Television Broadcasts Limited — Capital/Financing Update 2011

Dec 21, 2011

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

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

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China Fortune Financial Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 290) Website: http://www.290.com.hk

DISCLOSEABLE TRANSACTION ACQUISITION OF 35% EQUITY INTEREST IN A FINANCE LEASE COMPANY INVOLVING ISSUE OF CONVERTIBLE BOND

The Board is pleased to announce that on 21 December 2011, the Purchaser, a direct whollyowned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Vendor, the Guarantor and the Company pursuant to which the Vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the Sale Shares, representing 35% of the entire issued share capital of the Target Company, and the Sale Loan. The consideration in relation to the Acquisition is HK$40,384,615, which shall be satisfied, upon Completion, by the issue of the Convertible Bond by the Company to the Vendor. Upon full conversion of the Convertible Bond, 201,923,075 Conversion Shares will be issued by the Company.

The Conversion Shares represent approximately 6.57% of the issued share capital of the Company as at the date of this announcement and approximately 6.17% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares. The Conversion Shares will be issued under the General Mandate.

Pursuant to the Sale and Purchase Agreement, the Target Company, the Vendor, Good Year and the Purchaser will enter into the Shareholders’ Agreement upon Completion to govern their respective rights and obligations in relation to the Target Company and the affairs, business and management of the Target Company.

As the applicable percentage ratios as set out in Rule 14.07 of the Listing Rules in relation to the Acquisition are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company pursuant to Rule 14.06 of the Listing Rules and is subject to the disclosure requirements under Chapter 14 of the Listing Rules.

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THE SALE AND PURCHASE AGREEMENT

Date:

21 December 2011

Parties:

• (1) the Vendor: Ever Step Holdings Limited

• (2) the Purchaser: Promiseasy Limited

• (3) the Guarantor: Credit China Holdings Limited, which has guaranteed in favour of the Purchaser the performance of the obligations of the Vendor under the Sale and Purchase Agreement

• (4) the Company: China Fortune Financial Group Limited, which has guaranteed in favour of the Vendor the performance of the obligations of the Purchaser under the Sale and Purchase Agreement

Asset to be acquired

Pursuant to the Sale and Purchase Agreement, the Vendor conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Shares, representing 35% of the entire issued share capital of the Target Company, and the Sale Loan.

Consideration

The consideration of the Acquisition is HK$40,384,615, which shall be satisfied, upon Completion, by the issue of the Convertible Bond by the Company to the Vendor.

The Consideration was determined after arm’s length negotiations between the Vendor and the Purchaser after taking into consideration by the Company and the Purchaser of various factors, including but not limited to (i) the factors stated in the section headed ‘‘Reasons for and Benefits of the Acquisition’’ set out below; (ii) the current financial position of the Group; (iii) the financial performance of the Target Company and its subsidiaries (excluding the Excluded WFOE); (iv) the established business relationships of the Target Company and its subsidiaries (excluding the Excluded WFOE); and (v) the management expertise of the Guarantor, the Target Company and its subsidiaries (excluding the Excluded WFOE) in the finance leasing industry in the PRC.

Upon full conversion of the Convertible Bond, a total of 201,923,075 Conversion Shares, representing approximately 6.57% of the existing issued share capital of the Company as at the date of this announcement and approximately 6.17% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares, shall be issued by the Company.

The Conversion Shares will be issued under the General Mandate. Immediately prior to the execution of the Sale and Purchase Agreement, the Company has not utilised any part of the General Mandate. The issue of the Conversion Shares is not subject to the Shareholders’ approval. After the allotment and issue of the Conversion Shares, there will remain 412,894,058 Shares available to be issued by the Company under the General Mandate.

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Principal terms and conditions of the Convertible Bond are summarised in the section headed ‘‘Principal Terms and Conditions of the Convertible Bond’’ below.

Conditions precedent

Completion of the Sale and Purchase Agreement is conditional upon the following conditions being fulfilled (or waived) on or before 31 January 2012 (or such later date as the Vendor and the Purchaser shall agree in writing):

• (a) the Listing Committee of the Stock Exchange having granted the listing of, permission to deal in, all Conversion Shares that may be allotted and issued upon the exercise of the conversion rights attaching to the Convertible Bond;

• (b) all necessary consents, licences and approvals required to be obtained by each of the parties under the Sale and Purchase Agreement in respect of the Sale and Purchase Agreement and the transactions contemplated thereunder having been obtained and remaining in full force and effect;

• (c) the Vendor Warranties remaining true and accurate in all respects;

• (d) the Purchaser Warranties remaining true and accurate in all respects; and

• (e) the GY SPA becoming unconditional (save for the condition for the Sale and Purchase Agreement to become unconditional).

The conditions (a) and (b) above are incapable of being waived by either the Purchaser or the Vendor.

If the above conditions have not been fulfilled (or waived if applicable) on or before 4: 00 p.m. on 31 January 2012, or such later date as the Vendor and the Purchaser may agree in writing, the Sale and Purchase Agreement shall cease and terminate and neither party shall have any obligations and liabilities towards each other thereunder save for any antecedent breaches.

Indemnities

The Vendor shall on demand indemnify the Purchaser against certain Taxation matters and stamp duties; any loss, damage, cost or expense suffered by the Purchaser from the breach of any Vendor Warranties, undertaking or any other terms of the Sale and Purchase Agreement; any loss or damage suffered by the Purchaser as a result of any business activities of Rongtong or the failure on the part of the Vendor to make good and remedy any shortfall of any unpaid and outstanding rents and interests and/or bad debts due from the lessee(s) to Rongtong under any agreements for a period up to 31 December 2012; and any loss or damage suffered by the Purchaser in connection with or otherwise arising out of the Disposal and/or arising from or in connection with any assets, liabilities, investments or business operations of the Excluded WFOE.

The parties under the Sale and Purchase Agreement agreed that the above indemnities shall survive Completion.

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Completion

Completion shall take place within three (3) Business Days following the day on which all the above conditions are fulfilled (or waived as the case may be) (or such date as the parties may mutually agree).

Upon Completion, the Target Company will become an associate of the Company.

THE SHAREHOLDERS’ AGREEMENT

Date:

To be entered into upon Completion, which is expected to take place on or before 31 December 2011.

Parties:

• (1) the Target Company

• (2) the Vendor

• (3) Good Year

• (4) the Purchaser

Terms of the Shareholders’ Agreement

Pursuant to the Shareholders’ Agreement, each of the Vendor, Good Year and the Purchaser shall hold 35%, 30% and 35% of the entire issued share capital of the Target Company, respectively, at the time when they enter into the Shareholders’ Agreement.

Pursuant to the Shareholders’ Agreement, each of the Vendor, Good Year and the Purchaser has to contribute, in proportion to their respective shareholding in the Target Company, an aggregate amount of HK$200,000,000 in cash by way of shareholders’ loan to the Target Company to pay up the registered capital of Rongtong, an indirect wholly-owned subsidiary of the Target Company. Therefore, each of the Vendor, Good Year and the Purchaser has to contribute HK$70,000,000, HK$60,000,000 and HK$70,000,000, respectively. Each of the Vendor, Good Year and the Purchaser should have contributed HK$70,000,000, HK$27,692,308 and HK$32,307,692, respectively, at the time when they enter into the Shareholders’ Agreement and the balance of the shareholders’ loan shall be contributed in full by Good Year (as to HK$32,307,692) and the Purchaser (as to HK$37,692,308) on or before 16 January 2013.

Other principal terms of the Shareholders’ Agreement

Scope of business of The principal asset of the Target Company is its 100% indirect equity the Target interest in Rongtong, which principally engaged in the business of Company: finance leases, leasing, sale and purchase of local and oversea leasing business and assets, determination of the residual values of leasing business, and advisory and guarantee services in relation to leasing business in Shanghai and the adjacent regions.

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Profit Sharing:

The Target Company shall declare and distribute at least 50% of the net profits as shown in the consolidated audited financial statements of the Target Company of each financial year to the shareholders as dividends save and except otherwise agreed by the parties under the Shareholders’ Agreement.

• Board of Directors:

• The number of directors of the Target Company shall not be less than five. Each of the Purchaser and the Vendor shall have the right to nominate two directors and Good Year shall have the right to nominate one director. The chairman shall be a director nominated by the Purchaser. The quorum for a meeting of the board of directors of the Target Company shall be two and shall have at least one director each nominated by the Vendor and the Purchaser. Each director shall be entitled to one vote.

• Management A committee of at least five members shall be established for Committee: Rongtong. Each of the Purchaser and the Vendor shall have the right to nominate two members and Good Year shall have the right to nominate one member. The chairman of the committee shall be nominated by the Vendor. Each of the two members nominated by the Purchaser in the committee shall be granted with an absolute veto right to all matters and proposals tabled at the committee for consideration notwithstanding the voting results or resolutions of all other members of the committee. The quorum for a meeting of the committee shall be two and shall have at least one member each nominated by the Vendor and the Purchaser. Each member of the committee shall be entitled to one vote. The committee is responsible for, including but not limited to, the approval of all leasing transactions and setting credit and provision of bad debts policies of Rongtong.

• Shareholders’ The quorum for a shareholders’ meeting shall be two shareholders and Meeting: at least one of whom shall be the Vendor and one of whom shall be the Purchaser.

• Right of First Refusal Transfer of equity interest in the Target Company by any of the and Co-sale: Vendor, Good Year or the Purchaser or any of their affiliates, permitted transferees and assignees (the ‘‘Transferor’’) to a third party is subject to a first right of refusal or right of co-sale of the other parties. The Transferor shall send written notice stating the details of the proposed transfer to the other non-transferring shareholders. For a period of 30 days after giving the written notice, the other shareholders shall have the right to either (i) purchase the offered interests or (ii) in the event that the offered interests shall be more than 20% of the total issued shares as at the date of the written notice, sell such number of its shares by exercise of its co-sale right.

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• Board of Directors of subsidiaries of the Target Company:

• All matters of the board of directors of each of the subsidiaries of the Target Company, including but not limited to the composition of the board, each of the party’s right to nominate and appoint such number of directors, the chairman, the quorum of board meetings and voting shall follow and be of the same arrangements as those of the Target Company.

THE EXCLUDED WFOE ARRANGEMENT

The parties to the Sale and Purchase Agreement agreed that the existing consultancy business conducted by the Excluded WFOE which is currently indirectly held by the Target Company shall be excluded from the Acquisition. Accordingly, the Vendor shall (i) procure that the Disposal, which shall at all times comply with each Target Company and its subsidiaries constitutional documents and all applicable legislation and all necessary licences, consents and other permissions and regulatory or third party approvals, be completed on or before 28 February 2012; and (ii) within 5 Business Days upon fulfilment of the Vendor’s obligations under (i) above, deliver to the Purchaser sufficient evidence (to the Purchaser’s satisfaction) that such Disposal has been duly completed.

FINANCIAL INFORMATION ON THE TARGET COMPANY AND RONGTONG

The Target Company is a company incorporated in the British Virgin Islands on 25 September 2009 and its principal business is investment holding. The Target Company will not own any asset other than its investment in Rongtong through its direct wholly-owned subsidiary upon completion of the Disposal of the Excluded WFOE.

Rongtong was established on 17 January 2011 and it commenced business operations in March 2011. According to the unaudited management accounts of Rongtong, as at 30 November 2011, Rongtong recorded unaudited revenue for the 10 months ended 30 November 2011 of approximately RMB15,400,000 (equivalent to approximately HK$18,900,000). The unaudited profit before tax and unaudited profit after tax of Rongtong for the 10 months ended 30 November 2011 amounted to approximately RMB12,200,000 (equivalent to approximately HK$14,900,000) and RMB9,200,000 (equivalent to approximately HK$11,300,000), respectively.

As at 30 November 2011, Rongtong had unaudited net assets of approximately RMB117,600,000 (equivalent to approximately HK$143,900,000) as shown in its management accounts.

The above financial information was prepared in accordance with PRC Generally Accepted Accounting Principles.

INFORMATION ON THE RELEVANT PARTIES

The Group is principally engaged in securities and insurance brokerage and margin financing in Hong Kong.

The Purchaser, a company incorporated in the British Virgin Islands with limited liability and a direct wholly-owned subsidiary of the Company, is an investment holding company.

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The Vendor, a company incorporated in the British Virgin Islands with limited liability and a direct wholly-owned subsidiary of the Guarantor, is an investment holding company. The Vendor owns the entire equity interest of the Target Company immediately prior to Completion.

The Guarantor, a company incorporated in the Cayman Islands with limited liability and the issued shares of which are listed on the Growth Enterprise Market of the Stock Exchange, is principally engaged in the provision of pawn loan, entrusted loan and financing consultancy services in the PRC and Hong Kong.

The Target Company, a company incorporated in the British Virgin Islands on 25 September 2009 with limited liability, is an investment holding company. It has an authorised capital of US$50,000 divided into 50,000 ordinary shares of US$1 each, of which 100 shares have been issued and are fully paid up. The Target Company is indirectly interested in the entire equity interest of Rongtong, a company principally engaged in the business of finance leases, leasing, sale and purchase of local and oversea leasing business and assets, determination of the residual values of leasing business, and advisory and guarantee services in relation to leasing business in Shanghai and the adjacent regions and has registered capital of HK$200,000,000 and paid up capital of HK$130,000,000.

Good Year, a company incorporated in Hong Kong with limited liability, is an investment holding company.

To the best of the knowledge, information and belief of the Directors having made all reasonably enquiries, the Vendor, the Guarantor, the Target Company, Good Year and their respective ultimate beneficial owners are Independent Third Parties.

PRINCIPAL TERMS AND CONDITIONS OF THE CONVERTIBLE BOND

Issuer: the Company Holder: the Vendor Principal Amount: HK$40,384,615 Issue Price: 100% at the full face value of the Convertible Bond Status: The Convertible Bond constitutes direct and unconditional unsubordinated and unsecured obligations of the Company and shall at all times rank pari passu and without any preference among themselves. The payment obligations of the Company under the Convertible Bond shall, save for such exceptions as may be provided by applicable legislation, at all times rank at least equally with all its other present and future unsecured and unsubordinated obligations. Form and The Convertible Bond will be issued in registered form in a single Denomination: denomination of HK$40,384,615. The certificate will be issued to the Vendor in respect of its registered holding of the Convertible Bond.

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Interest:

• 12% per annum during the period commencing from the date of issue of the Convertible Bond and ending on the maturity date. In the event that the Convertible Bond is in whole or in part converted into the Conversion Shares anytime during a particular interest period, no interest shall accrue on the Convertible Bond or any part thereof which has been converted into Conversion Shares for the whole interest period.

• Interest Period: Each period of twelve (12) calendar months, in each case beginning on 1 January of each calendar year and ending on the day immediately before the following interest payment date, except in the case of the first period when it means the period beginning on the issue date and ending on the day immediately before the following interest payment date.

• Maturity Date: Thirty-six (36) calendar months after the date of issue of the Convertible Bond.

• Conversion Price:

• HK$0.20 per Conversion Share, subject to adjustments under certain circumstances including but not limited to capitalisation issue, share consolidation, share subdivision, capital distribution and rights issue.

The initial Conversion Price of HK$0.20 per Conversion Share was determined after arm’s length negotiations among the Company, the Purchaser and the Vendor with reference to the prevailing market price of the Shares, and represent:

• (1) a premium of approximately 24.2% over HK$0.161 per Share, being the closing price as quoted on the Stock Exchange on 21 December 2011 (‘‘Last Trading Day’’);

• (2) a premium of approximately 17.8% over HK$0.170 per Share, being the average of the closing prices as quoted on the Stock Exchange for the last five consecutive trading days up to and including the Last Trading Day; and

• (3) a premium of approximately 22.9% over HK$0.163 per Share, being the average of the closing prices as quoted on the Stock Exchange for the last ten consecutive trading days up to and including the Last Trading Day.

Conversion Rights:

• Holder of the Convertible Bond will have the right at any time and from time to time during the period commencing from the date of issue of the Convertible Bond and ending on the maturity date to convert the Convertible Bond in whole or in part of the outstanding principal amount of the Convertible Bond into Conversion Shares.

Conversion Shares:

• 201,923,075 Conversion Shares would be in issue on full conversion of the Convertible Bond, subject to adjustments to the Conversion Price.

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Redemption:

• The Company shall be entitled to redeem the Convertible Bond by repaying the Vendor the then outstanding principal amount and accrued interests of the Convertible Bond commencing from the first year after the date of issue of the Convertible Bond provided that (a) the Company has served a written redemption notice to the Vendor; (b) such written notice has been duly delivered by the Company to the Vendor at least ten (10) Business Days days in advance before the date of actual redemption; and (c) the Vendor has not issued the conversion notice in respect of any outstanding principal amount the Convertible Bond.

• Redemption Amount: Unless previously redeemed or converted, the Company shall redeem the Convertible Bond by repaying the Vendor all outstanding principal amount and accrued interests of the Convertible Bond on the date that is thirty-six (36) calendar months after the date of issue of the Convertible Bond.

• Transferability: The Convertible Bond shall not be transferred or assigned by the Vendor without the prior written consent of the Company.

• Ranking of The Conversion Shares issued upon conversion of the Convertible Conversion Shares: Bonds will in all respects rank pari passu with the Shares already in issue on the conversion date.

• Listing: No application will be made by the Company for the listing of the Convertible Bond on the Stock Exchange. An application will be made by the Company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in the Conversion Shares that may be issued upon the conversion of the Convertible Bond.

The Convertible Bond in the principal amount of HK$40,384,615 will be issued to the Vendor to satisfy the Consideration for the Acquisition.

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EQUITY FUND RAISING ACTIVITIES DURING THE PAST TWELVE MONTHS

The following table summarises the equity fund raising activities of the Company during the past twelve months immediately before the date of this announcement:

				Actual use of
				proceeds as at the
Date of		Net Proceeds	Intended use of	date of this
announcement	Event	(Approximately)	proceeds	announcement
6 September 2011	Extension of option	Estimated to be a	General working	As at the date of this
	period to 36 months	maximum of HK$128	capital of the	announcement, no
	pursuant to the	million in the event	Group	option has been
	second supplemental	that the options are		exercised and
	agreement dated	fully exercised		therefore no
	6 September 2011			proceeds have been
				raised
12 May 2011	Placing of a maximum	Estimated to be	General working	Used as intended
	of 150,000,000 Shares	approximately HK$49	capital of the
	pursuant to the	million	Group
	placing agreement
	dated 12 May 2011

Save as disclosed above, there has not been any other equity fund raising activity during the past twelve months immediately before the date of this announcement.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is principally engaged in securities and insurance brokerage and margin financing in Hong Kong. As bank lending in the PRC is not able to satisfy the increasing financing requirements of small and medium enterprises in the PRC, there has been significant development in alternative financing markets that are complementary to traditional bank lending in the PRC. It has led to the development of a more diversified domestic financing market platform, which has resulted in favourable market opportunities for the further development of the finance leasing industry in the PRC.

The Directors consider that the entering into of the Sale and Purchase Agreement and the Shareholders’ Agreement allows the Group to extend its scope of business to prepare itself to become a full range financial services provider. The Acquisition is in line with the existing principal business of the Group. The Directors believe that the Acquisition provides an opportunity for the Group to enter into the finance leases business in the PRC, which would also provide an additional income source for the Group. The Directors also consider that the Acquisition is an appropriate strategic expansion for and beneficial to the Group.

By leveraging on the expertise of Rongtong in operating finance leasing business in the PRC, the Directors believe that the Target Company (through its subsidiaries) is well-positioned to capture the business opportunities emerging from the great demand for finance leasing and related services in the PRC.

The Directors, including all the independent non-executive Directors, consider that the entering into of the Sale and Purchase Agreement and the Shareholders’ Agreement are on normal commercial terms, and the terms of which are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

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EFFECTS ON SHAREHOLDING STRUCTURE OF THE COMPANY

The table below sets out the shareholding structure of the Company as at the date of this announcement and immediately after the completion of the Acquisition and conversion of the Convertible Bond:

Jadehero Limited (Note 1) Mankind Investment Limited (Note 2) Vendor Existing public Shareholders	As at the date of this announcement Number of Shares Approximate % 800,000,000 26.02% 500,000,000 16.26% — — 1,774,085,668 57.72% 3,074,085,668 100%	Immediately after the completion of the Acquisition (assuming the Convertible Bond are converted in full at the initial Conversion Price) Number of Shares Approximate % 800,000,000 24.42% 500,000,000 15.26% 201,923,075 6.17% 1,774,085,668 54.15% 3,276,008,743 100%	Immediately after the completion of the Acquisition (assuming the Convertible Bond are converted in full at the initial Conversion Price) Number of Shares Approximate % 800,000,000 24.42% 500,000,000 15.26% 201,923,075 6.17% 1,774,085,668 54.15% 3,276,008,743 100%
			100%

Notes:

1. These Shares are directly held by Jadehero Limited (‘‘Jadehero’’) and in addition to these 800,000,000 Shares, Jadehero is also interested in 800,000,000 underlying shares as at the date of this announcement.

Jadehero is a company incorporated in the British Virgin Islands with limited liability. It is owned as to 20% by Marvel Steed Limited and as to 80% by Southlead Limited. Mr. Wong Kam Fa, Tony (‘‘Mr. Wong’’) is the sole beneficial owner of the entire equity interest in Marvel Steed Limited whereas Mr. Xia Yingyan (‘‘Mr. Xia’’) is the sole beneficial owner of the entire equity interest in Southlead Limited. Accordingly, Mr. Wong and Mr. Xia are deemed to be interested in these Shares.

The 800,000,000 underlying shares are shares falling to be issued upon full exercise of options 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. It may fall to be issued upon full exercise of the options which is convertible into a maximum 800,000,000 Shares.

1. These Shares are held by Mankind Investment Limited (‘‘Mankind Investment’’), a company incorporated in the British Virgin Islands with limited liability. Mankind Investment is wholly-owned by China Cinda (HK) Asset Management Co., Limited (‘‘China Cinda HK’’), a company incorporated in Hong Kong with limited liability. China Cinda HK is in turn wholly-owned by Well Kent International Investment Company Limited (‘‘Well Kent’’), a company incorporated in Hong Kong with limited liability. Well Kent is in turn wholly-owned by China Cinda Asset Management Co. Ltd. (‘‘China Cinda’’), a company established in the PRC. As such, each of China Cinda HK, Well Kent and China Cinda is deemed to be interested in the aforesaid Shares held by Mankind Investment.

IMPLICATIONS UNDER THE LISTING RULES

As the applicable percentage ratios as set out in Rule 14.07 of the Listing Rules are more than 5% but less than 25%, the Acquisition constitutes a discloseable transaction of the Company pursuant to Rule 14.06 of the Listing Rules and is subject to the disclosure requirements under Chapter 14 of the Listing Rules.

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DEFINITIONS

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

• ‘‘Acquisition’’ the acquisition of the Sale Shares and the Sale Loan by the Purchaser in accordance with the terms of the Sale and Purchase Agreement

• ‘‘Board’’ the board of the Directors ‘‘Business Day’’ a day (other than a Saturday, Sunday and public holiday in Hong Kong) on which licensed banks are generally open for business in Hong Kong throughout their normal business hours

• ‘‘Company’’ China Fortune Financial Group Limited, a company incorporated in the Cayman Islands with limited liability and the shares of which are listed on the Main Board of the Stock Exchange (stock code: 290)

• ‘‘Completion’’ completion of the sale and purchase of the Sale Shares and the Sale Loan in accordance with the terms and conditions of the Sale and Purchase Agreement

• ‘‘Consideration’’ the consideration of HK$40,384,615 for the Acquisition payable to the Vendor by the Purchaser upon Completion

• ‘‘Conversion Price’’ HK$0.20 per Conversion Share, subject to adjustments in accordance with the terms and conditions of the Convertible Bond

• ‘‘Conversion new Share(s) to be allotted and issued by the Company upon exercise Share(s)’’ of the conversion rights attaching to the Convertible Bond

• ‘‘Convertible Bond’’ convertible bonds in the principal amount of HK$40,384,615 to be issued by the Company to the Vendor for settlement of the Consideration

• ‘‘Disposal’’ the disposal of the Excluded WFOE by the Target Company by way of transferring the entire equity interest in the Excluded WFOE (including all assets and liabilities, earnings or losses prior to the date of disposal) to the Guarantor or its subsidiaries

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘Excluded WFOE’’ 峻岭物業顧問（上海）有限公司 (**Lucky Target Property Consultants (Shanghai) Company Limited), a wholly-foreign-owned enterprise established in the PRC and an indirect wholly-owned subsidiary of the Target Company

• ‘‘General Mandate’’ the general mandate granted to the Directors to issue, allot and deal with 614,817,133 new Shares, being 20% of the total issued share of the Company as at the date of passing the relevant resolution at the annual general meeting on 12 August 2011

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• ‘‘Good Year’’ Goodyear International Capital Limited, a company incorporated in Hong Kong with limited liability, is an investment holding company and an Independent Third Party

• ‘‘Group’’ the Company and its subsidiaries ‘‘Guarantor’’ Credit China Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the issued shares of which are listed on the Growth Enterprise Market of the Stock Exchange (stock code: 8207)

• ‘‘GY SPA’’ the sale and purchase agreement entered into between the Vendor and Good Year relating to the sale and purchase of 30% of the entire issued share capital of the Target Company and an interest-free ondemand loan of HK$27,692,308 due from the Target Company to the Vendor, which is to be assigned to Good Year

• ‘‘HK$’’ Hong Kong dollar, the lawful currency of Hong Kong ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC ‘‘Independent Third person(s) or company(ies) and their respective ultimate beneficial Party(ies)’’ owner(s) which, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of and not connected with the Company and its connected persons as defined under the Listing Rules

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• ‘‘PRC’’ the People’s Republic of China, and, for the purpose of this announcement, excludes Hong Kong, Macau Special Administration Region and Taiwan

• ‘‘Purchaser’’ Promiseasy Limited, a company incorporated in the British Virgin Islands with limited liability and a direct wholly-owned subsidiary of the Company

• ‘‘Purchaser the representations and warranties given by the Purchaser as set out in Warranties’’ the Sale and Purchase Agreement

• ‘‘RMB’’ Renminbi, the lawful currency of the PRC ‘‘Rongtong’’ 融通融資租賃（上海）有限公司 (**Rongtong Finance Lease (Shanghai) Company Limited), a company principally engaged in the business of finance leases, leasing, sale and purchase of local and oversea leasing business and assets, determination of the residual values of leasing business, and advisory and guarantee services in relation to leasing business in Shanghai and the adjacent regions, which is a whollyforeign-owned enterprise established in the PRC and an indirect wholly-owned subsidiary of the Target Company

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• ‘‘Sale and Purchase the sale and purchase agreement dated 21 December 2011 entered into Agreement’’ between the Vendor, the Guarantor, the Company and the Purchaser relating to the sale and purchase of the Sale Shares and the Sale Loan

• ‘‘Sale Loan’’ an interest-free on-demand loan of HK$32,307,692 due from the Target Company to the Vendor, which is to be assigned to the Purchaser

• ‘‘Sale Shares’’ 35 shares or such number of shares (if applicable) of US$1.00 each in the issued share capital of the Target Company beneficially held by the Vendor, representing 35% of the issued share capital of the Target Company as at Completion

‘‘Share(s)’’ the ordinary share(s) of HK$0.01 each in the share capital of the Company ‘‘Shareholder(s)’’ holder(s) of the shares of the Company ‘‘Shareholders’ the shareholders’ agreement to be entered into among the Target Agreement’’ Company, the Vendor, Good Year and the Purchaser upon Completion in relation to the affairs, business and management of the Target Company and its relationship to each of its shareholders ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘Target Company’’ Measure Up International Limited, a company incorporated in the British Virgin Islands with limited liability, is an investment holding company and an indirect wholly-owned subsidiary of the Guarantor

• ‘‘Taxation’’ liability to any form of taxation (including, taxes, withholding taxes, duties, imposts, levies, rates or any other amounts payable to any revenue, customs or similar authorities in any part of the world) whenever and wherever created and including an amount equal to any deprivation of any relief from taxation and all costs, interest, penalties, charges and expenses incurred in connection with such taxation of failure to pay such taxation

• ‘‘US$’’ United States dollar(s), the lawful currency of the United States of America

• ‘‘Vendor’’ Ever Step Holdings Limited, a company incorporated in the British Virgin Islands with limited liability, is an investment holding company and a direct wholly-owned subsidiary of the Guarantor

‘‘Vendor Warranties’’ the representations and warranties given by the Vendor set out in the Sale and Purchase Agreement ‘‘%’’ per cent.

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For the purpose of this announcement, the exchange rate of HK$1 to RMB0.817 has been used for currency translation, where applicable. Such exchange rate is for illustration purpose only and do not constitute representations that any amount in HK$ or RMB have been, could have been or may be converted at such rate.

• ** The English transliteration of the Chinese name in this announcement, where indicated, is included for information purpose only, and should not be regarded as the official English name of such Chinese name

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

Hong Kong, 21 December 2011

As at the date of this announcement, the Board consists of five executive Directors, namely Mr. Zhang Min (Chairman), Mr. Ng Cheuk Fan, Keith (Managing Director), Mr. Hon Chun Yu, Mr. Xia Yingyan and Mr. Yeung Kwok Leung; two non-executive Directors, Mr. Wong Kam Fat, Tony (Vice-chairman) and Mr. Wu Ling and three independent non-executive Directors, namely, Mr. Lam Ka Wai, Graham, Mr. Ng Kay Kwok and Mr. Tam B Ray Billy.

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