Alltronics Holdings Limited — Proxy Solicitation & Information Statement 2015

Dec 23, 2015

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 dealers or registered institutions in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in ALLTRONICS HOLDINGS LIMITED (華訊 股份有限公司), you should at once hand this circular to the purchaser or the transferee or to the bank, stockbroker, registered dealer in securities or other agent through whom the sale or the transfer was effected for transmission to the purchaser or the transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

This circular is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for securities of the Company.

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ALLTRONICS HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 833)

MAJOR TRANSACTION – ACQUISITION OF PROPERTIES

A letter from the Board is set out on pages 3 to 7 of this circular.

24 December 2015

CONTENTS

			Page
DEFINITIONS	. . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			3
APPENDIX I	–	FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . .	8
APPENDIX II	–	VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
APPENDIX III	–	GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . .	15

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following terms or expressions have the following meanings:

• “Acquisition”

the acquisition of the Properties by the Purchaser from the Vendor pursuant to the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement

• “Announcement”

the announcement dated 10 November 2015 made by the Company in relation to the Acquisition

• “associate”

• shall have the meaning ascribed to it under the Listing Rules

• “Board” the board of Directors

• “Business Day”

means a day (excluding a Saturday, Sunday, public holidays or the day on which a black rainstorm warning or typhoon signal no. 8 or above is hoisted between 9:00 a.m. to 5:00 p.m.) on which licensed banks in Hong Kong are generally open for business throughout their normal business hours

• “Company”

Alltronics Holdings Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange

• “Completion”

completion of the Acquisition pursuant to the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement in relation to the acquisition of the Properties entered into between the Purchaser and the Vendor

• “connected person”

shall have the meaning as ascribed to it under the Listing Rules

• “Consideration”

the consideration for the Acquisition, being HK$176,000,000

• “Director(s)”

the director(s) of the Company

• “EGM”

any extraordinary general meeting of the Company to be held for the Shareholders to consider and, if thought fit, approve the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement and the transactions contemplated thereunder

• “Formal Sale and Purchase Agreement”

the formal agreement for sale and purchase of the Properties entered into between the Vendor and the Purchaser on 20 November 2015

• “Group”

• the Company and its subsidiaries

– 1 –

DEFINITIONS

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong” Hong Kong Special Administrative Region of the People’s Republic of China

• “Independent Third Party third party(ies) independent of, not connected or acting in (Parties)” concert (as defined in the Codes on Takeovers and Mergers and Share Buy-backs) with the Company and any of its connected persons or any of their respective associates (as defined under the Listing Rules)

• “Last Trading Day” 6 November 2015, being the last full trading day of the Shares on the Stock Exchange immediately prior to the publication of the Announcement

• “Latest Practicable Date” 21 December 2015, being the latest practicable date for ascertaining certain information contained in this circular

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange

• “Preliminary S&P Agreement” the preliminary agreement for sale and purchase of the Properties entered into between the Vendor and the Purchaser on 6 November 2015

• “Properties” office located on the 4th floor of Citicorp Centre, 18 Whitfield Road, Hong Kong and car parking space no. 7 on the 1st floor and car parking space nos. 19, 19A and 21 on the 2nd floor of Citicorp Centre, 18 Whitfield Road, Hong Kong, having a total gross floor area of approximately 14,074 square feet

• “Purchaser” Alltronics Tech. Mftg. Limited, an indirect wholly-owned subsidiary of the Company

• “Share(s)” ordinary share(s) of HK$0.01 each in the share capital of the Company

• “Shareholder(s)” shareholder(s) of the Company, holder(s) of the ordinary share(s) of HK$0.01 each of the Company

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

• “Valuer” Ascent Partners Valuation Service Limited

• “Vendor” Seajet Investments Limited

• “%” per cent

– 2 –

LETTER FROM THE BOARD

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ALLTRONICS HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 833)

Executive Directors: Mr. Lam Yin Kee Ms. Yeung Po Wah Mr. So Kin Hung Mr. Lam Chee Tai, Eric

Registered Office: Cricket Square, Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Non-executive Director: Mr. Fan, William Chung Yue

Independent Non-executive Directors: Mr. Pang Kwong Wah Mr. Leung Kam Wah Mr. Yau Ming Kim, Robert

Head office and principal place of business in Hong Kong: Room 1108, 11/F Eastwood Centre No. 5 A Kung Ngam Village Road Shau Kei Wan, Hong Kong

24 December 2015

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION – ACQUISITION OF PROPERTIES

INTRODUCTION

References are made to the Announcement regarding the Acquisition, an announcement dated 12 November 2015 regarding the grant of waiver from strict compliance with Rule 14.41(a) of the Listing Rules and the announcement dated 20 November 2015 regarding the update on the Acquisition.

On 6 November 2015, the Purchaser, an indirect wholly-owned subsidiary of the Company, entered into the Preliminary S&P Agreement with the Vendor in relation to the acquisition of the Properties located at Citicorp Centre, 18 Whitfield Road, Hong Kong at a consideration of HK$176,000,000.

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LETTER FROM THE BOARD

The purpose of this circular is to provide the Shareholders with further information in relation to the Acquisition. Details of the Acquisition are as follows:

THE ACQUISITION

The Preliminary S&P Agreement

Date: 6 November 2015

Purchaser: Alltronics Tech. Mftg. Limited, an indirect wholly-owned subsidiary of the Company

Vendor: Seajet Investments Limited

To the best of the Directors’ knowledge, information and belief, after having made all reasonable enquiries, the Vendor and its ultimate beneficial owner(s) are Independent Third Parties of the Company and its connected persons.

Assets to be acquired for

The assets to be acquired by the Purchaser from the Vendor are the office located on the 4th floor of Citicorp Centre, 18 Whitfield Road, Hong Kong and car parking space no. 7 on the 1st floor and car parking space nos. 19, 19A and 21 on the 2nd floor of Citicorp Centre, 18 Whitfield Road, Hong Kong, having a total gross floor area of approximately 14,074 square feet.

The Properties are sold to the Purchaser on an “as is” basis. The Properties shall be delivered in vacant possession, and the office located on the 4th floor of Citicorp Centre, 18 Whitfield Road, Hong Kong will be used as the head office of the Group.

A valuation report of the Properties has been carried out by Ascent Partners Valuation Service Limited, which valued the market value of the Properties at HK$179,000,000 as at 30 November 2015. The valuation report of the Properties performed by Ascent Partners Valuation Service Limited is set out in Appendix II to this circular.

Formal Sale and Purchase Agreement

The Purchaser and the Vendor entered into the Formal Sale and Purchase Agreement on 20 November 2015.

Consideration and payment terms

The consideration for the Acquisition is HK$176,000,000, payable in cash, which shall be satisfied by the Purchaser in the following manner:

1. An initial deposit of HK$8,800,000, representing 5% of the total consideration for the Acquisition, shall be payable by the Purchaser upon the signing of the Preliminary S&P Agreement;

2. A further deposit of HK$8,800,000, representing 5% of the total consideration for the Acquisition, shall be payable by the Purchaser on or before 20 November 2015; and

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LETTER FROM THE BOARD

1. HK$158,400,000, representing the remaining balance of the total consideration for the Acquisition, shall be payable by the Purchaser upon Completion.

As at the Latest Practicable Date, the initial deposit and the further deposit have been settled by the Purchaser in cash.

The consideration for the Acquisition was determined after arm’s length negotiations between the parties by reference to the prevailing market conditions, as well as the location of the Properties and market price of comparable properties in the same area. It is expected that 40% of the Consideration will be financed by bank mortgage financing and the remaining portion of the Consideration will be financed by internal resources of the Group.

The Directors (including the independent non-executive Directors) believe that the Consideration is fair and reasonable and in the interests of the Company and the Shareholders as a whole.

Agency fee

On Completion, the Purchaser and the Vendor shall pay a sum of HK$880,000 and HK$1,760,000, respectively, to the estate agent for the Acquisition, who is an Independent Third Party, as commission for the services rendered by the estate agent.

Completion

Subject to satisfaction of the conditions to the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement entered into between the parties, completion of the Acquisition shall take place on or before 7 March 2016.

REASONS FOR THE ACQUISITION

The existing head office of the Group in Hong Kong is rented under an operating lease which will expire in October 2016. The Acquisition will provide a permanent head office to the Group in Hong Kong with a potential of capital appreciation in the long run. Taking into account the above factors, the Directors consider that the terms of the Acquisition are fair and reasonable and the Acquisition is in the interests of the Shareholders and the Company as a whole.

INFORMATION OF THE PURCHASER AND THE COMPANY

The Purchaser is an indirect wholly-owned subsidiary of the Company and its principal activity is the manufacturing and trading of electronics products and components for electronic products.

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LETTER FROM THE BOARD

The Company is an investment holding company and its subsidiaries are principally engaged in manufacturing and trading of electronic products, components for electronic products, biodiesel products, and provision of energy saving business solutions.

INFORMATION OF THE VENDOR

To the best of the Directors’ knowledge, information and belief, the Vendor is owned by Evergetic Development Company Limited, a company incorporated in Hong Kong, and Mr. Cheung Leung Cho. Further, Evergetic Development Company Limited is owned by Mr. Cheung Leung Cho, Mr. Li Kwok Hung, Mr. Leung Hong Yin and Ms. Chow Lai Yin, Ellen. The Vendor and its ultimate beneficial owners are Independent Third Parties of the Company and its connected persons. The Vendor is a company principally engaged in property investment.

FINANCIAL EFFECT ON THE GROUP

The Company intends to finance the Consideration as to approximately HK$70.4 million by means of a mortgage loan from a bank and as to the remaining balance of the Consideration by internal resources of the Group. As at 31 October 2015, the Group has cash and cash equivalents of approximately HK$105 million. Further, the net proceeds from the placing of 69,172,000 shares pursuant to the placing agreement dated 20 November 2015 entered into between the Company, as an issuer, and CNI Securities Group Limited as placing agent, amounted to approximately HK$128 million and the Group has already received such proceeds on 7 December 2015.

As at the Latest Practicable Date, the Company and the bank are still negotiating the terms of the proposed mortgage loan for the Properties, which have not yet been finalized. If the Group fails to obtain the bank mortgage, the cash and cash equivalents and unutilized banking facilities of the Group will be sufficient to settle the Consideration in full.

The Properties will be held as leasehold land and leasehold buildings in the Group after Completion. Following the Acquisition, the total assets of the Group are expected to increase by approximately HK$198 million, representing the sum of the Consideration, commission to the estate agent, stamp duty and other expenses incurred for the Acquisition, and the estimated renovation costs. On the other hand, the net assets value of the Group is expected to remain unchanged as the increase in leasehold land and leasehold buildings will be offset by the decrease in cash balances of the Group and increase in bank borrowings. The Group expects the Acquisition will increase the Group’s liabilities by the mortgage loan amount of HK$70.4 million and will increase the bank interests and depreciation charges by approximately HK$1.2 million and HK$5.9 million respectively and will reduce the office rental expenses by approximately HK$1.9 million annually.

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LETTER FROM THE BOARD

GENERAL

In respect of the Acquisition, the applicable percentage ratios, where applicable, calculated by reference to Rule 14.07 of the Listing Rules, are 25% or more but less than 100%. Accordingly, the Acquisition constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to Shareholders’ approval pursuant to Rule 14.40.

To the best of the Directors’ knowledge, information and belief, after having made all reasonable enquiries, no Shareholder has any material interest in the Acquisition and no Shareholder is required to abstain from voting on the relevant resolution to be proposed at an EGM in relation to the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement and the transactions contemplated thereunder.

On 11 December 2015, the Company received a written approval of the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement and the transactions contemplated thereunder, in accordance with Rule 14.44 of the Listing Rules, from Profit International Holdings Limited, which is the registered holder of and beneficially interested in 254,100,000 Shares, representing approximately 56.5% of the entire issued share capital of the Company as at the Latest Practicable Date. The shareholding in Profit International Holdings Limited is owned as to 95% by Mr. Lam Yin Kee and 5% by Ms. Yeung Po Wah, who are the executive Directors of the Company.

Accordingly, such written shareholder’s approval will be accepted in lieu of holding an EGM for the approval of the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement and the transactions contemplated thereunder pursuant to Rule 14.44 of the Listing Rules. Therefore, no EGM will be convened for the purpose of approving the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement and the transactions contemplated thereunder. This circular will therefore be sent to the Shareholders for their information only.

ADDITIONAL INFORMATION

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

Yours faithfully, On behalf of the Board of Alltronics Holdings Limited Lam Yin Kee

Chairman

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group (i) for the six months ended 30 June 2015, is disclosed on pages 2 to 38 of the interim report of the Company for the six months ended 30 June 2015 released on 17 September 2015; (ii) for the year ended 31 December 2014 is disclosed on pages 33 to 105 of the annual report of the Company for the year ended 31 December 2014 released on 20 April 2015; (iii) for the year ended 31 December 2013 is disclosed on pages 32 to 101 of the annual report of the Company for the year ended 31 December 2013 released on 15 April 2014; and (iv) for the year ended 31 December 2012 is disclosed on pages 31 to 103 of the annual report of the Company for the year ended 31 December 2012 released on 21 April 2013, which are available on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (http://www.irasia.com/listco/hk/alltronics/index.htm). There was no qualified opinion issued for the audited financial information of the Group for the last three financial years.

2. INDEBTEDNESS

At the close of business on 31 October 2015, being the latest practicable date prior to the printing of this circular and for the purpose of this indebtedness statement, the Group had total borrowings amounted to HK$200.4 million, comprising bank overdrafts of HK$8.9 million, bank loans of HK$140.2 million, bills payable and trust receipt loans of HK$48.1 million and obligations under finance leases of HK$3.2 million, all of which are denominated in Hong Kong dollars. Out of the total borrowings of HK$200.4 million as at 31 October 2015, HK$23.9 million of which are secured by bank deposits of HK$10.5 million and trade receivables of HK$1.4 million.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, the Group did not, at the close of business on 31 October 2015, have any outstanding loan capital issued, outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptances credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

The Directors confirmed that there has been no material change in the indebtedness and contingent liabilities of the Group since 31 October 2015.

3. WORKING CAPITAL

The Directors, after due and careful enquiry, are of the opinion that, after taking into account the Acquisition and the financial resources available to the Group, including internally generated funds and banking facilities, the Group has sufficient working capital for its present requirements for at least the next twelve months from the date of this circular, in the absence of unforeseeable circumstances.

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirmed that there was no material adverse change in the financial or trading position or prospects of the Group since 31 December 2014, being the date to which the latest published audited financial statements of the Group were made.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. FINANCIAL AND TRADING PROSPECT OF THE GROUP

The Group will continue to maintain the manufacturing and trading of electronic products, components for electronic products, biodiesel products, and provision of energy saving business solutions as its core business.

As disclosed in the Company’s interim report for the six months ended 30 June 2015, the Group foresees that the global economic environment in the second half of 2015 will remain uncertain. However, the Group will continue its efforts to tighten controls over production costs and overheads, and to improve production efficiency so as to maximize the gross profit margin. Orders from customers for new products are expected in 2016.

Regarding the energy saving business segment, the Group will continue the installation of LED lighting equipment at the retail stores and hotels of its customers.

The Group also expects there will be a fair value gain on derivative financial instruments for the year ending 31 December 2015, compared to a fair value loss for the year ended 31 December 2014, as most of the derivative financial instruments will be close to their respective expiry dates at 31 December 2015. For the six months ended 30 June 2015, there was a fair value gain on derivative financial instruments of HK$6.5 million.

As at 31 December 2014, the Group’s net current assets were HK$131.7 million with cash and cash equivalents balance of HK$64.4 million. After the Completion of the Acquisition, which will be funded by a combination of new bank borrowings and internal resources of the Group, the Directors expect that the Group’s financial position shall maintain positive net assets value for at least the current financial year ending 31 December 2015.

The Directors consider that it would not be in the best interest to continue to use leased properties as the Group’s head office because of the risk of substantial increases in rental expenses and the risk of early termination or non-renewal of the Group’s tenancy agreement by the landlord. In addition, the Acquisition will provide a permanent head office to the Group in Hong Kong with a potential of capital appreciation in the long run. As such, the Acquisition is in the interests of the Company and its Shareholders as a whole.

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VALUATION REPORT

APPENDIX II

The following is the text of a letter and valuation certificate prepared for the purpose of incorporation in this circular received from Ascent Partners Valuation Service Limited, an independent valuer, in connection with its valuation as at 30 November 2015 of the property interests to be acquired by the Group.

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Suite 2102, Hong Kong Trade Centre 161-167 Des Voeux Road Central Hong Kong Tel: 3679-3890 Fax: 3579-0884

Date: 24 December 2015

The Board of Directors Alltronics Holdings Limited Room 1108, 11/F Eastwood Centre No. 5 A Kung Ngam Village Road Shau Kei Wan, Hong Kong

Dear Sir/Madam,

RE: Valuation of Office on 4/F, Car Parking Space No. 7 on 1/F, Nos. 19 & 19A and 21 on 2/F of Citicorp Centre, No. 18 Whitfield Road, Hong Kong (the “Property”)

In accordance with the instructions received from Alltronics Holdings Limited (the “ Company ”) and its subsidiaries (hereinafter together referred to as the “ Group ”) for us to carry out a valuation of the property to be acquired, we confirm that we have carried out property inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property interests as at 30 November 2015 (referred to as the “ Valuation Date ”) for the purpose of incorporation in the circular of the Group.

This letter which forms part of our valuation report explains the basis and methodology of valuation, clarifying assumptions, valuation considerations, title investigation and limiting conditions of this valuation.

BASIS OF VALUATION

Our valuation of the property interests represents the market value which we would define as intended to mean “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

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VALUATION REPORT

APPENDIX II

VALUATION METHODOLOGY

As the office sector is an open market in Hong Kong, market information, including asking price and transaction records, is abundant and publicly available. It is widely accepted that by adopting the market approach (direct comparison method) based on actual market information is appropriate to derive the market value as it reflects the latest market trend and condition as at the valuation date. As such, we have valued the property interests on market basis and the direct comparison method is adopted where comparison based on prices realised on actual sales price of comparable property is made. Comparable properties of similar size, character, and location are analysed and carefully weighted against all the respective advantages and disadvantages of each property in order to arrive at a fair comparison of values.

VALUATION CONSIDERATIONS

In valuing the property interests, we have complied with all the requirements contained in Chapter 5 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards (2012 Edition) published by The Hong Kong Institute of Surveyors.

VALUATION ASSUMPTIONS

Unless otherwise stated, our valuation has been made on the assumption that the seller sells the property interests on the open market in their existing states without the benefit of a deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements, which could serve to affect the value of the property interests. We have also assumed that the Property has been constructed, occupied and used in full compliance with, and without contravention of all laws, except only where otherwise stated. We have further assumed that, for any use of the Property upon which this report is based, all required licenses, permit, certificate and authorizations have been obtained.

No allowance has been made in our valuation for any charges, mortgages or amount owing on any property interests nor for any expense or taxation which may be incurred in effecting a sale. We have assumed that the Property is free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

We have assumed that the owners of the Property have free and uninterrupted rights to use and dispose of the Property for the whole of the unexpired term of Land Grant.

Other special assumptions of the property interests, if any, have been stated out in the footnotes of the valuation certificate attached herewith.

TITLE INVESTIGATION

We have carried out title searches at the Land Registry for the property interests located in Hong Kong. We have been, in some instances, provided with the extracts of the documents relating to the Property. However, we have not verified ownership of the Property to verify the existence of any amendments which do not appear on the copies handed to us. All documents have been used for reference only.

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VALUATION REPORT

APPENDIX II

LIMITING CONDITIONS

We have inspected the exterior, and wherever possible, the interior of the Property but no structural survey had been made. In the course of our inspection, we did not note any serious defects. We are not, however, able to report that the Property is free from rot, infestation or any other structural defects. Further, no test has been carried out on any of the building services. All dimensions, measurements and areas are only approximates. We have not been able to carry out detailed on-site measurements to verify the site and floor areas of the Property and we have assumed that the areas shown on the copies of documents handed to us are correct.

We have not carried out any soil investigations to determine the suitability of the soil conditions and the services etc. for any future development. Our valuation is prepared on the assumption that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during the construction period. We do not make any allowance for contamination or pollution of the land, if any, which may have been caused by past usage.

We have relied to a considerable extent on information provided by the Group and have accepted advice given to us on such matters, in particular, but not limited to, the sales records, tenure, planning approvals, statutory notices, easements, particulars of occupancy, site and floor areas and all other relevant matters in the identification of the property interests.

We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We have also been advised by the Group that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and we have no reason to suspect that any material information has been withheld.

REMARKS

Unless otherwise stated, all monetary amounts stated in this report are in Hong Kong Dollars (HKD).

Our valuation certificate in respect of the property interests is herewith attached.

Yours faithfully, For and on behalf of

Ascent Partners Valuation Service Limited

Stephen Y. W. Yeung

MFin BSc(Hons) Land Adm. MHKIS MCIREA RPS(GP) Principal

Mr. Stephen Y. W. Yeung is a Registered Professional Surveyor (General Practice Division) and a Professional Member of The Hong Kong Institute of Surveyors with over 10 years’experience in valuation of properties in HKSAR and mainland China. Mr. Yeung is also a valuer on the List of Property Valuers for Undertaking Valuations for Incorporation or Reference in Listing Particulars and Circulars and Valuations in Connection with Takeovers and Mergers published by HKIS.

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VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Property interests to be acquired by the Group for self-use in Hong Kong

			Market Value in
		Particular of	existing state as at
Property	Description and tenure	Occupancy	30 November 2015
Office on 4/F, Car	The Property comprises an office floor on	The property is	HK$179,000,000
Parking Space No. 7 on	4th Floor, one private car parking space on	currently vacant.
1/F, Nos. 19 & 19A and	1st Floor and three private car parking		(Hong Kong Dollar
21 on 2/F of Citicorp	spaces on 2nd Floor of a 36-storey office		One Hundred Seventy
Centre, No. 18 Whitfield	building (with 13th, 18th Floors omitted)		Nine Million)
Road, Hong Kong	completed in 1983.
268/10080th undivided	The saleable area of the property (excluding
shares of and in The	private car parking spaces) is approximately
Remaining Portion of	12,890 sq.ft.
Inland Lot Nos. 1936
and 2227	The Remaining Portion of Inland Lot Nos.
	1936 and 2227 are held under Government
	Lease for a term of 75 years renewable for
	75 years commencing from 21 March 1904.

The Government Rent payable of the lots is HKD9,124 per annum.

Notes:

• (1) The registered owner of the Property is Seajet Investments Limited vide Memorial No. 09112700370029 dated 3 November 2009.

• (2) Pursuant to a copy of the Formal Sale and Purchase Agreement dated 20 November 2015 provided by the Group that were entered into between Seajet Investments Limited (the “ Vendor ”) and Alltronics Tech. Mftg. Limited (the “ Purchaser ”) whom the Purchaser is an indirect wholly-owned subsidiary of the Company, the consideration is HKD176,000,000 and the completion date is on or before 7 March 2016.

• (3) The Property is subject to encumbrances as listed below:

• (i) A Copy Deed of Mutual Covenant vide Memorial No. UB2462844 dated 4 August 1983;

• (ii) A Supplemental Deed of Mutual Covenant vide Memorial No. UB2476944 dated 30 September 1983; and

• (iii) An Occupation Permit No. H108/83 dated 20 July 1983.

• (4) The Property lies within an area zoned “Commercial” under the Approved North Point Outline Zoning Plan No. S/H8/24 dated 10 December 2010.

• (5) The Property is located on the northern side of Whitfield Road and the eastern side of the Hing Fat Street in the Eastern District of Hong Kong Island. The locality is primarily a mass residential area comprising various tenement buildings together with estate type developments. In addition, there are some commercial and industrial developments dispersed in the vicinity including the AIA Tower, Sea View Estate and Harbour Grand Hong Kong Hotel. The popular Victoria Park is also located within walking distance. Transportation is convenient, it is accessible via franchised bus, public light-bus, taxi and both the Tin Hau and Fortress Hill MTR Stations are situated within 10 minutes’ walk from the Property. According to the information from the Rating and Valuation Department, the latest average yield is about 2.8% for Grade A office.

• (6) As confirmed by the Group, the proposed renovation cost of the Property is approximately HKD5,000,000.

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VALUATION REPORT

APPENDIX II

• (7) The Group has confirmed as follows:

• (i) No options or rights of pre-emption concerning or affecting the Property;

• (ii) No environmental issues such as breach of environmental regulations;

• (iii) No notices, pending litigation, breach of law or title defects affecting the Property;

• (iv) No plans to dispose of or change the use of the Property.

• (8) The inspection was performed by Mr. Charles Choi (BSc (Hons) Estate Management) on 3 December 2015.

– 14 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES OR DEBENTURES OF THE COMPANY OR ANY OF ITS ASSOCIATED CORPORATIONS

As at the Latest Practicable Date, the interests and short positions of the Directors or chief executive of the Company in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“ SFO ”)) which are required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO); or (b) pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) in the Listing Rules to be notified to the Company and the Stock Exchange were as follows:

(i) Long position in the Shares

			Approximate
			percentage
			of the
		Total	Company’s
		number of	issued share
Name	Nature of interest	Shares	capital
Mr. Lam Yin Kee	Corporate and	262,508,290	58.38%
(Note 1)	Beneficial Owner
Mr. Lam Chee Tai, Eric	Beneficial Owner	1,677,060	0.37%
(Note 2)
Ms. Yeung Po Wah	Corporate and	262,508,290	58.38%
(Note 1)	Interest of spouse
Notes:

• (1) Mr. Lam Yin Kee, chairman and executive Director of the Company, has personal interests in 8,408,290 Shares. 254,100,000 Shares are owned by Profit International Holdings Limited, a company incorporated in the British Virgin Islands and is owned as to 95% by Mr. Lam Yin Kee and 5% by Ms. Yeung Po Wah. Ms. Yeung Po Wah is an executive Director of the Company and the spouse of Mr. Lam Yin Kee.

(2) Mr. Lam Chee Tai, Eric is an executive Director of the Company and the son of Mr. Lam Yin Kee and Ms. Yeung Po Wah.

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APPENDIX III

(ii) Long position in the shares of associated corporation

			Approximate
			percentage
			of the
			associated
			corporation’s
	Name of associated	Capacity/Nature of	issued share
Name	corporation	interest	capital
Mr. Lam Yin Kee	Profit International	Beneficial Owner	95%
	Holdings Limited
Ms. Yeung Po Wah	Profit International	Beneficial Owner	5%
	Holdings Limited

As at the Latest Practicable Date, the Directors do not hold any short position in Shares, underlying Shares or debentures of the Company or any of its associated corporations.

Save as disclosed above, none of the Directors or any of their associates had any interests or short positions in the Shares, underlying Shares or debentures of the Company or its associated corporations which had been recorded in the register required to be kept under Section 352 of the SFC as at the Latest Practicable Date.

3. SUBSTANTIAL SHAREHOLDERS’ AND OTHER PERSONS’ INTERESTS HAVING 5% OR MORE SHAREHOLDING AND SHORT POSITIONS

Save as disclosed in the section headed “DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS AND SHORT POSITIONS IN SHARES, UNDERLYING SHARES OR DEBENTURES OF THE COMPANY OR ANY OF ITS ASSOCIATED CORPORATIONS”, as at the Latest Practicable Date, so far as is known to any Director or chief executive of the Company, the following persons, had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or were, directly or indirectly, interested in ten per cent. or more of the nominal value of any class of Share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group:

			Approximate
			percentage
			of the
		Total	Company’s
	Capacity/Nature of	number of	issued share
Name	interest	Shares	capital
Profit International Holdings	Beneficial Owner	254,100,000	56.51%
Limited (Note 1)
Ms. Liu Jing	Beneficial Owner	69,172,000	15.38%

Note:

(1) Profit International Holdings Limited is beneficially owned as to 95% by Mr. Lam Yin Kee and 5% by Ms. Yeung Po Wah, the executive directors of the Company.

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APPENDIX III

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any persons (who were not Directors or chief executives of the Company) who had an interest or short position in the Share or underlying Shares of the Company which would fall to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO, or was directly or indirectly interested in 5% or more of the nominal value of any class of Share capital carrying rights to vote in all circumstances at general meetings of the Company or any of its subsidiaries or held any option in respect of such capital.

4. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or any of their respective close associates has engaged in any business that competes or may compete with the business of the Group or has or may have any other conflict of interests with the Group.

5. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing service contract or proposed service contract with any member of the Group which will not expire or determinable by the Company within one year without payment of compensation (other than statutory compensation).

6. DIRECTORS’ INTERESTS IN CONTRACTS OF SIGNIFICANCE AND ASSETS

As at the Latest Practicable Date, save as a tenancy agreement entered between the Purchaser and Profit Home Investments Limited, a connected person (as it is owned as to 60% by Ms. Yeung Po Wah, an executive Director of the Company, and 20% by Mr. Lam Chee Tai, Eric, an executive Director of the Company), for leasing of a property for a period from 1 April 2015 to 31 March 2017 for a monthly rent of HK$150,000, none of the Directors had any direct or indirect interest in any assets which have been, since 31 December 2014, being the date to which the latest published audited accounts of the Company were made up, acquired or disposed of by, or leased to any member of the Group, or are proposed to be acquired or disposed of by, or leased to any member of the Group.

7. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation, arbitration or claim of material importance and no litigation, arbitration or claim of material importance is known to the Directors to be pending or threatened against the Group.

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8. MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business) had been entered into by members of the Group within two years preceding the Latest Practicable Date and are or may be material:

• (a) the Preliminary S&P Agreement and the Formal Sale and Purchase Agreement;

• (b) the placing agreement dated 20 November 2015 entered into between the Company, as an issuer, and CNI Securities Group Limited, as the placing agent, in relation to placing 69,172,000 new Shares to the placee Ms. Liu Jing at the placing price of HK$1.88 per placing share;

• (c) the placing agreement dated 31 July 2015 (which was terminated on 21 August 2015 pursuant to a termination agreement entered into between the Company and CNI Securities Group Limited) entered into between the Company, as an issuer, and CNI Securities Group Limited, as the placing agent, in relation to placing 69,172,000 new Shares at the placing price of HK$1.88 per placing share;

• (d) the tenancy agreement dated 31 March 2015 entered into between the Purchaser and Profit Home Investments Limited, a connected person (as it is owned as to 60% by Ms. Yeung Po Wah, an executive director of the Company, and 20% by Mr. Lam Chee Tai, Eric, an executive director of the Company), for leasing of a property for a period from 1 April 2015 to 31 March 2017 for a monthly rent of HK$150,000; and

• (e) the joint venture agreement dated 20 October 2014 entered into between a subsidiary of the Company, Alltronics Industries Limited, and Shenzhen Buyang Anfang Technology Company Limited (深圳市步陽安防技術有限公司) in relation to the establishment of the joint venture company, which is proposed to be principally engaged in the manufacturing and sale of printers and other accessory products for printers. Pursuant to the joint venture agreement, the registered capital of the joint venture company shall be RMB30 million (approximately HKD37.8 million), among which Shenzhen Buyang Anfang Technology Company Limited and Alltronics Industries Limited shall hold 51% and 49% of its equity interest respectively.

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9. EXPERTS AND CONSENTS

The following are the qualification of the expert who had given opinion contained in this circular:

Name

Qualification

Ascent Partners Valuation Service Limited Property valuer

As at the Latest Practicable Date, the above expert did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, or had any interest, either direct or indirect, in any assets which had been since 31 December 2014 (being the date to which the latest published audited accounts of the Company were made up) acquired or disposed of by, or leased to any member of the Group, or were proposed to be acquired or disposed of by, or leased to any member of the Group.

The above expert has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which it appears.

10. GENERAL

• (a) The registered office of the Company is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

• (b) The principal place of business of the Company in Hong Kong is located at Room 1108, 11/F, Eastwood Centre, No. 5 A Kung Ngam Village Road, Shau Kei Wan, Hong Kong.

• (c) The Hong Kong branch share registrar and transfer office of the Company is Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (d) The company secretary of the Company is Mr. Leung Fuk Cheung, a fellow member of the Hong Kong Institute of Certified Public Accountants and the Association of the Chartered Certified Accountants.

• (e) In the event of any inconsistency, the English text of this circular shall prevail over the Chinese text.

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APPENDIX III

11. DOCUMENTS FOR INSPECTION

Copies of the following documents are available for inspection during normal office hours at Room 1108, 11/F, Eastwood Centre, No. 5 A Kung Ngam Village Road, Shau Kei Wan, Hong Kong on the date of this circular and up to and including 11 January 2016:

• (a) this circular;

• (b) the Memorandum and Articles of Association of the Company;

• (c) the annual reports of the Company for the two years ended 31 December 2013 and 2014;

• (d) the interim reports of the Company for the two six months periods ended 30 June 2014 and 2015;

• (e) the letter and valuation certificate prepared by Ascent Partners Valuation Service Limited and valuation report of the Properties, the text of which is set out in Appendix II to this circular;

• (f) the material contracts referred to in the section headed “Material contracts” of this appendix; and

• (g) the letter of consent referred to under the section headed “Experts and consents” in this appendix.

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