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

If you have sold or transferred all your shares in Siberian Mining Group Company Limited (the “Company”), you should at once hand this circular, together with the accompanying form of proxy, to the purchaser or the transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

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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SIBERIAN MINING GROUP COMPANY LIMITED ��[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1142)

CONNECTED TRANSACTION: AMENDMENTS OF TERMS OF THE FIRST CONVERTIBLE NOTE

Independent financial adviser to the independent board committee and independent shareholders of the Company

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WALLBANCK BROTHERS Securities (Hong Kong) Limited

A letter from the independent board committee of the Company containing its recommendation to the independent shareholders of the Company is set out on page 20 of this circular. A letter from Wallbanck Brothers Securities (Hong Kong) Limited, the independent financial adviser, containing its advice to the independent board committee and the independent shareholders of the Company is set out on pages 21 to 39 of this circular.

A notice convening an extraordinary general meeting of the Company (the “EGM”) to be held at Meeting Room 4, 7/F, Hongkong International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Kowloon, HK at 3:00 p.m. on 8 February 2010 is set out on pages 44 to 45 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and deposit the same at the office of the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

4 January 2010

* For identification purpose only

	Page
Definitions.................................................................................................................................	1
Letter from the Board.............................................................................................................	5
Letter from the Independent Board Committee.................................................................	20
Letter from Wallbanck Brothers...........................................................................................	21
Appendix — General information.........................................................................................	40
Notice of EGM..........................................................................................................................	44

– i –

DEFINITIONS

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

“2008 Circular”

the circular of the Company dated 31 December 2008 in relation to, among others, the Acquisition

“Acquisition” the acquisition by Grandvest International Limited of 90% of the entire issued share capital of Langfeld Enterprises Limited and 90% of the entire outstanding shareholder’s loan due and owing by Langfeld Enterprises Limited to Cordia pursuant to the Acquisition Agreement

“Acquisition Agreement” the conditional sale and purchase agreement dated 31 October 2008 entered into between, among others, Grandvest International Limited, a wholly-owned subsidiary of the Company, as purchaser and Cordia as vendor in relation to the Acquisition, details of which are set out in the 2008 Circular

“acting in concert” has the meaning ascribed to it under the Takeovers Code “Amendments” the proposed amendments to the First Convertible Note pursuant to the Modification Deed
“Announcement” the announcement of the Company date 14 December 2009 in relation to the Modification Deed and the transactions contemplated thereunder
“associate(s)” has the meaning ascribed to it under the Listing Rules “Board” the board of Directors “business day” any day (other than a Saturday or Sunday) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours
“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
“connected person” has the meaning ascribed to it under the Listing Rules “Conversion Share(s)” the new Share(s) to be issued by the Company upon the exercise of the conversion rights attaching to the First Convertible Note or the Restated First Convertible Note (as the case may be) pursuant to the terms thereof

– 1 –

DEFINITIONS

“Convertible Notes” altogether, the First Convertible Note, the Second Convertible Note and the Third Convertible Note. As at the Latest Practicable Date, the Second Convertible Note and the Third Convertible Note had not been issued
“Cordia” Cordia Global Limited, a company incorporated in British Virgin Islands with limited liability, being the Noteholder and a substantial shareholder of Langfeld Enterprises Limited, a nonwholly owned subsidiary of the Company. As at the Latest Practicable Date, Cordia was interested in approximately 0.15% of the existing issued share capital of the Company
“Director(s)” director(s) of the Company “Effective Date” the date on which the Modification Deed becomes effective “EGM” the extraordinary general meeting of the Company to be convened to consider and, if thought fit, approve the Modification Deed and the transactions contemplated thereunder
“First Convertible Note” the convertible note in the principal amount of US$253 million (equivalent to HK$1,973.4 million) issued by the Company to Cordia on 25 May 2009 for settlement of the consideration (as detailed in the 2008 Circular) pursuant to the terms of the Acquisition Agreement. As at the Latest Practicable Date, the outstanding principal amount of the First Convertible Note was US$142 million
“Group” the Company and its subsidiaries “Hong Kong” the Hong Kong Special Administrative Region of the PRC
“Independent Board Committee” the independent committee of the Board comprising all the independent non-executive Directors, namely Mr. Liew Swee Yean, Mr. Tam Tak Wah and Mr. Yoshinori Suzuki, established for the purpose of advising the Independent Shareholders in relation to the Modification Deed and the transactions contemplated thereunder
“Independent Shareholders” Shareholders other than those who are required under the Listing Rules to abstain from voting on the resolution to be proposed at the EGM to approve the Modification Deed and the transactions contemplated thereunder
“Last Trading Day”
14 December 2009, being the last trading day of the Shares on the Stock Exchange prior to the release of the Announcement

– 2 –

DEFINITIONS

“Latest Practicable Date” 29 December 2009, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular
“Listing Rules” the Rules Governing the Listing of the Securities on the Stock Exchange
“Modification Deed” the conditional modification deed dated 14 December 2009 as modified by the supplemental deed dated 22 December 2009 entered into between the Company and Cordia to amend certain existing terms of the First Convertible Note
“New Conversion Price” the conversion price for each Conversion Share to be issued upon exercise of the conversion rights attaching to the Restated First Convertible Note, being HK$0.04 initially and subject to the adjustments which may be made pursuant to the terms of the Restated First Convertible Note
“Noteholder” holder of the First Convertible Note or the Restated First Convertible Note (as the case may be)
“Options” options granted by the Company pursuant to the share option scheme of the Company adopted on 19 October 2002
“PRC” the People’s Republic of China
“Promissory Note” the promissory note in the principal amount of US$35 million to be issued by the Company in favour of Cordia on the Effective Date
“Restated First Convertible Note” the convertible note or notes to be constituted by and issued pursuant to an instrument to be negotiated by the Company and Cordia based on the terms and conditions of the Modification Deed after the SGM, the principal amount of which shall be the principal amount of the First Convertible Note which remain unexercised immediately prior to the issue of the Restated First Convertible Note and the Promissory Note less US$35 million, being the principal amount of the Promissory Note
“Second Convertible Note” has the meaning ascribed to it under the 2008 Circular, details of which are set out in the 2008 Circular and the announcement of the Company dated 25 November 2009
“SFC” Securities and Futures Commission of Hong Kong

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

– 3 –

DEFINITIONS

“Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company “Shareholder(s)” holder(s) of Share(s) “Stock Exchange” The Stock Exchange of Hong Kong Limited “Takeovers Code” the Hong Kong Code on Takeovers and Mergers “Third Convertible Note” has the meaning ascribed to it under the 2008 Circular “Wallbanck Brothers” Wallbanck Brothers Securities (Hong Kong) Limited, a licensed corporation to carry out types 4 (advising on securities), 6 (advising on corporate finance), and 9 (asset management) regulated activities under the SFO, and the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the Modification Deed and the transactions contemplated thereunder

“HK$” Hong Kong dollars, the lawful currency of Hong Kong “US$” United States dollars, the lawful currency of the United States of America “%” per cent.

– 4 –

LETTER FROM THE BOARD

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SIBERIAN MINING GROUP COMPANY LIMITED ��[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1142)

Executive Directors:

Mr. Chiu Chi Hong Mr. Li Wing Sang Mr. Lim Ho Sok Mr. Shin Min Chul

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

Independent non-executive Directors:

Mr. Liew Swee Yean Mr. Tam Tak Wah Mr. Yoshinori Suzuki

Head office and principal place of business in Hong Kong:

16th Floor No. 8 Queen’s Road Central Central Hong Kong

4 January 2010

To the Shareholders and, for information only, the Noteholder and holders of Options

Dear Sir or Madam,

CONNECTED TRANSACTION: AMENDMENTS OF TERMS OF THE FIRST CONVERTIBLE NOTE

INTRODUCTION

On 14 December 2009 and 22 December 2009, the Company announced that the Company and Cordia entered into the Modification Deed and the supplemental deed to the Modification Deed respectively pursuant to which the Company and Cordia conditionally agreed to amend the existing terms of the First Convertible Note with effect from the Effective Date.

* For identification purpose only

– 5 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, Cordia was a substantial shareholder of Langfeld Enterprises Limited, a non-wholly owned subsidiary of the Company. Accordingly, Cordia is a connected person of the Company and the entering into of the Modification Deed constitutes a connected transaction for the Company under the Listing Rules. The Amendments (including the issue of the Promissory Note and the Restated First Convertible Note and the allotment and issue of the Conversion Shares falling to be issued upon the exercise of the conversion rights attaching to the Restated First Convertible Note) are subject to the reporting and announcement requirements and the approval of the Independent Shareholders by poll at the EGM under the Listing Rules.

The purpose of this circular is to provide you with details of (i) the Modification Deed; (ii) the letter of recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Modification Deed and the transactions contemplated thereunder; (iii) the letter of advice from Wallbanck Brothers to the Independent Board Committee and the Independent Shareholders in relation to the Modification Deed and the transactions contemplated thereunder; (iv) the notice of the EGM; and (v) other information as required under the Listing Rules.

THE MODIFICATION DEED

Reference is made to the announcements of the Company dated 14 November 2008 and 25 May 2009 in relation to, among others, the Acquisition, and the 2008 Circular.

As at the Latest Practicable Date, the outstanding principal amount of the First Convertible Note was US$142 million (equivalent to HK$1,107.6 million) which was convertible into Conversion Shares at a conversion price of HK$0.12 per Conversion Share (subject to adjustments).

On 14 December 2009 (after trading hours), the Company and Cordia entered into the Modification Deed (as modified by the supplemental deed entered into by the Company and Cordia on 22 December 2009) pursuant to which the Company and Cordia conditionally agreed to amend certain existing terms of the First Convertible Note with effect from the Effective Date. The principal terms of the Modification Deed are summarised as follows:

Date

14 December 2009

Parties

(i) the Company; and
(ii) Cordia, being the sole Noteholder as at the Latest Practicable Date.

As at the Latest Practicable Date, Cordia was interested in approximately 0.15% of the existing issued share capital of the Company and was a substantial shareholder of Langfeld Enterprises Limited, a non-wholly owned subsidiary of the Company. Cordia is a company incorporated in the British Virgin Islands with limited liability and is wholly owned by Mr. Choi Sungmin. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, Cordia is an investment holding company.

– 6 –

LETTER FROM THE BOARD

Summary of the Amendments

The Amendments are summarised as follows:

Principal amount:

Existing terms

US$253 million (equivalent to HK$1,973.4 million), of which US$142 million (equivalent to HK$1,107.6 million) remained outstanding as at the Latest Practicable Date.

Amendments

On the Effective Date, the certificate in respect of the outstanding First Convertible Note will be delivered to the Company for cancellation and the Promissory Note in the principal amount of US$35 million (equivalent to HK$273 million) and the Restated First Convertible Note in the principal amount of US$107 million (equivalent to HK$834.6 million) (assuming that the outstanding principal amount of the First Convertible Note which remains unexercised immediately prior to the issue of the Restated First Convertible Note and the Promissory Note is US$142 million) will be issued.

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LETTER FROM THE BOARD

Maturity and redemption:

Existing terms

The Company shall be entitled to redeem the First Convertible Note at a price equal to 115% of the outstanding principal amount of the First Convertible Note on the date falling five years after 25 May 2009 (“ Original Maturity Date ”), without entitlement of early redemption before the Original Maturity Date.

Amendments

The Company shall be entitled to redeem the Restated First Convertible Note at a price equal to 100% of the outstanding principal amount of the Restated First Convertible Note on the date falling six years after 25 May 2009 (“ Maturity Date ”), without entitlement of early redemption before the Maturity Date.

The Promissory Note has a maturity date of 25 May 2015 and the Company may in its sole discretion elect to repay all or any part of the amount outstanding under the Promissory Note at any time prior to the maturity date of the Promissory Note and the principal amount of the Promissory Note will then be reduced by the amount repaid. No interest shall accrue on the amount due under the Promissory Note.

Conversion rights:

The Noteholder shall have the right at any time from the date of issue up to and including the date immediately prior to the Original Maturity Date, to convert in amounts of US$100,000, or its integral multiples, except that if the outstanding principal amount of the First Convertible Note is less than US$100,000, the whole (but not part) of the outstanding principal amount of the First Convertible Note held by the Noteholder into Conversion Shares.

There will not be any conversion right attached to the Promissory Note.

– 8 –

LETTER FROM THE BOARD

Existing terms

The Noteholder shall be entitled to convert the outstanding principal amount of the First Convertible Note during the conversion period, provided that, immediately after the exercise of the conversion rights: (i) the Noteholder together with the parties acting in concert with it will not hold or control such level of the voting rights of the Company as may trigger a mandatory general offer under the Takeovers Code, regardless of whether a waiver has been granted by the SFC on the obligation of a mandatory general offer under the Takeovers Code; and (ii) the conversion of the outstanding principal amount of the First Convertible Note will not cause the public float of the Company unable to meet the requirement under Rule 8.08 of the Listing Rules.

Amendments

As to the principal amount of the Restated First Convertible Note, the Noteholder shall have the right at any time from the Effective Date up to and including the date immediately prior to the Original Maturity Date to convert in amounts of US$100,000, or its integral multiples, except that if the outstanding principal amount of the Restated First Convertible Note is less than US$100,000, the whole (but not part) of the outstanding principal amount of the Restated First Convertible Note held by the Noteholder into Conversion Shares, provided that immediately after the exercise of the conversion rights: (i) the Noteholder together with the parties acting in concert with it will not hold or control such level of the voting rights of the Company as may trigger a mandatory general offer under the Takeovers Code, regardless of whether a waiver has been granted by the SFC on the obligation of a mandatory general offer under the Takeovers Code; and (ii) the conversion of the outstanding principal amount of the Restated First Convertible Note will not cause the public float of the Company unable to meet the requirement under Rule 8.08 of the Listing Rules. In addition, the Noteholder shall indemnify and keep the Company indemnified, upon demand, against all costs, expenses, claims, damages, penalties and proceedings which may be incurred or suffered by the Company as a result of a breach of the aforesaid.

All and any of the conversion rights attaching to the Restated First Convertible Note will not be extended, and will lapse on the Original Maturity Date.

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LETTER FROM THE BOARD

Conversion price:

Existing terms

The initial conversion price is HK$0.12 per Conversion Share, s u b j e c t t o a d j u s t m e n t s (“ Adjustments ”) upon the occurrence of consolidation, subdivision or reclassification of Shares, capitalisation of profits or reserves, capital distributions, rights issues of Shares or options, warrants or other rights to subscribe for or purchase or otherwise acquire any Shares at less than the average closing prices (the “ Current Market Price ”) as quoted by the Stock Exchange (or the other stock exchange the Shares are then listed or quoted or dealt in) per Share for the five (5) consecutive trading days ending on the trading day immediately preceding the date of announcement of the terms of issue, rights issues by the Company of any securities (other than Shares or options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares) or options, warrants or other rights to subscribe for, purchase or otherwise acquire such securities, issue for cash of any Shares (other than Shares issued on the exercise of conversion rights attached to the First Convertible Note or on the exercise of any other rights of conversion into, or exchange or subscription for, Shares) or issue of options, warrants or other rights to subscribe for, purchase or otherwise acquire Shares at a price per Share

Amendments

The initial conversion price is HK$0.04 (“ New Conversion Price ”) per Conversion Share, subject to adjustments upon the occurrence of consolidation, subdivision or reclassification of Shares, capitalisation of profits or reserves, capital distributions, rights issues of Shares, options over Shares, issue of Shares or convertible securities other than Shares issued on the exercise of the conversion right at price less than 80% of the then market price per Share, modification of rights of conversion, offers to Shareholders, or any other events the Company determines that a downward adjustment should be made to the conversion price.

– 10 –

LETTER FROM THE BOARD

Existing terms

which is less than 80% of the Current Market Price, issue of securities (other than the First Convertible Note) which carry rights of conversion into, or exchange or subscription for, Shares at a total effective consideration per Share which is less than 80% of the Current Market Price, modification of rights of conversion, exchange or subscription and offers to Shareholders. If the Company determines that a downward adjustment should be made to the conversion price as a result of events other than the aforesaid, the Company shall consult the auditors or an independent merchant bank of international repute in relation to the adjustment.

As at the Latest Practicable Date, the conversion price was HK$0.12 per Conversion Share.

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LETTER FROM THE BOARD

Security:

Existing terms

The performance of all obligations of the Company under the First Convertible Note is secured by charges (the “ Share Charges ”) over 90% of the issued share capital of Langfeld Enterprises Limited, all the issued shares of Grandvest International Limited and 70% participation interests of LLC “Shakhta Lapichevskaya” in favour of Cordia as security for the Convertible Notes. The Share Charges shall be discharged as soon as reasonably practicable upon the date falling three years from the date of the Share Charges, upon the date on which Cordia ceases to hold Convertible Notes with a face value of 50% or more of the Convertible Notes issued, or if all present and future moneys, debts and liabilities due, owing or incurred by the Company to the holder of the Convertible Notes have been irrevocably paid, whichever is the earliest.

Amendments

The performance of all obligations of the Company under the Restated First Convertible Note is secured by charges with the terms identical to the Share Charges.

The Promissory Note is unsecured.

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LETTER FROM THE BOARD

Save for the aforesaid Amendments, there were no other material changes to the terms of the First Convertible Note.

Pursuant to the Modification Deed, Cordia shall bear all the costs and expenses incurred by it in relation to the preparation, execution and performance of the Modification Deed and all the costs and expenses properly and reasonably incurred by the Company in relation to the preparation, execution and performance of the Modification Deed.

New Conversion Price

The New Conversion Price of HK$0.04 per Conversion Share represents:

(a) a discount of approximately 14.89% to the closing price of HK$0.047 per Share as quoted on the Stock Exchange on the Last Trading Day;
(b) a discount of approximately 17.36% to the average closing price of HK$0.0484 per Share as quoted on the Stock Exchange for the 5 consecutive trading days up to and including the Last Trading Day;
(c) a discount of approximately 18.37% to the average closing price of HK$0.049 per Share as quoted on the Stock Exchange for the 10 consecutive trading days up to and including the Last Trading Day;
(d) a premium of approximately 14.29% over the closing price of HK$0.035 per share as quoted on the Stock Exchange on the Latest Practicable Date; and
(e) a discount of approximately 7.19% to the unaudited consolidated net assets value of the Company attributable to the Shareholders of approximately HK$0.0431 per Share as at 30 September 2009 (based on the unaudited consolidated net assets of the Company attributable to the Shareholders of approximately HK$443,043,000 and 10,284,501,200 Shares in issue as at 30 September 2009).

Conversion Shares

For illustrative purpose only, upon full conversion of US$107 million principal amount of the Restated First Convertible Note at the New Conversion Price of HK$0.04 per Conversion Share, a total of 20,865 million Conversion Shares will be issued, representing approximately 202.88% of the existing issued share capital of the Company, and approximately 66.73% of the issued share capital of the Company as enlarged by the conversion of the Restated First Convertible Note.

Conditions precedent to the Modification Deed

The Modification Deed is conditional upon:

(a) the passing of an ordinary resolution to approve the Amendments and the creation of the Promissory Note by the Independent Shareholders at an extraordinary general meeting of the Company to be convened and held;

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LETTER FROM THE BOARD

(b) the approval from the Stock Exchange of the Amendments in accordance with Rule 28.05 of the Listing Rules and the Listing Committee of the Stock Exchange having granted the listing of, and the permission to deal in, the maximum number of the Conversion Shares falling to be allotted and issued upon exercise of the conversion right attaching to the Restated First Convertible Note; and
(c) the obtaining of all necessary consents and approvals required to be obtained on the part of the Company and Cordia in respect of the Amendments.

The Amendments were arrived at after arm’s length negotiation between the Company and Cordia. If any of the conditions precedent has not been satisfied on or before 31 December 2010 (or such later date as the Company and Cordia may agree), the provisions of the Modification Deed shall become null and void.

The Effective Date shall be the third business day after all the conditions precedent set out above are satisfied or subject to the satisfaction of all such conditions precedent, any later day as may be agreed between the Company and Cordia.

Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares to be issued on conversion of the Restated First Convertible Note.

EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

The following are the shareholding structures of the Company as at the Latest Practicable Date and the shareholding structures of the Company under the following scenarios (assuming that there is no other change in the issued share capital and shareholding structure of the Company from the Latest Practicable Date save as mentioned below):

(A) immediately after the conversion of part of the Restated First Convertible Note at the initial New Conversion Price to the extent that Cordia will hold approximately 29.99% of the entire issued share capital of the Company after such conversion;
(B) immediately after the full exercise of the Options which are outstanding as at the Latest Practicable Date (“ Outstanding Options ”) and conversion of part of the Restated First Convertible Note at the initial New Conversion Price to the extent that Cordia will hold approximately 29.99% of the entire issued share capital of the Company after such conversion and exercise;

– 14 –

LETTER FROM THE BOARD

(C) immediately after the full conversion of the Restated First Convertible Note at the initial New Conversion Price and full exercise of the Outstanding Options (for illustrative purpose only); and
(D) immediately after the full conversion of the Restated First Convertible Note at the initial New Conversion Price, the Second Convertible Note and the Third Convertible Note (assuming the Third Convertible Note is in the aggregate principal amount of US$550.8 million) at the initial conversion price of HK$0.12 per Share and full exercise of the Outstanding Options (for illustrative purpose only).

Cordia_(Note 1) Goldwyn Management Limited(Note 2) Mr. Li Wing Sang (Note 3) Mr. Chiu Chi Hong (Note 3) DTV China Holdings Limited(Note 4)_ Other public Shareholders Total	As at the Latest Practicable Date Shares Approximate % 15,000,000 0.15% 560,000,000 5.44% — — — — 320,000,000 3.11% 9,389,501,200 91.30% 10,284,501,200 100.00%	Scenario A Shares Approximate % 4,399,119,283 29.99% 560,000,000 3.82% — — — — 320,000,000 2.18% 9,389,501,200 64.01% 14,668,620,483 100.00%	Scenario B (Note 3) Shares Approximate % 4,449,392,478 29.99% 560,000,000 3.78% 19,560,000 0.13% 19,560,000 0.13% 320,000,000 2.16% 9,467,741,200 63.81% 14,836,253,678 100.00%	Scenario C (Notes 3 and 5) Shares Approximate % 20,880,000,000 66.78% 560,000,000 1.79% 19,560,000 0.06% 19,560,000 0.06% 320,000,000 1.03% 9,467,741,200 30.28% 31,266,861,200 100.00%	Scenario D (Notes 3 and 5) Shares Approximate % 58,762,000,000 84.98% 560,000,000 0.81% 19,560,000 0.03% 19,560,000 0.03% 320,000,000 0.46% 9,467,741,200 13.69% 69,148,861,200 100.00%	Scenario D (Notes 3 and 5) Shares Approximate % 58,762,000,000 84.98% 560,000,000 0.81% 19,560,000 0.03% 19,560,000 0.03% 320,000,000 0.46% 9,467,741,200 13.69% 69,148,861,200 100.00%
						100.00%

Notes:

As at the Latest Practicable Date, Cordia was the holder of the First Convertible Note and a substantial shareholder of a non-wholly owned subsidiary of the Company, Langfeld Enterprises Limited. After the date of the Announcement, Cordia entered into a loan agreement with an Independent Third Party, pursuant to which the Independent Third Party shall advance a loan of approximately US$2.22 million to Cordia for a term of 60 months, and Cordia shall transfer 500 million Shares to the Independent Third Party as collateral. The Independent Third Party shall have right to freely dispose of those 500 million Shares and shall return 500 million Shares to Cordia upon full and punctual repayment of the loan (together with the interest accrued) by Cordia.
The entire issued share capital of Goldwyn Management Limited was beneficially owned by Mr. Lim Ho Sok, an executive Director and the chairman of the Company, as at the Latest Practicable Date.
As at the Latest Practicable Date, the Company had outstanding Options carrying rights to subscribe for an aggregate of 117,360,000 Shares. Save for the aforesaid Outstanding Options and the First Convertible Note, the Company did not have any other outstanding options, warrants, derivatives or securities convertible into Shares as at the Latest Practicable Date. As at the Latest Practicable Date, Mr. Li Wing Sang and Mr. Chiu Chi Hong, being executive Directors, each held 19,560,000 Options.
DTV China Holdings Limited was wholly and beneficially owned by a director of a non-wholly owned subsidiary of the Company, DTVChina, Inc. as at the Latest Practicable Date.
The shareholding structures for scenarios (C) and (D) are for illustration purpose only as pursuant to the terms of the Restated First Convertible Note, the Second Convertible Note and the Third Convertible Note (together the “ Notes ”), (i) after the exercise of the conversion right attaching to the Notes, the holder of the Notes, together with the parties acting in concert with it shall not hold or control such level of the voting rights of the Company as may trigger a mandatory general offer under the Takeovers Code, regardless of whether a waiver has been granted by the SFC on the obligation of a mandatory general offer under the Takeovers Code; and (ii) the conversion of the outstanding principal amount of the Notes will not cause the public float of the Company unable to meet the requirement under Rule 8.08 of the Listing Rules.

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LETTER FROM THE BOARD

REASONS FOR ENTERING INTO THE MODIFICATION DEED

The Directors consider that the terms of the Modification Deed are fair and reasonable and the Amendments are in the interests of the Shareholders as a whole notwithstanding the dilution effect in the shareholding interests of the existing Shareholders (other than Cordia and its associates) from approximately 99.85% as at the Latest Practicable Date to approximately 70.01% immediately after the conversion of part of the Restated First Convertible Note at the initial New Conversion Price to the extent that Cordia will hold approximately 29.99% of the entire issued share capital of the Company after such conversion (as detailed in the paragraph headed “Effect on the shareholding structure of the Company” above) for the following reasons:

(i) Conversion price

The Board is of the view that the New Conversion Price, which was determined after arm’s length negotiations between the Company and Cordia and taken into account of, among others, the net assets value of the Group and the recent market price of the Shares, can increase the incentive of the Noteholder to convert the Restated First Convertible Note into Conversion Shares before the Maturity Date.

Due to the financial tsunami and the relatively weak global financial performance, the trading price of the Shares on the Stock Exchange had been adversely affected over the past year. To illustrate, as disclosed in the 2008 Circular, the initial conversion price of the First Convertible Note of HK$0.12 per Share represents: (i) a premium of approximately 42.86% over the closing price of HK$0.084 per Share as quoted on the Stock Exchange on 25 September 2008, being the last trading day prior to the entering into of the Acquisition Agreement; and (ii) a premium of approximately 18.81% over the closing price of HK$0.101 per Share as quoted on the Stock Exchange as at the latest practicable date prior to the printing of the 2008 Circular. The trading price of the Shares had slipped during the recent months. Based on the average closing price of HK$0.0484 (the “ Five Day Average Price ”) and HK$0.049 (the “ Ten Day Average Price ”) per Share as quoted on the Stock Exchange for the five consecutive trading days and ten consecutive trading days up to and including the Last Trading Day, respectively, the initial conversion price of HK$0.12 per Share represents a premium of approximately 147.93% and 144.90% over the Five Day Average Price and the Ten Day Average Price respectively. Should the Amendments be approved, the New Conversion Price of HK$0.04 per Share would represent a discount of approximately 17.36% and 18.37% to the Five Day Average Price and the Ten Day Average Price respectively.

In light of the above trading statistics, and having reviewed the financial position and the performance of the Group, the market conditions, as well as the expected responses from the Noteholder, both the Company and Cordia believe that the New Conversion Price will be more realistic and can make it more appealing for the Noteholder to convert the Restated First Convertible Note into Conversion Shares during the remaining term of the Restated First Convertible Note.

– 16 –

LETTER FROM THE BOARD

(ii) Redemption price

The reduction of the redemption price of the First Convertible Note can decrease the financial costs of the Company, which is favourable to the financial position of the Group. Also, like the adjustment of the Conversion Price, such reduction can also increase the incentive of the Noteholder to exercise the conversion rights attaching to the Restated First Convertible Note.

(iii) Working capital requirement

The Directors consider that the extension of time for the repayment of the outstanding principal amount of the First Convertible Note will provide further flexibility for the Group to plan its working capital requirements ahead.

INFORMATION ON THE GROUP

The Group is principally engaged in (i) coal mining in Russia; and (ii) digital television broadcasting industry including provision of equipments and software of cable video-on-demand system, information broadcasting system, embedded television systems and value-added services.

FINANCIAL EFFECTS OF THE AMENDMENTS

Based on the closing price of the Shares as at the Latest Practicable Date, the Company estimates that the Group will record an unaudited loss of approximately HK$391.0 million and a corresponding increase in liability of the Group as a result of the Amendments. The actual financial impact of the Amendments will be calculated on the basis of the relevant figures as at the Effective Date and therefore may be different from the aforesaid.

IMPLICATIONS UNDER THE LISTING RULES

The Company will apply to the Stock Exchange for its approval of the Amendments in accordance with Rule 28.05 of the Listing Rules.

– 17 –

LETTER FROM THE BOARD

As far as the Company is aware after having made all reasonable enquiries, as at the Latest Practicable Date, Cordia and its associates in aggregate were beneficially interested in 15,000,000 Shares (representing approximately 0.15% of the entire existing issued share capital of the Company), being the number of Shares in respect of which Cordia and its associates will control or will be entitled to exercise control over the voting rights at general meeting of the Company. Cordia and its associates will abstain from voting on the proposed ordinary resolution to approve the Modification Deed and the transactions contemplated thereunder at the EGM in respect of all their Shares. As at the Latest Practicable Date, no voting trust or other agreement or arrangement or understanding (other than an outright sale) had been entered into by or binding upon Cordia and/or any of its associates; and there was no obligation or entitlement of Cordia or any of its associates as at the Latest Practicable Date, whereby Cordia and/or its associates had or might have temporarily or permanently passed control over the exercise of voting rights in respect of its/their Shares to a third party, either generally or on a case-by-case basis.

The Independent Board Committee comprising all the independent non-executive Director, namely Mr. Liew Swee Yean, Mr. Tam Tak Wah and Mr. Yoshinori Suzuki, has been established to advise the Independent Shareholders in relation to the Modification Deed and the transactions contemplated thereunder. Wallbanck Brothers has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in relation to the Modification Deed and the transactions contemplated thereunder.

EGM

Set out on pages 44 to 45 is a notice convening the EGM to be held at Meeting Room 4, 7/F, Hongkong International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Kowloon, HK at 3:00 p.m. on 8 February 2010 at which an ordinary resolution will be proposed to consider and, if thought fit, to approve the Modification Deed and the transactions contemplated thereunder.

A form of proxy for use at the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

RECOMMENDATIONS

Your attention is drawn to the letter from the Independent Board Committee to the Independent Shareholders set out on page 20 of this circular, and the letter from Wallbanck Brothers on pages 21 to 39 of this circular which contains their advice to the Independent Board Committee and the Independent Shareholders regarding the Modification Deed and the transactions contemplated thereunder as well as the principal factors and reasons taken into consideration in arriving at their advice.

– 18 –

LETTER FROM THE BOARD

The Directors consider that the terms of the Modification Deed and the transactions contemplated thereunder are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the EGM to approve the Modification Deed and the transactions contemplated thereunder. You are advised to read the letter from the Independent Board Committee and the letter from Wallbanck Brothers mentioned above before deciding how to vote at the EGM.

ADDITIONAL INFORMATION

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

Yours faithfully,

For and on behalf of the Board Siberian Mining Group Company Limited Lim Ho Sok Chairman

– 19 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of the letter of recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Modification Deed and the transactions contemplated thereunder prepared for the purpose of inclusion in this circular.

==> picture [98 x 35] intentionally omitted <==

SIBERIAN MINING GROUP COMPANY LIMITED ��[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1142)

4 January 2010

To the Independent Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION: AMENDMENTS OF TERMS OF THE FIRST CONVERTIBLE NOTE

We refer to the circular of the Company dated 4 January 2010 (the “ Circular ”), of which this letter forms part. Unless the context requires otherwise, capitalised terms used herein shall have the same meanings as those defined in the Circular.

We have been appointed by the Board as members of the Independent Board Committee to advise you on the terms of the Modification Deed and the transactions contemplated thereunder. Wallbanck Brothers has been appointed as the independent financial adviser to advise you and us in this regard. Details of their advice, together with the principal factors and reasons they have taken into consideration in giving such advice, are set out on pages 21 to 39 of the Circular. Your attention is also drawn to the “Letter from the Board” in the Circular and the additional information set out in the appendix thereto.

Having considered the terms of the Modification Deed and the transactions contemplated thereunder and taking into account the independent advice of Wallbanck Brothers, in particular the principal factors, reasons and recommendation as set out in their letter, we consider that (i) the terms of the Modification Deed and the transactions contemplated thereunder are on normal commercial terms and are fair and reasonable in so far as the Independent Shareholders are concerned; and (ii) the entering into of the Modification Deed and the transactions contemplated thereunder are in the interests of the Company and the Independent Shareholders as a whole. Accordingly, we recommend you to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Modification Deed and the transactions contemplated thereunder.

Yours faithfully, Independent Board Committee Liew Swee Yean Tam Tak Wah Yoshinori Suzuki Independent non-executive Directors

* For identification purpose only

– 20 –

LETTER FROM WALLBANCK BROTHERS

The following is the full text of a letter of advice from Wallbanck Brothers, the independent financial adviser to the Independent Board Committee and the Independent Shareholders regarding the Modification Deed and the transactions contemplated thereunder for the purpose of incorporation into this circular.

==> picture [46 x 46] intentionally omitted <==

WALLBANCK BROTHERS Securities (Hong Kong) Limited

2310, Tower 2, Lippo Centre, 89 Queensway, Central, Hong Kong

4 January 2010

To the independent board committee and the independent shareholders of Siberian Mining Group Company Limited

Dear Sirs,

CONNECTED TRANSACTION: AMENDMENTS OF TERMS OF THE FIRST CONVERTIBLE NOTE

INTRODUCTION

We refer to our appointment as independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Modification Deed and the transactions contemplated thereunder, details of which are set out in the letter from the Board (the “ Letter from the Board ”) contained in the circular to the Shareholders dated 4 January 2010 (the “ Circular ”), of which this letter forms part. Terms used in this letter shall have the same meanings as those defined in the Circular unless the context requires the otherwise.

On 14 December 2009 and 22 December 2009, the Company announced that the Company and Cordia entered into the Modification Deed and the supplemental deed to the Modification Deed respectively pursuant to which the Company and Cordia have conditionally agreed to amend the existing terms of the First Convertible Note with effect from the Effective Date.

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LETTER FROM WALLBANCK BROTHERS

As at the Latest Practicable Date, Cordia was a substantial shareholder of Langfeld Enterprises Limited, a non-wholly owned subsidiary of the Company. Accordingly, Cordia is a connected person of the Company and the entering into of the Modification Deed constitutes a connected transaction for the Company under the Listing Rules. The Amendments (including the issue of the Promissory Note and the Restated First Convertible Note and the allotment and issue of the Conversion Shares falling to be issued upon the exercise of the conversion rights attaching to the Restated First Convertible Note) are subject to the approval of the Independent Shareholders by poll at the EGM under the Listing Rules. Cordia and its associates are required to abstain from voting at the EGM.

An Independent Board Committee comprising Mr. Liew Swee Yean, Mr. Tam Tak Wah and Mr. Yoshinori Suzuki (all being independent non-executive Directors) has been formed to advise the Independent Shareholders on (i) whether the terms of the Modification Deed are on normal commercial terms are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the entering into the Modification Deed of Settlement is in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote in respect of the relevant resolution(s) to approve the Modification Deed and the transactions contemplated thereunder. We, Wallbanck Brothers, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders in this respect.

BASIS OF OUR OPINION

In formulating our opinion and recommendations, we have relied on the accuracy of the information, opinions and representations provided to us by the Directors and management of the Company, and have assumed that all information, opinions and representations contained or referred to in the Circular were true and accurate at the time when they were made and will continue to be accurate at the Latest Practicable Date. We have also assumed that all statements of belief, opinion and intention made by the Directors in the Circular were reasonably made after due enquiry. We have no reasons to doubt that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and representations and opinions made to us untrue, inaccurate or misleading. We consider that we have received sufficient information to enable us to reach an informed view and to justify reliance on the accuracy of the information contained in the Circular to provide a reasonable basis for our opinions and recommendations. Having made all reasonable enquiries, the Directors have further confirmed that, to the best of their knowledge, they believe there are no other facts or representations the omission of which would make any statement in this circular, including this letter, misleading. We have not, however, carried out any independent verification of the information provided by the Directors and management of the Company, nor have we conducted an independent investigation into the business and affairs of any member of the Group or any of its respective subsidiaries or associates.

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LETTER FROM WALLBANCK BROTHERS

In formulating our opinion, we have relied on the financial information provided by the Company, particularly, on the accuracy and reliability of financial statements and other financial data of the Company. We have not audited, compiled nor reviewed the said financial statements and financial data. We shall not express any opinion or any form of assurance on them. We have had no reason to doubt the truth and accuracy of the information provided to us by the Company. The Directors have also advised us that no material facts have been omitted from the information to reach an informed view, and we have no reason to suspect that any material information has been withheld. We have not carried out any feasibility study on any past, and forthcoming investment decision, opportunity or project undertaken or be undertaken by the Company. Our opinion has been formed on the assumption that any analysis, estimation, forecast, anticipation, condition and assumption provided by the Company are valid and sustainable. Our opinions shall not be constructed as to give any indication to the validity, sustainability and feasibility of any past, existing and forthcoming investment decision, opportunity or project undertaken or to be undertaken by the Company.

In formulating our opinion, we have not considered the taxation implications on the Independent Shareholders arising from the Modification Deed and the transactions contemplated thereunder as these are particular to the individual circumstances of each Shareholder. It is emphasized that we will not accept responsibility for any tax effect on or liability of any person resulting from his or her decision to the Modification Deed and the transactions contemplated thereunder. In particular, the Independent Shareholders who are overseas residents or are subject to overseas taxation or Hong Kong taxation on securities dealings should consult their own tax positions, and if in any doubt, should consult their own professional advisers.

Our opinions are necessarily based upon the financial, economic, market, regulatory and other conditions as they existed on, and the facts, information, representations, and opinions made available to us as of, the Latest Practicable Date. We disclaim any undertaking or obligation to advise any person of any change in any fact or matter affecting the opinion expressed herein which may come or be brought to our attention before and after the EGM.

Our opinions are formulated only and exclusively for the purpose of the Modification Deed and the transactions contemplated thereunder and shall not be used for any other purpose in any circumstance nor for any comparable purpose with any other opinions.

Our opinions and their validity are subject to the risk factors relating to the Acquisition as indicated in this letter below.

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LETTER FROM WALLBANCK BROTHERS

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion to the Independent Board Committee in respect of the terms of the Modification Deed, we have taken into consideration the following principal factors and reasons:

1. Background for entering into the Modification Deed

On 25 May 2009, the Company announced that the Acquisition was completed and the First Convertible Note with a principal amount of US$253 million (equivalent to HK$1,973.4 million) and zero coupon rate was issued to Cordia. The initial conversion price of the First Convertible Note was set at HK$0.12 per Conversion Share. The First Convertible Note will mature on the date falling on the fifth anniversary from 25 May 2009 and the Company shall be entitled to redeem at a price equal to 115% of the outstanding principal amount of the First Convertible Note. As at the Latest Practicable Date, the First Convertible Note in a principal amount of US$111 million (equivalent to HK$865.8 million) has been converted into 7,215 million Shares. Accordingly, the outstanding principal amount of the First Convertible Note was US$142 million (equivalent to HK$1,107.6 million) which was convertible into Conversion Shares at a conversion price of HK$0.12 per Conversion Share (subject to adjustments).

On 14 December 2009, the Company announced that on the even date, the Company and Cordia entered into the Modification Deed pursuant to which the Company and Cordia have conditionally agreed to amend certain existing terms of the First Convertible Note with effect from the Effective Date such that (i) the Conversion Price be amended from HK$0.12 (subject to adjustments) to HK$0.04 (subject to adjustments); (ii) the date of maturity of the First Convertible Note be extended from the date falling on the fifth anniversary from 25 May 2009 to the date falling on the sixth anniversary from 25 May 2009 (the “ Maturity Date ”); (iii) the Company shall be entitled to redeem the Restated First Convertible Note at a price equal to 100% of its outstanding principal amount; (iv) the Restated First Convertible Note in the principal amount of US$107 million (equivalent to HK$834.6 million) will be represented by a global certificate, which will be registered in the name of a nominee of, and will be deposited with a common depositary for, Euroclear and Clearstream; (v) the Promissory Note in the principal amount of US$35 million (equivalent to HK$273 million) with maturity date on 25 May 2015 will be issued without interest; and (vi) the Noteholder shall provide indemnity to the Company on the restriction on conversion of the Restated First Convertible Note pursuant to the Modification Deed.

Subsequently on 22 December 2009, the Company and Cordia had entered into a supplemental deed to the Modification Deed for the purposes of deleting the requirement and related condition precedent of representing the Restated First Convertible Note by a global certificate registered in the name of a nominee of, and depositing it with a common depositary for, Euroclear and Clearstream in the Modification Deed. According to the announcement of the Company dated 22 December 2009, such amendments were made for the reasons that the Euroclear and Clearstream will require additional time and costs for completing the Modification Deed which would not be in the interest of both Cordia and the Company and the Shareholders.

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LETTER FROM WALLBANCK BROTHERS

2. Information on the Group

As stated in the Letter from the Board, the Group is principally engaged in (i) coal mining in Russia; and (ii) digital television broadcasting industry including provision of equipments and software of cable video-on-demand system, information broadcasting system, embedded television systems and value added services.

Table 1 below summarized the financial performance of the Group for the three years ended 31 March 2009 and the six months ended 30 September 2008 and 30 September 2009.

Table 1: Financial performance of the Group

	For the
	six months ended
	30 September		For the		year ended 31	March
	2009	2008		2009	2008	2007
	(HK$’000) (HK$’000)		(HK$’000)		(HK$’000)	(HK$’000)
	(Unaudited) (Unaudited		(Audited)		(Audited)	(Audited)
	and restated)
Turnover	7,433	62,029	115,531		120,550	166,429
Gross profit	3,459	21,583	31,205		17,803	26,369
Gross profit margin (%)	46.54	34.80	27.01		14.77	15.84
Profit/(Loss) before taxation	(425,046)	11,259		(523)	(14,638)	(31,523)
Profit/(Loss) after taxation	(424,093)	9,627		34	(14,498)	(39,354)
	As at
	30 September			As at 31 March
	2009		2009		2008	2007
	(HK$’000)	(HK$’000)		(HK$’000)		(HK$’000)
	(Unaudited)	(Audited)			(Audited)	(Audited)
Cash and cash equivalents	133,422		7,098		19,322	5,426
Net assets	750,045		146,240		48,173	35,591
Gearing ratio (total interest-bearing
borrowings to total assets)	11.0%		0%		13.8%	21.5%

Source: the annual reports of the Company for the year ended 31 March 2007, 2008, 2009 and the interim report of the Company for the period ended 30 September 2009

– 25 –

LETTER FROM WALLBANCK BROTHERS

For the year ended 31 March 2008, the Group recorded an audited consolidated turnover of approximately HK$120,550,000, representing a decrease of approximately 27.57% from HK$166,429,000 for the financial year ended 31 March 2007. Loss after taxation amounted to approximately HK$14,498,000 for the year ended 31 March 2008, as compared to a loss of approximately HK$39,354,000 for the year ended 31 March 2007.

According to the annual report of the Company for the year ended 31 March 2008, the intense competition in the garment industry has made the Group having to face a general trend of fall in the selling prices of garment products which reduced its turnover. The overall gross profit also fell by 32.5%. The operating loss was approximately HK$9.3 million (2007: HK$1.7 million). The loss was mainly attributable to (i) the fall in turnover of garment products for reasons explained below (ii) the general falling trend in selling prices of garment products under keen competition (iii) the increase in cost of sales as a result of the appreciation in Renminbi (iv) the relatively low profit margin of our PRC joint venture as the production plant is facing higher cost of production in terms of raw materials, fuel and labor and (v) the increase in Hong Kong staff costs and other administrative expenses.

The net assets of the Group as at 31 March 2008 was HK$48,173,000 (31 March 2007: HK$35,591,000), representing an increase of 35.35% as compared with those as at 31 March 2007. As at 31 March 2008, the Group’s cash and cash equivalents totaled approximately HK$19,322,000 (31 March 2007: HK$5,426,000), representing an increase of 256.10% against the balance as at 31 March 2007. The gearing ratio was 13.8% (total interest-bearing borrowings to total assets) as at 31 March 2008 (31 March 2007: 21.5%).

For the year ended 31 March 2009, the Group recorded an audited consolidated turnover of approximately HK$115,531,000, representing a decrease of approximately 4.16% from HK$120,550,000 of the year ended 31 March 2008. Profit after taxation amounted to approximately HK$34,000 for the year ended 31 March 2009, as compared to a loss of approximately HK$14,498,000 for the year ended 31 March 2008.

According to the annual report of the Company for the year ended 31 March 2009, the global financial crisis caused by the sub-prime crisis in the US has made the garment and premium business facing a difficult period, and the turnover reduced approximately 25.55%. The reduction in total turnover has been narrowed by the new source of income of the Group from the digital television technology services business, which was acquired by the Group in April 2008. The new business has a higher profit margin and the overall gross profit has increased by 75.28%.

For the year ended 31 March 2009, the operating profit of the Group was approximately HK$6.7 million (2008: loss HK$9.3 million). The profit was mainly attributable to (i) the higher profit margin of the digital television technology services business (ii) the gain from the disposal of two properties of the Group during the period.

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LETTER FROM WALLBANCK BROTHERS

The net assets of the Group as at 31 March 2009 was HK$146,240,000 (31 March 2008: HK$48,173,000), representing an increase of 203.57% as compared with those as at 31 March 2008. As at 31 March 2009, the Group’s cash and cash equivalents totaled approximately HK$7,098,000 (31 March 2008: HK$19,322,000), representing a decrease of 63.26% against the balance as at 31 March 2008. The gearing ratio was 0% (total interest-bearing borrowings to total assets) as at 31 March 2009 (31 March 2008: 13.8%).

According to the interim report of the Group for the six months ended 30 September 2009, during the six months ended 30 September 2009, the Group recorded a turnover of approximately HK$7,433,000 (2008: HK$62,029,000), representing a decrease of approximately 88.0% as compared to the corresponding period in prior year. The decrease in turnover was mainly due to the discontinued operations of the garment and premium business in August 2009 and a drop in turnover of the business of digital television technology services. The turnover of the Group for the period under review solely generated from the digital television technology service operations. Due to the global negative financial impact as a consequence of the financial tsunami, digital television services business has faced a challenging time as the growth of the industry was not as rapid as expected.

For the six months ended 30 September 2009, the Group recorded a loss from operations of approximately HK$88,283,000 (2008: profit of HK$13,954,000). The profit of the corresponding period in prior year was partly due to a gain on disposal of a property held for sale and disposal of a property. The loss in the current period was mainly due to the drop of turnover and high administrative and other expenses for the coal mining segment.

The net assets of the Group as at 30 September 2009 was HK$750,045,000 (31 March 2009: HK$146,240,000), representing an increase of approximately 412.9% as compared with those as at 31 March 2009. As at 30 September 2009, the Group’s cash and cash equivalents totaled approximately HK$133,422,000 (31 March 2009: HK$7,098,000), representing an increase of approximately 18 times compared to the balance as at 31 March 2009. The gearing ratio was 11.0% (total interest-bearing borrowings to total assets) as at 30 September 2009 (31 March 2009: nil).

3. Reasons for the Amendments under the Modification Deed

As stated in the Letter from the Board, the Directors consider that the terms of the Modification Deed are fair and reasonable and the Amendments are in the interests of the Shareholders as a whole for the reasons that (i) the New Conversion Price can increase the incentive of the Noteholder to convert the Restated First Convertible Note into Conversion Shares before the Maturity Date; (ii) the reduction of the redemption price of the First Convertible Note can decrease the financial costs of the Company; and (iii) the extension of time for the repayment of the outstanding principal amount of the First Convertible Note could provide flexibility to the Group’s working capital. Details of the aforesaid reasons are stated in the paragraph headed “Reasons for entering into the Modification Deed” in the Letter from the Board, and further be discussed in this letter below.

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LETTER FROM WALLBANCK BROTHERS

4. Review on major terms of the Amendments

As stated in the Letter from the Board, the Amendments were arrived at after arm’s length negotiation between the Company and Cordia. In order to understand the reasons and evaluate the impacts of the Amendments on the Group, we have reviewed some of the major terms of the Amendments as follows:

(i) Reduction in the Conversion Price

Under the Modification Deed, the Conversion Price of the First Convertible Note will be amended from HK$0.12 to HK$0.04 per Conversion Share, representing a decrease of approximately 66.67%. According to the Letter from the Board, the reduction in the Conversion Price is due to the onset of the financial tsunami and subsequent relatively weak global financial market performance, which had adversely affected the trading price of the Shares. The market price of the Share has been decreased by approximately 44.05% from HK$0.084 on 25 September 2008 (i.e. being the last trading day prior to the release of announcement in relation to the Acquisition) to HK$0.047 on 14 December 2009 (i.e. being the last trading day prior to the release of the Announcement). Notwithstanding that the reduction in the Conversion Price represents a deeper discount to the decrease in market price of the Share, both the Company and Cordia believe that the New Conversion Price will be more realistic and can make it appealing for the Noteholder to convert the Restated First Convertible Note into Conversion Shares during the remaining term of the Restated First Convertible Note.

Further, assuming the outstanding First Convertible Note not to be converted, in order to fully cover the financial obligation arising from the redemption of the First Convertible Note in the outstanding principal amount of US$142 million, the Company is required to pay in cash of approximately US$163.3 million (being 115% of the principal amount of the outstanding First Convertible Note) for the First Convertible Note due on the business day falling on the fifth anniversary from 25 May 2009. However, the cash position of the Group as approximately HK$133.4 million, or approximately US$17.1 million, as at 30 September 2009. Therefore, it is fair and reasonable for us to concur in principle with the view of the Directors that the reduction in the Conversion Price could increase the incentive for the Noteholder to convert the Restated First Convertible Note into Conversion Shares during the remaining term of the Restated First Convertible Note, and strengthen the financial position of the Company.

(ii) Extending the maturity date of the First Convertible Note

Under the Modification Deed, the date of maturity of the First Convertible Note will be extended from the date falling on the fifth anniversary from 25 May 2009 to the date falling on the sixth anniversary from 25 May 2009. Accordingly, it is fair and reasonable for us to concur in principle with the view of the Directors that such extension of time for the repayment of the outstanding principal amount of the First Convertible Note will provide further flexibility for the Group to plan for its forthcoming working capital requirements.

– 28 –

LETTER FROM WALLBANCK BROTHERS

(iii) Reduction in the redemption price of the First Convertible Note

Under the Modification Deed, the Company shall be entitled to redeem the Restated First Convertible Note at a price equal to 100% of its outstanding principal amount as US$142 million, instead of 115% of the outstanding principal amount of the First Convertible Note as US$163.3 million. Accordingly, it is fair and reasonable for us to concur in principle with the view of the Directors that such reduction of the redemption price of the First Convertible Note can decrease the financial costs of the Company and increase the incentive of the Noteholder to exercise the conversion right attaching to the Restated First Convertible Note.

(iv) Issuance of the Promissory Note

Under the Modification Deed, the Promissory Note in the principal amount of US$35 million (equivalent to HK$273 million) will be issued to Cordia. Having considered that (i) the Promissory Note does not bear any interest; (ii) the maturity date of the Promissory Note is the same as the Restated First Convertible Note; and (iii) the fact that the Promissory Note does not have any dilution effect to the shareholding interests of the Company, it is fair and reasonable to infer that the issuance of the Promissory Note is in the interest of the Company and its shareholders as a whole.

5. Review on major terms of the Restated First Convertible Note

Set out below are some of the principal terms of the Restated First Convertible Note:

Principal amount	:	US$107 million (equivalent to HK$834.6 million)
Interest	:	No interest shall be accrued
Maturity	:	The sixth anniversary from 25 May 2009
Conversion price	:	HK$0.04 (subject to adjustments)

As stated in the Letter from the Board, the New Conversion price of HK$0.04 per Conversion Share represents:

(i) a premium of approximately 14.29% over the closing price of approximately HK$0.035 per Share as quoted on the Stock Exchange on the Latest Practicable Date;
(ii) a discount of approximately 14.89% to the closing price of approximately HK$0.047 per Share as quoted on the Stock Exchange on the Last Trading Day;
(iii) a discount of approximately 17.36% to the average closing price of approximately HK$0.0484 per Share as quoted on the Stock Exchange for the 5 consecutive trading days up to and including the Last Trading Day;
(iv) a discount of approximately 18.37% to the average closing price of approximately HK$0.049 per Share as quoted on the Stock Exchange for the 10 consecutive trading days up to and including the Last Trading Day; and

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LETTER FROM WALLBANCK BROTHERS

(v) a discount of approximately 7.19% to the unaudited consolidated net assets value of the Company attributable to the Shareholders of approximately HK$0.0431 per Share as at 30 September 2009 (based on the unaudited consolidated net assets of the Company attributable to the Shareholders of approximately HK$443,043,000 and 10,284,501,200 Shares in issue as at 30 September 2009).

As stated in the Letter from the Board, the Amendments (including the New Conversion Price) have been arrived at after arm’s length negotiation between the Company and Cordia. In addition, due to the said onset of the financial tsunami and the subsequent relatively weak global financial market performance, the trading price of the Shares on the Stock Exchange had been adversely affected over the past year.

(i) Review on Share price performance

Chart 1 below shows the New Conversion Price and the closing prices of the Shares as quoted on the Stock Exchange during the period commencing from 15 December 2008 (being the date one year preceding the date of entering into the Modification Deed) up to and including the Latest Practicable Date (the “ Review Period ”):

Chart 1: Historical share price performance of the Company

==> picture [220 x 195] intentionally omitted <==

Notes:

On market days when the Shares are not traded, the closing price equals to that of the preceding trading day.
Trading in the Shares was suspended on 2 September 2009, 24 and 25 November 2009 pending the release of relevant announcements.

Source: Stock Exchange website

– 30 –

LETTER FROM WALLBANCK BROTHERS

As illustrated above, the Shares had been traded above the New Conversion Price of HK$0.04 per Conversion Share during majority of the Review Period, with a range from HK$0.035 to HK$0.141 per Share. We noted that the New Conversion Price was set at a premium of approximately 14.29% over the lowest closing price of the Share during the Review Period, and the closing price of the Share has declined significantly since the end of May 2009. The highest closing price of HK$0.141 on 27 and 29 May 2009 represents a substantial premium of approximately 302.86% over the lowest closing price of HK$0.035 on the Latest Practicable Date. The Directors represented that save and except for the reasons that (i) the financial tsunami and the relatively weak global financial performance had adversely affected the trading price of the Shares; and (ii) the possible effect caused by the conversion of the First Convertible Note, they are not aware of any reasons for such decrease in Share price during the Review Period. In view of such poor historical share price performance, we consider that the New Conversion Price is more realistic compared to the original conversion price of HK$0.12 per Conversion Share, which represents a premium of approximately 242.86% over the closing Share price on the Latest Practicable Date.

(ii) Comparison with Market Comparables

In order to assess the fairness and reasonableness of the terms of the Restated First Convertible Note, to the best of our knowledge, we have looked into recent issues of convertible notes/bonds by companies listed on the Main Board and GEM of the Stock Exchange which have made announcements for acquisition of assets by issuing convertible notes/bonds (the “ Market Comparables ”) from 1 September 2009 up to and including 14 December 2009 (being the approximate 3 months prior to the date of the Announcement, as timely information reflecting relevant market sentiment), for reference. Shareholders should note that the business, operation and prospect of the Company are not the same as the Market Comparables and we have not conducted any in-depth investigation into businesses and operations of the Market Comparables. As the terms of the Market Comparables are determined under similar market conditions and sentiments as the Restated First Convertible Note, we believe that the Market Comparables may reflect the recent trend of the terms of convertible bonds/notes in the market and consider the Market Comparables are fair and representative samples.

– 31 –

LETTER FROM WALLBANCK BROTHERS

					Premium/	Premium/
					(discount)	(discount)
					over/to the	over/to the
					closing price	average closing
					of the shares	price of
					as at the last	the last 5
					trading day	trading days
					prior to the	prior to the
					date of the	date of the
Date of					corresponding	corresponding
announcement	Company name (stock code)	Principal amount	Maturity	Interest rate	announcement	announcement
		HK$ million	Years	%	%	%
4-Sep-09	Broad Intelligence International
	Pharmaceutical Holdings Limited (1149)	1,179.85	5	0	(1.52)	(7.67)
7-Sep-09	Winbox International (Holdings) Limited (474)	980.36	5	0	(26.67)	(24.4)
16-Sep-09	Buildmore International Limited (108)	273	3	0	(22.94)	(19.62)
22-Sep-09	Shanghai Allied Cement Limited (1060)	350	3	0	135.29	144.4
23-Sep-09	Hembly International Holdings Limited (3989)	676.04	5	0	22.45	53.06
23-Sep-09	Yun Sky Chemical (International)
	Holdings Limited (663)	1,855	5	0	(69.2)	(64.8)
23-Sep-09	Sino-Tech International Holdings Limited (724)	950.4	5	0	(68.4)	(63.7)
27-Sep-09	Bright International Group Limited (1163)	6,950	3	0	(9.09)	(3.54)
1-Oct-09	RBI Holdings Limited (566)	3,814.95	4	0	1.23	0
13-Oct-09	Berjaya Holdings (HK) Limited (288)	2,190	10	3.5	(72.97)	(72.14)
				(Note 2)
15-Oct-09	China Digital Licensing (Group) Limited (8175)	26.903	5	0	(27.69)	(27.69)
21-Oct-09	Vision Tech International Holdings Limited (922)	1,190	10	0	29.63	22.81
22-Oct-09	Xian Yuen Titanium Resources Holdings Limited (353)	1,053.76	5	0	(37)	(37.5)
12-Nov-09	Honbridge Holdings Limited (8137)	400	5	0	17.65	20.19
13-Nov-09	Grandtop International Holdings Limited (2309)	909.09	10	0	2.11	2.11
		(Note 1)
18-Nov-09	Loudong General Nice Resources (China)
	Holdings Limited (988)	250	3	0	25	33.93
18-Nov-09	Ching Hing (Holdings) Limited (692)	1,680	3	2	4.76	(16.03)
20-Nov-09	Hong Kong Energy (Holdings) Limited (987)	83.06	3	0	16.28	22.55
		(Note 1)
23-Nov-09	Xian Yuen Titanium Resources
	Holdings Limited (353)	140.43	10	0	(31.62)	(31.11)
30-Nov-09	Solartech International Holdings Limited (1166)	1,432	3	0	(51.43)	(51.43)
30-Nov-09	Continental Holdings Limited (513)	325	3	1.5	(5.0)	(11.21)
1-Dec-09	Aptus Holdings Limited (8212)	1,500	6	0	(36.71)	(31.13)
9-Dec-09	Global Green Tech Group Limited (274)	895.19	3	0	(19.19)	(12.09)
Average			5.09	0.30	(9.78)	(7.61)
Maximum			10	3.5	135.29	144.40
Minimum			3	0	(72.97)	(72.14)
14-December-09	The Company	834.6	6	0	(14.89)	(17.36)
Notes:

(1) The aggregate principal amount was converted into HK$ based on the exchange rates of US$1 = HK$7.78 and RMB1 = HK$1.13 for illustration purposes.
(2) The convertible loan securities will bear an interest rate of 1% per annum for the first two years and 3.5% for the remaining eight years.

Source: Stock Exchange website

– 32 –

LETTER FROM WALLBANCK BROTHERS

(a) The Conversion Price

As indicated in the above table, the conversion prices of the Market Comparables (i) ranged from a discount of approximately 72.97% to a premium of approximately 135.29% over the respective closing price of their shares as at the last trading days prior to the date of the corresponding announcement; and (ii) ranged from a discount of approximately 72.14% to a premium of approximately 144.40% over the respective average closing price of their shares for the last 5 trading days prior to the date of the corresponding announcement. The said range of premium discount was meaningful and reasonable for comparison purpose, as the said range reflects the real and actual high market volatility as a result of the financial tsunami occurred in the year 2008 and the recent Dubai’s financial crisis causing uncertainty and disruption to the global financial market. The New Conversion Price, which represents discounts of approximately 14.89% to the closing price of the Shares as at the Last Trading Day and approximately 17.36% to the average closing price of the Shares for the last 5 trading days (including the Last Trading Day), is hence within the said market range.

Notwithstanding that the discount rates of the New Conversion Price was above the average discount rates of the Market Comparables, we hold the view that the New Conversion Price of HK$0.04 is not unfair and unreasonable so far as the Company and the Independent Shareholders are concerned, in consideration of the assumed bases as (i) it is unlikely that the Noteholder would exercise its conversion rights given that the prevailing market price is substantially lower than the initial conversion price at HK$0.12 per Conversion Share; (ii) the reduction in the proposed conversion price of the First Convertible Note from HK$0.12 to HK$0.04 per Conversion Share will increase the possibility of the Noteholder to exercise the conversion rights so as to reduce the debt level of the Group; and (iii) the discounts represented by the New Conversion Price are within the range of the Market Comparables.

(b) The maturity

The maturities of the Market Comparables range from 3 to 10 years with an average of about 5.09 years. The Restated First Convertible Note has a maturity of 6 years, which falls within the range of the Comparables and is higher than the average maturity of about 5.09 years of the Market Comparables.

(c) The interest rate

As presented by the above table, the Market Comparables carried an annual interest rate of 0% to 3.5%. The Restated First Convertible Note, which does not bear any interest, hence fall within and are at the minimum of the said market range.

– 33 –

LETTER FROM WALLBANCK BROTHERS

(d) Other terms of the Restated First Convertible Note

We have also reviewed the other terms of the Restated First Convertible Note and are not aware of any terms under the Amendments are of material irregularity.

Having taken into account (i) the discounts of the New Conversion Price are within the range of the Market Comparables; (ii) the maturity of the Restated First Convertible Note is within the range of that of the Market Comparables; and (iii) the annual interest rate of the Restated First Convertible Note is at the minimum of the range of the Market Comparables, it is fair and reasonable to infer that the terms of the Restated First Convertible Note are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned.

6. Potential dilution to the shareholdings of the Independent Shareholders

The following table sets out the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately after conversion of the Restated First Convertible Note at the New Conversion Price to the extent that Cordia will hold approximately 29.99% of the entire issued share capital of the Company after such conversions and exercises; and (iii) immediately after full conversion of the Restated First Convertible Note:

Cordia_(Note 1) Goldwyn Management Limited(Note 2) DTV China Holdings Limited(Note 3)_ Other public Shareholders Total	Immediately after conversion of the Restated First Convertible Note at the New Conversion Price to the extent that Cordia will hold approximately 29.99% of the entire issued share capital As at the of the Company after such Latest Practicable Date conversions and exercises Number of Number of Shares Approx. % Shares Approx. % 15,000,000 0.15% 4,399,119,283 29.99% 560,000,000 5.44% 560,000,000 3.82% 320,000,000 3.11% 320,000,000 2.18% 9,389,501,200 91.30% 9,389,501,200 64.01% 10,284,501,200 100% 14,668,620,483 100%	Immediately after full conversion of the Restated First Convertible Note (Note 4) Number of Shares Approx.% 20,880,000,000 67.03% 560,000,000 1.80% 320,000,000 1.03% 9,389,501,200 30.14% 31,149,501,200 100%	Immediately after full conversion of the Restated First Convertible Note (Note 4) Number of Shares Approx.% 20,880,000,000 67.03% 560,000,000 1.80% 320,000,000 1.03% 9,389,501,200 30.14% 31,149,501,200 100%
			100%

– 34 –

LETTER FROM WALLBANCK BROTHERS

Notes:

As at the Latest Practicable Date, Cordia was the holder of the First Convertible Note and a substantial shareholder of non-wholly owned subsidiary of the Company, Langfeld Enterprises Limited. After the date of the Announcement, Cordia entered into a loan agreement with an Independent Third Party, pursuant to which the Independent Third Party shall advance a loan of approximately US$2.22 million to Cordia for a term of 60 months, and Cordia shall transfer 500 million Shares to the Independent Third Party as collateral. The Independent Third Party shall have the right to freely dispose of those of 500 million Shares and shall return 500 million Shares to Cordia upon full and punctual repayment of the loan (together with the interest accrued)
The entire issued share capital of Goldwyn Management Limited is beneficially owned by Mr. Lim Ho Sok, an executive Director, as at the Latest Practicable Date.
DTV China Holdings Limited is wholly and beneficially owned by a director of a non-wholly owned subsidiary of the Company, DTVChina, Inc., as at the Latest Practicable Date.
The shareholding structure is for illustration purpose only as pursuant to the terms of the Restated First Convertible Note, (i) after the exercise of the conversion right attaching to the Restated First Convertible Note, the Noteholder, together with the parties acting in concert with it shall not hold or control such level of the voting rights of the Company as may trigger a mandatory general offer under the Takeovers Code, regardless of whether a waiver has been granted by the SFC on the obligation of a mandatory general offer under the Takeovers Code; and (ii) the conversion of the outstanding principal amount of the Restated First Convertible Note will not cause the public float of the Company unable to meet the requirement under Rule 8.08 of the Listing Rules

As illustrated in the above table, the shareholding interest of the public Shareholders would be diluted from approximately 91.30% to approximately 64.01% immediately after conversion of the Restated First Convertible Note at the New Conversion Price to the extent that Cordia will hold approximately 29.99% of the entire issued share capital of the Company after such conversions and exercises.

The change of conversion price from HK$0.12 to HK$0.04 pursuant to the Modification Deed would increase the dilution effect of the Shareholders as additional 11,635,000,000 Shares (representing approximately 113.13% of the existing issued share capital of the Company) will be issued if the entire conversion rights under the Restated First Convertible Notes are exercised. However, having considered that (i) the reduction in conversion price of the First Convertible Note could increase the possibility for the Noteholder to convert the Restated First Convertible Note into Conversion Shares; and (ii) the potential improvement of the financial position of the Group after the exercise of the Restated First Convertible Note, we are of the opinion that the reduction in the Conversion Price and the issue of the Restated First Convertible Note would lessen the financial burden of the Group. Having considered the above, it is fair and reasonable to infer that the shareholding dilution effect arising from the exercise of the Restated First Convertible Notes is acceptable.

– 35 –

LETTER FROM WALLBANCK BROTHERS

7. Possible financial effects of the Amendments

(i) Effect on net assets value

Upon completion of the Amendments, there will be an overall increase in liability and hence, decrease in net assets value of the Group as a result of changes in maturity, conversion price and redemption price of the Restated First Convertible Note. Assuming the Restated First Convertible Note is converted in full, the net assets value of the Group will be increased by the carrying amount of the Restated First Convertible Note.

(ii) Effect on earnings

The Directors expected that notwithstanding that the Restated First Convertible Note is non-interest-bearing, effective interest rate will also be applied and the Restated First Convertible Note is subject to fair value adjustment, and therefore interest expense and change in fair value of the Restated First Convertible Note may be recorded which may affect the earnings of the Group. Furthermore, as stated in the Letter from the Board, the Company estimates that the Group will record an unaudited loss of approximately HK$391 million as a result of the Amendments. Such loss would be in one-off nature and subject to final audit.

(iii) Effect on working capital

As discussed above, without the Amendments, the Company is required to pay in cash of approximately US$163.3 million (being 115% of the principal amount of the outstanding First Convertible Note) for the Convertible Notes due on the date falling on the fifth anniversary from 25 May 2009. However, under the Modification Deed, the cash payment obligation of approximately US$107 million (being 100% of the principal amount of the Restated First Convertible Note) under the Restated First Convertible Note will be extended to the date falling on the sixth anniversary from 25 May 2009 and the Promissory Note in the principal amount of US$35 million will mature on 25 May 2015. Accordingly, it is fair and reasonable to expect that the Amendments will provide more flexibility for the Group to plan its working capital requirements or retain cash for future development.

(iv) Effect on gearing

According to the annual report of the Company for the year ended 31 March 2009, the gearing ratio of the Group, being a ratio of total interest-bearing bank borrowings to total assets, was nil. Since the Restated First Convertible Note and the Promissory Note do not bear any interest (excluding the effective interest), it is fair and reasonable to infer that the Amendments may not have impact on the gearing of the Group.

– 36 –

LETTER FROM WALLBANCK BROTHERS

8. Risk factors

The Shareholders shall be fully aware of the following risk factors relating to the Acquisition as stated in the announcement of the Company dated 14 November 2008:

(i) Investments in new business

The Acquisition constitutes an investment in the new business sector of coal mining. The new business, coupled with the regulatory environment, may pose significant challenges to the Group’s administrative, financial and operational resources. Since the Group does not have significant experience in the new business, it is not in a position to assure the timing and amount of any return that may be generated from the new business, nor is it in a position to control the operation risks, including the risk of obtaining and renewing the relevant mining licences, that could lead to a loss. If any exploration and mining projects, in which the Group attempts to develop does not progress as planned, the Group may not recover the funds and resources it has spent, and this may adversely affect the Group.

(ii) Country risk

The Group is entering into a new business in Russia, which the Group does not have any business therein. There is a possibility that changes in the business environment will reduce the profitability of doing business in Russia. The change of political and economic conditions in Russia may adversely affect the Group.

(iii) Significant and continuous capital investment

The coal mining business requires significant and continuous capital investment. The investment may not be completed as planned and may exceed the original budgets, and it is not guaranteed to achieve the intended economic results or commercial viability. Actual capital expenditures for the new business may significantly exceed the Group’s budgets because of various factors beyond the Group’s control, which in turns may affect the Group’s financial condition.

(iv) Cyclical nature of coal markets and fluctuations in coal prices

As the revenue of the new business will be derived from coal and coal-related operations, part of the Company’s future business and results of operations may be dependent on the international and Russia’s supply of and demand for coal. The fluctuations in supply and demand are caused by numerous factors beyond the Company’s control, which include, but not limited to:

(a) global and domestic economic and political conditions and competition from other energy sources; and
(b) the rate of growth and expansion in industries with high coal demand, such as steel and power industries.

– 37 –

LETTER FROM WALLBANCK BROTHERS

There is no assurance that the international and Russia’s demand for coal and coal-related products will continue to grow, or that the international and Russia’s demand for coal and coal-related products will not experience excess supply.

(v) Policies and regulations

The new business is subject to extensive governmental regulations, policies and controls. There can be no assurance that the relevant government authorities will not change the existing laws and regulations or impose additional or more stringent laws or regulations. Failure to comply with the relevant laws and regulations in the coal mining industry in Russia may adversely affect the Group.

(vi) Environmental protection policies

The coal mining business is subject to the environmental protection law and regulations in Russia. If the Group fails to comply with existing or future environmental laws and regulations, the Group may be required to take remedial measures, which could have a material adverse effect on the business, operations, financial condition and results of operations of the Group.

Our opinions, views and their validity are subject to the above risk factors relating to the Acquisition.

RECOMMENDATION

Having considered the above principal factors and reasons as discussed above and as summarized below:

(i) the New Conversion Price can increase the incentive of the Noteholder to convert the Restated First Convertible Note into Conversion Shares before the Maturity Date;
(ii) the reduction of the redemption price of the First Convertible Note can decrease the financial costs of the Company;
(iii) the extension of time for the repayment of the outstanding principal amount could enhance the working capital requirements of the Group; and
(iv) the discounts represented by the New Conversion Price are within the range of the Market Comparables.

– 38 –

LETTER FROM WALLBANCK BROTHERS

Having considered the above principal factors and reasons and Directors’ representations, on balance, we are of the opinion that in such circumstance the terms of the Modification Deed are fair and reasonable so far as the Independent Shareholders are concerned and the Amendments are in the interest of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Shareholders, and also recommend the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the resolution approving the Modification Deed and the transactions contemplated thereunder at the EGM.

Yours faithfully, For and on behalf of WALLBANCK BROTHERS Securities (Hong Kong) Limited Phil Chan Chief Executive Officer

– 39 –

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors collectively and individually accept full responsibility for the accuracy of the information contained in this circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief there are no other facts the omission of which would make any statement herein misleading.

2. DIRECTORS’ INTERESTS AND SHORT POSITIONS IN THE SHARES, UNDERLYING SHARES AND DEBENTURES OF THE COMPANY AND ITS ASSOCIATED CORPORATIONS

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange, were as follows:

Interests in the Shares

					Approximate
				Number of	percentage of
			Number of	underlying	the issued
			issued Shares	Shares	share capital of
			interested	interested	the Company as
	Long position/	Nature of	or deemed	or deemed	at the Latest
Name of Directors	Short position	interest	to be interested	to be interested	Practicable Date
Mr. Li Wing Sang	Long position	Beneficial owner	—	19,560,000	0.19%
(“Mr. Li”)(Note 1)
Mr. Chiu Chi Hong	Long position	Beneficial owner	—	19,560,000	0.19%
(“Mr. Chiu”)(Note 1)
Mr. Lim Ho Sok	Long position	Interest in controlled	560,000,000	—	5.45%
(“Mr. Lim”)(Note 2)		corporation

– 40 –

GENERAL INFORMATION

APPENDIX

Notes:

As at the Latest Practicable Date, Mr. Li and Mr. Chiu each owned 19,560,000 Options which confer each of them the rights to acquire 19,560,000 Shares, with the exercise period from 10 September 2007 to 9 September 2017 at an exercise price of HK$0.2226 per Share.
These 560,000,000 Shares were held by Goldwyn Management Limited (“ Goldwyn ”), a company whollyowned by Mr. Lim as at the Latest Practicable Date.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required (i) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including any interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

3. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered into or had 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. INTEREST IN ASSETS AND CONTRACTS

No contract or arrangement in which any of the Directors is materially interested and which is significant in relation to the business of the Group subsisted as at the Latest Practicable Date.

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 March 2009 (being the date to which the latest published audited consolidated financial statements of the Group were made up), 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.

5. COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors and their respective associates were interested in any business which competes or is likely to compete, either directly or indirectly, with the businesses of the Group, other than those businesses where the Directors were appointed as directors to represent the interests of the Company and/or the Group.

– 41 –

GENERAL INFORMATION

APPENDIX

6. EXPERT AND CONSENT

The following is the qualification of the expert who has given advice or opinion contained in this circular:

Name

Qualifications

Wallbanck Brothers

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

Wallbanck Brothers has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and/or references to its name in the form and context in which they respectively appear.

As at the Latest Practicable Date, Wallbanck Brothers did not have any shareholding in any member of the Group and did not have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group. As at the Latest Practicable Date, Wallbanck Brothers did not have any direct or indirect interest in any assets which have been, since 31 March 2009 (being the date to which the latest published audited consolidated financial statements of the Group were made up), 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.

7. MATERIAL ADVERSE CHANGE

The Directors confirm that save for those information as disclosed in the announcement of the Company dated 15 December 2009 and the unaudited financial results of the Group for the period ended 30 September 2009 as announced by the Company on 23 December 2009, there has been no material adverse change in the financial or trading position of the Group since 31 March 2009, the date to which the latest published audited consolidated financial statements of the Group were made up.

8. GENERAL

(a) The Directors confirm that none of the Director was also a director of a company which had an interest or short position in the Shares or 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.

– 42 –

GENERAL INFORMATION

APPENDIX

(b) The branch share registrar of the Company in Hong Kong is Tricor Tengis Limited, the address of which is at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(c) In the event of inconsistency, the English texts of this circular and the accompanying form of proxy prevail over their respective Chinese texts.

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours from 9:00 a.m. to 6:00 p.m. (save for Saturdays, Sundays and public holidays) at the principal place of business of the Company in Hong Kong at 16th Floor, No. 8 Queen’s Road Central, Central, Hong Kong from the date of this circular up to and including the date of the EGM:

(a) the Acquisition Agreement;
(b) the Share Charges;
(c) the note instrument constituting the First Convertible Note dated 25 May 2009 entered into between the Company and Cordia;
(d) the loan facilities letter dated 21 October 2009 in relation to the provision of Loan Facilities by Cordia to the Company; and
(e) the Modification Deed.

– 43 –

NOTICE OF EGM

==> picture [98 x 35] intentionally omitted <==

SIBERIAN MINING GROUP COMPANY LIMITED ��[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1142)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“ EGM ”) of Siberian Mining Group Company Limited (the “ Company ”) will be held at Meeting Room 4, 7/F, Hongkong International Trade & Exhibition Centre, 1 Trademart Drive, Kowloon Bay, Kowloon, HK at 3:00 p.m. on Monday, 8 February 2010 for the purposes of considering and, if thought fit, passing the following resolution as ordinary resolution:

ORDINARY RESOLUTION

“ THAT subject to the fulfillment or waiver of the conditions set out in the conditional deed of modification (the “ Modification Deed ”) dated 14 December 2009 (as supplemented by the supplemental deed (the “ Supplemental Deed ”) dated 22 December 2009) and entered into between the Company and Cordia Global Limited (“ Cordia ”) to amend certain terms and conditions of the convertible note (the “ First Convertible Note ”) in the outstanding principal amount of US$142 million (a copy of the Modification Deed and the Supplemental Deed having been produced to the EGM and marked “A” and “B” respectively and initialed by the chairman of the EGM for the purpose of identification),

(i) the Modification Deed (as supplemented by the Supplemental Deed) and all transactions contemplated thereunder and all other matters in connection therewith and incidental thereto be and are hereby generally and unconditionally approved, confirmed and ratified in all respects;
(ii) the issue and the creation of the amended and restated First Convertible Note (the “ Restated First Convertible Note ”) in the principal amount to be determined in accordance with the terms and conditions of the Modification Deed (as supplemented by the Supplemental Deed) be and are hereby generally and unconditionally approved in all respects;
(iii) the directors (the “ Directors ”) of the Company be and are hereby generally and specifically authorised to allot and issue such number of new shares (the “ Conversion Shares ”) of par value of HK$0.01 each in the capital of the Company as may be required upon the exercise of the conversion rights attaching to the Restated First Convertible Note;
(iv) the Director be and are hereby generally and specifically authorised to issue the promissory note (the “ Promissory Note ”) in the principal amount of US$35 million; and

* For identification purpose only

– 44 –

NOTICE OF EGM

(v) the Directors be and are hereby generally and unconditionally authorised to do all such acts and things as they consider necessary or expedient in connection with the issue and the creation of Restated First Convertible Note pursuant to the terms and conditions of the Modification Deed (as supplemented by the Supplemental Deed), including the allotment and issue of the Conversion Shares upon the exercise of the conversion rights attaching to the Restated First Convertible Note, the issue of the Promissory Note, and any other matters contemplated respectively thereunder.”

By order of the Board Siberian Mining Group Company Limited Lim Ho Sok Chairman

Hong Kong, 4 January 2010

Head office and principal place of Registered office: business in Hong Kong: Cricket Square, 16th Floor, Hutchins Drive, No. 8 Queen’s Road Central, P.O. Box 2681, Central, Grand Cayman KY1-1111, Hong Kong Cayman Islands

Notes:

A member entitled to attend and vote at the EGM is entitled to appoint one or more proxy to attend and, subject to the provisions of the articles of association of the Company, to vote on his behalf. A proxy need not be a member of the Company but must be present in person at the EGM to represent the member. 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 order to be valid, the form of proxy must be duly completed and signed in accordance with the instructions printed thereon and deposited together with a power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority, at the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof. Completion and return of a form of proxy will not preclude a member from attending in person and voting at the EGM or any adjournment thereof, should he so wish.
In the case of joint holders of shares, any one of such holders may vote at the EGM, either personally or by proxy, in respect of such share as if he was solely entitled thereto, but if more than one of such joint holder are present at the EGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such shares shall alone be entitled to vote in respect thereof.

– 45 –

AI assistant

Qiniu Limited — Proxy Solicitation & Information Statement 2010

50678_rns_2010-01-04_4857856a-1f5c-46c3-9689-ca1944cd7969.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

SIBERIAN MINING GROUP COMPANY LIMITED ������������[*]

CONNECTED TRANSACTION: AMENDMENTS OF TERMS OF THE FIRST CONVERTIBLE NOTE

WALLBANCK BROTHERS Securities (Hong Kong) Limited

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

SIBERIAN MINING GROUP COMPANY LIMITED ������������[*]

CONNECTED TRANSACTION: AMENDMENTS OF TERMS OF THE FIRST CONVERTIBLE NOTE

INTRODUCTION

THE MODIFICATION DEED

Date

Parties

Summary of the Amendments

Existing terms

Amendments

Existing terms

Amendments

Existing terms

Amendments

Conversion price:

Existing terms

Amendments

Existing terms

LETTER FROM THE BOARD

Security:

Existing terms

Amendments

LETTER FROM THE BOARD

New Conversion Price

Conversion Shares

Conditions precedent to the Modification Deed

LETTER FROM THE BOARD

EFFECT ON THE SHAREHOLDING STRUCTURE OF THE COMPANY

REASONS FOR ENTERING INTO THE MODIFICATION DEED

(i) Conversion price

(ii) Redemption price

(iii) Working capital requirement

INFORMATION ON THE GROUP

FINANCIAL EFFECTS OF THE AMENDMENTS

IMPLICATIONS UNDER THE LISTING RULES

LETTER FROM THE BOARD

EGM

RECOMMENDATIONS

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Yours faithfully,

SIBERIAN MINING GROUP COMPANY LIMITED ������������[*]

CONNECTED TRANSACTION: AMENDMENTS OF TERMS OF THE FIRST CONVERTIBLE NOTE

WALLBANCK BROTHERS Securities (Hong Kong) Limited

CONNECTED TRANSACTION: AMENDMENTS OF TERMS OF THE FIRST CONVERTIBLE NOTE

INTRODUCTION

LETTER FROM WALLBANCK BROTHERS

BASIS OF OUR OPINION

LETTER FROM WALLBANCK BROTHERS

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background for entering into the Modification Deed

2. Information on the Group

LETTER FROM WALLBANCK BROTHERS

3. Reasons for the Amendments under the Modification Deed

4. Review on major terms of the Amendments

(i) Reduction in the Conversion Price

(ii) Extending the maturity date of the First Convertible Note

(iii) Reduction in the redemption price of the First Convertible Note

(iv) Issuance of the Promissory Note

5. Review on major terms of the Restated First Convertible Note

LETTER FROM WALLBANCK BROTHERS

(i) Review on Share price performance

(ii) Comparison with Market Comparables

(a) The Conversion Price

(b) The maturity

(c) The interest rate

LETTER FROM WALLBANCK BROTHERS

6. Potential dilution to the shareholdings of the Independent Shareholders

LETTER FROM WALLBANCK BROTHERS

Qiniu Limited Proxy Solicitation & Information Statement 2010

SIBERIAN MINING GROUP COMPANY LIMITED ��[*]

SIBERIAN MINING GROUP COMPANY LIMITED ��[*]

SIBERIAN MINING GROUP COMPANY LIMITED ��[*]

SIBERIAN MINING GROUP COMPANY LIMITED ��[*]