WAI KEE HOLDINGS LIMITED

Transcription

1 THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser. If you have sold or transferred all your shares in Wai Kee Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or the transfer was effected for transmission to the purchaser or transferee. Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular. WAI KEE ZENS WAI KEE HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 610) PROPOSED RE-ELECTION OF RETIRING DIRECTORS PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES PROPOSALS FOR ADOPTION OF A NEW SHARE OPTION SCHEME AND TERMINATION OF THE EXISTING SHARE OPTION SCHEME AND NOTICE OF ANNUAL GENERAL MEETING A notice convening the annual general meeting of Wai Kee Holdings Limited to be held at Academy Room I-II, 1st Floor, InterContinental Grand Stanford Hong Kong, 70 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Tuesday, 15th May, 2012 at 11:00 a.m. is set out in Appendix IV to this circular. Whether or not you intend to attend such meeting, please complete the enclosed form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Tricor Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding such meeting. Completion and return of the form of proxy will not preclude shareholders from attending and voting at the meeting or any adjourned meeting if they so wish. 30th March, 2012

2 CONTENTS Page Definitions... 1 Letter from the Board Appendix I Details of Retiring Directors Standing for Re-election... 8 Appendix II Explanatory Statement Appendix III Summary of the Principal Terms of the New Share Option Scheme Appendix IV Notice of Annual General Meeting Appendix V General i

3 DEFINITIONS In this circular, unless the context otherwise requires, the following expressions shall have the following meanings. AGM Associates Board Build King Bye-laws Company Directors Existing Share Option Scheme Group Hong Kong Latest Practicable Date Listing Rules New Issue Mandate New Share Option Scheme the annual general meeting of the Company to be convened and held at Academy Room I-II, 1st Floor, InterContinental Grand Stanford Hong Kong, 70 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Tuesday, 15th May, 2012 at 11:00 a.m.; the same definition as described under the Listing Rules; the board of directors of the Company; Build King Holdings Limited, a company incorporated in Bermuda with limited liability, a subsidiary of the Company and the shares of which are listed on the Main Board of the Stock Exchange; the bye-laws of the Company; Wai Kee Holdings Limited, a company incorporated in Bermuda with limited liability, and the shares of which are listed on the Main Board of the Stock Exchange; the directors of the Company; the share option scheme adopted by the Company on 18th September, 2002; the Company and its subsidiaries; the Hong Kong Special Administrative Region of the People s Republic of China; 26th March, 2012, being the latest practicable date prior to the printing of this circular; the Rules Governing the Listing of Securities on the Stock Exchange; a general mandate proposed to be granted to the Directors to exercise the power of the Company to issue new Shares on the terms set out in the Notice; the new share option scheme which is proposed to be adopted by the Company at the AGM, a summary of the principal terms of which is set out in Appendix III to this circular; 1

4 DEFINITIONS Notice Participant Repurchase Mandate Road King SFO Share(s) Shareholder(s) Stock Exchange Takeovers Code HK$ the notice convening the AGM; means any executive or non-executive directors of the Group, any executives or officers and full-time employees of the Group who the Board or a committee thereof appointed for the purpose of administering the New Share Option Scheme considers, in its sole discretion, have contributed or will contribute to the Group; a general mandate proposed to be granted to the Directors to exercise the power of the Company to repurchase the Shares on the terms set out in the Notice; Road King Infrastructure Limited, a company incorporated in Bermuda with limited liability, an associated corporation of the Company and the shares of which are listed on the Main Board of the Stock Exchange; the Securities and Futures Ordinance, Chapter 571 of the Law of Hong Kong; ordinary share(s) of par value of HK$0.10 each in the capital of the Company; the shareholder(s) of the Company; The Stock Exchange of Hong Kong Limited; the Hong Kong Code on Takeovers and Mergers; Hong Kong Dollars, the lawful currency of Hong Kong; and % per cent. 2

5 LETTER FROM THE BOARD WAI KEE ZENS WAI KEE HOLDINGS LIMITED (Incorporated in Bermuda with limited liability) (Stock Code: 610) Executive Directors: Registered Office: William Zen Wei Pao (Chairman) Clarendon House Derek Zen Wei Peu (Vice Chairman) Church Street Anriena Chiu Wai Yee Hamilton HM 11 Bermuda Non-executive Directors: Patrick Lam Wai Hon Principal Place of Business: Chu Tat Chi Unit 1103, 11th Floor Leslie Cheng Chi Pang East Ocean Centre 98 Granville Road Independent Non-executive Directors: Tsimshatsui Steve Wong Che Ming Kowloon Samuel Wan Siu Kau Hong Kong Francis Wong Man Chung To the Shareholders Dear Sir or Madam, 30th March, 2012 PROPOSED RE-ELECTION OF RETIRING DIRECTORS PROPOSED GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES PROPOSALS FOR ADOPTION OF A NEW SHARE OPTION SCHEME AND TERMINATION OF THE EXISTING SHARE OPTION SCHEME INTRODUCTION At the AGM, resolutions will be proposed: AND NOTICE OF ANNUAL GENERAL MEETING (a) to re-elect retiring Directors; 3

6 LETTER FROM THE BOARD (b) (c) (d) (e) to allot, issue and deal with additional Shares and to make or grant offers, agreements and options not exceeding 20% of the aggregate nominal value of the issued share capital of the Company as at the date of passing such resolution; to repurchase Shares not exceeding 10% of the aggregate nominal value of the issued share capital of the Company as at the date of passing such resolution; to add to the general mandate for issuing Shares set out in (b) above the number of Shares repurchased by the Company pursuant to the Repurchase Mandate set out in (c) above; and to approve and adopt the New Share Option Scheme and to terminate the Existing Share Option Scheme. The purpose of this circular is to provide you with information in relation to the above resolutions and to give you notice of the AGM. PROPOSED RE-ELECTION OF RETIRING DIRECTORS Pursuant to Bye-law 87, at each annual general meeting, one-third of the Directors for the time being (or, if their number is not a multiple of three (3), the number nearest to but not less than one-third) shall retire from office by rotation. Accordingly, Mr. William Zen Wei Pao, Miss Anriena Chiu Wai Yee and Mr. Francis Wong Man Chung will retire from office. Mr. William Zen Wei Pao, Miss Anriena Chiu Wai Yee and Mr. Francis Wong Man Chung, being eligible, offer themselves for re-election at the AGM. Details of such Directors are set out in Appendix I to this circular. PROPOSED GENERAL MANDATE TO ISSUE NEW SHARES At the AGM, it will be proposed, by way of an ordinary resolution, that the Directors be given a general and unconditional mandate to exercise all powers of the Company to issue new Shares up to 20% of the aggregate nominal value of the issued share capital of the Company at the date of the passing the ordinary resolution. As at the Latest Practicable Date, there were 793,124,034 Shares in issue. Subject to the passing of the relevant ordinary resolution and on the basis that no further Shares are issued or repurchased prior to the date of the AGM, the Company would be authorised to issue up to a maximum of 158,624,806 Shares. In addition, it is further proposed, by way of a separate ordinary resolution, that the New Issue Mandate be extended so that the Directors be given a general mandate to issue further Shares of an aggregate nominal value equal to the aggregate nominal value of the Shares repurchased by the Company under the Repurchase Mandate. PROPOSED GENERAL MANDATE TO REPURCHASE SHARES At the AGM, it will be proposed, by way of an ordinary resolution, that the Directors be given a general and unconditional mandate to exercise all powers of the Company to repurchase Shares on the Stock Exchange up to a maximum of 10% of the Shares in issue at the date of passing the ordinary resolution. An explanatory statement containing information relating to the Repurchase Mandate as required pursuant to the Listing Rules is set out in Appendix II to this circular. 4

7 LETTER FROM THE BOARD PROPOSALS FOR ADOPTION OF A NEW SHARE OPTION SCHEME AND TERMINATION OF THE EXISTING SHARE OPTION SCHEME The Existing Share Option Scheme was adopted by the Company on 18th September, 2002 and will expire on 17th September, In view of the expiration of the Existing Share Option Scheme and in order to enable the Company to continue to grant options to selected Participants as incentives or rewards for their contribution to the Group, the Directors propose to recommend to the Shareholders at the AGM to approve the adoption of the New Share Option Scheme and simultaneously terminate the operation of the Existing Share Option Scheme. As at the Latest Practicable Date, the Company or the Group does not maintain any share option scheme other than the Existing Share Option Scheme. It is proposed that, subject to the approval of the Shareholders for the adoption of the New Share Option Scheme at the AGM and termination of the Existing Share Option Scheme, the operation of the Existing Share Option Scheme shall be terminated with effect from the conclusion of the AGM (such that no further options could thereafter be offered under the Existing Share Option Scheme but in all other respects the provisions of the Existing Share Option Scheme shall remain in full force and effect) and the New Share Option Scheme will take effect, subject to the approval of the Stock Exchange, from the conclusion of the AGM. Operation of the New Share Option Scheme will commence after all conditions precedent have been fulfilled. Options granted prior to such termination will continue to be valid and exercisable in accordance with the rules of the Existing Share Option Scheme. The reason for adoption of the New Share Option Scheme is to enable the Company to continue provide selected Participants with the opportunity to acquire proprietary interests in the Company and to encourage such participants to work towards enhancing the value of the Company and the Shares for the benefit of the Company and the Shareholders as a whole, in view of the upcoming expiry of the Existing Share Option Scheme. The rules of the New Share Option Scheme provide that the Company may specify the participants to whom Options shall be granted, the number of Shares subject to each option and the date on which the options shall be granted. The subscription price will be determined by the Board subject to the requirements of the Listing Rules. The Board may also at its discretion include in a grant of options such terms including: (i) the minimum period for which an option must be held and/or minimum performance targets that must be reached before it can be exercised; and/or (ii) any other terms, all of which may be imposed (or not imposed) either on a case-by-case basis or generally. The Directors consider that such rules enable the Company, with appropriate flexibility, to grant options on terms that promote the alignment of interests of the participants (as a potential stakeholder in the Company) and that of the Company. A resolution will be proposed at the AGM for the Board to grant options under the New Share Option Scheme for the subscription of not more than 10% of the entire issued capital of the Company (excluding, for this purpose, options which have lapsed in accordance with the terms of any other share option scheme of the Group, and the outstanding options granted and yet to be exercised pursuant to the Existing Share Option Scheme) as at the date of the passing of the relevant resolution. 5

8 LETTER FROM THE BOARD As at the Latest Practicable Date, there were 793,124,034 Shares in issue. Assuming that there is no change in the number of issued Shares between the period from the Latest Practicable Date and the date of adoption of the New Share Option Scheme, the number of Shares issuable pursuant to the New Share Option Scheme and any other share option schemes of the Company on the date of approval of the New Share Option Scheme will initially be 79,312,403 Shares, being 10% of the total number of Shares in issue on the date of approval of the New Share Option Scheme, unless the Company obtains a fresh approval from its Shareholders to renew the 10% limit on the basis that the maximum number of Shares which may be issued upon exercise of all outstanding share options granted and yet to be exercised under the New Share Option Scheme and any other share option schemes of the Company shall not exceed 30% of the issued share capital of the Company from time to time. The Directors do not consider it appropriate to state the value of all options that can be granted pursuant to the New Share Option Scheme as if they had been granted on the Latest Practicable Date as a number of variables which are crucial for the calculation of the option value have not been determined. Such variables include but are not limited to the exercise price, exercise period and lock-up period (if any). The Directors believe that any calculation of the value of the options as at the Latest Practicable Date based on a number of speculative assumptions would not be meaningful and would be misleading to the Shareholders. The adoption of the New Share Option Scheme is conditional upon: (i) (ii) the passing by the shareholders of the Company in general meeting of an ordinary resolution to approve the adoption of the New Share Option Scheme; and the Listing Committee of the Stock Exchange granting the listing of, and permission to deal in, any Shares which may fall to be issued pursuant to the exercise of options under the New Share Option Scheme. With respect to the operation of the New Share Option Scheme, the Company will, where applicable, comply with the relevant requirements under Chapter 17 of the Listing Rules. None of the Directors is a trustee of the New Share Option Scheme or has any direct or indirect interest in such trustee, if any. An application will be made to the Listing Committee of the Stock Exchange for granting the approval for the listing of, and permission to deal in, the Shares to be issued pursuant to the exercise of the options granted under the New Share Option Scheme. A summary of the principal terms of the New Share Option Scheme which is proposed to be approved and adopted by the Company at the AGM is set out in the Appendix III to this circular. A copy of the rules of the New Share Option Scheme is available for inspection at the Company s principal place of business in Hong Kong at Unit 1103, 11th Floor, East Ocean Centre, 98 Granville Road, Tsimshatsui, Kowloon, Hong Kong during normal business hours from the date hereof up to and including the date of the AGM, and at the AGM. 6

9 LETTER FROM THE BOARD AGM Set out in Appendix IV to this circular is the Notice. A form of proxy for use by the Shareholders in respect of the AGM is also enclosed. Whether or not the Shareholders are able to attend the AGM, they are requested to complete the enclosed form of proxy and return it to the Company s branch share registrar in Hong Kong, Tricor Secretaries Limited, at 26th Floor, Tesbury Centre, 28 Queen s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the AGM. Completion and return of the form of proxy will not preclude the Shareholders from attending and voting at the AGM should they wish to do so. To the extent that the Company is aware having made all reasonable enquiries, no Shareholder has a material interest in the adoption of the New Share Option Scheme and the termination of the Existing Share Option Scheme. Therefore, no Shareholder is required to abstain from voting at the AGM in respect of the resolution to approve the same. VOTING BY POLL Pursuant to Rule of the Listing Rules, any votes of the Shareholders at a general meeting must be taken by poll. Therefore, the chairman of the AGM will demand a poll for each and every resolution put forward at the AGM pursuant to Bye-law 66. The Company will appoint scrutineers to handle vote-taking procedures at the AGM. The results of the poll will be published on the websites of the Stock Exchange and the Company as soon as possible in accordance with Rule of the Listing Rules. RECOMMENDATION The Directors are of the opinion that the re-election of retiring Directors, the grant of the New Issue Mandate and the Repurchase Mandate, and the adoption of the New Share Option Scheme and termination of the Existing Share Option Scheme are in the best interests of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of the relevant resolutions to be proposed at the AGM. GENERAL Your attention is drawn to the additional information set out in Appendix I (Details of Retiring Directors Standing for Re-election), Appendix II (Explanatory Statement), Appendix III (Summary of the Principal Terms of the New Share Option Scheme), and Appendix IV (Notice of Annual General Meeting) to this circular. Yours faithfully, For and on behalf of the Board William Zen Wei Pao Chairman 7

10 APPENDIX I DETAILS OF RETIRING DIRECTORS STANDING FOR RE-ELECTION The following are the particulars of the Directors who will retire and, being eligible, offer themselves for re-election at the AGM: William ZEN Wei Pao, age 64, is the Chairman of the Company. He has been with the Group since He was appointed as an Executive Director in July 1992 and a member of the Remuneration Committee of the Company in April 2005 and the Chairman of the Nomination Committee of the Company in February He is also the Chairman of Road King. He holds a Bachelor of Science Degree from The Chinese University of Hong Kong and a Master of Business Administration Degree from Asia International Open University (Macau). He also attended Executive Education Program at Harvard University. He is a member of both the Hong Kong Institution of Engineers and the Institute of Quarrying, the United Kingdom. He has over 40 years of experience in civil engineering industry. Mr. Zen is responsible for the overall strategic planning and corporate marketing and development of the Group. He is the brother of Mr. Zen Wei Peu, Derek. Save as disclosed above, Mr. Zen did not hold any directorship in other listed public companies in the last three years. Save for his directorship in the Group and he is the brother of Mr. Derek Zen Wei Peu, Mr. Zen does not have any relationship with any director, senior management, substantial shareholders or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Zen holds 192,381,843 Shares, 1,400,000 ordinary shares in Build King, 2,000,000 non-voting deferred shares in Wai Kee (Zens) Construction & Transportation Company Limited and 30,000 non-voting deferred shares in Wai Luen Stone Products Limited, both of which are associated corporations of the Company. Mr. Zen also holds 7,250,000 ordinary shares in Road King, 2,500,000 outstanding share options granted on 6th November, 2007 and 1,400,000 outstanding share options granted on 9th April, 2010 by Road King. Save as disclosed above, Mr. Zen does not have, and is not deemed to have, other interests and short positions in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO). Mr. Zen entered into a service agreement with the Company for a term of three years commencing from 1st August, 2009 and is subject to retirement by rotation and re-election pursuant to the Bye-laws. He is entitled to receive under his service agreement an annual remuneration package of HK$315,000 plus bonus subject to the performance of the Company and the individual. His emolument will be reviewed and determined by the Remuneration Committee of the Company annually with reference to his duties and responsibilities with the Company, the Company s performance and the prevailing market condition. Mr. Zen has not been involved in any of the matters as mentioned under Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there are no other matters in relation to Mr. Zen that need to be brought to the attention of the Shareholders. 8

11 APPENDIX I DETAILS OF RETIRING DIRECTORS STANDING FOR RE-ELECTION Anriena CHIU Wai Yee, age 48, was appointed as an Executive Director in June She joined the Group in April She is the Company Secretary of the Company. She holds a Bachelor of Administrative Studies Degree and a Master Degree of Professional Accounting. Miss Chiu is an associate member of The Hong Kong Institute of Chartered Secretaries and The Institute of Chartered Secretaries and Administrators. She has extensive experience in company secretarial field. Miss Chiu is responsible for the construction materials division of the Group, the personnel and administration department and secretarial department of the Company. Miss Chiu did not hold any directorship in other listed public companies in the last three years. Save for her directorship in the Group, Miss Chiu does not have any relationship with any director, senior management, substantial shareholders or controlling shareholders of the Company. As at the Latest Practicable Date, Miss Chiu holds 1,116,000 ordinary shares in Build King and 1,920 common shares in Chai-Na-Ta Corp., an associated corporation of the Company. Miss Chiu also holds 205,000 ordinary shares in Road King and 100,000 outstanding share options granted on 6th November, 2007 by Road King. Save as disclosed above, Miss Chiu does not have, and is not deemed to have, other interests and short positions in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO). Miss Chiu has entered into a service agreement with the Company commencing from 21st June, 2011 and expiring on 31st July, 2012 and is subject to retirement by rotation and re-election pursuant to the Bye-laws. She is entitled to receive under her service agreement an annual remuneration package of HK$1,590,000 plus bonus as determined by the profit sharing scheme of the Company. Her emolument will be reviewed and determined by the Remuneration Committee of the Company annually with reference to her duties and responsibilities with the Company, the Company s performance and the prevailing market condition. Miss Chiu has not been involved in any of the matters as mentioned under Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there are no other matters in relation to Miss Chiu that need to be brought to the attention of the Shareholders. 9

12 APPENDIX I DETAILS OF RETIRING DIRECTORS STANDING FOR RE-ELECTION Francis WONG Man Chung, age 47, was appointed as an Independent Non-executive Director and a member of the Audit Committee of the Company in August He was appointed as the Chairman of the Audit Committee and a member of the Remuneration Committee of the Company in April 2005, as well as a member of the Nomination Committee of the Company in February Mr. Wong holds a Master Degree in Management conferred by Guangzhou Jinan University of China. He is a Certified Public Accountant (Practising) and has over 20 years of experience in the profession of accounting. He is a fellow member of the Association of Chartered Certified Accountants, the United Kingdom and the Hong Kong Institute of Certified Public Accountants, a certified tax adviser of the Taxation Institute of Hong Kong, an associate member of the Institute of Chartered Accountants in England and Wales, and a member of the Society of Chinese Accountants and Auditors, Hong Kong. Mr. Wong is a Director of both Union Alpha CPA Limited and Union Alpha CAAP Certified Public Accountants Limited, which are professional accounting firms, and a Founding Director and member of Francis M. C. Wong Charitable Foundation Limited, a charitable institution. Prior to that, he worked for an international accounting firm for 6 years and The Hong Kong Securities Clearing Company Limited for 2 years. Mr. Wong is currently an Independent Non-executive Director and either the chairman or a member of the Audit Committee/ Remuneration Committee of China Oriental Group Company Limited, Digital China Holdings Limited and eforce Holdings Limited, all of whose shares are listed on the Main Board of the Stock Exchange. He was once an Independent Non-executive Director of Lightscape Technologies Inc., a company with its shares traded on the OTC Bulletin Board in the United States of America. Save as disclosed above, Mr. Wong did not hold any directorship in other listed public companies in the last three years. Save for his directorship in the Company, Mr. Wong does not have any relationship with any director, senior management, substantial shareholders or controlling shareholders of the Company. As at the Latest Practicable Date, Mr. Wong does not have, and is not deemed to have, other interests and short positions in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO). Mr. Wong has entered into a letter of appointment with the Company for a term of three years commencing from 1st March, 2012 and is subject to retirement by rotation and re-election in accordance with the Bye-laws. Mr. Wong is entitled to an emolument of HK$189,000 per annum for acting as an Independent Non-executive Director and additional fees of HK$110,000 and HK$33,000 per annum for acting as the Chairman of the Audit Committee and a member of the Remuneration Committee of the Company respectively. His director s fee will be reviewed and determined by the Board annually with authorization granted by the Shareholders at an annual general meeting of the Company and taking reference to his duties and responsibilities with the Company, the Company s performance and the prevailing market situation. Mr. Wong has not been involved in any of the matters as mentioned under Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules and there are no other matters in relation to Mr. Wong that need to be brought to the attention of the Shareholders. 10

13 APPENDIX II EXPLANATORY STATEMENT This appendix serves as an explanatory statement, as required by Rule 10.06(1)(b) of the Listing Rules, to provide Shareholders with requisite information reasonably necessary for them to make an informed decision as to whether to vote for or against the ordinary resolution to be proposed at the AGM in relation to the Repurchase Mandate. SHARE CAPITAL As at the Latest Practicable Date, there were 793,124,034 Shares in issue. Subject to the passing of the relevant ordinary resolution and on the basis that no further Shares are issued or repurchased prior to the date of the AGM, the Company would be authorized to repurchase up to a maximum of 79,312,403 Shares. REASONS FOR THE REPURCHASES The Directors believe that it is in the best interests of the Company and the Shareholders to have general authority from the Shareholders to enable the Directors to repurchase Shares on the Stock Exchange. Such repurchases may, depending on marketing conditions and funding arrangements at the time, lead to an enhancement of the net asset value per Share and/or its earnings per Share and will only be made when the Directors believe that such repurchase will benefit the Company and the Shareholders. FUNDING OF THE REPURCHASES It is proposed that repurchases of securities under the Repurchase Mandate would be financed from available cash flow or working capital facilities of the Company and its subsidiaries. In repurchasing the securities, the Company may only apply funds legally available for such purpose in accordance with its memorandum of association and Bye-laws and the laws of Bermuda. The laws of Bermuda provide that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant Shares, or funds of the Company which would otherwise be available for dividend or distribution or the proceeds of a new issue of Shares made for the purpose of the repurchase. The amount of premium payable on the repurchase may only be paid out of either funds of the Company which would otherwise be available for dividend or distribution or out of the share premium account before the Shares are repurchased. There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the latest published audited accounts of the Company for the year ended 31st December, 2011), in the event that the proposed Repurchase Mandate was to be exercised in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements or the gearing levels of the Company which in the opinion of the Directors are from time to time appropriate for the Company. 11

14 APPENDIX II EXPLANATORY STATEMENT SHARE PRICES The highest and lowest prices at which the Shares have been traded on the Stock Exchange in each of the previous twelve months prior to the Latest Practicable Date were as follows: Per Share Highest Lowest HK$ HK$ 2011 March April May June July August September October November December January February March (up to the Latest Practicable Date) DISCLOSURE OF INTERESTS None of the Directors nor, to the best of their knowledge and belief having made all reasonable enquiries, any of their Associates has any present intention, in the event that the Repurchase Mandate is approved by the Shareholders, to sell any of the Shares to the Company. No connected person (as defined in the Listing Rules) of the Company has notified the Company that he/ she has a present intention to sell any of the Shares to the Company, or has undertaken not to do so, in the event that the Repurchase Mandate is approved by the Shareholders. UNDERTAKING OF THE DIRECTORS The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the powers of the Company to make repurchases pursuant to the proposed resolution in accordance with the Listing Rules and the laws of Bermuda. 12

15 APPENDIX II EXPLANATORY STATEMENT EFFECT OF THE TAKEOVERS CODE If a Shareholder s proportionate interest in the voting rights of the Company increases as a result of the Directors exercising the powers of the Company to repurchase Shares pursuant to the Repurchase Mandate, such increase will be treated as an acquisition of voting rights for the purposes of Rule 32 of the Takeovers Code. Accordingly, a Shareholder or group of Shareholders acting in concert could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code. To the best knowledge of the Company, as at the Latest Practicable Date and for the purpose of the SFO, Mr. William Zen Wei Pao, Mr. Derek Zen Wei Peu and Vast Earn Group Limited ( Vast Earn ) were interested in 10% or more of the issued share capital of the Company: Approximate percentage of the issued ordinary share capital of the Company as at the Name Number of Shares held Latest Practicable Date William Zen Wei Pao (Note) 192,381, % Derek Zen Wei Peu (Note) 185,557, % Vast Earn 213,868, % Note: Mr. William Zen Wei Pao and Mr. Derek Zen Wei Peu are brothers and are presumed to be acting in concert with each other by reason that they are close relatives. As at the Latest Practicable Date, the aggregate number of Shares held by them was 377,938,921 Shares, amounting to approximately 47.65% of the issued share capital of the Company. In the event that the Directors exercise in full the power to repurchase the Shares pursuant to the Repurchase Mandate and assuming that there is no alteration to the existing shareholdings of Mr. William Zen Wei Pao, Mr. Derek Zen Wei Peu and Vast Earn, the combined shareholding of Mr. William Zen Wei Pao and Mr. Derek Zen Wei Peu will be increased to approximately 52.95% and the shareholding of Vast Earn will be increased to 29.96%. Accordingly, Mr. William Zen Wei Pao and Mr. Derek Zen Wei Peu will incur an obligation to make a mandatory offer under Rule 26 of the Takeovers Code as the aggregate percentage shareholding of Mr. William Zen Wei Pao and Mr. Derek Zen Wei Peu has increased by more than 2% of the voting rights of the Company. In addition, the public float requirement under Rule 8.08 of the Listing Rules may be breached. However, the Directors do not have any intention for the Company to exercise its power to repurchase the Shares to the extent that would trigger a mandatory offer by Mr. William Zen Wei Pao and Mr. Derek Zen Wei Peu under Rule 26 of the Takeovers Code or will result in the public float of the Company falling below 25%. SHARE REPURCHASES MADE BY THE COMPANY No repurchase of the Shares (whether on the Stock Exchange or otherwise) has been made by the Company during the six months preceding the Latest Practicable Date. 13

16 APPENDIX III SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME In addition to the defined terms used in the circular which are not specifically defined below, unless the context otherwise requires, the following additional expressions shall have the following meanings for the purpose of this appendix only. Acceptance Date Adoption Date Auditors Board Business Day Bye-laws Commencement Date Grant Date Grantee Option Option Period Scheme Period the date upon which a grant of Option must be accepted by the relevant Participant, being a date not later than 30 days after the Grant Date; 15th May, 2012 (the date on which the New Share Option Scheme is conditionally adopted by resolution of the Shareholders in general meeting); the auditors for the time being of the Company; the board of directors of the Company or a committee thereof appointed for the purpose of administering the New Share Option Scheme; any day on which the Stock Exchange is open for the business of dealing in securities; bye-laws of the Company (as amended from time to time); in respect of any particular Option, the date upon which the Option is deemed to be accepted pursuant to the New Share Option Scheme; the date (which shall be a Business Day) on which the grant of an Option is made to (and subject to acceptance by) a Participant as determined in accordance with the New Share Option Scheme; any Participant who accepts a grant of Option(s) in accordance with the terms of the New Share Option Scheme, or (where the context so permits) any person who is entitled to any such Option in consequence of the death of the original Grantee, or the legal personal representative of such person; An option to subscribe for Shares granted to (and subject to acceptance by) a Participant pursuant to the New Share Option Scheme; in respect of any particular Option, the period commencing on the 1st anniversary of the Commencement Date of the relevant Option and expiring on the 4th anniversary of the Commencement Date; the period of 10 years commencing on the Adoption Date; 14

17 APPENDIX III SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME Subscription Price Subsidiary the price per Share at which a Grantee may subscribe for Shares on the exercise of an Option pursuant to paragraph (d) below, subject to adjustment in accordance with the New Share Option Scheme; and a company which is for the time being and from time to time a subsidiary (within the meaning of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong)) of the Company, whether incorporated in Hong Kong or elsewhere. The following is a summary of the principal terms of the New Share Option Scheme: (a) Purpose The purpose of the New Share Option Scheme is to provide Participants with the opportunity to acquire proprietary interests in the Company and to encourage Participants to work towards enhancing the value of the Company and the Shares for the benefit of the Company and the Shareholders as a whole. (b) Who May Join The Directors may, at their discretion, invite Participants to take up Options at a price calculated in accordance with paragraph (d) below. A grant of Options shall remain open for acceptance by the Participant concerned on or before the Acceptance Date provided that no such grant shall be open for acceptance after the expiry of the Scheme Period or after the New Share Option Scheme is terminated or after the Participant ceases to be a Participant. An Option shall be regarded as having been accepted when the Company receives from the Grantee the duplicate of the grant letter, comprising acceptance of the grant, duly signed by the Grantee together with a remittance in favour of the Company of HK$1.00 as consideration for the grant of Option on or before the Acceptance Date. Such remittance is not refundable in any circumstances. The grant letter shall specify the terms on which the Option is granted. Such terms may, at the discretion of the Board, include among other things, (i) the minimum period for which an Option must be held and/or minimum performance targets that must be reached before it can be exercised; and/or (ii) any other terms, all of which may be imposed (or not imposed) either on a case-by-case basis or generally. (c) Grant of Options to Connected Persons or any of their Associates Any grant of Options to any Director, chief executive or substantial shareholder (as such terms as defined in the Listing Rules) of the Company, or any of their respective Associates under the New Share Option Scheme or any other share option schemes of the Company or any of the Subsidiaries shall be subject to the prior approval of the Independent Non-executive Directors (excluding Independent Non-executive Directors who are the proposed Grantees of the Options in question). 15

18 APPENDIX III SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME Where any grant of Options to a substantial shareholder or an Independent Non-executive Director of the Company, or any of their respective Associates, would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled or outstanding) to such person in the 12-month period up to and including the proposed Grant Date: (i) (ii) representing in aggregate over 0.1% of the number of Shares in issue on the date of such grant; and having an aggregate value, based on the closing price of the Shares as stated in the Stock Exchange s daily quotations sheets on each relevant date on which the grant of such Options is made to (and subject to acceptance by) such person under the relevant scheme, in excess of HK$5 million, such further grant of Options shall be subject to prior approval by resolution of the Shareholders (voting by way of poll). The Company shall send a circular to the Shareholders in accordance with the Listing Rules, and all connected persons (as defined in the Listing Rules) of the Company shall abstain from voting in favour of the resolution at such general meeting of the Shareholders. (d) Subscription Price The Subscription Price shall be determined by the Board in its absolute discretion but in any event shall be at least the highest of: (i) (ii) (iii) the closing price of the Shares as stated in the Stock Exchange s daily quotations sheets on the Grant Date which must be a Business Day; the average closing price of the Shares as stated in the Stock Exchange s daily quotations sheets for the 5 Business Days immediately preceding the Grant Date; and the nominal value of the Shares. (e) Maximum Number of Shares (i) The maximum 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 Company and/or any Subsidiary shall not, in the absence of Shareholders approval, in aggregate exceed 10% in nominal amount of the aggregate of Shares in issue on the Adoption Date (the Scheme Mandate Limit ). Options lapsed or cancelled in accordance with the terms of the New Share Option Scheme and (as the case may be) such other share option schemes of the Company and/or any Subsidiary shall not be counted for the purpose of calculating the Scheme Mandate Limit. 16

19 APPENDIX III SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME The Company may renew the Scheme Mandate Limit at any time subject to prior Shareholders approval but in any event, 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 options to be granted under any other share option schemes of the Company under the limit as refreshed must not exceed 10% of the Shares in issue as at the date of the Shareholders approval of the renewed limit. Options previously granted (and subject to acceptance) under the New Share Option Scheme and any other share option schemes of the Company and/or any Subsidiary (including those outstanding, cancelled or lapsed in accordance with the New Share Option Scheme or such other schemes of the Company and/ or any Subsidiary and those that have been exercised) will not be counted for the purpose of calculating the limit as renewed. (ii) (iii) (iv) (v) The Listing Rules provide that the Company may seek separate approval by the Shareholders in general meeting for granting options beyond the Scheme Mandate Limit to specifically identified Participants in accordance with the provisions of the Listing Rules (which include the issue of circular containing information prescribed by the Listing Rules). Accordingly, if the prior approval of the Shareholders in general meeting is obtained in accordance with the relevant procedural requirements of the Listing Rules, the Board may grant Options to such Participants in respect of such number of Shares and on such terms as may be specified in the said shareholders approval, notwithstanding that such grant of Options will result in any of the Scheme Mandate Limit being exceeded. Subject to paragraph (iv) below, no Participant shall be granted an Option which, if accepted and exercised in full, would result in such Participant becoming entitled to subscribe for such number of Shares as, when aggregated with the total number of Shares already issued and which may be issued upon exercise of all Options granted and to be granted to him, together with all options granted and to be granted to him under any other share option scheme(s) of the Company and/or any Subsidiary, within the 12-month period immediately preceding the proposed Grant Date (including exercised, cancelled and outstanding options), would exceed one per cent. (1%) of the number of Shares in issue as at the proposed Grant Date. If the prior approval of the Shareholders in general meeting is obtained, in accordance with the relevant procedural requirements of the Listing Rules, at which meeting such Participant and his Associates shall abstain from voting on the relevant resolution, the Board may grant Options to such Participant in respect of such number of Shares and on such terms as may be specified in the said shareholders approval, notwithstanding that such grant of Options will result in the said one-per cent. limit being exceeded. The limit on the total number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the New Share Option Scheme, together with all outstanding options granted and yet to be exercised under any other share option scheme(s) of the Company and/or any Subsidiary, must not exceed 30 per cent. (30%) of the number of issued Shares from time to time. No Options may be granted if such grant will result in the said 30-per cent. limit being exceeded. Options lapsed or cancelled in accordance with the terms of the New Share Option Scheme or any other share option scheme(s) of the Company and/or any Subsidiary shall not be counted for the purpose of calculating the said 30-per cent. limit. 17

20 APPENDIX III SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME (f) Time of Exercise of Option An Option may be exercised in accordance with the terms of the New Share Option Scheme at any time during the Option Period. (g) Rights are Personal to Grantees An Option is personal to the Grantee and shall not be assignable and no Grantee shall in any way sell, transfer, assign, charge, mortgage, encumber or create any interest in favour of any third party over or in relation to any Option or purport to do any of the foregoing. (h) Rights on Termination of Employment (i) General In the event of a Grantee ceasing to be a Participant for any reason other than his death or the termination of his employment or directorship on one or more of the grounds specified in paragraph (r)(vi), the Option (to the extent not already exercised) shall lapse on the date of cessation of such employment (which date shall be the last actual working day with the Company or the relevant Subsidiary whether salary is paid in lieu of notice or not) or directorship (in the case of a director resigning, which date shall be the date on which the resignation letter is served on the Company, and in all other cases, the date as determined by the Board) and shall cease to be exercisable provided that the Board may within one month from the date of such cessation otherwise determine that, the Option (or such remaining part thereof) shall become exercisable within such period as the Board may determine following the date of such cessation. Subject to the sole discretion of the Board, a Grantee shall not be regarded as ceasing to be a Participant if he ceases to hold a position of directorship or employment with the Company or any particular Subsidiary but at the same time he takes up a different position of directorship or employment with the Company or another Subsidiary, as the case may be. (ii) Dismissal In the event of the Grantee ceasing to be a Participant by reason of termination of his employment or directorship on one or more of the grounds specified in paragraph (r)(vi) and the Grantee has exercised the Option in whole or in part pursuant to the New Share Option Scheme but Shares have not been allotted to him as at the date of cessation, the Grantee shall be deemed not to have so exercised such Option and the Company shall return to the Grantee the amount of the Subscription Price for the Shares paid in respect of the purported exercise of such Option. In addition, any Options granted to such Grantee which are unexercised as at the date he ceases to be a Participant will lapse automatically. 18

21 APPENDIX III SUMMARY OF THE PRINCIPAL TERMS OF THE NEW SHARE OPTION SCHEME (i) Rights on Death In the event of the Grantee ceasing to be a Participant by reason of his death and none of the events which would be a ground for termination of his employment or directorship with the Company and/ or any of the Subsidiaries under paragraph (r)(vi), his legal personal representative(s) may exercise the Option up to the Grantee s entitlement (to the extent not already exercised) within the period of 6 months following his death provided that where any of the events set out in paragraphs (k), (l) and (m) occurs prior to his death or within such period of 6 months following his death, then his personal representative(s) may so exercise the Option within the various periods respectively set out in such paragraphs. (j) Effect of Alterations to Share Capital Subject to paragraph (e) above, in the event of any capitalisation issue, rights issue, consolidation, sub-division or reduction of the share capital of the Company (other than an issue of Shares as consideration in respect of a transaction) whilst an Option remains outstanding in that it is granted and yet to be exercised (and has not lapsed or been cancelled), corresponding adjustments (if any) shall be made in: the number of Shares subject to the New Share Option Scheme, the number of Shares subject to outstanding Options, the Subscription Price in relation to each outstanding Option and/or the method of exercise of the Options, provided that: (i) (ii) any such adjustments must give the Grantee the same proportion of the issued share capital of the Company as that to which the Grantee was entitled immediately before such adjustment, but so that no such adjustment shall be made to the extent that the effect of such adjustment would be to enable any Share to be issued at less than its nominal value; and notwithstanding paragraph (j)(i) above, any adjustments as a result of an issue of securities with a price-dilutive element, such as rights issue, open offer or capitalisation issue, should be based on a scrip factor similar to the one used in accounting standards in adjusting the earnings per share figures (referred to in Hong Kong Accounting Standards 33) and the acceptable adjustments set out in the Supplemental Guidance on Listing Rule 17.03(3) issued by the Stock Exchange on 5th September, 2005 and any future guidance or interpretation of the Listing Rules issued by the Stock Exchange from time to time, but no such adjustments shall be made to the extent that a Share would be issued at less than its nominal value. In respect of any adjustment required by this paragraph (j), other than any made on a capitalisation issue, an independent financial adviser or the Auditors must also confirm to the Board in writing that the adjustments satisfy the above proviso. The capacity and role of the independent financial adviser or the Auditors pursuant to this paragraph (j) is that of experts and not of arbitrators and their confirmation shall (in the absence of manifest error) be final and binding on the Company and the Grantees. The costs of the independent financial adviser or the Auditors shall be borne by the Company. 19