SUBSCRIPTION OF CONVERTIBLE BONDS

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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 the Cayman Islands with limited liability) (Stock Code: 8011) SUBSCRIPTION OF CONVERTIBLE BONDS SUBSCRIPTION OF CONVERTIBLE BONDS On 16 November 2012 (after trading hours), the Company and Mr. Chan Meng Kam entered into the Subscription Agreement pursuant to which the Company agreed to issue and Mr. Chan Meng Kam agreed to subscribe for the Convertible Bonds with the principal amount of HK$16,000,000. The Subscription is conditional upon the Stock Exchange granting listing of and permission to deal in the Conversion Shares. An application will be made to the Listing Committee of the Stock Exchange for granting approval for the listing of, and permission to deal in, the Conversion Shares. The Conversion Shares represent approximately 5.48% of the existing issued share capital of the Company and represent approximately 5.19% of the issued share capital of the Company as enlarged by the allotment and issue of the Conversion Shares. It is intended that the net proceeds of the Subscription of approximately HK$16,000,000 is to be applied as general working capital of the Group. SUBSCRIPTION On 16 November 2012 (after trading hours), the Company and Mr. Chan Meng Kam entered into the Subscription Agreement pursuant to which the Company agreed to issue and Mr. Chan Meng Kam agreed to subscribe for the Convertible Bonds. Date: 16 November 2012 (after trading hours) Parties: Issuer: Subscriber: the Company Mr. Chan Meng Kam 1

2 To the best of the Directors knowledge, information and belief, and having made all reasonable enquiries, the Subscriber is an independent third party. Principal terms of the Convertible Bonds Principal Amount: Maturity Date: Interest: Conversion Right(s): Redemption on Maturity Date: Early Redemption by the Company: Conversion Period: Conversion Price: HK$16,000,000. a date falling on the first anniversary of the Issue Date. interest is payable semi-annually at the rate of 3% per annum. the Bondholder(s) shall have the right(s) at any time during the Conversion Period to convert the whole or part of the principal amount outstanding under the Convertible Bonds at the Conversion Price into Conversion Shares. the principal amount of the Convertible Bonds which remains outstanding on the Maturity Date shall be redeemed by the Company together with interest accrued thereon. the Company shall have the right at any time to redeem the whole or part of the outstanding Convertible Bonds together with interest accrued thereon. the period commencing from the Issue Date up to and including the date falling 30 Business Days immediately prior to the Maturity Date. the Conversion Price of HK$0.160 per Conversion Share represents: (1) a premium of approximately 6.67% over the closing price of HK$0.150 per Share as quoted on the Stock Exchange on 16 November 2012, being the date of the Subscription Agreement; and (2) a premium of approximately 4.17% over the average closing price per Share of approximately HK$ as quoted on the Stock Exchange for the last five consecutive trading days up to and including 16 November 2012, being the last trading day and the date of the Subscription Agreement. Adjustment to Conversion Price: the Conversion Price will be subject to adjustment for, amongst other things, consolidation, subdivision or reclassification of Shares, capitalisation of profits or reserves, dividend or distribution, rights issue of Shares or options over Shares, issues at less than current market price and other events which may have a diluting effect on the holder of the Convertible Bonds. 2

3 Conversion Shares: upon full conversion of the Convertible Bonds at the initial Conversion Price of HK$0.160 per Conversion Share, an aggregate of 100,000,000 Conversion Shares will be issued, representing: (1) approximately 5.48% of the existing issued share capital of the Company; and (2) approximately 5.19% of the issued share capital of the Company as enlarged by the allotment and issue of the Conversion Shares. Transferability: Ranking of the Conversion Shares: subject to all applicable laws and regulations and prior notification to the Company, the Convertible Bonds may be assigned or transferred in whole or in part of the principal amount outstanding to any other party. the Conversion Shares, when allotted and issued, will rank pari passu in all respects with the Shares in issue as at the date of allotment and issue of the Conversion Shares. The Conversion Price was determined on an arm s length basis between the parties with reference to the prevailing market price and the recent trading volume of the Shares and the net asset value of the Company. The Directors consider that the terms of the Subscription Agreement are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Conditions Precedent Completion of the Subscription under the Subscription Agreement shall be conditional upon: (1) there being no breach of the warranties given by the Company under the Subscription Agreement; and (2) the Listing Committee of the Stock Exchange granting listing of and permission to deal in the Conversion Shares. Completion of the Subscription Completion of the Subscription will take place on the third Business Days after the date on which conditions precedent are satisfied or waived or such other date as the Company and the Subscriber may agree. Mandate to issue the Conversion Shares The 100,000,000 Conversion Shares shall be allotted and issued under the General Mandate granted to the Directors at the annual general meeting of the Company held on 4 May The Directors 3

4 were authorized to allot and issue up to 364,501,225 Shares pursuant to the General Mandate. Up to the date of this announcement, 2,464,764 Shares have been issued to an employee pursuant to the General Mandate. There are still 362,036,461 Shares which may be issued under the General Mandate and accordingly, the issuance of the Conversion Shares is not subject to any approval by the Shareholders. REASONS FOR THE SUBSCRIPTION AND USE OF PROCEEDS The Company is principally engaged in the exploration, exploitation and development of oil, natural gas and coal, and trading of petroleum-related products. The Subscriber is a businessman and is principally engaged in real estate and hotel investments in Macau and Mainland China. The gross proceeds and net proceeds of the Subscription will be approximately HK$16,000,000, which is intended to be applied as general working capital of the Group. The net issue price per Conversion Share based on the above net proceeds is approximately HK$ EFFECT ON SHAREHOLDING STRUCTURE OF THE COMPANY The table below sets out the shareholding structures of the Company (i) as at the date of this announcement; (ii) immediately upon the issuance of the Conversion Shares: As at the date of Upon issuance of this announcement Conversion Shares Shares % Shares % Silver Star Enterprises Holdings Inc. (Note) 1,274,255, ,274,255, Subscriber ,000, Public Shareholders 550,714, ,714, Total 1,824,970, ,924,970, Note: The entire issued share capital of Silver Star Enterprises Holdings Inc. is beneficially owned by Mr. Lam Nam. FUND RAISING ACTIVITIES DURING THE PAST TWELVE MONTHS The Company did not conduct any equity fund raising activities in the past twelve months immediately preceding the date of this announcement. 4

5 LISTING APPLICATION AND RANKING OF SUBSCRIPTION SHARES The Convertible Bonds will not be listed on any stock exchange. An application will be made to the Stock Exchange for the listing of, and permission to deal in, the Conversion Shares. The Conversion Shares, when allotted and issued, will rank pari passu in all respects with the Shares in issue as at the date of allotment and issue of the Conversion Shares. DEFINITIONS In this announcement, unless the context otherwise requires, the following expressions shall have the following meanings: Bondholder(s) Business Day Company Conversion Conversion Period Conversion Price the person or persons who is or are for the time being registered in the register of Convertible Bonds as the holder(s) of the Convertible Bonds; means a day on which banks are generally open for business in Hong Kong (other than a Saturday, Sunday or public holiday or a day on which a tropical cyclone warning No. 8 or above or a black rainstorm warning signal is hoisted or remains hoisted in Hong Kong at any time between 9:00 am and 5:00 pm); Polyard Petroleum International Group Limited, the shares of which are listed on the Stock Exchange; the exercise of the Conversion Rights attached to the Convertible Bonds and the issuance of the Conversion Shares accordingly; the period commencing from the Issue Date up to and including the date falling 30 Business Days immediately prior to the Maturity Date; the price at which each Conversion Share will be issued upon Conversion, being HK$0.160 per Conversion Share and subject to adjustments which may be made pursuant to the terms and conditions of the Convertible Bonds; 5

6 Conversion Right(s) Conversion Shares Convertible Bonds Directors GEM GEM Listing Rules General Mandate Group HK$ Hong Kong Issue Date Maturity Date Shareholder(s) Share(s) Stock Exchange the right(s) of the Bondholder(s) at any time during the Conversion Period to convert the whole or part of the principal amount of the Convertible Bonds into Conversion Shares; the new Shares to be issued upon Conversion; the convertible bonds to be issued by the Company to Mr. Chan Meng Kam in the principal amount of HK$16,000,000 in aggregate subject to the terms of the Subscription Agreement; means the directors of the Company for the time being; means the Growth Enterprise Market of the Stock Exchange; means the Rules Governing the Listing of Securities on the GEM, as amended from time to time; means the general mandate approved by the Shareholders at the annual general meeting on 4 May 2012 to grant to the Directors to issue and allot up to 20% of the issued share capital of the Company as the date of the annual general meeting; means the Company and its subsidiaries; means Hong Kong dollars, the lawful currency of Hong Kong; means the Hong Kong Special Administrative Region of the People s Republic of China; the date of issue of the Convertible Bonds; a date falling on the first anniversary of the Issue Date; means holder(s) of Shares from time to time. means ordinary share(s) of nominal value HK$0.04 each in the capital of the Company; means The Stock Exchange of Hong Kong Limited; 6

7 Subscription Subscription Agreement the subscription of the Convertible Bonds by Mr. Chan Meng Kam pursuant to the Subscription Agreement; the subscription agreement entered into between the Company and Mr. Chan Meng Kam on 16 November For and on behalf of the board Polyard Petroleum International Group Limited Kuai Wei Chairman Hong Kong 16 November 2012 As at the date of this announcement, the board of directors of the Company comprises: Executive Directors Mr. Kuai Wei Mr. Lai Chun Liang Mr. Lin Zhang Independent Non-Executive Directors Mr. Wang Yanhui Mr. Pai Hsi-Ping Mr. Wong Kon Man Jason This announcement, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules 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: (1) the information contained in this announcement is accurate and complete in all material respects and not misleading; (2) there are no other matters the omission of which would make any statement in this announcement misleading; and (3) all opinions expressed in this announcement have been arrived at after due and careful consideration and are founded on bases and assumptions that are fair and reasonable. This announcement will remain on the Latest Company Announcements page of the GEM website at for at least 7 days from the date of its posting and on the Company s website at 7