Qiniu Limited — Capital/Financing Update 2012

Jan 27, 2012

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

SIBERIAN MINING GROUP COMPANY LIMITED 西伯利亞礦業集團有限公司 [*]

(incorporated in the Cayman Islands with limited liability)

(Stock code: 1142)

MAJOR DISPOSAL

THE DISPOSAL

The Board announces that on 27 January 2012 (after trading hours), the Company as vendor entered into the Agreement with the Purchaser and the Guarantor, pursuant to which the Company conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Shares for a consideration of HK$100,000. It is estimated that, upon Completion, the Group will record a gain from the Disposal of approximately HK$8,956,000 (net of cost of disposal). Shareholders should note that the exact amount of gain from the Disposal would be calculated on the basis of the relevant figures as at the Completion Date and therefore would be different from the above amount.

The Sale Shares represent the entire issued share capital of DNC. DNC is an investment holding company. Upon Completion, the Company will cease to hold any equity interest in the Disposed Group and the Disposed Group will cease to be subsidiaries of the Company upon Completion.

IMPLICATIONS OF THE LISTING RULES

As the revenue ratio as set out in Rule 14.07 of the Listing Rules is more than 25% but less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to reporting, announcement and Shareholders’ approval requirement.

The Purchaser has confirmed that it, its ultimate beneficial owners and their respective associates (as defined under the Listing Rules) do not hold any Shares. The Guarantor has confirmed that he and his respective associates (as defined under the Listing Rules) do not hold any Shares. To the best knowledge, information and belief of the Directors, no Shareholder and its associates (as defined under the Listing Rules) is required to abstain from voting on the Disposal at the EGM.

The EGM will be convened for the Shareholders to consider and, if thought fit, to approve the Agreement and the transactions contemplated thereunder. A circular will be despatched by the Company to the Shareholders on or before 17 February 2012, containing: (i) further details of the Agreement and further information of the Company; (ii) a notice of the EGM; and (iii) other information as required by the Listing Rules.

* For identification purposes only

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BACKGROUND

The Board announces that on 27 January 2012 (after trading hours), the Company as vendor entered into the Agreement with the Purchaser and the Guarantor, pursuant to which the Company conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Shares for a consideration of HK$100,000. It is estimated that, upon Completion, the Group will record a gain from the Disposal of approximately HK$8,956,000 (net of cost of disposal). Shareholders should note that the exact amount of gain from the Disposal would be calculated on the basis of the relevant figures as at the Completion Date and therefore would be different from the above amount.

The Sale Shares represent the entire issued share capital of DNC. DNC is an investment holding company. Upon Completion, the Company will cease to hold any equity interest in the Disposed Group and the Disposed Group will cease to be subsidiaries of the Company upon Completion.

THE AGREEMENT

Date : 27 January, 2012 Parties : Vendor : the Company Purchaser : Netcore Co., Ltd, a company incorporated under the laws of the British Virgin Islands, and as advised by the Purchaser, is a professional risk investment fund of technology industry and is principally engaged in professional strategic investment in the technology industry. Guarantor : Mr. MOU Shuang Chun, an independent third party not connected with the Company and its connected persons (as defined under the Listing Rules)

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, the Guarantor, the Purchaser and its ultimate beneficial owner(s) are third parties independent of the Company and its connected persons.

In consideration of the Vendor agreeing to enter into the Agreement, the Guarantor has agreed to guarantee the performance by the Purchaser of its obligations under the Agreement subject to and upon the terms and conditions of the Agreement.

Asset to be disposed of

The asset to be disposed of is the Sale Shares, representing the entire issued share capital of DNC.

Details of the principal activities and financial information of the Disposed Group are set out in paragraph headed “Information of the Group and the Disposed Group” below.

Consideration and gain from the Disposal

The Consideration for the Sale Shares is HK$100,000 which will be settled by the Purchaser in the following manner:

• (a) upon signing of the Agreement, the Purchaser shall pay the Deposit to the Vendor by way of cashier order or cash;

• (b) the remaining balance of the Consideration shall be paid by the Purchaser to the Vendor on the Completion Date by way of cashier order or cash.

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If the Purchaser fails to complete the Agreement in accordance with the terms and conditions of the Agreement, the Vendor may forfeit the Deposit.

It is estimated that, upon Completion, the Group will record a gain from the Disposal of approximately HK$8,956,000 (net of cost of disposal). Shareholders should note that the exact amount of gain from the Disposal would be calculated on the basis of the relevant figures as at the Completion Date and therefore would be different from the above amount.

Basis of determination of the Consideration

The Consideration was determined after arm’s length negotiations between the Vendor and the Purchaser after taking into account (i) the unaudited net liabilities of the Disposed Group as at 30 September 2011; (ii) the financial performance of the Disposed Group for the six months ended 30 September 2011 and each of the two years ended 31 March 2011 and 2010; and (iii) the business prospects of the Disposed Group.

Having considered the above and the factors described in the paragraph headed “Reasons for and benefits derived from the Disposal” below, the Directors are of the view that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Condition

Completion of the Agreement is conditional, upon the fulfillment of the following condition (which shall not be waived by the Purchaser) on or before 30 April 2012 (or such other date as the parties may agree):

• (a) the Shareholders passing at an extraordinary general meeting of the Company the resolutions approving the Agreement and the transactions contemplated thereunder in accordance with the Listing Rules and any applicable laws and regulations.

If the condition precedent has not been fulfilled on or before the said date, the Agreement shall lapse and neither party shall be bound to proceed with the sale and purchase of the Sale Shares, except for any antecedent breaches of the Agreement.

Guarantee

The Guarantor unconditionally and irrevocably as primary obligor undertakes to the Company the due observance and performance by the Purchaser of all the obligations of the Purchaser under the Agreement.

Completion

Completion shall take place on the fifth Business Day after the condition precedent has been fulfilled and in any event not later than 30 April 2012 (or at such later date and time as may be agreed between the parties to the Agreement).

INFORMATION OF THE GROUP AND THE DISPOSED GROUP

The principal activity of the Company is investment holding. The principal activities of the Group include (i) holding of mining rights of coal mines located in Russia; (ii) conducting the business of coal trading and scrapped iron trading; and (iii) provision of digital television technology services in the PRC.

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As at the date of this announcement, DNC is wholly-owned by the Company and is the holding company within the Disposed Group. The principal activity of the DNC is investment holding and its prime asset is the entire issued share capital of Century Power. Century Power is an investment holding company and its sole asset is 51% equity interest in the DTVChina. DTVChina is an investment holding company and its prime assets are the 100% equity interest in EnRich DTV and EnReach Information. The principal activity of EnReach Information is provision of digital television technology services whereas EnRich DTV is an investment holding company in digital television.

The financial information of the Disposed Group for the six months ended 30 September 2011 and each of the years ended 31 March 2010 and 2011, which are prepared in accordance with the Hong Kong accounting standards are as follows:

	For the
	six months ended	Year ended	Year ended
	30 September 2011	31 March 2011	31 March 2010
	(Unaudited)	(Unaudited)	(Unaudited)
	(HK$’000)	(HK$’000)	(HK$’000)
Turnover	1,457	8,028	14,660
Loss before taxation	3,391	63,824	161,503
Loss after taxation	3,256	54,343	160,610
Net liabilities	5,979	2,583	146,357

INFORMATION OF THE PURCHASER

As advised by the Purchaser, the Purchaser is a company established under the laws of the British Virgin Islands and is a professional risk investment fund of technology industry and engaging in professional strategic investment in the technology industry. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are third parties independent of and not connected with the Company and its connected persons (as defined in the Listing Rules).

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

Upon Completion of the Disposal, all members of the Disposed Group will no longer be treated as subsidiaries of the Group and its financial results will cease to be consolidated into the consolidated accounts of the Group. It is estimated that, upon Completion, the Group will record a gain from the Disposal of approximately HK$8,956,000 (net of cost of disposal), which is calculated on the basis of the Consideration less (i) the unaudited net liabilities of the Disposed Group attributable to the Group of approximately HK$4,667,000 as of 30 September 2011 and (ii) the release of exchange reserve of approximately HK$4,689,000 as of 30 September 2011 arising from the translation of the assets and liabilities of the Disposed Group that were denominated in Renminbi in prior years. Shareholders should note that the exact amount of gain from the Disposal would be calculated on the basis of the relevant figures as at the Completion Date and therefore would be different from the above amount. It is expected that the gain from the Disposal would be reflected in the consolidated accounts of the Group for the year ending 31 March 2012. Based on the unaudited consolidated management accounts of the Group as at 30 September 2011, the total assets and total liabilities of the Group are expected to be decreased immediately after the completion of the Disposal.

The proceeds received from the Disposal will be used as general working capital of the Group.

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REASONS FOR AND BENEFITS DERIVED FROM THE DISPOSAL

The digital television technology business was continuously underperformed during the year. The market is in fact competitively saturated and having slim margin. With keen market competition, product substitutes emerging and being stricken by the aftermath of financial crisis, the respective intangible asset of customer base and goodwill were fully impaired during the year of 2011. In view of tightened liquidity and uncertainty of economy in the PRC, the Company is not optimistic to this segment in the forthcoming year. The Disposal enables the Group to focus its resources in the coal mining, coal and scrapped iron trading business.

In view of the above reasons and benefits, the Directors (including the independent non-executive Directors) are of the view that entering into the Agreement by the Company is in the interests of the Group and the Shareholders as a whole and the terms of the Agreement are on normal commercial terms and are fair and reasonable.

IMPLICATIONS OF THE LISTING RULES

As the revenue ratio as set out in Rule 14.07 of the Listing Rules is more than 25% but less than 75%, the Disposal constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is subject to reporting, announcement and Shareholders’ approval requirement.

The Purchaser has confirmed that it, its ultimate beneficial owners and their respective associates (as defined under the Listing Rules) do not hold any Shares. The Guarantor has confirmed that he and his respective associates (as defined under the Listing Rules) do not hold any Shares. To the best knowledge, information and belief of the Directors, as no Shareholder has interest in the Disposal, no Shareholder and its associates (as defined under the Listing Rules) is required to abstain from voting on the Disposal at the EGM.

The EGM will be convened for the Shareholders to consider and, if thought fit, to approve the Agreement and the transactions contemplated thereunder. A circular will be despatched by the Company to the Shareholders on or before 17 February 2012, containing: (i) further details of the Agreement and further information of the Company; (ii) a notice of the EGM; and (iii) other information as required by the Listing Rules.

As Completion is subject to the fulfillment of condition precedent which is detailed in this announcement, the Disposal may or may not be completed. Shareholders and potential investors should exercise caution when dealing in the Shares.

DEFINITIONS

In this announcement, the following expressions have the meanings set out below unless the context otherwise requires.

“associate(s)”

has the meaning ascribed to it under the Listing Rules

• “Agreement”

a sale and purchase agreement entered into between, among others, the Company, the Purchaser and the Guarantor on 27 January 2012 in connection with the sale and purchase of the Sale Shares

• “Board”

the board of Directors of the Company

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“Business Day”	a day (excluding Saturday, Sunday and any day on which a tropical cyclone
	warning No. 8 or above is hoisted or remains hoisted between 9:00 a.m.
	and 12:00 noon and is not lowered at or before 12:00 noon or on which a
	“black” rainstorm warning signal is hoisted or remains in effect between
	9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon)
	on which licensed banks are generally open for business in Hong Kong
“Company”	Siberian Mining Group Company Limited (stock code: 1142), a company
	incorporated in the Cayman Islands with limited liability, the issued shares
	of which are listed on the Main Board of the Stock Exchange
“Century Power”	Century Power (China) Limited, a company incorporated under the laws
	of Hong Kong and an indirect wholly-owned subsidiary of the Company
“Completion”	completion of the Agreement
“Completion Date”	the date on which Completion takes place
“connected person(s)”	has the meaning ascribed to it in the Listing Rules, and “connected” shall
	be construed accordingly
“Consideration”	the consideration payable for the Sale Shares
“Deposit”	HK$30,000
“DNC”	Digital New Century Co. Limited is a company incorporated under the
	laws of Hong Kong and a direct wholly-owned subsidiary of the Company,
	which is the legal and beneficial owner of the entire equity interest in
	Century Power. Century Power is the legal and beneficial owner of 51%
	of the equity interest in DTVChina which in turn is the legal and beneficial
	owner of the entire equity interest in EnReach Information and EnRich
	DTV
“Disposal”	the disposal of the entire issued share capital of DNC by the Company
	subject to and upon the terms and conditions of the Agreement
“Disposed Group”	collectively DNC, Century Power, DTVChina, EnReach Information and
	EnRich DTV
“Director(s)”	director(s) of the Company
“DTVChina”	DTVChina, Inc., a company incorporated under the laws of British Virgin
	Islands and an indirect non-wholly-owned subsidiary of the Company
“EGM”	the extraordinary general meeting of the Company to be convened to
	approve the Agreement and transactions contemplated thereunder
“EnRich DTV”	EnRich DTV (China) Co. Limited, a company incorporated under the
	laws of Hong Kong and an indirect non-wholly-owned subsidiary of the
	Company

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“EnReach Information”

影蒞馳信息技術 (上海) 有限公司, a company incorporated under the laws of the PRC and an indirect non-wholly-owned subsidiary of the Company

the Company and its subsidiaries

“Group”	the Company and its subsidiaries
“Guarantor”	Mr. MOU Shuang Chun, an independent third party not connected with the
	Company and its connected persons (as defined under the Listing Rules)
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock Exchange
“PRC”	the People’s Republic of China, which for the purpose of this
	announcement, shall exclude Hong Kong, the Macau Special
	Administrative Region of the PRC and Taiwan
“Purchaser”	Netcore Co., Ltd, a company incorporated under the laws of British Virgin
	Islands and having made all reasonable enquiries, the Purchaser and its
	ultimate beneficial owners are independent third parties not connected with
	the Company and its connected persons (as defined under the Listing Rules)
“Sale Shares”	100 fully paid up shares of HK$1 par value in the capital of DNC registered
	in the name of the Company and which comprise the entire issued share
	capital of DNC
“Share(s)”	ordinary share(s) of par value of HK$0.2 each in the issued share capital
	of the Company
“Shareholder(s)”	person(s) whose name(s) appear in the register of members of the
	Company as the holder(s) of Share(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$” or “HK dollars”	Hong Kong dollars, the lawful currency of Hong Kong
“%”	per cent.
	By order of the Board
	Siberian Mining Group Company Limited
	Lim Ho Sok
	Chairman

Hong Kong, 27 January 2012

As at the date of this announcement, the Board consists of Mr. Lim Ho Sok and Mr. Shin Min Chul as executive Directors, Mr. Pang Ngoi Wah Edward as non-executive Director, and Mr. Liew Swee Yean, Mr. Tam Tak Wah and Mr. Young Yue Wing Alvin as independent non-executive Directors.

This announcement will remain on the website of the Stock Exchange at www.hkexnews.hk on the “Latest Listed Company Information” page for at least 7 days from the date of its posting and on the Company’s website at www.ilinkfin.net/siberian_mining.

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