER FROM GUANGDONG SECURITIES

The Directors further advised us that under the Twelve “Five-Year Plan” of the PRC, the next generation information technology industry is one of the PRC’s seven strategic emerging industries. For our due diligence purpose, we have also searched over the internet for the government policies on the development of the next generation information technology industry. We noted that on 10 October 2010, the State Council issued《國務院關於加快培育和發展戰略性新興產業的決定》(The decision to accelerate the development of the strategic emerging industries by the State Council) to accelerate the development of the next generation information technology industry, including but not limited to the construction of information network infrastructure, the promotion of mobile communication, the research and development of internet of things and the development of the high-end software industry. Subsequently on 31 December 2011, the Nanjing Municipal People’s Government issued 《南京市“十二五”智慧城市發展規劃》 (The development plan towards an intelligent city for Nanjing City during the twelve five-year) (the “ Plan ”), which emphasised on the development of Nanjing City, the PRC to become an intelligent city targeted to promote its development of information technology. The Plan also mentioned the development of the usage of integrated circuit cards and the development of the intelligent transportation system in Nanjing City, the PRC during the twelve “five-year” period of the PRC. The Directors believed that the current favourable government policies on the next generation information technology industry in Nanjing City, the PRC would benefit the informationlisation projects invested by Nanjing City Information.

Moreover, according to the 2010 Statistical Yearbook of Nanjing and a news release dated 9 February 2012 both issued by the by the Nanjing Municipal Statistics Bureau, the residential population in Nanjing City, the PRC amounted to approximately 8.11 million in 2011, representing an increase of approximately 6.85% as compared to the corresponding figure of approximately 7.59 million in 2008. In view of the public utilities nature of the informationalisation projects invested by Nanjing City Information, the Directors expected that the demand for the products and services of the informationalisation projects invested by Nanjing City Information will be substantial in the future.

Given the prospects of the informationalisation projects invested by Nanjing City Information as mentioned above, the Board believed that the Acquisition will facilitate the Company to develop the information operation business and will bring positive financial and operation impact to the Company, both of which will be beneficial for the future development of the Company.

In light of the above reasons for and potential benefits of the Acquisition, we concur with the Directors that the Acquisition, which is not in the ordinary and usual course of business of the Group, is in the interests of the Company and the Shareholders as a whole.

* For identification purposes only

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LETTER FROM GUANGDONG SECURITIES

(2) Principal terms of the Equity Transfer Agreement

The Equity Transfer Agreement

The Equity Transfer Agreement was entered into among the Company (as purchaser) and Nanjing Sample Digital (as vendor) on 24 May 2012. Pursuant to the Equity Transfer Agreement, the Company has conditionally agreed to purchase and Nanjing Sample Digital has conditionally agreed to sell the Target Interest at a total consideration of RMB24.4 million. Subsequently on 19 June 2012, the Company and Nanjing Sample Digital entered into a supplemental agreement to amend the Equity Transfer Agreement for extending the long stop date for obtaining the Independent Shareholders’ approval in respect of the Acquisition from 31 July 2012 to 30 September 2012. The Target Interest represents approximately 13.83% equity interest in Nanjing City Information.

Condition precedent

Completion is conditional upon the passing of the resolution by the Independent Shareholders at the EGM to approve the Equity Transfer Agreement and the transactions contemplated thereunder.

Consideration for the Acquisition

As advised by the Directors, the consideration for the Acquisition of RMB24.4 million was determined after arm’s length negotiations between the Company and Nanjing Sample Digital. The consideration for the Acquisition is equivalent to the initial cost of Nanjing Sample Digital in its subscription of the approximately 13.83% equity interest in Nanjing City Information.

The Directors further advised us that the initial cost of Nanjing Sample Digital in its subscription of the approximately 13.83% equity interest in Nanjing City Information was determined with reference to the appraised value of the net asset value of Nanjing City Information as at 31 July 2010 according to a valuation report prepared by an independent valuer. The Directors considered the consideration for the Acquisition to be fair and reasonable so far as the Independent Shareholders are concerned.

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LETTER FROM GUANGDONG SECURITIES

Payment terms

The consideration for the Acquisition shall be paid by the Company to Nanjing Sample Digital at Completion. The Company intends to satisfy the above consideration in cash by its internal funding.

As confirmed by the Directors, the terms of the Equity Transfer Agreement have been determined after arm’s length negotiations between the Company and Nanjing Sample Digital. The Directors considered that the terms of the Equity Transfer Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned, and the Acquisition, which is not in the ordinary and usual course of business of the Group, is in the interests of the Company and the Shareholders as a whole.

Trading multiples analysis for the Acquisition

In order to assess the fairness and reasonableness of the consideration for the Acquisition, we have performed a trading multiples analysis which includes the price to earnings ratio (“ PER ”) and the price to book ratio (“ PBR ”) analysis. We have searched for companies listed on the Stock Exchange engaging in similar lines of business as Nanjing City Information, i.e. informationalisation project investment in the PRC (including Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan) (the “ Market Comparables ”) for comparison. To the best of our knowledge and endeavour, we identified 16 exhaustive companies which met the said criteria. We also consider the Market Comparables to be fair and representative samples. It should be noted that the businesses, operations and prospects of Nanjing City Information are not exactly the same as the Market Comparables, and we have not conducted any in-depth investigation into the businesses and operations of the Market Comparables. The Market Comparables are hence only used for illustrative purpose.

Set out below are the implied PERs and the implied PBRs of the Market Comparables based on their closing prices as at 24 May 2012, being the date of the Equity Transfer Agreement, and their latest published financial information:

Company name
(Stock code)	Principal business	Year end date	PER	PBR
			(times)	(times)
Computer And Technologies	Provision of system and	31/12/2011	8.07	1.08
Holdings Limited (46)	network integration
	services, application
	development services, IT
	solutions implementation
	and outsourcing; enterprise
	software applications and
	outsourcing and e-business
	services; property and
	treasury investments.

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LETTER FROM GUANGDONG SECURITIES

Company name
(Stock code)	Principal business	Year end date	PER	PBR
			(times)	(times)
Champion Technology	Sale of general system	30/6/2011	5.95	0.06
Holdings Limited (92)	product; provision of			(Note 1)
	service; software
	licensing, lease of system
	product, investment in
	telecommunication
	network, e-commerce
	project; strategic
	investment in advanced
	technology product
	development companies.
Beijing Development (Hong	Provide IT related services	31/12/2011	17.17	1.14
Kong) Limited (154)	included system
	integration; construction
	of information networks
	and sale of related
	equipment; IT technical
	support and consultation
	services; develop and sale
	of software.
Kingdee International	Develop, manufacture and	31/12/2011	18.02	1.68
Software Group Company	sell of software products
Limited (268)	and provision of
	software-related technical
	services.
Chinasoft International	Development and provision	31/12/2011	21.36	1.43
Limited (354)	of information technology
	(IT) solutions services, IT
	outsourcing services,
	consulting services,
	mobile internet technology
	services and training
	services.

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LETTER FROM GUANGDONG SECURITIES

Company name
(Stock code)	Principal business	Year end date	PER	PBR
			(times)	(times)
DVN (Holdings) Limited	Design, develop, integrate &	31/12/2011	N/A	0.26
(500)	sales of smart cards,		(Note 2)
	conditional access sys,
	2-way cable network sys,
	digital set top boxes,
	digital broadcasting sys &
	related software, provision
	of advertising agency
	services & online financial
	market info.
Capinfo Company Limited	Provision of information	31/12/2011	10.85	1.00
(1075) (Note 3)	technologies and services
	supply including system
	integration, software
	development, IT planning
	and consultancy, IT
	operation and
	maintenance, etc.
Qianlong Technology	Research, development and	31/12/2011	5.97	0.76
International Holdings	distribution of software,
Limited (1236)	and the provision of
	related maintenance, usage
	and information services.
Nanjing Sample Technology	Provision of visual identifi	31/12/2011	9.97	1.84
Company Limited (1708)	cation and RFID
(Note 3)	technologies based full
	solutions to intelligent
	traffic, customs logistics
	and health care and other
	application areas.
DIGITALHONGKONG.COM	Provision of secured	30/6/2011	N/A	11.52
(8007)	electronic payment		(Note 2)	(Note 1)
	processing platform and
	software licensing
	services.

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LETTER FROM GUANGDONG SECURITIES

Company name
(Stock code)	Principal business	Year end date	PER	PBR
			(times)	(times)
Jiangsu Nandasoft	Develop, manufacture and	31/12/2011	4.10	0.75
Technology Company	marketing of network
Limited (8045) (Note 3)	security software, internet
	application software,
	educational software,
	business application
	software and provides IT
	consulting services and
	sales of computer
	hardware products and
	equipment.
Excel Technology	Sale of enterprise software	31/12/2011	83.91	1.71
International Holdings	products and provision of
Limited (8048)	maintenance services,
	systems integration
	services and resale of
	complementary hardware
	and software products,
	consultancy services, and
	services in respect of ASP
	business.
Zheda Lande Scitech	Provision of	31/12/2011	N/A	0.77
Limited (8106) (Note 3)	telecommunication		(Note 2)
	solutions, trading of
	hardware and computer
	software, provision of
	telecommunication
	value-added services and
	investment holding.
Jian ePayment Systems	Development and operation	31/12/2011	N/A	3.54
Limited (8165)	of back end electronic		(Note 2)
	receipt/payment and data
	recording and processing
	software system; and
	manufacturing and
	distribution of the
	associated commercial
	applications in the PRC.

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LETTER FROM GUANGDONG SECURITIES

Company name
(Stock code)	Principal business	Year end date	PER	PBR
			(times)	(times)
China Information	Development and sale of	31/12/2011	N/A	3.86
Technology Development	computer software and		(Note 2)
Limited (8178)	hardware, the provision of
	system integration and
	related support services.
AGTech Holdings Limited	Provision of sports lottery	31/12/2011	N/A	0.70
(8279)	management and		(Note 2)
	marketing consultancy
	services and gaming
	technologies (game
	software, systems,
	hardware and terminals)
	business in the PRC.
Maximum			83.91	11.52
Minimum			4.10	0.06
Average			18.54	2.01
The consideration for the			50.72	0.81
Acquisition

Source: the Stock Exchange website (www.hkex.com.hk)

Notes:

The implied PBRs for the selected companies were calculated based on their latest published interim reports.
The selected companies recorded losses for their latest financial years.
The implied PERs and PBRs were calculated based on the ordinary shares and domestic shares of the relevant companies.

As depicted by the above table, the implied PBRs of the Market Comparables ranged from approximately 0.06 times to 11.52 times, with an average of approximately 2.01 times.

Given that the audited net assets of Nanjing City Information as at 31 December 2011 was approximately RMB219.13 million, the implied PBR of the consideration for the Acquisition is approximately 0.81 times to “approximately 13.83% of the audited net assets of Nanjing City Information as at 31 December 2011”, which falls within the PBR range of the Market Comparables.

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LETTER FROM GUANGDONG SECURITIES

We also noticed that the implied PERs of the Market Comparables ranged from approximately 4.10 times to 83.91 times, with an average of approximately 18.54 times.

Given that the audited net profits after taxation of Nanjing City Information for the year ended 31 December 2011 was approximately RMB3.48 million, the implied PER of the consideration for the Acquisition is approximately 50.72 times to “approximately 13.83% of the audited net profits after taxation of Nanjing City Information for the year ended 31 December 2011”, which falls within the PER range of the Market Comparables. Among the Market Comparables, we noted that the implied PER of Excel Technology International Holdings Limited (“ Excel Technology ”) was substantially above the range of the implied PERs of the other Market Comparables. We are therefore of the view that the implied PER of such company is rather an outliner. The implied PERs of the Market Comparables (excluding Excel Technology) should range from approximately 4.10 times to 21.36 times, with an average of approximately 11.27 times. Hence, the implied PER of the consideration for the Acquisition of approximately 50.72 times is higher than the maximum implied PER of the Market Comparables (excluding Excel Technology). Such comparison result may illustrate that the consideration for the Acquisition is inferior to the market valuation in terms of premium over earnings of listed companies with similar lines of business as Nanjing City Information. Nonetheless, we are of the view that while considering the fairness and reasonableness of the consideration for the Acquisition, Independent Shareholders should also take into account other important factors such as (i) it is one of Group’s business strategies to further carry out the construction of technical platform, build up certain platform systems including supporting platform for operation, internet portal display platform and vehicle-mounted collection platform regarding the information services provided by the Group; (ii) Nanjing City Information’s profitability has been expanding persistently since its establishment in 2009; and (iii) the positive outlook of the informationlisation projects invested by Nanjing City Information as represented by the Directors in the sub-section headed “Reasons for the Acquisition” above, which would likely to be favourable to the future business of Nanjing City Information and thereby allowing Nanjing City Information to contribute profits to the Group.

Having taken into account the basis of the consideration for the Acquisition and the results of our trading multiples analysis as set forth above, we consider that the consideration for the Acquisition is fair and reasonable so far as the Independent Shareholders are concerned.

We have also reviewed the other major terms of the Equity Transfer Agreement (such as the terms in relation to representations and warranties, taxation and governing law) and consulted the legal adviser to the Company regarding those major terms of the Equity Transfer Agreement. Having also considered that (i) the condition precedent to the Equity Transfer Agreement (being the passing of the resolution by the Independent Shareholders at the EGM to approve the Equity Transfer Agreement and the transactions contemplated

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LETTER FROM GUANGDONG SECURITIES

thereunder) is required under the Listing Rules; (ii) the consideration for the Acquisition shall be paid by the Company to Nanjing Sample Digital at Completion; (iii) it is one of Group’s business strategies to further carry out the construction of technical platform, build up certain platform systems including supporting platform for operation, internet portal display platform and vehicle-mounted collection platform regarding the information services provided by the Group; and (iv) the representation of the legal adviser to the Company that the major terms of the Equity Transfer Agreement are not uncommon, we are of the view that the terms of the Equity Transfer Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

(3) Possible financial effects of the Acquisition

As confirmed by the Directors, the Company will hold approximately 13.83% equity interest in Nanjing City Information as a result of the Acquisition. The financial results of Nanjing City Information will be included in the financial statements of the Group under cost method.

Effects on net asset value and gearing

As extracted from the Annual Report, the audited net asset value of the Group was approximately RMB792.45 million as at 31 December 2011. According to the Directors, the Group’s net asset value would remain unchanged as a result of the Acquisition. As extracted from the Annual Report, the gearing ratio (being bank loan and long-term loan less cash and cash equivalents divided by equity) of the Group was nil as at 31 December 2011. As confirmed by the Directors, the gearing ratio of the Group would remain to be nil as a result of the Acquisition.

Effects on earnings and working capital

Taking into account the prospects of the informationalisation projects invested by Nanjing City Information as discussed in the sub-section headed “Reasons for the Acquisition” above, the Directors expected that the Acquisition would likely to have a positive impact on the future earnings of the Group. Given that the Company intends to satisfy the consideration for the Acquisition in cash by its internal funding, the Group’s working capital would decrease due to the Acquisition.

It should be noted that the aforementioned analyses are for illustrative purpose only and does not purport to represent how the financial position of the Group will be upon Completion.

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LETTER FROM GUANGDONG SECURITIES

RECOMMENDATION

Having considered the above factors and reasons, we are of the opinion that (i) the terms of the Equity Transfer Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the Acquisition, which is not in the ordinary and usual course of business of the Group, is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to vote in favour of the relevant resolution to be proposed at the EGM to approve the Equity Transfer Agreement and the transactions contemplated thereunder and we recommend the Independent Shareholders to vote in favour of the resolution in this regard.

Yours faithfully, For and on behalf of Guangdong Securities Limited Graham Lam Managing Director

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. 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 misleading.

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the securities of the Company and its associated corporations

Save as disclosed below, as at the Latest Practicable Date, none of the Directors, Supervisors and chief executive officers of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or its associated corporations (within the meaning of Part XV of the SFO) which should be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they have taken or which they are deemed to have under such provisions of the SFO), or which were required to be recorded in the register required to be kept pursuant to Section 352 of the SFO, or otherwise required to be notified to the Company pursuant to the required standard of dealings as set out in Model Code for Securities Transactions by Directors of Listed Companies (Appendix 10 of the Listing Rules).

Long positions in Shares

			Approximate
			percentage of
			the registered
	Number of		capital of the
Name of Director	Shares	Nature of interest	Company (%)
Sha Min	1,350,000	Beneficial owner	0.6%
	65,720,000	Interest of controlled	29.33%
		corporation

Note: Mr. Sha Min (“Mr. Sha”) directly holds 1,350,000 Domestic Shares and is interested in 47.91% of equity interest of Nanjing Sample Technology Group Company Limited which in turn owns 65,720,000 Domestic Shares. Under the SFO, Mr. Sha is deemed to be interested in all 67,070,000 Domestic Shares. Du Yu（杜予）is the spouse of Mr. Sha. Under the SFO, Du Yu is also deemed to be interested in 67,070,000 Domestic Share in which Mr. Sha is interested.

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GENERAL INFORMATION

APPENDIX

(b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial shareholders

So far as to the knowledge of the Directors, as at Latest Practicable Date, the following shareholders (other than the Directors, Supervisors or chief executive officers of the Company) had interests and short positions in the shares or underlying shares of the Company which should be notified to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO.

			Approximate
			percentage of the
			registered capital
	Number of	Nature of	of the Company
Name of Shareholders	Shares	interest	(%)
Nanjing Sample Technology	65,720,000	Beneficial	29.33%
Group Company Limited	Domestic Shares	owner/corporate
(“Sample Group”) (Note 1)
Jiangsu Ruihua Investment	15,000,000	Beneficial	6.69%
Holding Group Company Ltd.	Domestic Shares	owner/corporate
(“Jiangsu Winfast”)
Active Gold Holding Limited	49,545,000	Beneficial	22.11%
	Domestic Shares	owner/corporate
Atlantis Capital Holdings	28,889,000	Interest of	12.89%
Limited (Note 2)	H Shares	controlled
		corporation
Liu Yang (Note 2)	28,889,000	Interest of	12.89%
	H Shares	controlled
		corporation
Golden Meditech Holdings	12,097,000	Interest of	5.40%
Limited (Note 3)	H Shares	controlled
		corporation
Manygain Global Limited	10,000,000	Beneficial owner	4.46%
	H Shares
JP Morgan Chase & Co.	7,000,000	Interest of	3.12%
	H Shares	controlled
		corporation/
		Custodian
		corporation/
		approved
		lending agent
Norges Bank	7,000,000	Beneficial owner	3.12%
	H Shares

Note:

(1) Sample Group directly holds 60,770,000 Domestic Shares. Sample Group is also interested in 100% of the registered capital of Nanjing Sample Technology Commerce City Company Limited* （南京三寶科技商城有限公司） (“Sample Commerce City”), which

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GENERAL INFORMATION

APPENDIX

holds 4,950,000 Domestic Shares and therefore by virtue of the SFO, Sample Group is deemed to be interested in the 4,950,000 Domestic Shares held by Sample Commerce City. As such, Sample Group is the substantial and the single largest shareholders of the Company. Mr. Sha Min, the Chairman of the Company, held 47.91% of equity interest of Sample Group, together with parties acting in concert with him (including 3.58% held by Ms. Liao Qiong, 9.52% held by Mr. Sun Huai Dong, 4.67% held by Mr. Chang Yong, an executive director of the Company, and 2.27% held by Mr. Guo Ya Jun, an executive director of the Company) held an aggregate of 67.95% of equity interest of Sample Group.

(2) Atlantis Capital Holdings Limited is 100% owned by Ms. Liu Yang. Both Altantis Capital Holdings Limited and Ms. Liu Yang owned the 28,889,000 Shares in a capacity of interest under controlled corporation.
(3) 12,097,000 H Shares were held by GM Investment Company Limited, which is a wholly-owned subsidiary of Golden Meditech Holdings Limited (formerly known as Golden Meditech Company Limited). By virtue of GM Investment Company Limited’s interests in the Company, Golden Meditech Company Holdings Limited is deemed to be interested in the same 12,097,000 H Shares under the SFO.

3. MATERIAL CONTRACTS

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

(I) The guarantee agreement dated 23 May 2011 entered into by the Company, as guarantor, in favour of Bank of Jiangsu Company Ltd., （江蘇銀行股份有限公司） (the “Bank”) for the provision of guarantee on the repayment in full the principal amount, interests, fees and expenses of a loan facility granted by the Bank to Zhong Jian Zhi Kang Supply Chain Management Company Limited*
（中健之康供應鏈服務有限責任公司）for an amount of RMB200,000,000.
(II) The sale and purchase agreement dated 12 August 2011 entered into between the Company as purchaser and 南京三寶科技集團有限公司 (Nanjing Sample Technology Group Co. Ltd.) as vendor for the sale and purchase of a land use rights of the land situated in 馬群科技園 (Maqun Technology Park), Qixia District, Nanjing City, Jiangsu Province of the PRC (the “Land”) at a consideration of RMB9,533,100.
(III) The sale and purchase agreement dated 12 August 2011 entered into between the Company as purchaser and 南京三寶科技集團有限公司 (Nanjing Sample Technology Group Co. Ltd.) as vendor for the sale and purchase of the building situated on the Land at a consideration of RMB7,302,300.
(IV) The agreement dated 18 October 2011 entered into by Nanjing Wu Lian Wang Yan Jiu Yuan Development Co., Limited（南京物聯網研究院發展有限公司）, a wholly owned subsidiary of the Company, with Nanjing Kang Da Lai Electronic Technology Co., Ltd.（南京康達來電子科技有限公司）to acquire 65% equity interests of Nanjing City Intelligent Transportation Co., Ltd.（南京城市智能交通有限公司）at a consideration of RMB14,350,000.

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GENERAL INFORMATION

APPENDIX

(V) The capital injection agreement dated 19 December 2011 entered into between the Company, Nanjing Pharmaceutical Company Limited （南京醫藥股份有限公司） (“Nanjing Pharmaceutical”) and Zhong Jian Zhi Kang Supply Chain Management Company Limited （中健之康供應鏈服務有限責任公司） (the “JV Company”), pursuant to which each of the Company and Nanjing Pharmaceutical agreed to inject RMB100,000,000 into the JV Company as its registered capital.

4. DIRECTORS’ SERVICE CONTRACTS

Each of the Directors (including executive Directors, non-executive Directors and independent non-executive Directors) has entered into a service contract with the Company. The service contracts will expire on 31 December 2012 and the further renewal of a term of 3 years shall be subject to the approval at the annual general meeting of the Company.

Save as disclosed above, no Director or Supervisor has a service contract with the Company which is not terminable by the Company within one year without payment, other than statutory compensation.

5. QUALIFICATIONS OF EXPERT

The following are the qualifications of the professional adviser who has given opinions or advice contained in this circular:

Name Qualifications

Guangdong Securities Limited

a licensed corporation to carry out type 1 (dealing in securities), type 2 (dealing in futures contracts), type 4 (advising on securities), type 6 (advising on corporate finance) and type 9 (asset management) regulated activities under the SFO

6. CONSENTS

Guangdong Securities has given and has not withdrawn its written consents to the issue of this circular with the inclusion herein of its letter and references to its name in the form and context in which it appears.

As at the Latest Practicable Date,

(i) Guangdong Securities did not have any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group; and
(ii) Guangdong Securities did not have any direct or indirect interest in any asset which has been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 December 2011, being the date to which the latest published audited financial statements of the Group were made up.

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GENERAL INFORMATION

APPENDIX

7. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011, being the date to which the latest published audited financial statements of the Group was made up.

8. INTEREST IN ASSETS

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 December 2011, being the date to which the latest published audited financial statements of the Group were made up, acquired or disposed of by or leased to any member of the Group (including any company which will become a subsidiary of the Company by reason of an acquisition which has been agreed or proposed since 31 December 2011), or were proposed to be acquired or disposed of by or leased to any member of the Group (including any company which will become a subsidiary of the Company by reason of an acquisition which has been agreed or proposed since 31 December 2011).

9. INTEREST IN CONTRACT OR ARRANGEMENT

As at the Latest Practicable Date, none of the Directors were materially interested in any contract or arrangement which was significant in relation to the business of the Group (including any company which will become a subsidiary of the Company by reason of an acquisition which has been agreed or proposed since 31 December 2011, being the date to which the latest audited consolidated financial statements of the Company have been made up).

10. DIRECTORS’ INTEREST IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors and their respective associates had any business or interest in a business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

11. MISCELLANEOUS

So far as is known to the Directors, as at the Latest Practicable Date, there was (i) no voting trust or other agreement or arrangement or understanding (other than an outright sale) entered into by or binding upon any Shareholder; and (ii) no obligation or entitlement of any Shareholder, whereby he has or may have temporarily or permanently passed control over the exercise of the voting rights in respect of his Shares to a third party, either generally or on a case-by-case basis.

So far as is known to the Directors, as at the Latest Practicable Date, there was no discrepancy between any Shareholder’s beneficial shareholding interest in the Company as disclosed in this circular and the number of Shares in respect of which he will control or will be entitled to exercise control over the voting right at the EGM.

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GENERAL INFORMATION

APPENDIX

12. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection during normal business hours on any business day at the principal place of business in Hong Kong of the Company at Room 3112A, 31/F, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong from the date of this circular up to and including the date of the EGM:

(a) the service contracts entered into between each Director and the Company referred to in the paragraph headed “Directors’ Service Contracts” in this Appendix;
(b) the Equity Transfer Agreement;
(c) the letter from the Independent Board Committee, the text of which is set out on page 14 of this circular;
(d) the letter from Guangdong Securities, the text of which is set out on pages 15 to 29 of this circular;
(e) the consent letter from Guangdong Securities as referred to in the paragraph headed “Consents” in this Appendix; and
(f) a copy of this circular.

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NOTICE OF EGM

南京三寶科技股份有限公司 NANJING SAMPLE TECHNOLOGY COMPANY LIMITED*

(a joint stock limited company incorporated in the People’s Republic of China with limited liability) (Stock Code: 1708)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Nanjing Sample Technology Company Limited (the “ Company ”) shall be held at No.10 Maqun Avenue, Maqun Technology Park, Qixia District, Nanjing City, Jiangsu Province, the PRC on Friday, 10 August 2012 at 10:00 a.m. for the purposes of considering, and if thought fit, passing the following resolutions:

ORDINARY RESOLUTION

“ THAT the equity transfer agreement dated 24 May 2012 (as amended by a supplemental agreement dated 19 June 2012) entered into between Nanjing Sample Technology Company Limited (the “ Company ”) as purchaser and Nanjing Sample Digital Technology Co., Ltd.（南京三寶數碼科技有限公司）as vendor for the Company’s acquisition of 13.83% equity interest in Nanjing City Information Investment Holding Co., Ltd. （南京市信息化投資控股有限公司）at a total consideration of RMB24,400,000 (a copy of which is produced to the meeting marked “A” and initialed by the chairman of the meeting for identification purpose) and the transactions contemplated thereby be and are hereby confirmed, approved and ratified, and the directors of the Company be and are hereby authorised to take such actions and execute such documents as they may consider necessary or desirable to carry out and complete the transactions thereunder.”

SPECIAL RESOLUTION

“ THAT the changes in the amendments to the articles of association of the Company (the “ Articles of Association ”) as set out in the amended Articles of Association (a copy of which is produced to the meeting marked “B” and initialed by the chairman of the meeting for identification purpose) be approved and adopted by the Company with effect from (i) the completion of the Issue of A Shares; and (ii) obtaining the required approval or endorsement from or the registration with relevant regulatory authorities, and that the board of directors of the Company (the “ Board ”) be authorised to modify the wordings of such Articles of Association as appropriate and to take all such actions and execute all such documents or instruments for and on behalf of the Company as the Board may, in its absolute discretion,

* For identification purposes only

– 36 –

NOTICE OF EGM

consider necessary or expedient in order to effect the issue of A shares by the Company, and to deal with other related issues arising from or relating to the changes in the amendments to the Articles of Association accordingly.”

By Order of the Board Nanjing Sample Technology Company Limited Sha Min Chairman

Nanjing, the PRC 22 June 2012

Notes:

Any member of the Company (“ Member ”) entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and vote on his behalf. A proxy need not be a member of the Company. In the case of a joint holding, the form of proxy may be signed by any joint holder, but if more than one joint holder is present at the meeting, whether in person or by proxy, that one of the joint holders whose name stands first on the register of Members in respect of the relevant joint holding shall alone be entitled to vote in respect thereof.
To be valid, a proxy form and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such authority must be delivered to the Company’s H Share Registrar, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17th Floor, Hopewell Center, 183 Queen’s Road East, Wanchai, Hong Kong (in case of holders of H Shares) or to the Company’s registered office at Building No. 1, Ruan Jian Chuang Ye Zhong Xin, High Technology Development Region, Qixia District, Nanjing City, Jiangsu Province, the PRC (in case of holders of Domestic Shares) not less than 24 hours before the time appointed for the holding of the EGM or 24 hours before the time appointed for taking the poll. Delivery of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the meeting and, in such event, the instrument appointing a proxy shall be deemed to be revoked.
Holders of the H Shares or Domestic Shares who intend to attend the EGM are requested to complete the enclosed REPLY SLIP FOR ATTENDANCE AT THE EXTRAORDINARY GENERAL MEETING and return it to the Company’s Hong Kong H Share registrar and transfer office, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F., Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (in case of holders of H Shares) or the Company’s registered office at Building No. 1, Ruan Jian Chuang Ye Zhong Xin, High and New Technology Industrial Development Zone, Nanjing City, Jiangsu Province, the PRC (in case of holders of Domestic Shares) on or before Friday, 20 July 2012. The reply slip may be delivered by hand or by post.
The register of members of the Company will be closed from 10 July 2012 (Tuesday) to 10 August 2012 (Friday) (both days inclusive), during which period no transfer of Shares will be effected. Shareholders whose names appear on the register of members of the Company at the close of trading on 9 August 2012 will be entitled to attend and vote at the EGM convened by the above notice.
Members or their proxies shall present identity proof (and form of proxy in case of proxies) upon attending the EGM.

As at the date hereof, the executive Directors are Mr. Sha Min (Chairman), Mr. Chang Yong, Mr. Guo Ya Jun, the non-executive Director is Mr. Ma Jun; and the independent non-executive Directors are Mr. Xu Suming, Mr. Li Haifeng and Mr. Shum Shing Kei.

– 37 –

AI assistant

Nanjing Sample Technology Company Limited — Proxy Solicitation & Information Statement 2012

50106_rns_2012-06-21_9a4f6b89-c4b3-4460-9aa7-8585968ba2a9.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

南京三寶科技股份有限公司 NANJING SAMPLE TECHNOLOGY COMPANY LIMITED*

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED CHANGES TO THE AMENDMENTS TO ARTICLES OF ASSOCIATION

AND NOTICE OF EXTRAORDINARY GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

南京三寶科技股份有限公司 NANJING SAMPLE TECHNOLOGY COMPANY LIMITED*

DISCLOSEABLE AND CONNECTED TRANSACTION PROPOSED CHANGES TO THE AMENDMENTS TO ARTICLES OF ASSOCIATION AND NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

LETTER FROM THE BOARD

THE EQUITY TRANSFER AGREEMENT

Parties:

Interest to be acquired:

Condition precedent:

Consideration

Payment terms

INFORMATION OF THE GROUP

INFORMATION OF NANJING CITY INFORMATION

REASONS FOR THE ACQUISITION

LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

PROPOSED CHANGES TO THE AMENDMENTS TO ARTICLES OF ASSOCIATION

LETTER FROM THE BOARD

“Article 217

“Article 217

EGM

LETTER FROM THE BOARD

VOTING BY WAY OF POLL

RECOMMENDATIONS

ADDITIONAL INFORMATION

南京三寶科技股份有限公司 NANJING SAMPLE TECHNOLOGY COMPANY LIMITED*

DISCLOSEABLE AND CONNECTED TRANSACTION

DISCLOSEABLE AND CONNECTED TRANSACTION

INTRODUCTION

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

(1) Background of the Acquisition

Information on Nanjing City Information

Reasons for the Acquisition

(2) Principal terms of the Equity Transfer Agreement

Condition precedent

Consideration for the Acquisition

LETTER FROM GUANGDONG SECURITIES

Payment terms

Trading multiples analysis for the Acquisition

LETTER FROM GUANGDONG SECURITIES

(3) Possible financial effects of the Acquisition

Effects on net asset value and gearing

Effects on earnings and working capital

RECOMMENDATION

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

(a) Directors’ interests and short positions in the securities of the Company and its associated corporations

Long positions in Shares

(b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial shareholders

3. MATERIAL CONTRACTS

4. DIRECTORS’ SERVICE CONTRACTS

5. QUALIFICATIONS OF EXPERT

Name Qualifications

6. CONSENTS

7. MATERIAL ADVERSE CHANGE

8. INTEREST IN ASSETS

9. INTEREST IN CONTRACT OR ARRANGEMENT

10. DIRECTORS’ INTEREST IN COMPETING BUSINESS

11. MISCELLANEOUS

12. DOCUMENTS AVAILABLE FOR INSPECTION

NOTICE OF EGM

南京三寶科技股份有限公司 NANJING SAMPLE TECHNOLOGY COMPANY LIMITED*

ORDINARY RESOLUTION

SPECIAL RESOLUTION

By Order of the Board Nanjing Sample Technology Company Limited Sha Min Chairman

Notes:

More from Nanjing Sample Technology Company Limited

Nanjing Sample Technology Company Limited Proxy Solicitation & Information Statement 2012