SMIT Holdings Limited

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

This joint announcement appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Offeror or the Company.

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GREEN FLOURISH LIMITED

(a company incorporated in the British Virgin Islands with limited liability)

(a company incorporated in the Cayman Islands with limited liability) (Stock code: 2239)

JOINT ANNOUNCEMENT

(1) ACQUISITION OF SHARES IN SMIT HOLDINGS LIMITED BY GREEN FLOURISH LIMITED

(2) MANDATORY UNCONDITIONAL CASH OFFERS BY CHANGJIANG CORPORATE FINANCE (HK) LIMITED ON BEHALF OF GREEN FLOURISH LIMITED

TO ACQUIRE ALL THE ISSUED SHARES IN THE SHARE CAPITAL AND FOR THE CANCELLATION OF ALL THE OUTSTANDING SHARE OPTIONS OF SMIT HOLDINGS LIMITED (OTHER THAN THOSE ALREADY OWNED/AND OR AGREED TO BE ACQUIRED BY GREEN FLOURISH LIMITED AND/OR PARTIES ACTING IN CONCERT WITH IT) AND

(3) RESUMPTION OF TRADING IN SHARES IN SMIT HOLDINGS LIMITED

Financial adviser to the Offeror

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Independent financial adviser to the Independent Board Committee

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THE SHARE PURCHASE AGREEMENTS

The Company was informed that on 5 December 2016, the Vendors and the Offeror entered into the Sale and Purchase Agreements, pursuant to which the Vendors have agreed to sell and the Offeror has agreed to purchase the Sale Shares, representing approximately 42.29% of the total issued share capital of the Company as at the date of this joint announcement.

Completion of the Sale and Purchase Agreements, which took place on 5 December 2016, has resulted in the Offeror acquiring the Sale Shares, representing approximately 42.29% of the issued share capital of the Company as at the date of this joint announcement and incurring an obligation to make the Offers under the Takeovers Code.

MANDATORY UNCONDITIONAL CASH OFFER

Upon completion of the Share Purchase Agreements and as at the date of this joint announcement, the Offeror and the parties acting in concert with it are interested in 165,161,810 Shares, representing approximately 54.72% of the issued share capital of the Company. Accordingly, the Offeror and the parties acting in concert with it is required to make a mandatory unconditional general offer for all issued Shares (other than those already owned by the Offeror or parties acting in concert with it) pursuant to Rule 26.1 of the Takeovers Code and to make comparable offers for all Share Options pursuant to Rule 13 of the Takeovers Code.

Changjiang CFHK, on behalf of the Offeror, will make the Offers in compliance with the Takeovers Code and on the terms to be set out in the Composite Document.

The Share Offer

For each Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$2.25 in cash

The Share Offer Price of HK$2.25 per Offer Share under the Share Offer is the same as the highest purchase price per Sale Share paid by the Offeror under the Sale and Purchase Agreements. The Share Offer will be extended to all Shareholders other than the Offeror and parties acting in concert with it in accordance with the Takeovers Code. The Offer Shares to be acquired under the Share Offer shall be fully paid and free from all Encumbrances and together with all rights attached thereto, including all rights to any dividend or other distribution declared, made or paid on or after the date on which the Share Offer is made.

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As referred to in the section headed “Undertakings Not to Accept the Offers” below, the Undertaking Obligors have irrevocably undertaken to the Offeror that they will not transfer, sell or make any of the Excluded Shares entitled for acceptance under the Offers before the close of the Offers and will not accept the Share Offer in respect of the Excluded Shares. Changjiang CFHK has been provided with copies of the irrevocable undertakings given by each of the Undertaking Obligors.

The Option Offer

Changjiang CFHK, on behalf of the Offeror, will make appropriate offers to the Independent Optionholders in accordance with Rule 13 of the Takeovers Code to cancel all outstanding Share Options (whether vested or not), other than those already owned by the Offeror and the parties acting in concert with it, in exchange for cash.

(a) In respect of Share Options with an exercise price of HK0.1086 For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$2.1414 in cash (b) In respect of Share Options with an exercise price of HK$0.3180 For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . . HK$1.932 in cash (c) In respect of Share Options with an exercise price of HK$1.0548 For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$1.1952 in cash The above prices of the Option Offer are the see-through price which has been determined by deducting the exercise price payable on exercise of each Share Option from the Share Offer Price payable for each Offer Share under the Share Offer pursuant to Rule 13 of the Takeovers Code.

In respect of the following Share Options, since the exercise prices of which are higher than the Share Offer Price, all such Share Options are out-of-money and, therefore, Changjiang CFHK will, on behalf of the Offeror, make a nominal cash offer for the cancellation of such Share Options (other than those already owned by the Offeror and the parties acting in concert with it) on the following terms: (a) In respect of Share Options with an exercise price of HK$3.1567 For cancellation of each Share Option . . . . . . . . . . . . . . . . HK$0.000156 in cash

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	(b) In respect of Share Options with an exercise price of HK$4.2038
	For cancellation of each Share Option . . . . . . . . . . . . . . . .HK$0.000156	in cash
	(c) In respect of Share Options with an exercise price of HK$4.3589
	For cancellation of each Share Option . . . . . . . . . . . . . . . .HK$0.000156	in cash
	(d) In respect of Share Options with an exercise price of HK$4.7777
	For cancellation of each Share Option . . . . . . . . . . . . . . . .HK$0.000156	in cash
	(e) In respect of Share Options with an exercise price of HK$4.7855
	For cancellation of each Share Option . . . . . . . . . . . . . . . .HK$0.000156	in cash
	(f) In respect of Share Options with an exercise price of HK$5.7782
	For cancellation of each Share Option . . . . . . . . . . . . . . . .HK$0.000156	in cash
	(g) In respect of Share Options with an exercise price of HK$8.2524
	For cancellation of each Share Option . . . . . . . . . . . . . . . .HK$0.000156	in cash
	(h) In respect of Share Options with an exercise price of HK$9.4080
	For cancellation of each Share Option . . . . . . . . . . . . . . . .HK$0.000156	in cash
	Following acceptance of the Option Offer, the relevant Share Options together with
	all rights attaching thereto will be cancelled and renounced in their	entirety.
	Assuming none of the Share Options are exercised or lapsed prior to the	close of
	the Offers, the Option Offer is valued at approximately HK$32,003,792.
	Further information on the Option Offer will be set out in a letter to the
	Optionholders which will be despatched, as far as practicable, contemporaneously
	with the despatch of the Composite Document.
	Total Consideration for the Offers
	Based on the Share Offer Price of HK$2.25 per Offer Shares and 301,839,808
	Shares in issue as at the date of this joint announcement (including the Sale
	Shares), the entire issued share capital of the Company is valued at
	HK$679,139,568. As the Offeror and parties acting in concert with it will have
	interest in 165,161,810 Shares, in the event the Share Offer is accepted in	full, the
	maximum amount payable by the Offeror under the Share Offer	will be

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HK$136,152,986 (excluding the Excluded Shares and assuming (i) none of the Share Options are exercised prior to the close of the Offers, and (ii) there is no change in the issued share capital of the Company from the date of this joint announcement up to the close of the Offers).

Based on the above prices of the Option Offer, the maximum amount payable by the Offeror under the Option Offer will be HK$32,003,792 (assuming no Share Option is exercised prior to the close of the Offers and the Option Offer is accepted in full).

In the event all the Share Options (excluding the out-of-money Share Options and those Share Options already owned by the Offeror and the parties acting in concert with it) are exercised in full prior to the close of the Offers, the Share Offer is accepted in full (excluding the Excluded Shares and including all Offer Shares issued and allotted as a result of the exercise of all in-the-money Share Options and assuming there is no change in the issued share capital of the Company from the date of this joint announcement up to the close of the Offers) and the Option Offer (for the out-of-money Share Options only) is accepted in full, the maximum amount payable by the Offeror pursuant to the Share Offer will be increased to approximately HK$178,286,992 and the maximum amount payable by the Offeror pursuant to the Option Offer will be approximately HK$3,808.

Principal terms of the Offers are set out in the section headed “Mandatory Unconditional Cash Offers” below. The Offeror intends to finance the Offers by a loan from Ping An Bank. Such loan has already been drawn down and deposited in an Offeror’s account. Any withdrawal of funds from such account can only be allowed by joint instruction of the Offeror and Changjiang CFHK. Changjiang CFHK, the financial adviser to the Offeror in respect of the Offers, is satisfied that sufficient financial resources are, and will remain, available to the Offeror to satisfy the full acceptance of the Offers.

WARNING: Shareholders and investors generally should exercise caution when dealing in the securities of the Company, and if they are in any doubt about their position, they should consult their professional advisers.

COMPOSITE DOCUMENT

It is the intention of the Offeror and the Company that the offer document and the offeree board circular be combined in the Composite Document. Pursuant to Rule 8.2 of the Takeovers Code, the Composite Document is required to be dispatched to Shareholders within 21 days from the date of this joint announcement or such other date as may be approved by the Executive. It is expected that the Composite Document will be despatched on or before 28 December 2016. Further announcement will be made when the Composite Document together with the relevant forms of acceptance/cancellation and transfer are despatched.

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The Composite Document will set out, among other matters, the Offers, a letter of recommendation from the Independent Board Committee in relation to the Offers and a letter of advice from an independent financial adviser appointed to advise the Independent Board Committee in respect of the Offers.

INDEPENDENT BOARD COMMITTEE

Pursuant to Rule 2.1 of the Takeovers Code, an independent board committee, comprising all the non-executive Directors, namely Mr. Zeng Zhijie and Mr. Kwan, Allan Chung-yuen, and all the independent non-executive Directors, namely Mr. Zhang Junjie, Mr. Woo Kar Tung, Raymond and Mr. Jin Yufeng, has been established by the Company to make a recommendation to the Independent Shareholders and the Independent Optionholders in connection with the Offers. The Independent Board Committee has approved the appointment of Messis Capital to advise the independent board committee, which in turn will make a recommendation to the Independent Shareholders and the Independent Optionholders in respect of the Offers. Independent Shareholders and the Independent Optionholders are encouraged to read the Composite Document carefully, including the advice of Messis Capital to the Independent Board Committee and the recommendation of the Independent Board Committee to the Independent Shareholders and the Independent Optionholders in respect to the Offers, before deciding whether or not to accept the Offers.

RESUMPTION OF TRADING IN THE SHARES

Trading in the Shares on the Stock Exchange was suspended from 9:00 a.m. on 5 December 2016 at the request of the Company and an application has been made to the Stock Exchange to allow dealings in the Shares to resume with effect from 9:00 a.m. on 8 December 2016.

THE SHARE PURCHASE AGREEMENTS

Date:

5 December 2016

Parties:

Purchaser: The Offeror, which is wholly-owned by Mr. Huang Xueliang, chairman and executive Director of the Company

Vendors: Please see table below for a list of the Vendors, the number of Sale Shares to be sold by each of them and the consideration payable to each of them under the Sale and Purchase Agreements

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Vendors Number of Shares held as at the date of this joint announcement Oak Investment Partners X, L.P. 56,972,972 Oak X Affiliates Fund, L.P. 914,620 Mayfield XI, a Delaware Limited Partnership 1,228,033 Mayfield XI Qualified, a Delaware Limited Partnership 19,693,985 Mayfield Associates Fund VI, a Delaware Limited Partnership 409,340 Mayfield Principals Fund II, a Delaware LLC Including Multiple Series 1,409,959 GSR Ventures I, L.P. 45,612,840 GSR Principals Fund I, L.P. 1,410,705 Total 127,652,454	Number of Sale Shares Consideration per Sale Share (HK$) 56,972,972 2.25 914,620 2.25 1,228,033 2.25 19,693,985 2.25 409,340 2.25 1,409,959 2.25 45,612,840 2.175 1,410,705 2.175 127,652,454	Total Consideration (HK$) 128,189,187 2,057,895 2,763,074.25 44,311,466.25 921,015 3,172,407.75 99,207,927 3,068,283
		283,691,255.25

The Sale Shares

The Sale Shares comprise a total of 127,652,454 Shares in aggregate, representing 42.29% of the entire issued share capital of the Company as at the date of this joint announcement.

Pursuant to the terms of the Share Purchase Agreements, the Sale Shares were acquired by the Offeror, free from all Encumbrances and together with all rights and benefits attached and accrued to them on Completion.

Purchase price and payment terms

The total purchase price for the Sale Shares pursuant to the Share Purchase Agreements is HK$283,691,255.25. The purchase price for each Vendor set out above has been paid in full to each Vendor at Completion.

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The respective purchase price for the relevant Sale Shares was agreed between the Offeror and each Vendor after arm’s length negotiations, taking into account of, among others, (i) historical trading prices of the Shares and the trading volume of the Company; and (ii) the prevailing market prices of the Shares.

Completion

There is no condition precedent to the Share Purchase Agreements. Completion of the Sale and Purchase Agreements took place on 5 December 2016, which has resulted in the Offeror acquiring the Sale Shares, representing approximately 42.29% of the issued share capital of the Company as at the date of this joint announcement and incurring an obligation to make the Offers under the Takeovers Code.

MANDATORY UNCONDITIONAL CASH OFFERS

Details of all classes of “relevant securities” (as defined in note 4 to Rule 22 of the Takeovers Code) issued by the Company and the numbers of such securities in issue as at the date of this joint announcement are as follows:

(a) a total of 301,839,808 Shares in issue in the share capital of the Company; and
(b) a total of 55,783,284 outstanding Share Options granted under the Pre-IPO Share Option Scheme with rights to subscribe for a total of 55,783,284 new Shares.

As at the date of this joint announcement, save as disclosed above, the Company has no outstanding securities, options, derivatives or warrants which are convertible or exchangeable into Shares and the Company has no other relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code).

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A summary of the outstanding Share Options as referred to in paragraph (b) above is set out below:

			Outstanding
			Share Options
			as at the date
		Exercise price	of this joint
Date of grant	Exercisable period	per Share	announcement
		(HK$)
9 March 2008	9 March 2010 to 8 March	0.1086	4,028,405
	2018
26 July 2009	26 July 2013 to 8 March	0.318	7,319,656
	2018
5 March 2010	5 March 2014 to 15 May	0.318	4,981,975
	2019
1 September 2010	1 September 2014 to 31	4.2038	11,959,747
	August 2020
31 December 2010	31 December 2014 to 30	5.7782	2,362,580
	December 2020
8 January 2011	8 January 2015 to 8	5.7782	548,781
	January 2021
1 March 2011	1 March 2015 to 1 March	4.2038	548,781
	2021
1 March 2011	1 March 2015 to 1 March	8.2524	7,595,972
	2021
1 March 2012	1 March 2016 to 1 March	9.408	348,197
	2022
30 September 2012	30 September 2016 to 25	4.7777	29,524
	April 2022
30 September 2012	30 September 2016 to 25	4.7855	4,546,290
	April 2022
1 March 2013	1 March 2017 to 28	4.7855	274,390
	February 2023
1 August 2013	1 August 2017 to 31 July	1.0548	6,544,129
	2023
1 August 2013	1 August 2017 to 31 July	4.3589	4,420,467
	2023
1 March 2014	1 March 2018 to 1 March	3.1567	274,390
	2024

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As at the date of this joint announcement, the Offeror and the parties acting in concert with it hold 12,648,147 Share Options granted under the Pre-IPO Share Option Scheme with rights to subscribe for a total of 12,648,147 new Shares.

Changjiang CFHK, on behalf of the Offeror, will make the Offers in compliance with the Takeovers Code and on the terms to be set out in the Composite Document.

The Share Offer

For each Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$2.25 in cash

The Share Offer will be unconditional in all respects.

The Option Offer

Changjiang CFHK, on behalf of the Offeor, will make appropriate offers to the Independent Optionholders in accordance with Rule 13 of the Takeovers Code to cancel all outstanding Share Options (whether vested or not), other than those already owned by the Offeror and the parties acting in concert with it, in exchange for cash.

(a) In respect of Share Options with an exercise price of HK0.1086

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . . . HK$2.1414 in cash

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(b) In respect of Share Options with an exercise price of HK$0.3180

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . . . . HK$1.932 in cash

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . . . HK$1.1952 in cash

The above prices of the Option Offer are the see-through price which has been determined by deducting the exercise price payable on exercise of each Share Option from the Share Offer Price payable for each Offer Share under the Share Offer pursuant to Rule 13 of the Takeovers Code.

(a) In respect of Share Options with an exercise price of HK$3.1567

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$0.000156 in cash

(b) In respect of Share Options with an exercise price of HK$4.2038

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$0.000156 in cash

(c) In respect of Share Options with an exercise price of HK$4.3589
For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$0.000156 in cash
(d) In respect of Share Options with an exercise price of HK$4.7777
For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$0.000156 in cash
(e) In respect of Share Options with an exercise price of HK$4.7855
For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$0.000156 in cash
(f) In respect of Share Options with an exercise price of HK$5.7782
For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$0.000156 in cash

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(g) In respect of Share Options with an exercise price of HK$8.2524

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$0.000156 in cash

(h) In respect of Share Options with an exercise price of HK$9.4080

For cancellation of each Share Option . . . . . . . . . . . . . . . . . . . HK$0.000156 in cash

The Option Offer will be unconditional in all respects.

Following acceptance of the Option Offer, the relevant Share Options together with all rights attaching thereto will be cancelled and renounced in their entirety. Assuming none of the Share Options are exercised or lapsed prior to the close of the Offers, the Option Offer is valued at approximately HK$32,003,792.

Further information on the Option Offer will be set out in a letter to the Optionholders which will be despatched, as far as practicable, contemporaneously with the despatch of the Composite Document.

Total Consideration for the Offers

Based on the Share Offer Price of HK$2.25 per Offer Shares and 301,839,808 Shares in issue as at the date of this joint announcement (including the Sale Shares), the entire issued share capital of the Company is valued at HK$679,139,568. As the Offeror and parties acting in concert with it will have interest in 165,161,810 Shares, in the event the Share Offer is accepted in full, the maximum amount payable by the Offeror under the Share Offer will be HK$136,152,986 (excluding the Excluded Shares and assuming (i) none of the Share Options are exercised prior to the close of the Offers, and (ii) there is no change in the issued share capital of the Company from the date of this joint announcement up to the close of the Offers).

In the event all the Share Options are exercised in full prior to the close of the Offers (excluding the out-of-money Share Options and those Share Options already owned by the Offeror and the parties acting in concert with it), the Share Offer is accepted in full (excluding the Excluded Shares and including all Offer Shares issued and allotted as a result of the exercise of all in-the-money Share Options and assuming there is no change in the issued share capital of the Company from the date of this

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joint announcement up to the close of the Offers) and the Option Offer (for the out-of-money Share Options only) is accepted in full, the maximum amount payable by the Offeror pursuant to the Share Offer will be increased to approximately HK$178,286,992 and the maximum amount payable by the Offeror pursuant to the Option Offer will be approximately HK$3,808.

Undertakings Not to Accept the Offers

The following Shareholders have irrevocably undertaken to the Offeror, until the closing or lapsing of the Offers or the Offeror’s withdrawal of the Offers (whichever is earlier), that in respect of their Shares held as at the date of this joint announcement (as set out in the table below), it:

(a) will not accept the Offers in respect of such Excluded Shares;
(b) will not directly or indirectly, sell, transfer, encumber, charge, pledge, grant any option or other right over or otherwise dispose of or deal with such Excluded Shares; and
(c) will not enter into any agreement or arrangement in relation to the above.

	No. of Excluded
Undertaking Obligors	Shares held
Xinxin (Hongkong) Capital Co., Limited	29,999,000
Pacven Walden Ventures V, L.P.	25,779,560
Shanghai SummitView Venture Capital Limited Partnership	10,214,000
Beijing Integrated Circuit Industry International Fund L.P.	8,123,000
SVIC No, 30 New Technology Business Investment L.L.P.	2,050,000
Total:	76,165,560

The total number of Excluded Shares represents approximately 25.23% of the issued share capital of the Company as at the date of this joint announcement.

Comparisons of the Share Offer Price

The Share Offer Price represents:

(i) a discount of approximately 22.41% to the closing price of HK$2.90 per Share as quoted on the Stock Exchange on the Last Trading Day;

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(ii) a discount of approximately 22.57%, 22.15% and 18.95% to the average closing price of approximately HK$2.906, HK$2.89 and HK$2.776 per Share, being the average closing price of Shares as quoted on the Stock Exchange for the 5, 10 and 30 trading days respectively immediately prior to and including the Last Trading Date;
(iii) a premium of approximately 40.63% over the audited consolidated net assets of the Group’s HK$1.60 per Share calculated based on the Group’s audited consolidated net assets as at 31 December 2015 of approximately HK$483,462,392.6 (equivalent to US$62,176,860) and 301,839,808 Shares in issue as at the date of this joint announcement; and
(iv) a discount of approximately 9.27% over the unaudited consolidated net assets of the Group’s HK$2.48 per Share calculated based on the Group’s unaudited consolidated net assets as at 30 June 2016 of approximately HK$749,431,082.7 (equivalent to US$96,382,412) and 301,839,808 Shares in issue as at the date of this joint announcement.

The Share Offer Price is equal to the maximum price per Sale Share paid by the Offeror in the Acquisition.

The price of the Option Offer for the out-of-money Share Options is of nominal value as the exercise prices of the out-of-money Share Options are above the Share Offer Price. The price of the Option Offer for the in-the-money Share Options is the see-through price which represents the difference between the Share Offer Price and the exercise price of the in-the-money Share Options of HK$0.1086, HK$0.318 and HK$1.0548 respectively.

Highest and Lowest Prices

During the six-month period preceding the date of this joint announcement, the highest closing price of the Shares as quoted on the Stock Exchange was HK$2.99 per Share on 6 June 2016, and the lowest closing price of the Shares as quoted on the Stock Exchange was HK$2.29 per Share on 18 July 2016.

Financial Resources Available for the Offers

The Offeror intends to finance the the Offers by a loan from Ping An Bank. Such loan has already been drawn down and deposited in an Offeror’s account. Any withdrawal of funds from such account can only be allowed by joint instruction of the Offeror and Changjiang CFHK. Changjiang CFHK, the financial adviser to the Offeror in respect of the Offer, is satisfied that sufficient financial resources are, and will remain, available to the Offeror to satisfy the full acceptance of the Offers.

— 14 —

Settlement of Consideration for Shares and Share Options

Settlement of the consideration in cash for the Offers will be made as soon as possible and in any event within seven business days (as defined under the Takeovers Code) of the date on which the duly completed acceptances of the Offers and the relevant documents of title in respect of such acceptances are received by the Offeror to render each such acceptance complete and valid.

INTENTIONS IN RELATION TO THE COMPANY

As a result of the Acquisition and as at the date this joint announcement, the Offeror has become the controlling Shareholder. Following the close of the Offers, the Offeror will continue to be the controlling Shareholder. The Offeror intends to continue the existing business of the Group. The Offeror does not intend to nominate any new Directors to the Board.

The Offeror has no intention to redeploy the fixed assets of the Group and has no plan to terminate the employment of any other employees or other personnel of the Group.

SHAREHOLDING STRUCTURE OF THE COMPANY

The following table sets out the shareholding structure of the Company immediately before and after Completion (and assuming there are no changes to the total number of issued shares of the Company):

Name of Shareholders The Offeror and the parties acting in concert with it The Vendors Undertaking Obligors Xinxin (Hongkong) Capital Co., Limited Pacven Walden Ventures V, L.P. Shanghai SummitView Venture Capital Limited Partnership Beijing Integrated Circuit Industry International Fund L.P. SVIC No, 30 New Technology Business Investment L.L.P. Other Shareholders Total	As at the date of this joint announcement Number of Shares held % of Shares in issue 37,509,356 12.43 127,652,454 42.29 29,999,000 9.94 25,779,560 8.54 10,214,000 3.38 8,123,000 2.69 2,050,000 0.68 60,512,438 20.05 301,839,808 100.00	Upon completion of the purchase of Sale Shares by the Offeror Number of Shares held % of Shares in issue 165,161,810 54.72 — — 29,999,000 9.94 25,779,560 8.54 10,214,000 3.38 8,123,000 2.69 2,050,000 0.68 60,512,438 20.05 301,839,808 100.00	Upon completion of the purchase of Sale Shares by the Offeror Number of Shares held % of Shares in issue 165,161,810 54.72 — — 29,999,000 9.94 25,779,560 8.54 10,214,000 3.38 8,123,000 2.69 2,050,000 0.68 60,512,438 20.05 301,839,808 100.00
			100.00

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INFORMATION ON THE OFFEROR

The Offeror is a company incorporated in the BVI with limited liability on 29 March 2011, principally engaged in investment holding. The Offeror is wholly-owned by Mr. Huang Xueliang, chairman and executive Director of the Company.

INFORMATION ON THE GROUP

The Group is a leading security devices provider globally for pay TV broadcasting access and for mobile point-of-sales, or mPOS, payment systems in China. The Group designs, develops and markets security devices primarily for the pay TV industry worldwide through sales of conditional access module, or CAM, products which provide end users with access to pay TV content. The Company has been listed on the Stock Exchange since 30 March 2016.

Pre-IPO Share Option Schemes

The Company has a Pre-IPO Share Option Scheme. As at the date of this joint announcement, there were 55,783,284 outstanding Share Options granted under the Pre-IPO Share Option Scheme. The total number of Shares that may be issued upon exercise of the Share Options was 55,783,284 Shares. The total number of outstanding Share Options that are held by the Independent Optionholders and which are subject to the Option Offer is 43,135,137 Share Options.

Other than the Shares and the Share Options, the Company does not have any other outstanding equity securities (including equity related convertible securities, or warrants, options or subscription rights or derivatives in respect of any equity share capital of the Company (including non-transferable options)).

Independent Board Committee

Pursuant to Rule 2.1 of the Takeovers Code, an independent board committee, comprising all the non-executive Directors, namely Mr. Zeng Zhijie and Mr. Kwan, Allan Chung-yuen, and all the independent non-executive Directors, namely Mr. Zhang Junjie, Mr. Woo Kar Tung, Raymond and Mr. Jin Yufeng, has been established by the Company to make a recommendation to the Independent Shareholders and the Independent Optionholders in connection with the Offers. The Independent Board Committee has approved the appointment of Messis Capital to advise the Independent Board Committee, which in turn will make a recommendation to the Independent Shareholders and the Independent Optionholders in respect of the Offers. Independent Shareholders and the Independent Optionholders are encouraged to read

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the Composite Document carefully, including the advice of Messis Capital to the Independent Board Committee and the recommendation of the independent board committee to the Independent Shareholders and the Independent Optionholders in respect to the Offers, before deciding whether or not to accept the Offers.

FURTHER TERMS OF THE OFFERS

The Share Offer and the Option Offer

The Share Offer will be unconditional. Acceptance of the Share Offer by any Shareholder will be deemed to constitute a warranty by such person that all the Shares to be sold by such person under the Share Offer will be free from all Encumbrances and together with all rights attaching thereto, including all rights to receive any divided or other distribution declared, made or paid on or after the date on which the Share Offer is made. Acceptance of the Share Offer shall be irrevocable and not capable of being withdrawn, except as permitted under the Takeovers Code.

The Option Offer will also be unconditional. Acceptance of the Option Offer by any Optionholder will be deemed to constitute a warranty by such person all the Share Options to be sold by such person under the Option Offer are free from all Encumbrances and will be cancelled and renounced together with all rights attaching thereto on or after the date on which the Option Offer is made. Acceptances of the Option Offer shall be irrevocable and not capable of being withdrawn, except as permitted under the Takeovers Code.

The Offers extend to Shares issued and unconditionally allotted while the Offers remain open for acceptance, including any Shares allotted or issued pursuant to the exercise of Share Options.

Hong Kong Stamp Duty

The seller’s ad valorem stamp duty arising from acceptances of the Share Offer will be payable by the relevant Shareholders at a rate of HK$1.00 for every HK$1,000 (or part of HK$1,000) of (i) the market value of the Offer Shares; or (ii) the consideration payable by the Offeror for such Shareholder’s Shares, whichever is higher, and will be deducted from the amount payable to the Shareholders who accept the Offers. The Offeror will pay the buyer’s ad valorem stamp duty and will account to the Stamp Office of Hong Kong for all stamp duty payable on the sale and purchase of Shares in respect of which valid acceptances are received under the Share Offer.

No stamp duty is payable in connection with the acceptance of the Option Offer.

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Taxation Advice

Shareholders and Optionholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting or rejecting the Offers. None of the Offeror, parties acting in concert with it, the Company, and their respective ultimate beneficial owners, directors, officers, agents or associates or any other person involved in the Offers accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Offers.

GENERAL MATTERS RELATING TO THE OFFERS

Availability of the Offer Document

Overseas Shareholders and Optionholders

The making of the Offers to persons residing outside Hong Kong may be affected by the laws of the relevant jurisdictions. It is the responsibility of any overseas persons wishing to accept the Offers to satisfy themselves as to the full observance of the laws of their own relevant jurisdiction.

In the event that the receipt of the Composite Document by Overseas Shareholders and Optionholders is prohibited by relevant law or may only be effected after compliance with conditions or requirements that the directors of the Offeror regard as unduly onerous or burdensome, the Composite Document will not be despatched to such Overseas Shareholders and Optionholders. The Offeror will apply for any waivers as may be required by the Executive pursuant to Note 3 to Rule 8 of the Code at such time.

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Further agreements or arrangements

The Offeror confirms that, as at the date of this joint announcement:

(i) there is no outstanding derivative in respect of securities in the Company which has been entered into by the Offeror, its ultimate beneficial owners and/or any person acting in concert with any of them;
(ii) there are no other arrangements to which it is a party (whether by way of option, indemnity or otherwise) in relation to the shares of the Offeror or the Shares which might be material to the Offers (as referred to in Note 8 to Rule 22 of the Takeovers Code);
(iii) save for the 165,161,810 Shares and 12,648,147 outstanding Share Options held by the Offeror and the parties acting in concert with it, none of the Offeror, its ultimate beneficial owners, and/or parties acting in concert with any of them owns or has control or direction over any voting rights or rights over the Shares or convertible securities, options, warrants or derivatives of the Company;
(iv) there are no agreements or arrangements to which it is a party which relate to the circumstances in which it may or may not invoke a pre-condition or a condition to the Offers;
(v) the Offeror and its parties acting in concert have not received any irrevocable commitment to accept the Offers; and
(vi) save for the 165,161,810 Shares and 12,648,147 outstanding Share Options held by the Offeror and the parties acting in concert with it, the Offeror, its ultimate beneficial owners and parties acting in concert with any of them have not dealt in nor do they have any shareholding interest in or control any Shares, convertible securities, warrants or Share Options in the Company during the six months immediately prior to the date of the Share Purchase Agreements and up to the date of this joint announcement; and
(vii) except for the Acquisition, there have been no dealings in Shares or Share Options by the Offeror or parties acting in concert with it in the six-month period ended on the date of this joint announcement.

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Maintaining the Listing

The Offeror will use its reasonable endeavours to maintain the listing of the Company on the Stock Exchange and to ensure that minimum public float is maintained in accordance with the Listing Rules as soon as possible following the closing of the Offers in compliance with the Listing Rules.

The Stock Exchange has stated that if, at the close of the Offers, less than 25 per cent. Of the Shares are held by the public or if the Stock Exchange believes that:

a false market exists or may exist in the trading of the Shares; or
there are insufficient Shares in public hands to maintain an orderly market,

then it will consider exercising its discretion to suspend trading in the Shares.

In this connection, it should be noted that upon completion of the Offers, there may be insufficient public float for the Shares and therefore, trading in the Shares may be suspended until a prescribed level of public float is attained.

Disclosure of Dealings

The respective associates of the Offeror and the Company are hereby reminded to disclose their dealings in any securities of the Company in accordance to Rule 22 of the Takeovers Code.

Pursuant to Note 11 to Rule 22 of the Takeovers Code, stockbrokers, banks and others who deal in relevant securities on behalf of clients have a general duty to ensure, so far as they are able, that those clients are aware of the disclosure obligations attaching to associates and other persons under Rule 22 of the Takeovers Code and that those clients are willing to comply with them. Principal traders and dealers who deal directly with investors should, in appropriate cases, likewise draw attention to the relevant rules of the Takeovers Code. However, this does not apply when the total value of dealings (excluding stamp duty and commission) in any relevant security undertaken for a client during any 7 day period is less than HK$1 million.

This dispensation does not alter the obligation of principals, associates and other persons themselves to initiate disclosure of their own dealings, whatever total value is involved.

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Intermediaries are expected to co-operate with the Executive in its dealings enquiries. Therefore, those who deal in relevant securities should appreciate that stockbrokers and other intermediaries will supply the Executive with relevant information as to those dealings, including identities of clients, as part of that co-operation.

RESUMPTION OF TRADING IN THE SHARES

WARNING: Shareholders and investors generally should exercise caution when dealing in the securities of the Company, and if they are in any doubt about their position, they should consult their professional advisers.

DEFINITIONS

The following definitions apply throughout this joint announcement, unless the context requires otherwise:

Acquisition	the acquisition of an aggregate of 127,652,454 Shares	by
	the Offeror from the Vendors on 5 December 2016,
	representing approximately 42.29% of the issued share
	capital of the Company
acting in concert	has the meaning given to it in the Takeovers Code
associate(s)	has the meaning given to it in the Takeovers Code
Board	the board of Directors
BVI	the British Virgin Islands
Changjiang CFHK	Changjiang Corporate Finance (HK) Limited,	a
	corporation licensed by the SFC to conduct Type	6
	(advising on corporate finance) regulated activities under
	the SFO, the financial adviser to the Offeror
Company	SMIT Holdings Limited, a company incorporated	in
	Cayman Islands with limited liability, the shares of which
	are listed on the Stock Exchange
Completion	completion of the Acquisition in accordance with the terms
	and conditions of the Sale and Purchase Agreements

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Composite Document the offer and response document (in either composite or separate form) to be issued to all Shareholders and Optionholders in accordance with the Takeovers Code containing, among other things, details of the Offers and the form of acceptance and transfer/cancellation
Director(s) director(s) of the Company Encumbrances (i) any valid mortgage, pledge, charge, lien, rights of pre-emption, guarantee, trust arrangements or any other similar restriction on rights securing, or conferring any priority of payment in respect of, any obligation of any person, (ii) any valid proxy, power of attorney, voting trust agreement, beneficial interest, option, right of first offer or refusal or other transfer restriction in favour of any person and (iii) any adverse, legal and valid claim as to title, possession or use
Excluded Shares the Shares held by the undertaking Shareholders which are subject to the irrevocable undertakings set out in the section headed “Undertakings Not to Accept the Offer”
Executive the Executive Director of the Corporate Finance Division of the SFC
Group the Company and its subsidiaries Hong Kong the Hong Kong Special Administrative Region of the People’s Republic of China
HK$ Hong Kong dollars, the lawful currency of Hong Kong Independent Board the independent board committee of the Board, comprising Committee those Directors as identified in the section headed “Independent Board Committee” and formed for the purpose of advising the Independent Shareholders and the Independent Optionholders in respect of the Offers
Independent the Optionholders other than the Offeror and parties acting Optionholders in concert with it
Independent the Shareholders other than the Offeror and parties acting Shareholders in concert with it

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Last Trading Day 2 December 2016, the last trading day for the Shares prior to the date of this joint announcement Listing Rules the Rules Governing the Listing of Securities on the Stock Exchange Messis Capital Messis Capital Limited, a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities as defined under the SFO, being the independent financial adviser to the Independent Board Committee in respect of the Offers Offers the Share Offer and the Option Offer Offeror Green Flourish Limited, a company incorporated in the BVI with limited liability Offer Share(s) all Shares that are not owned or agreed to be acquired by the Offeror or parties acting in concert with it and “Offer Share” means any of them Option Offer the offer proposed to be made by the Offeror in compliance with Rule 13 of the Takeovers Code to cancel all outstanding Share Options other than those not already owned by the Offeror and parties acting in concert with it Optionholders the holders of the Share Options Overseas Optionholder(s) whose address(es), as shown on the Optionholders register of members of the Company, is/are outside Hong Kong Overseas Shareholders Shareholder(s) whose address(es), as shown on the register of members of the Company, is/are outside Hong Kong Pre-IPO Share Option the pre-IPO share option scheme of the Company as Scheme assumed from the share incentive plan of the Company as adopted on 21 February 2008 by resolutions in writing of the sole shareholder passed on 15 September 2015 Sale Shares 127,652,454 Shares sold by the Vendors to the Offeror pursuant to the terms of the Sale and Purchase Agreements SFC the Securities and Futures Commission of Hong Kong

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SFO the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong) Share Offer the mandatory conditional cash offer by Changjiang CFHK on behalf of the Offeror to acquire the Shares not already owned by the Offeror and parties acting in concert with it Share Offer Price the cash amount of HK$2.25 payable by the Offeror to Shareholders for each Share accepted under the Share Offer

Share Option the outstanding options granted pursuant to the Pre-IPO Share Option Scheme which are not yet exercised as at the date of this joint announcement
Share Purchase each of the respective sale and purchase agreements all Agreements dated 5 December 2016 and entered into among the Vendors as the vendors and the Offeror as the purchaser in respect of the sale and purchase of the Sale Shares
Shareholders holders of Shares Shares the existing issued shares of US$0.00002 each in the Company at the date hereof and any such further shares which are unconditionally allotted or issued after the date hereof and before the date on which the Offers close (or such earlier date or dates as the Offeror may decide) pursuant to the exercise of Share Options under the Pre-IPO Share Option Scheme or otherwise

Stock Exchange the Stock Exchange of Hong Kong Limited Takeovers Code The Hong Kong Code on Takeovers and Mergers as in force from time to time

Vendors Oak Investment Partners X, L.P., Oak X Affiliates Fund, L.P., Mayfield XI, a Delaware Limited Partnership, Mayfield XI Qualified, a Delaware Limited Partnership, Mayfield Associates Fund VI, a Delaware Limited Partnership, Mayfield Principals Fund II, a Delaware LLC Including Multiple Series, GSR Ventures I, L.P., GSR Principals Fund I, L.P., and “Vendor” means any of them

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Undertaking Obligors

Xinxin (Hongkong) Capital Co., Limited, Pacven Walden Ventures V, L.P., Shanghai SummitView Venture Capital Limited Partnership, Beijing Integrated Circuit Industry International Fund L.P. and SVIC No, 30 New Technology Business Investment L.L.P.

US$ United States dollars, the lawful currency of the United States, of America

% per cent.

For the purpose of this joint announcement, unless the context otherwise requires, conversion of US$ into HK$ is based on the approximate exchange rate of US$1.00 to HK$7.7756. Such exchange rate is for the purpose of illustration only and does not constitute a representation that any amounts in HK$ or US$ have been, could have been or may be converted at such or any other rate or at all.

By order of the board of directors of GREEN FLOURISH LIMITED Huang Xueliang Director

By order of the board of Directors SMIT HOLDINGS LIMITED Huang Xueliang Chairman

Hong Kong, 7 December 2016

As at the date of this joint announcement, the sole director of the Offeror is Mr. Huang Xueliang.

As at the date of this joint announcement, the executive Director of the Company is Mr. Huang Xueliang (chairman and chief executive officer); the non-executive Directors are Mr. Zeng Zhijie and Mr. Kwan, Allan Chung-yuen; and the independent non-executive Directors are Mr. Zhang Junjie, Mr. Woo Kar Tung, Raymond and Mr. Jin Yufeng.

The director of the Offeror jointly and severally accept full responsibility for the accuracy of the information in this joint announcement (other than in respect of the Group) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this joint announcement (other than in relation to the Group) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement the omission of which would make any of the statements in this joint announcement misleading.

The board of directors of the Company jointly and severally accept full responsibility for the accuracy of the information in this joint announcement (other than in respect of the Offeror) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this joint announcement (other than in relation to the Offeror) have been arrived at after due and careful consideration and there are no other facts not contained in this joint announcement the omission of which would make any of the statements in this joint announcement misleading.

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AI assistant

SMIT Holdings Limited — M&A Activity 2016

50470_rns_2016-12-07_a4ddbffb-b97c-444e-8ac3-84b6ded1e200.pdf

GREEN FLOURISH LIMITED