Television Broadcasts Limited — Proxy Solicitation & Information Statement 2011

Jul 15, 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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China Fortune Group Limited

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 290)

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

(I) TERMINATION OF EXISTING SHARE OPTION SCHEME AND ADOPTION OF NEW SHARE OPTION SCHEME (II) CHANGE OF COMPANY NAME AND

(III) NOTICE OF EXTRAORDINARY GENERAL MEETING

Terms used in this cover page, have the same meanings as defined in this circular.

A notice convening the EGM to be held at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong on 19 August 2011 at 11:00 a.m. is set out on pages 20 to 22 of this circular. A form of proxy for the EGM is enclosed with this circular. Whether or not you are able to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch registrar and transfer office in Hong Kong, Union Registrars Limited, at 18th Floor, 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 EGM 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 EGM if you so wish.

18 July 2011

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	The Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix	— Principal Terms Of The New Share Option Scheme . . . . . . . . . . . . . . . . . . . . . .	12
Notice of the Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		20

– i –

DEFINITIONS

Unless the context otherwise requires, terms or expressions used in this circular shall have the meaning ascribed to them below:

• ‘‘Adoption Date’’

being the date on which the New Scheme was adopted by an ordinary resolution passed by the Shareholders at the EGM

• ‘‘Associate(s)’’ or ‘‘associate(s)’’

• has the meaning ascribed thereto under the Listing Rules

• ‘‘Auditors’’ means the auditors for the time being of the Company

• ‘‘Board’’ the board of Directors

• ‘‘Business Associate’’

• an individual or entity who may be:

• (a) any advisor or consultant (in the areas of legal, technical, financial, corporate, managerial or any business or business development of the Group or a Subsidiary or any Invested Entity) to the Group or a Subsidiary or any Invested Entity;

• (b) any provider or supplier of goods or services to the Group or a Subsidiary or any Invested Entity;

• (c) any customer of the Group or of any Invested Entity

• ‘‘Business Day’’

• any day (excluding Saturday and Sunday) on which banks in Hong Kong generally are open for business and the Stock Exchange is open for the business of dealing in securities

• ‘‘Change of Company Name’’ the change of the name of the Company from ‘‘China Fortune Group Limited 中國富強集團有限公司’’ to ‘‘China Fortune Financial Group Limited 中國富強金融集團有限公司’’, to be proposed at the EGM

• ‘‘Company’’ China Fortune Group Limited, a company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the main board of the Stock Exchange

• ‘‘Connected Person(s)’’ has the meaning as ascribed under the Listing Rules

• ‘‘Director(s)’’ means a director of the Company from time-to-time (inclusive of any non-executive director or independent non-executive director of the Company) and ‘‘Directors’’ shall be construed accordingly

• ‘‘EGM’’ the extraordinary general meeting of the Company to be convened and held on 19 August 2011 at 11:00 a.m. for the purpose of considering and, if thought fit, to approve, inter alia, (i) the termination of the Existing Scheme and adoption of the New Scheme and (ii) the Change of Company Name

– 1 –

DEFINITIONS

‘‘Employee’’ any Director or employee of the Company, whether full time or otherwise, or any employee or director (inclusive of any executive director, non-executive director and independent nonexecutive director) of any Subsidiary or Invested Entity, whether full-time or otherwise, and ‘‘Employees’’ shall be interpreted and construed accordingly ‘‘Existing Scheme’’ the existing share option scheme of the Company adopted pursuant to a resolution passed by the then Shareholders on 12 February 2003 ‘‘Grantee’’ means any Participant who accepts an Offer in accordance with the provisions of this New Scheme, or (where the context so permits) the legal personal representative(s) entitled to such Option in consequence of the death of the original Grantee (being an individual), or (where the context so permits) a nominee who is appointed in accordance with the provisions of the New Scheme; and ‘‘Grantees’’ shall be interpreted and construed accordingly ‘‘Group’’ the Company and its Subsidiaries, from time-to- time ‘‘Hong Kong’’ The Hong Kong Special Administrative Region of the PRC

• ‘‘Invested Entity’’ any entity in which the Company or any Subsidiary holds an equity interest

• ‘‘Latest Practicable Date’’ 13 July 2011, being the latest practicable date prior to the printing of this circular for the purposes of ascertaining certain information contained herein

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange from time-to-time in force

• ‘‘New Principal Place of Business the new principal place of business in Hong Kong of the in Hong Kong’’ Company will be 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong with effect from 1 August 2011

• ‘‘New Scheme’’ the new share option scheme proposed to be adopted by the Company at the EGM, a summary of its principal terms is set out in the appendix to this circular (or as the case may be, refer to such new scheme which having been approved at the EGM and subsequently amended from time-to-time in accordance with the provisions thereof)

‘‘Offer’’ the offer of the grant of an Option to any Participant as the Board may make in accordance with the New Scheme

– 2 –

DEFINITIONS

• ‘‘Offer Date’’ the date on which an Offer is made to a Participant under and pursuant to the New Scheme

• ‘‘Option’’ a right to subscribe for Shares pursuant to the New Scheme, and ‘‘Options’’ shall be interpreted and construed accordingly

‘‘Option Holder’’ a person holding an Option (and, where relevant, includes his personal representatives)

• ‘‘Option Period’’ in respect of any particular Option, a period (which may not expire later than 10 years from the Offer Date of that Option) to be determined and notified by the Board to the Grantee thereof and, in the absence of such determination, from the Offer Date to the earlier of (i) the date on which such Option lapses under the provisions herein; and (ii) 10 years from the Offer Date of that Option

• ‘‘Participant’’ any Employee or Business Associate (as the case may be) who satisfies the eligibility criteria set out in the New Scheme and ‘‘Participants’’ shall be construed accordingly

• ‘‘Personal Representative(s)’’ the person or persons who, by virtue of the laws of succession applicable in respect of the death of a Grantee (being an individual), is or are entitled to exercise the Option granted to such Grantee (to the extent not already exercised)

• ‘‘PRC’’ The People’s Republic of China (for the purpose of this circular, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan)

• ‘‘Shares’’ shares of HK$0.10 each of the Company, or, if there has been a sub-division, consolidation, re-classification or re-construction of the share capital of the Company, shares forming part of the ordinary equity share capital of the Company of such other nominal amount as shall result from any such sub-division, consolidation, re-classification or re-construction, and ‘‘Share’’ shall be interpreted and construed accordingly

• ‘‘Shareholders’’ holders of Share(s) and each individually a ‘‘Shareholder’’

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Subscription Price’’ the price per Share at which a Grantee may subscribe for Shares on the exercise of an Option as described herein

• ‘‘Subsidiary’’

has the meaning as ascribed under the Listing Rules

– 3 –

DEFINITIONS

‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘%’’ per cent

The English text of this circular prevails over its Chinese translation in the case of discrepancy.

– 4 –

LETTER FROM THE BOARD

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China Fortune Group Limited

(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. Yeung Kwok Leung Mr. Hon Chun Yu Mr. Xia Yingyan

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:

13th Floor, Sunning Plaza 10 Hysan Avenue Causeway Bay Hong Kong

Mr. Ng Kay Kwok Mr. Lam Ka Wai, Graham Mr. Tam B Ray Billy

18 July 2011

• To the Shareholders, and for information purpose only, the holders of warrants and convertible securities of the Company

Dear Sir or Madam

(I) TERMINATION OF EXISTING SHARE OPTION SCHEME AND ADOPTION OF NEW SHARE OPTION SCHEME AND (II) CHANGE OF COMPANY NAME

INTRODUCTION

The Directors propose (1) to terminate the Existing Scheme and adopt the New Scheme and (2) the Change of Company Name.

The purpose of this circular is to provide you with further details of (i) the termination of the Existing Scheme and the adoption of the New Scheme, (ii) the Change of Company Name and (iii) the notice of EGM.

– 5 –

LETTER FROM THE BOARD

TERMINATION OF EXISTING SCHEME

By a resolution of the then Shareholders passed on 12 February 2003, the Existing Scheme was adopted. Under the Existing Scheme, the Directors were authorized to grant options to subscribe for Shares to any full-time employee (including executive Director) of any member of the Group.

As at the Latest Practicable Date, the Company does not have any option outstanding pursuant to the Existing Scheme and nor does it maintain any share option scheme other than the Existing Scheme.

The Board proposes to terminate the Existing Scheme and adopt the New Scheme, both of which are subject to the approval of the Shareholders at the EGM. Upon the termination of the Existing Scheme, if so approved, no further options shall be offered or granted pursuant to the Existing Scheme.

ADOPTION OF NEW SCHEME

The New Scheme

Set out in the appendix to this circular is a summary of the principal terms of the New Scheme, which serves to summarize the terms of the New Scheme, but does not constitute the full terms of the same. A copy of the full terms of the New Scheme will be available for inspection at the New Principal Place of Business in Hong Kong of the Company at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong during normal business hours for a 14-day period immediately preceding the date of the EGM and also at the EGM.

With its broadened basis of participation, under the New Scheme, the Participants, at the absolute discretion of the Board, may include any party who is (a) an Employee; or (b) a Business Associate; or (c) a person or entity that provides research, development or other technological support to the Group or any Invested Entity; or (d) a shareholder of any member of the Group or any Invested Entity or any holder of any securities issued by any member of the Group or any Invested Entity.

The total number of Shares which may be allotted and issued upon exercise of all outstanding Options granted under the New Scheme and any other share option schemes of the Company must not, in aggregate, exceed 10% of the Shares in issue on the date of approval of the New Scheme by the Shareholders (the ‘‘General Scheme Limit’’). This 10% limit may, however, be refreshed as detailed in paragraph 3 of the appendix to this circular.

On the basis of there being 2,924,085,668 Shares in issue as at the Latest Practicable Date and that no Shares are issued or repurchased by the Company prior to the EGM, the General Scheme Limit will be 292,408,566 Shares.

The Company is not required to appoint any trustee for the purpose of administering the New Scheme. The Board does not intend to appoint any trustee for the purpose of administering the New Scheme. The New Scheme will be subject to administration of the Board.

To the best knowledge of the Directors, as at the Latest Practicable Date, no Shareholder has a material interest in the New Scheme different to that of any other Shareholder and accordingly, no Shareholder is required to abstain from voting at the EGM on the resolution approving the adoption of the New Scheme.

– 6 –

LETTER FROM THE BOARD

Material differences between the New Scheme and the Existing Scheme

• Issues Existing Scheme New Scheme Time for compliance and/ No specific time limit for All conditions precedent shall be or satisfaction of compliance and/or satisfaction of complied and/or satisfied within 60 conditions precedent conditions precedent days of the board meeting approving the New Scheme

• Option Period 5 years, commencing on the date of 10 years, commencing on the date acceptance of grant of Option of the Offer

• Time of acceptance of Acceptance of an Offer must be An Offer must be accepted within Option received by the secretary of the 28 days from the Offer Date Company within a period of 30 days inclusive of, and from the date of grant of an Option

• Class of Participants eligible employee (namely, any eligible Participants (namely, any full-time employee (including Employee; any Business Associate; executive director) whom the Board any person or entity that provides confirms to be eligible) research, development or other

eligible Participants (namely, any Employee; any Business Associate; any person or entity that provides research, development or other technological support to the Group or any Invested Entity; and any shareholder of any member of the Group or any Invested Entity or any holder of any securities issued by any member of the Group or an Invested Entity)

• Rights to exercise Option If employment of an Option Holder after cessation of employee ceases by reason of employment death, ill-health or retirement, the employee or his Personal Representatives (as the case may be) may exercise all outstanding Options within 6 months of such cessation

If employment of Option Holder employee ceases by reason of death, ill-health or retirement, the employee or his Personal Representatives (as the case may be) may exercise all outstanding Options within 12 months of such cessation

– 7 –

LETTER FROM THE BOARD

Issues

Existing Scheme

New Scheme

If employment of an Option Holder employee ceases by reason other than death, ill-health, retirement, voluntary resignation, termination of employment in accordance with the relevant provisions of the contract of employment, inability to repay debt, or bankruptcy, any outstanding Option may be exercised within 1 month of cessation

If the Option Holder employee ceases to be an employee for any reason other than death, ill-health or retirement in accordance with his contract of employment or for serious misconduct or other grounds referred to in the New Scheme before exercising his Option in full, the Option (to the extent not already exercised) will lapse on the date of cessation and will not be exercisable unless the Board otherwise determine.

Right of Grantees in the case of a General Offer

In the case of a general offer, subject to the conditions set out in the Existing Scheme, each Option Holder shall be entitled to exercise any outstanding Option within 14 days after the offeror (of the general offer) has obtained control of the Company; and

In the case of a general or partial offer, subject to the conditions set out in the New Scheme, a Grantee shall be entitled to exercise any outstanding Option at any time before the close of such offer (or any revised Offer)

Any Option which has not been so exercised shall, upon expiry of the 14 days’ period, cease and determine provided that if, during such period, such Option Holder becomes entitled to exercise rights of compulsory acquisition of Shares and gives notice of his intention to exercise such rights, the Option shall be and remain exerciseable until one (1) month from the date of such notice

Conditions of the adoption of the New Scheme

The adoption of the New Scheme is conditional upon (i) the approval of the termination of the Existing Scheme, the adoption of the New Scheme and the allotment and issuance of the Shares which may fall to be allotted and issued upon the exercise of any Options granted under the New Scheme by the Shareholders at the general meeting of the Company; and (ii) the Stock Exchange granting approval of the listing of, and permission to deal in the Shares which may fall to be allotted and issued upon the exercise of the Options to be granted under the New Scheme up to a maximum of 10% of the Shares in issue as at the date of the EGM.

– 8 –

LETTER FROM THE BOARD

Application will be made to the Stock Exchange for the approval of the listing of, and permission to deal in the Shares representing 10% of the issued share capital of the Company as at the date of the EGM which may fall to be allotted and issued upon the exercise of Options to be granted under the New Scheme.

Reasons for the proposal

The Exiting Scheme will expire on 12 February 2013. The Directors consider that it is appropriate to adopt the New Scheme due to the following:

The purpose of the New Scheme is to enable the Group to recruit and retain senior management and key employees, attract human resources that are valuable to the Group and the Invested Entity, and to provide the Participants with an opportunity to have a personal stake in the Company through the Company offering the grant of Options with the view to motivate the Participants to optimize their performance and efficiency for the benefit of the Group or the Invested Entity. With this in mind, the management of the Company proposes that the Existing Scheme should be replaced by the New Scheme so as to further expand the scope of persons being eligible to participate in the share option scheme of the Company, that is, the Participants that the New Scheme is intended to benefit.

The scope of Participants under the New Scheme is wider than that under the Existing Scheme — not only does it encompass full-time employees (including executive Directors) of any member of the Group, but it also encompasses, among others, (a) any Employee; (b) any Business Associate; (c) any person or entity that provides research, development or other technological support to the Group or any Invested Entity; and (d) any shareholder of any member of the Group or any Invested Entity or any holder of any securities issued by any member of the Group or any Invested Entity. In line with the purpose of the New Scheme to enable the Group to grant Options to selected Participants as incentives or rewards for their contribution to the Group, by extending the definition of ‘‘Eligible Participants’’ to include Business Associate, the Company has the alternative to reward Business Associate by way of granting Options. The grant of Options also provide the Business Associates with the opportunity to have an equity interest in the Company which will help foster a stronger business relationship between the Business Associates and the Group thus contributing to the long term growth of the Group.

Having taken into account the above-mentioned reasons and factors, the Directors consider that the adoption of the New Scheme is in the interests of the Company and the Shareholders as a whole.

Proceeds derived from the New Scheme shall be used as general working capital of the Company.

Value of all Options that can be granted under the New Scheme

The Directors consider that it is inappropriate to state the value of all Options that may be granted pursuant to the New Scheme as if they had been granted on the Latest Practicable Date, because the calculation of the value of the Options is based on a number of variables such as the exercise price, exercise period, interest rate, expected volatility and other relevant variables. As no Option has been granted under the New Scheme, such variables are not available for the purposes of calculating the value

– 9 –

LETTER FROM THE BOARD

of the options that can be granted under the New Scheme. The Directors believe that any calculation of the value of the Options as at the Latest Practicable Date based on such numerous speculative assumptions would not be meaningful to the Shareholders.

CHANGE OF COMPANY NAME

The Board propose to change the name of the Company from ‘‘China Fortune Group Limited 中國 富強集團有限公司’’ to ‘‘China Fortune Financial Group Limited 中國富強金融集團有限公司’’.

Conditions for the Change of Company Name

The proposed Change of Company Name is subject to the following conditions:

• (i) the passing of a special resolution by the Shareholders at the forthcoming EGM approving the proposed Change of Company Name; and

• (ii) the Registrar of Companies in the Cayman Islands granting approval for the proposed Change of Company Name.

The new name of the Company will take effect from the date on which the Registrar of Companies in the Cayman Islands enters the new name of the Company on the register in place of the existing name. The Registrar of Companies in the Cayman Islands shall issue the certificate of incorporation on change of name thereafter. The Company will then carry out all necessary filing procedures in Hong Kong.

Reason for the Change of Company Name

The Board is of the view that the new name will better reflect the nature and business development of the Company. This change will not affect the Company’s existing business.

The Board believes that the proposed Change of Company Name is in the interests of the Company and the Shareholders as a whole.

Effect of Change of Company Name

The Change of Company Name will not affect any of the rights of the holders of securities of the Company. All existing share certificates of the Company in issue bearing the existing name of the Company will, after the Change of Company Name becoming effective, continue to be evidence of title to such securities and will remain to be valid for trading, settlement, registration and delivery purposes. Accordingly, there will not be any arrangement for free exchange of the existing share certificates for new share certificates bearing the new name of the Company.

Upon the Change of Company Name becoming effective, new share certificates of the Company will be issued under the new name. The English and the Chinese stock short names of the Company will also be changed.

Further announcement(s) will be made by the Company when the Change of Company Name becomes effective, to inform the Shareholders of the relevant trading arrangement and the new English and Chinese stock short names pursuant to the Change of Company Name.

– 10 –

LETTER FROM THE BOARD

EGM

The EGM will be held to consider and, if thought fit, pass (i) the ordinary resolution to terminate the Existing Scheme and the adoption of the New Scheme and (ii) the special resolution to approve the Change of Company Name.

A notice convening the EGM to be held on 19 August 2011 at 11:00 a.m. at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong is set out on pages 20 to 22 of this circular.

A form of proxy for the EGM is enclosed with this circular. Whether or not you will be able to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the branch share registrar and transfer office of the Company in Hong Kong, Union Registrars Limited, at 18th Floor, 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 EGM 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 EGM or any adjournment thereof if you so wish. In compliance with the Listing Rules, all the proposed resolutions will be taken by way of poll at the EGM.

RECOMMENDATION

The Directors consider that the proposed resolutions in respect of the termination of the Existing Scheme and the adoption of the New Scheme and the Change of Company Name as set out in the notice of the EGM are all in the interests of the Company and the Shareholders as a whole. Accordingly, The Directors recommend all Shareholders to vote in favour of all the proposed resolutions at the EGM.

RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

ADDITIONAL INFORMATION

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

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

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PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX

Following is a summary of the principal terms and conditions of the New Scheme which serves to summarize the terms of the proposed New Scheme, but does not constitute the full terms of the same.

1. PURPOSES OF THE NEW SCHEME

The purpose of the New Scheme is to enable the Group to grant Options to selected Participants as incentives or rewards for their contribution to the Group. The Directors consider the New Scheme, with its broadened basis of participation, will enable the Group to reward the Employees, Business Associate and other selected Participants (as defined below) for their contributions to the Group.

2. PARTICIPANTS

The Board (which expression shall, for the purpose of this appendix, include a duly authorised committee thereof) may, at its absolute discretion, invite any person belonging to any of the following classes of Participants, to take up Options to subscribe for Shares:

• (a) any Employee;

• (b) any Business Associate;

• (c) any person or entity that provides research, development or other technological support to the Group or any Invested Entity; or

• (d) any shareholder of any member of the Group or any Invested Entity or any holder of any securities issued by any member of the Group or an Invested Entity.

• (the persons referred above are the ‘‘Participants’’)

The eligibility of any of the above class of Participants to the grant of any Option shall be determined by the Directors from time to time on the basis of the Directors’ opinion as to his contribution to the development and growth of the Group.

3. MAXIMUM NUMBER OF SHARES

• (a) The maximum number of Shares to be issued upon the exercise of all outstanding Options granted and yet to be exercised under the New Scheme and any other share option schemes of the Company (including the Existing Scheme) shall not in aggregate exceed 30% of the issued share capital of the Company from time to time.

• (b) The initial total number of Shares which may be issued upon exercise of all Options (excluding, for this purpose, Options which have lapsed in accordance with the terms of the New Scheme and any other share option schemes of the Company) to be granted under the New Scheme and any other share option schemes of the Company shall not in aggregate exceed 10% of the Shares in issue as at the Adoption Day (the ‘‘General Scheme Limit’’).

• (c) Subject to Clause 5(a) above but without prejudice to Clause 5(d) below, the Company may issue a circular to the Shareholders and seek approval of the Shareholders in general meeting to refresh the General Scheme Limit provided that the total number of Shares which may be issued upon exercise of all Options to be granted under the New Scheme and any other share

– 12 –

PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX

options schemes of the Company shall not exceed 10% of the Shares in issue as at the date of approval of the refreshed limit and for the purpose of calculating the refreshed limit, Options (including those outstanding, cancelled, lapsed or exercised in accordance with the New Scheme and any other share option schemes of the Company) previously granted under the New Scheme and any other share option schemes of the Company will not be counted.

• (d) Subject to Clause 5(a) above and without prejudice to Clause 5(c) above, the Company may seek separate Shareholders’ approval in general meeting to grant Options beyond the General Scheme Limit or, if applicable, the refreshed limit referred to in Clause 5(c) above to Participants specifically identified by the Company before such approval is sought. In such event, the Company shall send a circular to the Shareholders containing information required under the Listing Rules.

4. MAXIMUM ENTITLEMENT OF EACH PARTICIPANT

• (a) The total number of Shares issued and which may fall to be issued upon exercise of the Options granted under the New Scheme and any other share option schemes of the Company (including both exercised or outstanding Options) to each Participant in any 12-month period shall not exceed 1% of the issued share capital of the Company for the time being (the ‘‘Individual Limit’’). Any further grant of Options to a Participant in excess of the Individual Limit (including exercised, cancelled and outstanding Options) in any 12-month period up to and including the date of such further grant shall be subject to the issue of a circular to the Shareholders and the Shareholders’ approval in general meeting of the Company.

5. GRANT OF OPTIONS TO CONNECTED PERSONS

• (a) Any grant of Options under the New Scheme to a Director, chief executive or substantial Shareholder of the Company shall be approved by independent non-executive Directors (excluding any independent non-executive Director who is the Grantee of the Options in question).

• (b) Where any grant of Options to a substantial Shareholder or an independent non-executive Director would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

• (i) representing in aggregate over 0.1% of the Shares in issue; and

• (ii) having an aggregate value, based on the closing price of the Shares at the date of each grant, in excess of HK$5,000,000;

such further grant of Options shall be approved by the Shareholders in general meeting. The Company shall send a circular to the Shareholders containing the information required under the Listing Rules. Any change in the terms of Options granted to a substantial Shareholder or an independent non-executive director of the Company shall be approved by the Shareholders in general meeting.

– 13 –

PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX

6. TIME OF ACCEPTANCE AND EXERCISE OF OPTION

• (a) An Offer may be accepted by a Participant within 28 days from the Offer Date. A consideration of HK$1.00 is payable on acceptance of the Offer. An Option may be exercised in accordance with the terms of the New Scheme at any time during a period to be determined and notified by the Board to each Grantee, which period may commence on the Offer Date but shall end in any event prior to the expiration of the Option Period.

• (b) Unless the Board otherwise determined and stated in the Offer to a Participant, there is no minimum period for which an Option granted under the New Scheme shall be held before it can be exercised.

• (c) Any Offer may be accepted in respect of less than the number of Shares to which the offered Option relates provided that it is accepted in respect of a board lot for dealing in Shares on the Stock Exchange or an integral multiple thereof.

• (d) The Board may on a case-by-case basis and at its discretion when and whenever an Offer is or will be made, impose any criteria, conditions, restrictions or limitations in relation thereto additional to those expressly set forth in the New Scheme as it may think fit (but which shall be stated in the Offer).

• (e) An Offer shall not be made or an Option shall not be granted (i) after a price sensitive event has occurred or a price sensitive matter has been the subject of a decision until such price sensitive information has been published pursuant to the requirements of the Listing Rules; or (ii) in particular, during the period commencing one month (or such period of time as the Listing Rules may require from time-to-time) immediately preceding the earlier of:

• (i) the date of the board meeting for the approval of the Company’s results for any year, half-year, quarterly or any other interim period (whether or not required under the Listing Rules); and

• (ii) the deadline for the Company to publish announcement of results for any year or halfyear under the Listing Rules, or quarterly or any other interim period (whether or not required under the Listing Rules),

and ending on the date of the results announcement. Such period will cover any period of delay in the publication of a results announcement.

7. PERFORMANCE TARGETS

Unless the Directors otherwise determined and stated in the Offer to a Participant, the Participant concerned is not required to achieve any performance targets before any Options granted under the New Scheme can be exercised.

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PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX

8. SUBSCRIPTION PRICE FOR SHARES AND CONSIDERATION FOR THE OPTION

The Subscription Price for Shares under the New Scheme will be a price determined by the Directors, but shall not be less than the higher of (i) the closing price of Shares as stated in the Stock Exchange’s daily quotations sheet on the date of the Offer of grant, which shall be a Business Day; (ii) the average closing price of Shares as stated in the Stock Exchange’s daily quotations for the 5 trading days immediately preceding the date of the Offer of grant; and (iii) the nominal value of the Shares.

9. RANKING OF SHARES

• (a) The Shares to be allotted and issued upon the exercise of an Option will be subject to the articles of association of the Company and will rank pari passu in all respects with the fully paid Shares as at the date of allotment or, if that date falls on a day when the register of members of the Company is closed, the first day of the re-opening of the register of members (the ‘‘Exercise Date’’) and accordingly will entitle the holders thereof to participate in all dividends or other distributions paid or made on or after the Exercise Date other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date there for shall be before the Exercise Date. A Share allotted upon the exercise of an Option shall not carry voting rights until the completion of the registration of the Grantee on the register of members of the Company as the holder thereof.

• (b) Unless the context otherwise requires, references to ‘‘Shares’’ in this paragraph include references to Shares in the ordinary equity share capital of the Company of such nominal amount as shall result from a subdivision, consolidation, re-classification or reduction of the Share capital of the Company from time to time.

10. PERIOD OF THE NEW SCHEME

The New Scheme shall remain in force for a period of 10 years commencing on the Adoption Date (the ‘‘Effective Period’’). To avoid any doubt, the Option Period may continue to run notwithstanding the expiration of the Effective Period provided that provisions of the New Scheme are fully and wholly complied with.

11. RIGHTS ON CEASING EMPLOYMENT

If the Grantee is an Employee and ceases to be an Employee for any reason other than death, illhealth or retirement in accordance with his contract of employment or for serious misconduct or other grounds referred to in Clause 15 below before exercising his Option in full, the Option (to the extent not already exercised) will lapse on the date of cessation and will not be exercisable unless the Board otherwise determine.

12. RIGHTS ON DEATH, ILL-HEALTH OR RETIREMENT

If the Grantee is an Employee and ceases to be an Employee by reason of his death, ill-health or retirement in accordance with his contract of employment before exercising the Option in full, his Personal Representative(s), or, as appropriate, the Grantee may exercise the Option (to the extent not

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PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX

already exercised) in whole or in part within a period of 12 months following the date of cessation which date shall be the last day on which the Grantee was at work with the Group or the Invested Entity whether salary is paid in lieu of notice or not or such longer period as the Board may determine.

13. RIGHTS ON DISMISSAL

If the Grantee is an Employee and ceases to be an Employee by reason that he has been guilty of serious misconduct or has committed any act of bankruptcy or has become insolvent or has made any arrangements or composition with his creditors generally, or has been convicted of any criminal offence (other than an offence which in the opinion of the Board does not bring the Grantee or the Group or the Invested Entity into disrepute), his Option will lapse automatically and will not in any event be exercisable on or after the date of cessation to be an Employee.

14. RIGHTS OF BUSINESS ASSOCIATE

• (a) If the Grantee is a Business Associate and ceases to be a Business Associate by any reason other than death, termination or expiry of the corresponding contract before exercising his Option in full, the Grantee may exercise the Option (to the extent not already exercised) in whole or in part up to his entitlement at the date of cessation within a period of 12 months following the date of cessation, failing which his Option (to the extent not already exercised) shall lapse.

• (b) If the Grantee is a Business Associate and ceases to be a Business Associate by any reason of his death, termination or expiry of the corresponding contract before exercising his Option in full, his Personal Representative(s), or, as appropriate, the Grantee may exercise the Option (to the extent not already exercised) in whole or in part up to his entitlement at the date of cessation within a period of 12 months following the date of cessation, failing which his Option (to the extent not already exercised) shall lapse.

15. RIGHTS ON BREACH OF CONTRACT

If the Board shall at its absolute discretion determine that (i) the Grantee of any Option (other than an Employee or Business Associate) has committed any breach of any contract entered into between the Grantee on the one part and the Group or any Invested Entity on the other part; or (ii) that such Grantee has committed any act of bankruptcy or has become insolvent or is subject to any winding-up, liquidation or analogous proceedings or has made any arrangement or composition with his creditors generally; or (iii) such Grantee can no longer make any contribution to the growth and development of the Group by reason of the cessation of its relations with the Group or by other reason whatsoever, the Option granted to such Grantee under the New Scheme shall lapse, and any part of the Option not already exercised at the date of the event referred to (i), (ii) or (iii) above shall not in any event be exercisable on or after the date on which the event referred to (i), (ii) or (iii) above has occurred.

16. RIGHTS ON A GENERAL OFFER, A COMPROMISE OR ARRANGEMENT

• (a) If a general or partial offer, whether by way of take-over offer, Share re-purchase offer, or scheme of arrangement or otherwise in like manner is made to all the holders of the Shares, or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror, the Company shall use all

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PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX

reasonable endeavours to procure that such offer is extended to all the Grantees on the same terms, mutatis mutandis, and assuming that they will become, by the exercise in full of the Options granted to them, Shareholders. If such offer becomes or is declared unconditional, a Grantee shall be entitled to exercise his Option (to the extent not already exercised) to its full extent or to the extent specified in the Grantee’s notice to the Company in exercise of his Option at any time before the close of such Offer (or any revised Offer) or the record date for entitlements under such scheme of arrangement, as the case may be. Subject to the above, an Option will lapse automatically (to the extent not exercised) on the date on which such Offer (or, as the case may be, revised Offer) closes.

• (b) In the event of a compromise or arrangement between the Company and its creditors (or any class of them) or between the Company and the Shareholders (or any class of them), in connection with a scheme for the reconstruction or amalgamation of the Company is proposed, the Company shall give notice thereof to all Grantees on the same date as it gives notice of the meeting to its creditors or Shareholders to consider such a compromise or arrangement, and thereupon the Grantee (or his or her personal representative(s), as the case may be) may forthwith and until the expiry of the period commencing with such date and ending with the earlier of the date falling 2 months thereafter and the date on which such compromise or arrangement is sanctioned by the court be entitled to exercise his or her Option (to the extent which has become exercisable but not already exercised), but the exercise of the Option shall be conditional upon such compromise or arrangement being sanctioned by the court and becoming effective. The Company may thereafter require such Grantee (or his or her personal representative(s), as the case may be) to transfer or otherwise deal with the Shares issued as a result of the exercise of his or her Options in these circumstances so as to place the Grantee in the same position as nearly as would have been the case had such Shares been subject to such compromise or arrangement. Subject to the above, an Option will lapse automatically (to the extent not exercised) on the date the proposed compromise or arrangement becomes effective.

17. RIGHTS ON WINDING UP

In the event of a resolution being proposed for the voluntary winding-up of the Company during the Effective Period or the Option Period (as the case may be), the Grantee (or his or her personal representative(s), as the case may be) may, subject to the provisions of all applicable laws, by notice in writing to the Company at any time not less than 2 Business Days prior to the date on which such resolution is to be considered and/or passed, exercise his Option (to the extent not already exercised) either to its full extent or to the extent specified in such notice in accordance with the provisions of the New Scheme and the Company shall allot and issue to the Grantee the Shares in respect of which such Grantee has exercised his Option not less than the Business Day immediately prior to the date on which such resolution is to be considered and/or passed whereupon the Grantee shall accordingly be entitled, in respect of the Shares thus allotted and issued to him in the aforesaid manner, to participate in the distribution of the assets of the Company available in liquidation pari passu with the holders of the Shares in issue on the day prior to the date of passing of such resolution. Subject to the above, all Options (to the extent not exercised) shall lapse and determine on the commencement of the winding-up of the Company.

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PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX

18. ADJUSTMENTS TO THE SUBSCRIPTION PRICE

In the event of a capitalisation issue, rights issue, subdivision or consolidation of Shares or reduction of capital of the Company whilst an Option remains exercisable, such corresponding alterations (if any) certified by the Auditors for the time being of or an independent financial adviser to the Company as fair and reasonable will be made to the number or nominal amount of Shares, the subject matter of the New Scheme and the Option so far as unexercised and/or the Option price of the Option concerned, provided that (i) any adjustments shall give a Grantee the same proportion of the issued Share capital to which he was entitled prior to such alteration; (ii) the issue of Shares or other securities of the Group as consideration in a transaction may not be regarded as a circumstance requiring adjustment; and (iii) no alteration shall be made the effect of which would be to enable a Share to be issued at less than its nominal value and in each case, any adjustment shall be made, and in each case, any adjustment shall be made in compliance with the Listing Rules and such rules, codes and guidance notes of the Stock Exchange from time to time. In addition, in respect of any such adjustments, other than any made on a capitalisation issue, such Auditors or independent financial adviser shall confirm to the Directors in writing that the adjustments satisfy the requirements of the relevant provision of the Listing Rules.

19. CANCELLATION OF OPTIONS

Any cancellation of Options granted but not exercised shall require the approval of the Board and subject to the consent of the relevant Grantee.

When the Company cancels any Option granted to a Grantee but not exercised and issues new Option(s) to the same Grantee, the issue of such new Option(s) may only be made with available unissued Options (excluding the Options so cancelled) within the General Scheme Limit or the new limits approved by the Shareholders pursuant to Clauses 5(c) and 5(d) above.

20. TERMINATION OF THE NEW SCHEME

The Company may by ordinary resolution in general meeting at any time terminate the New Scheme and in such event no further Options shall be offered but in all other respects the provisions of the New Scheme shall remain in force to the extent necessary to give effect to the exercise of any Options (to the extent not already exercised) granted during the Effective Period or otherwise prior to the termination or otherwise as may be required in accordance with the provisions of the New Scheme. Options (to the extent not already exercised) granted prior to such termination shall continue to be valid and exercisable in accordance with the New Scheme.

21. RIGHTS ARE PERSONAL TO THE GRANTEE

An Option is personal to the Grantee and shall not be transferable or assignable. To avoid any doubt, no Option shall be granted to any associated company, nominated person or any other entity connected or associated with any Grantee or Participant.

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PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME

APPENDIX

22. LAPSE OF OPTION

An Option shall lapse automatically (to the extent not already exercised) on the earliest of (a) the expiry of the Effective Period or the Option Period in respect of such Option (as may be the case); (b) the expiry of the any of the respective periods or dates referred to in Clauses 11 to 17; (c) the passing of the resolution in accordance with Clause 20; or (d) the date on which the Board exercise the right to cancel the Option in accordance with the provisions of the New Scheme.

23. OTHERS

• (a) Further to Clause 2.1(a) above, the New Scheme is conditional on the Stock Exchange granting the listing of and permission to the obtaining of the approval of the Shareholders at the EGM and deal in, such number of Shares to be issued pursuant to the exercise of any Options which may be granted under the New Scheme, such number being not less than that of the General Scheme Limit.

• (b) The terms and conditions of the New Scheme relating to the matters set out in Chapter 17 of the Listing Rules shall not be altered to the advantage of Grantees except with the approval of the Shareholders in general meeting.

• (c) Any alterations to the terms and conditions of the New Scheme which are of a material nature or any change to the terms of Options granted shall be approved by the Shareholders in general meeting, except where the alterations take effect automatically under the existing terms of the New Scheme.

• (d) The amended terms of the New Scheme or the Options shall comply with the relevant requirements of Chapter 17 of the Listing Rules.

• (e) Any change to the authority of the Directors or the scheme administrators in relation to any alteration to the terms of the New Scheme shall be approved by the Shareholders in general meeting.

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NOTICE OF THE EXTRAORDINARY GENERAL MEETING

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China Fortune Group Limited

(Incorporated in the Cayman Islands with limited liability)

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

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘Meeting’’) of China Fortune Group Limited (the ‘‘Company’’) will be held on 19 August 2011 at 11:00 a.m. at 35th Floor, Office Tower, Convention Plaza, 1 Harbour Road, Wanchai, Hong Kong for the following purposes:

ORDINARY RESOLUTION

To consider, and if thought fit, to pass with or without amendments, the following resolution as ordinary resolution:

1. ‘‘THAT subject to and conditional upon the Listing Committee of the Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) granting the approval of the listing of, and permission to deal in, the shares of the Company (‘‘Shares’’) to be allotted and issued upon the exercise of options to be granted under the new share option scheme of the Company (the ‘‘New Scheme’’), the rules of which are contained in the document marked ‘‘AA’’ produced to the Meeting and for the purposes of identification signed by the chairman of the Meeting thereof, the New Scheme be and is hereby approved and adopted and with effect from the date of the New Scheme becoming unconditional and coming into effect, and the existing share option scheme of the Company which was adopted by the Company on 12 February 2003 be terminated therefrom and the directors of the Company be and are hereby authorized to do all acts and enter into all such transactions, arrangements and agreements as may be necessary or expedient in order to give full effect to the New Scheme, including without limitation:

2. (a) to administer the New Scheme under which options will be granted to participants eligible under New Scheme to subscribe for Shares, including but not limited to determining and granting the options in accordance with the terms of the New Scheme;

3. (b) to modify and/or amend the New Scheme from time to time provided that such modification and/or amendment is effected in accordance with the provisions of the New Scheme relating to the modification and/or amendment and subject to Chapter 17 of the Rules Governing the Listing of Securities on the Stock Exchange (the ‘‘Listing Rules’’);

4. (c) to allot and issue from time to time such number of Shares as may be required to be allotted and issued upon the exercise of the options granted under the New Scheme and subject to the Listing Rules, provided that the total number of Shares which may be

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NOTICE OF THE EXTRAORDINARY GENERAL MEETING

issued upon exercise of all options to be granted under the New Scheme and any other share options scheme of the Company shall not in aggregate exceed 10% of the Shares in issue as at the date of passing this resolution, but the Company may seek approval by its shareholders in general meeting for refreshing the 10% limit under the New Scheme;

• (d) to make application at appropriate time or times to the Stock Exchange and any other stock exchanges upon which the issued Shares may for the time being be listed, for the listing of and permission to deal in, any Shares which may hereafter from time to time be allotted and issued upon the exercise of options granted under the New Scheme; and

• (e) To consent, if they deem fit and expedient, to such conditions, modifications and/or variations as may be required or imposed by the relevant authorities in relation to the New Scheme.

SPECIAL RESOLUTION

To consider, and if thought fit, to pass with or without amendments, the following resolution as special resolution:

1. ‘‘THAT subject to the approval of the Registrar of Companies in the Cayman Islands, the name of the Company be changed to ‘‘China Fortune Financial Group Limited 中國富強金融 集團有限公司’’, and the directors of the Company be and are hereby authorized generally to do all such acts and things and sign or execute all such documents or make such arrangements as they may, in their sole and absolute discretion, consider necessary or expedient in connection with the implementation of or giving effect to the foregoing change of company name and the transactions contemplated thereunder.’’

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

Managing Director

Hong Kong, 18 July 2011

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

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

Notes:

1. Any registered shareholders of the Company entitled to attend and vote at the Meeting may appoint one or more than one proxy to attend and to vote in his stead. A proxy need not be a registered shareholder of the Company.

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NOTICE OF THE EXTRAORDINARY GENERAL MEETING

1. Where there are joint registered holders of any share, any one of such persons may vote at the Meeting, either personally or by proxy, in respect of such share as if he was solely entitled thereto; but if more than one of such joint holders be present at the Meeting personally or by proxy, that one of the said persons so present being the most or, as the case may be, the more senior shall alone be entitled to vote in respect of the relevant joint holding and, for this purpose, seniority shall be determined by reference to the order in which the names of the joint holders stand on the register in respect of the relevant joint holding.

2. In order to be valid, this form of proxy and any power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority must be delivered at the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited, 18/F, Fook Lee Commercial Centre, Town Place, 33 Lockhart Road, Wanchai, Hong Kong, not less than 48 hours before the time appointed for the holding of the Meeting or any adjourned meeting (as the case may be). No instrument appointing a proxy shall be valid after the expiration of 12 months from the date named in it as the date of its execution.

3. Whether or not you propose to attend the Meeting in person, you are strongly urged to complete and return the proxy form in accordance with the instructions printed thereon. Completion and delivery of this form of proxy will not preclude you from attending in person and voting at the Meeting if you so wish and, in such event, this form of proxy shall be deemed to be revoked.

As at the date of hereof, 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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