CONTINUING CONNECTED TRANSACTIONS SUPPLEMENTAL AGREEMENT TO THE NEW MASTER AGREEMENT AND REVISION OF ANNUAL CAPS

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement. (Incorporated in Bermuda with limited liability) (Stock code: 111) CONTINUING CONNECTED TRANSACTIONS SUPPLEMENTAL AGREEMENT TO THE NEW MASTER AGREEMENT AND REVISION OF ANNUAL CAPS Independent Financial Adviser On 31 March 2016 (after trading hours), the Company and CCAM entered into the Supplemental Agreement to the New Master Agreement. The Supplemental Agreement is conditional upon the approval of the Independent Shareholders at the SGM. In light of the development of the business of the Group and that of the CCAM Group during the recent months, including but not limited to the updated business plan or proposed projects to be conducted by CCAM Group, and the expected increase of transaction volume between CCAM Group and the Group taking into account of the acquisition of certain equity interest in banking and financial services related entity by CCAM Group (as announced by CCAM on 18 December 2015), the Board expects that the Proposed Annual Caps shall be revised to cater for the latest business plan of both the Group and the CCAM Group. As such, the Company and CCAM propose to amend the New Master Agreement by entering into the Supplemental Agreement to amend certain terms of the New Master Agreement and to revise the Proposed Annual Caps. LISTING RULES IMPLICATIONS As at the date of this announcement, Sinoday is interested in 403,960,200 Shares, representing approximately 63% of the issued share capital of the Company. Sinoday is a wholly-owned subsidiary of China Cinda (HK) which is in turn a wholly-owned subsidiary of CCAM. Accordingly, members of the CCAM Group are connected persons of the Company and the transactions contemplated under the New Master Agreement, as well as the Supplemental Agreement, which is supplementing the New Master Agreement, constitute continuing connected transactions of the Company under Rule 14A.14 of the Listing Rules. 1

2 Since the Revised Annual Caps for Category I Transactions, Category II Transactions and Category III Transactions for each of the three years ending 2018 are expected to represent more than 5% of each of the applicable percentage ratios (other than the profits ratio) under the Listing Rules and are expected to exceed HK$10 million each, the continuing connected transactions contemplated under Category I Transactions, Category II Transactions and Category III Transactions under the New Master Agreement as supplemented by the Supplemental Agreement, and the respective Revised Annual Caps (other than those for Category IV Transactions, which represent less than 5% of each of the applicable percentage ratios (other than the profits ratio) under the Listing Rules and are less than HK$10 million) therefore are subject to the reporting, announcement and Independent Shareholders approval requirements under Chapter 14A of the Listing Rules. GENERAL The SGM will be held for the Independent Shareholders to consider and, if thought fit, among other things, (i) the entering into of the Supplemental Agreement; and (ii) the Revised Annual Caps for the three years ending 2018 by way of ordinary resolutions. A circular containing, among other things, (i) principal terms of, and information relating to the Supplemental Agreement; (ii) information relating to the Revised Annual Caps for the three years ending 2018; (iii) a letter from the Independent Board Committee, which sets out the recommendations of the Independent Board Committee to the Independent Shareholders in relation to the New Master Agreement as supplemented by the Supplemental Agreement and the Revised Annual Caps (other than those for Category IV Transactions); (iv) a letter from the Independent Financial Adviser, which sets out the opinions and recommendations of the Independent Financial Adviser to the Independent Board Committee and Independent Shareholders inrelationtothenewmasteragreement as supplemented by the Supplemental Agreement and the Revised Annual Caps (other than those for Category IV Transactions); and (v) a notice to convene the SGM, is expected to be despatched to the Shareholders on or before 10 May Reference is made to the announcement made by the Company on 18 December 2015 in relation to, among other things, the entering into of the New Master Agreement and the Proposed Annual Caps. BACKGROUND OF THE SUPPLEMENTAL AGREEMENT TO THE NEW MASTER AGREEMENT AND REVISION OF PROPOSED ANNUAL CAPS On 18 December 2015, the Company and CCAM entered into the New Master Agreement, pursuant to which the Group has agreed to provide (i) brokerage services for securities, futures and options trading; placing and underwriting and sub-underwriting services for securities; (ii) corporate finance advisory service; and (iii) asset management services, to the CCAM Group; as well as to (iv) pay advisory fee to the CCAM Group for their provision of corporate finance advisory services to the Group, for a term of 1 year commencing from 1 January 2016 and ending on The Proposed Annual Caps in respect of each category of transactions contemplated under the New Master Agreement for the year ending 2016 were set as HK$9,990,000 for each of the Category I, Category II, Category III and Category IV Transactions respectively. 2

3 In light of the development of the business of the Group and that of the CCAM Group during the recent months, including but not limited to the updated business plan or proposed projects to be conducted by CCAM Group, and the expected increase of transaction volume between CCAM Group and the Group taking into account of the acquisition of certain equity interest in banking and financial services related entity by CCAM Group (as announced by CCAM on 18 December 2015), the Board expects that the Proposed Annual Caps shall be revised to cater for the latest business plan of both the Group and the CCAM Group. As such, the Company and CCAM propose to amend the New Master Agreement by entering into the Supplemental Agreement to amend certain terms of the New Master Agreement and to revise the Proposed Annual Caps. SUPPLEMENTAL AGREEMENT TO THE NEW MASTER AGREEMENT On 31 March 2016 (after trading hours), the Company and CCAM entered into the Supplemental Agreement to the New Master Agreement. The Supplemental Agreement is conditional upon the approval of the Independent Shareholders at the SGM. Principal terms of the New Master Agreement as amended by the Supplemental Agreement are summarized as follows: Parties: The Company CCAM Date: 31 March 2016 Terms: Original term under the New Master Agreement: One year commencing from 1 January 2016 up to 2016 (both days inclusive) The company and CCAM are entitled to extend the New Master Agreement on or before 2016 and to take such action as may be appropriate to comply with the Listing Rules. New term under the New Master Agreement as amended by the Supplemental Agreement: Three years commencing from 1 January 2016 up to 2018 (both days inclusive) The company and CCAM are entitled to extend the New Master Agreement on or before 2018 and to take such action as may be appropriate to comply with the Listing Rules. Proposed Annual Caps: For details of the revision to the Proposed Annual Caps please refer to the section headed The Revised Annual Caps below. Save as disclosed above, the other terms and conditions of the New Master Agreement remain unchanged and effective. 3

4 CONDITIONS PRECEDENT TO THE SUPPLEMENTAL AGREEMENT The effective of the Supplemental Agreement is conditional upon the following conditions precedent being fulfilled: (i) (where applicable) the Company and CCAM having obtained the approval at the SGM (or a general meeting, in the case of CCAM) on the Supplemental Agreement and the transactions contemplated thereunder, including the Revised Annual Caps. (ii) the Company having obtained all necessary approval for the entering into of the Supplemental Agreement and for the performance of its obligations thereunder; and (iii) CCAM having obtained all necessary approval for the entering into of the Supplemental Agreement and for the performance of its obligations thereunder. THE REVISED ANNUAL CAPS Upon the Supplemental Agreement becoming effective, the Proposed Annual Caps will be revised and the Revised Annual Caps are as follows: The Originally Proposed Annual Caps ending 2016 HK$ Category I Transactions 9,990,000 Category II Transactions 9,990,000 Category III Transactions 9,990,000 Category IV Transactions 9,990,000 The Revised Annual Caps ending 2016 ending 2017 ending 2018 (HK$) (HK$) (HK$) Category I Transactions 23,000,000 46,000,000 67,000,000 Category II Transactions 15,000,000 15,000,000 15,000,000 Category III Transactions 90,000, ,000, ,000,000 For the avoidance of doubt, the Proposed Annual Caps for Category IV Transactions for the year ending 2016 under the New Master Agreement remains unchanged at HK$9,990,000, and the annual caps for Category IV Transactions for the years ending 31 December 2017 and 2018, also at HK$9,990,000 each, were provided under the Supplemental Agreement in light of the revision of the terms of the New Master Agreement. 4

5 The Revised Annual Caps were determined by the Company after taking into account of the following: For Category I Transactions The Company has taken into account of: (i) the historical transactions amount for the relevant transactions as detailed in the section headed Historical Transaction Amount below; (ii) the estimated total monetary value which would be brokered for securities and bonds trading, placing, underwriting and sub-underwriting; (iii) the relevant commission rates to be charged by the Group in accordance with the Group s pricing policy for each of the three years ending 2018; and (iv) a buffer of approximately 10% to provide flexibility to cater for any potential fluctuations of the actual size of the projects and market conditions over the term of the New Master Agreement as supplemented by the Supplemental Agreement. For Category II Transactions The Company has taken into account of: (i) the estimated transaction amount of the services to be provided to the CCAM Group by the Group, which involve two to three potential corporate exercises to be undertaken by the CCAM Group involving services from the Group each year and the estimated nature and complexity of such transactions; (ii) the estimated resources to be spent on providing the relevant corporate finance services; (iii) where the transaction involves fund raising, the estimated size of the funds involved and the corresponding fee chargeable in line with the Company s pricing policies; and (iv) the fees charged by the Group to independent clients for similar transactions. For Category III Transactions The Company has taken into account of: (i) the estimated total monetary value of the funds to be managed by the Group during the term of the New Master Agreement as supplemental by the Supplemental Agreement; (ii) the management fee and performance fee rates to be charged by the Group in accordance with the Group s and the CCAM Group s pricing policy; and (iii) plus a buffer of approximately 10% to provide flexibility to cater for any potential fluctuations. 5

6 For Category IV Transactions The Company has taken into account of: (i) the estimated transaction amount of the services to be provided by the CCAM Group to the Group, in particular the new branch of the Group recently established in Qianhai, Shenzhen, the PRC in February 2016 and the financial business to be undertaken by it going forward; (ii) the complexity of transactions involved; (iii) the estimated resources to be spent on providing the relevant corporate finance services; (iv) where the transaction involves fund raising, the size of the funds involved; and (v) the fees charged to the Group by Independent Third Parties for similar transactions. When determining the Revised Annual Caps, the Company has also based on the principal assumption that, during the term of the New Master Agreement as supplemented by the Supplemental Agreement, there will not be any adverse change or disruption in market conditions, operation and business environment or government policies which may materially affect the business of the Group and/or the CCAM Group. The Board is of the view that the Revised Annual Caps are in line with the estimated latest development of the business of and the business plans of, the Group and the CCAM Group, and are determined based on the principles of fairness and reasonableness. Pricing policies of the Group and internal control For the pricing policies and the internal control measures of the Company in relation to the transactions contemplated under the New Master Agreement, please refer to the announcement of the Company dated 18 December There has been no material revision or update of the Company s pricing policies since then. Historical transactions amount Set out below are the historical income in respect of the Category I, Category II and Category III transactions conducted under the agreement dated 22 October 2013 and entered into between the Company and CCAM in relation to the provision of certain financial services to/ by CCAM and/or its associates (as renewed by the New Master Agreement), and under the New Master Agreement for the two months ended 29 February 2016: Ended 2014 Ended 2015 For the two months ended 29 February 2016 Actual income Actual income Actual income HK$ HK$ HK$ Category I Transactions 1,182,726 8,400,182 0 Category II Transactions Category III Transactions 506,825 17,740, ,660 6

7 There was no historical amount of Category IV Transactions since it is a new type of services contemplated under the New Master Agreement in anticipation of the development of PRC business and to provide the clients with better services. REASONS FOR AND BENEFITS OF THE SUPPLEMENTAL AGREEMENT AND REVISION OF RELEVANT ANNUAL CAPS Our Group has continuously spent efforts in developing the Group s business and to maximize returns to the Shareholders, and have been actively negotiating with CCAM Group for cooperation on possible projects and business plans. The acquisition of certain equity interest in banking and financial services related entity by CCAM Group (as announced by CCAM on 18 December 2015) is also expected to contribute to the increase in the business transactions between the CCAM Group and the Group. The Company was also informed by CCAM that new business plans were emerging and previously contemplated projects which were at a preliminary stage have now become more concrete (though which may be subject to legally binding agreements or further implementation process). As such, details of the proposed transactions to be carried out which are covered by the New Master Agreement have been updated or revised, and hence the Proposed Annual Caps also need to be revised to cater the need of the Company. Based on the above factors, the Directors (excluding the independent non-executive Directors, whose opinion will be set out in the circular of the SGM) believe that the New Master Agreement as supplemented by the Supplemental Agreement and the terms thereof and the Revised Annual Caps for the three years ending 2018 are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS Mr. Zhao Hongwei, the chairman and an executive Director of the Company held a management position in CCAM is considered having conflict of interest in the New Master Agreement and has abstained from voting on the Board resolution approving the Supplemental Agreement and the transactions contemplated thereunder. As at the date of this announcement, Sinoday is interested in 403,960,200 Shares, representing approximately 63% of the issued share capital of the Company. Sinoday is a wholly-owned subsidiary of China Cinda (HK) which is in turn a wholly-owned subsidiary of CCAM. Accordingly, members of the CCAM Group are connected persons of the Company and the transactions contemplated under the New Master Agreement, as well as the Supplemental Agreement, which is supplementing the New Master Agreement, constitute continuing connected transactions of the Company under Rule 14A.14 of the Listing Rules. Since the Revised Annual Caps for Category I Transactions, Category II Transactions and Category III Transactions for each of the three years ending 2018 are expected to represent more than 5% of each of the applicable percentage ratios (other than the profits ratio) under the Listing Rules and are expected to exceed HK$10 million each, the continuing connected transactions contemplated under Category I Transactions, Category II transactions and Category III Transactions under the New Master Agreement as supplemented by the Supplemental Agreement, and the respective Revised Annual Caps (other than those for Category IV Transactions, which represent less than 5% of each of the applicable percentage ratios (other than the profits ratio) under the Listing Rules and are less than HK$10 million) therefore are subject to the reporting, announcement and Independent Shareholders approval requirements under Chapter 14A of the Listing Rules. 7

8 The Independent Board Committee comprising the independent non-executive Directors, namely Mr. Wang Tongsan, Mr. Chen Gongmeng, Mr. Hung Muk Ming, has been established for the purpose of advising the Independent Shareholders in respect of, among other things, the New Master Agreement as supplemented by the Supplemental Agreement and the Revised Annual Caps (other than those for Category IV Transactions) for the three years ending 31 December The Independent Financial Adviser has also been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of, among other things, the New Master Agreement as supplemented by the Supplemental Agreement and the Revised Annual Caps (other than those for Category IV Transactions) for the three years ending INFORMATION ABOUT THE PARTIES The Group is principally engaged in the provision of financial services in Hong Kong, including the provision of securities brokering and margin financing services, commodities and futures brokering, financial planning, asset management and corporate finance advisory services in Hong Kong. CCAM Group is principally engaged in distressed asset management, and provides customized financial solutions and differentiated asset management services to its clients through its diversified business platforms. GENERAL The SGM will be held for the Independent Shareholders to consider and, if thought fit, among other things, (i) the entering into of the Supplemental Agreement; and (ii) the Revised Annual Caps for the three years ending 2018 by way of ordinary resolutions. A circular containing, among other things, (i) principal terms of, and information relating to, the Supplemental Agreement; (ii) information relating to the Revised Annual Caps for the three years ending 2018; (iii) a letter from the Independent Board Committee, which sets out the recommendations of the Independent Board Committee to the Independent Shareholders in relation to the New Master Agreement as supplemented by the Supplemental Agreement and the Revised Annual Caps (other than those for Category IV Transactions); (iv) a letter from the Independent Financial Adviser, which sets out the opinions and recommendations of the Independent Financial Adviser to the Independent Board Committee and Independent Shareholders in relation to the New Master Agreement as supplemented by the Supplemental Agreement and the Revised Annual Caps (other than those for Category IV Transactions); and (v) a notice to convene the SGM, is expected to be despatched to the Shareholders on or before 10 May As at the date of this announcement, Sinoday, being the controlling shareholder of the Company, is deemed to have material interests in the Supplemental Agreement and the transactions contemplated thereunder, including the Revised Annual Caps. Sinoday and its associates shall, therefore, abstain from voting ontheresolutionsinrelationtotheentering into of the Supplemental Agreement and the transactions contemplated thereunder, including the Revised Annual Caps at the SGM. 8

9 DEFINITIONS In this announcement, the following expressions shall have the following meanings unless the context otherwise requires: associate(s) Board Category I Transactions Category II Transactions Category III Transactions Category IV Transactions CCAM CCAM Group has the meaning ascribed to it under the Listing Rules the board of Directors provision by the Group to CCAM Group of brokering services for securities, futures and options trading; placing, underwriting and subunderwriting services for securities (including but not limited to securities issued by the CCAM Group) as contemplated under the New Master Agreement provision by the Group to CCAM Group of corporate finance advisory services (including but not limited to advisory services in relation to (i) the compliance of the Listing Rules and The Codes on Takeovers and Mergers and Share; (ii) the issue of securities; and (iii) group restructuring) as contemplated under the New Master Agreement provision by the Group to CCAM Group of asset management services as contemplated under the New Master Agreement provision of corporate finance advisory services by the CCAM Group to the Group in relation to financial activities in the PRC (including but not limited to advisory services in relation to the (i) compliance of relevant PRC laws; (ii) the operation of asset management; and (iii) the target investees of the funds) as contemplated under the New Master Agreement China Cinda Asset Management Co., Ltd., a joint stock limited company incorporated in the PRC, the H shares of which are listed on the Main Board of the Stock Exchange (stock code: 1359) CCAM and/or its associates China Cinda (HK) China Cinda (HK) Holdings Company Limited, a company incorporated in Hong Kong with limited liability and a whollyowned subsidiary of CCAM Company connected persons Director(s) Group Hong Kong Cinda International Holdings Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange (stock code: 111) has the meaning ascribed to it under the Listing Rules director(s) of the Company the Company and its subsidiaries the Hong Kong Special Administrative Region of the PRC 9

10 Independent Board Committee Independent Financial Adviser Independent Shareholders Independent Third Party(ies) Listing Rules New Master Agreement PRC Proposed Annual Caps Revised Annual Caps SGM Shares(s) Shareholder(s) Sinoday the committee of the Board comprising all the independent nonexecutive Directors established to advise the Independent Shareholders as to voting at the SGM on the resolutions approving the Supplemental Agreement and the transactions contemplated thereunder, including the Revised Annual Caps RaffAello Capital Limited, a corporate licensed to carry out Type 6 (advising on corporate finance) regulated activity under the Securities and Futures Ordinance (Cap. 571, Laws of Hong Kong) Shareholders other than Sinoday and its associates persons(s) or company(ies) which is/are independent of any member of the Group, the Directors, the chief executives, the controlling shareholders, the substantial shareholders of the Company or its subsidiaries, and their respective associates the Rules Governing the Listing of Securities on the Stock Exchange the agreement dated 18 December 2015 and entered into between the Company and CCAM in relation to the provision of certain financial services to the CCAM Group and vice versa the People s Republic of China which, for the purpose of this announcement, excludes Hong Kong, the Macau Special Administrative Region and Taiwan the annual caps in respect of each category of transactions contemplated under the New Master Agreement for the year ending 2016 the revised Proposed Annual Caps in respect of each of Category I Transactions, Category II Transactions and Category III Transactions contemplated under the New Master Agreement as amended by the Supplemental Agreement for the three years ending 2018 the special general meeting of the Company to be convened and held for the Independent Shareholders to consider and approve the resolutions in respect of the Supplemental Agreement and the transactions contemplated thereunder, including the Revised Annual Caps issued ordinary share(s) of HK$0.1 each in the share capital of the Company holder(s) of the Shares Sinoday Limited, a company incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of China Cinda (HK) 10

11 Stock Exchange Supplemental Agreement HK$ The Stock Exchange of Hong Kong Limited the conditional supplemental agreement to the New Master Agreement dated 31 March 2016 entered into between the Company and CCAM to amend certain terms of the New Master Agreement Hong Kong dollars, the lawful currency of Hong Kong % per cent. By order of the Board Cinda International Holdings Limited Lau Mun Chung Executive Director Hong Kong, 31 March 2016 As at the date hereof, the Board comprises the following Directors: Executive Directors: Mr. Zhao Hongwei (Chairman) Mr. Gong Zhijian (Managing Director) Mr. Lau Mun Chung Non-executive Director: Independent Non-executive Directors: Mr. Chow Kwok Wai Mr. Wang Tongsan Mr. Chen Gongmeng Mr. Hung Muk Ming Website: 11