Newton Resources Ltd — Proxy Solicitation & Information Statement 2019

Apr 24, 2019

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Newton Resources Ltd, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1231)

PROPOSALS FOR RE-ELECTION OF RETIRING DIRECTORS, GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE NEW SHARES AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of the Company to be held at Meeting Room S428 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Wednesday, 12 June 2019 at 11:45 a.m. is set out on pages 16 to 20 of this circular. A form of proxy for use at the Annual General Meeting is also enclosed with this circular. Such form of proxy is also published on the websites of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (www.newton-resources.com).

If you are not able to attend the Annual General Meeting, please complete and sign the enclosed form of proxy in accordance with the instructions printed thereon and return it to 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 as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the Annual General Meeting (i.e. at or before 11:45 a.m. on Monday, 10 June 2019 (Hong Kong time)) or any adjournment thereof. Completion and return of the form of proxy will not preclude shareholders from attending and voting in person at the Annual General Meeting or any adjournment thereof if they so wish and, in such event, the form of proxy shall be deemed to be revoked.

25 April 2019

CONTENTS

	Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Re-election of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
General Mandates to Repurchase Shares and Issue New Shares. . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Annual General Meeting and Proxy Arrangement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Responsibility Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Recommendation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
APPENDIX I – DETAILS OF THE RETIRING DIRECTORS
STANDING FOR RE-ELECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX II – EXPLANATORY STATEMENT FOR
THE SHARE REPURCHASE MANDATE . . . . . . . . . . . . . . . . . . . . . .	11
NOTICE OF ANNUAL GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	16

– i –

DEFINITIONS

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

“2018 AGM”

the annual general meeting of the Company held on 23 May 2018

“Annual General Meeting” the annual general meeting of the Company to be held at or “AGM” Meeting Room S428 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Wednesday, 12 June 2019 at 11:45 a.m., to consider and, if appropriate, to approve the resolutions contained in the notice of the AGM which is set out on pages 16 to 20 of this circular, or any adjournment thereof “Articles” the articles of association of the Company, as amended from time to time “Board” the board of Directors “close associates” has the meaning ascribed thereto under the Listing Rules “Company” Newton Resources Ltd, a company incorporated in the Cayman Islands with limited liability, and the Shares of which are listed on the Main Board of the Stock Exchange

“Controlling Shareholder” has the meaning ascribed thereto under the Listing Rules “core connected person(s)” has the meaning ascribed thereto under the Listing Rules “Director(s)” the director(s) of the Company “Group” the Company and its subsidiaries collectively “HK$” Hong Kong dollar, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China “Latest Practicable Date” 16 April 2019, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

– 1 –

DEFINITIONS

“SFO”

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

“Shares(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company

“Share Issuance Mandate” a general mandate proposed to be granted to the Directors at the AGM to exercise the power of the Company to allot, issue or deal with the Shares during the period and in the manner as set out in item 7(2) of the notice of the AGM not exceeding 20% of the total number of issued Shares of the Company as at the date of passing such proposed ordinary resolution

“Share Repurchase Mandate” a general mandate proposed to be granted to the Directors at the AGM to exercise the power of the Company to repurchase the Shares during the period and in the manner as set out in item 7(1) of the notice of the AGM not exceeding 10% of the total number of issued Shares of the Company as at the date of passing such proposed ordinary resolution

“Shareholder(s)” holder(s) of the Share(s)

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

“Substantial Shareholder” has the meaning ascribed thereto under the Listing Rules “Takeovers Code” The Code on Takeovers and Mergers “%” per cent

– 2 –

LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1231)

Executive Directors:

Mr. Chong Tin Lung, Benny (Chairman) Mr. Li Changfa Mr. Luk Yue Kan

Registered Office:

P.O. Box 309 Ugland House Grand Cayman, KY1-1104 Cayman Islands

Non-executive Director:

Mr. Wu Wai Leung, Danny

Independent Non-executive Directors:

Mr. Tsui King Fai Mr. Lee Kwan Hung Mr. Shin Yick, Fabian

Principal Place of Business

in Hong Kong: Suite 4117 41/F, Jardine House 1 Connaught Place Central, Hong Kong

25 April 2019

To the Shareholders

Dear Sir/Madam,

PROPOSALS FOR RE-ELECTION OF RETIRING DIRECTORS, GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE NEW SHARES AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with information in respect of certain resolutions to be proposed at the AGM for (i) the re-election of the retiring Directors; (ii) the granting of the Share Repurchase Mandate and the Share Issuance Mandate to repurchase Shares and to issue new Shares respectively, and to give you notice of the AGM.

RE-ELECTION OF RETIRING DIRECTORS

In accordance with the articles 106(1) and 106(2) of the Articles, Messrs. Tsui King Fai, Lee Kwan Hung and Luk Yue Kan shall retire from their office by rotation at the AGM. All the above retiring Directors, being eligible, shall offer themselves for re-election as the Directors at the AGM.

– 3 –

LETTER FROM THE BOARD

The nomination committee of the Company (the “Nomination Committee”) has reviewed the structure, size and composition of the Board, the qualifications, skills, experience, time commitment, contribution and the independence of all the independent non-executive Directors with reference to the nomination principles and criteria set out in the Company’s Board diversity policy and nomination policy for Directors as well as the Company’s corporate strategy.

By following the criteria set out in the nomination policy for Directors of the Company and measurable objectives set out in the Board diversity policy of the Company together with taking into account the contribution and time commitment by each of Messrs. Tsui King Fai and Lee Kwan Hung to the Company, the Nomination Committee has assessed their independence and is satisfied with the results.

Mr. Tsui King Fai possesses appropriate professional qualification in the accounting and financial management in accordance with the requirements under the Listing Rules whereas Mr. Lee Kwan Hung possesses appropriate professional qualification in the legal expertise, and both of them have extensive experience in relation to corporate governance matters of the listed companies in Hong Kong. It is believed that their directorship in the Company can keep bringing valuable contributions to the Board and its diversity. Both Messrs. Tsui King Fai and Lee Kwan Hung have confirmed their independence with reference to the independence guidelines set out in rule 3.13 of the Listing Rules.

On 29 March 2019, the Board considers that they are still independent and will continue to bring valuable business experience, knowledge and professionalism to the Board for its efficient and effective functioning. In this regard, the Nomination Committee has proposed the re-appointment of them as independent non-executive Directors to the Board for it to make recommendations to the Shareholders for re-election at the AGM.

Mr. Lee Kwan Hung is holding more than seven listed company directorships as independent nonexecutive directors. He is not involved in the day-to-day operations and management of the businesses in all such positions. Mr. Lee Kwan Hung has annually disclosed to the Company the number and nature of offices held in public companies and other significant commitments with time involved. As a competent professional, he is good at time management and has sound knowledge and skills to effectively handle those positions. The Board considers that Mr. Lee Kwan Hung is able to devote sufficient time to his duties as a member of the Board.

Details of the retiring Directors who are proposed to be re-elected at the AGM are set out in Appendix I to this circular.

– 4 –

LETTER FROM THE BOARD

GENERAL MANDATES TO REPURCHASE SHARES AND ISSUE NEW SHARES

At the 2018 AGM, general mandates were granted to the Directors to exercise the powers of the Company to repurchase Shares and issue new Shares respectively. Such mandates, to the extent not used by the date of AGM, will lapse at the conclusion of the AGM. In order to give the Directors the flexibility and discretion to exercise the powers of the Company to repurchase Shares and to issue new Shares if and when appropriate, the following ordinary resolutions will be proposed at the AGM to approve:

• (a) the granting of the proposed Share Repurchase Mandate to the Directors to exercise the power of the Company to repurchase Shares not exceeding 10% of the total number of issued Shares of the Company as at the date of passing the proposed ordinary resolution contained in item 7(1) of the notice of the AGM as set out on pages 16 to 20 of this circular, being a maximum of 400,000,000 Shares on the basis that no further Shares are issued or repurchased during the period from the Latest Practicable Date up to the date of the AGM;

• (b) the granting of the proposed Share Issuance Mandate to the Directors to exercise the power of the Company to allot, issue or deal with new Shares not exceeding 20% of the total number of issued Shares of the Company as at the date of passing the proposed ordinary resolution contained in item 7(2) of the notice of the AGM as set out on pages 16 to 20 of this circular, being a maximum of 800,000,000 Shares on the basis that no further Shares are issued or repurchased during the period from the Latest Practicable Date up to the date of the AGM; and

• (c) the extension of the Share Issuance Mandate such that the number of the Shares repurchased by the Company pursuant to the Share Repurchase Mandate as mentioned in item 7(1) of the notice of the AGM will also be added to the Share Issuance Mandate as mentioned in item 7(2) of the notice of the AGM.

With reference to the Share Repurchase Mandate and the Share Issuance Mandate, the Directors wish to state that they have no immediate plan to repurchase any Shares or issue any new Shares pursuant thereto.

An explanatory statement required by the Listing Rules to provide the Shareholders with all information reasonably necessary to enable them to make an informed decision on whether to vote for or against the granting of the Share Repurchase Mandate is set out in Appendix II to this circular.

ANNUAL GENERAL MEETING AND PROXY ARRANGEMENT

The notice of the AGM is set out on pages 16 to 20 of this circular.

Pursuant to the Listing Rules and the Articles, any vote of the Shareholders at a general meeting must, subject to certain exceptions, be taken by poll. Accordingly, all the proposed resolutions will be put to vote by way of poll at the AGM. An announcement on the poll vote results will be published by the Company after the AGM in the manner prescribed under rule 13.39(5) of the Listing Rules.

– 5 –

LETTER FROM THE BOARD

A form of proxy for use at the AGM is enclosed with this circular and such form of proxy is also published on the websites of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (www.newton-resources.com). To be valid, the form of proxy must be completed and signed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority (if any) under which it is signed or a certified copy of that power of attorney or authority at 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 as soon as possible but in any event not less than 48 hours before the time appointed for holding the AGM (i.e. at or before 11:45 a.m. on Monday, 10 June 2019 (Hong Kong time)) or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the AGM or any adjournment thereof if you so wish and, in such event, your form of proxy shall be deemed to be revoked.

RESPONSIBILITY STATEMENT

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

RECOMMENDATION

The Directors consider that the proposals for the re-election of retiring Directors, the granting of the Share Repurchase Mandate and Share Issuance Mandate to repurchase Shares and to issue new Shares and the extension of the Share Issuance Mandate are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to be proposed at the AGM.

GENERAL

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholders is required to abstain from voting on the resolutions to be proposed at the AGM.

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

Yours faithfully, For and on behalf of the Board Newton Resources Ltd Chong Tin Lung, Benny Chairman and Executive Director

– 6 –

DETAILS OF THE RETIRING DIRECTORS STANDING FOR RE-ELECTION

APPENDIX I

The following are the details of the retiring Directors who will retire and, being eligible, offer themselves for re-election at the AGM:

Mr. Tsui King Fai , aged 69, was appointed as an independent non-executive Director on 15 December 2010 and is the chairman of the audit committee and a member of each of the remuneration committee and the nomination committee of the Company.

Mr. Tsui currently holds positions in the following companies listed on the Main Board of the Stock Exchange:

Name of Company	Title
Lippo Limited (stock code: 226)	Independent non-executive director
Lippo China Resources Limited (stock code: 156)	Independent non-executive director
Hongkong Chinese Limited (stock code: 655)	Independent non-executive director
China Aoyuan Group Limited (stock code: 3883)	Independent non-executive director
(formerly known as China Aoyuan Property Group Limited)
Vinda International Holdings Limited (stock code: 3331)	Independent non-executive director

Moreover, Mr. Tsui was a director and senior consultant of WAG Worldsec Corporate Finance Limited up to his resignation on 30 June 2016.

Mr. Tsui graduated from the University of Houston with a Master of Science in Accountancy degree and a Bachelor of Business Administration degree with first class honors awarded in 1974 and 1973 respectively.

Mr. Tsui is a fellow member of the Hong Kong Institute of Certified Public Accountants and a member of each of the Chartered Accountants Australia and New Zealand, and the American Institute of Certified Public Accountants. He has extensive experience in accounting, finance and investment management, particularly in investments in China. Mr. Tsui had worked for two of the “Big Four” audit firms in Hong Kong and the United States of America.

Save as disclosed above, Mr. Tsui did not hold any position with the Company or other members of the Group, any directorship in other listed public companies in the three years preceding the Latest Practicable Date, or any other major appointment or professional qualification.

– 7 –

DETAILS OF THE RETIRING DIRECTORS STANDING FOR RE-ELECTION

APPENDIX I

Mr. Tsui entered into a letter of appointment with the Company on 28 June 2017 for a fixed term of three years commencing from 4 July 2017, subject to retirement by rotation and re-election at annual general meetings pursuant to the Articles, and subject to termination thereof by service of not less than three months’ notice by either party. In respect of his service to the Company as an independent nonexecutive Director, Mr. Tsui is entitled to a Director’s fee of HK$264,000 per annum pursuant to his letter of appointment. Save for the Director’s fee, he is not expected to receive any other remuneration for holding his office as an independent non-executive Director. Mr. Tsui’s annual emoluments as an independent non-executive Director was determined by the Board based on the recommendation from the remuneration committee of the Company with reference to the Company’s performance, his duties and responsibilities with the Company, and the prevailing market conditions. For the financial year ended 31 December 2018, his emoluments comprised a Director’s fee of HK$264,000.

As at the Latest Practicable Date, Mr. Tsui does not have any interests in the Shares within the meaning of Part XV of the SFO. Save as disclosed above, Mr. Tsui does not have any relationship with any other Directors, senior management, Substantial Shareholder or Controlling Shareholder of the Company.

Save as disclosed above, there is no information in relation to the proposed re-election of Mr. Tsui that is required to be disclosed pursuant to any of the requirements of rules 13.51(2) of the Listing Rules and there is no other matter in relation to Mr. Tsui that needs to be brought to the attention of the Shareholders.

Mr. Lee Kwan Hung , aged 53, was appointed as an independent non-executive Director on 15 December 2010 and is the chairman of each of the remuneration committee and the nomination committee of the Company. Currently, he is a consultant of Howse Williams.

Mr. Lee currently also holds positions in the following companies listed on the Main Board of the Stock Exchange:

Name of company	Title
Embry Holdings Limited (stock code: 1388)	Independent non-executive director
NetDragon Websoft Holdings Limited (stock code: 777)	Independent non-executive director
Tenfu (Cayman) Holdings Company Limited	Independent non-executive director
(stock code: 6868)
China BlueChemical Ltd. (stock code: 3983)	Independent non-executive director
Landsea Green Group Co., Ltd. (stock code: 106)	Independent non-executive director
Red Star Macalline Group Corporation Ltd. (stock code:1528)	Independent non-executive director
FSE Services Group Limited (stock Code: 331)	Independent non-executive director
(formerly known as FSE Engineering Holdings Limited)
Ten Pao Group Holdings Limited (stock Code: 1979)	Independent non-executive director
China Goldjoy Group Limited (stock code:1282)	Independent non-executive director

Mr. Lee was previously a member of the audit committee of the Company up to his resignation from such position with effect from 9 April 2018.

– 8 –

DETAILS OF THE RETIRING DIRECTORS STANDING FOR RE-ELECTION

APPENDIX I

Moreover, Mr. Lee was an independent non-executive director of Futong Technology Development Holdings Limited (stock code: 465) and Asia Cassava Resources Holdings Limited (stock code: 841), up to his resignation on 18 November 2017 and 13 May 2018 respectively.

Mr. Lee holds a Bachelor of Laws (Honours) degree and Postgraduate Certificate in Laws from the University of Hong Kong. He was admitted as a solicitor in Hong Kong and the United Kingdom and is a practising lawyer. Between 1993 and 1994, Mr. Lee was a senior manager in the Listing Division of the Stock Exchange. Mr. Lee was a partner of Woo Kwan Lee & Lo between 2001 and 2011.

Save as disclosed above, Mr. Lee did not hold any position with the Company or other members of the Group, any directorship in other listed public companies in the three years preceding the Latest Practicable Date, or any other major appointment or professional qualification.

Mr. Lee entered into a letter of appointment with the Company on 28 June 2017 for a fixed term of three years commencing from 4 July 2017, subject to retirement by rotation and re-election at annual general meetings pursuant to the Articles, and subject to termination thereof by service of not less than three months’ notice by either party. In respect of his service to the Company as an independent nonexecutive Director, Mr. Lee is entitled to a Director’s fee of HK$264,000 per annum pursuant to his letter of appointment. Save for the Director’s fee, he is not expected to receive any other remuneration for holding his office as an independent non-executive Director. Mr. Lee’s annual emoluments as an independent non-executive Director was determined by the Board based on the recommendation from the remuneration committee of the Company with reference to the Company’s performance, his duties and responsibilities with the Company, and the prevailing market conditions. For the financial year ended 31 December 2018, his emoluments comprised a Director’s fee of HK$264,000.

As at the Latest Practicable Date, Mr. Lee does not have any interests in the Shares within the meaning of Part XV of the SFO. Save as disclosed above, Mr. Lee does not have any relationship with any other Directors, senior management, Substantial Shareholder or Controlling Shareholder of the Company.

Save as disclosed above, there is no information in relation to the proposed re-election of Mr. Lee that is required to be disclosed pursuant to any of the requirements of rules 13.51(2) of the Listing Rules and there is no other matter in relation to Mr. Lee that needs to be brought to the attention of the Shareholders.

– 9 –

DETAILS OF THE RETIRING DIRECTORS STANDING FOR RE-ELECTION

APPENDIX I

Mr. Luk Yue Kan , aged 43, was appointed as an executive Director and the chief financial officer of the Company on 1 April 2015 and is a member of the investment committee of the Company. He joined the Company in March 2011 as the financial controller. In November 2011, he assumed the additional role of company secretary of the Company. He oversees the trading business, treasury management, financial reporting, company secretarial, human resources, risk management, mergers and acquisitions and investor relations matters of the Company. He is also a director and company secretary of subsidiaries of the Company.

Mr. Luk holds an Executive MBA degree from Richard Ivey School of Business at The University of Western Ontario in Canada and a Bachelor’s degree in Accountancy from the Hong Kong Polytechnic University. He is a fellow member of the Hong Kong Institute of Certified Public Accountants, and an associate and a Certified Tax Advisor of the Taxation Institute of Hong Kong. Mr. Luk has over 21 years’ experience in auditing, accounting and financial management.

Save as disclosed above, Mr. Luk did not hold any position with the Company or other members of the Group, any directorship in other listed public companies in the three years preceding the Latest Practicable Date, or any other major appointment or professional qualification.

Mr. Luk entered into a service contract with the Company on 31 January 2018 for a fixed term of three years commencing from 1 April 2018, subject to retirement by rotation and re-election at annual general meetings pursuant to the Articles, and subject to termination thereof by service of not less than three months’ notice by either party. Mr. Luk is entitled to a remuneration of HK$170,100 per month and a discretionary bonus in respect of his service to the Company as an executive Director, the chief financial officer and the company secretary of the Company pursuant to his service contract. Save for the above remuneration and discretionary bonus, he is not expected to receive any other remuneration for holding his office as an executive Director. Mr. Luk’s annual emoluments as an executive Director, the chief financial officer and the company secretary of the Company was determined by the Board based on the recommendation from the remuneration committee of the Company with reference to the Company’s performance, his duties and responsibilities with the Company, and the prevailing market conditions. For the financial year ended 31 December 2018, his emoluments comprised salaries and discretionary bonus of approximately HK$2,430,000.

As at the Latest Practicable Date, Mr. Luk does not have any interests in Shares within the meaning of Part XV of the SFO. Save as disclosed above, Mr. Luk does not have any relationship with any other Director, senior management, Substantial Shareholder or Controlling Shareholder of the Company.

Save as disclosed above, there is no information in relation to the proposed re-election of Mr. Luk that is required to be disclosed pursuant to any of the requirements of rules 13.51(2) of the Listing Rules and there is no other matter in relation to Mr. Luk that needs to be brought to the attention of the Shareholders.

– 10 –

EXPLANATORY STATEMENT FOR THE SHARE REPURCHASE MANDATE

APPENDIX II

The following is an explanatory statement required by the Listing Rules to provide the Shareholders with all information reasonably necessary to enable them to make an informed decision on whether to vote for or against the ordinary resolution to be proposed at the AGM in relation to the granting of the Share Repurchase Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the total number of issued Shares of the Company comprised 4,000,000,000 Shares.

Subject to the passing of the ordinary resolution granting the proposed Share Repurchase Mandate as set out in item 7(1) of the notice of the AGM and on the basis that no further Shares are issued or repurchased during the period from the Latest Practicable Date up to the date of the AGM, the Directors would be authorised to exercise the power of the Company under the Share Repurchase Mandate to repurchase, during the period in which the Share Repurchase Mandate remains in force, up to a maximum of 400,000,000 Shares, representing 10% of the total number of issued Shares of the Company as at the date of the AGM.

2. REASONS FOR REPURCHASE

The Directors believe that the granting of the Share Repurchase Mandate is in the best interests of the Company and the Shareholders as a whole. Such repurchases of Shares may, depending on the market conditions and funding arrangements at the relevant time, result in an enhancement of the net asset value per Share and/or earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and the Shareholders.

3. FUNDING OF REPURCHASE

Repurchases of Shares pursuant to the proposed Share Repurchase Mandate would be financed out of funds legally available for such purpose in accordance with the memorandum and articles of association of the Company, the laws of the Cayman Islands and/or any other applicable laws, as the case may be.

Repurchases will be funded from the Company’s available cash flow or working capital facilities.

– 11 –

EXPLANATORY STATEMENT FOR THE SHARE REPURCHASE MANDATE

APPENDIX II

4. IMPACT OF REPURCHASE

There might be a material adverse impact on the working capital and/or gearing position of the Company (as compared with the financial position disclosed in the latest audited accounts contained in the annual report of the Company for the year ended 31 December 2018) in the event that the Share Repurchase Mandate was to be carried out in full at any time during the proposed repurchase period. However, the Directors do not intend to exercise the Share Repurchase Mandate to such extent and in circumstances that would have a material adverse impact on the working capital or the gearing levels of the Company which in the opinion of the Directors are from time to time appropriate for the Company.

5. SHARE PRICES

The highest and lowest prices per Share at which Shares traded on the Stock Exchange during each of the previous 12 months, and up to the Latest Practicable Date were as follows:

	Highest	Lowest
Month	Price	Price
	HK$	HK$
2018
April	0.84	0.65
May	0.74	0.65
June	0.80	0.69
July	0.80	0.73
August	0.82	0.71
September	0.92	0.83
October	0.98	0.88
November	0.97	0.87
December	1.04	0.85
2019
January	1.05	0.88
February	0.96	0.91
March	0.95	0.86
April (up to the Latest Practicable Date)	0.93	0.79

– 12 –

EXPLANATORY STATEMENT FOR THE SHARE REPURCHASE MANDATE

APPENDIX II

6. EFFECT OF TAKEOVERS CODE

If a Shareholder’s proportionate interest in the voting rights of the Company increases as a result of a repurchase of Shares pursuant to the Share Repurchase Mandate, such increase will be treated as an acquisition of voting rights for the purposes of the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting in concert (within the meaning under the Takeovers Code), depending on the level of increase of the Shareholder’s interest, could obtain or consolidate control of the Company and become(s) obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, if the Share Repurchase Mandate is exercised in full and assuming that (i) there would not be any changes in the issued share capital of the Company prior to such repurchase of Shares; and (ii) each of the Shareholders below would not dispose of or acquire any Shares prior to such repurchase, the shareholding percentage of the Shareholders, who, so far as is known to the Directors, before such repurchase had and/or would after such repurchase have an interest in 10% or more of the total number of issued Shares of the Company would be as follows:

		Percentage of	Percentage of
		shareholdings	shareholding
		before exercise	if Share
		of Share	Repurchase
	Number of	Repurchase	Mandate is
Name of Shareholder	Shares held	Mandate	exercised in full
Mak Siu Hang, Viola(1)	1,149,744,000	28.74%	31.94%
VMS Investment Group Limited (“VMSIG”)(1)	1,149,744,000	28.74%	31.94%
Fast Fortune Holdings Limited (“Fast Fortune”)(1)	360,000,000	9.00%	10.00%
Shougang Group Co., Ltd.(2)	1,098,570,000	27.46%	30.52%
Shougang Holding (Hong Kong) Limited
(“Shougang Hong Kong”)(2)	1,098,570,000	27.46%	30.52%
Lord Fortune Enterprises Limited (“Lord Fortune”)(2)	370,000,000	9.25%	10.28%
Plus All Holdings Limited (“Plus All”)(2)	728,570,000	18.21%	20.24%
Cheng Yu Tung Family (Holdings) Limited(3)	620,000,000	15.50%	17.22%
Cheng Yu Tung Family (Holdings II) Limited(4)	620,000,000	15.50%	17.22%
Chow Tai Fook Capital Limited (“CTF Capital”)(5)	620,000,000	15.50%	17.22%
Chow Tai Fook (Holding) Limited (“CTF Holding”)(6)	620,000,000	15.50%	17.22%

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EXPLANATORY STATEMENT FOR THE SHARE REPURCHASE MANDATE

APPENDIX II

		Percentage of	Percentage of
		shareholdings	shareholding
		before exercise	if Share
		of Share	Repurchase
	Number of	Repurchase	Mandate is
Name of Shareholder	Shares held	Mandate	exercised in full
Chow Tai Fook Enterprises Limited
(“CTF Enterprises”)(7)	620,000,000	15.50%	17.22%
New World Development Company Limited (“NWD”)(8)	620,000,000	15.50%	17.22%
NWS Holdings Limited (“NWS”)(9)	620,000,000	15.50%	17.22%
NWS Resources Limited (“NWS Resources”)(9)	620,000,000	15.50%	17.22%
NWS Mining Limited (“NWS Mining”)(9)	620,000,000	15.50%	17.22%
Modern Global Holdings Limited (“Modern Global”)(9)	620,000,000	15.50%	17.22%
Perfect Move Limited (“Perfect Move”)(9)	620,000,000	15.50%	17.22%
Faithful Boom Investments Limited
(“Faithful Boom”)(9)	620,000,000	15.50%	17.22%

Notes:

• (1) Fast Fortune and VMSIG held 360,000,000 Shares and 789,744,000 Shares as beneficial owners, respectively. Ms. Mak Siu Hang, Viola held a 100% direct interest in VMSIG. Fast Fortune was a whollyowned subsidiary of VMSIG. Therefore, Ms. Mak Siu Hang, Viola was deemed to be interested in all the Shares held by each of VMSIG and Fast Fortune, and VMSIG was deemed to be interested in all the Shares held by Fast Fortune.

• (2) Shougang Group Co., Ltd. held a 100% direct interest in Shougang Hong Kong. Lord Fortune and Plus All were wholly-owned subsidiaries of Shougang Hong Kong. Therefore, Shougang Group Co., Ltd. and Shougang Hong Kong were both deemed to be interested in all the Shares held by Lord Fortune and Plus All.

• (3) Cheng Yu Tung Family (Holdings) Limited held approximately 48.98% direct interest in CTF Capital and was accordingly deemed to have an interest in the Shares interested by or deemed to be interested by CTF Capital.

• (4) Cheng Yu Tung Family (Holdings II) Limited held approximately 46.65% direct interest in CTF Capital and was accordingly deemed to have an interest in the Shares interested by or deemed to be interested by CTF Capital.

• (5) CTF Capital held approximately 81.03% direct interest in CTF Holding and was accordingly deemed to have an interest in the Shares interested by or deemed to be interested by CTF Holding.

• (6) CTF Holding held 100% direct interest in CTF Enterprises and was accordingly deemed to have an interest in the Shares interested by or deemed to be interested by CTF Enterprises.

• (7) CTF Enterprises held more than one-third of the issued shares of NWD and was accordingly deemed to have an interest in the Shares interested by or deemed to be interested by NWD.

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EXPLANATORY STATEMENT FOR THE SHARE REPURCHASE MANDATE

APPENDIX II

• (8) NWD held more than 60% direct interest in NWS and was accordingly deemed to have an interest in the Shares interested by or deemed to be interested by NWS.

• (9) NWS held a 100% direct interest in NWS Resources, which held a 100% direct interest in NWS Mining. NWS Mining held a 100% interest in Modern Global, which held a 100% direct interest in Perfect Move. Faithful Boom was a wholly-owned subsidiary of Perfect Move. Therefore, NWS, NWS Resources, NWS Mining, Modern Global and Perfect Move were all deemed to be interested in all the Shares held by Faithful Boom.

In the event that the Share Repurchase Mandate is exercised in full and assuming that no Shares are issued or repurchased between the Latest Practicable Date and the date of repurchase and no Shares are disposed of or acquired by these Shareholders as aforesaid, the shareholding of these Shareholders in the Company would be increased to approximately the respective percentage as shown in the last column of the table above. Such increases will give rise to an obligation by Ms. Mak Siu Hang, Viola, VMSIG, Shougang Group Co., Ltd. and Shougang Hong Kong to make a mandatory offer for all the issued Shares under Rules 26 and 32 of the Takeovers Code. The Directors will not exercise the Share Repurchase Mandate to such an extent that would give rise to such obligation, or reduce the amount of Shares held by the public to less than 25% of the total number of issued Shares of the Company.

7. SHARE REPURCHASE MADE BY THE COMPANY

During the 6 months immediately prior to the Latest Practicable Date, the Company had not repurchased any of the Shares (whether on the Stock Exchange or otherwise).

8. UNDERTAKING OF THE DIRECTORS

To the best of their knowledge and having made all reasonable enquiries, none of the Directors nor any of their respective close associates (as defined in the Listing Rules) has any present intention to sell any Shares to the Company in the event that the granting of the Share Repurchase Mandate is approved by the Shareholders.

The Company has not been notified by any core connected persons of the Company that they have a present intention to sell any Shares to the Company, or that they have undertaken not to sell any Shares held by them to the Company in the event that the granting of the Share Repurchase Mandate is approved by the Shareholders.

The Directors have undertaken to the Stock Exchange to exercise the power of the Company to make repurchases of Shares pursuant to the Share Repurchase Mandate in accordance with the Listing Rules and the applicable laws of the Cayman Islands and in accordance with the regulations set out in the memorandum and articles of association of the Company.

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NOTICE OF ANNUAL GENERAL MEETING

==> picture [177 x 39] intentionally omitted <==

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1231)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT an Annual General Meeting of Newton Resources Ltd (the “Company”) will be held at Meeting Room S428 (Harbour Road Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong on Wednesday, 12 June 2019 at 11:45 a.m. for the following purposes:

ORDINARY RESOLUTIONS

1. To receive and approve the audited consolidated financial statements and the reports of the directors and independent auditor of the Company for the year ended 31 December 2018.

2. To re-elect Mr. Tsui King Fai as an independent non-executive director of the Company.

3. To re-elect Mr. Lee Kwan Hung as an independent non-executive director of the Company.

4. To re-elect Mr. Luk Yue Kan as an executive director of the Company.

5. To authorise the board of directors of the Company to fix the directors’ remuneration.

6. To re-appoint Messrs. Ernst & Young as the auditor of the Company and to authorise the board of directors of the Company to fix the auditor’s remuneration.

7. To consider as specific business and, if thought fit, pass with or without amendment(s), the following resolutions as ordinary resolutions:

8. (1) “ THAT :

   • (a) subject to paragraph (b) of this resolution, a general mandate be and is hereby generally and unconditionally given to the directors of the Company (the “Directors”) to exercise all the powers of the Company during the Relevant Period (as hereinafter defined) to repurchase its shares on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) or on any other stock exchange on which the shares of the Company may be listed and recognised by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws, rules and regulations including but not limited to the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or that of any other stock exchange as amended from time to time;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the total number of shares of the Company to be repurchased by the Company pursuant to the mandate in paragraph (a) of this resolution shall not exceed 10% of the total number of issued shares of the Company as at the date of passing this resolution and the said mandate shall be limited accordingly; and

• (c) for the purposes of this resolution:

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

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

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

• (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders in general meeting.”

(2) “ THAT :

• (a) subject to paragraph (c) of this resolution, a general mandate be and is hereby generally and unconditionally approved and given to the Directors during the Relevant Period (as hereinafter defined) to allot, issue and deal with additional shares in the capital of the Company or securities convertible into such shares or options, warrants, or similar rights to subscribe for any shares or convertible securities and to make or grant offers, agreements and options which would or might require the exercise of such powers;

• (b) the mandate in paragraph (a) of this resolution shall authorise the Directors to make or grant offers, agreements and options during the Relevant Period which would or might require the exercise of such powers after the end of the Relevant Period;

• (c) the aggregate number of share allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors pursuant to the mandate in paragraph (a) of this resolution, otherwise than pursuant to:

• (i) a Rights Issue (as hereinafter defined);

• (ii) the exercise of any conversion rights attaching to any securities which are convertible into shares of the Company;

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NOTICE OF ANNUAL GENERAL MEETING

• (iii) the exercise of the rights under any option scheme of the Company or similar arrangement for the time being adopted for the grant or issue to Directors and/or employees of the Company and/or any of its subsidiaries of options to subscribe for, or rights to acquire, shares of the Company; or

• (iv) any issue of shares as scrip dividends or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on the shares of the Company in accordance with the articles of association of the Company from time to time,

shall not exceed 20% of the total number of issued shares of the Company as at the date of passing this resolution and the said mandate shall be limited accordingly; and

• (d) for the purposes of this resolution:

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

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

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

• (iii) the date on which the authority set out in this resolution is revoked or varied by an ordinary resolution of the shareholders in general meeting.

“Rights Issue” means an offer of shares open for a period fixed by the Directors to holders of shares of the Company or any class thereof on the register of members on a fixed record date in proportion to their then holdings of such shares or class thereof (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of any relevant jurisdiction or the requirements of any recognised regulatory body or any stock exchange).”

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NOTICE OF ANNUAL GENERAL MEETING

• (3) “ THAT conditional upon the passing of the ordinary resolutions set out in items 7(1) and 7(2) of the notice convening this meeting (the “Notice”), the general mandate referred to in the ordinary resolution set out in item 7(2) of the Notice be and is hereby extended by the addition to the aggregate number of shares which may be allotted, issued and dealt with or agreed conditionally or unconditionally to be allotted, issued and dealt with by the Directors pursuant to such general mandate of an amount representing the aggregate number of shares of the Company repurchased by the Company pursuant to the mandate referred to in the ordinary resolution set out in item 7(1) of the Notice, provided that such amount shall not exceed 10% of the aggregate number of issued shares of the Company as at the date of passing the ordinary resolution set out in item 7(1).”

By Order of the Board Newton Resources Ltd Chong Tin Lung, Benny Chairman and Executive Director

Hong Kong, 25 April 2019

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. All resolutions at the meeting will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and the articles of association of the Company and the poll voting results will be published on the websites of the Hong Kong Exchanges and Clearing Limited and the Company in accordance with the Listing Rules.

2. Any member of the Company entitled to attend and vote at the meeting is entitled to appoint another person as his/her/its proxy to attend and vote instead of him/her/it. A member of the Company who is the holder of two or more shares of the Company may appoint more than one proxy to represent him/her/it and vote on his/her/its behalf at the meeting or any adjournment thereof. A proxy (who must be an individual) need not be a member of the Company. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed. In addition, a proxy or proxies representing either a member of the Company who is an individual or a member of the Company which is a corporation is entitled to exercise the same powers on behalf of the member of the Company which he or they represent(s) as such member of the Company could exercise.

3. In order to be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power of attorney or authority, shall be deposited at 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 less than 48 hours before the time appointed for the holding of the meeting (i.e. at or before 11:45 a.m. on Monday, 10 June 2019 (Hong Kong time)) or any adjournment thereof. Delivery of the form of proxy shall not preclude a member 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.

4. For determining the entitlement to attend and vote at the meeting, the register of members of the Company will be closed from Thursday, 6 June 2019 to Wednesday, 12 June 2019, both dates inclusive, during which period no transfer of shares will be registered. In order to qualify for attending and voting at the meeting, all transfers of shares of the Company accompanied by the relevant properly completed transfer forms and the relevant share certificates 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 for registration not later than 4:30 p.m. on Wednesday, 5 June 2019.

5. If a Typhoon Signal No. 8 or above is hoisted or a Black Rainstorm Warning Signal is in force at or at any time after 9:00 a.m. on the date of the meeting, the meeting will be postponed or adjourned. The Company will post an announcement on the websites of the Hong Kong Exchanges and Clearing Limited and the Company to notify shareholders of the date, time and place of the rescheduled meeting.

The meeting will be held as scheduled when an Amber or Red Rainstorm Warning Signal is in force. Shareholders should decide on their own whether they would attend the meeting under bad weather condition bearing in mind their own situation.

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