China Pipe Group Limited — AGM Information 2021

Apr 15, 2021

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 a licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Daphne International Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee, or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected, for transmission to the purchaser or transferee.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited 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.

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DAPHNE INTERNATIONAL HOLDINGS LIMITED
達 芙 妮 國 際 控 股 有 限 公 司 []
(Incorporated in the Cayman Islands with limited liability)
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(Stock Code: 210)

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES, RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting (“ AGM ”) of Daphne International Holdings Limited (the “ Company ”) to be held at Unit 1603-1604, 16/F, Causeway Bay Plaza I, 489 Hennessy Road, Causeway Bay, Hong Kong on Wednesday, 26 May 2021 at 3:00 p.m. is set out on pages 11 to 15 of this circular.

Whether or not you are able to attend the AGM, you are requested to complete and return the accompany form of proxy in accordance with the instructions printed thereon to the Company’s share registrar in Hong Kong, Tricor Secretaries Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, or submit the form of proxy electronically at https://emeeting.tricor.hk/#/491 in accordance with the instructions printed on the accompany notification letter, as soon as possible and in any event no later than 3:00 p.m. (Hong Kong time) on Monday, 24 May 2021, or not less than 48 hours before the time of any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting at the AGM (or any adjournment thereof) should you so wish.

Hong Kong, 16 April 2021

• for identification purpose only

CONTENTS

	Page
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
APPENDIX I EXPLANATORY STATEMENT ON REPURCHASE MANDATE. . . . . . 5
APPENDIX II PARTICULARS OF DIRECTORS TO BE RE-ELECTED. . . . . . . . . . . . 9
NOTICE OF ANNUAL GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11

LETTER FROM THE BOARD

DAPHNE INTERNATIONAL HOLDINGS LIMITED 達 芙 妮 國 際 控 股 有 限 公 司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 210)

Executive Directors: Mr. Chang Chih-Kai (Chairman) Mr. Chang Chih-Chiao (Chief Executive Officer) Mr. Wang Jungang

Independent Non-executive Directors: Mr. Hon Ping Cho Terence Mr. Huang Shun-Tsai Mr. Kuo Jung-Cheng

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

Principal Place of Business in Hong Kong: Unit 2605, 26/F The Metropolis Tower 10 Metropolis Drive Hung Hom, Kowloon Hong Kong

16 April 2021

To Shareholders

Dear Sir/Madam,

PROPOSALS FOR GENERAL MANDATES TO REPURCHASE AND ISSUE SHARES, RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with, among other things, information regarding the resolutions to be proposed at the AGM relating to (i) the granting to the directors of the Company (the “ Directors ”) of general mandates to repurchase and issue shares of the Company (the “ Shares ”), (ii) the re-election of the retiring Directors, and to give you the notice of the AGM.

• for identification purpose only

1

LETTER FROM THE BOARD

GENERAL MANDATE TO REPURCHASE SHARES

The general mandate granted to the Directors by the shareholders of the Company (the “ Shareholders ”) at the annual general meeting of the Company held on 26 May 2020 to repurchase Shares will expire at the conclusion of the AGM. At the AGM, the board of Directors (the “ Board ”) will propose an ordinary resolution, the full text of which is set out as resolution No. 6 in the notice of the AGM, to grant an unconditional general mandate to the Directors to exercise all powers of and on behalf of the Company to repurchase the Shares up to a maximum of 10% of the total number of the issued Shares as at the date of passing of the resolution (the “ Repurchase Mandate ”). The general mandate will continue to be in force until the conclusion of the next annual general meeting of the Company or any earlier date as referred to in resolution No. 6(d) as set out in the notice of the AGM. In accordance with the requirements of the Rules Governing the Listing of Securities (the “ Listing Rules ”) on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”), an explanatory statement on the Repurchase Mandate is set out in Appendix I to this circular to provide you with the requisite information reasonably necessary to enable you to make an informed decision on the proposed resolution.

As at 8 April 2021, being the latest practicable date prior to printing of this circular (the “ Latest Practicable Date ”), the Company had an aggregate of 1,814,056,622 Shares in issue. Subject to the passing of the relevant resolution approving the general mandate to repurchase Shares and on the basis that no further Shares are issued or repurchased by the Company between the Latest Practicable Date and the date of the AGM, the Company would be allowed to repurchase Shares up to a maximum of 181,405,662 Shares.

GENERAL MANDATE TO ISSUE SHARES

The general mandate granted to the Directors by the Shareholders on 26 May 2020 to issue Shares will expire at the conclusion of the AGM. In order to ensure flexibility and discretion to the Directors, in the event that it becomes desirable to issue any Shares, approval is to be sought from the Shareholders for a general mandate to issue Shares pursuant to the Listing Rules. At the AGM, an ordinary resolution, the full text of which is set out as resolution No. 7 in the notice of the AGM, will be proposed to grant the Directors an unconditional general mandate to allot, issue and deal with Shares not exceeding 20% of the total number of the issued Shares at the date of passing of the resolution (the “ Issue Mandate ”). The general mandate will continue to be in force until the conclusion of the next annual general meeting of the Company or any earlier date as referred to in resolution No. 7(d) as set out in the notice of the AGM.

Subject to the passing of the relevant resolution approving the general mandate to issue Shares and on the basis that no further Shares are issued or repurchased by the Company between the Latest Practicable Date and the date of the AGM, the Company would be allowed to allot, issue and deal with a maximum of 362,811,324 Shares.

EXTENSION MANDATE

In addition, an ordinary resolution, the full text of which is set out as resolution No. 8 in the notice of the AGM, will also be proposed at the AGM to extend the limit of the Issue Mandate by adding thereto the total number of Shares repurchased under the Repurchase Mandate (the “ Extension Mandate ”).

2

LETTER FROM THE BOARD

RE-ELECTION OF RETIRING DIRECTORS

Pursuant to Article 84 of the Articles of Association of the Company (the “ Articles ”) at each annual general meeting one-third of the Directors for the time being (or, if their number is not a multiple of 3, the number nearest to but not less than one-third) shall retire from office by rotation provided that every Director shall be subject to retirement at an annual general meeting at least once every three years.

In addition, in accordance with Article 83(3), any Director appointed by the Board to fill a casual vacancy shall hold office until the first general meeting after his appointment and be subject to re-election at such meeting and any Director appointed by the Board as an addition to the existing Board shall hold office only until the next following annual general meeting of the Company and shall then be eligible for re-election. Accordingly, Mr. Wang Jungang, being an additional Director appointed by the Board on 21 October 2020, will retire and, being eligible, offer himself for re-election as an executive Director at the AGM.

The re-election of the retiring Directors has been reviewed by the Nomination Committee of the Company which made recommendations to the Board that the re-election be proposed for the Shareholders’ approval at the AGM.

As such, Mr. Chang Chih-Kai and Mr. Wang Jungang will retire and, being eligible, offer themselves for re-election. The biographical details, interests in the Shares and other information required to be disclosed pursuant to Rule 13.51(2) of the Listing Rules of the Directors proposed for re-election at the AGM are set out in Appendix II to this circular.

VOTING BY POLL

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of the Shareholders at the AGM must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. The results of the poll will be published on the websites of the HKEXnews (www.hkexnews.hk) and the Company (www.daphneholdings.com) in the manner prescribed under Rule 13.39(5) of the Listing Rules.

CLOSURE OF REGISTER OF MEMBERS

The register of members of the Company will be closed from Friday, 21 May 2021 to Wednesday, 26 May 2021, both days inclusive, during which period no transfer of Shares will be effected. In order to qualify for attending the AGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong, Tricor Secretaries Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 4:30 p.m. on Thursday, 20 May 2021.

3

LETTER FROM THE BOARD

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.

RECOMMENDATION

The Board considers that the proposals of the Repurchase Mandate, the Issue Mandate, and the re-election of the retiring Directors are in the best interests of the Company and its Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the resolutions to be proposed at the AGM as set out in the notice of the AGM.

GENERAL INFORMATION

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

Yours faithfully, By order of the Board Daphne International Holdings Limited Chang Chih-Kai Chairman

4

APPENDIX I EXPLANATORY STATEMENT ON REPURCHASE MANDATE

This appendix serves as an explanatory statement, as required by the Listing Rules, to provide the requisite information to Shareholders for their consideration of the proposed resolution in relation to the Repurchase Mandate.

1. LISTING RULES RELATING TO THE REPURCHASE OF SHARES

The Listing Rules permit companies with a primary listing on the Stock Exchange to repurchase their shares on the Stock Exchange subject to certain restrictions. The Listing Rules provide that all proposed repurchases of shares must be approved by the Shareholders in advance by an ordinary resolution either by way of a general mandate or by a specific approval of a particular transaction and that the shares to be repurchased must be fully paid up.

2. ISSUED SHARES

As at the Latest Practicable Date, there were a total of 1,814,056,622 Shares in issue.

Subject to the passing of the proposed resolution granting the Repurchase Mandate and on the basis that no further Shares are issued or repurchased between the Latest Practicable Date and the date of the AGM, the Company would be allowed under the Repurchase Mandate to repurchase up to a maximum of 181,405,662 Shares which represents a 10% of the total number of issued Shares as at the date of passing such resolution.

3. REASONS FOR REPURCHASES

The Directors believe that the grant of the Repurchase Mandate is in the best interests of the Company and the Shareholders as a whole. Repurchases may, depending on the circumstances, result in an enhancement in the net asset value and/or earnings per Share. The Directors are seeking the grant of a general mandate to repurchase Shares to give the Company the flexibility to do so if and when appropriate. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by the Directors at the relevant time having regarded to the circumstances then pertaining.

4. FUNDING OF REPURCHASES

There might have a material adverse impact on the working capital or gearing position of the Company in the event that the proposed Shares repurchases were to be carried out in full at any time during the proposed repurchase period. However, repurchases must be made out of funds legally available for such purpose in accordance with the Articles, the laws of the Cayman Islands, the Listing Rules and any other applicable laws. It is envisaged that the funds required for any repurchases would be derived from the distributable reserves of the Company.

The Directors do not intend 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 position of the Company.

5

EXPLANATORY STATEMENT ON REPURCHASE MANDATE

APPENDIX I

5. SHARE PRICES

The highest and lowest prices at which Shares were traded on the Stock Exchange during each of the previous twelve months preceding the Latest Practicable Date are as follows:

	Price per share	Price per share
	Highest	Lowest
	HK$	HK$
2020
April	0.136	0.102
May	0.130	0.122
June	0.126	0.121
July	0.190	0.126
August	0.245	0.180
September	0.221	0.184
October	0.228	0.207
November	0.235	0.217
December	0.235	0.217
2021
January	0.235	0.205
February	0.217	0.200
March	0.201	0.185
April (up to the Latest Practicable Date)	0.197	0.192

6. TAKEOVERS CODE

If, as a result of a share repurchase, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of The Codes on Takeovers and Mergers and Share Buy-backs (the “ Takeovers Code ”) issued by the Securities and Futures Commission of Hong Kong. As a result, a Shareholder or a 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 and Rule 32 of the Takeovers Code.

6

EXPLANATORY STATEMENT ON REPURCHASE MANDATE

APPENDIX I

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, substantial Shareholders having interested in 5% or more of the Company’s issued Shares, under the register of substantial shareholders maintained by the Company pursuant to Section 336 of the Securities and Futures Ordinance (“ SFO ”) were:

				Approximate
				percentage of
			Approximate	shareholding if
			percentage of	the Repurchase
		Number of	existing	Mandate is
Name of shareholders	Capacity	Shares	shareholding	exercised in full
Lucky Earn International	Beneficial interests	400,719,995	22.09%	24.54%
Limited		(Note 1)
Warrior Limited	Beneficial interests	329,456,045	18.16%	20.18%
		(Note 2)
Teresaeleven Inc.	Interests of controlled corporation	329,456,045	18.16%	20.18%
		(Note 2)
Ms Quan Qizi	Interests of controlled corporation	329,456,045	18.16%	20.18%
		(Note 2)
Top Glory Assets Limited	Beneficial interests	174,908,895	9.64%	10.71%
		(Note 3)
Ms. Chen Jennifer Yi-Chen	Interests of controlled corporation	174,908,895	9.64%	10.71%
		(Note 3)
Mr. Chen Tommy Yi-Hsun	Interests of controlled corporation	176,508,895	9.73%	10.81%
	and personal interests	(Note 3)
Pushkin Holding Limited	Beneficial interests	147,740,920	8.14%	9.05%
		(Note 4)
Mr. Chen Ming-Yuan	Interests of controlled corporation	147,740,920	8.14%	9.05%
		(Note 4)
Mr. Ma Liang Chun	Personal interests	109,862,000	6.06%	6.73%

7

EXPLANATORY STATEMENT ON REPURCHASE MANDATE

APPENDIX I

Notes:

• (1) Mr. Chang Chih-Kai, the Chairman of the Board and the executive Director of the Company and Mr. Chang Chih-Chiao, an executive Director and Chief Executive Officer of the Company, and their two sisters have beneficial interests of 26%, 26% and 24% each, respectively, in Lucky Earn International Limited, a company incorporated in the British Virgin Islands.

• (2) Warrior Limited has beneficial interest in 164,914,238 shares of the Company and has subscribed for convertible notes of the Company. Upon full conversion of the convertible notes, an aggregate of 164,541,807 shares would be issued to Warrior Limited. Warrior Limited is wholly owned by Teresaeleven Inc., which in turn is wholly owned by Ms. Quan Qizi. Teresaeleven Inc. and Ms. Quan are deemed to be interested in 329,456,045 shares of the Company held by Warrior Limited.

• (3) Mr. Chen Tommy Yi-Hsun, an ex-director of the Company, and Ms. Chen Jennifer Yi-Chen have beneficial interests of 50% each in Top Glory Assets Limited, a company incorporated in the British Virgin Islands. By virtue of the SFO, they are deemed to be interested in 174,908,895 shares of the Company held by Top Glory Assets Limited.

• (4) Pushkin Holding Limited is solely owned by Mr. Chen Ming-Yuan. By virtue of the SFO, Mr. Chen is deemed to be interested in 147,740,920 shares of the Company held by Pushkin Holding Limited.

Based on the current holding of the above Shareholders, an exercise of the Repurchase Mandate in full would not result in any of them becoming obliged to make a mandatory offer under Rule 26 and Rule 32 of the Takeovers Code.

The Directors are not aware of any consequences which may arise under the Takeovers Code as a result of any repurchases made under the Repurchase Mandate. The Company, however, has no intention to exercise the Repurchase Mandate to the effect that it will result in the public float to fall below 25% or such other minimum percentage prescribed by the Listing Rules from time-to-time.

7. SHARE REPURCHASES MADE BY THE COMPANY

No repurchase of Shares (whether on the Stock Exchange or otherwise) has been made by the Company during the six months immediately preceding the Latest Practicable Date.

8. UNDERTAKING

The Directors have undertaken to the Stock Exchange that they may exercise the powers of the Company to make repurchases pursuant to the Repurchase Mandate only in accordance with the Listing Rules and the applicable laws of the Cayman Islands.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their close associates (as defined in the Listing Rules), has any present intention, in the event that the Repurchase Mandate is approved by Shareholders, to sell Shares to the Company.

No core connected person (as defined in the Listing Rules) of the Company has notified the Company that he has present intention to sell Shares to the Company nor has any such person undertaken not to sell any Shares held by him to the Company in the event that the Repurchase Mandate is granted.

8

APPENDIX II PARTICULARS OF DIRECTORS TO BE RE-ELECTED

The particulars of the retiring Directors proposed to be re-elected at the AGM are as follows:

(1) Mr. Chang Chih-Kai

Mr. Chang Chih-Kai, aged 40, has been an executive Director of the Company since November 2004 and has been appointed as the Chairman of the board of directors since May 2017. He was also the chief executive officer (“CEO”) of the Group from April 2016 to October 2020. Mr. Chang now is mainly responsible for management of the Board, product development and supply chain management of the Group.

Mr. Chang studied a bachelor’s degree of Art in Auckland University after graduated from Pakuranga College in New Zealand. He is the brother of Mr. Chang Chih-Chiao, an executive Director and CEO, and holds directorships in certain subsidiaries of the Company.

As at the Latest Practicable Date, Mr. Chang has 26% beneficial interests in Lucky Earn International Limited which holds 400,719,995 Shares, representing approximately 22.09% of the issued Shares. He also has personal interest in 6,000,000 underlying Shares in respect of the share options granted by the Company, representing approximately 0.33% of the issued Shares. Save as aforementioned, Mr. Chang has no other interests in the Company within the meaning of Part XV of the SFO.

Mr. Chang has entered into a service agreement with the Company with a term of 3 years. He is entitled to an annual remuneration of RMB3,000,000 plus discretionary bonus and other benefits and allowances which are determined with reference to his duties and responsibilities with the Company, the performance of the Company and the prevailing market condition and are subject to review and revision by the Remuneration Committee and the Board of the Company from time to time.

Save as disclosed above, there is no information relating to Mr. Chang that is required to be disclosed pursuant to Rules 13.51(2) of the Listing Rules, nor are there any other matters that need to be brought to the attention of the Shareholders.

9

PARTICULARS OF DIRECTORS TO BE RE-ELECTED

APPENDIX II

(2) Mr. Wang Jungang

Mr. Wang Jungang, aged 38, was appointed as an executive Director of the Company and chief operating officer (“COO”) in October 2020. He is responsible for the overall sales operation and the development of licensing business of the Group. Mr. Wang was a co-founder of Shanghai Tai Yue E-Commerce Ltd., also known as Tailorism, an online made-to-measure startup company which aims to provide solutions for fitting of clothing based on 3D modeling and big data computing, and acted as its chief executive officer from October 2014 to October 2020. He has extensive experience in establishing financial models, and strategic and business operation planning. He was previously the chief operating officer of Shanghai Muyao Textile Ltd. (Shirley Pajamas) from February 2012 to September 2014 and worked at Morgan Stanley Management Service (Shanghai) Ltd. as an analyst from August 2008 to January 2012.

Mr. Wang obtained a master’s degree in Computer Software and Theory from Peking University in July 2008 and a bachelor’s degree in Computer Science and Technology from Nanjing University of Science and Technology in July 2005.

Save as disclosed above, as at the Latest Practicable Date, Mr. Wang (i) does not have any relationship with the Directors, senior management, substantial or controlling shareholders (as defined in the Listing Rules) of the Company; (ii) has not held any directorship in any other public companies in the last three years, the securities of which are listed on any securities market in Hong Kong or overseas; and (iii) does not have any interests in the shares, underlying shares and debentures of the Company which are required to be disclosed pursuant to Part XV of the SFO.

With respect to his directorship with the Company, Mr. Wang has entered into a service agreement with the Company and his tenure as the Director, subject to rotation and re-election at annual general meetings of the Company in accordance with the Articles, will be three years with nominal remuneration of HK$1 per annum without discretionary bonus. Being the COO of the Group, he is also entitled to an annual remuneration of RMB60,000 plus other benefits and allowance. The remuneration is considered and recommended by the remuneration committee of the Company and determined with reference to, among others, the remuneration policy of the Company and his duties when carrying out function as an executive Director and COO.

Save as disclosed above, there is no information relating to Mr. Wang that is required to be disclosed pursuant to Rules 13.51(2) of the Listing Rules, nor are there any other matters that need to be brought to the attention of the Shareholders.

10

NOTICE OF ANNUAL GENERAL MEETING

DAPHNE INTERNATIONAL HOLDINGS LIMITED

達 芙 妮 國 際 控 股 有 限 公 司[*]

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 210)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an annual general meeting (the “ AGM ”) of Daphne International Holdings Limited (the “ Company ”) will be held at Unit 1603-1604, 16/F, Causeway Bay Plaza I, 489 Hennessy Road, Causeway Bay, Hong Kong on Wednesday, 26 May 2021 at 3:00 p.m. for the purpose of considering and, if thought fit, passing, with or without amendments, the following resolutions as ordinary resolutions:

ORDINARY RESOLUTIONS

1. To receive and adopt the audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors and the independent auditor for the year ended 31 December 2020;

2. To re-elect Mr. Chang Chih-Kai as an executive director of the Company;

3. To re-elect Mr. Wang Jungang as an executive director of the Company;

4. To authorise the board of directors of the Company to fix the directors’ remuneration;

5. To re-appoint PricewaterhouseCoopers as the Company’s independent auditor and authorise the board of directors to fix their remuneration;

• For identification purposes only

11

NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT :

2. (a) subject to paragraph (c) below, the exercise by the directors of the Company (“ Directors ”) during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase shares of the Company on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) or on any other stock exchange on which the shares of the Company may be listed and which is recognised by the Securities and Futures Commission of Hong Kong (the “ SFC ”) and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and requirements of the SFC, the Stock Exchange or of any other stock exchange as amended from time to time, be and is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) above shall be in addition to any other authorisation given to the Directors and shall authorise the Directors on behalf of the Company during the Relevant Period to procure the Company to repurchase its own shares at a price to be determined by the Directors;

4. (c) the aggregate number of shares of the Company to be repurchased or agreed to be repurchased by the Company pursuant to the approval in paragraph (a) above shall not exceed 10% of the total number of the issued shares of the Company at the date of passing of this resolution, and the said approval shall be limited accordingly; and

5. (d) for the purposes of this resolution,

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

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

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Articles of Association of the Company or any applicable laws of the Cayman Islands to be held; or

• (iii) the date upon which the authority set out in this resolution is revoked or varied by way of an ordinary resolution of the shareholders of the Company in general meeting.”

12

NOTICE OF ANNUAL GENERAL MEETING

1. “ THAT :

2. (a) subject to paragraph (c) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with the unissued shares of the Company and to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares of the Company) which would or might require the exercise of such powers, subject to and in accordance with all applicable laws, be and is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) above, shall be in addition to any other authorisation given to the Directors and shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options (including bonds, warrants and debentures convertible into shares of the Company) which would or might require the exercise of such powers after the expiry of the Relevant Period;

4. (c) the aggregate number of shares allotted and issued or agreed conditionally or unconditionally to be allotted and issued (whether pursuant to options or otherwise) by the Directors pursuant to the approval granted in paragraph (a) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) any scrip dividend or similar arrangement providing for the allotment and issue of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the Articles of Association of the Company; or (iii) the exercise of any options granted under the share option scheme or similar arrangement for the time being adopted or to be adopted for the grant or issue of shares or rights to acquire shares of the Company approved by the Stock Exchange; or (iv) any issue of shares upon the exercise of rights of subscription or conversion under the terms of any warrants of the Company or any securities which are convertible into shares, shall not exceed 20% of the total number of the issued shares of the Company at the date of passing this resolution, and the said approval shall be limited accordingly; and

13

NOTICE OF ANNUAL GENERAL MEETING

• (d) for the purpose of this resolution,

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

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

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Articles of Association of the Company or any applicable laws of the Cayman Islands to be held; or

• (iii) the date upon which the authority set out in this resolution is revoked or varied by way of an ordinary resolution of the shareholders of the Company in general meeting.

“ Rights Issue ” means an offer of shares, or offer or issue of warrants, options or other securities giving rights to subscribe for shares open for a period fixed by the Directors to the holders of shares of the Company on the register of members on a fixed record date in proportion to their then holding of such shares (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regarded to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory applicable to the Company).”

1. “ THAT conditional upon the passing of resolution Nos. 6 and 7 above, the general mandate granted to the Directors pursuant to resolution No. 7 above be and is hereby extended by adding thereto of the aggregate number of the shares as stated in resolution No. 6 above provided that such amount shall not exceed 20% of the total number of the issued shares of the Company at the date of passing this resolution.”

By Order of the Board Daphne International Holdings Limited Chang Chih-Kai Chairman

Hong Kong, 16 April 2021

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

Principal place of business in Hong Kong: Unit 2605, 26/F The Metropolis Tower 10 Metropolis Drive, Hung Hom Kowloon, Hong Kong

14

NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. Any shareholder of the Company entitled to attend and vote at the AGM is entitled to appoint more than one proxy to attend and on a poll, vote instead of him/her. A proxy need not be a shareholder of the Company.

2. The form of proxy must be received by 3:00 pm (Hong Kong time) on Monday, 24 May 2021, or not less than 48 hours before the time of the holding of any adjourned meeting.

Shareholders may submit the form of proxy electronically at https://emeeting.tricor.hk/#/491 by entering the username and the password either printed on the notification letter sent to the shareholders by post on 16 April 2021 or which has been sent to the shareholders by email if the shareholders have registered an email address to receive electronic communications. Alternatively, shareholders may send the completed form of proxy to the Company’s share registrar in Hong Kong, Tricor Secretaries Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Shareholders who have submitted the proxy appointment electronically shall not lodge the physical form of proxy to Tricor Secretaries Limited.

In order to be valid, the completed form of proxy (together with any power of attorney or other authority (if any) under which it is signed, or a notarially certified copy thereof) must be deposited by 3:00 pm (Hong Kong time) on Monday, 24 May 2021, or not less than 48 hours before the time of the holding of any adjourned meeting, at Tricor Secretaries Limited at the above address. Any power of attorney or other authority relating to an appointment of a proxy cannot be submitted electronically and must be deposited as referred to above for the appointment to be valid.

3. The register of members of the Company will be closed from Friday, 21 May 2021 to Wednesday, 26 May 2021, both days inclusive, during which period no transfer of shares of the Company will be effected. In order to qualify to attend and vote at the AGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s share registrar in Hong Kong no later than 4:30 p.m. on Thursday, 20 May 2021 for registration.

4. Where there are joint registered holders of any share, any one of such persons may vote at the AGM, either personally or by proxy, in respect of such share as if he/she were solely entitled thereto; but if more than one of such joint holders are present at the AGM personally or by proxy, that one of the said persons so present being the most or, as the case may be, the more senior shall alone be entitled to vote in respect of the relevant joint holding and, for this purpose, seniority shall be determined by reference to the order in which the names of the joint holders stand on the register of members in respect of the relevant joint holding.

5. Taking into account of the recent development of the COVID-19 pandemic, the Company will implement the following prevention and control measures at the AGM against the pandemic to protect the shareholders from the risk of infection:

• (i) Compulsory body temperature check will be conducted for every shareholder or proxy at the entrance of the venue. Any person with a body temperature of over 37.5 degrees Celsius will not be admitted to the venue;

• (ii) Every shareholder or proxy who has travelled from jurisdictions, which according to the Department of Health of Hong Kong would render such person subject to a quarantine order, within 21 days of the date of the AGM will not be admitted to the venue;

• (iii) Every shareholder or proxy is required to wear surgical facial mask throughout the AGM; and

• (iv) No refreshment will be served nor any souvenir will be given.

Furthermore, the Company wishes to advise the shareholders, particularly shareholders who are subject to quarantine in relation to COVID-19, that they may appoint the chairman of the AGM as a proxy to vote on the resolution, instead of attending the AGM in person.

As at the date of this notice, the Board of the Company comprises three Executive Directors, namely Mr. Chang Chih-Chiao, Mr. Chang Chih-Kai and Mr. Wang Jungang; and three Independent Non-executive Directors, namely Mr. Hon Ping Cho Terence, Mr. Huang Shun-Tsai and Mr. Kuo JungCheng.

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