Television Broadcasts Limited — AGM Information 2011

Jul 7, 2011

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 stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in China Fortune Group Limited , you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or the transferee.

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

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 290)

Website: http://www.290.com.hk

PROPOSAL FOR GRANT OF GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES AND RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of China Fortune Group Limited to be held at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong on 12 August 2011 at 11:00 a.m. is set out on pages 13 to 16 of this circular. A form of proxy for use at the annual general meeting is enclosed with this circular. Whether or not you are able to attend the meeting, 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 registrar and transfer office in Hong Kong, Union Registrars Limited at 18/F, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong as soon as possible, and in any event not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting or any adjournment thereof, should you so wish.

8 July 2011

CONTENTS

		Pages
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM THE BOARD
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Proposed grant of the Issue Mandate, the Repurchase
	Mandate and the Extension Mandate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
3.	Re-election of retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
4.	The AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
5.	Recommendations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
6.	Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
APPENDIX I – EXPLANATORY STATEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
APPENDIX II – BIOGRAPHY OF DIRECTORS PROPOSED TO
	BE RE-ELECTED AT THE AGM. . . . . . . . . . . . . . . . . . . . . . . . . . .	9
NOTICE OF ANNUAL GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		13

• i -

DEFINITIONS

In this circular, unless otherwise defined, terms used herein shall have the following meanings:

the annual general meeting of the Company to be held at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong on 12 August 2011 at 11:00 a.m.;

“AGM” Hong Kong on 12 August 2011 at 11:00 a.m.; “Articles of Association” the articles of association of the Company;

“Board” the board of Directors;

“Company”

China Fortune Group Limited, 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;

“Directors” the directors of the Company; “Extension Mandate” a general and unconditional mandate to be granted to the Directors to the effect that the total number of Shares which may be allotted and issued under the Issue Mandate may be increased by an additional number representing such number of Shares actually repurchased under the Repurchase Mandate;

“Group” the Company and its subsidiaries; “Hong Kong” The Hong Kong Special Administrative Region of the PRC;

“Issue Mandate” the general and unconditional mandate to be granted to the Directors to exercise the powers of the Company to allot, issue and deal with new Shares up to 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of the relevant resolution;

• “Latest Practicable Date” 6 July 2011, 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 Securities on the Stock Exchange;

“PRC” The People’s Republic of China, and for the sole purpose of this circular excludes Hong Kong, Macau Special Administrative Region and Taiwan;

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DEFINITIONS

“Repurchase Mandate”	a general and unconditional mandate to be granted to the Directors
	to exercise all the powers of the Company to repurchase Shares
	of the Company on the Stock Exchange which shall not exceed
	10% of the aggregate nominal amount of the share capital of the
	Company in issue as at the date of the passing of the relevant
	resolution;
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws
	of Hong Kong);
“Share(s)”	ordinary share(s) of HK$0.10 each in the share capital of
	the Company;
“Shareholder(s)”	holder(s) of Share(s);
“Stock Exchange”	The Stock Exchange of Hong Kong Limited;
“Takeovers Code”	The Hong Kong Codes on Takeovers and Mergers;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong; and
“%”	per cent.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 290)

Website: http://www.290.com.hk

Executive Directors:

Mr. ZHANG Min (Chairman) Mr. NG Cheuk Fan, Keith (Managing Director) Mr. HON Chun Yu Mr. XIA Yingyan Mr. YEUNG Kwok Leung

Non-Executive Director:

Mr. WONG Kam Fat, Tony (Vice-Chairman)

Independent Non-Executive Directors:

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

Head Office and Principal Place of Business in Hong Kong: 13/F, Sunning Plaza 10 Hysan Avenue Causeway Bay Hong Kong

Mr. LAM Ka Wai, Graham Mr. NG Kay Kwok Mr. TAM B Ray Billy

8 July 2011

To the Shareholders, and for information purpose only,

the holders of warrants and convertible securities of the Company

Dear Sir or Madam,

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

INTRODUCTION

The purposes of this circular are to provide you with information regarding the resolutions to be proposed at the AGM and to give you notice of the AGM. Resolutions to be proposed at the AGM include (i) the grant of the Issue Mandate (ii) the grant of the Repurchase Mandate (iii) the grant of the Extension Mandate; and (iv) the re-election of retiring Directors.

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LETTER FROM THE BOARD

PROPOSED GRANT OF THE ISSUE MANDATE, THE REPURCHASE MANDATE AND THE EXTENSION MANDATE

At the last annual general meeting of the Company held on 31 August 2010, the Directors were granted general mandates to exercise the powers of the Company to (i) allot, issue and deal with Shares up to 20% of the aggregate nominal amount of the share capital of the Company in issue at that date and (ii) repurchase Shares representing not exceeding 10% of the aggregate nominal amount of the share capital of the Company in issue at that date. The general mandate to issue Shares had been fully utilised following the completion of the placing as disclosed in the announcement of the Company dated 31 January 2011 while the general mandate to repurchase shares will expire at the conclusion of the AGM.

Ordinary resolutions will be proposed at the AGM for the Shareholders to consider and, if thought fit, grant the Issue Mandate and the Repurchase Mandate as set out in Resolution no. 4 and 5 of the notice of the AGM respectively. In addition, an ordinary resolution regarding the Extension Mandate will be proposed at the AGM to authorize the increase in the total number of new Shares which may be allotted and issued under the Issue Mandate by an additional number representing such number of Shares actually repurchased under the Repurchase Mandate as set out in Resolution no. 6 of the notice of the AGM.

As at the Latest Practicable Date, the Company had an aggregate of 2,924,085,668 Shares in issue. Subject to the passing of the resolutions for the approval of the Issue Mandate and the Repurchase Mandate and on the basis that no further Shares are issued or repurchased between the Latest Practicable Date and the date of the AGM, the Company would be allowed under the Issue Mandate to allot, issue and deal with a maximum of 584,817,133 Shares and under the Repurchase Mandate to repurchase a maximum of 292,408,566 Shares, respectively.

An explanatory statement in relation to the proposed Repurchase Mandate is set out in the Appendix I to this circular. This explanatory statement containing the particulars required by the Listing Rules to enable the Shareholders to make an informed decision on whether to vote for or against Resolution no. 5 of the notice of AGM to be proposed at the AGM.

RE-ELECTION OF RETIRING DIRECTORS

In accordance with article 99 of the Articles of Association, Mr. Zhang Min and Mr. Xia Yingyan, shall hold offices only until the AGM and, being eligible, offer themselves for re-election at the AGM.

In accordance with article 116 of the Articles of Association, Mr. Ng Cheuk Fan, Keith, Mr. Yeung Kwok Leung and Mr. Ng Kay Kwok shall retire from office by rotation and, being eligible, offer themselves for re-election at the AGM.

The biographical details of Mr. Zhang Min, Mr. Xia Yingyan, Mr. Ng Cheuk Fan, Keith, Mr. Yeung Kwok Leung and Mr. Ng Kay Kwok are set out in Appendix II of this circular.

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LETTER FROM THE BOARD

THE AGM

A notice convening the AGM to be held at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong on 12 August 2011 at 11:00 a.m. is set out on pages 13 to 16 of this circular. A copy of the 2011 annual report of the Company is despatched to the Shareholders together with this circular. Ordinary resolutions in respect of the re-election of retiring Directors, the grant of the Issue Mandate, the Repurchase Mandate and the Extension Mandate will be proposed at the AGM.

A form of proxy for use at the AGM is enclosed with this circular. Whether or not you are able to attend the AGM, 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 registrar and transfer office in Hong Kong, Union Registrars Limited at 18/F, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, 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 AGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy shall not preclude the Shareholders from attending and voting in person at the AGM or any adjournment thereof should you so wish.

In accordance with Rule 13.39(4) of the Listing Rules, all votes of shareholders at a general meeting must be taken by poll. Accordingly, the chairman of the AGM will demand on poll for every resolution put to the vote at the AGM pursuant to article 80 of the Articles of Association. The Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATIONS

The Directors consider that the proposed ordinary resolutions as set out in the notice of AGM are in the best interests of the Company and the Shareholders as a whole, and accordingly, recommend all Shareholders to vote in favour of all the resolutions to be proposed at the AGM.

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

RESPONSIBILITY STATEMENT

This circular includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. 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.

By Order of the Board China Fortune Group Limited Ng Cheuk Fan, Keith Managing Director

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EXPLANATORY STATEMENT

APPENDIX I

This appendix contains the particulars that are required by the Listing Rules to be included in an explanatory statement to enable the Shareholders to make an informed decision on whether to vote for or against the resolution to be proposed at the AGM in relation to the Repurchase Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the number of Shares in issue was 2,924,085,668.

Subject to the passing of the relevant ordinary resolution to approve the Repurchase Mandate (as set out in Resolution no. 5 of notice of the AGM) and on the basis that no further Shares are issued or repurchased prior to the AGM, exercise in full of the Repurchase Mandate would result in the repurchase by the Company of a maximum of 292,408,566 Shares during the period as set out in Resolution no. 5 of notice of AGM, representing not more than 10% of the issued share capital of the Company as at the Latest Practicable Date.

2. REASONS FOR REPURCHASES

The Directors have no present intention to repurchase any Shares but consider that the Repurchase Mandate is in the best interests of the Company and the Shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets value of the Group and/or its earnings per Share and will only be made when the Directors believe that such a repurchase will benefit the Company and its Shareholders.

3. FUNDING OF REPURCHASE

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with the Articles of Association, the Listing Rules and the applicable laws of the Cayman Islands.

There might be an adverse impact on the working capital or gearing position of the Company (as compared with its financial position as disclosed in the audited consolidated accounts contained in the annual report for the year ended 31 March 2011) in the event that the Repurchase Mandate is exercised in full at any time during the proposed repurchase period. The Directors, however, do not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time be appropriate for the Company.

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EXPLANATORY STATEMENT

APPENDIX I

4. SHARE PRICES

(i) Share prices

The highest and lowest closing prices at which the Shares have been traded on the Stock Exchange in each of the twelve months preceding the Latest Practicable Date and up to the Latest Practicable Date were as follows:

		Per Share
	Highest		Lowest
	HK$		HK$
Year 2010
July	0.350		0.310
August	0.450		0.330
September	0.450		0.355
October	0.430		0.350
November	0.490		0.360
December	0.540		0.370
Year 2011
January	0.460		0.385
February	0.415		0.280
March	0.400		0.300
April	0.365		0.310
May	0.355		0.295
June	0.315		0.240
July (up to the Latest Practicable Date)	0.300		0.270

5. DIRECTORS, THEIR ASSOCIATES AND CONNECTED PERSON

None of the Directors nor, to the best of their knowledge and having made all reasonable enquiries, any of their respective associates (as defined in the Listing Rules), have any present intention to sell any Shares to the Company or its subsidiaries under the Repurchase Mandate in the event that such mandate is approved by the Shareholders.

No connected persons of the Company (as defined in the Listing Rules) has notified the Company that he/she has a present intention to sell any Shares to the Company nor has he/she undertaken not to do so in the event that the Repurchase Mandate is approved by Shareholders.

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EXPLANATORY STATEMENT

APPENDIX I

6. UNDERTAKING OF THE DIRECTORS

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the Repurchase Mandate in accordance with the Listing Rules, the applicable laws of the Cayman Islands and the Articles of Association.

7. TAKEOVERS CODE CONSEQUENCE

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

As at the Latest Practicable Date, the interests of substantial shareholders of the Company, as defined in the Listing Rules, were as follows:

		Approximate percentage of
Name of substantial	Number of issued	the total issued share
shareholder	shares held	capital of the Company
Jadehero Limited	800,000,000	27.36%
Mankind Investment Limited (“MIL”)	500,000,000	17.10%

On the basis that no further Shares are issued or repurchase prior to the AGM and the respective shareholdings of the above-mentioned substantial shareholders remained unchanged, in the event that the Directors exercise in full the power to repurchase Shares of the Company under the Repurchase Mandate, if so approved, in accordance with the terms of resolution no. 5 as set out in the notice of AGM, the shareholdings of Jadehero Limited and Mankind Investment Limited would be increased to approximately 30.40% and 19% of the issued share capital of the Company respectively. In view of this, it would be expected that Jadehero Limited would give rise to an obligation to make a mandatory offer in accordance with Rule 26 of Takeovers Code. However, the Directors currently do not have any intention to repurchase Shares pursuant to the Repurchase Mandate to such extent as would give rise to such an obligation to make a mandatory offer under the Takeovers Code. Save as aforesaid, the Directors are not aware of any consequences which would arise under the Takeovers Code as a result of any repurchase to be made under the Repurchase Mandate. In the event that the Repurchase Mandate is implemented in full, the number of Shares held by the public would not fall below 25% of the issued share capital of the Company.

8. SHARE PURCHASE MADE BY THE COMPANY

The Company has not purchased any Shares (whether on the Stock Exchange or otherwise) in the six months preceding the Latest Practicable Date.

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BIOGRAPHY OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE AGM

APPENDIX II

EXECUTIVE DIRECTORS

Mr. ZHANG Min (“ Mr. Zhang ”), aged 53, was appointed as a non-executive Director on 8 December 2010 and was re-designated to executive Director on 12 April 2011. He was also appointed as chairman of the Company on 12 April 2011. He holds a Bachelor of Philosophy Degree from the Beijing Normal College and a Master of Laws Degree from the Renmin University of China. He is currently an independent non-executive director of Silver Base Group Holdings Limited, a company listed on the main board of the Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) and the Chief Marketing Officer of the China Cinda Asset Management Co., Ltd, a holding Company of MIL which holds 500,000,000 Shares of the Company, representing 17.10% of the total issued share capital of the Company as at the Latest Practicable Date. He was the chief executive of China Construction Bank Corporation, Hong Kong Branch, from September 2006 to March 2011 and a director of CCB International (Holdings) Limited and China Construction Bank (Asia) Corporation Limited from August 2006 to March 2011. CCB International (Holdings) Limited is a wholly-owned subsidiary of the China Construction Bank (“ CCB ”) in Hong Kong. China Construction Bank (Asia) Corporation Limited is a wholly-owned subsidiary of the China Construction Bank Corporation (together with its subsidiaries referred to as the “ CCBC Group ”), a joint stock company incorporated in the PRC with limited liability, whose issued shares are listed on the main board of the Stock Exchange. He was the former president of the Beijing Banking Association from 2003 to 2005 and the Beijing Investment Institution from 2001 to 2006. Mr. Zhang possesses over 20 years’ experience in the banking industry through his work with the CCBC Group.

Save as disclosed above, Mr. Zhang does not hold any other position in the Company or any of its subsidiaries and has not held any directorships in the last three years in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas.

Save as disclosed above, Mr. Zhang does not have any relationship with any director, senior management or substantial or controlling shareholder of the Company (as defined under the Rules Governing the Listing of Securities on the Stock Exchange (the “ Listing Rules ”)), and does not hold any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance.

Mr. Zhang has entered into a director’s service agreement for a term of one year from 12 April 2011 subject to retirement by rotation and re-election in accordance with the Articles of Association. Mr. Zhang is entitled to an annual remuneration of HK$8,000,000 which was determined by the remuneration committee of the Company with reference to Mr. Zhang’s experience, duties and responsibilities in the Company and the prevailing market conditions.

Save as disclosed above, there is no other information relating to Mr. Zhang’s re-election which is required to be disclosed pursuant to paragraphs (h) to (v) of Rule 13.51(2) of the Listing Rules nor other matter that needs to be brought to the attention of the Shareholders.

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BIOGRAPHY OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE AGM

APPENDIX II

Mr. Xia Yingyan (“ Mr. Xia ”), aged 49, was appointed as non-executive Director on 8 December 2010 and was re-designated to executive Director on 5 May 2011. He graduated from Hainan University, majoring in both International Trade and Commerce and Business Administration. Mr. Xia possesses significant management experience in the PRC and Hong Kong trade and business. He was formerly the development manager of Hainan Huahai (Hong Kong) Limited, and the assistant to president of HNA Group (Hong Kong) Limited, a subsidiary of HNA Group. HNA Group is based in Hainan Province of the PRC whose shares are listed on PRC’s A and B Stock Exchange Markets.

Currently, Mr. Xia is the manager of Hainan Meilan International Airport Company Limited (“ Hainan Meilan ”) where he is responsible for Hong Kong affairs. Hainan Meilan is a joint stock company incorporated in the PRC with limited liability whose issued shares are listed on the main board of the Stock Exchange.

Mr. Xia has deemed interests in shares and underlying shares of the Company that are held by Jadehero Limited (“ Jadehero ”), a substantial shareholder of the Company. As at the Latest Practicable Date, Jadehero holds (i) 800,000,000 shares of the Company; and (ii) option entitling Jadehero to subscribe for convertible bonds of the Company in the maximum principal sum of HK$128 million with an initial conversion price of HK$0.16 per conversion share. Jadehero is owned as to 80% by Southlead Limited and 20% by Marvel Steed Limited. Mr. Xia is the sole beneficial owner of the entire equity interest in Southlead Limited and Mr. Wong Kam Fat, Tony, a non-executive Director and vice-chairman of the Company, is the sole beneficial owner of the entire equity interest in Marvel Steed Limited.

Save as described above, Mr. Xia does not have any relationship with any director, senior management or substantial or controlling shareholder of the Company (as defined under the Listing Rules, and he does not hold any interest in the shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance, and he has not held any directorships in the last three years in any other public companies the securities of which are listed on any securities market in Hong Kong or overseas.

Mr. Xia has entered into a director’s service agreement for a term of one-year with effect from 5 May 2011 subject to retirement by rotation and re-election in accordance with the Articles of Association. Mr. Xia is entitled to a monthly remuneration of HK$70,000 on a 13-month basis which was determined by the remuneration committee of the Company with reference to Mr. Xia’s experience, duties and responsibilities in the Company and the prevailing market conditions.

Save as disclosed above, there is no other information relating to the re-designation of Mr. Xia which is required to be disclosed pursuant to paragraphs (h) to (v) of Rule 13.51(2) of the Listing Rules and there is no other matter that needs to be brought to the attention of the shareholders of the Company.

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BIOGRAPHY OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE AGM

APPENDIX II

Mr. Ng Cheuk Fan, Keith (“ Mr. Keith Ng ”), aged 50, was appointed as an executive Director of in April 2007 and was further appointed as Managing Director of the Company on 4 December 2007. Upon his directorate in the Company, he was further appointed as directors of various subsidiaries within the Group. Mr. Keith Ng graduated from the University of Alberta, Canada with a Bachelor degree in commerce, majoring in accounting. He also received a Master of Commerce degree in Professional Accounting from the University of New South Wales, Australia. Mr. Keith Ng is a member of the CPA Australia and an associate member of the Hong Kong Institute of Certified Public Accountants. He has over 20 years of corporate development, corporate re-structuring, management and accounting experience. He holds directorship in almost all subsidiaries of the Group. Mr. Keith Ng is an independent non-executive director of the Hong Kong Building and Loan Agency Limited, a company listed on the main board of the Stock Exchange. He is also an executive director of Hao Tian Resources Group Limited, and U-right International Holdings Limited (“ U-right ”), companies listed on the main board of the Stock Exchange. Mr. Keith Ng is also the company secretary of U-right. He was an executive director of PNG Resources Holdings Limited (Leroi Holdings Limited) from July 2004 to June 2008. He was an executive director of New Environmental Energy Holdings Limited, a company listed on the main board of the Stock Exchange, for the period from August 2010 to May 2011.

As at the Latest Practicable Date, Mr. Keith Ng does not have any interests in any Shares or underlying Shares of the Company within the meaning of Part XV of the SFO. He does not have any other relationship with any Directors, senior management, substantial or controlling Shareholders of the Company.

Mr. Keith Ng has entered into a director’s service agreement for a term of one year with effect from 4 April 2011 subject to retirement by rotation and re-election in accordance with the Articles of Association. Mr. Keith Ng is entitled to a monthly remuneration of HK$80,000 on a 13-month basis which was reviewed by the remuneration committee of the Company on the basis of his duties, academic background, working experience and responsibilities in the Company as well as the prevailing market conditions.

Save as disclosed above, there is no other matter that need to be brought to the attention of the Shareholders and there is no information required to be disclosed pursuant to rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules in respect of Mr. Keith Ng who stand for re-election at the AGM.

Mr. Yeung Kwok Leung (“ Mr. Yeung ”), aged 37, joined the Group in October 2005 and was appointed as Qualified Accountant of the Group on 2 November 2005. On 23 December 2005, he was appointed as an executive Director. Mr. Yeung holds a Bachelor degree in Accountancy. He has over 13 years’ experience in auditing, financial controlling, accounting, corporate development as well as business strategies. He is a fellow member of the Association of Chartered Certified Accountants and an associate member of the Hong Kong Institute of Certified Public Accountants. Mr. Yeung is responsible for the financial and accounting functions of the Group. He holds directorship in almost all subsidiaries in the Group. He is currently an executive director of Morning Star Resources Limited, a company listed in the main board of the Stock Exchange.

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BIOGRAPHY OF DIRECTORS PROPOSED TO BE RE-ELECTED AT THE AGM

APPENDIX II

As at the Latest Practicable Date, Mr. Yeung does not have any interests in any Shares or underlying Shares of the Company within the meaning of Part XV of the SFO. He does not have any other relationship with any Directors, senior management, substantial or controlling Shareholders of the Company.

Mr. Yeung has entered into a director’s service agreement for a term of one year with effect from 1 August 2010 subject to retirement by rotation and re-election in accordance with the Articles of Association. Mr. Yeung is entitled to a monthly remuneration of HK$80,000 on a 13-month basis which was reviewed by the remuneration committee of the Company on the basis of his duties, academic background, working experience and responsibilities in the Company as well as the prevailing market conditions.

Save as disclosed above, there is no other matter that need to be brought to the attention of the Shareholders and there is no information required to be disclosed pursuant to rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules in respect of Mr. Yeung who stand for re-election at the AGM.

INDEPENDENT NON-EXECUTIVE DIRECTOR

Mr. Ng Kay Kwok (“ Mr. Ng ”), aged 49, appointed as an independent non-executive Director in September 2007. Mr. Ng graduated from the Australian National University with a Bachelor’s degree in Economics. He is a member of CPA Australia. He has extensive experience in accounting and financial management. He was an executive director and company secretary of M Dream Inworld Limited, a company listed on the Growth Enterprise Market of the Stock Exchange (the “ GEM ”) from 9 July 2010 to 31 May 2011 and from 1 January 2007 to 31 May 2011, respectively. Mr. Ng was also an independent non-executive director of Hao Wen Holdings Limited (formally known as Everpride Biopharmaceutical Company Limited), a company listed on the GEM, during the period from 17 July 2006 to 15 May 2009. Saved as disclosed herein, Mr. Ng has not held any directorship in other listed company in Hong Kong over the past three years.

As at the Latest Practicable Date, Mr. Ng does not have any interests in any Shares or underlying Shares of the Company within the meaning of Part XV of the SFO. He does not have any other relationship with any Directors, senior management, substantial or controlling Shareholders of the Company.

Mr. Ng has entered into a letter of appointment with the Company for a term of one year with effect from 4 December 2010 subject to retirement by rotation and re-election in accordance with the Articles of Association. He is entitled to a director fee of HK$11,000 per month which was determined with reference to his duties, academic background, working experience and responsibilities in the Company as well as the prevailing market conditions.

Save as disclosed above, there is no other matter that need to be brought to the attention of the Shareholders and there is no information required to be disclosed pursuant to rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules in respect of the Mr. Ng who stand for re-election at the AGM.

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NOTICE OF ANNUAL GENERAL MEETING

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(Incorporated in the Cayman Islands with limited liability) (Stock Code: 290) Website: http://www.290.com.hk

NOTICE IS HEREBY GIVEN that the annual general meeting of China Fortune Group Limited (the “ Company ”) will be held at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong on 12 August 2011 at 11:00 a.m. for the following purposes:

1. To receive and consider the audited consolidated financial statements and the reports of the directors (the “ Directors ”) and the auditor of the Company for the year ended 31 March 2011.

2. (a) To re-elect Mr. Zhang Min as executive Director;

3. (b) To re-elect Mr. Ng Cheuk Fan, Keith as executive Director;

4. (c) To re-elect Mr. Xia Yingyan as executive Director;

5. (d) To re-elect Mr Yeung Kwok Leung as executive Director;

6. (e) To re-elect Mr. Ng Kay Kwok as an independent non-executive Director;

7. (f) To authorise the board of directors (the “ Board ”) to fix the Directors’ remuneration; and

8. (g) To grant power to the Board to appoint additional Director(s).

9. To re-appoint SHINEWING (HK) CPA Limited as auditor of the Company and to authorize the Board to fix their remuneration.

To consider, as special business and, if thought fit, pass with or without amendments, the following resolutions as ordinary resolutions:

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT :

2. (a) subject to paragraph (c) of this Resolution, and pursuant to the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited (the “ Listing Rules ”), the exercise by the Directors during the Relevant Period (as defined hereinafter) of all the powers of the Company to allot, issue and deal with additional shares of HK$0.1 each in the capital of the Company ( the “ Shares and to make or grant offers, agreements and options (including warrants, bonds, notes, debentures and other securities which carry rights to subscribe for or are convertible into shares) which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) of this Resolution shall authorize the Directors during the Relevant Period (as defined hereinafter) to make or grant offers, agreements and options (including warrants, bonds, notes, debentures and other securities which carry rights to subscribe for or are convertible into shares) which would or might require the exercise of such powers after the end of the Relevant Period (as defined hereinafter);

4. (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) and issued by the Directors pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Rights Issue (as defined hereinafter); or (ii) the exercise of any options granted under any share option scheme adopted by the Company or (iii) an issue of Shares pursuant to any scrip dividends or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association of the Company in force from time to time, shall not exceed 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution and the said approval shall be limited accordingly; and

5. (d) for the purposes of this resolution:–

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

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

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

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

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NOTICE OF ANNUAL GENERAL MEETING

“Rights Issue” means an offer of Shares, or offer or issue of warrants, options or other securities giving rights to subscribe for Shares, open for a period fixed by the Directors to holders of Shares, whose name appear on the Company’s register of members on a fixed record date in proportion to their then holdings of such Shares as at that date (subject to such exclusion or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements, or having regard to any restrictions or obligations under the laws of, or the requirements of any recognized regulatory body or any stock exchange in, any territory or otherwise howsoever applicable to the Company).”

1. “ THAT :

2. (a) subject to paragraph (b) of this Resolution, the exercise by the Directors during the Relevant Period (as defined hereinafter) of all powers of the Company to repurchase Shares on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) or any other stock exchange on which the Shares may be listed and recognised by the Securities and Futures Commission of Hong Kong (“ SFC ”) and the Stock Exchange for such purpose, subject to and in accordance with all applicable laws and regulations, be and is hereby generally and unconditionally approved;

3. (b) the aggregate nominal amount of Shares which may be repurchased or agreed to be repurchased by the Company pursuant to the approval in paragraph (a) of this Resolution during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of the passing of this Resolution and the authority granted pursuant to paragraph (a) of this Resolution shall be limited accordingly; and

4. (c) for the purposes of this Resolution, “Relevant Period” means the period from the date of the passing of this Resolution until whichever is the earliest of:

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

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

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

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NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT conditional upon the passing of the resolutions set out as Resolutions no. 4 and 5 in the notice convening this meeting, the general mandate granted to the Directors to exercise the powers of the Company to allot, issue and deal with Shares pursuant to Resolution no. 4 set out in the notice convening this meeting be and is hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the Shares in the capital of the Company repurchased by the Company under the authority granted pursuant to resolution no. 5 set out in the notice convening this meeting, provided that such an extended amount shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of this resolution.”

By Order of the Board of Directors of China Fortune Group Limited Ng Cheuk Fan, Keith Managing Director

Hong Kong, 8 July 2011

Notes:

• (1) A shareholder entitled to attend and vote at this meeting may appoint one or more than one proxy to attend and to vote in his stead. A proxy need not be a shareholder of the Company.

• (2) Where there are joint registered holders of any Share, any one of such joint holders may vote at the meeting, either personally or by proxy, in respect of such Share as if he were solely entitled thereto; but if more than one of such joint holders be present at the meeting 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.

• (3) In order to be valid, the form of proxy duly completed and signed in accordance with the instructions printed thereon together with the power of attorney or other authority, if any, under which it is signed or a notarially certified copy thereof must be delivered to the Company’s branch registrar and transfer office Union Registrars Limited at 18/F, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the annual general meeting or any adjournment thereof (as the case may be).

• (4) All voting by the members at the Meeting shall be conducted by way of poll.

As at the date of this notice, the Board consists of five Executive Directors, namely Mr. Zhang Min (Chairman), Mr. Ng Cheuk Fan, Keith (Managing Director), Mr. Xia Yingyan, Mr. Yeung Kwok Leung and Mr. Hon Chun Yu; one Non-Executive Director, Mr. Wong Kam Fat, Tony (Vice-Chairman) and three Independent Non-Executive Directors, namely, Mr. Tam B Ray Billy, Mr. Ng Kay Kwok and Mr. Lam Ka Wai, Graham.

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