PAX Global Technology Limited — Proxy Solicitation & Information Statement 2016

Jan 4, 2016

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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in PAX Global Technology Limited (the “Company”), you should at once hand this circular 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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PAX GLOBAL TECHNOLOGY LIMITED 百富環球科技有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 327)

RENEWAL OF FRAMEWORK AGREEMENT FOR THE SUPPLY OF E-PAYMENT TERMINAL PRODUCTS — CONTINUING CONNECTED TRANSACTIONS

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

A letter of recommendation from the Independent Board Committee is set out on pages 10 to 11 of this circular and a letter of recommendation from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders is set out on pages 12 to 23 of this circular.

A notice convening the special general meeting (the “SGM”) of PAX Global Technology Limited to be held at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong on Friday, 22 January 2016 at 3:00 p.m. is set out on pages 28 to 29 of this circular.

A form of proxy for use at the SGM is enclosed with this circular. If you do not intend to attend the SGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the principal place of business of the Company at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the SGM. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment of it, if you so wish.

5 January 2016

* For identification purpose only

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . . . . . . . .	10
LETTER FROM GRAM CAPITAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
APPENDIX — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . .	24
NOTICE OF SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28

DEFINITIONS

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

• “associate(s)”

• has the meaning ascribed to it under the Listing Rules;

• “Board”

the board of Directors;

• “Company”

• PAX Global Technology Limited, a company incorporated in Bermuda with limited liability whose shares are listed on the Stock Exchange;

• “Directors”

• the directors of the Company;

• “E-payment Terminal”

• electronic funds transfer point-of-sale terminal;

• “Framework Agreement”

the framework agreement between the Company and Hi Sun dated 19 December 2012;

• “Gram Capital” or “Independent Financial Adviser”

• Gram Capital Limited, a licensed corporation to carry out Type 6 (advising on corporate finance) regulated activities as defined under the SFO and the independent financial adviser to the Independent Board Committee and the Independent Shareholders in relation to the New Framework Agreement and the transactions contemplated thereunder;

• “Group”

• the Company and its subsidiaries;

• “Hi Sun”

Hi Sun Technology (China) Limited, a company incorporated in Bermuda with limited liability whose shares are listed on the Stock Exchange;

• “Hi Sun Group”

Hi Sun and its subsidiaries;

• “Hong Kong”

• Hong Kong Special Administrative Region of the PRC;

• “Independent Board Committee”

• an independent committee of the Board which comprises Mr. Yip Wai Ming, Dr. Wu Min and Mr. Man Kwok Kuen, Charles;

• “Independent Shareholders”

• Shareholders other than Hi Sun and their respective associates;

• “Latest Practicable Date”

• 31 December 2015, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein;

– 1 –

DEFINITIONS

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange;

• “New Framework Agreement”

the new framework agreement between the Company and Hi Sun dated 31 December 2015;

“NFC”

near field communication is a set of standards for smartphones and similar devices to establish radio communication with each other by touching them together or bringing them into close proximity. Present and anticipated applications include contactless transactions, data exchange, and simplified setup of more complex communications;

• “Operators” the third-party payment service operators;

“PRC” People’s Republic of China; “SFO” the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong);

“SGM”

the special general meeting of the Company to be held on Friday, 22 January 2016 to consider, and if thought fit, approve the transactions contemplated under the New Framework Agreement and related annual caps;

• “Shareholder(s)” the shareholder(s) of the Company;

• “Shares” shares of HK$0.10 each in the share capital of the Company;

• “Stock Exchange” The Stock Exchange of Hong Kong Limited;

• “SXF” 隨行付支付有限公司, a subsidiary of Hi Sun;

“HK$” Hong Kong dollars, lawful currency of Hong Kong; and “%” per cent.

– 2 –

LETTER FROM THE BOARD

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PAX GLOBAL TECHNOLOGY LIMITED 百富環球科技有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 327)

Executive Directors: Mr. NIE Guoming (Chairman) Mr. LU Jie (Chief Executive Officer) Mr. LI Wenjin

Independent Non-Executive Directors: Mr. YIP Wai Ming Dr. WU Min Mr. MAN Kwok Kuen, Charles

Registered Office

and headquarters: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head Office and Principal

Place of Business: Room 2416, 24th Floor Sun Hung Kai Centre 30 Harbour Road Wanchai Hong Kong

5 January 2016

• To the Shareholders and, for information only, holders of Share options of the Company

Dear Sir or Madam,

RENEWAL OF FRAMEWORK AGREEMENT FOR THE SUPPLY OF E-PAYMENT TERMINAL PRODUCTS — CONTINUING CONNECTED TRANSACTIONS

INTRODUCTION

Reference is made to the continuing connected transactions announcement of the Company dated 19 December 2012 in relation to, among others, the Framework Agreement. As the term of the Framework Agreement will expire on 31 December 2015, the parties to the Framework Agreement have agreed to renew the terms of the transactions and entered into the New Framework Agreement on 31 December 2015.

• For identification purpose only

– 3 –

LETTER FROM THE BOARD

Pursuant to the New Framework Agreement, the Group will sell and the Hi Sun Group will purchase E-payment Terminal products for a term commencing from the date on which the Shareholders’ approval is obtained to 31 December 2018 (both dates inclusive).

The purpose of this circular is (i) to provide you with further information in relation to the transactions contemplated under the New Framework Agreement; (ii) to set out the opinion and recommendations of the Independent Board Committee and Gram Capital; and (iii) to give you notice of the SGM at which the resolutions set out therein will be proposed. The SGM will be held on Friday, 22 January 2016 for the purpose of, among others, obtaining the approval from the Independent Shareholders for the transactions contemplated under the New Framework Agreement and the annual caps in respect thereof by way of poll.

BACKGROUND, AND REASONS FOR AND BENEFITS OF THE NEW FRAMEWORK AGREEMENT

The Company sees considerable potential demand for E-payment Terminal products in this sector due to relatively much lower penetration rate in China by comparing with mature payment markets and promotion of mobile payment, including different NFC payment such as “Quickpass” by China Unionpay and upcoming entrance of “Apple Pay” in China market, so as the development of QR Code payments. With the issue of third-party payment licences by The People’s Bank of China in recent years to 270 parties, the Operators become the key drivers of the E-payment Terminal market growth. Operators and their agents are aggressively expanding in tier two and tier three cities in China within level 2, level 3 and level 4 merchants. (Level 2: Merchants processing one million to six million transactions annually via all channels. Level 3: Merchants processing 20,000 to one million e-commerce transactions annually. Level 4: Merchants processing fewer than 20,000 e-commerce transactions annually.) Hi Sun Group, which provides payment processing solutions as part of its core businesses, also seeks to capitalise on the opportunities this presents. Payment processing solutions segment has been one of the major business segments of the Hi Sun Group since year 2013. Up till present, SXF, a subsidiary of Hi Sun, has developed itself to be one of the leading Operators in China. In view of Hi Sun Group’s track record as a payment processing solutions provider and the Group’s established position in the E-payment Terminal products market, the Company sees the ability to provide E-payment Terminal products as part of the total payment processing solutions to be offered by Hi Sun Group to have considerable potential for expanding the Group’s market position.

Hi Sun as a substantial shareholder of the Company is a connected person of the Company under the Listing Rules, therefore transactions between members of the Hi Sun Group and the Group will constitute connected transactions of the Company.

– 4 –

LETTER FROM THE BOARD

In view of the above, the Directors consider that entering into the New Framework Agreement is expected to help to expand the Group’s business in the PRC. The Board does not envisage any disadvantages of entering into the New Framework Agreement as the terms of the New Framework Agreement are no less favourable than those offered by other independent third parties to the Company in relation to similar transactions. The Directors consider that the transactions contemplated under the New Framework Agreement and the annual caps are fair and reasonable, on normal commercial terms and in the interests of the Group and its Shareholders as a whole. Mr. Li Wenjin, being an executive director of Hi Sun, is regarded as having a material interest in the transactions under the New Framework Agreement and accordingly abstained from voting on the board resolution approving the New Framework Agreement and the annual caps in accordance with Rule 13.44 of the Listing Rules.

THE NEW FRAMEWORK AGREEMENT

Reference is made to the continuing connected transactions announcement of the Company dated 19 December 2012 in relation to, among others, the Framework Agreement.

Considering that the business transactions in relation to the sale and purchase of E-payment Terminal products between the Group and Hi Sun Group will continue after the expiry of the term of the Framework Agreement, the Company and Hi Sun entered into the New Framework Agreement. Pursuant to the terms of the New Framework Agreement, the Group will sell and the Hi Sun Group will purchase E-payment Terminal products for Hi Sun Group’s payment processing solutions services for a term commencing from the date on which the Shareholders’ approval is obtained to 31 December 2018 (both dates inclusive).

The key terms of the New Framework Agreement are as follows:

Date: 31 December 2015

Parties: (1) the Company (2) Hi Sun

Subject matter: The Group will sell and the Hi Sun Group will purchase E-payment Terminal products in accordance with the terms of the New Framework Agreement.

Individual agreements: Relevant members of the Group and the Hi Sun Group will from time to time enter into individual agreements which will set out the detailed terms of the sale and purchase of the relevant E-payment Terminal products. The terms of the individual agreements will be negotiated based on the following principles:

• (a) the sale and purchase of E-payment Terminal products would be based on normal commercial terms;

– 5 –

LETTER FROM THE BOARD

• (b) the prices payable for the E-payment Terminal products would be agreed between the relevant seller and the relevant purchaser by reference to the prevailing market prices of products with similar specifications at the relevant time; and

• (c) the terms and conditions of such sales and purchases, including terms of settlement, shall be no less favourable to the Group than those available from independent third parties from time to time.

PRICING TERMS AND BASIS

The E-payment Terminal products to be sold to Hi Sun Group are the same as those offered to independent third parties, which include major financial institutions in the PRC. As part of the Group’s internal control, the prices of the E-payment Terminal products offered to Hi Sun Group will be determined with reference to at least 5 actual transactions prices of E-payment Terminal products of comparable quality, quantity and specifications offered to independent third parties. In particular, reference will be made to the final tender prices regarding E-payment Terminal products under successful contracts offered to major institutions in the PRC as a result of the tender process. The price of the E-payment Terminal products offered to Hi Sun Group and to independent third parties are determined on a costs-plus-premium basis in accordance with the internal policies of the Group, which would take into account the profit margin for E-payment Terminal products in the market for reference.

In any event, all sales to Hi Sun Group will be no less favourable than the terms which are offered to independent third parties for selling products of comparable quality, quantity and specifications.

The average production costs per unit will be inversely proportional to the scale of production for each order. The actual transaction price of the relevant sales order will reflect any discount in the average production costs per unit tailored to the scale of the order to maintain a competitive edge. The discount is determined in accordance with the market practice of granting discounts on bulk purchases of E-payment Terminal products for reference. In determining the extent of discount to be granted, the Company shall refer to its internal policy which sets out different degree of discount against different categories of scale of purchase.

Independent non-executive Directors of the Company will review and would continue to review the transactions under the New Framework Agreement to ensure such agreements are entered into through arm’s length negotiations and on normal commercial terms, are fair and reasonable, and are carried out pursuant to the terms of such agreements. The auditors of the Company would also conduct an annual review on the pricing and annual caps under the New Framework Agreement. The Company will facilitate the provision of necessary information to the independent non-executive Directors and the auditors for the purpose of such review.

In view of the pricing policy and internal control measures above, the Directors consider that the transactions under the New Framework Agreement will be conducted through arm’s length negotiations and on normal commercial terms and not prejudicial to the interests of the Company and its minority Shareholders.

– 6 –

LETTER FROM THE BOARD

Undertaking: Hi Sun will undertake in favour of the Company that the E-payment Terminal products purchased under the New Framework Agreement will be supplied and installed by Hi Sun Group members at merchants as part of the payment processing solution services provided by Hi Sun Group. Hi Sun will provide a written confirmation as to compliance with such undertaking within 3 months after the end of each financial year with respect to purchases made in the previous year.

Non-competition: Hi Sun agrees and acknowledges that the entering into of the New Framework Agreement does not constitute any waiver or release of any of Hi Sun’s obligations under the deed of non-competition dated 1 December 2010. The transactions under the New Framework Agreement and the subsequent sales of the E-payment Terminal products by Hi Sun Group to its customers are not within the subject matter contemplated under the deed of non-competition as the nature of products and services provided to the respective customers of the Group and the Hi Sun Group are different. The directors (including independent non-executive directors) of the Company consider that the sales of E-payment Terminal products to Hi Sun Group and the subsequent sales of E-payment Terminal products by Hi Sun Group to its customers comply with the non-compete undertaking.

Condition precedent: The transactions contemplated under the New Framework Agreement are conditional upon the obtaining of approval from the Independent Shareholders at the SGM.

Term: The New Framework Agreement will be effective from the date on which approval is obtained from the Independent Shareholders at the SGM. The term of the New Framework Agreement commences on the date on which the Shareholders’ approval is obtained and will expire on 31 December 2018 (both dates inclusive).

ANNUAL CAPS

HISTORICAL FIGURES

The following table sets out the respective aggregate value of products sold and purchased under the Framework Agreement for the two years ended 31 December 2013 and 31 December 2014 and the 9 months ended 30 September 2015, their respective annual caps for the three years ended 31 December 2015:

				For the
				9 months ended
				30 September
				2015
				(unaudited) (for
				actual amount
		For the year	For the year	only)/for the
		ended	ended	year ended 31
		31 December	31 December	December 2015
		2013	2014	(for annual
		(audited)*	(audited)*	cap only)*
		HKD’000	HKD’000	HKD’000
Actual		178,263	55,025	85,979
Annual	Caps	330,000	600,000	700,000

– 7 –

LETTER FROM THE BOARD

As far as the Directors are aware, none of the Annual Caps of the Framework Agreement for the three years ended 31 December 2015 has been exceeded as at the Latest Practicable Date.

PROPOSED ANNUAL CAPS

Set out below are the annual caps of the total contract value for the sale and purchase of E-payment Terminal products under the New Framework Agreement:

Total value not Period exceeding* Effective date of the New Framework Agreement–31 December 2016 HK$300,000,000 1 January 2017–31 December 2017 HK$350,000,000 1 January 2018–31 December 2018 HK$400,000,000

The Board determines the above proposed caps with reference to the anticipated growth capacity of the Group’s business year-on-year resulting from the positive long term outlook in market conditions, the extent of which could be significant as there has been an increasing acceptance of card payment transactions, a rising usage of electronic payment, ease of obtaining credit cards by consumers and the PRC government’s support in developing the country’s electronic payment infrastructure. The proposed annual caps represent the highest possible aggregate volume of E-payment Terminal products to be purchased by Hi Sun Group for providing payment processing solutions.

The proposed annual cap for the year ending 31 December 2016 is made with reference to the historical transaction amount of approximately HK$149 million of sales for the six months ended 31 December 2015 as a starting point. As such, the average historical figure on an annual basis used as reference will be HK$298 million (equal to twice the amount of HK$149 million*), which is close to the proposed annual cap for the year ending 31 December 2016. Furthermore, with respect to the increment of the annual caps for the year ending 31 December 2017 and 31 December 2018, the Company has considered the expected increase in demand for the E-payment Terminal products and unexpected factors, such as appreciation of RMB and change in demands of different products in China market, which may lead to an increase in demand for E-payment Terminal products. Therefore, the Board considers that the increment of the proposed annual caps to be appropriate.

• Before value added tax

GENERAL INFORMATION AND LISTING RULES IMPLICATIONS

The Group is a E-payment Terminal solutions provider principally engaged in the development and sale of E-payment Terminal products and provision of related services.

Hi Sun is an investment holding company and its subsidiaries are principally engaged in provision of payment processing solutions, provision of financial solutions, sales of electronic power meters and solutions, provision of telecommunication solutions and provision of payment platform solutions.

– 8 –

LETTER FROM THE BOARD

As Hi Sun is a substantial Shareholder interested in 364,000,000 Shares, representing approximately 32.7% of the Company’s issued share capital as at the Latest Practicable Date, Hi Sun is a connected person of the Company within the meaning of the Listing Rules and the transactions under the New Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. Hi Sun will abstain from voting on the resolution(s) to approve the transactions contemplated under the New Framework Agreement at the SGM. None of Hi Sun’s associates are Shareholders as at the Latest Practicable Date.

As one or more of the applicable percentage ratios (other than the profits ratio) in respect of the caps on the total contract value for the sale and purchase of the E-payment Terminal products under the New Framework Agreement on an annual basis exceeds 5% and HK$10,000,000, such continuing connected transactions are subject to the reporting, announcement, independent Shareholders’ approval and annual review requirements under Chapter 14A of the Listing Rules. An Independent Board Committee has been constituted to make a recommendation to the Independent Shareholders in respect of the resolution to approve the New Framework Agreement.

The Company has appointed Gram Capital as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the New Framework Agreement are fair and reasonable so far as the Shareholders are concerned.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee as set out on pages 10 to 11 of this circular which contains its recommendation to the Independent Shareholders in respect of the ordinary resolution contained in the notice of SGM set out on pages 28 to 29 of this circular to approve the transactions contemplated under the New Framework Agreement and the related annual caps.

The advice of Gram Capital to the Independent Board Committee and the Independent Shareholders as to whether the terms of the transactions contemplated under the New Framework Agreement and the annual caps in respect thereof are fair and reasonable and in the interest of the Company and its Independent Shareholders as a whole is set out on pages 12 to 23 of this circular.

FURTHER INFORMATION

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

Yours faithfully, By order of the Board

Li Wenjin Executive Director

– 9 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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PAX GLOBAL TECHNOLOGY LIMITED 百富環球科技有限公司[*]

(Incorporated in Bermuda with limited liability)

(Stock code: 327)

5 January 2016

To the Independent Shareholders

Dear Sir or Madam,

RENEWAL OF FRAMEWORK AGREEMENT FOR THE SUPPLY OF E-PAYMENT TERMINAL PRODUCTS — CONTINUING CONNECTED TRANSACTIONS

We have been appointed as members of the Independent Board Committee to advise the Independent Shareholders of PAX Global Technology Limited (the “Company”) in respect of the resolution to approve the transactions contemplated under the New Framework Agreement subject to the annual caps in respect thereof, details of which are set out in the “Letter from the Board” contained in the circular of the Company (the “Circular”) of which this letter forms part. Unless the context otherwise requires, terms used in this letter shall have the same meanings as defined in the Circular.

Your attention is drawn to the “Letter from the Board”, the advice of Gram Capital in its capacity as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of whether (i) the terms of the transactions contemplated under the New Framework Agreement are on normal commercial terms, in the ordinary and usual course of business of the Group, fair and reasonable and in the interest of the Company and its Independent Shareholders as a whole; and (ii) the annual caps to which the transactions contemplated under the New Framework Agreement are subject are fair and reasonable so far as the Company and the Independent Shareholders are concerned, as set out in the “Letter from Gram Capital” as well as other additional information set out in other parts of the Circular.

• For identification purpose only

– 10 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the advice of, and the principal factors and reasons considered by Gram Capital in relation thereto as stated in its letter, we consider the terms of the transactions contemplated under the New Framework Agreement and the annual caps in respect thereof to be fair and reasonable and are on normal commercial terms or better and in the ordinary and usual course of business of the Group, and in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution(s) to be proposed at the SGM in respect of the transactions contemplated under the New Framework Agreement.

Yours faithfully, Independent Board Committee

Mr. Yip Wai Ming Dr. Wu Min Mr. Man Kwok Kuen, Charles Independent Non-executive Directors

– 11 –

LETTER FROM GRAM CAPITAL

Set out below is the text of a letter received from Gram Capital, the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the New Framework Agreement and the transactions contemplated thereunder for the purpose of inclusion in this circular.

Room 1209, 12/F. Nan Fung Tower 88 Connaught Road Central/ 173 Des Voeux Road Central Hong Kong

5 January 2016

• To: The independent board committee and the independent shareholders of PAX Global Technology Limited

Dear Sirs,

CONTINUING CONNECTED TRANSACTIONS RENEWAL OF FRAMEWORK AGREEMENT FOR THE SUPPLY OF E-PAYMENT TERMINAL PRODUCTS

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 New Framework Agreement and the transactions contemplated thereunder, details of which are set out in the letter from the Board (the “ Board Letter ”) contained in the circular dated 5 January 2016 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.

With reference to the announcement of the Company dated 19 December 2012 in relation to, among others, the Framework Agreement, the term of the Framework Agreement will expire on 31 December 2015. As such, the parties to the Framework Agreement have agreed to renew the terms of the transactions and entered into the New Framework Agreement on 31 December 2015. Pursuant to the New Framework Agreement, the Group will sell and the Hi Sun Group will purchase E-payment Terminal products for a term commencing from the date on which the necessary Shareholders’ approval is obtained (the “ Effective Date ”) to 31 December 2018.

– 12 –

LETTER FROM GRAM CAPITAL

According to the Board Letter, as Hi Sun is a substantial Shareholder interested in approximately 32.7% of the Company’s issued share capital as at the Latest Practicable Date, Hi Sun is a connected person of the Company within the meaning of the Listing Rules and the transactions contemplated under the New Framework Agreement constitute continuing connected transactions for the Company under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios (other than the profits ratio) in respect of the caps on the total contract value for the sale and purchase of the E-payment Terminal products payable under the New Framework Agreement on an annual basis exceeds 5% and HK$10,000,000, such continuing connected transactions are subject to the reporting, announcement, independent shareholders’ approval and annual review requirements under Chapter 14A of the Listing Rules.

The Independent Board Committee comprising Mr. Yip Wai Ming, Dr. Wu Min and Mr. Man Kwok Kuen, Charles (all being independent non-executive Directors) has been established to advise the Independent Shareholders on (i) whether the terms of the New Framework Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the New Framework Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole and are conducted in the ordinary and usual course of business of the Group; and (iii) how the Independent Shareholders should vote in respect of the resolution(s) to approve the New Framework Agreement and the transactions contemplated thereunder at the SGM. We, Gram Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

OUR INDEPENDENCE

As at the Latest Practicable Date, we were not aware of any relationships or interests between Gram Capital and the Company or any other parties that could be reasonably regarded as hindrance to Gram Capital’s independence to act as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders.

Besides that, (i) we have not acted as independent financial adviser in respect of any transaction of the Company in the last two years; and (ii) apart from the advisory fee and expenses payable to us in connection with our appointment as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, no arrangement exists whereby we shall receive any other fees or benefits from the Company.

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

– 13 –

LETTER FROM GRAM CAPITAL

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. Our opinion is based on the Directors’ representation and confirmation that there are no undisclosed private agreements/arrangements or implied understanding with anyone concerning the New Framework Agreement and the transactions contemplated thereunder. 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, that the information contained in the 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 in the Circular or the Circular misleading. We, as the Independent Financial Adviser, take no responsibility for the contents of any part of the Circular, save and except for this letter of advice.

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, Hi Sun Group or their respective subsidiaries or associates, nor have we considered the taxation implication on the Group or the Shareholders as a result of the entering into of the New Framework Agreement. 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. In addition, 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, it is the responsibility of Gram Capital to ensure that such information has been correctly extracted from the relevant sources.

– 14 –

LETTER FROM GRAM CAPITAL

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion in respect of the New Framework Agreement and the transactions contemplated thereunder, we have taken into consideration the following principal factors and reasons:

1. Background of and reasons for the New Framework Agreement

Information on the Group

With reference to the Board Letter, the Group is an E-payment Terminal solutions provider principally engaged in the development and sale of E-payment Terminal products and provision of related services.

Set out below are the financial information of the Group for the six months ended 30 June 2015 and the two years ended 31 December 2014 as extracted from the interim report of the Company for the six months ended 30 June 2015 (the “ 2015 Interim Report ”) and the annual report of the Company for the year ended 31 December 2014 (the “ 2014 Annual Report ”):

	For the	For the	For the
	six months	year ended	year ended
	ended	31 December	31 December	Change from
	30 June 2015	2014	2013	2013 to 2014
	(unaudited)	(audited)	(audited)
	HK$’000	HK$’000	HK$’000	%
Revenue	1,107,638	2,373,272	1,472,488	61.17
– E-payment Terminal products	1,050,410	2,221,605	1,366,580	62.57
– Consumer activated devices	33,768	91,733	48,348	89.73
– Contactless devices	1,444	11,537	16,407	(29.68)
– Services	13,963	26,435	20,687	27.79
– Others	8,053	21,962	20,466	7.31
Gross profit	459,267	864,866	541,129	59.83
Profit for the period/year	309,039	391,806	226,540	72.95

As illustrated in the above table, during the year ended 31 December 2014, the revenue of the Group experienced a substantial growth and amounted to approximately HK$2,373.27 million, representing an increase of approximately 61.17% as compared to the prior year. The growth was mainly driven by the increase in sales of E-payment Terminal products. The sales of E-payment Terminal products was the largest portion of revenue of the Group for the six months ended 30 June 2015 and represented a growth of approximately 11.57% as compared to the corresponding period in 2014.

With reference to the 2015 Interim Report, the increase in sales of E-payment Terminal products had been mainly driven by the increase in sales in overseas markets during the period. After years of hard work, sales in international markets

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LETTER FROM GRAM CAPITAL

are finally bearing fruit. Meanwhile, mobile payment has been gaining increasing popularity in the PRC market excluding Hong Kong, Macau and Taiwan (the “ China Market ”) and the major emerging markets. Financial institutions and the Operators have been aggressively building the E-payment Terminal networks for micro merchants in order to capture the benefits from the rising usage of electronic payment and high levels of retail consumption. Furthermore, recent state policies have also encouraged the building of electronic transaction networks, which further fuel the fast growth of E-payment Terminal demand.

As a result of the increase in revenue, the Group’s profit for the year ended 31 December 2014 also increased substantially by approximately 72.95% as compared to the prior year.

With reference to the sales announcement of the Company dated 19 October 2015, the unaudited consolidated revenue of the Group increased by approximately 37% to approximately HK$2,030.5 million for the nine months ended 30 September 2015 when compared to the corresponding period in 2014. Turnover generated from the China Market increased by approximately 24% to approximately HK$1,002.2 million for the nine months ended 30 September 2015 as compared to the corresponding period in 2014. The growth in the China Market was regained through all sales channels especially the third party payment service providers during the third quarter of 2015. The China Market turnover contributed to approximately 49% of the total turnover for the nine months ended 30 September 2015 as compared to 54% for the corresponding period in 2014.

As advised by the Directors, the sales of E-payment Terminal products in the China Market represents approximately 50% of the total sales of E-payment Terminal products (in both the China Market and overseas market) for the nine months ended 30 September 2015.

Information on Hi Sun

With reference to the Board Letter, Hi Sun, being a substantial Shareholder, is an investment holding company and its subsidiaries are principally engaged in the provision of payment processing solutions, provision of telecommunication solutions, provision of financial solutions, provision of payment platform solutions and sales of electronic power meters and solutions.

Reasons for entering into the New Framework Agreement

With reference to the Board Letter, the Company sees considerable potential demand for E-payment Terminal products in this sector due to relatively much lower penetration rate in the PRC by comparing with mature payment markets and promotion of mobile payment, including different NFC payment such as “Quickpass” by China Unionpay and upcoming entrance of “Applepay” in China Market, so as the development of QR-Code payments. With the issue of third-party payment licences by The People’s Bank of China in recent years to 270 parties, the Operators become the key drivers of the E-payment Terminal market growth.

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LETTER FROM GRAM CAPITAL

Operators and their agents are aggressively expanding in tier two and tier three cities in the PRC within level 2, level 3 and level 4 merchants.

Summarised below are our findings in relation to the China Market from the publications made by The People’s Bank of China titled “支付體系運行總體情況” (Overall Payment System Operating Condition*) on 2 June 2015, 8 September 2015 and 25 November 2015, for the first, second and third quarter of 2015 respectively:

			Increase		Increase
			from 1st		from 2nd
	1st quarter	2nd quarter	quarter to	3rd quarter	quarter to
	of 2015	of 2015	2nd quarter	of 2015	3rd quarter
	_(Approximately) _	_(Approximately) _	_(Approximately) _	_(Approximately) _	(Approximately)
Number of point-of-sale
terminal installed	16.42 million	17.95 million	9.32%	19.89 million	10.81%
Number of bank cards
transactions	17.78 billion	20.77 billion	16.82%	22.36 billion	7.66%
Number of electronic
payment transactions	22.74 billion	24.98 billion	9.85%	27.14 billion	8.65%

Source: The People’s Bank of China Reference links:

1. http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/2812521/index.html

2. http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/2947525/index.html

3. http://www.pbc.gov.cn/goutongjiaoliu/113456/113469/2981803/index.html

Hi Sun Group, which provides payment possessing solutions as part of its core businesses, also seeks to capitalise on the opportunities this presents. Payment possessing solutions segment has been one of the major business segments of Hi Sun Group since year 2013. Up till present, SXF, a subsidiary of Hi Sun, has developed itself to be one of the leading Operators in the PRC. In view of Hi Sun Group’s track record as a payment possessing solutions provider and the Group’s established position in the E-payment Terminal products market, the Company sees the ability to provide E-payment Terminal products as part of the total payment processing solutions to be offered by Hi Sun Group to have considerable potential for expanding the Group’s market position.

In view of the above and the recent growth in sales of E-payment Terminal products (being the largest revenue source of the Group), we concur with the Directors that the entering into of the New Framework Agreement and the transactions contemplated thereunder are in the interests of the Company and the Shareholders as a whole.

* For identification purpose only

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LETTER FROM GRAM CAPITAL

2. Principal terms of the New Framework Agreement

The tables below summarise the major terms of each of the New Framework Agreement:

Date:

31 December 2015

Parties:

(i) The Company (ii) Hi Sun

Subject matter:

The Group will sell and the Hi Sun Group will purchase E-payment Terminal products in accordance with the terms of the New Framework Agreement (the “ CCTs ”).

Individual agreements:

Relevant members of the Group and the Hi Sun Group will from time to time enter into individual agreements which will set out the detailed terms of the sale and purchase of the relevant E-payment Terminal products. The terms of the individual agreements will be negotiated based on the following principles (the “ Principles ”):

• (a) the sale and purchase of E-payment Terminal products would be based on normal commercial terms;

• (b) the prices payable for the E-payment Terminal products would be agreed between the relevant seller and the relevant purchaser by reference to the prevailing market prices of products with similar specifications at the relevant time; and

• (c) the terms and conditions of such sales and purchases, including terms of settlement, shall be no less favourable to the Group than those available from independent third parties from time to time.

Detailed pricing terms and basis (including relevant internal control policy) (the “ Pricing Terms, Basis & IC Policy ”) are set out under the section headed “Pricing terms and basis” of the Board Letter.

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LETTER FROM GRAM CAPITAL

Undertaking:

Hi Sun will undertake in favour of the Company that the E-payment Terminal products purchased under the New Framework Agreement will be supplied and installed by Hi Sun Group members at merchants as part of the mobile and other payment solution services and/or platforms provided by Hi Sun Group. Hi Sun will provide a written confirmation as to compliance with such undertaking within 3 months after the end of each financial year with respect to purchases made in the previous year.

Non-competition:

Hi Sun agrees and acknowledges that the entering into of the New Framework Agreement does not constitute any waiver or release of any of Hi Sun’s obligations under the deed of non-competition dated 1 December 2010 (the “ Deed ”). The transactions under the New Framework Agreement and the subsequent sales of the E-payment Terminal products by Hi Sun Group to its customers are not within the subject matter contemplated under the deed of non-competition as the nature of products and services provided to the respective customers of the Group and the Hi Sun Group are different. For our due diligence purpose, we have (i) obtained from the Company copies of the annual declarations made by Hi Sun since 2012 that Hi Sun had complied with the undertakings contained in the Deed; and (ii) discussed with the Directors to further understand the nature of products and services provided to the respective customers of the Group and the Hi Sun Group.

Condition precedent:

The transactions contemplated under the New Framework Agreement are conditional upon the obtaining of approval from the Independent Shareholders at the SGM.

Term:

The New Framework Agreement will be effective from the date on which approval has been obtained from the Independent Shareholders at the SGM. The term of the New Framework Agreement commences on the Effective Date and will expire on 31 December 2018 (both dates inclusive).

As depicted above, it is stipulated under the New Framework Agreement that (i) the sale and purchase of E-payment Terminal products would be based on normal commercial terms; (ii) the prices payable for the E-payment Terminal products would be agreed between the relevant seller and the relevant purchaser by reference to the prevailing market prices of products with similar specifications at the relevant time; and (iii) the

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LETTER FROM GRAM CAPITAL

terms and conditions of such sales and purchases, including terms of settlement, shall be no less favourable to the Group than those available from independent third parties from time to time.

For our due diligence purpose, we have obtained and discussed the Pricing Terms, & Basis & IC Policy with the Directors. We have also reviewed the previous individual executed contracts/agreements entered into between (a) the Company and members of Hi Sun Group; and (b) the Company and independent third parties from 2013 to 2015 and nothing has come to our attention that causes us to believe that the reviewed individual contracts/agreements entered into between the Company and members of Hi Sun Group were not negotiated and entered into based on the Principles and the Pricing Terms, Basis & IC Policy.

With reference to the 2014 Annual Report and as confirmed by the Directors, the independent non-executive Directors have reviewed, among other things, the CCTs for the year ended 31 December 2014 and in their opinion, the CCTs were entered into by the Company: (i) in the ordinary and usual course of business of the Group; (ii) on normal commercial terms and/or on terms no less favourable to the Company than terms available to or from independent third parties; and (iii) in accordance with the relevant agreement governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole.

The Company’s auditors were also engaged to report on the Group’s continuing connected transactions in accordance with “Hong Kong Standard on Assurance Engagements 3000”, “Assurance Engagements Other Than Audits or Reviews of Historical Financial Information” and with reference to Practice Note 740 “Auditor’s Letter on Continuing Connected Transactions under the Listing Rules” issued by the Hong Kong Institute of Certified Public Accountants. Based on the work performed, the auditors of the Company confirmed to the Board that, among other things, nothing has come to their attention that causes them to believe that the CCTs for the year ended 31 December 2014 (i) had not been approved by the Board; (ii) were not, in all material respects, in accordance with the pricing policies of the Group; (iii) were not entered into, in all material respects, in accordance with the relevant agreement governing the CCTs; and (iv) had exceeded the relevant cap disclosed previously.

In light of the above, we are of the view that the terms of the New Framework Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

3. The annual caps under the New Framework Agreements

With reference to the Board Letter, the New Framework Agreement and the transactions contemplated thereunder will be subject to, among other things, the annual caps for the terms from the Effective Date to 31 December 2018 (both dates inclusive) (the “ Annual Cap(s) ”). Set out below are (i) the historical amount of the CCTs for the two years ended 31 December 2014 and the nine months ended 30 September 2015; (ii) the historical

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LETTER FROM GRAM CAPITAL

annual caps of the CCTs from the effective date of the Framework Agreement to 31 December 2015; and (iii) the proposed Annual Caps for the three years ending 31 December 2018:

			For the
	For the	For the	nine months
	year ended	year ended	ended
	31 December	31 December	30 September
	2013*	2014*	2015*
	Approximate	Approximate	Approximate
	HK$ million	HK$ million	HK$ million
Historical amount of the CCTs	178.26	55.03	85.98
	From the
	effective date
	of the
	Framework	For the	For the
	Agreement to	year ended	year ended
	31 December	31 December	31 December
	2013*	2014*	2015*
	HK$ million	HK$ million	HK$ million
Historical annual caps of
the CCTs	330	600	700
	For the	For the	For the
	year ending	year ending	year ending
	31 December	31 December	31 December
	2016*	2017*	2018*
	HK$ million	HK$ million	HK$ million
Proposed Annual Caps of
the CCTs	300	350	400

With reference to the Board Letter, the Annual Caps were determined with reference to the anticipated growth capacity of the Group’s business year-on-year resulting from the positive long term outlook in market conditions, the extent of which could be significant as there has been an increasing acceptance of card payment transactions, a rising usage of electronic payment, ease of obtaining credit cards by consumers and the PRC government’s support in developing the country’s electronic payment infrastructure.

The Annual Caps are the estimated highest possible aggregate volume of E-payment Terminal products to be purchased by Hi Sun Group for providing payment processing solutions.

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LETTER FROM GRAM CAPITAL

Furthermore, with respect to the increment of the Annual Caps for the year ending 31 December 2017 and 31 December 2018, the Company has considered the expected increase in demand for the E-payment Terminal products and unexpected factors, such as appreciation of RMB and change in demands of different products in the PRC Market, which may lead to an increase in demand for E-payment Terminal products.

We noticed from the 2015 Interim Report that the CCTs for the six months ended 30 June 2015 were amounted to approximately HK$1 million only. As confirmed by the Directors, (i) the CCTs for the three months ended 30 September 2015 amounted to approximately HK$84.98 million; and (ii) having taken into account the purchase orders and purchase indication made by the Hi Sun Group for the three months ended 31 December 2015, the CCTs are expected to be amounted to approximately HK$64 million* for the three months ended 31 December 2015.

With reference to the Board Letter, the proposed annual cap for the year ending 31 December 2016 is made with reference to the estimated transaction amount of approximately HK$149 million of sales for the six months ended 31 December 2015 as a starting point. As such, the average historical figure on an annual basis used as reference will be HK$298 million (equal to twice the amount of HK$149 million), which is close to the proposed annual cap for the year ending 31 December 2016. We considered that it is reasonable to estimate the Annual Cap of HK$300 million for the year ending 31 December 2016 taken into account the actual amount of CCTs for the three months ended 30 September 2015 and the expected amount of CCTs for the three months ended 31 December 2015 (i.e. an aggregated amount of approximately HK$148.98 million* in half a year).

As for the Annual Caps for the two years ending 31 December 2018, we noticed that the growth rates of the Annual Caps will be approximately 16.67% for the year ending 31 December 2017 and 14.29% for the year ending 31 December 2018. In light of the favourable market conditions (i.e. the recent growth in number of point-of-sale terminal installed, bank cards transactions and electronic payment transactions as demonstrated under the section headed “Reasons for entering into the New Framework Agreement” above, we consider the aforesaid growth rate to be resonable.

Given the above factors, we consider that the Annual Caps for the three years ending 31 December 2018 are fair and reasonable so far as the Independent Shareholders are concerned.

Shareholders should note that as the Annual Caps are relating to future events and were estimated based on assumptions which may or may not remain valid for the entire period up to 31 December 2018, and they do not represent forecasts of revenue/income to be incurred from the CCTs. Consequently, we express no opinion as to how closely the actual revenue/income to be incurred from the CCTs will correspond with the Annual Caps.

• Before value added tax

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LETTER FROM GRAM CAPITAL

4. Listing Rules implication

The Directors confirmed that the Company shall comply with the requirements of Rules 14A.53 to 14A.59 of the Listing Rules pursuant to which (i) the values of the CCTs must be restricted by the Annual Caps for the period concerned under the New Framework Agreement; (ii) the terms of the New Framework Agreement must be reviewed by the independent non-executive Directors annually; (iii) details of independent non-executive Directors’ annual review on the terms of the New Framework Agreement must be included in the Company’s subsequent published annual reports and financial accounts. Furthermore, it is also required by the Listing Rules that the auditors of the Company must provide a letter to the Board confirming whether anything has come to their attention that causes them to believe that the CCTs (i) have not been approved by the Board; (ii) were not, in all material respects, in accordance with the pricing policies of the Group; (iii) were not entered into, in all material respects, in accordance with the relevant agreement governing the transactions; and (iv) have exceeded the Annual Caps. In the event that the total amounts of the CCTs exceed the Annual Caps, or that there is any material amendment to the terms of the New Framework Agreement, as confirmed by the Directors, the Company shall comply with the applicable provisions of the Listing Rules governing continuing connected transactions.

Given the above stipulated requirements for continuing connected transactions pursuant to the Listing Rules, we are of the view that there are adequate measures in place to monitor the CCTs and thus the interest of the Independent Shareholders would be safeguarded.

RECOMMENDATION

Having taken into consideration the factors and reasons as stated above, we are of the opinion that (i) the terms of the New Framework Agreement are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned; and (ii) the entering into of the New Framework Agreement 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 resolution(s) to be proposed at the SGM to approve the New Framework Agreement and the transactions contemplated thereunder and we recommend the Independent Shareholders to vote in favour of the resolution(s) in this regard.

Yours faithfully, For and on behalf of Gram Capital Limited Graham Lam

Managing Director

Note: Mr. Graham Lam is a licensed person registered with the Securities and Futures Commission and a responsible officer of Gram Capital Limited to carry out Type 6 (advising on corporate finance) regulated activity under the SFO. He has over 20 years of experience in investment banking industry.

– 23 –

APPENDIX

GENERAL INFORMATION

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 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.

2. DISCLOSURE OF INTERESTS

I. Interests of Directors

As at the Latest Practicable Date, so far as is known, the interests and short positions of each of the Directors in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required (a) to 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 are taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Companies to be notified to the Company and the Stock Exchange are as follows:

			Approximate
			percentage of
Name of Directors	Capacity	Total interests	shareholding
		(Note 1)	(Note 2)
Nie Guoming	Beneficial owner	3,700,000 (L)	0.33%
Lu Jie	Beneficial owner	10,400,000 (L)	0.94%
Li Wenjin	Beneficial owner	2,890,000 (L)	0.26%

Notes:

1. The letter “L” denotes a long position in the share options.

2. The percentage is calculated based on the total number of issued Shares as at the Latest Practicable Date which was 1,112,014,000 ordinary Shares.

– 24 –

APPENDIX

GENERAL INFORMATION

II. Interests of Shareholders discloseable pursuant to the SFO

As at the Latest Practicable Date, so far as is known to the Directors and based on the Company’s register required to be maintained pursuant to section 336 of the SFO, the following persons (other than a Director) had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO or who were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group are as follows:

(a) Interests in the Shares

				Approximate
Name of		Class of	Total number	percentage of
shareholders	Capacity	Securities	of Shares	shareholding
			(Note 1)	(Note 2)
Hi Sun Technology	Beneficial	Ordinary	364,000,000 (L)	32.73%
(China) Limited	owner
FMR LLC	Investment	Ordinary	79,002,280 (L)	7.10%
	manager

Notes:

1. The letter “L” denotes a long position in the Shares.

2. The percentage is calculated based on the total number of issued Shares as at the Latest Practicable Date which was 1,112,014,000 ordinary Shares.

(b) Substantial Shareholders of other members of the Group

Save as disclosed above, the Directors are not aware that there is any person (other than a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at a general meeting of any other member of the Group.

– 25 –

APPENDIX

GENERAL INFORMATION

III. Directors’ interests in assets and contracts of the Group

As at the Latest Practicable Date:

• (i) none of the Directors had any direct or indirect interests in any assets which have since 31 December 2014 (being the date to which the latest published audited consolidated financial statements of the Group were made up) been acquired or disposed of by or leased to any members of the Group, or are proposed to be acquired or disposed of by or leased to any members of the Group;

• (ii) none of the Directors was materially interested in any contracts or arrangements entered into by any members of the Group subsisting as at the Latest Practicable Date which is significant in relation to the business of the Group.

IV. Directors’ interests in competing business

As at the Latest Practicable Date, so far as is known to the Directors, no Director or any of their respective associates had any interests in a business, which competes or may compete with the business of the Group.

3. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors or proposed Directors had entered into or proposed to enter into any service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

4. 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 2014, being the date up to which the latest published audited consolidated financial statements of the Group were made up.

– 26 –

APPENDIX

GENERAL INFORMATION

5. EXPERT

The following is the qualification of Gram Capital, which has given its opinion or advice which is contained in this circular:

Name

Qualification

Gram Capital Limited a licensed corporation to carry out Type 6 (advising on corporate finance) regulated activities under the SFO

As at the Latest Practicable Date, Gram Capital did not have:

• (a) any direct or indirect interest in any assets which have since 31 December 2014 (being the date to which the latest published audited consolidated financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group; and

• (b) any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

Gram Capital has given and has not withdrawn its consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which they respectively appear.

6. MISCELLANEOUS

In any event of inconsistency, the English language text of this circular shall prevail over the Chinese language text.

7. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the New Framework Agreement will be available for inspection during normal business hours on any weekday (except public holidays) at the principal place of business of the Company in Hong Kong at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong from the date of this circular, for a period of 14 days or up to date of the SGM, whichever is longer.

– 27 –

NOTICE OF SGM

==> picture [129 x 60] intentionally omitted <==

PAX GLOBAL TECHNOLOGY LIMITED 百富環球科技有限公司[*]

(Incorporated in Bermuda with limited liability) (Stock code: 327)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the “SGM”) of PAX Global Technology Limited (the “Company”) will be held at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong on Friday, 22 January 2016 at 3:00 p.m. for the purpose of considering and, if thought fit, passing, with or without modifications, the following resolution of the Company:

ORDINARY RESOLUTION

1. “THAT:

2. (A) the transactions contemplated under the new framework agreement entered into between the Company and Hi Sun Technology (China) Limited on 31 December 2015 (the “New Framework Agreement”) (a copy of which is produced to the meeting marked “A” and initialled by the chairman of the Company for the purpose of identification) and the annual caps for the periods ending 31 December 2016, 2017 and 2018 respectively in respect of the sale and purchase of electronic fund transfer point-of-sale products in accordance with the terms of the New Framework Agreement further described on pages 5 to 8 of the shareholders’ circular dated 5 January 2016 issued by the Company be and are hereby approved; and

3. (B) the directors of the Company be and are hereby authorised to take all actions and execute all documents which they deem necessary, desirable or appropriate in order to implement or give effect to the New Framework Agreement and transactions contemplated thereunder.”

By order of the board of PAX Global Technology Limited Li Wenjin Executive Director

5 January 2016

• For identification purpose only

– 28 –

NOTICE OF SGM

Notes:

• (1) Any member of the Company entitled to attend and vote at a meeting of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member of the Company who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at a general meeting of the Company or at a class meeting. A proxy need not be a member of the Company.

• (2) Delivery of an instrument appointing a proxy shall not preclude a member of the Company from attending and voting in person at the meeting convened and in such event, the instrument appointing a proxy shall be deemed to be revoked.

• (3) The instrument appointing a proxy and the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the principal place of the business of the Company at Room 2416, 24th Floor, Sun Hung Kai Centre, 30 Harbour Road, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjourned meeting (as the case may be).

• (4) All votings on the resolutions in this notice by the members at the meeting shall be conducted by poll.

As at the date of this notice, the Board comprises three executive Directors, namely Mr. Nie Guoming, Mr. Lu Jie and Mr. Li Wenjin and three independent non-executive Directors, namely Mr. Yip Wai Ming, Dr. Wu Min and Mr. Man Kwok Kuen, Charles.

– 29 –