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Youzan Technology Limited AGM Information 2012

Apr 16, 2012

51261_rns_2012-04-16_06c5a7a5-0681-4a34-93a7-c593964ee2c1.pdf

AGM Information

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THIS SUPPLEMENTAL CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this supplemental circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

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

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) take no responsibility for the contents of this supplemental 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 supplemental circular.

This supplemental circular, for which the directors of the Company (the “Directors”) collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market (the “GEM”) of the Stock Exchange for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that, to the best of their knowledge and belief, the information contained in this supplemental 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 supplemental circular misleading.

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China Innovationpay Group Limited 中國創新支付集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

SUPPLEMENTAL CIRCULAR TO THE CIRCULAR TO SHAREHOLDERS DATED 28 MARCH 2012 AND RELATING TO THE PROPOSED ADOPTION OF NEW SHARE OPTION SCHEME AND REVISED NOTICE OF AGM

This supplemental circular should be read together with the circular to the shareholders of the Company dated 28 March 2012 (the “Circular”). A revised notice convening the annual general meeting of the Company (the “AGM”) to be held at Yue Function Room, First Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Thursday, 3 May 2012 at 10:00 a.m. is set out on pages 19 to 29 of this supplemental circular. By such revised notice of the AGM, an additional resolution will be proposed for shareholders’ consideration at the AGM, in relation to the proposed adoption of the new share option scheme of the Company, details of which are set out in this supplemental circular.

A new form of proxy (second form of proxy) for use at the AGM, which contains the additional resolution to be proposed at the AGM, is sent together with this supplemental circular. Whether or not you are able to attend the AGM, you are requested to complete the second form of proxy in accordance with the instructions printed thereon and return it to the Secretary of the Company at the Company’s principal place of business and head office in Hong Kong at Unit 2708, 27/F., The Center, 99 Queen’s Road Central, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed for the holding of the AGM (or any adjournment thereof). Completion and return of the second form of proxy will not preclude you from attending and voting at the AGM (or any adjournment thereof) in person if you so wish.

This supplemental circular will remain on the “Latest Company Announcement” page of the GEM website at www.hkgem.com for at least 7 days from the date of its publication and will be published on the Company’s website at www.innovationpay.com.hk.

16 April 2012

CHARACTERISTICS OF THE GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

– i –

TABLE OF CONTENTS

Page
DEFINITIONS
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		 1
LETTER FROM THE BOARD
1.
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		 4
2.
Proposed Adoption of New Share Option Scheme . . . . . . . . . . . . . . . . . . . . . .		 5
3.
AGM, Revised Notice of AGM and Second Form of Proxy . . . . . . . . . . . . . . .		 7
4.
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		 8
APPENDIX I
—
PRINCIPAL TERMS OF NEW SHARE
OPTION SCHEME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
APPENDIX II
—
SPECIAL ARRANGEMENTS ON COMPLETION
AND SUBMISSION OF THE SECOND
FORM OF PROXY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
REVISED NOTICE OF AGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

– ii –

DEFINITIONS

In this supplemental circular, unless the context requires otherwise, the expressions as stated below will have the following meanings:

  • “AGM”

  • means the annual general meeting of the Company to be held at Yue Function Room, First Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Thursday, 3 May 2012 at 10:00 a.m., the initial notice of which is set out in the Circular and the revised notice of which is set out on pages 19 to 29 of this supplemental circular;

  • “associate(s)” has the same meaning as defined in the GEM Listing Rules;

  • “Auditors” means the auditors for the time being of the Company;

  • “Board” means the board of Directors;

  • “Business Day”

  • means a day on which the Stock Exchange is open for the business of dealing in securities;

  • “Company”

  • means China Innovationpay Group Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the GEM;

  • “Connected Person”

  • has the same meaning ascribed to it in the GEM Listing Rules;

  • “Directors” means the directors of the Company;

  • “Eligible Participant(s)”

  • has the meaning ascribed to it in Appendix I to this supplemental circular;

  • “Exercise Price”

  • means the price per Share, at which a Grantee may subscribe for the Shares on the exercise of an Option;

  • “Existing Share Option Scheme”

  • means the existing share option scheme adopted by the Company pursuant to an ordinary resolution of the Shareholders passed on 26 April 2002;

  • “GEM”

  • means the Growth Enterprise Market of the Stock Exchange;

– 1 –

DEFINITIONS

  • “GEM Listing Rules”

  • means the Rules Governing the Listing of Securities on GEM;

  • “Grantee”

  • means any Eligible Participant who accepts the offer of the grant of an Option in accordance with the provisions of the New Share Option Scheme;

  • “Group”

  • means the Company and its Subsidiaries;

  • “HK$”

  • means Hong Kong dollars, the lawful currency of Hong Kong;

  • “Hong Kong” means the Hong Kong Special Administrative Region of the PRC;

  • “Latest Practicable Date” means 13 April 2012, being the latest practicable date prior to the printing of this supplemental circular for ascertaining certain information contained herein;

  • “New Share Option Scheme”

  • means the share option scheme proposed to be adopted by the Company at the AGM, a summary of the principal terms of which is set out in Appendix I to this supplemental circular;

  • “Option”

  • means an option to subscribe for Shares that may be granted pursuant to the New Share Option Scheme;

  • “Option Period”

  • means in respect of any particular Option, the period commencing immediately after the Business Day on which the Option is deemed to be offered to grant and accepted in accordance with the New Share Option Scheme and expiring on a date to be determined and notified by the Board to such Grantee within the period during which the Option may be exercisable provided that such period shall not exceed the period of five (5) years from the date of grant of the Option;

  • “PRC”

  • means the People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan;

  • “Share(s)”

  • means share(s) of nominal value of HK$0.01 each in the existing share capital of the Company;

– 2 –

DEFINITIONS

“Shareholders” means the shareholders of the Company; “Stock Exchange” means The Stock Exchange of Hong Kong Limited; “Subsidiary” has the same meaning ascribed to it in the GEM Listing Rules; and “%” means per cent.

– 3 –

LETTER FROM THE BOARD

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China Innovationpay Group Limited 中國創新支付集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

Executive Directors: Guan Guisen Lei Chunxiong

Non-Executive Director: Li Yuezhong

Independent Non-Executive Directors: Fong Chi Wah Wang Zhongmin Gu Jiawang

Registered office: Canon’s Court 22 Victoria Street Hamilton HM 12 Bermuda

Head Office and Principal Place of Business: Unit 2708, 27/F. The Center 99 Queen’s Road Central Hong Kong 16 April 2012

To the Shareholders

Dear Sir/Madam,

SUPPLEMENTAL CIRCULAR TO THE CIRCULAR TO SHAREHOLDERS DATED 28 MARCH 2012 AND RELATING TO THE PROPOSED ADOPTION OF NEW SHARE OPTION SCHEME AND REVISED NOTICE OF AGM

INTRODUCTION

This supplemental circular should be read together with the Circular to the Shareholders dated 28 March 2012 which contains the information in respect of the resolutions to be proposed at the AGM.

The purpose of this supplemental circular is to provide you with details of the proposed adoption of the New Share Option Scheme, which is proposed to be considered and, if thought fit, approved by the Shareholders at the AGM, the proposed resolution relating to which is set out in the revised notice of the AGM attached hereto.

– 4 –

LETTER FROM THE BOARD

PROPOSED ADOPTION OF NEW SHARE OPTION SCHEME

The Existing Share Option Scheme was adopted by the Company pursuant to an ordinary resolution of the Shareholders passed on 26 April 2002. It will be valid and effective for a period of ten (10) years from the date of its adoption and will expire on 25 April 2012 accordingly. As at the Latest Practicable Date, there were options to subscribe for 41,214,583 Shares under the Existing Share Option Scheme remained outstanding.

Details of such outstanding options as at the Latest Practicable Date were as follows:

Date of grant
Grantees
Exercise period
Exercise
price
14 May 2002
Employees
14 May 2003
to 13 May 2012
HK$0.1883
13 August 2008
Employees
13 August 2008
to 12 August 2018
HK$0.06
10 November
2009
Employees and
Consultants
10 November 2010
to 9 November 2019
HK$0.1026
Total:		 Number of
outstanding
options
750,000
1,714,583
38,750,000
41,214,583

Other than the Existing Share Option Scheme, the Company does not maintain any other share option scheme as at the Latest Practicable Date.

In light of the imminent expiry of the Existing Share Option Scheme on 26 April 2012, the Directors consider that it is appropriate to adopt the New Share Option Scheme. The purpose of the New Share Option Scheme is to enable the Company to grant Options to the Eligible Participants as incentive or rewards for their contributions to the Group. Save for the definition of “Eligible Participant(s)” and necessary modifications and/or amendments made thereto pursuant to the GEM Listing Rules, there is no material difference between the terms of the Existing Share Option Scheme and the New Share Option Scheme. The principal terms of the New Share Option Scheme are set out in Appendix I to this supplemental circular.

The Board considers that the New Share Option Scheme will facilitate the retention and the recruitment of high-calibre staff of the Group and it is the interests of the Group as a whole for the directors, executives, officers or employees and the support from professionals, consultants, agents, advisers, service providers, business associates and partners to be given incentives to participate in the growth of the Group in the form of share options to subscribe for Shares. Furthermore, the Board considers that the Eligible Participants will share common interests and objectives with the Group upon their exercise of the Options, which is beneficial to the development of the Group.

– 5 –

LETTER FROM THE BOARD

The adoption of the New Share Option Scheme is conditional upon:

  • (1) the passing of the necessary resolution(s) of the Shareholders to approve and adopt the provisions of the New Share Option Scheme; and

  • (2) the Listing Committee of the Stock Exchange granting approval for the listing of, and permission to deal in, the Shares falling to be issued pursuant to the exercise of the Options under the New Share Option Scheme.

The maximum number of Shares which may be allotted and issued upon exercise of all outstanding Options granted under the New Share Option Scheme and any other share option scheme(s) of the Company may represent up to 10% of the Shares in issue on the date of approval of the New Share Option Scheme by the Shareholders at the AGM (the “ Scheme Mandate Limit ”), which maximum number may however be refreshed as detailed in paragraph (3) of Appendix I to this supplemental circular.

The New Share Option Scheme does not contain any specific requirements for the minimum period which an Option must be held before exercise or for performance targets applicable to the Options. The Directors have retained the flexibility to impose such conditions as and when they consider appropriate.

As at the Latest Practicable Date, the issued share capital of the Company is 4,464,639,457 Shares. Assuming that prior to the AGM, no Shares are issued or repurchased by the Company, the Scheme Mandate Limited will be 446,463,945 Shares, representing 10% of the Shares in issue as at the date of the passing of the ordinary resolution. There are Options to subscribe for up to 446,463,945 Shares available to be granted by the Directors under the New Share Option Scheme. No Director is a trustee of the New Share Option Scheme or has a direct or indirect interest in such trustee. As at the Latest Practicable Date, having made all reasonable enquiries, the Company was not aware of any Shareholder who is required under the GEM Listing Rules to abstain from voting on the resolution to be proposed at the AGM to approve the adoption of the New Share Option Scheme.

The Directors have considered and agreed that the New Share Option Scheme would enable the Company to offer such employees and personnel Options to acquire equity interest in the Company as a reward and additional incentive for their contribution to the long term success of the business of the Company.

The Directors consider that it is not appropriate to state the value of all the Options that can be granted under the New Share Option Scheme as if they had been granted on the Latest Practicable Date prior to the approval of the New Share Option Scheme given that the variables which are critical for the calculation of the value of such Options cannot be determined. These variables include the subscription price payable for Shares upon the exercise of subscription rights attaching to the Options, whether or not Options will be granted under the New Share Option Scheme and the timing of the granting of such Options, the period during which the subscription rights may be exercised, the discretion of the Board to impose any performance target that has to be achieved before the subscription rights attaching to the Options can be exercised and any other conditions that

– 6 –

LETTER FROM THE BOARD

the Board may impose with respect to the Options and whether or not such Options, if granted, will be exercised. The subscription price payable for the Shares depends on the price of the Shares as quoted on the Stock Exchange, which in turn depends on when the Board is to grant Options under the New Share Option Scheme. With a scheme life of five years, the Board is of the view that it is too premature to state whether or not Options will be granted under the New Share Option Scheme and, if so, the number of Options that may be granted. It is also difficult to ascertain with accuracy the subscription price of the Shares given the volatility to which the price of the Shares may be subject during the five year life span of the New Share Option Scheme. In the premises, the Directors are of the view that the value of the Options depends on a number of variables which are either difficult to ascertain or can only be ascertained subject to a number of theoretical bases and speculative assumptions. Accordingly, the Directors believe that any calculation of the value of the Options will not be meaningful and may be misleading to the Shareholders in the circumstances.

Application will be made to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in, the Shares which may be issued pursuant to the exercise of any Options to be granted under the New Share Option Scheme.

Copy of the rules of the New Share Option Scheme will be available for inspection at the Company’s principal place of business in Hong Kong at Unit 2708, 27/F., The Center, 99 Queen’s Road Central, Hong Kong from 9:00 a.m. to 5:00 p.m. on any weekday (Saturdays and public holidays excepted) for the period from the date of this supplemental circular until the date of the AGM.

AGM, REVISED NOTICE OF AGM AND SECOND FORM OF PROXY

The AGM will be held as originally scheduled on Thursday, 3 May 2012 at 10:00 a.m. at Yue Function Room, First Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong. A revised notice of AGM is set out on pages 19 to 29 of this supplemental circular.

Since both the initial notice convening the AGM and the form of proxy (the “First Form of Proxy”) for the AGM sent together with the Circular do not contain the resolution for the adoption of the New Share Option Scheme, a revised notice of AGM is set out on pages 19 to 29 of this supplemental circular and a new form of proxy (the “Second Form of Proxy”) is enclosed with this supplemental circular.

Whether or not you are able to attend the AGM, please complete the enclosed Second Form of Proxy in accordance with the instructions printed thereon and return it to the Secretary of the Company at the Company’s principal place of business and head office in Hong Kong at Unit 2708, 27/F., The Center, 99 Queen’s Road Central, Hong Kong as soon as practicable and in any event not later than 48 hours before the time appointed for holding the AGM or any adjournment thereof. Special arrangements about completion and submission of the Second Form of Proxy are set out in Appendix II to this supplemental circular. Shareholders who have appointed or intend to appoint proxy/proxies to attend the AGM are requested to pay particular attention to the special arrangements set out therein.

– 7 –

LETTER FROM THE BOARD

Completion and return of the Second Form of Proxy will not preclude you from attending and voting at the AGM if you so wish.

RECOMMENDATION

The Directors consider that the proposed adoption of the New Share Option Scheme is in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of such resolution at the AGM.

Yours faithfully, For and on behalf of the Board CHINA INNOVATIONPAY GROUP LIMITED Guan Guisen Chairman

– 8 –

APPENDIX I

PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

This Appendix I summaries the principal terms of the New Share Option Scheme but does not form part of nor was it intended to be, part of the New Share Option Scheme nor should it be taken as effecting the interpretation of the rules of the New Share Option Scheme.

(1) PURPOSE OF THE NEW SHARE OPTION SCHEME

The purpose of the New Share Option Scheme is to enable the Company to grant Options to the Eligible Participants as incentive or rewards for their contributions to the Group.

(2) WHO MAY JOIN

The Board may, at their sole and absolute discretion, invite any person belonging to any of the following classes of eligible participants (the “Eligible Participants”) to take up Options to subscribe for Shares:

  • (a) any employee or proposed employee, manager or officer (whether full time or part time) of the Company or any of its Subsidiaries;

  • (b) any director (including executive or non-executive and whether independent or not) of the Company or any of its Subsidiaries;

  • (c) any person or entity that provides design, research, development or other support or any advisory, consultancy, professional or other services to a member of the Group;

  • (d) any other group or classes of participants from time to time determined by the Board as having contributed or may contribute by way of joint venture, business alliances or other business arrangements to the development and growth of the Group; and

  • (e) an associate of any of the foregoing persons set out in paragraphs (2)(a) to (d) above.

The Board may in its sole and absolute discretion select and subject to such conditions (including, without limitation, any minimum period for which an Option must be held before it can be wholly or partly exercised and/or any performance targets which must be achieved before an Option can be wholly or partly exercised) as it may think fit.

– 9 –

APPENDIX I

PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

(3) MAXIMUM NUMBER OF SHARES

  • (a) The maximum aggregate number of Shares to be issued upon exercise of all outstanding Options granted and yet to be exercised under the New Share Option Scheme and any other share option schemes of the Group must not in aggregate exceed 30% of the Shares in issue to time (the “ Overall Scheme Limit ”).

  • (b) The total number of Shares which may be allotted and issued upon the exercise of all Options (excluding, for this purpose, Options which have lapsed in accordance with the terms of the New Share Option Scheme and any other share option scheme(s)) to be granted under the New Share Option Scheme and any other share option schemes of the Company must not in aggregate exceed 10% of the Shares in issue as at the date of approval of the New Share Option Scheme (the “ Scheme Mandate Limit ”).

  • (c) Subject to (a) above and without prejudice to (d) below, the Company may seek approval of the Shareholders in general meeting for “refreshing” the Scheme Mandate Limit. However, the total number of Shares which may be issued upon exercise of all Options to be granted under the New Share Option Scheme and any other share option schemes of the Group under the Scheme Mandate Limit as “refreshed” must not exceed 10% of the Shares in issue as at the date of approval of the refreshing of the Scheme Mandate Limit (the “ Refreshed Scheme Mandate Limit ”). Options to subscribe for Shares previously granted under any existing schemes (including those outstanding, cancelled, lapsed or exercised in accordance with the New Share Option Scheme or exercised Options) will not be counted for the purpose of calculating the Refreshed Scheme Mandate Limit.

  • (d) Subject to (a) above and without prejudice to (c) above, the Company may seek separate approval by its Shareholders in general meeting for granting Options to subscribe for Shares beyond the Scheme Mandate Limit or the Refreshed Scheme Mandate Limit to the Eligible Participant specially identified by the Company before such approval is sought. In such event, the Company must send a circular to its Shareholders containing a generic description of the specified Eligible Participant, the number and terms of Options to be granted, the purpose of granting Options to the specified Eligible Participant with an explanation as to how the terms of these Options serve such purpose and such other information and the information required under Rule 23.02(2)(d) of the GEM Listing Rules and disclaimer required under Rule 23.02(4) of the GEM Listing Rules.

– 10 –

APPENDIX I

PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

(4) MAXIMUM ENTITLEMENT OF EACH ELIGIBLE PARTICIPANT

The total number of Shares issued and which may fall to be issued on the exercise of the Options granted under the New Share Option Scheme and any other share option scheme of the Group (including both exercised and outstanding Options) to each Eligible Participant in any 12-month period shall not exceed 1% of the Shares in issue for the time being (the “ Individual Limit ”). Any further grant of Options to an Eligible Participant in excess of the Individual Limit 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 approval of the Shareholders in general meeting with such Eligible Participant and his associates abstaining from voting. The number and terms (including the Exercise Price) of Options to be granted (and Options previously granted to such Eligible Participant) must be fixed before approval of the Shareholders and the date of the Board meeting proposing such further grant should be taken as the date of grant for the purpose of calculating the Exercise Price under Note 1 to Rule 23.03(9) of the GEM Listing Rules.

(5) GRANT OF OPTIONS TO CONNECTED PERSONS

  • (a) Any grant of Options to a Connected Person or its associates must be approved by all the independent non-executive Directors (excluding any independent non-executive Director who is a Grantee).

  • (b) Where Options are proposed to be granted to a Connected Person and if such grant would result in the total number of Shares issued and to be issued upon exercise of all Options granted and to be granted (including Options exercised, cancelled and outstanding) in any 12-month period up to and including the date of such grant to such person: (i) representing in aggregate over 0.1% of all the Shares in issue for the time being; 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 million; then proposed grant must be subject to approval of the Shareholders in general meeting taken on a poll. The Company must send a circular to the Shareholders. All Connected Persons of the Company must abstain from voting (except that any Connected Persons may vote against the relevant resolution at the general meeting provided that his intention to do so has been stated in the circular) at the general meeting. The circular must contain the following:

  • (i) details of the number and terms (including the Exercise Price) of the Options to be granted to each Eligible Participant, which must be fixed before the general meeting concerned, and the date of meeting of the Board for proposing such further grant is to be taken as the date of grant for the purpose of calculating the Exercise Price;

  • (ii) a recommendation from the independent non-executive Directors of the Company (excluding any independent non-executive Director of the Company who is the Grantee of the Options) to the independent shareholders as to voting; and

– 11 –

APPENDIX I

PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

  • (iii) the information required under the relevant provisions of Chapters 2 and 23 of the GEM Listing Rules.

(6) TIME OF ACCEPTANCE AND EXERCISE OF AN OPTION

An offer of grant of an Option shall remain open for acceptance by an Eligible Participant to whom the offer is made for a period of twenty-eight (28) days from the date upon which the offer is made.

An Option may be exercised in accordance with the provisions of the New Share Option Scheme at any time during the Option Period subject to the provisions for early termination thereof.

There is no specific requirement under the New Share Option Scheme that an Option must be held for any minimum period before it can be exercised, but the terms of the New Share Option Scheme provide that the Board has the discretion to impose a minimum period at the time of grant of any particular Option.

(7) PERFORMANCE TARGETS

Unless the Board otherwise determined and stated in the offer of the grant of Options to a Grantee, a Grantee shall not be required to achieve, meet or exceed any performance targets before that particular Grantee can exercise the Option(s) granted.

(8) EXERCISE PRICE FOR SHARES AND CONSIDERATION FOR THE OPTION

The Exercise Price in respect of any particular Option shall be such price as determined by the Board in its sole and absolute discretion at the time of the grant of the relevant Option but in any case the Exercise Price must be the higher of (a) the closing price of Shares as stated in the Stock Exchange’s daily quotations sheet on the date of the offer of grant, which must be a Business Day; (b) the average closing price of Shares as stated in the Stock Exchange’s daily quotations sheets for the five (5) Business Days immediately preceding the date of grant; and (c) the nominal value of a Share. A nominal consideration of HK$1.00 is payable on acceptance of the grant of an Option.

(9) RANKING OF SHARES

No dividends will be payable and no voting rights will be exercisable in relation to an Option that has not been exercised (including those arising on a liquidation of the Company). The Options will not rank for any rights (which include, among other things, voting rights and dividend rights) attaching to Shares by reference to a date preceding the date of allotment.

The Shares to be allotted upon the exercise of an Option will not carry voting rights until completion of the registration of the Grantee (or such other person nominated by the Grantee) as the holder thereof. Subject to the aforesaid, Shares allotted and issued on the exercise of Options will rank pari passu with and shall have the same voting, dividend,

– 12 –

APPENDIX I PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

transfer and other rights, including those arising on liquidation of the Company as attached to the other fully-paid Shares in issue on the date of issue.

(10) RESTRICTIONS ON THE TIME OF GRANT OF OPTIONS

A grant of Options shall not be made after a price sensitive development has occurred or a price-sensitive matter has been the subject of a decision of the Group until such price sensitive information has been announced pursuant to the requirements of the Listing Rules. In particular, during the period of one month immediately preceding the earlier of: (a) the date of the Board meeting (as such date is first notified to the Stock Exchange in accordance with the GEM Listing Rules) 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 GEM Listing Rules); and (b) the deadline for the Company to publish an announcement of its results for any year or half-year 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 announcements, no Option may be granted. Such period shall cover any period of delay in the publication of a results announcement.

(11) PERIOD OF THE NEW SHARE OPTION SCHEME

The New Share Option Scheme shall be valid and effective for a period of five (5) years commencing on the date when the New Share Option Scheme is conditionally adopted by the Shareholders.

(12) RIGHTS ON CEASING EMPLOYMENT OR ENGAGEMENT

In the event that the Grantee ceases to be an Eligible Participant for any reason(s) other than his (i) death; (ii) retirement; (iii) ill-health; (iv) disability; (v) injury and (vi) termination of relationship with the Company and/or any of the Subsidiaries on the grounds of guilty of misconduct or conviction of any criminal offence involving integrity or honesty or breach of contract or in relation to an employee on any ground (if so determined by the Board) on which an employer would be entitled to terminate his employment at common law or pursuant to any applicable laws, the Option granted to such Grantee will lapse within three months following the date of such cessation (to the extent not already exercised).

(13) RIGHTS ON DEATH, RETIREMENT, ILL-HEALTH, DISABILITY OR INJURY

If the Grantee is an employee and ceases to be an Eligible Participant by reason of his death, retirement, ill-health, disability or injury, any outstanding offer of an Option which has not been accepted in accordance with the provisions of the New Share Option Scheme and any Option which has not then become exercisable will lapse and, his personal representative(s), or, as appropriate, the Grantee may exercise any Option which has then become exercisable (to the extent not already been exercised) in whole or in part within a period of twelve (12) months following the date of cessation which date shall be the last day on which the Grantee was at work with the Group whether salary is paid in lieu of notice or not or such longer period as the Directors may determine.

– 13 –

APPENDIX I

PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

(14) RIGHTS ON A GENERAL OFFER

If a general offer by way of takeover is made to all Shareholders (or all Shareholders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror) and such offer becomes or is declared unconditional prior to the expiry date of the relevant Option, the Grantee (or his legal personal representatives) shall be entitled to exercise the Option in full (to the extent not already exercised) at any time within one month after the date on which the offer becomes or is declared unconditional.

(15) RIGHTS ON VOLUNTARY WINDING UP

In the event a notice is given by the Company to its members to convene a general meeting for the purposes of considering, and if thought fit, approving a resolution to voluntarily wind-up the Company, the Company shall forthwith give notice thereof to all Grantees and thereupon, each Grantee (or his legal personal representatives) shall be entitled to exercise all or any of his Options at any time not later than two (2) Business Days prior to the proposed general meeting of the Company by giving notice in writing to the Company, accompanied by a remittance for the full amount of the aggregate Exercise Price for the Shares in respect of which the notice is given whereupon the Company shall as soon as possible and, in any event, no later than the Business Day immediately prior to the date of the proposed general meeting referred to above, allot the relevant Shares to the Grantee credited as fully paid.

(16) RIGHTS ON COMPROMISE OR ARRANGEMENT BETWEEN THE COMPANY AND ITS MEMBERS OR CREDITORS

In the event of a compromise or arrangement between the Company and its members or creditors being proposed in connection with any scheme for the reconstruction or amalgamation of the Company, the Company shall give notice thereof to all Grantees on the same day as it gives notice of the meeting to its members or creditors to consider such a scheme or arrangement and the Grantee shall be entitled to exercise all or any of his Options in whole or in part at any time prior to 12 noon (Hong Kong time) on the Business Day immediately preceding the date of the meeting directed to be convened by the relevant court for the purposes of considering such compromise or arrangement and if there are not than one meeting for such purpose, the date of the first meeting. With effect from the date of such meeting, the rights of all Grantees to exercise their respective Options shall forthwith be suspended. Upon such compromise or arrangement becoming effective, all Options shall, to the extent that they have not been exercised, lapse and determine. The Board shall endeavour to procure that the Shares issued as a result of the exercise of Options in such circumstances shall for the purposes of such compromise or arrangement form part of the issued share capital of the Company on the effective date thereof and that such Shares shall in all respects be subject to such compromise or arrangement. If for any reason such compromise or arrangement is not approved by the relevant court (whether upon the terms presented to the relevant court or upon any other terms as may be approved by such court) the rights of the Grantees to exercise their respective Options shall with effect from the date of the making of the order by the

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APPENDIX I

PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

relevant court be restored in full) as if such compromise or arrangement had not been proposed by the Company and no claim shall lie against the Company or any of its officers for any loss or damage sustained by any Grantee as a result of the aforesaid suspension.

(17) RIGHTS ON WINDING-UP BY COURT ORDER

In the event that a court order is made for the winding-up of the Company, the Grantee (or his personal representative(s)) may, by giving notice in writing to the Company at any time within twenty-one (21) days after the date of the court order, elect to be treated as if his Option (to the extent not already exercised) has been exercised either to its full extent or to the extent specified in such notice immediately before the court order and shall accordingly be entitled to receive out of the assets available in liquidation pari passu with the holders of the Shares such sum (if any) as would have been received by him in respect of the Shares subject to his Option reduced by an amount equal to the aggregate Exercise Price which would otherwise have been payable in respect thereof.

(18) ALTERATIONS OF CAPITAL STRUCTURE

In the event of any alteration in the capital structure of the Company whilst any Option remains exercisable, whether by way of capitalization issue, rights issue, open offer, sub-division, consolidation of shares or reduction of the share capital of the Company, such corresponding alterations (if any) shall be made (except on an issue of securities of the Company as consideration in a transaction which shall not be regarded as a circumstance requiring alteration or adjustment) in:

  • (a) the number or nominal amount of the Shares subject to the Option so far as unexercised; or

  • (b) the Exercise Price,

as the Company’s independent financial adviser or the Auditors shall at the request of the Company or any Grantee, certify in writing to the Board, either generally or as regard any particular Grantee, to have, in their opinion, satisfied the requirement of the relevant provisions of the GEM Listing Rules (including, where applicable, the requirements contained in any supplementary guidance issued by the Stock Exchange as may be in force) that such adjustments give an Eligible Participant the same proportion of the equity capital as that to which that person was previously entitled, but that no such adjustments be made to the extent that a Share would be issued at less than its nominal value.

(19) CANCELLATION OF OPTIONS

The Board shall be entitled for following reasons or causes to cancel any Option in whole or in part by giving notice in writing to the Grantee stating that such Option is thereby cancelled with effect from the date specified in such notice:

  • (a) the Grantee commits or permits or attempts to commit or permit a breach of the restriction on transferability of the Option pursuant to paragraph (21) hereof or any terms or conditions imposed or attached to the grant of the Option; or

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APPENDIX I

PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

  • (b) if the Grantee has, in the opinion of the Board, conducted himself in any manner whatsoever to the detriment of or prejudicial to the interests of the Company or its Subsidiaries,

that the Option shall be deemed to have been cancelled with effect from such specified date in respect of any part of the Option which has not been exercised as at such specified date and no compensation shall be payable upon any such cancellation, Provided that the Board shall be entitled in its sole and absolute discretion to pay such compensation to the Grantee in such manner as it may consider appropriate in any particular case.

(20) TERMINATION OF THE NEW SHARE OPTION SCHEME

The Company by resolution in general meeting or the Board may at any time resolve to terminate the operation of the New Share Option Scheme and in such event no further Options shall be offered but the provisions of the New Share Option Scheme shall remain in force to the extent necessary to give effect to the exercise of any Option granted prior to the termination or otherwise as may be required in accordance with the provisions of the New Share Option Scheme and Options granted prior to such termination shall continue to be valid and exercisable in accordance with the New Share Option Scheme. Details of the Options granted, including Options exercised or outstanding, under the New Share Option Scheme shall be disclosed in the circular to the Shareholders seeking approval of the new scheme established after the termination of the New Share Option Scheme.

(21) TRANSFERABILITY OF OPTIONS

An Option is personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Option.

(22) LAPSE OF OPTIONS

An Option shall lapse automatically and not be exercisable (to the extent not already exercised) on the earliest of:

  • (a) the expiry of the Option Period;

  • (b) the expiry of any of the periods or situations referred to in paragraphs (12) to (17);

  • (c) the date of on which the scheme of arrangement of the company referred to in paragraph (16);

  • (d) the date of commencement of the winding-up of the Company commences;

  • (e) the date on which the Grantee ceases to be an Eligible Participant by reason of the termination of his relationship with the Company or any of the Subsidiaries on any one or more of the grounds that he has been guilty of

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APPENDIX I

PRINCIPAL TERMS OF NEW SHARE OPTION SCHEME

serious misconduct or has been convicted of any criminal offence involving his integrity or honesty or he has committed any breach of contract or in relation to an employee of the Company or any of the Subsidiaries (if so determined by the Board) on any other ground on which an employer would be entitled to terminate his employment at common law or pursuant to any applicable laws or under the Grantee’s service contract with the Company or the relevant Subsidiary and that a resolution of the Board or the board of directors of the relevant Subsidiary to the effect that the relationship of a Grantee has or has not been terminated on the grounds specified in this paragraph shall be conclusive; and

  • (f) the date on which the Board shall exercise the Company’s right to cancel the Option at any time after the Grantee commits a breach of paragraph (21) or the Options are cancelled referred to in paragraph (19).

(23) ALTERATION OF THE NEW SHARE OPTION SCHEME

  • (a) Subject to the GEM Listing Rules and sub-paragraphs (b) to (e) below, all provisions of the New Share Option Scheme may be altered in any respect by resolution of the Board without the approval of the Shareholders in general meeting.

  • (b) The terms of the New Share Option Scheme relating to the matters set out in Rule 23.03 of the GEM Listing Rules shall not be altered to the advantage of the Grantees without the prior approval of the Shareholders in general meeting.

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

  • (d) The amended terms of the New Share Option Scheme or the Options must still comply with the relevant requirements of Chapter 23 of the GEM Listing Rules as amended from time to time.

  • (e) Any change to the authority of the Board in relation to any alteration to the terms of the New Share Option Scheme must be approved by the Shareholders in general meeting.

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APPENDIX II SPECIAL ARRANGEMENTS ON COMPLETION AND SUBMISSION OF THE SECOND FORM OF PROXY

SPECIAL ARRANGEMENTS ON COMPLETION AND SUBMISSION OF THE SECOND FORM OF PROXY

A Shareholder who has not yet lodged the First Form of Proxy is requested to lodge the Second Form of Proxy if he/she wishes to appoint proxy/proxies to attend the AGM on his/her behalf. In this case, the First Form of Proxy should not be lodged.

A Shareholder who has already lodged the First Form of Proxy should note that:

  • (i) If no Second Form of Proxy is lodged, the First Form of Proxy will be treated as a valid proxy form lodged by him/her if correctly completed. The proxy/proxies so appointed by the Shareholder will be entitled to vote at his/her discretion or to abstain from voting on any resolution properly put to the AGM other than those referred to in the notice convening the AGM dated 28 March 2012 and the First Form of Proxy including, the resolution for the proposed adoption of the New Share Option Scheme set out in this supplemental circular.

  • (ii) If the Second Form of Proxy is lodged prior to 48 hours before the time appointed for holding the AGM or any adjournment thereof (the “Closing Time”), the Second Form of Proxy will revoke and supersede the First Form of Proxy previously lodged by him/her. The Second Form of Proxy will be treated as a valid proxy form lodged by the Shareholder if correctly completed.

  • (iii) If the Second Form of Proxy is lodged after the Closing Time, the Second Form of Proxy will be invalid. However, it will revoke the First Form of Proxy previously lodged by the Shareholder, and any vote that may be cast by the purported proxy/proxies (whether appointed under the First Form of Proxy or the Second Form of Proxy) will not be counted in any poll which will be taken on a proposed resolution. Accordingly, Shareholders are advised not to lodge the Second Form of Proxy after the Closing Time. If such Shareholders wish to vote at the AGM, they will have to attend in person and vote at the AGM themselves.

Shareholders are reminded that completion and delivery of the First Form of Proxy and/or the Second Form of Proxy will not preclude Shareholders from attending and voting in person at the AGM or at any adjourned meeting should they so wish.

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REVISED NOTICE OF AGM

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China Innovationpay Group Limited 中國創新支付集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 8083)

REVISED NOTICE OF ANNUAL GENERAL MEETING

REVISED NOTICE IS HEREBY GIVEN that the annual general meeting (the “AGM”) of China Innovationpay Group Limited (the “Company”) will be held at Yue Function Room, First Floor, City Garden Hotel, 9 City Garden Road, North Point, Hong Kong on Thursday, 3 May 2012 at 10:00 a.m. for the following purposes:

  1. To receive and consider the audited financial statements and the reports of the directors and auditors for the year ended 31 December 2011.

  2. To re-elect retiring directors and authorise the board of directors to fix their remuneration.

  3. To re-appoint auditors and to authorise the board of directors to fix their remuneration.

As special business, to consider and, if thought fit, to pass the following resolutions as ordinary resolutions of the Company:

  1. “ THAT

  2. (i) subject to paragraph (iii) of this resolution, pursuant to the Rules (the “GEM Listing Rules”) Governing the Listing of Securities on the Growth Enterprise Market (the “GEM”) on The Stock Exchange of Hong Kong Limited (the “Stock Exchange”), the exercise by the directors of the Company during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares) which might require the exercise of such powers be and is hereby generally and unconditionally approved;

  3. (ii) the approval in paragraph (i) of this resolution shall authorise the directors of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

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REVISED NOTICE OF AGM

  • (iii) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph (i) of this resolution, otherwise than pursuant to (a) a Rights Issue (as defined below), (b) the exercise of warrants to subscribe for shares of the Company or the exercise of options granted under any ordinary share option scheme adopted by the Company, or (c) an issue of shares of the Company in lieu of whole or part of a dividend on shares of the Company in accordance with the bye-laws of the Company, shall not exceed 20% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this resolution and this approval shall be limited accordingly; and

  • (iv) for the purpose of this resolution:

“Relevant Period” means the period from the date of this resolution until whichever is the earliest of:

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

  • (b) the expiration of the period within which the next annual general meeting of the Company is required by the bye-laws of the Company or the Company Act 1981 of Bermuda (amended) or any applicable laws to be held; and

  • (c) the date on which the authority sets out in this resolution is revoked or varied by an ordinary resolution in general meeting.

“Rights Issue” means offer of shares of the Company open for a period fixed by the directors of the Company to holders of shares on the register of members of the Company on a fixed record date in proportion to their then holdings of such shares as at that date (subject to such exclusions or other arrangements as the directors of the Company may deem necessary or expedient in relation to overseas shareholders or fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of, any recognised regulatory body or any stock exchange in any territory outside Hong Kong).”

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REVISED NOTICE OF AGM

  1. “ THAT

  2. (i) subject to paragraph (ii) of this resolution, the exercise by the directors of the Company during the Relevant Period (as defined below) of all powers of the Company to repurchase issued shares in the capital of the Company on GEM or any other stock exchange on which the securities of the Company may be listed and recognized by the Securities and Futures Commission of Hong Kong and the Stock Exchange for such purpose, subject to and in connection with all applicable laws and/or the requirements of the Rules Governing the Listing of Securities on GEM or of any other stock exchange as amended from time to time, be and the same is hereby generally and unconditionally approved;

  3. (ii) the aggregate nominal amount of shares of the Company which the Company is authorised to repurchase pursuant to the approval in paragraph (i) of this resolution shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue as at the date of the passing of this resolution, and this approval shall be limited accordingly; and

  4. (iii) for the purpose of this resolution:

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

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

  • (b) the expiration of the period within which the next annual general meeting of the Company is required by the bye-laws of the Company or the Company Act 1981 of Bermuda (as amended) or any applicable laws to be held; and

  • (c) the date on which the authority sets out for this resolution is revoked or varied by an ordinary resolution in general meeting.”

  • “ THAT conditional upon ordinary resolutions nos. 4 and 5 above being passed, the aggregate nominal amount of shares of the Company which are repurchased by the Company under the authority granted to the directors of the Company as mentioned in ordinary resolution no. 5 above shall be added to the aggregate nominal amount of share capital that may be allotted or agreed conditionally or unconditionally to be allotted by the directors of the Company pursuant to ordinary resolution no. 4 above.”

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REVISED NOTICE OF AGM

  1. “ THAT conditional upon the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, the shares of HK$0.01 each in the capital of the Company (the “Shares”) which may fall to be allotted and issued upon exercise of the subscription rights attaching to the options that may be granted under the share option scheme, a copy of which is produced to the meeting marked “A” and signed by the chairman of this meeting for the purpose of identification (the “ New Share Option Scheme ”), up to the general scheme limit, being the total number of Shares which may be issued upon exercise of all options to be granted under the New Share Option Scheme and any other share option scheme of the Group and which must not in aggregate exceed 10 per cent. of the Shares in issue as at the day of the passing of this resolution, the New Share Option Scheme be and is hereby approved and adopted by the Company and the directors of the Company be and are hereby authorised to grant options to subscribe for Shares under the New Share Option Scheme and to allot and issue Shares pursuant to the exercise of any options which may fall to be granted under the New Share Option Scheme and to do all such acts as they may in their absolute discretion consider necessary or expedient in order to give full effect to the New Share Option Scheme, and that to the extent permissible under the bye-laws of the Company, the GEM Rules and the rules of the New Share Option Scheme, the directors of the Company may vote in respect of any resolution(s) under or affecting the New Share Option Scheme (including the granting of options thereunder or approving the allotment and issue of Shares upon exercise of options thereunder) notwithstanding any interest(s) of any director(s) of the Company.”

As special business, to consider and, if thought fit, to pass the following resolutions as special resolutions of the Company:

  1. “ THAT the bye-laws of the Company (the “Bye-laws”) be and are hereby amended in the following manner:-

  2. (a) Bye-law 1(A)

    • (i) By adding the following new definition of “business day” immediately following the definition of “Bermuda” in the existing Bye-law 1(A):-

““business day” means a day on which The Stock Exchange of Hong Kong Limited is generally open for business of dealing in securities in Hong Kong. For the avoidance of doubt, where The Stock Exchange of Hong Kong Limited is closed for business of dealing in securities in Hong Kong on a business day by reason of a Number 8 or higher typhoon signal or black rainstorm warning, such day shall for the purposes of these Bye-laws be counted as a business day.”; and

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REVISED NOTICE OF AGM

  • (ii) By adding the following new definition of “substantial shareholder” immediately following the definition of “Statutes” in the existing Bye-law 1(A):-

“substantial shareholder” means a person who is entitled to exercise, or to control the exercise of, 10% or more (or such other percentage as may be prescribed by the rules of the stock exchange in the Relevant Territory from time to time) of the voting power at any general meeting of the Company.”;

(b) Bye-law 63

By deleting the existing Bye-law 63 in its entirety and substituting therefor the following new Bye-law 63:-

  • “63. An annual general meeting shall be called by notice in writing of not less than twenty-one (21) clear days and not less than twenty (20) clear business days and any special general meeting called for the passing of a Special Resolution shall be called by notice in writing of not less than twenty-one (21) clear days and not less than ten (10) clear business days. All other special general meetings may be called by notice in writing of not less than fourteen (14) clear days and not less than ten (10) clear business days however if permitted by the rules of the stock exchange in the Relevant Territory, a general meeting may be called by shorter notice if it is so agreed:

  • (i) in the case of a meeting called as the annual general meeting, by all the shareholders entitled to attend and vote thereat; and

  • (ii) in the case of any other meeting, by a majority in number of the shareholders having a right to attend and vote at the meeting, being a majority together holding not less than ninety-five per cent, (95%) in nominal value of the shares giving that right.

The notice shall be exclusive of the day on which it is served or deemed to be served and of the day for which it is given, and shall specify the place, the day and the hour of meeting and, in case of special business, the general nature of that business, and shall be given, in the manner hereinafter mentioned or in such other manner, if any, as may be prescribed by the Company in general meeting, to such persons as are, under these Bye-Laws, entitled to receive such notices from the Company.”;

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REVISED NOTICE OF AGM

(c) Bye-law 70

By deleting the existing Bye-law 70 in its entirety and substituting therefor the following new Bye-law 70:-

  • “70. At any general meeting a resolution put to the vote of the meeting shall be decided by way of poll save that the Chairman of the meeting may in good faith and in compliance with the rules of the stock exchange in the Relevant Territory, allow a resolution which relates purely to a procedural and administrative matter to be voted on by a show of hands. Where a show of hands is allowed, before or on the declaration of the result of the show of hands, a poll may be demanded:-

  • (i) by at least three shareholders present in person or by a duly authorised corporate representative or by proxy for the time being entitled to vote at the meeting; or

  • (ii) by any shareholder or shareholders present in person or by a duly authorised corporate representative or by proxy and representing not less than one-tenth of the total voting rights of all the shareholders having the right to vote at the meeting; or

  • (iii) by any shareholder or shareholders present in person or by a duly authorised corporate representative or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

Where a resolution is voted on by a show of hands, unless a poll is demanded and the demand is not withdrawn a declaration by the Chairman that a resolution has on a show of hands been carried, or carried unanimously, or by a particular majority, or lost, and an entry to that effect made in the book containing the minutes of the proceedings of the Company shall be conclusive evidence of the fact without proof of the number or proportion of the votes recorded in favour or against such resolution.

For the purpose of this Bye-law, procedural and administrative matters are those that (i) are not on the agenda of the general meeting or in any supplementary circular that may be issued by the Company to the shareholders; and (ii) relate to the Chairman’s duties to maintain the orderly conduct of the meeting and/or allow the business of the meeting to be properly and effectively dealt with, whilst allowing all shareholders a reasonable opportunity to express their views.”;

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REVISED NOTICE OF AGM

(d) Bye-law 71

By deleting the existing Bye-law 71 in its entirety and substituting therefor the following new Bye-law 71:-

  • “71. If a poll is required or demanded as aforesaid, the result of the poll shall be deemed to be the resolution of the meeting at which the poll was demanded. The Company shall only be required to disclose the voting figures on a poll if such disclosure is required by the rules of the stock exchange in the Relevant Territory.”;

  • (e) Bye-laws 72 and 74

By deleting the existing Bye-laws 72 and 74 in their entirety and replacing each of them with the words “Intentionally Deleted”;

(f) Bye-law 98(H)

By deleting the existing Bye-law 98(H)(iv) in its entirety and replacing it with the words “Intentionally Deleted”;

  • (g) Bye-laws 98(I) and 98(J)

By deleting the existing Bye-laws 98(I) and 98(J) in their entirety and replacing each of them with the words “Intentionally Deleted”;

(h) Bye-law 129

By deleting the existing Bye-law 129 in its entirety and substituting therefor the following new Bye-law 129:-

  • “129. A resolution in writing signed by all the Directors except such as are absent from the territory in which the Head Office is for the time being situate or temporarily unable to act through ill-health or disability (or their alternate Directors) shall (so long as such a resolution shall be signed by at least two Directors or their alternates and provided that a copy of such resolution has been given or the contents thereof communicated to all the Directors (or their alternates) for the time being entitled to receive notices of Board meetings) be as valid and effectual as if it had been passed at a meeting of the Board duly convened and held. Any such resolutions in writing may consist of several documents in like form each signed by one or more of the Directors or alternate Directors. Notwithstanding the foregoing, a resolution in writing shall not be passed in lieu of a meeting of the Board for the purposes of considering any matter or business in which a substantial shareholder of the Company or a Director has a conflict of interest and the Board has determined that such conflict of interest to be material.”;

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REVISED NOTICE OF AGM

(i) Bye-law 163

  • (1) By deleting Bye-law 163(B) in its entirety and substituted therefor the following new Bye-law 163(B):-

    • “(B) The Company shall at each annual general meeting appoint one or more firms of auditors to hold office until the conclusion of the next annual general meeting, but if an appointment is not made, the Auditors in office shall continue in office until a successor is appointed. A Director, officer or employee of the Company or of any of its subsidiaries or a partner, officer or employee of any such Director, officer or employee shall not be capable of being appointed Auditors of the Company, The Board may fill any casual vacancy in the office of Auditors after obtaining shareholders’ prior approval at the general meeting by way of an Ordinary Resolution, but while any such vacancy continues the surviving or continuing Auditors (if any) may act. Subject as otherwise provided by the Companies Act, the remuneration of the Auditors shall be fixed by or on the authority of the Company in the annual general meeting except that in any particular year the Company in general meeting may delegate the fixing of such remuneration to the Board and the remuneration of any Auditors appointed to fill any casual vacancy may be fixed by the Board.”;

  • (2) By inserting the following new Bye-law 163(C) after the new Bye-law 163(B):-

    • “(C) Any removal of an Auditor before the end of its terms of office must obtain prior shareholders’ approval at a general meeting in accordance with the Statutes.”;

  • (j) Bye-law 167

By deleting the existing Bye-law 167 in its entirety and substituting therefor the following new Bye-law 167:-

  • “167. (A) Except where otherwise expressly stated, any notice or document (including any “corporate communication” within the meaning ascribed under the rules of the stock exchange in the Relevant Territory) to be given to or by any person pursuant to these Bye-laws shall be in writing or, to the extent permitted by the Statutes and any applicable rules of the stock exchange in the Relevant Territory from time to time and subject to this Bye-law, contained in an electronic communication. A notice calling a meeting of the Board need not be in writing.

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REVISED NOTICE OF AGM

  • (B) Any notice or document (including any “corporate communication” within the meaning ascribed under the rules of the stock exchange in the Relevant Territory) to be given to or by any person pursuant to these Bye-laws may be served on or delivered to any shareholder of the Company either personally or by sending it through the post in a prepaid envelope or wrapper addressed to such shareholder at his registered address as appearing in the register or by leaving it at that address addressed to the shareholder or by any other means authorised in writing by the shareholder concerned or (other than share certificates) by publishing it by way of advertisement in at least one English language newspaper and one Chinese language newspaper circulating generally in the Hong Kong. Without limiting the generality of the foregoing but subject to the Statutes and any rules of the stock exchange in the Relevant Territory from time to time, a notice or document may be served or delivered by the Company to any shareholder by electronic means to such address as may from time to time be authorised by the shareholder concerned or by publishing it on a website and notifying the shareholder concerned that it has been so published (“notice of availability”). The notice of availability may be given to the shareholder by any of the means set out above other than by publishing it on a website. In the case of joint holders of a share, all notices shall be given to that one of the joint holders whose name stands first in the register and notice so given shall be sufficient notice to all the joint holders.”; and

(k) Bye-law 169

BY deleting the existing Bye-law 169 in its entirety and substituting therefor the following new Bye-law 169:-

  • “169. Any notice or other document, if sent by mail, postage prepaid, shall be deemed to have been served or delivered on the day following that on which the letter, envelope, or wrapper containing the same is put into the post. In proving such service it shall be sufficient to prove that the letter, envelope or wrapper containing the notice or document was properly addressed and put into the post as prepaid mail. Any notice or document not sent by post but left by the Company at the address of a shareholder noted on the register shall be deemed to have been served or delivered on the day it was so left. Any notice or document, if sent by electronic means (including through any relevant system), shall be deemed to be have been given on the day following that on which the electronic communication was sent by or on behalf

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REVISED NOTICE OF AGM

of the Company. Any notice or document served or delivered by the Company by any other means authorised in writing by the shareholder concerned shall be deemed to have been served when the Company has carried out the action it has been authorised to take for that purpose. Any notice or other document published by way of advertisement in the Newspapers or in an appointed newspaper shall be deemed to have been served or delivered on the day it was so published. Any notice or document published on a website shall be deemed given by the Company to a shareholder on the later of (i) the date on which a notice of availability is deemed served on such shareholder and (ii) the date on which such notice or document was published on the website.”.

  1. “ THAT subject to passing of special resolution no. 8 as set out in the notice convening this meeting, a new set of Bye-laws which consolidates all of the proposed amendments referred to in resolution no. 8 and all previous amendments made pursuant to resolutions passed by shareholders of the Company at previous general meetings, a copy of which has been tabled at the meeting marked “B” and signed by the chairman of this meeting for identification purpose, be and is hereby adopted as the new Bye-laws in substitution for and to the exclusion of the existing Bye-laws with immediate effect.”

By Order of the Board of China Innovationpay Group Limited Guan Guisen Chairman

Hong Kong, 16 April 2012

Principal place of business and head office in Hong Kong:

Unit 2708, 27/F.,

The Center, 99 Queen’s Road Central, Hong Kong

Notes:

  1. Any member entitled to attend and vote at the AGM is entitled to appoint one or more separate proxies to attend and vote instead of him/her. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed. A proxy need not be a member of the Company. Special arrangements on completion and submission of the Second Form of Proxy are set out in Appendix II to the supplemental circular of the. Shareholders who have appointed or intend to appoint proxy/proxies to attend the AGM are requested to pay particular attention to the special arrangements set out therein.

  2. Where there are joint holders of any share, any one of such persons may vote at the AGM, either personally or by proxy, in respect of such share as if he/she were solely entitled thereto, provided that if more than one of such joint holders be present at the AGM personally or by proxy, the person whose name stands first in the register in respect of such share shall alone be entitled to vote in respect thereof.

– 28 –

REVISED NOTICE OF AGM

  1. A new form of proxy (the “Second Form of Proxy”) is enclosed. To be valid, the Second Form of Proxy together with the power of attorney or other authority (if any) under which it is signed (or a notarially certified copy thereof) must be deposited at the Company c/o the Company Secretary at the Company’s principal place of business and head office in Hong Kong at Unit 2708, 27/F., The Center, 99 Queen’s Road Central, Hong Kong not less than 48 hours before the time appointed for holding the AGM or any adjourned meeting.

  2. An explanatory statement containing further details regarding ordinary resolutions nos. 4 to 6 as required by the GEM Listing Rules is set out in Appendix I to the circular of the Company dated 28 March 2012.

  3. Particulars of the retiring directors are set out in Appendix II to the circular of the Company dated 28 March 2012.

  4. Details of the proposed amendments to the Bye-laws are set out in Appendix III to the circular of the Company dated 28 March 2012.

  5. A summary of the principal terms of the New Share Option Scheme is set out in Appendix I to the supplemental circular issued by the Company on 16 April 2012.

  6. As at the date of this revised notice, the Board comprises two executive directors, namely Mr. Guan Guisen and Dr. Lei Chunxiong; one non-executive director, namely Mr. Li Yuezhong and three independent non-executive directors, namely Dr. Fong Chi Wah, Mr. Wang Zhongmin and Mr. Gu Jiawang.

– 29 –

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