Cornerstone Technologies Holdings Limited — M&A Activity 2019

Dec 23, 2019

THIS COMPOSITE DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of the Offer, this Composite Document and/or the accompanying Form(s) of Acceptance or as to the action to be taken, you should consult a licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your securities in Elegance Commercial and Financial Printing Group Limited, you should at once hand this Composite Document and the accompanying Form of Acceptance to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited, The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this Composite Document and the accompanying Form of Acceptance, make no representation as to their 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 Composite Document and the accompanying Form of Acceptance.

This Composite Document should be read in conjunction with the accompanying Form of Acceptance, the contents of which form part of the terms and conditions of the Offer.

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ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED GLOBAL FORTUNE GLOBAL LIMITED 精雅商業財經印刷集團有限公司

(Incorporated in the British Virgin Islands with limited liability) (Incorporated in the Cayman Islands with limited liability) (Stock code: 8391)

COMPOSITE DOCUMENT IN RELATION TO MANDATORY UNCONDITIONAL CASH OFFER BY VBG CAPITAL LIMITED FOR AND ON BEHALF OF THE OFFEROR TO ACQUIRE ALL OF THE ISSUED SHARES IN ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED (OTHER THAN THOSE ALREADY OWNED AND/OR AGREED TO BE ACQUIRED BY THE OFFEROR AND/OR PARTIES ACTING IN CONCERT WITH IT)

Financial adviser to the Offeror VBG CAPITAL LIMITED

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Independent Financial Adviser to the Independent Board Committee

VINCO CAPITAL LIMITED

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed “Definitions” in this Composite Document.

A letter from VBG Capital containing, among other things, the details of the terms and conditions of the Offer is set out on pages 1 to 11 of this Composite Document. A letter from the Board is set out on pages 12 to 18 of this Composite Document. A letter from the Independent Board Committee containing its advice to the Independent Shareholders is set out on pages IBC-1 to IBC-2 of this Composite Document. A letter from Vinco Capital containing its advice to the Independent Board Committee in respect of the Offer is set out on pages IFA-1 to IFA-21 of this Composite Document.

Persons (including, without limitation, custodians, nominees and trustees) who would, or otherwise intend to, forward this Composite Document and/or the accompanying Form of Acceptance to any jurisdiction outside Hong Kong, should read the details in this regard which are contained in the paragraph headed “Overseas Shareholders” in the “Letter from VBG Capital” of this Composite Document, before taking any action. It is the responsibility of each Overseas Shareholder wishing to accept the Offer to satisfy himself, herself or itself as to the full observance of the laws of the relevant jurisdiction in connection therewith, including the obtaining of any governmental, exchange control or other consents which may be required and the compliance with other necessary formalities, regulatory and/or legal requirements. Each Overseas Shareholder is advised to seek professional advice on deciding whether or not to accept the Offer.

The procedures for acceptance of the Offer and other related information are set out in Appendix I to this Composite Document and in the accompanying Form of Acceptance. Acceptances of the Offer should be received by the Registrar of the Company, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong by no later than 4:00 p.m. on Monday, 13 January 2020 or such later time and/or date as the Offeror may determine and announce in accordance with the Takeovers Code.

The Composite Document will remain on the websites of the Stock Exchange at www.hkexnews.hk and the Company at www.elegance.hk as long as the Offer remains open.

23 December 2019

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid- sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board of the Stock Exchange and no assurance is given that there will be a liquid market in the securities traded on GEM.

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CONTENTS

	Page
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iii
IMPORTANT NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	v
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	vi
LETTER FROM VBG CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
LETTER FROM THE INDEPENDENT BOARD COMMITTEE. . . . . . . . . . .	IBC-1
LETTER FROM VINCO CAPITAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IFA-1
APPENDIX I — FURTHER TERMS OF THE OFFER AND
PROCEDURES FOR ACCEPTANCE
AND SETTLEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II — FINANCIAL INFORMATION OF THE GROUP. . . . . . .	II-1
APPENDIX III — GENERAL INFORMATION OF THE GROUP. . . . . . . .	III-1
APPENDIX IV — GENERAL INFORMATION OF THE OFFEROR. . . . . .	IV-1
ACCOMPANYING DOCUMENT — FORM OF ACCEPTANCE

— ii —

EXPECTED TIMETABLE

The expected timetable set out below is indicative only and further announcement(s) by the Offeror and the Company will be made in the event of any changes when appropriate. Unless otherwise specified, all time and date references contained in this Composite Document refer to Hong Kong time and dates.

Despatch date of this Composite Document and

the accompanying Form of Acceptance and

commencement date of the Offer (Note 1) . . . . . . . . . . . . . . . Monday, 23 December 2019

Offer opens for acceptance (Note 1) . . . . . . . . . . . . . . . . . . . . . Monday, 23 December 2019

Latest time and date for acceptance

of the Offer (Note 2) . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Monday, 13 January 2020

Closing Date of the Offer (Note 2) . . . . . . . . . . . . . . . . . . . . . . . . Monday, 13 January 2020

• Announcement of the results of the Offer as at

• the Closing Date to be posted on the website

of the Stock Exchange (Note 2) . . . . . . . . . . . . . . 7:00 p.m. on Monday, 13 January 2020

• Latest date for posting of remittance for the amounts

• due under the Offer in respect of valid acceptances

received under the Offer (Note 3) . . . . . . . . . . . . . . . . . . . Wednesday, 22 January 2020

Notes:

1. The Offer, which is unconditional in all respects, is made on the date of posting of this Composite Document, and is capable of acceptance on and from that date until 4:00 p.m. on the Closing Date.

2. Acceptances of the Offer shall be irrevocable and not capable of being withdrawn, except in the circumstances set out in the paragraph headed “4. RIGHT OF WITHDRAWAL” in Appendix I to this Composite Document.

3. In accordance with the Takeovers Code, the Offer must initially be open for acceptance for at least 21 days following the date on which this Composite Document is posted. The latest time and date for acceptance of the Offer is 4:00 p.m. on Monday, 13 January 2020. An announcement will be jointly issued by the Company and the Offeror through the website of the Stock Exchange by 7:00 p.m. on Monday, 13 January 2020 stating whether the Offer has been extended, revised or expired. In the event that the Offeror decides to revise or extend the Offer and the announcement does not specify the next closing date, at least 14 days’ notice by way of an announcement will be given before the Offer is closed to those Independent Shareholders who have not accepted the Offer.

Beneficial owners of the Shares who hold their Shares in CCASS directly as an investor participant or indirectly via a broker or custodian participant should note the timing requirements (set out in Appendix I to this Composite Document) for causing instructions to be made to CCASS in accordance with the General Rules of CCASS and CCASS Operational Procedures.

— iii —

EXPECTED TIMETABLE

1. Remittances in respect of the cash consideration (after deducting the seller’s ad valorem stamp duty in respect of acceptances of the Offer) payable for the Offer Shares tendered under the Offer will be despatched to the accepting Independent Shareholder(s) accepting the Offer by ordinary post at their own risk as soon as possible, but in any event within seven (7) Business Days following the date of receipt by the Registrar of all the duly completed acceptance of the Offer and the relevant documents of title of the Offer Shares in respect of such acceptance to render the acceptance under the Offer complete and valid, in accordance with the Takeovers Code.

2. If there is a tropical cyclone warning signal number 8 or above, or a black rainstorm warning:

3. (a) in force in Hong Kong at any local time before 12:00 noon but no longer in force after 12:00 noon on the latest date for acceptance of the Offer, the latest time for acceptance of the Offer and the posting of remittances will remain at 4:00 p.m. on the same Business Day;

4. (b) in force in Hong Kong at any local time between 12:00 noon and 4:00 p.m. on the latest date for acceptance of the Offer, the latest time for acceptance of the Offer will be rescheduled to 4:00 p.m. on the following Business Day which does not have either of those warnings in force at any time between 9:00 a.m. and 4:00 p.m.

Save as mentioned above, if the latest time for acceptance of the Offer and the posting of remittances do not take effect on the date and time as stated above, the other dates mentioned above may be affected. The Offeror and the Company will notify the Independent Shareholders any change to the expected timetable as soon as practicable by way of announcement(s).

— iv —

IMPORTANT NOTICES

NOTICE TO OVERSEAS SHAREHOLDERS

The Offeror intends to make the Offer available to all Shareholders (other than the parties acting in concert with the Offeror), including those with registered addresses outside Hong Kong. However, the availability of the Offer to any persons who are not resident in Hong Kong may be affected by the applicable laws of the relevant jurisdictions. Any Shareholders who are not resident in Hong Kong and who wish to accept the Offer should inform themselves about and observe any applicable requirements in their own jurisdictions. It is the responsibility of the Shareholders who are not resident in Hong Kong who wish to accept the Offer to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection with the acceptance of the Offer (including the obtaining of any governmental or other consent which may be required or the compliance with other necessary formalities and the payment of any transfer or other taxes due from the Shareholders in respect of such jurisdictions) and, where necessary, consult their own professional advisers. Acceptance of the Offer by any overseas Shareholder will constitute a warranty by such person that such person (i) is permitted under all applicable laws to receive and accept the Offer, and any revision thereof, (ii) has observed all the applicable laws and regulations of the relevant jurisdiction in connection with such acceptance, including obtaining any government or other consent which may be required, and (iii) has complied with any other necessary formality and has paid any issue, transfer or other taxes due from the Shareholders in such jurisdiction, and that such acceptance shall be valid and binding in accordance with all applicable laws. Overseas Shareholders are recommended to seek professional advice on whether to accept the Offer.

— v —

DEFINITIONS

In this Composite Document, the following expressions have the meanings set out below unless the context requires otherwise:

• “acting in concert”

has the meaning ascribed to it under the Takeovers Code

• “associate(s)”

has the meaning ascribed to it under the GEM Listing Rules or the Takeovers Code (as the case may be)

• “Board”

the board of Directors

• “Business Day(s)”

• a day on which the Stock Exchange is open for the transaction of business

• “BVI”

the British Virgin Islands

• “CCASS”

• the Central Clearing and Settlement System established and operated by HKSCC

• “Closing Date”

• Monday, 13 January 2020, being the closing date of the Offer, or any subsequent closing date(s) of the Offer as may be determined and announced jointly by the Offeror and the Company, with the consent of the Executive in accordance with the Takeovers Code

• “Colorful Bay” Colorful Bay Limited, a company incorporated in the BVI with limited liability and is wholly-owned by Mr. So as at the Latest Practicable Date

• “Company”

• Elegance Commercial and Financial Printing Group Limited, a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on GEM (stock code: 8391)

• “Completion” the completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the Sale and Purchase Agreement

• “Completion Date”

• 19 November 2019, the date on which the Completion took place

— vi —

DEFINITIONS

• “Composite Document”

• this composite offer and response document jointly issued by the Offeror and the Company to the Independent Shareholders other than the Offeror and parties acting in concert with it (including the Vendor) in respect of the Offer (together with the Form of Acceptance) in compliance with the Takeovers Code

• “Consideration”

• the total consideration of HK$59,978,400 paid by the Offeror to the Vendor pursuant to the Sale and Purchase Agreement

• “controlling shareholder” the meaning ascribed to it under the GEM Listing Rules

• “Deep Champion”

• Deep Champion Limited, a company incorporated in the BVI with limited liability and is wholly-owned by Mr. Leung as at the Latest Practicable Date

• “Director(s)”

• the director(s) of the Company

• “Encumbrance”

• any mortgage, charge, pledge, lien, (otherwise than arising by statute or operation of law), equities, hypothecation or other encumbrance, priority or security interest, deferred purchase, title retention, leasing, sale-and-repurchase or sale-and-leaseback arrangement whatsoever over or in any property, assets or rights of whatsoever nature and includes any agreement for any of the same

• “Executive”

• the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director

• “Form of Acceptance”

• the form of acceptance and transfer of the Offer Share(s) in respect of the Offer accompanying this Composite Document

• “GEM”

• GEM operated by the Stock Exchange

• “GEM Listing Rules” the Rules Governing the Listing of Securities on GEM

• “Group”

• the Company and its subsidiaries

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DEFINITIONS

• “HKEX”

Hong Kong Exchanges and Clearing Limited

• “HKSCC”

Hong Kong Securities Clearing Company Limited

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “Independent Board Committee”

• the independent committee of the Board, comprising all independent non-executive Directors, namely Mr. Kwong Chi Wing, Mr. Chan Ka Yeung and Mr. Tam Ka Hei Raymond, who have no direct or indirect interest in the Offer, established pursuant to the Takeovers Code to give recommendations to the Independent Shareholders as to whether the Offer is fair and reasonable and as to acceptance of the Offer

• “Independent Financial Adviser” or “Vinco Capital”

• Vinco Capital Limited, a corporation licensed to conduct type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activity under the SFO, being the independent financial adviser appointed by the Company for the purpose of advising the Independent Board Committee in relation to the terms of the Offer and in particular (i) as to whether the Offer is, or is not, fair and reasonable; and (ii) as to acceptance of the Offer

• “Independent Shareholders” the Shareholders other than the Offeror and parties acting in concert with it (including the Vendor)

• “Irrevocable Undertaking” the irrevocable undertaking set out in the Sale and Purchase Agreement given by the Vendor to the Offeror in respect of the 106,200,000 Shares held by it (representing approximately 24.14% of the issued share capital of the Company as at the Latest Practicable Date), details of which are set out in the paragraph headed “The Irrevocable Undertaking” in the “Letter from VBG Capital” of this Composite Document

• “Joint Announcement”

• the announcement jointly published by the Company and the Offeror dated 13 November 2019 in relation to, among other things, the Offer pursuant to Rule 3.5 of the Takeovers Code

— viii —

DEFINITIONS

• “Last Trading Day”

• 5 November 2019, being the day on which the Shares last traded on the Stock Exchange immediately prior to the publication of the Joint Announcement

• “Latest Practicable Date”

• 20 December 2019, being the latest practicable date prior to the printing of this Composite Document for ascertaining certain information contained in this Composite Document

• “Mr. Leung”

• Mr. Leung Shu Kin, an executive Director of the Company. Mr. Leung is also a controlling shareholder of the Company as at the Latest Practicable Date

• “Mr. Liang”

• Mr. Liang Zihao, who legally and beneficially owns 49% of the issued share capital of the Offeror as at the Latest Practicable Date

• “Mr. So”

• Mr. So Wing Keung, the chairman, the chief executive officer and an executive Director of the Company. Mr. So is also a controlling shareholder of the Company as at the Latest Practicable Date

• “Mr. Wu”

• Mr. Wu Jianwei, who legally and beneficially owns 51% of the issued share capital of the Offeror as at the Latest Practicable Date

• “Offer” the mandatory unconditional cash offer to be made by VBG Capital for and on behalf of the Offeror, to acquire all the issued Shares not already owned and/or agreed to be acquired by the Offeror and/or parties acting in concert with it (excluding the Vendor) in accordance with the Takeovers Code

• “Offer Period”

• has the meaning ascribed thereto under the Takeovers Code, which commenced on 2 July 2019, being the date of the first announcement published pursuant to Rule 3.7 of the Takeovers Code

• “Offer Price”

• HK$0.325 per Offer Share

• “Offer Share(s)”

• all the Share(s) in issue that are subject to the Offer

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DEFINITIONS

• “Offeror”

• Global Fortune Global Limited, a company incorporated in the BVI with limited liability and is owned as to 51% by Mr. Wu and as to 49% by Mr. Liang

• “Overseas Shareholder(s)” Independent Shareholder(s) (if any), whose address(es), as shown on the register of members of the Company is/are outside Hong Kong

• “PRC” the People’s Republic of China, which for the purpose of this Composite Document, shall exclude Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• “Registrar” Tricor Investor Services Limited, the Company’s branch share registrar and transfer office at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong

• “Relevant Period” the period from 2 January 2019, being the date falling six months immediately preceding the commencement of the Offer Period, up to and including the Latest Practicable Date

• “Sale and Purchase Agreement”

• the conditional sale and purchase agreement dated 5 November 2019 and entered into, among others, the Vendor, Mr. So and the Offeror for the sale and purchase of the Sale Shares

• “Sale Shares” an aggregate of 223,800,000 Shares acquired by the Offeror from the Vendor pursuant to the terms of the Sale and Purchase Agreement

• “SFC”

• the Securities and Futures Commission of Hong Kong

• “SFO”

• Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

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

• “Shareholder(s)”

• holder(s) of the issued Shares

— x —

DEFINITIONS

“Stock Exchange”

The Stock Exchange of Hong Kong Limited

• “Takeovers Code”

the Code on Takeovers and Mergers issued by the SFC

• “VBG Capital” VBG Capital Limited, the financial adviser of the Offeror and parties acting in concert with it in respect of the Offer, and is a corporation licensed to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO

• “Vendor” Glorytwin Limited, a company incorporated in the BVI with liability limited by shares and owned as to 90% by Colorful Bay and 10% by Deep Champion as at the Latest Practicable Date

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

• “%” per cent

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LETTER FROM VBG CAPITAL

VBG Capital Limited

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18/F., Prosperity Tower 39 Queen’s Road Central Hong Kong

23 December 2019

To the Independent Shareholders

Dear Sir/Madam,

MANDATORY UNCONDITIONAL CASH OFFER BY VBG CAPITAL LIMITED FOR AND ON BEHALF OF THE OFFEROR TO ACQUIRE ALL OF THE ISSUED SHARES IN ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED (OTHER THAN THOSE ALREADY OWNED AND/OR AGREED TO BE ACQUIRED BY GLOBAL FORTUNE GLOBAL LIMITED AND/OR PARTIES ACTING IN CONCERT WITH IT)

INTRODUCTION

Reference is made to the Joint Announcement and the announcement of the Company dated 18 November 2019. On 13 November 2019 (after trading hours of the Stock Exchange), the Company and the Offeror jointly announced, among other things, that the Vendor (as vendor), the Offeror (as purchaser) and Mr. So entered into the Sale and Purchase Agreement dated 5 November 2019, pursuant to which the Vendor conditionally agreed to sell, and the Offeror conditionally agreed to acquire, the Sale Shares at the total consideration of HK$59,978,400 (equivalent to approximately HK$0.268 per Sale Share).

As disclosed in the section headed “ Conditions for the Completion of the Sale and Purchase Agreement ” in the Joint Announcement, completion of the Sale and Purchase Agreement is conditional upon the satisfaction (or waiver by the Offeror, where applicable) of certain conditions. The Company and the Offeror stated in the Joint Announcement that all such conditions have been satisfied. Accordingly, Completion took place on 19 November 2019.

— 1 —

LETTER FROM VBG CAPITAL

Upon Completion and as at the Latest Practicable Date, the Vendor owns or controls a total of 106,200,000 Shares, representing 24.14% of the issued share capital of the Company, whilst the Offeror owns or controls a total of 223,800,000 Shares, representing 50.86% of the issued share capital of the Company. Pursuant to the Takeovers Code, because each of the Vendor and the Offeror owns or controls more than 20% shareholding in the Company, they are presumed to be acting in concert and the Offeror and the Vendor hold, in aggregate, 330,000,000 Shares, representing 75% of the issued share capital of the Company. As the Offeror’s shareholding has increased to 50.86%, the leader of the concert group has been changed. Accordingly, the Offeror is required to make the Offer for all the issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it) under Rule 26.1 of the Takeovers Code. VBG Capital is making the Offer for and on behalf of the Offeror.

This letter forms part of this Composite Document which sets out, among other things, the principal terms of the Offer, the information of the Offeror and the Offeror’s intention on the Company. Further details of the Offer and procedures for acceptance and settlement are set out in Appendix I to this Composite Document and the accompanying Form of Acceptance. The Independent Shareholders are strongly advised to consider carefully the information contained in “ LETTER FROM THE BOARD ”, “ LETTER FROM THE INDEPENDENT BOARD COMMITTEE ” and “ LETTER FROM VINCO CAPITAL ” as set out in this Composite Document, the appendices as set out in this Composite Document and the Form of Acceptance and to consult their professional advisers if in doubt before reaching a decision as to whether or not to accept the Offer.

PRINCIPAL TERMS OF THE OFFER

The Offer is being made by VBG Capital for and on behalf of the Offeror in compliance with the Takeovers Code on the following terms:

The Offer

For each Offer Share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .HK$0.325 in cash

The Offer Price of HK$0.325 per Offer Share under the Offer is equal to the price paid by Mr. Liang for the acquisition of the Shares within six months prior to the commencement of the Offer Period. The Offer will be extended to all Independent Shareholders other than the Offeror and parties acting in concert with it in accordance with the Takeovers Code.

As at the Latest Practicable Date, the Company has 440,000,000 Shares in issue. The Company does not have any outstanding options, derivatives, warrants or securities which are convertible into Shares.

— 2 —

LETTER FROM VBG CAPITAL

The Offer is unconditional in all respects and is not conditional upon acceptances being received in respect of a minimum number of Offer Shares.

Comparison of value

The Offer Price of HK$0.325 per Offer Share represents:

• (a) a discount of approximately 14.5% to the closing price of HK$0.38 per Share as quoted on the Stock Exchange on 5 November 2019, being the Last Trading Day;

• (b) a discount of approximately 13.33% to the average of the closing prices as quoted on the Stock Exchange for the five consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.375 per Share;

• (c) a discount of approximately 14.7% to the average of the closing prices as quoted on the Stock Exchange for the 10 consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.381 per Share;

• (d) a discount of approximately 23.0% to the average of the closing prices as quoted on the Stock Exchange for the 30 consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.422 per Share;

• (e) a premium of approximately 55.5% over the audited consolidated net assets per Share of approximately HK$0.209 as at 31 March 2019 (being the date to which the latest audited consolidated annual results of the Group were made up), calculated based on the Group’s audited consolidated net assets attributable to the Shareholders of approximately HK$92,060,000 as at 31 March 2019 and 440,000,000 Shares in issue as at 13 November 2019; and

• (f) a premium of approximately 63.0% over the unaudited consolidated net assets per Share of approximately HK$0.199 as at 30 September 2019 (being the date to which the latest unaudited consolidated interim results of the Group were made up), calculated based on the Group’s unaudited consolidated net assets attributable to the Shareholders of approximately HK$87,730,000 as at 30 September 2019 and 440,000,000 Shares in issue as at 13 November 2019.

Highest and lowest Share price

During the six-month period up to and including the Last Trading Day:

• (i) the highest closing price of the Shares as quoted on the Stock Exchange was HK$0.72 per Share on 26 April 2019; and

— 3 —

LETTER FROM VBG CAPITAL

• (ii) the lowest closing price of the Shares as quoted on the Stock Exchange was HK$0.153 per Share on 2 and 3 April 2019.

THE IRREVOCABLE UNDERTAKING

Immediately after Completion, the Vendor will continue to own and control the Remaining Shares, representing approximately 24.14% of the entire issued share capital of the Company. Pursuant to the Irrevocable Undertaking, the Vendor has irrevocably undertaken to the Offeror that, in respect of the Remaining Shares, it will not accept the Offer and it will not, whether directly or indirectly, sell, transfer, charge, pledge or grant any option over or otherwise dispose of or create any encumbrances in respect of any of the Shares held by the Vendor or any interest in any of the Remaining Shares immediately after Completion up to and including the date of the close of the Offer. Accordingly, the Offer will not be extended to the Vendor (which is presumed to be a party acting in concert with the Offeror).

Total value of the Offer

As at 13 November 2019, there are 440,000,000 Shares in issue. On the basis of the Offer Price of HK$0.325 per Sale Share, the entire issued share capital of the Company would be valued at HK$143,000,000.

Immediately after Completion and on the basis that there are 110,000,000 Shares (excluding the 106,200,000 Shares held by the Vendor, which is a party acting in concert with the Offeror and has given the Irrevocable Undertaking) subject to the Offer and assuming that there is no change in the issued share capital of the Company, the value of the Offer is HK$35,750,000.

The Irrevocable Undertaking shall cease to be binding if the Sale and Purchase Agreement is terminated and the Offer is not proceeded with. A copy of the Irrevocable Undertaking is available for inspection, details of which are set out in the paragraph headed “ 13. DOCUMENTS AVAILABLE FOR INSPECTION ” of Appendix III to this Composite Document.

Confirmation of financial resources available to the Offeror

The aggregate Consideration payable by the Offeror in respect of the Sale Shares under the Sale and Purchase Agreement and the maximum consideration payable under the Offer will amount to HK$95,728,400.

— 4 —

LETTER FROM VBG CAPITAL

The Offeror will finance and satisfy the aggregate Consideration payable in respect of the Sale Shares and consideration payable under the Offer by its internal resources. VBG Capital, being the financial adviser to the Offeror, is satisfied that sufficient financial resources are available to the Offeror to satisfy the Consideration payable by the Offeror for the Sale Shares under the Sale and Purchase Agreement and the consideration payable under the full acceptance of the Offer (excluding the 106,200,000 Shares held by the Vendor, which is a party acting in concert with the Offeror and has given the Irrevocable Undertaking).

Effect of accepting the Offer

The Offer will be unconditional in all respects. Acceptance of the Offer will be irrevocable and not capable of being withdrawn, except as permitted under the Takeovers Code.

Provided that valid acceptance forms and the relevant certificate(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) are complete and in good order and have been received by the registrar of the Company, the Independent Shareholders will sell their tendered Shares to the Offeror free from all encumbrances and together with all rights attaching or accruing hereto, including, without limitation, the rights to receive in full all dividends and other distributions, if any, recommended, declared, made or paid by reference to a record date on or after the date on which the Offer is made, that is, the date of the posting of the Composite Document. As at 13 November 2019, the Company has no plan to distribute and/or declare any dividend during the offer period.

Acceptance of the Offer by any Independent Shareholder will be deemed to constitute a warranty by such person that all Shares sold by such person under the Offer are free from all encumbrances whatsoever and together with all rights accruing or attaching thereto, including, without limitation, the right to receive dividends and distributions recommended, declared, made or paid, if any, by reference to a record date on or after the date on which the Offer is made.

Payment

Payment in cash in respect of acceptances of the Offer will be made as soon as possible but within seven (7) Business Days of the date of receipt of a duly completed acceptance of the Offer. Relevant documents evidencing title must be received by or on behalf of the Offeror to render such acceptance of the Offer complete and valid.

No fractions of a cent will be payable and the amount of the consideration payable to an Independent Shareholder who accepts the Offer will be rounded up to the nearest cent.

— 5 —

LETTER FROM VBG CAPITAL

Dealing and interests in the Company’s securities

On or about 29 April 2019, Mr. Liang bought on market 400,000 Shares at a price of HK$0.325 per Share. On or about 4 October 2019, Mr. Liang disposed on market of those 400,000 Shares at prices ranging from HK$0.405 to HK$0.435 per Share. Save for the aforesaid dealings and the Sale and Purchase Agreement, to which each of the Offeror and the Vendor is a party, none of the Offeror, its ultimate beneficial owners, the Vendor and its ultimate beneficial owners, nor parties acting in concert with any of them has dealt in any Shares, options, derivatives, warrants or other securities convertible into Shares during the six-month period prior to 2 July 2019.

Hong Kong stamp duty

The seller’s Hong Kong ad valorem stamp duty arising in connection with acceptances of the Offer will be payable by the Independent Shareholders who accept the Offer at the rate of 0.1% of the consideration payable by the Offeror for the Shares of such Independent Shareholders, or (if higher) the value of the Shares as determined by the Collector of Stamp Revenue under the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong). The relevant amount of stamp duty payable by the Independent Shareholders will be deducted from the consideration payable to the accepting Independent Shareholders under the Offer. The Offeror will bear its own portion of buyer’s ad valorem stamp duty at the rate of 0.1% of the consideration payable in respect of acceptances of the Offer and will account to the Stamp Office of Hong Kong for all the stamp duty payable for the sale and purchase of the Shares which are validly tendered for acceptance under the Offer.

Your attention is drawn to the further details regarding the procedures for acceptance and settlement and acceptance period as set out in Appendix I to this Composite Document and the accompanying Form of Acceptance.

Overseas Shareholders

As the Offer to persons not resident in Hong Kong may be affected by the laws of the relevant jurisdiction in which they are resident, Overseas Shareholders who are citizens, residents or nationals of a jurisdiction outside Hong Kong should observe any applicable legal or regulatory requirements and, where necessary, consult their own professional advisers in respect of the acceptance of the Offer. It is the responsibilities of Overseas Shareholders who wish to accept the Offer to satisfy themselves as to the full observance of the laws and regulations of the relevant jurisdictions in connection with the acceptance of the Offer (including the obtaining of any governmental or other consent which may be required or the compliance with other necessary formalities and the payment of any transfer or other taxes due in respect of such jurisdictions).

— 6 —

LETTER FROM VBG CAPITAL

Taxation advice

Independent Shareholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of accepting or rejecting the Offer. It is emphasised that none of the Company, the Offeror or any of their respective directors, officers or associates or any other person involved in the Offer accepts responsibility for any taxation effects on, or liabilities of, any persons as a result of their acceptance or rejection of the Offer.

Any acceptance of the Offer by any Overseas Shareholder will be deemed to constitute a representation and warranty from such Overseas Shareholder to the Offeror that the local laws and requirements have been complied with. The Overseas Shareholders should consult their professional advisers if in doubt.

INFORMATION OF THE GROUP

Details of the information of the Group are set out in the paragraph headed “ INFORMATION OF THE GROUP ” in the “ LETTER FROM THE BOARD ” in this Composite Document.

INFORMATION OF THE OFFEROR

The Offeror is a company incorporated in the BVI with limited liability and is owned as to 51% by Mr. Wu and as to 49% by Mr. Liang. As at the Latest Practicable Date, the directors of the Offeror are Mr. Wu and Mr. Liang.

Mr. Wu, aged 37, obtained a diploma in Information Technology from the Singapore Temasek Polytechnic. Mr. Wu has extensive experience in investing and managing companies. He is currently the chief executive officer of Chang Yuan Investments Pte Ltd, Chang He Holdings Pte Ltd and Champion Management Pte Ltd in Singapore. His business encompasses property investment, asset management, business restructuring, hotel management and electric vehicles. He is mainly responsible for overseeing his business’s performance and management and directing the formulation of business development strategies. From 2012 to 2015, under his management and leadership, his business has acquired the property investment portfolio aggregately valued over approximately SG$150.0 million at the respective purchase dates including (i) commercial offices located at Marine Parade and Paya Lebar; (ii) hotels located at Joo Chiat and North Canal; and (iii) retail, food and beverage units at Katong in Singapore. Mr. Wu does not have any experience in the provision of printing services.

— 7 —

LETTER FROM VBG CAPITAL

Mr. Liang, aged 38, obtained his bachelor of business administration, marketing from the University of Regina, Canada in 2007. Mr. Liang has been the chairman of 廣州市番禺 區邦騰化工有限公司 (transliterated in English as Guangzhou Panyu District Bangteng Chemical Industry Limited), a company that is principally engaged in the production of industrial unsaturated resin, paints and powder coating since 2007. Mr. Liang has also been the chairman of 廣州番禺區宏豪投資有限公司 (transliterated in English as Guangzhou Panyu District Honghao Investment Limited), a company that is principally engaged in the provision of investment consultancy service and property management since 2018. Mr. Liang does not have any experience in the provision of printing services.

As at 13 November 2019, the Offeror is principally engaged in investment holding and save for entering into the Sale and Purchase Agreement, the Offeror did not engage in any other business activities.

INTENTION OF THE OFFEROR IN RELATION TO THE GROUP

Upon Completion, the Offeror intends that the Group will continue to carry on its existing businesses and will maintain the listing status of the Company on GEM.

The Offeror will, following the close of the Offer, conduct a detailed review of the business operations and financial position of the Group to formulate a sustainable business plans and a long-term strategy for the Group and explore other suitable business or investment opportunities for enhancing its future development and strengthening its revenue base. Subject to the results of the review, the Offeror may explore other business opportunities for the Company and consider whether any asset disposals, asset acquisitions, business rationalisation, business divestment, fund raising, restructuring of the business and/or business diversification will be appropriate in order to enhance long-term growth potential of the Group.

Notwithstanding the above, as at the Latest Practicable Date, the Offeror had no intention, understanding, negotiation or arrangement (concluded or otherwise) to downsize, cease or dispose any of the existing business of the Group. No investment or business opportunity has been identified nor has the Offeror entered into any agreements, arrangements, understandings or negotiations in relation to the injection of any assets or business into the Group, and the Offeror has no intention to discontinue the employment of the employees (save for the change in the composition of the Board) or to dispose of or re-deploy the assets of the Group other than those in its ordinary course of business.

— 8 —

LETTER FROM VBG CAPITAL

PROPOSED CHANGE OF BOARD COMPOSITION

The Board is currently made up of five Directors, comprising two executive Directors, being Mr. So Wing Keung and Mr. Leung Shu Kin, and three independent non-executive Directors, being Mr. Kwong Chi Wing, Mr. Chan Ka Yeung, and Mr. Tam Ka Hei Raymond.

The Offeror intends to nominate new Directors who will have the relevant knowledge and experience for appointment after the close of the Offer with effect from a date which is no earlier than such date as permitted under Rule 26.4 of the Takeovers Code. As at the Latest Practicable Date, the Offeror had not decided on the future composition of the Board.

Any changes to the Board will be made in compliance with the Takeovers Code and the GEM Listing Rules. Further announcement(s) will be made upon any resignation and appointment of the Directors becoming effective.

APPOINTMENT OF CHIEF OPERATING OFFICER

The Board has appointed Mr. Ng Ka Ki ( 吳家祺 ) as the chief operating officer of the Company with effect from 2 December 2019.

His biography is set out below:

Mr. Ng, aged 38, has become a certified public accountant of the Hong Kong Institute of Certified Public Accountants since July 2009. He has more than 15 years of experience in audit and accounting. Prior to joining the Group, he was the company secretary and financial controller of VBG International Holdings Limited (stock code: 8365), a company listed on GEM, from September 2013 to March 2018 and October 2014 to June 2019, respectively. From August 2010 to October 2014, he was the finance manager and company secretary of Jayden Resources Inc., a company listed on the TSX Venture Exchange in Canada (stock code: JDN). From January 2010 to July 2010, Mr. Ng was an accountant in a subsidiary of a company listed on the Main Board of the Stock Exchange. From September 2004 to December 2009, he worked in two accounting firms where his last position was a senior accountant. Mr. Ng was awarded a Bachelor of Business Administration (Honours) degree in Accountancy from the City University of Hong Kong in November 2004.

MAINTAINING THE LISTING STATUS OF THE COMPANY

The Stock Exchange has stated that if, at the close of the Offer, less than the minimum prescribed percentage applicable to the Company, being 25% of the issued Shares, are held by the public or if the Stock Exchange believes that (i) a false market exists or may exist

— 9 —

LETTER FROM VBG CAPITAL

in the trading of the Shares; or (ii) there are insufficient Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the Shares until the prescribed level of public float is restored.

The Offeror intends to maintain the listing of the Shares on GEM after the close of the Offer. The directors of the Offeror have jointly and severally undertaken to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares after the close of the Offer. The new Directors to be appointed to the Board will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares after the close of the Offer.

Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

As the Company and the Offeror are unable to ascertain at this stage the level of acceptances by Independent Shareholders under the Offer, they have not decided the exact steps/actions that will be taken by them after the close of the Offer to restore the public float of the Shares, if required. Notwithstanding this, the Company and the Offeror consider that the appropriate actions to be taken shall include placing down of sufficient number of accepted Shares by the Offeror and/or issue of new Shares by the Company for this purpose. The Company and the Offeror will issue a separate announcement as and when necessary in this regard.

COMPULSORY ACQUISITION

The Offeror does not intend to exercise any right which may be available to it to compulsorily acquire any outstanding Offer Shares not acquired under the Offer after the close of the Offer.

GENERAL

This Composite Document has been prepared for the purposes of complying with the laws of Hong Kong, the Takeovers Code and the GEM Listing Rules and the information disclosed may not be the same as which would have been disclosed if this Composite Document had been prepared in accordance with the laws of jurisdictions outside Hong Kong.

To ensure equality of treatment of all Independent Shareholders, those Independent Shareholders who hold Shares as nominee on behalf of more than one beneficial owner should, as far as practicable, treat the holding of such beneficial owner separately. It is essential for the beneficial owners of the Shares whose investments are registered in the names of nominees to provide instructions to their nominees of their intentions with regard to the Offer.

— 10 —

LETTER FROM VBG CAPITAL

The attention of the Overseas Shareholders is drawn to the section headed “ IMPORTANT NOTICES ” contained in this Composite Document and the paragraph headed “ 6. OVERSEAS SHAREHOLDERS ” in Appendix I to this Composite Document.

All documents and remittances to be sent to the Independent Shareholders will be sent to them by ordinary post at their own risk. Such documents and remittances will be sent to the Independent Shareholders at their respective addresses as they appear in the register of members of the Company or in the case of joint Shareholders, to such Shareholder whose name appears first in the register of members of the Company. None of the Offeror and parties acting in concert with it, the Company, VBG Capital, the Registrar or any of their respective ultimate beneficial owners, directors, officers, agents or associates or any other persons involved in the Offer will be responsible for any loss or delay in transmission of such documents and remittances or any other liabilities that may arise as a result thereof or in connection therewith.

WARNING

Independent Shareholders and potential investors are advised to exercise caution when dealing in the shares of the Company. Persons who are in doubt as to the action they should take should consult a licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional advisers.

ADDITIONAL INFORMATION

Your attention is drawn to the “ LETTER FROM THE BOARD ”, the “ LETTER FROM THE INDEPENDENT BOARD COMMITTEE ” and the “ LETTER FROM VINCO CAPITAL ” as set out in this Composite Document, the accompanying Forms of Acceptance and the additional information set out in the appendices to, which form part of, this Composite Document and to consult your professional advisers, before deciding whether or not to accept the Offer.

Yours faithfully For and on behalf of VBG Capital Limited Hui Ringo Wing Kun Director

— 11 —

LETTER FROM THE BOARD

==> picture [40 x 40] intentionally omitted <==

ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED 精雅商業財經印刷集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8391)

Executive Directors: Registered office in the Cayman Islands: Mr. So Wing Keung (Chairman) P.O. Box 1350, Mr. Leung Shu Kin Clifton House, 75 Fort Street, Grand Cayman, Independent non-executive Directors: KY1-1108, Cayman Islands Mr. Kwong Chi Wing Mr. Chan Ka Yeung Head office and principal place of Mr. Tam Ka Hei Raymond business in Hong Kong: Room 2402-2407, 24/F, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong 23 December 2019

To the Independent Shareholders,

Dear Sir or Madam,

MANDATORY UNCONDITIONAL CASH OFFER BY VBG CAPITAL LIMITED FOR AND ON BEHALF OF GLOBAL FORTUNE GLOBAL LIMITED TO ACQUIRE ALL OF THE ISSUED SHARES OF ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED (OTHER THAN THOSE ALREADY OWNED AND/OR AGREED TO BE ACQUIRED BY THE OFFEROR AND/OR PARTIES ACTING IN CONCERT WITH IT)

INTRODUCTION

Reference is made to the Joint Announcement.

— 12 —

LETTER FROM THE BOARD

As disclosed in the Joint Announcement, on 5 November 2019 (after trading hours of the Stock Exchange), the Vendor, the Offeror and Mr. So entered into the Sale and Purchase Agreement, pursuant to which the Vendor conditionally agreed to sell and the Offeror conditionally agreed to acquire an aggregate of 223,800,000 Sale Shares, representing approximately 50.86% of the issued share capital of the Company as at the Latest Practicable Date, at a total consideration of HK$59,978,400 (equivalent to approximately HK$0.268 per Sale Share). The Completion took place on 19 November 2019 and was announced on 20 November 2019 by the Company.

As mentioned in the “ LETTER FROM VBG CAPITAL ” contained in this Composite Document, upon Completion and as at the Latest Practicable Date, the Vendor became interested in 106,200,000 Shares, representing approximately 24.14% of the issued share capital of the Company, whilst the Offeror, its ultimate beneficial owners and parties acting in concert with any of them (excluding the Vendor) became the owner of 223,800,000 Shares, representing approximately 50.86% of the issued share capital of the Company. Pursuant to the Takeovers Code, in view that each of the Vendor and the Offeror is interested in more than 20% shareholding in the Company, they are presumed to be acting in concert and the Offeror and the Vendor hold, in aggregate, 330,000,000 Shares, representing 75% of the issued share capital of the Company. As the Offeror’s shareholding in the Company has increased to approximately 50.86%, the leader of the concert group has been changed. Accordingly, the Offeror is required to make the Offer for all the issued Shares (other than those already owned or agreed to be acquired by the Offeror and parties acting in concert with it) under Rule 26.1 of the Takeovers Code.

Pursuant to Rule 1.01 of the GEM Listing Rules, “controlling shareholder” is defined as any person who is or group of persons who are together entitled to exercise or control the exercise of 30% (or such other amount as may from time to time be specified in the Takeovers Code as being the level for triggering a mandatory general offer) or more of the voting power at general meetings of the issuer or who is or are in a position to control the composition of a majority of the board of directors of the issuer. Given that the Vendor is interested in 106,200,000 Shares, representing approximately 24.14% of the issued share capital of the Company, immediately after the Completion, the Vendor ceased to be a controlling shareholder of the Company.

This letter forms part of this Composite Document and set out, among other things, (i) information relating to the Group, the Offeror and the Offer; (ii) the recommendation of the Independent Board Committee to the Independent Shareholders in respect of the terms of the Offer and as to acceptance of the Offer; and (iii) the letter from Vinco Capital, containing its advice and recommendation to the Independent Board Committee in relation to the Offer.

Unless the context otherwise requires, terms defined in the Composite Document shall have the same meanings when used in this letter.

— 13 —

LETTER FROM THE BOARD

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee, comprising all independent non-executive Directors, namely, Mr. Kwong Chi Wing, Mr. Chan Ka Yeung and Mr. Tam Ka Hei Raymond, has been established to advise the Independent Shareholders as to whether the terms of the Offer are fair and reasonable and as to acceptance of the Offer. The above-named independent non-executive Directors have no direct or indirect interest or involvement in the Offer. It is considered appropriate for them to be members of the Independent Board Committee in this regard.

Pursuant to Rule 2.1 of the Takeovers Code, Vinco Capital has been appointed as the Independent Financial Adviser by the Company after approval by the Independent Board Committee to advise the Independent Board Committee in respect of the Offer and in particular as to whether the Offer is, or is not, fair and reasonable so far as the Independent Shareholders are concerned and as the acceptance of the Offer.

The full texts of the letter from the Independent Board Committee addressed to the Independent Shareholders and the letter from Vinco Capital addressed to the Independent Board Committee and the Independent Shareholders are set out in this Composite Document. You are advised to read both letters and the additional information contained in the appendices to this Composite Document carefully before taking any action in respect of the Offer.

THE OFFER

As set out in the “ LETTER FROM VBG CAPITAL ” contained in this Composite Document, the Offer is being made by VBG Capital for and on behalf of the Offeror in compliance with the Takeovers Code on the following terms:

The Offer

For each Offer Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.325 in cash

The Offer Price of HK$0.325 per Offer Share is equal to the price paid by Mr. Liang for the acquisition of the Shares within the Relevant Period.

The Offer is extended to all Independent Shareholders in accordance with the Takeovers Code. The Offer Shares to be acquired under the Offer shall be fully paid and free from all Encumbrances and together with all rights attaching to them, including the right to receive

— 14 —

LETTER FROM THE BOARD

in full all dividends and other distributions, if any, recommended, declared, made or paid by reference to a record date on or after the date on which the Offer is made, that is, the date of despatch of this Composite Document.

As at the Latest Practicable Date, the Company had 440,000,000 Shares in issue. The Company does not have any outstanding options, derivatives, warrants or securities which are convertible or exchangeable into Shares and has not entered into any agreement for the issue of such options, derivatives, warrants or securities which are convertible or exchangeable into Shares.

As at the Latest Practicable Date, no dividend has been paid or declared by the Company and the Board does not expect to declare any dividend during the Offer Period.

The Offer is unconditional in all respects and is not conditional upon acceptances being received in respect of a minimum number of Shares.

Please also refer to the “ LETTER FROM VBG CAPITAL ” contained in this Composite Document, Appendix I to this Composite Document and the accompanying Form of Acceptance for further information in relation to, among other things, the Offer and acceptance and settlement procedures of the Offer.

INFORMATION OF THE GROUP

The Company is incorporated in the Cayman Islands with limited liability and its Shares are listed on GEM of the Stock Exchange (stock code: 8391). The principal activity of the Company is investment holding. The principal activities of the Group are the provision of printing services. It provides commercial printing and financial printing services. In addition, the Group also provides standalone ad hoc design and artwork, and translation services to corporate customers.

SHAREHOLDING STRUCTURE OF THE COMPANY

Set out below is the shareholding structure of the Company (i) immediately before Completion; and (ii) after Completion and as at the Latest Practicable Date.

— 15 —

LETTER FROM THE BOARD

	(i) Immediately before	(i) Immediately before	(ii) After Completion and as	(ii) After Completion and as
Name of Shareholders	Completion		at the Latest Practicable Date
	Number of Shares	Approximate %	Number of Shares	Approximate %
The Offeror and parties in concert with
it (excluding the Vendor)	—	—	223,800,000	50.86
The Vendor_(Note)_and parties in
concert with it	330,000,000	75	106,200,000	24.14
Sub-total	330,000,000	75	330,000,000	75
Public Shareholders	110,000,000	25	110,000,000	25
Total	440,000,000	100	440,000,000	100

Note: As at the Latest Practicable Date, the Vendor is ultimately controlled by Mr. So, who owns 90% of the issued share capital of the Vendor through his wholly-owned company, Colorful Bay; and Mr. Leung, who owns 10% of the issued share capital of the Vendor through his wholly-owned company, Deep Champion. Mr. So and Mr. Leung are executive Directors.

Your attention is drawn to Appendices II and III to this Composite Document which contain further financial and general information of the Group.

INFORMATION OF THE OFFEROR

Your attention is drawn to the section headed “ INFORMATION OF THE OFFEROR ” in the “ LETTER FROM VBG CAPITAL ” contained in this Composite Document.

— 16 —

LETTER FROM THE BOARD

INTENTION OF THE OFFEROR REGARDING THE GROUP

Please refer to the section headed “ INTENTION OF THE OFFEROR IN RELATION TO THE GROUP ” in the “ LETTER FROM VBG CAPITAL ” contained in this Composite Document for details regarding Offeror’s intention on the business of the Group. The Board is aware of the Offeror’s intention to conduct a detailed review of the business operations and financial position of the Group to formulate a sustainable business plans and a long-term strategy for the Group and explore other suitable business or investment opportunities for enhancing its future development and strengthening its revenue base. Subject to the results of the review, the Offeror may explore other business opportunities for the Company and consider whether any asset disposals, asset acquisitions, business rationalisation, business divestment, fund raising, restructuring of the business and/or business diversification will be appropriate in order to enhance long-term growth potential of the Group. Subject to the applicable laws, regulations and rules, the Board will assess any proposals of the Offeror and render reasonable support to those proposals which are in the interests of the Group and the Shareholders as a whole. As at the Latest Practicable Date, the Offeror had no intention, understanding, negotiation or arrangement (concluded or otherwise) to downsize, cease or dispose any of the existing businesses of the Group.

Notwithstanding the above, as at the Latest Practicable Date, no investment or business opportunity has been identified nor has the Offeror entered into any agreements, arrangements, understandings or negotiations in relation to the injection of any assets or business into the Group, and the Offeror has no intention to discontinue the employment of the employees (save for the change in the composition of the Board) or to dispose of or redeploy the assets of the Group other than those in its ordinary course of business.

MAINTAINING THE LISTING STATUS OF THE COMPANY

The Stock Exchange has stated that if, at the close of the Offer, less than the minimum prescribed percentage applicable to the Company, being 25% of the issued Shares, are held by the public or if the Stock Exchange believes that (i) a false market exists or may exist in the trading of the Shares; or (ii) there are insufficient Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the Shares until the prescribed level of public float is restored.

The Offeror intends to maintain the listing of the Shares on GEM after the close of the Offer. The directors of the Offeror and the Directors have jointly and severally undertaken to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares after the close of the Offer. The new Directors to be appointed to the Board will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares after the close of the Offer.

— 17 —

LETTER FROM THE BOARD

Shareholders and potential investors are advised to exercise caution when dealing in the Shares.

As stated in the “ LETTER FROM VBG CAPITAL ” contained in this Composite Document, as the Company and the Offeror are unable to ascertain at this stage the level of acceptances by Independent Shareholders under the Offer, they have not decided the exact steps/actions that will be taken by them after the close of the Offer to restore the public float of the Shares, if required. Notwithstanding this, the Company and the Offeror consider that the appropriate actions to be taken shall include placing down of sufficient number of accepted Shares by the Offeror and/or issue of new Shares by the Company for this purpose. The Company and the Offeror will issue a separate announcement as and when necessary in this regard.

RECOMMENDATION

Your attention is drawn to (i) the “ LETTER FROM THE INDEPENDENT BOARD COMMITTEE ” as set out on pages IBC-1 to IBC-2 of this Composite Document, which contains its recommendation to the Independent Shareholders in respect of the Offer, and (ii) the “ LETTER FROM VINCO CAPITAL ” as set out on pages IFA-1 to IFA-21 of this Composite Document, which contains, among other things, its advice to the Independent Board Committee and the Independent Shareholders in relation to the Offer and the principal factors considered by it before arriving at its recommendation.

ADDITIONAL INFORMATION

Your attention is also drawn to the “ LETTER FROM VBG CAPITAL ” and the additional information contained in the appendices to this Composite Document.

Yours faithfully, By order of the Board

Elegance Commercial and Financial Printing Group Limited

So Wing Keung

Chairman and Chief Executive Officer

— 18 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Set out below is the text of the letter of recommendation from the Independent Board Committee in respect of the Offer which has been prepared for the purpose of inclusion in this Composite Document.

==> picture [40 x 39] intentionally omitted <==

ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED 精雅商業財經印刷集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8391)

23 December 2019

To the Independent Shareholders,

Dear Sir or Madam,

MANDATORY UNCONDITIONAL CASH OFFER BY VBG CAPITAL LIMITED FOR AND ON BEHALF OF THE OFFEROR TO ACQUIRE ALL OF THE ISSUED SHARES OF

ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED (OTHER THAN THOSE ALREADY OWNED AND/OR AGREED TO BE ACQUIRED BY THE OFFEROR AND/OR PARTIES ACTING IN CONCERT WITH IT)

INTRODUCTION

We refer to the Composite Document issued jointly by the Offeror and the Company dated 23 December 2019 of which this letter forms part. Unless the context requires otherwise, terms used in this letter shall have the same meaning as those defined in the Composite Document.

We have been appointed by the Board to form the Independent Board Committee to consider and to advise the Independent Shareholders as to whether or not the terms of the Offer are fair and reasonable and to make a recommendation as to the acceptance of the Offer.

Vinco Capital has been appointed as the Independent Financial Adviser to advise us in respect of the above. Detail of its advice and the principal factors and reasons taken into consideration in arriving at its recommendation are set out in the “ LETTER FROM VINCO CAPITAL ” on pages IFA-1 to IFA-21 of this Composite Document.

— IBC-1 —

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

We also wish to draw your attention to the “ LETTER FROM VBG CAPITAL ” and the “ LETTER FROM THE BOARD ” as set out in the Composite Document as well as the additional information set out in the appendices to this Composite Document.

We, being the members of the Independent Board Committee, have declared that, we are independent and do not have any conflict of interest in respect of the Offer and are therefore able to consider the terms of the Offer and to make recommendations to the Independent Shareholders.

RECOMMENDATIONS

Having considered the terms of the Offer and the advice from the Independent Financial Adviser, in particular the factors, reasons and recommendation as set out in the “ LETTER FROM VINCO CAPITAL ”, we concur with the view of the Independent Financial Adviser and consider that the terms of the Offer are fair and reasonable so far as the Independent Shareholders are concerned, and recommend the Independent Shareholders to accept the Offer.

However, Independent Shareholders who intend to accept the Offer are reminded to closely monitor the market price and liquidity of the Shares during the Offer Period, and consider selling their Shares in the open market rather than accepting the Offer if the net proceeds from the sale of such Shares in the open market would exceed the net proceeds receivable under the Offer.

The Independent Shareholders are recommended to read the full text of the “ LETTER FROM VINCO CAPITAL ” on pages IFA-1 to IFA-21 of this Composite Document. In any case, the Independent Shareholders are strongly advised that the decision to realize or to hold their investment is subject to individual circumstances and investment objectives. If in doubt, the Independent Shareholders should consult their own professional advisers for professional advice. Furthermore, the Independent Shareholders who wish to accept the Offer are recommended to read carefully the procedures for accepting the Offer as detailed in this Composite Document and the Form of Acceptance.

Yours faithfully,

For and on behalf of the

Independent Board Committee

Mr. Kwong Chi Wing

Mr. Chan Ka Yeung

Mr. Tam Ka Hei Raymond

Independent non-executive Independent non-executive Independent non-executive Director Director Director

— IBC-2 —

LETTER FROM VINCO CAPITAL

The following is the full text of a letter of advice from Vinco Capital to the Independent Board Committee in respect of the Offer, and is prepared for the purpose of incorporation in this Composite Document:

Vinco Capital Limited Unit 2610, 26/F., The Center 99 Queen’s Road Central, Hong Kong

23 December 2019

To the Independent Board Committee and the Independent Shareholders of Elegance Commercial and Financial Printing Group Limited

Dear Sirs,

MANDATORY UNCONDITIONAL CASH OFFER BY VBG CAPITAL LIMITED

FOR AND ON BEHALF OF GLOBAL FORTUNE GLOBAL LIMITED TO ACQUIRE ALL THE ISSUED SHARES OF ELEGANCE COMMERCIAL AND FINANCIAL PRINTING GROUP LIMITED (OTHER THAN THOSE ALREADY OWNED AND/OR AGREED TO BE ACQUIRED BY THE OFFEROR AND/OR PARTIES ACTING IN CONCERT WITH IT)

A. INTRODUCTION

We refer to our appointment as the Independent Financial Adviser to advise the Independent Board Committee in respect of the terms of the Offer and as to acceptance, details of which are set out in the Composite Document jointly issued by the Offeror and the Company to the Shareholders dated 23 December 2019 of which this letter forms part. Capitalised terms used in this letter shall have the same meanings ascribed to them in the Composite Document unless the context otherwise requires.

As disclosed in the Joint Announcement, on 5 November 2019 (after trading hours of the Stock Exchange), the Vendor, the Offeror and Mr. So entered into the Sale and Purchase Agreement, pursuant to which the Vendor conditionally agreed to sell and the Offeror conditionally agreed to acquire an aggregate of 223,800,000 Sale Shares, representing approximately 50.86% of the issued share capital of the Company as at the Latest Practicable Date, at a total consideration of HK$59,978,400 (equivalent to approximately HK$0.268 per Sale Share). The Completion took place on 19 November 2019 and was announced on 20 November 2019 by the Company.

— IFA-1 —

LETTER FROM VINCO CAPITAL

The Independent Board Committee, comprising all independent non-executive Directors, namely, Mr. Kwong Chi Wing, Mr. Chan Ka Yeung and Mr. Tam Ka Hei Raymond, has been established to advise the Independent Shareholders as to whether the terms of the Offer are fair and reasonable and as to acceptance of the Offer. We have been appointed as the Independent Financial Adviser to advise the Independent Board Committee in respect of the Offer. In our capacity as the Independent Financial Adviser, our role is to give an independent opinion to the Independent Board Committee as to whether the terms of the Offer are fair and reasonable and as to acceptance so far as the Independent Shareholders are concerned and such appointment has been approved by the Independent Board Committee.

As at the Latest Practicable Date, we are not connected with the directors, chief executive and substantial shareholders of the Company and the Offeror or any of their respective subsidiaries or their respective associates or any party acting, or presumed to be acting, in concert with any of them and accordingly, and, as at the Latest Practicable Date, did not have any shareholding, directly or indirectly, in any of their respective subsidiaries or their respective associates and, as at the Latest Practicable Date, did not have any shareholding, directly or indirectly, in any member of the Group or the Offeror or any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group and Offeror. We are not aware of any relationships or interest between us and the Company and the Offeror or any other parties that could be reasonably be regarded as hindrance to our independence as defined under Rule 17.96 of the GEM Listing Rules and Rule 2 of the Takeovers Code to act as the Independent Financial Adviser to the Independent Board Committee in respect of the Offer. We are eligible to give independent advice and recommendations on the terms of the Offer and as to acceptance. Apart from normal professional fees payable to us in connection with this appointment as the Independent Financial Adviser to the Independent Board Committee, no arrangement exists whereby we will receive any fees from the Company, its subsidiaries, its associates or their respective substantial shareholders or associates. We have not acted as the financial adviser or the independent financial adviser for the Company’s other transactions during the past two years. We are not aware of the existence of or change in any circumstances that would affect our independence. Accordingly, we consider that we are eligible to give independent advice on the Offer.

— IFA-2 —

LETTER FROM VINCO CAPITAL

B. BASIS OF OUR OPINION AND RECOMMENDATION

In formulating our opinion and recommendation, we have relied on the accuracy of the information and facts contained or referred to in the Composite Document and provided to us by the Company, the Directors and the management of the Company. We have assumed that all information and representations contained or referred to in the Composite Document were true and accurate at the time when they were made and continue to be true, accurate and up to date throughout the Offer Period. Shareholders will be notified of any material changes as soon as possible. We have also assumed that all statements of belief, opinion and intention made by the Directors and the Offeror in the Composite Document were reasonably made after due enquiries and considerations. We have no reasons to doubt that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have reviewed sufficient information to enable us to reach an informed view and to justify reliance on the accuracy of the information contained in the Composite Document and to provide a reasonable basis for our opinions and recommendations. All Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Composite Document (other than the information relating to the Offeror and parties acting in concert with it) and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Composite Document (other than opinions expressed by the directors of the Offeror) have been arrived at after due and careful consideration and there are no other facts not contained in the Composite Document, the omission of which would make any statement in the Composite Document misleading. The directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this Composite Document (other than that relating to the Group), and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this Composite Document (other than that expressed by the Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this Composite Document, the omission of which would make any statement contained in this Composite Document misleading. We have not, however, carried out any independent verification of the information provided by the Company, the Directors and the management of the Company, nor have we conducted an independent investigation into the business and affairs, financial condition and future prospects of the Group and/or the Offeror.

— IFA-3 —

LETTER FROM VINCO CAPITAL

In formulating our opinions, we have not considered the tax implications on the Independent Shareholders arising from acceptances or non-acceptances of the Offer as these are particular to their individual circumstances. It is emphasised that we will not accept responsibility for any tax effect on or liability of any person resulting from his or her acceptance or non-acceptance of the Offer. In particular, the Independent Shareholders who are residents outside Hong Kong or subject to overseas tax or Hong Kong taxation on securities dealings should consider their own tax position, and if in any doubt, should consult their own professional advisers.

In formulating our opinions, our opinions are necessarily based upon the financial, economic, market, regulatory and other conditions as they existed on, and the facts, information, representations, and opinions made available to us as of the Latest Practicable Date. Should there be any subsequent material changes in such information during the Offer Period, the Company will inform the Shareholders as soon as practicable in accordance with Rule 9.1 of the Takeovers Code. The Shareholders will also be informed by us as soon as practicable should there be any material changes to our opinion after the Latest Practicable Date throughout the Offer Period in accordance with Rule 9.1 of the Takeovers Code. Based on the foregoing, we confirm that we have taken all reasonable steps, which are applicable to the Offer, as referred to in Rule 17.92 of the GEM Listing Rules (including the notes thereto).

This letter is issued for the Independent Board Committee solely in respect of the Offer and, except for its inclusion in the Composite Document, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

C. PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation to the Independent Board Committee in relation to the terms of the Offer and as to acceptance, we have considered the principal factors and reasons set out below:

1. Business of the Group

The Company is incorporated in the Cayman Islands with limited liability and its Shares are listed on GEM of the Stock Exchange (stock code: 8391). The principal activities of the Group are the provision of printing services. It provides commercial printing and financial printing services. In addition, the Group also provides standalone ad hoc design and artwork, and translation services to corporate customers.

— IFA-4 —

LETTER FROM VINCO CAPITAL

2. Historical financial performance of the Group

Set out below are (i) the audited consolidated financial information of the Group for the two years ended 31 March 2019 extracted from the annual report of the Company for the year ended 31 March 2019 (the “ Annual Report 2019 ”); and (ii) the unaudited consolidated financial information of the Group for the six months ended 30 September 2019 extracted from the interim report of the Company for the six months ended 30 September 2019 (the “ Interim Report 2019/2020 ”):

	For the	year	For the six months	For the six months
	ended 31	March	ended 30	September
	2018	2019	2018	2019
	(audited)	(audited)	(unaudited)	(unaudited)
	HK$’000	HK$’000	HK$’000	HK$’000
Revenue	80,610	73,976	42,371	36,566
Loss attributable
to owners of the
Company	(8,789)	(7,736)	(2,836)	(4,223)
				As at
		As at 31	March	30 September
		2018	2019	2019
		(audited)	(audited)	(unaudited)
		HK$’000	HK$’000	HK$’000
Total assets		72,106	116,566	129,068
Total liabilities		29,548	24,506	41,338
Equity attributable to	owner of the
Company		42,186	91,671	87,270

Audited consolidated results for the two years ended 31 March 2019

As disclosed in the Annual Report 2019, the Group’s revenue decreased by approximately 8.2% from approximately HK$80.6 million for the year ended 31 March 2018 to approximately HK$74.0 million for the year ended 31 March 2019, which was mainly attributable to the decrease in revenue from commercial printing services as a result of increasing concern on environmental protection, the popularity of digitalization of information, the rise of online marketing, social media and globalization.

— IFA-5 —

LETTER FROM VINCO CAPITAL

The Group recorded a loss attributable to the owners of the Company at approximately HK$7.7 million for the year ended 31 March 2019, compared to the loss attributable to the owners of the Company of approximately HK$8.8 million for the year ended 31 March 2018. The loss for the two years ended 31 March 2019 was mainly attributable to the non-recurring listing expenses incurred of approximately HK$13.0 million and approximately HK$5.9 million for each respective year ended 31 March 2018 and 2019. Excluding the effect of the listing expenses, the Group would have recorded profit attributable to owners of the Company of approximately HK$4.2 million for the year ended 31 March 2018, and loss attributable to owners of the Company of approximately HK$1.8 million for the year ended 31 March 2019.

Excluding the factor of listing expenses, the loss-making position for the year ended 31 March 2019 was mainly attributable to (i) the decrease in total revenue by approximately HK$6.6 million which was resulted from the reduction in the orders from customers for commercial printing services because of the increasing concern on environmental protection, the popularity of digitalisation of information, the rise of online marketing, social media and globalisation, by approximately HK$8.7 million, from approximately HK$55.2 million for the year ended 31 March 2018 to approximately HK$46.5 million for the year ended 31 March 2019; and (ii) the additional administrative and other operating expenses including directors’ emoluments and professional fees after the listing, by approximately HK$2.2 million from approximately HK$18.3 million for the year ended 31 March 2018 to approximately HK$20.5 million for the year ended 31 March 2019.

Unaudited consolidated results for the six months ended 30 September 2019

As disclosed in the Interim Report 2019/2020, the Group’s revenue decreased by approximately 13.7% from approximately HK$42.4 million for the six months ended 30 September 2018 to approximately HK$36.6 million for the six months ended 30 September 2019. The decrease was mainly attributable to the decrease in revenue from financial printing services as a result of decrease in printing services jobs relating to non-recurring projects such as preparation of prospectus and related documents for initial public offerings (“ IPO ”).

— IFA-6 —

LETTER FROM VINCO CAPITAL

The Group recorded a loss attributable to owners of the Company of approximately HK$4.2 million for the six months ended 30 September 2019, compared to the loss attributable to owners of the Company of approximately HK$2.8 million for the six months ended 30 September 2018. The loss-making position for the six months ended 30 September 2019 was mainly attributable to (i) the decrease in sales orders from existing customers and non-recurring projects, primarily driven by increasing concern on environmental protection, the popularity of digitalisation of information, the emergence of online marketing, social media and globalisation; (ii) the increase in additional administrative and other operating expenses including directors’ emoluments, professional fees and audit fees; and (iii) the increase in selling expenses due to the hiring of new staff for the sales team during the six months ended 30 September 2019.

As at 30 September 2019, the Group recorded total assets, total liabilities and equity attributable to owners of the Company of approximately HK$129.1 million, HK$41.3 million and HK$87.3 million, respectively.

3. Business prospect of the Group

According to the Interim Report 2019/2020, the Group aims to continue to expand its market share and strengthen its market position, by pursuing the following business strategies: (i) to continue organic growth by consolidating existing customer relationship and developing new relationship; (ii) to acquire a permanent office premise for its business expansion of financial printing services; (iii) to upgrade hardware and software for its financial printing services; and (iv) to continue to attract and retain a team of top talents in the industry.

Financial printing services include specialized services for production of documents and publications including promotional and advertising documents, IPO prospectus, corporate announcements, financial reports (e.g. annual, interim and/or quarterly reports) and circulars, etc.. Major customers of financial printing services providers include listed companies and IPO applicants. The service scope in printing services industry in Hong Kong generally covers (i) design and artwork; (ii) typesetting and proofreading; (iii) translation; (iv) uploading documents to websites; (v) commercial and financial printing; (vi) binding; (vii) distribution; and (viii) value-added services.

— IFA-7 —

LETTER FROM VINCO CAPITAL

Commercial printing is mainly dealing with commercial customers from wide spectrum such as banks, insurance companies, corporate customers and their advertising agents and fund houses in Hong Kong. The growth of financial printing services industry in Hong Kong however is associated with the number of listed companies as well as equity fund raising activities on the Stock Exchange. According to HKEX Fact Book 2017 & 2018 and the initial public offering applications, delisting and suspensions report issued by the Stock Exchange, the number of new listings has increased by approximately 25.3% from 174 in the year of 2017 to 218 in the year of 2018, and the number of listing applications has increased by approximately 20.0% from 310 in the year of 2017 to 372 in the year of 2018. However, as at 31 October 2019, we noted that there were only 142 new listings and 280 listing applications received since 1 January 2019, being comparatively less than that as at 31 October 2018 where 195 new listings and 333 listing applications were received since 1 January 2018, representing a decrease of approximately 27.1% and 15.9% respectively. The downward trend in both the number of listing applications and new listings may suggest a reducing growth in the financial printing services industry in Hong Kong as less orders relating to IPO may be received for the year ending 31 March 2020.

We also noted from a publication titled “Printing Industry in Hong Kong” by the Hong Kong Trade Development Council in September 2019, that the performance of Hong Kong’s total exports have maintained stable at approximately HK$16,802 million and HK$16,665 million for 2017 and 2018 respectively which represent a slight decrease of approximately 0.8%. A large share of the export business is attributable to orders received directly from overseas countries, and mainly handled by larger printers or dealers who have established business relationships with overseas customers. Furthermore, emerging trends in the printing industry are the result of new technology such as combining various pre-press and post-production activities as well as automated workflow in order to improve accuracy and reduce time and cost. Customers are moving towards ordering online which allows for higher flexibility and efficiency.

According to the Quarterly Report of Wage and Payroll Statistics issued by the Census and Statistics Department of the Hong Kong Government issued in September 2019, the Nominal Wage Index increased by 3.8% in June 2019 from June 2018. In the section of “Professional and business services”, we noted that the nominal wage index has increased by 3.9% in June 2019 from June 2018. In addition, the statutory minimum wage rate has raised from HK$34.5 per hour to HK$37.5 per hour with effect from 1 May 2019. We expected that the statutory minimum wage will be reviewed and revised in a specific period. It is expected that the increasing salary would increase the staff cost of the Group for the year ending 31 March 2020.

— IFA-8 —

LETTER FROM VINCO CAPITAL

Rental expenses is one of the key components of cost of services for all the participants in the financial printing services industry. As disclosed by the Rating and Valuation Department of the Hong Kong Government, the average rents of private office spaces of all grades in the same available Hong Kong districts has increased from approximately HK$652/m² per month in December 2017 to approximately HK$739/m² per month in December 2018. According to the latest available public information, the average rents of private office spaces of all grades in the available Hong Kong districts has increased from approximately HK$696/m² per month in September 2018 to approximately HK$769/m² per month in September 2019. It is expected that the increasing trend of rents would increase the operating costs of the Group for the year ending 31 March 2020.

Taking into consideration the factors as mentioned above, we are of the opinion that the future prospect of the Group remains challenging.

4. Information of the Offeror

Reference is made to the section headed “Information of the Offeror” in the “Letter from VBG Capital” of the Composite Document.

The Offeror is a company incorporated in the BVI with limited liability and is owned as to 51% by Mr. Wu and as to 49% by Mr. Liang. As at the Latest Practicable Date, the directors of the Offeror are Mr. Wu and Mr. Liang.

Mr. Wu, aged 37, obtained a diploma in Information Technology from the Singapore Temasek Polytechnic. Mr. Wu has extensive experience in investing and managing companies. He is currently the chief executive officer of Chang Yuan Investments Pte Ltd, Chang He Holdings Pte Ltd and Champion Management Pte Ltd in Singapore. His business encompasses property investment, asset management, business restructuring, hotel management and electric vehicles. He is mainly responsible for overseeing his business’s performance and management and directing the formulation of business development strategies. From 2012 to 2015, under his management and leadership, his business has acquired the property investment portfolio aggregately valued over approximately SG$150.0 million at the respective purchase dates including (i) commercial offices located at Marine Parade and Paya Lebar; (ii) hotels located at Joo Chiat and North Canal; and (iii) retail, food and beverage units at Katong in Singapore. Mr. Wu does not have any experience in the provision of printing services.

— IFA-9 —

LETTER FROM VINCO CAPITAL

Mr. Liang, aged 38, obtained his bachelor of business administration, marketing from the University of Regina, Canada in 2007. Mr. Liang has been the chairman of 廣州市番禺區邦騰化工有限公司 (transliterated in English as Guangzhou Panyu District Bangteng Chemical Industry Limited), a company that is principally engaged in the production of industrial unsaturated resin, paints and powder coating since 2007. Mr. Liang has also been the chairman of 廣州番禺區宏豪投資有限公司 (transliterated in English as Guangzhou Panyu District Honghao Investment Limited), a company that is principally engaged in the provision of investment consultancy service and property management since 2018. Mr. Liang does not have any experience in the provision of printing services.

Although the Offeror and its ultimate beneficial shareholders have had investment and management experience in various industries in Singapore and the PRC, the Offeror does not possess previous experience in the provision of printing services in Hong Kong in which the Group is engaged, and therefore we are of the view that there remains uncertainty on the future performance of the Group under the management of new controlling shareholder (i.e. the Offeror).

5. Intention of the Offeror in relation to the Group

(i) Business

Reference is made to the section headed “Intention of the Offeror in relation to the Group” in the “Letter from VBG Capital” of the Composite Document. Upon Completion, the Offeror intends that the Group will continue to carry on its existing business and will maintain the listing status of the Company on GEM.

The Board is aware of the Offeror’s intention to conduct a detailed review of the business operations and financial position of the Group to formulate a sustainable business plan and a long-term strategy for the Group and explore other suitable business or investment opportunities for enhancing its future development and strengthening its revenue base. Subject to the results of the review, the Offeror may explore other business opportunities for the Company and consider whether any asset disposals, asset acquisitions, business rationalisation, business divestment, fund raising, restructuring of the business and/or business diversification will be appropriate in order to enhance long-term growth

— IFA-10 —

LETTER FROM VINCO CAPITAL

potential of the Group. Subject to the applicable laws, regulations and rules, the Board will assess any proposals of the Offeror and render reasonable support to those proposals which are in the interests of the Group and the Shareholders as a whole.

Notwithstanding the above, as at the Latest Practicable Date, the Offeror had no intention, understanding, negotiation or arrangement (concluded or otherwise) to downsize, cease or dispose of any of the existing businesses of the Group. No investment or business opportunity has been identified nor has the Offeror entered into any agreements, arrangements, understandings or negotiations in relation to the injection of any assets or business into the Group, and the Offeror has no intention to discontinue the employment of the employees (save for the change in the composition of the Board) or to dispose of or redeploy the assets of the Group other than those in its ordinary course of business.

(ii) Proposed Change of Board Composition

Reference is made to section headed “Proposed Change of Board Composition” in the “Letter from VBG Capital” of the Composite Document.

The Board is currently made up of five Directors, comprising two executive Directors, being Mr. So Wing Keung and Mr. Leung Shu Kin, and three independent non-executive Directors, being Mr. Kwong Chi Wing, Mr. Chan Ka Yeung, and Mr. Tam Ka Hei Raymond.

The Offeror intends to nominate new Directors who will have the relevant knowledge and experience for appointment after the close of the Offer with effect from a date which is no earlier than such date as permitted under Rule 26.4 of the Takeovers Code. As at the Latest Practicable Date, the Offeror had not decided on the future composition of the Board.

Any changes to the Board will be made in compliance with the Takeovers Code and the GEM Listing Rules. Further announcement(s) will be made upon any resignation and appointment of the Directors becoming effective.

— IFA-11 —

LETTER FROM VINCO CAPITAL

(iii) Maintaining the listing status of the Company

Reference is made to section headed “Maintaining the Listing Status of the Company” in the “Letter from VBG Capital” of the Composite Document.

The Stock Exchange has stated that if, at the close of the Offer, less than the minimum prescribed percentage applicable to the Company, being 25% of the issued Shares, are held by the public or if the Stock Exchange believes that (i) a false market exists or may exist in the trading of the Shares; or (ii) there are insufficient Shares in public hands to maintain an orderly market, it will consider exercising its discretion to suspend trading in the Shares until the prescribed level of public float is restored.

The Offeror intends to maintain the listing status of the Shares on GEM after the close of the Offer. The directors of the Offeror have jointly and severally undertaken to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares after the close of the Offer. The new Directors to be appointed to the Board will jointly and severally undertake to the Stock Exchange to take appropriate steps to ensure that sufficient public float exists in the Shares after the close of the Offer.

As the Company and the Offeror are unable to ascertain at this stage the level of acceptances by Independent Shareholders under the Offer, they have not decided the exact steps/ actions that will be taken by them after the close of the Offer to restore the public float of the Shares, if required. Notwithstanding this, the Company and the Offeror consider that the appropriate actions to be taken shall include placing down of sufficient number of accepted Shares by the Offeror and/or issue of new Shares by the Company for this purpose. The Company and the Offeror will issue a separate announcement as and when necessary in this regard.

— IFA-12 —

LETTER FROM VINCO CAPITAL

6. Principal terms of the Offer

The Offer is being made by VBG Capital for and on behalf of the Offeror in compliance with the Takeovers Code on the following terms:

The Offer

For each Offer Share .............................................................HK$0.325 in cash

The Offer Price of HK$0.325 per Offer Share under the Offer is equal to the price paid by Mr. Liang for the acquisition of the Shares within six months prior to the commencement of the Offer Period. The Offer will be extended to all Independent Shareholders other than the Offeror and parties acting in concert with it in accordance with the Takeovers Code.

The Offer is extended to all Independent Shareholders in accordance with the Takeovers Code. The Offer Shares to be acquired under the Offer shall be fully paid and free from all Encumbrances and together with all rights attaching to them, including the right to receive in full all dividends and other distributions, if any, recommended declared made or paid by reference to a record date on or after the date on which the Offer is made, that is, the date of despatch of this Composite Document.

As at the Latest Practicable Date, the Company had 440,000,000 Shares in issue. The Company does not have any outstanding options, derivatives, warrants or securities which are convertible into Shares and has not entered into any agreement for the issue of such options, derivatives, warrants or securities which are convertible or exchangeable into Shares.

As at the Latest Practicable Date, no dividend has been paid or declared by the Company and the Board does not expect to declare any dividend during the Offer Period.

The Offer is unconditional in all respects and is not conditional upon acceptances being received in respect of a minimum number of Offer Shares.

— IFA-13 —

LETTER FROM VINCO CAPITAL

Comparisons of value

The Offer Price of HK$0.325 per Offer Share represents:

• (a) a discount of approximately 14.5% to the closing price of approximately HK$0.38 per Share as quoted on the Stock Exchange on 5 November 2019, being the Last Trading Day;

• (b) a discount of approximately 13.3% to the average of the closing prices as quoted on the Stock Exchange for the five consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.375 per Share;

• (c) a discount of approximately 14.7% to the average of the closing prices as quoted on the Stock Exchange for the 10 consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.381 per Share;

• (d) a discount of approximately 23.0% to the average of the closing prices as quoted on the Stock Exchange for the 30 consecutive trading days immediately prior to and including the Last Trading Day of approximately HK$0.422 per Share;

• (e) a premium of approximately 55.5% over the audited consolidated net assets of approximately HK$0.209 per Share as at 31 March 2019 (being the date to which the latest audited consolidated annual results of the Group were made up), calculated based on the Group’s audited consolidated net assets attributable to the Shareholders of approximately HK$92,060,000 as at 31 March 2019 and 440,000,000 Shares in issue as at 13 November 2019;

• (f) a premium of approximately 63.0% over the unaudited consolidated net assets of the Company of approximately HK$0.199 per Share as at 30 September 2019 (being the date to which the latest unaudited consolidated interim results of the Group were made up), calculated based on the Group’s unaudited consolidated net assets attributable to the Shareholders of approximately HK$87,730,000 as at 30 September 2019 and 440,000,000 Shares in issue as at 13 November 2019; and

• (g) a discount of approximately of 7.7% to the closing price of approximately HK$0.350 per Share as quoted on the Stock Exchange on the Latest Practicable Date.

— IFA-14 —

LETTER FROM VINCO CAPITAL

7. Historical price performance of the Shares

The chart below illustrates the closing price levels of the Shares as quoted on the Stock Exchange from the twelve-month period preceding the date of the Joint Announcement and up to the Latest Practicable Date, being the period of 14 November 2018 to the Latest Practicable Date (the “ Review Period ”):

==> picture [355 x 184] intentionally omitted <==

----- Start of picture text -----

0.8
HK$0.72 on
0.7 26/04/2019
0.6
Closing Price
0.5
Offer Price
0.4
0.3
Announcement of
0.2 possible transfer of
sale shares under
HK$0.15 on Rule 3.7 of the
0.1 02/04/2019 and Takeovers Code on
03/04/2019 02/07/2019
0
Closing Price (HK$)
----- End of picture text -----

As shown in the chart above, the highest and lowest closing prices of the Shares during the Review Period were HK$0.72 on 26 April 2019 and HK$0.15 from 2 to 3 April 2019 respectively. The Offer Price therefore represents a discount of approximately 54.9% to the highest closing price of the Shares and a premium of approximately 112.4% over the lowest closing price of the Shares during the Review Period.

At the start of the Review Period, the closing price of the Share showed a decreasing trend from HK$0.30 on 14 November 2018 and reaching the lowest closing price of HK$0.15 from 2 to 3 April 2019 during the Review Period.

Following the lowest closing price, the closing price of the Share maintained not more than HK$0.20 until suddenly rising to HK$0.72 on 26 April 2019, before gradually falling back to HK$0.20 on 28 May 2019. After having made enquiry with the Company, the Company was unaware of any reasons for the surge in the prices of the Shares during the period leading to 26 April 2019.

The closing price of the Share maintained not more than HK$0.28 until the trading halt and publication of announcement regarding possible transfer of sale shares by the potential vendor to potential purchaser under Rule 3.7 of the Takeovers Code on 2 July 2019. We noted an increasing trend on the daily closing price up until 5 November 2019. As informed by the Company, such reason might be due to the comparatively smaller loss of approximately

— IFA-15 —

LETTER FROM VINCO CAPITAL

HK$0.9 million for the three months ended 30 June 2019 compared to the loss of approximately HK$4.4 million for the three months ended 30 June 2018 in the first quarterly results announcement published by the Company on 9 August 2019.

We noted that the Offer Price of HK$0.325 represents a discount of approximately 54.9% to the highest closing price of the Shares and a premium of approximately 112.4% over the lowest closing price of the Shares during the Review Period.

Since the publication of the Joint Announcement and up to the trading day immediately preceding the Latest Practicable Date (the “ Post-Announcement Period ”), we noted that the closing prices of the Shares have maintained at a range from HK$0.325 to HK$0.355 per Share, representing the same amount and a premium of approximately 9.2% respectively over the Offer Price. Given that the slight premium in the prices of the Share occurred during the PostAnnouncement Period after the publication of the Joint Announcement and the Company also did not announce any other significant news during the PostAnnouncement Period, we are of the view that the slight premium in the prices of the Shares was highly likely due to the news and market reaction of the Offer as disclosed in the Joint Announcement. In this connection, we consider that in the absence of any significant positive events and the Offer, there is no assurance that the closing prices of the Shares will continue to rise or maintain at a level equal to or above the Offer Price after the Latest Practicable Date or after closing of the Offer. Accordingly, we also consider the price trend prior to the publication of the Joint Announcement in the Pre-Announcement Period to more appropriately reflect the general price trend of the Company.

Based on the aforesaid analysis, we considered that (i) the closing prices have been fluctuating, with the Offer Price being above the closing prices of the Shares for 165 out of 266 trading days within the Review Period; (ii) the Offer Price represents a premium of approximately 63.0% over the unaudited consolidated net assets of the Company of approximately HK$0.199 per Share as at 30 September 2019 (being the date to which the latest unaudited consolidated interim results of the Group were made up), calculated based on the Group’s unaudited consolidated net assets attributable to the Shareholders of approximately HK$87,730,000 as at 30 September 2019 and 440,000,000 Shares in issue as at 13 November 2019; and (iii) there is a sharp increase in the closing prices of the Shares in the Post-Announcement Period which, other than potentially being the market reaction to the change in controlling shareholder, the Directors were unaware of any other factors for the surge in the prices of the Shares in the Post-Announcement Period and there is no assurance on the future price level.

— IFA-16 —

LETTER FROM VINCO CAPITAL

Independent Shareholders who wish to realise their investment in the Group are reminded that they should carefully and closely monitor the market price of the Shares during the Offer Period and consider selling their Shares in the open market during the Offer Period, rather than accepting the Offer, if the net proceeds from the sale of such Shares in the open market would exceed the net amount receivable under the Offer.

8. Liquidity of the Shares

The table below sets out the average daily trading volume of the Shares during the Review Period, and the percentage as represented by such average daily trading volume to the total number of Shares in issue at the corresponding month.

								Approximate	Approximate
								%	of average
						Approximate		daily trading
						%	of average		volume to
						daily trading		total number
							volume to		of Shares
			Total	Number	Average	total number			held by
			trading	of trading	daily		of issued		public
			volume	days	volume		Shares	Shareholders
			(Note 2)		(Note 1)		(Note 3)		(Note 4)
2018
November	(Note	5)	371,196,000	13	28,553,538		6.49%	25.96%(Note 7)
December			39,508,000	19	2,079,368		0.47%		1.89%
2019
January			31,884,000	22	1,449,273		0.33%		1.32%
February			15,696,000	17	923,294		0.21%		0.84%
March			8,832,000	21	420,571		0.10%		0.38%
April			288,568,000	19	15,187,789		3.45%		13.81%
May			57,021,000	21	2,715,286		0.62%		2.47%
June			10,132,000	19	533,263		0.12%		0.48%
July			37,804,002	21	1,800,191		0.41%		1.64%
August			26,976,000	22	1,226,182		0.28%		1.11%
September			13,764,000	21	655,429		0.15%		0.60%
October			5,463,000	21	260,143		0.06%		0.24%
November			4,780,000	15	318,667		0.07%		0.29%
December	(Note	6)	2,284,000	15	152,267		0.03%		0.14%

— IFA-17 —

LETTER FROM VINCO CAPITAL

Notes:

• (1) Average daily trading volume is calculated by dividing the total trading volume for the month/period by the number of trading days during the month/period which excludes any trading day on which trading in the Shares on the Stock Exchange was suspended for the whole trading day.

• (2) Total trading volume for the month/period is sourced from the website of the Stock Exchange.

• (3) Percentage of the average daily trading volume of the Share is calculated by divided by the number of Shares held by the public Shareholders as at the Latest Practicable Date. In the content of this section, the number of Shares held by public Shareholders means the total issued share capital of the Company less the Shares held by the controlling shareholders.

• (4) The total number of Shares held by Public is calculated based on the number of the total issued Shares.

• (5) Since the beginning of the Review Period, i.e. 14 November 2018.

• (6) Up to the Latest Practicable Date.

• (7) There was surge in trading volume in November 2018, which was substantially higher than the rest of the month. The Directors were not aware of any reasons for the surge in the trading volume in November 2018.

As illustrated from the above table, the average daily trading volume of the Shares during the Review Period ranged from approximately 152,267 Shares to approximately 28,553,538 Shares, representing approximately 0.03% and approximately 6.49% of the total number of Shares in issue as at the corresponding month respectively, and approximately 0.14% and 25.96% of the total number of Shares held by the public Shareholders. The average daily trading volume of Shares during the Review Period was generally thin.

Given the relatively low historical average daily trading volume of the Shares, it is uncertain that the overall liquidity of the Shares could be maintained and that there would be sufficient liquidity in the Shares for the Independent Shareholders to dispose of a significant number of Shares in the open market without exerting a downward pressure on the Share price. We, therefore, consider that the Offer provides the Independent Shareholders with an assured exit if they wish to realise their investments in the Shares.

— IFA-18 —

LETTER FROM VINCO CAPITAL

9. Comparable analysis

In order to assess the fairness and reasonableness of the Offer Price, we have conducted a research to identify comparable companies listed on the Stock Exchange which are primarily engaged in businesses similar to those of the Group based on the criteria that the comparable companies will need to be (i) engaged in provision of commercial printing and financial printing services in Hong Kong; (ii) having all its revenues being generated from the provision of the aforementioned printing services; (iii) having a market capitalization below HK$300 million in view of that the market capitalisation of the Company was approximately HK$143 million as at the Latest Practicable Date; and (iv) recorded loss for their latest respective financial year. We consider it appropriate to set a market capitalisation of the Comparables of no more than HK$300 million, having considered the market capitalisation of the Company of approximately HK$143 million based on the Offer Price, as this enables a more levelled comparison against the Company while still obtaining a sufficient number of Comparables.

In this regard, we have identified four companies based on our research on the website of the Stock Exchange in accordance with the first three criteria, namely REF Holdings Limited (HKEX:1631), A.Plus Group Holdings Limited (HKEX:1841), HM International Holdings Limited (HKEX:8416) and EDICO Holdings Limited (HKEX:8450). However, we are of the view that none of the mentioned companies may be applicable in assessing the fairness and reasonableness of the Offer Price as they have been profit-making for their latest respective financial year.

Given that there were no companies identified to match all criteria which we consider to be exhaustive and necessary, we are of the view that a comparable analysis may not be applicable in assessing the fairness and reasonableness of the Offer Price.

— IFA-19 —

LETTER FROM VINCO CAPITAL

10. Recommendation

Taking into consideration the abovementioned factors and reasons for the Offer, in particular:

• (i) the Group recorded a loss attributable to owners of the Company of approximately HK$8.8 million and approximately HK$7.7 million for the two years ended 31 March 2018 and 2019 mainly due to, other than the factor of listing expenses, (i) reduction in the orders from customers for commercial printing services because of the increasing concern on environmental protection, the popularity of digitalization of information, the rise of online marketing, social media and globalization; and (ii) the additional administrative and other operating expenses including directors’ emoluments and professional fees after the listing;

• (ii) there are uncertainties in the management of the Group given that the new controlling shareholder of the Group do not have any previous experience in the current principal business of the Group;

• (iii) the Offer price is above the closing prices of the Shares for 164 out of 268 trading days within the Review Period and represents a premium of approximately 63.0% over the unaudited consolidated net assets of the Company of approximately HK$0.199 per Share as at 30 September 2019 (being the date to which the latest unaudited consolidated interim results of the Group were made up), calculated based on the Group’s unaudited consolidated net assets attributable to the Shareholders of approximately HK$87,730,000 as at 30 September 2019 and 440,000,000 Shares in issue as at 13 November 2019; and

• (iv) the Offer represents an opportunity for Shareholders to realise their investment since Shareholders may not be able to dispose of large quantities of Shares without exerting downward pressure on the trading price of Shares in the open market given the low liquidity of the Shares.

We are of the view that the terms of the Offer are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we recommend the Independent Board Committee to advise the Independent Shareholders to accept the Offer.

— IFA-20 —

LETTER FROM VINCO CAPITAL

The Independent Shareholders, in particular those who intend to accept the Offer, are reminded to note the recent fluctuation in the price of the Shares. Since Post-Announcement Period, the Share price has ranged from the same amount to higher than the Offer Price. As such, we would like to remind the Independent Shareholders to closely monitor the market price and liquidity of the Shares during the Offer Period, and consider selling their Shares in the open market, if the net proceeds from the sale of such Shares in the market would exceed the net proceeds receivable under the Offer. Nevertheless, given that the trading volume of the Shares has been relatively low during the Review Period, Independent Shareholders should be mindful as to whether there will be sufficient liquidity in the Shares for the Independent Shareholders who wish to realise part or all of their investments in the Company at the prevailing market price of the Shares and whether their disposal of the Shares will exert a downward pressure on the market price of the Shares.

The Independent Shareholders are also reminded that their decisions to dispose or hold their investments in the Shares are subject to their individual circumstances and investment objectives and they are reminded to carefully (i) monitor the stock market and the trading price and liquidity of the Shares before the end of the Offer and consider selling their Shares in the open market, where possible, rather than accepting the Offer if the net proceeds from the market sale of their Shares after deducting all transaction costs are more than the net amount to be received under the Offer; and (ii) evaluate the future prospects of the Group. The Independent Shareholders should read carefully the procedures for accepting the Offer as detailed in the Composite Document, the appendices to the Composite Document and the Form of Acceptance, if they wish to accept the Offer.

Yours faithfully, For and on behalf of

Vinco Capital Limited

Alister Chung Managing Director

Note: Mr. Alister Chung is a licensed person registered with the Securities and Future Commission of Hong Kong and a responsible officer of Vinco Capital Limited to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO and has participated in and completed various advisory transactions involving companies listed in Hong Kong in respect of the Takeovers Code for over 10 years.

— IFA-21 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

To accept the Offer, you should complete and sign the accompanying Form of Acceptance in accordance with the instructions printed thereon, which instructions form part of the terms of the Offer. The instructions set out in this Composite Document should be read together with the instructions printed on the Form of Acceptance which form part of the terms of the Offer.

1. PROCEDURES FOR ACCEPTANCE OF THE OFFER

• (a) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares is/are in your name, and you wish to accept the Offer, you must send the duly completed and signed Form of Acceptance together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof), by post or by hand, to the Registrar, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong marked “Elegance Commercial and Financial Printing Group Limited – Offer” on the envelope as soon as possible but in any event the aforementioned documents shall reach the Registrar by not later than 4:00 p.m. on the Closing Date or such later time and/or date as the Offeror may determine and announce in compliance with the Takeovers Code.

• (b) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares is/are in the name of a nominee company or a name other than your own, and you wish to accept the Offer in respect of your holding of Shares (whether in full or in part), you must either:

• (i) lodge your share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) with the nominee company, or other nominee, and with instructions authorizing it to accept the Offer on your behalf and requesting it to deliver the Form of Acceptance duly completed together with the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) to the Registrar marked “Elegance Commercial and Financial Printing Group Limited – Offer” on the envelope; or

— I-1 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

• (ii) arrange for the Shares to be registered in your name by the Company through the Registrar, and deliver the Form of Acceptance duly completed and signed together with the relevant share certificate(s) and/ or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) to the Registrar marked “Elegance Commercial and Financial Printing Group Limited – Offer” on the envelope; or

• (iii) if your Shares have been lodged with your licensed securities dealer/ registered institution in securities/custodian bank through CCASS, instruct your licensed securities dealer/registered institution in securities/ custodian bank to authorize HKSCC Nominees Limited to accept the Offer on your behalf on or before the deadline set by HKSCC Nominees Limited. In order to meet the deadline set by HKSCC Nominees Limited, you should check with your licensed securities dealer/registered institution in securities/custodian bank for the timing on the processing of your instruction, and submit your instruction to your licensed securities dealer/registered institution in securities/custodian bank as required by them; or

• (iv) if your Shares have been lodged with your investor participant’s account maintained with CCASS, give your instruction via the CCASS Phone System or CCASS Internet System on or before the deadline set by HKSCC Nominees Limited. In order to meet the deadline set by HKSCC Nominees Limited, you should check with your licensed securities dealer/registered institution in securities/custodian bank for the timing on the processing of your instruction, and submit your instruction to your licensed securities dealer/registered institution in securities/custodian bank as required by them.

• (c) If you have lodged transfer(s) of any of your Shares for registration in your name and have not yet received your share certificate(s), and you wish to accept the Offer in respect of your Shares, you should nevertheless complete and sign the Form of Acceptance and deliver it to the Registrar marked “Elegance Commercial and Financial Printing Group Limited – Offer” on the envelope together with the transfer receipt(s) duly signed by yourself. Such action will constitute an irrevocable authority to the Offeror and/or VBG Capital or their respective agent(s) to collect from the Company or the Registrar on your behalf the relevant share certificate(s) when issued and

— I-2 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

to deliver such share certificate(s) to the Registrar on your behalf and to authorize and instruct the Registrar to hold such share certificate(s), subject to the terms and conditions of the Offer, as if it was/they were delivered to the Registrar with the Form of Acceptance.

• (d) If the share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of your Shares is/are not readily available and/ or is/are lost, as the case may be, and you wish to accept the Offer in respect of your Shares, the Form of Acceptance should nevertheless be completed and delivered to the Registrar marked “Elegance Commercial and Financial Printing Group Limited – Offer” on the envelope together with a letter stating that you have lost one or more of your share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) or that it is/they are not readily available. If you find such document(s) or if it/they become(s) available, the relevant share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) should be forwarded to the Registrar as soon as possible thereafter. If you have lost your share certificate(s) and/or transfer receipt(s) and/or other document(s) of title, you should also write to the Registrar for a letter of indemnity which, when completed in accordance with the instructions given, should be returned to the Registrar.

• (e) Acceptance of the Offer will be treated as effective and valid only if the completed Form of Acceptance is received by the Registrar on or before the latest time for acceptance of the Offer and the Registrar has recorded that the acceptance and any relevant documents required by Note 1 to Rule 30.2 of the Takeovers Code have been so received, and is:

• (i) accompanied by the relevant share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) and, if that/those share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) is/are not in your name, such other documents (e.g. a duly stamped transfer of the relevant Share(s) in blank or in favor of the acceptor executed by the registered holder) in order to establish your right to become the registered holder of the relevant Shares; or

— I-3 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

• (ii) from a registered Shareholder or his personal representatives (but only up to the amount of the registered holding and only to the extent that the acceptance relates to the Shares which are not taken into account under another sub-paragraph of this paragraph (v)); or

• (iii) certified by the Registrar or the Stock Exchange.

If the Form of Acceptance is executed by a person other than the registered Independent Shareholder, appropriate documentary evidence of authority (e.g. grant of probate or certified copy of a power of attorney) to the satisfaction of the Registrar must be produced.

• (f) Seller’s ad valorem stamp duty payable by the Independent Shareholders who accept the Offer and calculated at a rate of 0.1% of (i) the market value of the Offer Shares; or (ii) consideration payable by the Offeror in respect of the relevant acceptances of the Offer, whichever is higher, will be deducted from the amount payable by the Offeror to the relevant Independent Shareholder on acceptance of the Offer. The Offeror will arrange for payment of the sellers’ ad valorem stamp duty on behalf of the accepting Independent Shareholders and will pay the buyer’s ad valorem stamp duty in connection with the acceptance of the Offer and the transfer of the Offer Shares.

• (g) No acknowledgement of receipt of any Form of Acceptance, share certificate(s) and/or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) will be given.

2. ACCEPTANCE PERIOD AND REVISIONS

• (a) Unless the Offer has previously been revised or extended with the consent of the Executive, to be valid, the Form of Acceptance must be received by the Registrar in accordance with the instructions printed thereon by 4:00 p.m. on the Closing Date.

• (b) If the Offer is extended, the Offeror will issue an announcement in relation to any extension of the Offer, which announcement will state either the next Closing Date or, a statement that the Offer will remain open until further notice. In the latter case, at least fourteen (14) days’ notice in writing must be given before the Offer is closed to those Shareholders who have not accepted

— I-4 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

the relevant Offer before the Offer is closed. If, in the course of the Offer, the Offeror revise the terms of the Offer, all Shareholders, whether or not they have already accepted the Offer, will benefit under the revised terms. A revised offer must be kept open for at least fourteen (14) days following the date on which the revised offer document is posted.

• (c) If the Closing Date is extended, any reference in this Composite Document and in the Form of Acceptance to the Closing Date shall, except where the context otherwise requires, be deemed to refer to the subsequent closing date.

3. ANNOUNCEMENTS

• (a) By 6:00 p.m. on the Closing Date (or such later time and/or date as the Executive may in exceptional circumstances permit), the Offeror must inform the Executive and the Stock Exchange of its decision in relation to the expiry, revision and extension of the Offer. The Offeror must publish an announcement in accordance with the Takeovers Code on the Stock Exchange’s website by 7:00 p.m. on the Closing Date stating the results of the Offer and whether the Offer has been revised, extended or expired. The announcement will state the following:

• (i) the total number of Shares and rights over Shares for which acceptances of the Offer have been received;

• (ii) the total number of Shares and rights over Shares held, controlled or directed by the Offeror and parties acting in concert with it before the Offer Period; and

• (iii) the total number of Shares and rights over Shares acquired or agreed to be acquired during the Offer Period by the Offeror and parties acting in concert with it.

The announcement will include details of any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) of the Company which the Offeror and any parties acting in concert with it have borrowed or lent, save for any borrowed securities which have been either on-lent or sold, and specify the percentages of the relevant classes of issued share capital of the Company and the percentages of voting rights of the Company represented by these numbers of Shares.

— I-5 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

• (b) In computing the total number of Shares represented by acceptances, only valid acceptances that are complete and in good order and in compliance with Note 1 to Rule 30.2 of the Takeovers Code, and which have been received by the Registrar no later than 4:00 p.m. on the Closing Date, being the latest time and date for acceptance of the Offer, shall be included.

• (c) As required under the Takeovers Code, all announcements in respect of the Offer will be published on the website of the Stock Exchange (www.hkex.com.hk) and the website of the Company (www.elegance.hk) and must be made in accordance with the requirements of the Takeovers Code and the GEM Listing Rules respectively.

4. RIGHT OF WITHDRAWAL

• (a) Acceptance of the Offer tendered by the Shareholders shall be irrevocable and cannot be withdrawn, except in the circumstances set out in paragraph (b) below.

• (b) If the Offeror is unable to comply with the requirements set out in the paragraph headed “3. Announcements” above, the Executive may require that the Independent Shareholders who have tendered acceptances of the Offer be granted a right of withdrawal on terms that are acceptable to the Executive until the requirements set out in that paragraph are met.

In such case, if the Independent Shareholder(s) withdraw(s) the acceptance, the Offeror shall, as soon as possible but in any event within 10 days thereof, return by ordinary post the share certificate(s) and/or transfer receipt(s) and/or other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the Shares lodged with the Form of Acceptance to the relevant Independent Shareholder(s).

5. SETTLEMENT UNDER THE OFFER

Provided that a valid Form of Acceptance and the relevant share certificate(s) and/ or transfer receipt(s) and/or any other document(s) of title (and/or any satisfactory indemnity or indemnities required in respect thereof) in respect of the relevant Shares as required by Note 1 to Rule 30.2 of the Takeovers Code are duly completed and have been received by the Registrar on or before 4:00 p.m. on the Closing Date, a cheque for the amount (rounding up to the nearest cent) due to each of the Shareholders who accept the Offer less seller’s ad valorem stamp duty in respect

— I-6 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

of the Offer Shares tendered by him/her/it under the Offer will be despatched to such Shareholder by ordinary post at his/her/ its own risk as soon as possible but in any event within seven (7) Business Days of the date on which the duly completed acceptances of the Offer and the relevant documents of title in respect of such acceptances are received by the Registrar to render each such acceptance complete and valid.

No fractions of a cent will be payable and the amount of consideration payable to a Shareholder who accepts the Offer will be rounded up to the nearest cent.

Settlement of the consideration to which any Shareholder is entitled under the Offer will be implemented in full in accordance with its terms (save in respect of the payment of the seller’s ad valorem stamp duty of the Offer) without regard to any lien, right of set-off, counterclaim or other analogous right to which the Offeror may otherwise be, or claim to be, entitled against such Shareholder.

6. OVERSEAS SHAREHOLDERS

The making of the Offer to the Overseas Shareholders may be prohibited or affected by the laws of the relevant jurisdictions in which they are resident. Overseas Shareholders should obtain appropriate legal advice regarding the implications of the Offer in the relevant jurisdictions or keep themselves informed about and observe any applicable legal or regulatory requirements. It is the responsibility of Overseas Shareholders who wish to accept the Offer to satisfy themselves as to the full observance of the laws and regulations of all relevant jurisdictions in connection with the acceptance of the Offer (including but not limited to the obtaining of any governmental, exchange control or other consents and any registration or filing which may be required and the compliance with all other necessary formalities, regulatory and/or legal requirements and the payment of any transfer or other taxes due by the accepting Shareholders).

Acceptance of the Offer by any Overseas Shareholder will be deemed to constitute a warranty by such person that such person is permitted under applicable laws and regulations to receive and accept the Offer, and any revision thereof, and such acceptance shall be valid and binding in accordance with all applicable laws and regulations. Any such person is recommended to seek professional advice on deciding whether or not to accept the Offer.

— I-7 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

7. HONG KONG STAMP DUTY

The seller’s Hong Kong ad valorem stamp duty arising in connection with the acceptance of the Offer amounting to 0.1% of the amount payable in respect of the relevant acceptance or if higher, the market value of the Shares, will be deducted from the amount payable to the Independent Shareholders who accept the Offer. The Offeror will arrange for payment of the seller’s advalorem stamp duty on behalf of the relevant Independent Shareholders accepting the Offer and will pay its respective portion of the buyer’s ad valorem stamp duty (being 0.1% of the amount payable in respect of the relevant acceptance or if higher, the market value of the Shares) in connection with the acceptance of the Offer and the transfer of the Shares in accordance with the Stamp Duty Ordinance (Chapter 117 of the Laws of Hong Kong).

8. TAX IMPLICATIONS

Independent Shareholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of their acceptance of the Offer. It is emphasised that none of the Offeror, parties acting in concert with it, the Company, VBG Capital, the Independent Financial Adviser, the Registrar and (as the case may be) their respective ultimate beneficial owners, directors, officers, advisers, associates, agents or any other persons involved in the Offer and any of their respective agents are in a position to advise the Independent Shareholders on their individual tax implications, nor do they accept responsibility for any taxation effects on, or liabilities of, any person or persons as a result of their acceptance or rejection of the Offer.

9. GENERAL

• (a) All communications, notices, Form of Acceptance, certificate(s), share certificate(s), transfer receipt(s), other document(s) of title and/or any satisfactory indemnity or indemnities required in respect thereof and remittances to settle the consideration payable under the Offer will be delivered by or sent to or from the Independent Shareholders or their designated agents, by ordinary post at their own risk, and none of the Offeror, parties acting in concert with it, the Company, VBG Capital, the Independent Financial Adviser, the Registrar, other parties involved in the Offer and (as the case may be) their respective ultimate beneficial owners, directors, officers, advisers, associates, agents accepts any liability for any loss or any other liabilities that may arise as a result thereof.

— I-8 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

• (b) The provisions set out in the Form of Acceptance form part of the terms and conditions of the Offer.

• (c) The accidental omission to despatch this Composite Document and/or Form of Acceptance or any of them to any person to whom the Offer is made will not invalidate the Offer in any way.

• (d) The Offer is, and all acceptances will be, governed by and construed in accordance with the laws of Hong Kong. Execution of the Form of Acceptance by or on behalf of a Shareholder will constitute such Shareholder’s agreement that the courts of Hong Kong shall have exclusive jurisdiction to settle any dispute which may arise in connection with the Offer.

• (e) Due execution of the Form of Acceptance in accordance with Note 1 to Rule 30.2 of the Takeovers Code will constitute an authority to the Offeror, VBG Capital or such person or persons as the Offeror or VBG Capital may direct to complete, amend and execute any document on behalf of the person or persons accepting the Offer and to do any other act that may be necessary or expedient for the purposes of vesting in the Offeror, or such person or persons as it may direct, the Shares respect of which such person or persons has/have accepted the Offer.

• (f) Acceptance of the Offer by any Independent Shareholders will be deemed to constitute a warranty by such person or persons to the Offeror and VBG Capital that their Shares tendered under the Offer are sold by such person or persons free from all Encumbrances and together with all rights accruing or attaching to them as at the date of this Composite Document or subsequently being attached to them, including, without limitation, the rights to receive all future dividends and other distributions, declared, made or paid, if any, by the Company on or after the date of this Composite Document.

• (g) Acceptance of the Offer by any nominee will be deemed to constitute a warranty by such nominee to the Offeror that the number of Shares in respect of which it is indicated in the Form of Acceptance is the aggregate number of Shares held by such nominee for such beneficial owners who accept the Offer.

— I-9 —

FURTHER TERMS OF THE OFFER AND PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

APPENDIX I

• (h) If no number is inserted or a number inserted is greater than your registered holding of Share(s), or is greater or smaller than that represented by those physical Share(s) tendered for acceptance of the Offer and you have signed this form, this form will be returned to you for correction and resubmission. Any corrected form must be resubmitted and received by the Registrar on or before 4:00 p.m. on the Closing Date.

• (i) Reference to the Offer in this Composite Document and the Form of Acceptance shall include any extension and/or revision thereof.

• (j) In making their decisions, the Independent Shareholders must rely on his/ her/its/their own examination of the Offeror, the Group and the terms of the Offer, including the merits and risks involved. The contents of this Composite Document, including any general advice or recommendations contained therein, and the Form of Acceptance are not to be construed as legal or business advice. The Independent Shareholders should consult with his/her/its/their own professional advisers for professional advice.

• (k) All acceptances, instructions, authorities and undertakings given by the Independent Shareholders in the Form of Acceptance shall be irrevocable except as permitted under the Takeovers Code.

• (l) The English texts of this Composite Document and the Form of Acceptance shall prevail over their respective Chinese texts for the purpose of interpretation in case of inconsistency.

— I-10 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

1. SUMMARY OF FINANCIAL INFORMATION OF THE GROUP

The following is the summary of (i) the unaudited consolidated financial results of the Group for the six months ended 30 September 2019 as extracted from the interim report of the Company for the six months ended 30 September 2019; and (ii) the audited consolidated financial results of the Group for each of the two years ended 31 March 2018 and 2019 as extracted from the annual reports of the Company for the two years ended 31 March 2018 and 2019, respectively.

For the six months ended 30 September 2019 2018 HK$’000 HK$’000 (unaudited) (unaudited) Revenue 36,566 42,371 Cost of sales (28,267) (27,521) Gross profit 8,299 14,580 Profit or loss before income tax (4,518) (1,897) Income tax credit/ (expenses) 366 (810) Profit or loss and total comprehensive profit or loss for the period/year (4,152) (2,707) Profit or loss for the period/year attributable to: — Owners of the Company (4,223) (2,836) — Non-controlling interests 71 129 (4,152) (2,707) Loss per share attributable to owners of the Company Basic and diluted_(HK_ cents) (0.96) (0.68)

For the year ended 31 March 2019 2018 2017 HK$’000 HK$’000 HK$’000 (audited) (audited) (audited) 73,976 80,610 83,538 (53,796) (55,158) (61,735) 20,180 25,452 21,803 (7,751) (7,894) 1,979 182 (668) 18 (7,569) (8,562) 1,997 (7,736) (8,789) 1,900 167 227 97 (7,569) (8,562) 1,997 (1.81) (2.66) N/A

No earnings or loss per share is presented for the year ended 31 March 2017 because it is not considered meaningful due to the reorganisation of the Group.

— II-1 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

During the three years ended 31 March 2017, 2018 and 2019, the Group declared and paid dividends of HK$16,120,000, HK$9,925,000 and HK$150,000 respectively.

The Group’s consolidated financial statements as at and for each of the three years ended 31 March 2017, 2018 and 2019 had been audited by the Company’s independent auditor, Mazars CPA Limited, with unqualified and unmodified opinions issued.

Listing expenses of HK$499,000, HK$13.01 million and HK$5.93 million were incurred in the years ended 31 March 2017, 2018 and 2019 respectively.

Save as disclosed above, there were no items of any income or expense which were material in respect of the consolidated financial results of the Group for each of the three years ended 31 March 2017, 2018 and 2019 and the six months ended 30 September 2018 and 2019.

2. AUDITED CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP FOR THE YEAR ENDED 31 MARCH 2019

The audited consolidated financial statements of the Group for the year ended 31 March 2019 are contained in the annual report of the Company for the year ended 31 March 2019 (the “ 2019 Annual Report ”) which was published on 18 June 2018 on the websites of the Company (www.elegance.hk) and the Stock Exchange (https:// www1.hkexnews.hk/listedco/listconews/gem/2019/0627/gln20190627255.pdf).

(i) Consolidated Statement of Financial Position as at 31 March 2019

Please refer to pages 57 to 58 of the 2019 Annual Report.

• (ii) Consolidated Statement of Cash Flows for the year ended 31 March 2019

Please refer to pages 60 to 61 of the 2019 Annual Report.

• (iii) Other Consolidated Financial Statements for the year ended 31 March 2019

• (a) Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31 March 2019

Please refer to page 56 of the 2019 Annual Report.

— II-2 —

APPENDIX II FINANCIAL INFORMATION OF THE GROUP

• (b) Consolidated Statement of Changes in Equity for the year ended 31 March 2019

Please refer to page 59 of the 2019 Annual Report.

(iv) Summary of Significant Accounting Policies and Notes to the Consolidated Financial Statements for the year ended 31 March 2019

Please refer to pages 62 to 121 of the 2019 Annual Report.

3. UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2019

The Company is required to set out or refer to in this Composite Document the consolidated statement of profit or loss and the consolidated statement of financial position as shown in the unaudited financial results of the Group for the six months ended 30 September 2019, together with the notes to the relevant published accounts which are of major relevance to the appreciation of the above financial information.

The interim report of the Company for the six months ended 30 September 2019, which was issued on 31 October 2019, is posted on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (www.elegance.hk), and is accessible via the following hyperlink:

https://www1.hkexnews.hk/listedco/listconews/gem/2019/1114/2019111401529.pdf

The interim report of the Company for the six months ended 30 September 2019 is incorporated by reference into this Composite Document and form part of this Composite Document.

4. INDEBTEDNESS STATEMENT

As at 30 September 2019, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this Composite Document, the Group had outstanding borrowings of approximately HK$1,681,000, obligations under finance leases of approximately HK$1,861,000 and lease liabilities of approximately HK$19,756,000, details of which are set out below:

— II-3 —

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Borrowings — Bank borrowings Obligations under finance leases Lease liabilities Total	Secured and guaranteed Unsecured and unguaranteed HK$’000 HK$’000 (Unaudited) (Unaudited) 1,681 — 1,861 — — 19,756 3,542 19,756	Total HK$’000 (Unaudited) 1,681 1,861 19,756 23,298

Saved as aforesaid, and apart from intra-group liabilities and normal trade and other payables in the ordinary course of business, the Group did not, at the close of business on 30 September 2019, have any outstanding loan capital, bank overdrafts, charges or debentures, mortgages, term loans, debt securities or any other similar indebtedness or any finance lease commitments, hire purchase commitments, liabilities under acceptance (other than normal trade bills), acceptable credits or any guarantees or other material contingent liabilities.

5. MATERIAL CHANGE

The Directors confirmed that, save and except as disclosed below, there was no material change in the financial and trading position or outlook of the Group since 31 March 2019 (being the date to which the latest published audited consolidated financial statements of the Group have been made up) and up to the Latest Practicable Date:

• Net loss for the six months ended 30 September 2019

The Group recorded a net loss of approximately HK$4,152,000 for the six months ended 30 September 2019, which represents an increase of approximately 53.4% as compared to a net loss of approximately HK$2,707,000 for the corresponding period in 2018. The net loss was mainly attributable to (i) the decrease in revenue from commercial printing services mainly due to the decrease in sales orders; and (ii) the increase in administrative and other operating expenses.

— II-4 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

1. RESPONSIBILITY STATEMENT

This Composite Document includes particulars given in compliance with the Takeovers Code for the purpose of providing information to the Shareholders with regard to the Offeror, the Group and the Offer.

The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this Composite Document (other than that relating to the Offeror and parties acting in concert with it) and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this Composite Document (other than those expressed by the directors of the Offeror) have been arrived at after due and careful consideration and there are no other facts not contained in this Composite Document, the omission of which would make any statements in this Composite Document misleading.

2. SHARE CAPITAL

The authorised and issued share capital of the Company since the end of 31 March 2019 and as at the Latest Practicable Date were as follows:

Authorized HK$ 100,000,000,000 Shares of HK$0.01 each 1,000,000,000

Issued

440,000,000 Shares of HK$0.01 each 4,400,000

As at the Latest Practicable Date, there were no outstanding options, warrants, derivatives or convertible securities which may confer any right on the holder thereof to subscribe for, convert or exchange into Shares or any agreement or arrangement to issue Shares.

All issued Shares rank pari passu in all respects with each other, including, in particular, as to dividends, voting rights and return of capital. The Company has not issued any Shares since 31 March 2019, the date to which the latest audited financial statements of the Group were made up.

The issued Shares are listed on the Stock Exchange. None of the securities of the Company is listed or dealt in, and no listing or permission to deal in the securities of the Company is being or is proposed to be sought on any other stock exchange.

— III-1 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

3. MARKET PRICES

For market prices of the Shares during the Relevant Period, please refer to the paragraph headed “ 3. MARKET PRICES ” of Appendix IV to this Composite Document.

4. DISCLOSURE OF INTERESTS OF DIRECTORS OF THE COMPANY

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the Shares, underlying Shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO, which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO; or (b) pursuant to Section 352 of the SFO, to be recorded in the register referred therein; or (c) pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules to be notified to the Company and the Stock Exchange, were as follows:

			Approximate
			percentage of
			interest in the
			total issued
Name of director	Nature of interest	Number of Shares	Shares
So Wing Keung	Interest of corporation	106,200,000	24.14
	controlled by him
	(Note)

Note: Such shares are held by the Vendor. The Vendor is ultimately controlled by Mr. So, who owns 90% of the issued share capital of the Vendor through his wholly-owned company, Colorful Bay. Mr. So is deemed to be interested in the Shares in which the Vendor is interested under the SFO.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interest or short position in Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which was required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO; or (b) pursuant to Section 352 of the SFO, to be recorded in the register referred therein; or (c) pursuant to Rules 5.46 to 5.67 of the GEM Listing Rules to be notified to the Company and the Stock Exchange.

Pursuant to the Irrevocable Undertaking, the Vendor has irrevocably undertaken to the offeror that it will not accept the offer in respect of its own beneficial shareholding in the shares.

— III-2 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

5. DISCLOSURE OF INTERESTS OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, according to the register kept by the Company pursuant to section 336 of the SFO and, so far as is known to the Directors, the persons or entities who had an interest or a short position in the Shares or the 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 which were, 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 of any other company which is a member of the Group, or in any options in respect of such share capital were as follows:

Name of			Approximate % of
substantial		Number of Shares	the total issued
shareholder	Capacity	held/ interested	Shares
Global Fortune	Beneficial owner	223,800,000	50.86
Global Limited
Liang Zihao	Interest of	223,800,000	50.86
	corporation
	controlled by him
	(Note 1)
Wu Jianwei	Interest of	223,800,000	50.86
	corporation
	controlled by him
	(Note 2)
Glorytwin Limited	Beneficial owner	106,200,000	24.14
Colorful Bay Limited	Interest of	106,200,000	24.14
	corporation
	controlled by it
	(Note 3)
So Wing Keung	Interest of	106,200,000	24.14
	corporation
	controlled by him
	(Note 4)

— III-3 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

Notes:

1. Mr. Liang owns 49% of the issued share capital of Global Fortune Global Limited. Mr. Liang is deemed to be interested in the Shares in which Global Fortune Global Limited is interested under the SFO.

2. Mr. Wu owns 51% of the issued share capital of Global Fortune Global Limited. Mr. Wu is deemed to be interested in the Shares in which Global Fortune Global Limited is interested under the SFO.

3. Colorful Bay owns 90% of the issued share capital of the Vendor. Colorful Bay is deemed to be interested in the Shares in which the Vendor is interested under the SFO.

4. The Vendor is ultimately controlled by Mr. So, who beneficially owns 90% of the issued share capital of the Vendor through his wholly-owned company, Colorful Bay. Mr. So is deemed to be interested in the Shares in which the Vendor is interested under the SFO.

Save as disclosed above, as at the Latest Practicable Date, the Company had not been notified by any persons (other than Directors or chief executive of the Company) who had interests or short positions in the Shares or underlying Shares or debentures 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 which were required, pursuant to Section 336 of the SFO, to be recorded in the register referred to therein.

6. ADDITIONAL DISCLOSURE OF INTERESTS AND DEALINGS

As at the Latest Practicable Date:

• (a) during the Relevant Period and as at the Latest Practicable Date, save and except for the Sale Shares, none of the Offeror or any party acting in concert with it or its director had dealt for value in any Shares, convertible securities, warrants, options or derivatives of the Company;

• (b) during the Relevant Period and as at the Latest Practicable Date, the Company did not deal in an interest in the equity share capital or any convertible securities, warrants, options and derivatives of the Offeror;

• (c) during the Relevant Period and as at the Latest Practicable Date, save and except for the Sale Shares, none of the Directors had dealt in any Shares or other securities of the Company carrying voting rights or convertible securities, warrants, options or derivatives of the Company;

• (d) save as disclosed in the paragraph headed “ 4. DISCLOSURE OF INTERESTS OF DIRECTORS OF THE COMPANY ” in this appendix, none of the Directors held any interest in the securities of the Company;

— III-4 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

• (e) neither the Company nor any of the Directors held any interest in the securities of the Offeror;

• (f) there is no arrangement (whether by way of option, indemnity or otherwise) (as referred to in Note 8 to Rule 22 of the Takeovers Code) in relation to the shares of the Offeror or the Company and which might be material to the Offer;

• (g) none of the subsidiaries of the Company, pension fund of the Group or an adviser to the Company as specified in class (2) of the definition of “associate” under the Takeovers Code owned or controlled any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company during the Relevant Period;

• (h) no persons had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with the Company or any person who is an associate of the Company by virtue of classes (1), (2), (3) or (4) of the definition of “associate” under the Takeovers Code and no such person had dealt for value in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company during the Relevant Period;

• (i) no relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company were managed on a discretionary basis by fund managers connected with the Company and none of them had dealt for value in any relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company during the Relevant Period;

• (j) none of the Directors held any beneficial shareholdings in the Company which would otherwise entitle them to accept or reject the Offer; and

• (k) there were no relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company which the Company or the Directors had borrowed or lent.

— III-5 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

7. ARRANGEMENTS IN CONNECTION WITH THE OFFER

As at the Latest Practicable Date,

• (a) no benefit (other than statutory compensation) had been given or would be given to any Director as compensation for the loss of office or otherwise in connection with the Offer;

• (b) there was no material contract entered into by the Offeror in which any Director had a material personal interest; and

• (c) there was no agreement or arrangement between any Director and any other person which is conditional on or dependent upon the outcome of the Share Offer or otherwise connected with the Offer.

8. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, the Company had entered into the following service contracts and letters of appointment with the Directors:

• (a) A service contract dated 19 April 2018 entered into between the Company and Mr. So, pursuant to which Mr. So was appointed as an executive director for an initial period of three years commencing from 11 May 2018 until terminated by not less than three months’ notice in writing served by either party on the other and entitled to receive a fixed salary of Nil;

• (b) A service contract dated 19 April 2018 entered into between the Company and Mr. Leung, pursuant to which Mr. Leung was appointed as an executive director for an initial period of three years commencing from 11 May 2018 until terminated by not less than three months’ notice in writing served by either party on the other and entitled to receive a fixed salary of HK$720,000 per annum;

• (c) A letter of appointment dated 19 April 2018 entered into between the Company and Mr. Kwong Chi Wing, pursuant to which Mr. Kwong Chi Wing was appointed as an independent non-executive director for an initial period of three years commencing from 11 May 2018 until terminated by not less than three month’s notice in writing served by either party on the other and entitled to receive a fixed salary of HK$120,000 per annum;

— III-6 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

• (d) A letter of appointment dated 26 June 2019 entered into between the Company and Mr. Chan Ka Yeung, pursuant to which Mr. Chan Ka Yeung was appointed as an independent non-executive director for an initial period of three years commencing from 1 July 2019 until terminated by not less than 1 month’s notice in writing served by either party on the other and entitled to receive a fixed salary of HK$120,000 per annum;

• (e) A letter of appointment dated 26 June 2019 entered into between the Company and Mr. Tam Ka Hei Raymond, pursuant to which Mr. Tam Ka Hei Raymond was appointed as an independent non-executive director for an initial period of three years commencing from 1 July 2019 until terminated by not less than 1 month’s notice in writing served by either party on the other and entitled to receive a fixed salary of HK$120,000 per annum.

As at the Latest Practicable Date, save as disclosed above, none of the Directors had entered into any service contracts with the Company or any of its subsidiaries or associated companies which:

• (a) (including both continuous and fixed term contracts) have been entered into or amended within six months prior to the commencement of the Offer Period;

• (b) are continuous contracts with a notice period of 12 months or more; or

• (c) are fixed term contracts with more than 12 months to run irrespective of the notice period.

9. EXPERT AND CONSENT

In addition to the Offeror’s experts listed in paragraph 4 of Appendix IV, the following are the qualifications of the expert who has given opinions or advice which is contained or referred to in this Composite Document:

Name Qualification

Vinco Capital Limited A corporation licensed to carry type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO

— III-7 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

Vinco Capital has given and has not withdrawn its written consent to the issue of this Composite Document with the inclusion of the text of its letter, report, recommendation, opinion, and/or references to its name in the form and context in which it appears. As at the Latest Practicable Date, Vinco Capital does not have any direct or indirect interest in any assets which have been, since 31 March 2019 (the date to which the latest published audited consolidated financial statements of the Group 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.

10. LITIGATIONS

As at the Latest Practicable Date, none of the Company and its subsidiaries was engaged in any litigation or arbitration or claim of material importance and no litigation or claim of material importance is pending or threatened by or against the Company or any member of the Group.

11. MATERIAL CONTRACTS

The following contracts, not being contracts entered into in the ordinary course of business carried on or intended to be carried on by the Company or any of its subsidiaries, were entered into by the Group after the date falling two years before the commencement of the Offer Period up to and including the Latest Practicable Date and are or may be material:

• (a) the deed of indemnity dated 19 April 2018 entered into between Mr. So, Mr. Leung, Deep Champion and the Vendor in favour of the Company (for itself and as trustee for its subsidiaries);

• (b) the deed of non-competition dated 19 April 2018 entered into by each of Mr. So, Mr. Leung, Deep Champion and the Vendor in favour of the Company (for itself and as trustee for its subsidiaries);

• (c) the underwriting agreement relating to the public offer of the Shares dated 27 April 2018 entered into by the Company, the executive Directors, Mr. So, Mr. Leung, Deep Champion, Colorful Bay and the Vendor, VBG Capital Limited and Quasar Securities Co., Limited.

— III-8 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

12. GENERAL

• (a) The registered office of the Company is at PO Box 1350, Clifton House, 75 Fort Street, Grand Cayman, KY1-1108, Cayman Islands and the principal place of business of the Company is at 2402-2407, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong.

• (b) The Hong Kong share registrar and transfer office of the Company is Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (c) The principal share registrar and transfer office of the Company is Estera Trust (Cayman) Ltd. at PO Box 1350, Clifton House, 75 Fort Street, Grand Cayman, KY1-1108, Cayman Islands.

• (d) The English texts of this Composite Document and the Forms of Acceptance shall prevail over the Chinese text, in case of any inconsistency.

13. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection (i) on the website of the SFC at www.sfc.com.hk; (ii) on the website of the Company at www.elegance. hk; and (iii) at the office of the Company at Room 2402-2407, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong from the date of this Composite Document up to the Closing Date:

• (a) the memorandum of association and the articles of association of the Company;

• (b) the annual report of the Company for the year ended 31 March 2019;

• (c) the annual report of the Company for the year ended 31 March 2018;

• (d) the interim report of the Company for the six months ended 30 September 2019;

• (e) the prospectus of the Company dated 30 April 2018;

• (f) the letter from the Board, the text of which is set out on page 11 to 17 of this Composite Document;

— III-9 —

GENERAL INFORMATION OF THE GROUP

APPENDIX III

• (g) the letter from the Independent Board Committee, the text of which is set out on page IBC-1 to IBC-2 of this Composite Document;

• (h) the letter from Vinco Capital, the text of which is set out on page IFA-1 to IFA-21 of this Composite Document;

• (i) the service contracts and letters of appointment referred to in the paragraph headed “Directors’ Service Contracts” in this appendix;

• (j) the written consents referred to in the paragraph headed “Expert and Consent” in this appendix;

• (k) the material contracts referred to in the paragraph headed “Material Contracts” in this appendix; and

• (l) the Sale and Purchase Agreement dated 5 November 2019.

— III-10 —

GENERAL INFORMATION OF THE OFFEROR

APPENDIX IV

1. RESPONSIBILITY STATEMENT

The directors of the Offeror jointly and severally accept full responsibility for the accuracy of the information contained in this Composite Document (other than that relating to the Group), and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in this Composite Document (other than that expressed by the Directors) have been arrived at after due and careful consideration and there are no other facts not contained in this Composite Document, the omission of which would make any statement contained in this Composite Document misleading.

2. SHAREHOLDINGS AND DEALINGS IN SECURITIES OF THE COMPANY

On or about 29 April 2019, Mr. Liang bought on market 400,000 Shares at a price of HK$0.325 per Share. On or about 4 October 2019, Mr. Liang disposed on market of those 400,000 Shares at prices ranging from HK$0.405 to HK$0.435 per Share. Save for the aforesaid dealings and the 223,800,000 Sales Shares acquired under the Sale and Purchase Agreement, none of the Offeror or parties acting in concert with it has dealt in any Shares, options, derivatives, warrants or other securities convertible into Shares during the Relevant Period.

As at the Latest Practicable Date, the Offeror was interested in 223,800,000 Shares, representing approximately 50.86% of the entire issued share capital of the Company and the Vendor was interested in 106,200,000 Shares, representing approximately 24.14% of the entire issued share capital of the Company.

Save as disclosed above, the Offeror confirms that, as at the Latest Practicable Date:

• (a) save for the Irrevocable Undertaking, the Offeror and/or parties acting in concert with it have not received any irrevocable commitment to accept or reject the Offer;

• (b) there is no outstanding derivative in respect of securities in the Company which has been entered into by the Offeror, its ultimate beneficial owner and/ or parties acting in concert with any of them;

• (c) there are no conditions to which the Offer are subject;

— IV-1 —

GENERAL INFORMATION OF THE OFFEROR

APPENDIX IV

• (d) save for the Irrevocable Undertaking and the Sale and Purchase Agreement, there is no arrangement (whether by way of option, indemnity or otherwise) in relation to the Shares and which may be material to the Offer (as referred to in Note 8 to Rule 22 of the Takeovers Code);

• (e) save for the Sale Shares, none of the Offeror and/or parties acting in concert with it owns or has control or direction over any voting rights or rights over the Shares or convertible securities, options, warrants or derivatives of the Company;

• (f) there is no agreement or arrangement to which the Offeror and its ultimate beneficial owner and/or parties acting in concert with any of them is a party which relates to circumstances in which it may or may not invoke or seek to invoke a pre-condition or a condition to the Offer;

• (g) there is no relevant securities (as defined in Note 4 to Rule 22 of the Takeovers Code) in the Company which the Offeror and its ultimate beneficial owner and/or any person acting in concert with it has borrowed or lent;

• (h) no agreement, arrangement or understanding that any securities of the Company acquired in pursuant of the Offer would be transferred, charged or pledged to any other persons;

• (i) no benefit (other than statutory compensation required under the applicable laws) had been or would be given to any Directors as compensation for loss of office or otherwise in connection with the Offer;

• (j) no agreement, arrangement or understanding (including any compensation arrangement) existed between the Offeror and/or parties acting in concert with it on the one hand and any of the Directors, recent Directors, and Shareholders or recent Shareholders on the other hand which had any connection with or dependence upon the Offer;

• (k) no arrangement of the kind referred to in the third paragraph of Note 8 to Rule 22 of the Takeovers Code existed between the Offeror and/or parties acting in concert with it and/or its associates and any other person;

• (l) save for the Sale Shares held by the Offeror, there is no shareholding in the Company in which the director of the Offeror is interested;

— IV-2 —

APPENDIX IV GENERAL INFORMATION OF THE OFFEROR

• (m) apart from the consideration for the Sale Shares, there is no other consideration, compensation nor benefit in whatever form paid or to be paid by the Offeror or parties acting in concert with it (excluding the Vendor) to the Vendor or parties acting in concert with it (excluding the Offeror) in relation to or in connection with the sale and purchase of the Sale Shares;

• (n) there is no understanding, arrangement, agreement or special deal (as defined under Rule 25 of the Takeovers Code) between the Offeror or parties acting in concert with it (excluding the Vendor) on the one hand, and the Vendor and parties acting in concert with it (excluding the Offeror) on the other hand; and

• (o) there is no understanding, arrangement or agreement or special deal between (1) any Shareholders; and (2)(a) the Offeror and any party acting in concert with it, including the Vendor, or (b) the Company, its subsidiaries or associated companies.

3. MARKET PRICES

The table below shows the closing prices per Share on the Stock Exchange on (i) the last trading day of each of the calendar months during the Relevant Period; (ii) the Last Trading Day; and (iii) the Latest Practicable Date:

Date	Closing price
	HK$
31 January 2019	0.191
28 February 2019	0.190
29 March 2019	0.160
30 April 2019	0.265
31 May 2019	0.217
28 June 2019	0.275
31 July 2019	0.360
30 August 2019	0.530
30 September 2019	0.540
31 October 2019	0.395
5 November 2019 (being the Last Trading Day)	0.380
29 November 2019	0.330
20 December 2019 (being the Latest Practicable Date)	0.350

— IV-3 —

APPENDIX IV GENERAL INFORMATION OF THE OFFEROR

Highest and Lowest Share Price

During the Relevant Period:

• (i) the highest closing price of the Shares as quoted on the Stock Exchange was HK$0.72 per Share on 26 April 2019; and

• (ii) the lowest closing price of the Shares as quoted on the Stock Exchange was HK$0.153 per Share on 2 and 3 April 2019.

4. EXPERT AND CONSENTS

The following is the qualification of the expert who has given opinion or advice contained in this Composite Document.

Name

Qualification

VBG Capital Limited a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

VBG Capital has given and has not withdrawn its written consent to the issue of this Composite Document with inclusion of the text of its letter and the references to its name included herein in the form and context in which they appear.

5. MISCELLANEOUS

• (a) The Offeror is a company incorporated in the BVI and principally engages in investment holding. The Offeror is owned as to 51% by Mr. Wu and as to 49% by Mr. Liang. The registered office of the Offeror is situated at Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.

• (b) The registered office of VBG Capital is situated at 18/F, Prosperity Tower, 39 Queen’s Road Central, Central, Hong Kong.

• (c) The English text of this Composite Document and the accompanying Form of Acceptance shall prevail over their respective Chinese texts, in case of any inconsistency.

— IV-4 —

GENERAL INFORMATION OF THE OFFEROR

APPENDIX IV

6. DOCUMENTS AVAILABLE FOR INSPECTION

In addition to the document set forth in paragraph headed “13. Documents available for inspection” of Appendix III to this Composite Document, copies of the following documents are available for inspection (i) during normal business hours from 9:00 a.m. to 5:00 p.m. (other than Saturdays, Sundays and public holidays) at the principal place of business in Hong Kong of the Company at Room 2402-2407, 24/F, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong and (ii) on the website of the Securities and Futures Commission at www.sfc. hk, and the Company’s website at www.elegance.hk during the period from the date of this Composite Document up to and including the Closing Date:

• (a) the memorandum and articles of association of the Offeror;

• (b) the letter from VBG Capital, the text of which is set out on pages 1 to 11 of this Composite Document;

• (c) the written consent from VBG Capital referred to in the paragraph headed “Experts and Consents” in this appendix;

• (d) the Irrevocable Undertaking (as set out in the Sale and Purchase Agreement); and

• (e) the Sale and Purchase Agreement.

— IV-5 —