eprint Group Limited — Proxy Solicitation & Information Statement 2019

Mar 20, 2019

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult a stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in eprint Group Limited (the ‘‘Company’’), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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eprint GROUP LIMITED eprint 集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1884)

CONNECTED TRANSACTION IN RESPECT OF 2019

TENANCY AGREEMENTS,

CONTINUING CONNECTED TRANSACTION IN RESPECT OF 2019 MASTER SUPPLY AGREEMENT AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 20 to 21 of this circular. A letter of advice from Asia Investment Management Limited to the Independent Board Committee and the Independent Shareholders is set out on pages 22 to 41 of this circular.

A notice convening the EGM to be convened at Units A & B, 4/F., Phase 3, Kwun Tong Industrial Centre, Nos, 448-458 Kwun Tong Road, Kowloon, Hong Kong on Saturday, 6 April 2019 at 10:00 a.m. is set out on pages EGM-1 to EGM-3 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Whether or not you plan to attend the EGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the meeting or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

21 March 2019

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Letter from	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	20
Letter from	the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	22
Appendix	– General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	42
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		EGM-1

– i –

DEFINITIONS

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

• ‘‘2015 Master Supply Agreement’’

• the agreement entered into between the Company, Wilson Printing and Wilson (HK) on 14 December 2015, pursuant to which the Sellers agreed to supply the Products and to provide the Services for production and operation of the Printing Business

• ‘‘2015 Tenancy Agreements’’

• the tenancy agreements entered into between the respective landlords and subsidiaries of the Company on 14 December 2015 for the leasing of certain properties

• ‘‘2019 Master Supply Agreement’’

• the agreement entered into between the Company, Wilson Printing and Wilson (HK) on 25 February 2019, pursuant to which the Sellers agreed to supply the Products and to provide the Services for production and operation of the Printing Business, details as set out in the section headed ‘‘2019 Master Supply Agreement’’ in this circular

• ‘‘2019 Tenancy Agreements’’

• the tenancy agreements entered into between the respective landlords and subsidiaries of the Company on 25 February 2019 for the leasing of certain properties, details as set out in the section headed ‘‘2019 Tenancy Agreements’’ in this circular

• ‘‘Announcements’’

• the announcements of the Company dated 25 February 2019 and 18 March 2019 relating to the 2019 Tenancy Agreements and the 2019 Master Supply Agreement

• ‘‘Articles’’

• the articles of association of the Company

• ‘‘associates’’

• has the meaning as defined under the Listing Rules

• ‘‘Board’’ the board of Directors

• ‘‘Company’’

eprint Group Limited, a company incorporated in the Cayman Islands, whose shares are listed on the Stock Exchange

– 1 –

DEFINITIONS

• ‘‘Concerted Shareholders’’

collectively, Mr. She, Mr. Chong, Mr. Lam, Mr. WM Leung and Mr. YP Leung, pursuant to a deed of confirmation dated 2 July 2013 and entered into them confirming the existence of their acting concert arrangement, each of them has agreed to jointly control their respective interests in the Company held through eprint Limited

• ‘‘CTP’’

• CTP Limited, a company incorporated in Hong Kong with limited liability and is owned as to 25% by Mr. She, 25% by Mr. Chong, 25% by Mr. WM Leung and 25% by an Independent Third Party, and therefore is a connected person of the Company

• ‘‘Directors’’ the directors of the Company

• ‘‘e-banner’’

• e-banner Limited, a company incorporated in Hong Kong with limited liability and is a 51% owned subsidiary of the Company

• ‘‘EGM’’

• an extraordinary general meeting of the Company to be convened and held to approve, among others, the 2019 Tenancy Agreements, the 2019 Master Supply Agreement, and proposed annual caps and the transactions to be contemplated thereunder

• ‘‘eprint Limited’’

• eprint Limited, the controlling Shareholder holding 313,125,000 Shares, representing 56.93% of the issued share capital of the Company

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘Hong Kong’’

the Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Board Committee’’

• a committee of the Board comprising all the independent non-executive Directors, namely Mr. Poon Chun Wai, Mr. Fu Chung and Mr. Ma Siu Kit

– 2 –

DEFINITIONS

• ‘‘Independent Financial Adviser’’ or ‘‘Asia Investment Management’’

• ‘‘Independent Shareholders’’

• ‘‘Independent Third Party(ies)’’

• ‘‘Interested Directors’’

• ‘‘King Profit’’

• ‘‘Latest Practicable Date’’

• ‘‘Listing Rules’’

• ‘‘Lucky Gainer’’

• ‘‘Mr. Chong’’

• ‘‘Mr. Lam’’

• ‘‘Mr. Lam ST’’

• Asia Investment Management Limited, a licensed corporation under the SFO permitted to carry out Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (Asset Management) regulated activities for the purpose of the SFO, being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the 2019 Tenancy Agreements and the 2019 Master Supply Agreement

• any Shareholder other than the Concerted Shareholders and their associates

• person(s) and/or company(ies) who/which is (are) independent of the Company and its connected persons (as defined in the Listing Rules)

• being Mr. She, Mr. Chong, Mr. Lam and Mr. WM Leung

• King Profit International Limited, a company incorporated in Hong Kong with limited liability and is beneficially owned as to approximately 70% by VVV and 30% by Mr. Yip Chi Man, and therefore is a connected person of the Company

• 18 March 2019, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

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

• Lucky Gainer Limited, a company incorporated in Hong Kong with limited liability and is a wholly-owned subsidiary of the Company

• Mr. Chong Cheuk Ki, a non-executive Director and holds 21.62% interest in eprint Limited

• Mr. Lam Shing Kai, an executive Director and holds 21.62% interest in eprint Limited

• Mr. Lam Shing Tai, the brother of Mr. Lam, and therefore is a connected person of the Company

– 3 –

DEFINITIONS

‘‘Mr. WM Leung’’

Mr. Leung Wai Ming, a non-executive Director and holds 21.62% interest in eprint Limited

• ‘‘Mr. YP Leung’’

• Mr. Leung Yat Pang, being one of the Concerted Shareholders and holds 13.52% interest in eprint Limited

• ‘‘Mr. She’’

• Mr. She Siu Kee William, an executive Director and Chairman of the Company, and holds 21.62% interest in eprint Limited

• ‘‘PRC’’

• the People’s Republic of China, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan for the purpose of this circular

• ‘‘Printing Business’’ the printing business of the Group

• ‘‘Products’’

• the ink products, zine printing plates, printing solutions, consumables of printing machines and printing machine spare parts to be provided by the Sellers

• ‘‘Profit More’’

• Profit More Rich Limited, a company incorporated in Hong Kong with limited liability and is wholly owned by CTP, and therefore is a connected person of the Company

• ‘‘Promise Network’’ Promise Network Printing Limited, a company incorporated in Hong Kong with limited liability and is a wholly-owned subsidiary of the Company

• ‘‘Promise Properties’’

Promise Properties Limited, a company incorporated in Hong Kong with limited liability and is beneficially owned as to approximately 21.62% by Mr. She, 21.62% by Mr. Chong, 21.62% by Mr. WM Leung, 13.52% by Mr. YP Leung and 21.62% by an Independent Third Party, and therefore is a connected person of the Company

‘‘SFO’’

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

• ‘‘Sellers’’

• collectively, Wilson Printing and Wilson (HK)

• ‘‘Services’’

the provision of printing machine maintenance services by the Sellers

– 4 –

DEFINITIONS

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

• ‘‘Shareholder(s)’’ holder(s) of Share(s)

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘VVV’’ VVV Limited, a company incorporated in Hong Kong with limited liability and is beneficially owned as to approximately 21.62% by Mr. She, 21.62% by Mr. Chong, 21.62% by Mr. WM Leung, 13.52% by Mr. YP Leung and 21.62% by an Independent Third Party, respectively, and therefore is a connected person of the Company

• ‘‘Wilson (HK)’’ Wilson (Hong Kong) Limited, a company incorporated in Hong Kong with limited liability and is beneficially owned as to 65% by Mr. Lam ST, and therefore is a connected person of the Company

• ‘‘Wilson Printing’’ Wilson Printing Equipment Limited, a company incorporated in Hong Kong with limited liability and is wholly-owned by Mr. Lam ST, and therefore is a connected person the Company

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘%’’ per cent.

– 5 –

LETTER FROM THE BOARD

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eprint GROUP LIMITED eprint 集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1884)

Executive Directors: Registered Office: Mr. She Siu Kee William (Chairman) 4th Floor, Harbour Place, Mr. Lam Shing Kai 103 South Church Street, George Town, PO Box 10240, Non-executive Directors: Grand Cayman KY1-1002, Mr. Leung Wai Ming Cayman Islands Mr. Chong Cheuk Ki Mr. Deng Xiaen Head Office and Principal Place of Business in Hong Kong: Independent Non-Executive Directors: Flat A3, 1/F., Phase 3 Mr. Poon Chun Wai Kwun Tong Industrial Centre Mr. Fu Chung Kwun Tong Mr. Ma Siu Kit Kowloon Hong Kong 21 March 2019

To the Shareholders

Dear Sir or Madam,

CONNECTED TRANSACTION IN RESPECT OF 2019 TENANCY AGREEMENTS AND

CONTINUING CONNECTED TRANSACTION IN RESPECT OF 2019 MASTER SUPPLY AGREEMENT

Reference is made to the Announcements in respect of the 2019 Tenancy Agreements and 2019 Master Supply Agreement.

The purpose of this circular is to provide you with, among other things, (i) further information in relation to the 2019 Tenancy Agreements and 2019 Master Supply Agreement; (ii) a letter of recommendation from the Independent Board Committee to the Independent

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LETTER FROM THE BOARD

Shareholders; (ii) a letter of advice from Asia Investment Management to the Independent Board Committee and the Independent Shareholders in relation to the 2019 Tenancy Agreements and the 2019 Master Supply Agreement; and (iv) a notice of the EGM to consider and, if thought fit, to approve the 2019 Tenancy Agreements, 2019 Master Supply Agreement and its proposed annual caps.

CONNECTED TRANSACTION

2019 TENANCY AGREEMENTS

Background

2015 Tenancy Agreements

A total of 32 tenancy agreements were entered into between CTP, Promise Properties, VVV, Profit More and King Profit, as landlords, with Lucky Gainer, Promise Network and e- banner, as tenants, on 14 December 2015 under which the landlords agreed to lease a number of properties located in Kwun Tong Industrial Centre and a property in Chai Wan to the tenants with a total saleable area of approximately 54,077 square feet, for a term of 36 months ending on 31 March 2019 for use as offices, workshops, stores and car parks. The monthly rentals paid/ payable to the landlords for the years ended 31 March 2017 and 2018 and for the year ending 31 March 2019 are approximately HK$918,490, HK$820,042 and HK$861,649 respectively.

2019 Tenancy Agreements

Date

25 February 2019

Subject matter

(a) 2019 Tenancy Agreement I

The tenancy agreement (the ‘‘2019 Tenancy Agreement I’’) entered into between (i) CTP, King Profit, Profit More, Promise Properties and VVV as landlords (‘‘Landlords I’’), and (ii) Lucky Gainer and Promise Network as tenants (‘‘Tenants I’’), under which Landlords I agreed to lease a number of properties located in Kwun Tong Industrial Centre and one property in Chai Wan to Tenants I, with a total saleable area of approximately 36,812 square feet for use as offices, workshops, stores and car parks. The monthly rentals payable to the Landlords I for the three years ending 31 March 2022 are approximately HK$790,954, HK$838,400 and HK$888,800 respectively (exclusive of government rent, management fees and other utilities outgoings which are payable by the relevant tenant).

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LETTER FROM THE BOARD

			Saleable
Location of property	Landlord	Tenant	Area
			(sq. ft)
Unit W6 on 3rd Floor of Block 1,	CTP	Lucky Gainer	742
Kwun Tong Industrial Centre, Nos.472-
484 Kwun Tong Road, Kowloon
Unit K2 on 2nd Floor of Block 2,	CTP	Lucky Gainer	1,084
Kwun Tong Industrial Centre, Nos.
460-470 Kwun Tong Road, Kowloon
Unit L2 on 2nd Floor of Block 2, Nos.	CTP	Lucky Gainer	1,355
460-470 Kwun Tong Road, Kwun Tong
Industrial Centre, Kowloon
Unit W1 on 2nd Floor of Block 2,	CTP	Lucky Gainer	1,440
Kwun Tong Industrial Centre, Nos.
460-470 Kwun Tong Road, Kowloon
Unit W2 on 2nd Floor of Block 2,	CTP	Lucky Gainer	1,200
Kwun Tong Industrial Centre, Nos.
460-470 Kwun Tong Road, Kowloon
Unit A3 on 1st Floor of Block 3, Kwun	CTP	Lucky Gainer	1,822
Tong Industrial Centre, Nos. 448-458
Kwun Tong Road, Kowloon
Units W1, W2, W3, and W4 on 2nd	CTP	Lucky Gainer	1,629
Floor of Block 3, Kwun Tong Industrial
Centre, Nos. 448-458 Kwun Tong
Road, Kowloon
Unit B3 on 4th Floor of Block 3, Kwun	CTP	Lucky Gainer	1,500
Tong Industrial Centre, Nos. 448-458
Kwun Tong Road, Kowloon
Unit R4 on 2nd Floor of Block 4,	CTP	Lucky Gainer	1,865
Kwun Tong Industrial Centre, Nos.
436-446 Kwun Tong Road, Kowloon

– 8 –

LETTER FROM THE BOARD

			Saleable
Location of property	Landlord	Tenant	Area
			(sq. ft)
Unit M4 on 6th Floor of Block 4, Nos.	CTP	Lucky Gainer	1,300
436-446 Kwun Tong Road, Kwun Tong
Industrial Centre, Kowloon
Unit N4 on 6th Floor of Block 4, Kwun	CTP	Lucky Gainer	1,640
Tong Industrial Centre, Nos. 436-446
Kwun Tong Road, Kowloon
Unit P4 on 6th Floor of Block 4, Kwun	CTP	Lucky Gainer	1,285
Tong Industrial Centre, Nos. 436-446
Kwun Tong Road, Kowloon
Unit R4 on 6th Floor of Block 4, Kwun	CTP	Lucky Gainer	1,235
Tong Industrial Centre, Nos. 436-446
Kwun Tong Road, Kowloon
Car Parking Space No. 36 on	King Profit	Promise	N/A
Basement, Kwun Tong Industrial		Network
Centre, Nos. 436-484 Kwun Tong
Road, Kowloon
Unit A3 (including flat roof of	King Profit	Lucky Gainer	1,820
appurtenant thereto) on 4th Floor of
Block 3, Kwun Tong Industrial Centre,
Nos. 448-458 Kwun Tong Road,
Kowloon
Workshop Nos. M201, M202 and M210	Profit More	Lucky Gainer	2,895
on 3rd Floor of Block 2, Kwun Tong
Industrial Centre, Nos. 460-470 Kwun
Tong Road, Kowloon
Unit W3 on 2nd Floor of Block 2,	Promise	Lucky Gainer	1,200
Kwun Tong Industrial Centre, Nos.	Properties
460-470 Kwun Tong Road, Kowloon

– 9 –

LETTER FROM THE BOARD

			Saleable
Location of property	Landlord	Tenant	Area
			(sq. ft)
Unit K3 on 3rd Floor of Block 3, Kwun	Promise	Lucky Gainer	1,930
Tong Industrial Centre, Nos. 448-458	Properties
Kwun Tong Road, Kowloon
Unit H3 on 4th Floor of Block 3, Nos.	Promise	Lucky Gainer	1,380
448-458 Kwun Tong Road, Kwun Tong	Properties
Industrial Centre, Kowloon
Unit A4 on 6th Floor of Block 4, Nos.	Promise	Lucky Gainer	2,495
436-446 Kwun Tong Road, Kwun Tong	Properties
Industrial Centre, Kowloon
Portion of Workshop No.1 on Ground	VVV	Promise	379
Floor, Trend Centre, No. 29 Cheung		Network
Lee Street, Hong Kong
Car Parking Space No. 78 on	VVV	Promise	N/A
Basement, Kwun Tong Industrial		Network
Centre, Nos. 436-484 Kwun Tong
Road, Kowloon
Units K4 on 3rd Floor of Block 4, Nos.	VVV	Lucky Gainer	6,616
436-446 Kwun Tong Road, Kwun Tong
Industrial Centre, Kowloon

(b) 2019 Tenancy Agreement II

The tenancy agreement (the ‘‘2019 Tenancy Agreement II’’) entered into between CTP, as landlord, and e-banner, as tenant, under which CTP agreed to lease a number of properties located in Kwun Tong Industrial Centre to e-banner with a total saleable area of approximately 3,995 square feet for use as workshops. The monthly rentals payable to CTP for the three years ending 31 March 2022 are approximately HK$74,050, HK$78,500 and HK$83,200 respectively (exclusive of government rent, management fees and other utilities outgoings which are payable by the tenant).

– 10 –

LETTER FROM THE BOARD

			Saleable
Location of property	Landlord	Tenant	Area
			(sq. ft)
Unit A on 5th Floor of Block 4,	CTP	e-banner	2,495
Nos. 436-446 Kwun Tong Road,
Kwun Tong Industrial Centre, Kowloon
Unit B3 on 3rd Floor of Block 3,	CTP	e-banner	1,500
Nos. 448-458 Kwun Tong Road,
Kwun Tong Industrial Centre, Kowloon

(collectively, the ‘‘2019 Tenancy Agreements’’).

Term

The term of the 2019 Tenancy Agreements shall commence on and from 1 April 2019 and expire on 31 March 2022 (both days inclusive).

Rental

Pursuant to the 2019 Tenancy Agreements, the rental are determined based on the prevailing market rental of the respective properties and with reference to the valuation conducted by an independent qualified valuer. The aggregate rental under the 2019 Tenancy Agreements will be approximately HK$33,047,000 and is expected to be financed by the internal resources of the Group.

The estimated value of right-of-use assets to be recognised by the Company is approximately HK$31,000,000.

Conditions

The 2019 Tenancy Agreements is conditional upon the resolution regarding the 2019 Tenancy Agreements and the transactions contemplated thereunder being approved by the Independent Shareholders at the EGM.

– 11 –

LETTER FROM THE BOARD

CONTINUING CONNECTED TRANSACTION

2019 MASTER SUPPLY AGREEMENT

Background

On 14 December 2015, Wilson Printing and Wilson (HK), all of which are controlled by Mr. Lam ST, and the Company entered into the Master Supply Agreement for a term of three years ending on 31 March 2019, pursuant to which Wilson Printing and Wilson (HK) agreed to supply the Products and to provide the Services in respect of the printing machines to the Group. The purchase price payable by the Group to Wilson Printing and Wilson (HK) will be agreed following arm’s length negotiations between the relevant parties with reference to the prevailing market price of the similar products and services in Hong Kong.

2019 Master Supply Agreement

Date

25 February 2019

Parties

1. The Company

2. Wilson Printing

3. Wilson (HK)

Wilson Printing and Wilson (HK) collectively as ‘‘Sellers’’.

Supply service

Pursuant to the 2019 Master Supply Agreement, the Sellers agreed to sell the Products and to provide the Services to the Group for production and operation of the Printing Business.

Term

The term of the 2019 Master Supply Agreement shall commence on and from 1 April 2019 and expiring on 31 March 2022 (both days inclusive). Pursuant to the 2019 Master Supply Agreement, either party may terminate the 2019 Master Supply Agreement at any time by giving six months’ prior written notice of termination to the other.

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LETTER FROM THE BOARD

Pricing

Pursuant to the 2019 Master Supply Agreement, the price of the Products and the Services shall be based on:

• (i) the latest selling price of similar products from Independent Third Party or service fees as quoted by other independent service providers; or

• (ii) the prices agreed between the Group and the Sellers from time to time after arm’s length negotiation and are comparable to market prices of similar products and services as set out in (i) above.

The Company and the Sellers agreed that the transactions to be contemplated under the 2019 Master Supply Agreement shall be conducted on normal commercial terms, in particular:

• (a) on terms no less favourable to the Group than terms available to or from (as appropriate) Independent Third Parties;

• (b) in the ordinary and usual course of business of the Group and conducted after arm’s length negotiations; and

• (c) will not exceed the annual caps.

Proposed Annual Caps

The annual caps for the supply of the Products and the provision of the Services by the Sellers to the Group pursuant to the 2015 Master Supply Agreement for the financial years ended 31 March 2017 and 31 March 2018, and for the financial year ending 31 March 2019 are HK$20,485,000, HK$20,338,000 and HK$20,204,000 respectively. The actual transaction amount under the 2015 Master Supply Agreement for the financial years ended 31 March 2017 and 31 March 2018 amounted to HK$11,578,955 and HK$13,657,590 respectively and for the ten months ended 31 January 2019 amounted to HK$10,945,603.

The Directors estimate that the annual transaction amounts under the 2019 Master Supply Agreement for the three years ending 31 March 2022 will not exceed the annual caps of HK$12,829,000, HK$13,472,000 and HK$14,147,000 respectively.

The annual transaction amounts for the supply of the Products and the Services by the Sellers for the three years ending 31 March 2022 are determined after having considered, among others, (i) the expected volume of the Products and the Services to be purchased by the Group from Wilson Printing and Wilson (HK); (ii) the scale of operation (i.e. the own printing volume) of the Group anticipated by the Company; (iii) the expected average unit price of the Products and the Services for the years ending 31 March 2022.

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LETTER FROM THE BOARD

The Group’s own scale of production for the ten months ended 31 January 2019 was approximately 2,130 tonnes, and an annualized basis of about 2,560 tonnes, it is similar to the level for the year ended 31 March 2018 of approximately 2,470 tonnes. The expected volume of the Products and the Services to be purchased by the Group from Wilson Printing and Wilson (HK) are determined based on an annualized scale of production amount of the Products and the Services for the ten months ended 31 January 2019 with a steady growth together with the expected grow rate in the unit price of the Products and the Services at the rate of 5% per annum.

The factors taken into account that the Board considered in the future printing volume including the operating environment in Hong Kong will remain challenging in the foreseeable future that the Group has no present intention to commit any significant capital in printing machinery and the Group will pursue its strategy to outsource its printing tasks to subcontractors in the PRC.

Conditions

The 2019 Master Supply Agreement is conditional upon the resolution regarding the 2019 Master Supply Agreement (including the annual caps) and the transactions contemplated thereunder being approved by the Independent Shareholders at the EGM.

REASONS FOR THE 2019 TENANCY AGREEMENTS AND 2019 MASTER SUPPLY AGREEMENT

2019 Tenancy Agreements

CTP, Promise Properties, VVV, Profit More and King Profit are the landlords of certain properties which are leased to the Group. As certain subsidiaries of the Group have been using the properties historically, the Directors consider that it would be commercially beneficial to the Group if the production plants and offices are located in the same industrial building or in close proximity to each other, and therefore the Board (including the Independent Board Committee after taking into account the advice of the Independence Financial Adviser, but excluding the Interested Directors who are interested in the 2019 Tenancy Agreements) is of the view that it is in the interest of the Group for saving time and cost to enter into the 2019 Tenancy Agreements.

2019 Master Supply Agreement

The Group has established a long term relationship with Wilson Printing and Wilson (HK) which provide ink products, zinc printing plates, printing solutions, consumables of printing machines and spare parts to the Group regularly. Ink products, zinc printing plates and printing solutions are the principal raw materials to the Group’s Printing Business.

Wilson Printing and Wilson (HK) have been consistently supplying us with quality ink products, zinc printing plates and printing solutions in a timely fashion.

– 14 –

LETTER FROM THE BOARD

The Group purchased printing machines from the Sellers which can meet the Printing Business needs, and therefore required the supply of consumables of printing machines (i.e. zinc printing plates), spare parts compatible with the printing machines and maintenance services from the Sellers of those printing machines so as not to cause any disruption to the Printing Business. Using incompatible consumable will increase mechanical wear and tear.

The Group has been using customized color for printing. The ink products supplied by the Sellers can meet the Group’s standard of color.

The price payable for purchasing the Products from the Seller is determined with reference to (i) arm’s length negotiation by the parties by taking into account the prevailing market price; and (ii) the price offered by other Independent Third Party suppliers.

The fee payable for the Services provided by the Sellers is determined with reference to the fee offered by other Independent Third Party service providers.

In addition, the procurement department of the Group will obtain quotations from three other Independent Third Party suppliers for similar products and services on a regular basis to determine if the price and terms offered by the Sellers are comparable to or no less favourable than price and terms offered by Independent Third Party suppliers or service providers. After obtaining quotations, the staff of the procurement department will assess the quotations and formulate a report by reference to, among other things, the quality of printing machines consumables, the quality of services, experience, credit terms and ability to meet the Group’s requirements and standards as well as the price offered so as to determine the party with whom the Group will purchase the relevant products and services from. The head of the procurement department will final review the quotations and report and approve the selection of suppliers based on the above factors. Given that the price and terms provided by the Sellers as well as the ink products supplied by the Sellers can meet the Group’s customized colour of printing are more favourable to the Group than price and terms offered by other Independent Third Party suppliers. The head of the procurement department will monitor the process of the transactions to be conducted hereunder to ensure such price/fee is favourable to the Group. Save as being employees of the Company, the employees in the procurement department involved in the above procurement process are independent of the Company and its connected persons.

Given the aforesaid and after taking into account the terms of the 2019 Master Supply Agreement, the Board (including the Independent Board Committee after taking into account the advice of the Independence Financial Adviser, but excluding the Interested Directors) considers that entering into the 2019 Master Supply Agreement is in the interests of the Company and the Shareholders as a whole, and the terms thereof are on normal commercial terms and fair and reasonable.

– 15 –

LETTER FROM THE BOARD

GENERAL

The Group is principally engaged in the provision of printing services and solutions on advertisement, bound books and stationeries, to a diversified customer base in Hong Kong, including provision of one-stop internet printing service, from provision of design tools and software of customized products to various kinds of printing and processing services, to meet the diverse needs of customers.

CTP is principally engaged in the business of property investment, and is beneficially owned as to 25% by Mr. She, 25% by Mr. Chong, 25% by Mr. WM Leung and 25% by an Independent Third Party, respectively.

Promise Properties is principally engaged in the business of property investment, and is beneficially owned as to approximately 21.62% by Mr. She, 21.62% by Mr. Chong, 21.62% by Mr. WM Leung, 13.52%, by Mr. YP Leung and 21.62% by an Independent Third Party, respectively.

VVV is principally engaged in the business of property investment, and is beneficially owned as to approximately 21.62% by Mr. She, 21.62% by Mr. Chong, 21.62% by Mr. WM Leung, 13.52% by Mr. YP Leung and 21.62% by an Independent Third Party, respectively.

Profit More is principally engaged in the business of property investment, and is wholly owned by CTP.

King Profit is principally engaged in the business of property investment, and is beneficially owned as to approximately 70% by VVV and 30% by Mr. Yip Chi Man.

Wilson Printing is principally engaged in the business of trading of printing equipment and printing materials, and is wholly and beneficially owned by Mr. Lam ST.

Wilson (HK) is principally engaged in the business of trading of printing machineries and spare parts, and is beneficially owned as to 65% by Mr. Lam ST.

Accordingly, each of CTP, Promise Properties, VVV, Profit More, King Profit, Wilson Printing and Wilson (HK) are associates of Mr. She, Mr. Chong, Mr. Lam and Mr. WM Leung, and hence they are considered as connected persons of the Group under Chapter 14A of the Listing Rules.

As Mr. She, Mr. Lam, Mr. WM Leung and Mr. Chong, Directors of the Company, being the Concerted Shareholders, have material interests in the transactions contemplated under the 2019 Tenancy Agreements and the 2019 Master Supply Agreement, they have abstained from voting on the Board resolutions approving the 2019 Tenancy Agreements and the 2019 Master Supply Agreement and the transactions contemplated thereunder.

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LETTER FROM THE BOARD

As one or more of the applicable percentage ratios of the 2019 Tenancy Agreements are more than 5%, the aggregate transaction amount under the 2019 Tenancy Agreements constitutes a connected transaction under Chapter 14A of the Listing Rules. The 2019 Tenancy Agreements is subject to reporting, announcement and Independent Shareholders’ approval under Chapter 14A of the Listing Rules.

As the proposed annual caps in respect of the 2019 Master Supply Agreement for each of the three years ending 31 March 2022 is more than HK$10,000,000 and the applicable ratios calculated thereof are more than 5%, the transactions contemplated under the 2019 Master Supply Agreement and the proposed annual caps for each of the three years ending 31 March 2022 constitute continuing connected transaction under Chapter 14A of the Listing Rules, and therefore are subject to the reporting, announcement, annual review and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

THE INDEPENDENT BOARD COMMITTEE AND THE INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprising all independent non-executive Directors, namely Mr. Poon Chun Wai, Mr. Fu Chung and Mr. Ma Siu Kit, has been established to advise the Independent Shareholders, in respect of (i) the 2019 Tenancy Agreements; and (ii) the transactions under the 2019 Master Supply Agreement and the proposed annual caps.

No member of the Independent Board Committee has any interest in the 2019 Tenancy Agreements, the 2019 Master Supply Agreement and the proposed annual caps. A letter from the Independent Board Committee is set out on pages 20 to 21 of this circular.

Asia Investment Management has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders regarding (i) the 2019 Tenancy Agreements; and (ii) the transactions under the 2019 Master Supply Agreement and the proposed annual caps. A letter from the Independent Financial Adviser is set out on pages 22 to 41 of this circular.

EGM

Set out on pages EGM-1 to EGM-3 of this circular is a notice convening the EGM to consider and, if appropriate, to approve the ordinary resolutions relating to the 2019 Tenancy Agreements and the 2019 Master Supply Agreement.

A form of proxy for use at the EGM is enclosed herewith. Whether or not you intend to attend and/or vote at the EGM in person, you are requested to complete the form of proxy and return it to the Company’s branch share registrar and transfer office in Hong Kong, Tricor Investor Services Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong

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LETTER FROM THE BOARD

Kong as soon as possible and in any event not less than 48 hours before the time of the EGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. As such, all the resolutions set out in the notice of the EGM will be voted by poll.

According to Rule 2.15 of the Listing Rules, any shareholder that has a material interest in the transaction or arrangement shall abstain from voting on the resolution(s) approving the transaction or arrangement at the general meeting. As at the Latest Practicable Date, 550,000,000 Shares were in issue, among which, 313,125,000 Shares (representing approximately 56.93% of the issued Shares) were held by eprint Limited, which is held as to 21.62%, 21.62%, 21.62%, 21.62% and 13.52% by Mr. She, Mr. Chong, Mr. Lam, Mr. WM Leung and Mr. YP Leung. Pursuant to Rule 2.16 of the Listing Rules, eprint Limited is deemed to have a material interest in the transactions under the 2019 Tenancy Agreements, the 2019 Master Supply Agreement for being a close associate to the parties to the said agreements. Mr. She is beneficially interested in 1,584,000 Shares (representing approximately 0.288% of the issued Shares), Mr. Chong is also interested in 712,000 Shares held by his spouse, Ms. Yip Fei (representing approximately 0.129% of the issued Shares). Mr. Lam, Mr. WM Leung and Mr. YP Leung save for their interests in the Shares held through eprint Limited, they do not have any other interests in the Shares of the Company. Therefore, Mr. She, eprint Limited and Ms. Yip Fei shall all abstain from voting in favour of the resolutions to approve the transactions contemplated under the 2019 Tenancy Agreements and 2019 Master Supply Agreement and the proposed respective annual caps at the EGM.

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, as at the Latest Practicable Date, there was (i) no voting trust or other agreement or arrangement or understanding (other than an outright sale) entered into by or binding upon any Shareholder; and (ii) no obligation or entitlement of any Shareholder as at the Latest Practicable Date whereby he has or may have temporarily or permanently passed control over the exercise of the voting right in respect of his Shares to a third party, either generally or on a case-by-case basis. Accordingly, to the best knowledge, information and belief of the Directors, as at the Latest Practicable Date, there existed no discrepancy between any Shareholder’s beneficial shareholding interest in the Company and the number of Shares in respect of which such Shareholder will control or will be entitled to exercise control over the voting right at the EGM in respect of the resolutions approving the transactions contemplated under the 2019 Tenancy Agreements, 2019 Master Supply Agreement and the proposed annual caps.

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LETTER FROM THE BOARD

RECOMMENDATION

Your attention is drawn to the letter of advice from the Independent Financial Adviser as set out on pages 22 to 41 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in connection with the transactions under the 2019 Tenancy Agreements, the 2019 Master Supply Agreement and the proposed annual caps and the letter from the Independent Board Committee set out on pages 20 to 21 of this circular which contains its recommendation to the Independent Shareholders in relation to the transactions under the 2019 Tenancy Agreements, the 2019 Master Supply Agreement and the proposed annual caps.

The Board (including the Independent Board Committee), having taken into account the advice from the Independent Financial Adviser, but excluding the interested Directors who are interested or deemed to be interested in the 2019 Tenancy Agreements and the 2019 Master Supply Agreement, considers the 2019 Tenancy Agreements, the 2019 Master Supply Agreement and the proposed annual caps are in the interests of the Company and the Shareholders as a whole and accordingly recommend the Independent Shareholders to vote in favour of the relevant ordinary resolutions to be proposed at the EGM for approving the 2019 Tenancy Agreements, 2019 Master Supply Agreement and the proposed annual caps.

GENERAL

Your attention is also drawn to the appendix to this circular.

MISCELLANEOUS

The English text of this circular shall prevail over the Chinese text for the purpose of interpretation.

By Order of the Board eprint GROUP LIMITED She Siu Kee, William Chairman

– 19 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

==> picture [144 x 40] intentionally omitted <==

eprint GROUP LIMITED eprint 集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1884)

21 March 2019

To the Independent Shareholders

Dear Sir or Madam

CONNECTED TRANSACTION IN RESPECT OF 2019

TENANCY AGREEMENTS

AND

CONTINUING CONNECTED TRANSACTION IN RESPECT OF 2019 MASTER SUPPLY AGREEMENT

We have been appointed as the members of the Independent Board Committee to advise the Independent Shareholders in respect of the resolutions to approve the transactions contemplated under 2019 Tenancy Agreements, the 2019 Master Supply Agreement and the proposed annual caps, the details of which are set out in the ‘‘Letter from the Board’’ contained in the circular of the Company dated 21 March 2019 (the ‘‘Circular’’) of which this letter forms part. Unless the context otherwise requires, terms defined in the Circular shall have the same meanings when used in this letter.

Your attention is drawn to the ‘‘Letter from the Board’’, the advice of Asia Investment Management in its capacity as the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of whether the terms and conditions of the 2019 Tenancy Agreements and 2019 Master Supply Agreement are fair and reasonable and in the interests of the Company and its Shareholders as a whole, and are in the ordinary and usual course of business of the Company as set out in the ‘‘Letter from the Independent Financial Adviser’’ as well as other additional information set out in other parts of the Circular.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Having taken into account the advice of, and the principal factors and reasons considered by Asia Investment Management in relation thereto as stated in its letter, we consider the terms and conditions of the transactions contemplated under the 2019 Tenancy Agreements and 2019 Master Supply Agreement are on normal commercial terms and are fair and reasonable and are in the interests of the Company and the Shareholders as a whole, and the transactions contemplated hereunder are in the ordinary and usual course of business of the Company. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolutions to be proposed at the EGM to approve the transactions contemplated under the the 2019 Tenancy Agreements, the 2019 Master Supply Agreement and the proposed annual caps.

Yours faithfully Independent Board Committee Mr. Poon Chun Wai Mr. Fu Chung Mr. Ma Siu Kit Independent Independent Independent non-executive Director non-executive Director non-executive Director

– 21 –

LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the text of the letter of advice from Asia Investment Management Limited, the independent financial adviser to the Independent Board Committee and the Independent Shareholders, in relation to the connected transaction under the 2019 Tenancy Agreements and the continuing connected transactions (including the proposed annual caps) under the 2019 Master Supply Agreement which has been prepared for the purpose of inclusion in this circular.

==> picture [294 x 33] intentionally omitted <==

2806, 28/F., Windsor House, Chubb Tower, 311 Gloucester Road, Causeway Bay, Hong Kong

21 March 2019

To the Independent Board Committee and the Independent Shareholders

Dear Sirs,

CONNECTED TRANSACTION IN RESPECT OF 2019 TENANCY AGREEMENTS; AND

CONTINUING CONNECTED TRANSACTIONS IN RESPECT OF 2019 MASTER SUPPLY AGREEMENT

INTRODUCTION

We refer to our appointment as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in connection with (i) the 2019 Tenancy Agreements and the 2019 Master Supply Agreement (as defined below) and the transactions contemplated thereunder; and (ii) the respective proposed annual caps for the three years ending 31 March 2022, particulars of which are set out in the letter from the Board (the ‘‘Letter from the Board’’) contained in the circular of the Company to the Shareholders dated 21 March 2019 (the ‘‘Circular’’), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

As stated in the Letter from the Board, (i) certain premises owned by connected persons of the Company have been occupied by the Group for its business operation pursuant to certain tenancy agreements dated 14 December 2015 (the ‘‘2015 Tenancy Agreements’’) between the Group and CTP, Promise Properties, VVV, Profit More and King Profit; and (ii) the Group has purchased certain consumables of printing machines (e.g. zinc printing plates), spare parts

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

compatible with the printing machines and maintenance services from connected persons of the Company pursuant to an agreement dated 14 December 2015 (the ‘‘2015 Master Supply Agreement’’) between the Group and Wilson Printing and Wilson (HK). As the term of the 2015 Tenancy Agreements and the 2015 Master Supply Agreement will expire on 31 March 2019 and the Group intends to continue the services and products under these agreements, Lucky Gainer and Promise Network, both wholly owned subsidiaries of the Company, and e-banner, a nonwholly owned subsidiary of the Company, entered into two new tenancy agreements (the ‘‘2019 Tenancy Agreements’’) and the Company entered into a new supply agreement (the ‘‘2019 Master Supply Agreement’’ and together with the 2019 Tenancy Agreements, the ‘‘CCT Agreements’’) with relevant connected persons (as detailed in the paragraph below) on 25 February 2019 for a term of around three years from 1 April 2019 to 31 March 2022.

According to the Letter from the Board, (i) CTP is owned as to 25% by Mr. She, 25% by Mr. Chong, 25% by Mr. WM Leung and 25% by an Independent Third Party respectively; (ii) Promise Properties is owned as to approximately 21.62% by Mr. She, 21.62% by Mr. Chong, 21.62% by Mr. WM Leung, 13.52% by Mr. YP Leung and 21.62% by an Independent Third Party respectively; (iii) VVV is owned as to approximately 21.62% by Mr. She, 21.62% by Mr. Chong, 21.62% by Mr. WM Leung, 13.52% by Mr. YP Leung and 21.62% by an Independent Third Party respectively; (iv) Profit More is wholly owned by CTP; (v) King Profit is owned as to 70% by VVV and 30% by Mr. Yip Chi Man respectively; (vi) Wilson Printing is wholly owned by Mr. Lam ST; and (vii) Wilson (HK) is owned as to 65% by Mr. Lam ST and 35% by other shareholders respectively, each of these corporates are associates of Mr. She, Mr. Chong, Mr. Lam, Mr. WM Leung and Mr. YP Leung. As at the Latest Practicable Date, there were 550,000,000 Shares in issue, of which, 313,125,000 Shares (representing approximately 56.93% of the issued Shares) were held by eprint Limited, which is held as to 21.62%, 21.62%, 21.62%, 21.62% and 13.52% by Mr. She, Mr. Chong, Mr. Lam, Mr. WM Leung and Mr. YP Leung respectively. Furthermore, according to the latest disclosure of interests, 1,584,000 Shares and 712,000 Shares, representing approximately 0.29% and 0.13% of the issued share capital of the Company, were held by Mr. She at his personal capacity and Mr. Chong via interests of his spouse respectively. Hence, the counter parties to the CCT Agreements, being (i) CTP, Promise Properties, VVV, Profit More and King Profit, as lessors of properties (collectively the ‘‘Landlords’’); and (ii) Wilson Printing and Wilson (HK), as suppliers of the maintenance services and printing consumable products and spare parts (collectively the ‘‘Sellers’’ and together with the Landlords, the ‘‘CCT Parties’’), are considered as connected persons of the Group under Chapter 14A of the Listing Rules.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As such, the transactions contemplated under the CCT Agreements constitute connected transactions of the Company under Chapter 14A of the Listing Rules. As each of the aggregate rental value (the ‘‘Aggregate Rental Value’’) for the three years ending 31 March 2022 under the 2019 Tenancy Agreements and the proposed annual caps (the ‘‘Proposed Caps’’) in respect of the transactions contemplated under the 2019 Master Supply Agreement for each of the three years ending 31 March 2022 is more than HK$10,000,000 and the applicable ratios calculated thereof are more than 5%, the transactions contemplated under the 2019 Tenancy Agreements (as one-off acquisition of right-of-use asset) and the 2019 Master Supply Agreement (as continuing connected transactions), and the Proposed Caps are subject to the reporting, announcement, annual review (except for the 2019 Tenancy Agreements) and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules.

Pursuant to Rule 2.16 of the Listing Rules, eprint Limited is deemed to have a material interest in the transactions under the CCT Agreements for being a close associate to the parties to the CCT Agreements. Therefore, Mr. She, eprint Limited and Ms. Yip Fei, being the spouse of Mr. Chong, shall all abstain from voting in favour of the resolutions to approve the transactions contemplated under the CCT Agreements and the Proposed Caps at the EGM.

The Independent Board Committee comprising Mr. Poon Chun Wai, Mr. Fu Chung and Mr. Ma Siu Kit, all being the independent non-executive Directors, has been established by the Board to consider the terms of the CCT Agreements (including the Proposed Caps) and to make recommendation to the Independent Shareholders as regards voting. We, Asia Investment Management Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the CCT Agreements (including the Proposed Caps) are on normal commercial terms and in the ordinary and usual course of business of the Company; are fair and reasonable so far as the Independent Shareholders are concerned; and are in the interests of the Company and the Shareholders as a whole.

We are independent from and not connected with the Group and the CCT Parties or, where applicable any of their respective substantial shareholders, directors or chief executive, or any of their respective associates pursuant to Rule 13.84 of the Listing Rules. During the last two years, we have not been engaged as any financial adviser to the Company. Accordingly we are qualified to give independent advice to the Independent Board Committee and the Independent Shareholders regarding the CCT Agreements (including the Proposed Caps).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

BASIS AND ASSUMPTIONS OF OUR OPINION

In formulating our opinion, we have relied on the statements, information, opinions and representations expressed to us by the Directors and management of the Company. We have assumed that all such statements, information, opinions and representations expressed to us by the Directors and management of the Company, for which they are solely responsible, are true, accurate and complete in all material aspects at the time they were made and up to the date of the Circular. We have also assumed that all the opinions and representations have been reasonably made by the Directors and the management of the Company after due and careful enquiry. We have also sought and obtained confirmation from the Directors that no material facts have been omitted from the information supplied and opinions expressed to us. We consider that the information we have received is sufficient for us to reach an informed view and have no reason to believe that any material information have been withheld, nor doubt the truth or accuracy of the information provided. We have not, however, conducted any independent investigation into the business and affairs of the Company or any of its subsidiaries, nor have we carried out any independent verification of the information supplied.

PRINCIPAL FACTORS AND REASONS CONCERNED

In considering whether the terms of the CCT Agreements (including the Proposed Caps) are fair and reasonable and are in the interest of the Company and the Shareholders as a whole, we have taken into account the principal factors and reasons set out below:

Information on the Group and the CCT Parties

(I) The Group

As set out in the Letter from the Board, the Group is principally engaged in provision of printing services and solutions on advertisement, bound books and stationeries, to diversified customer base in Hong Kong, including provision of one-stop internet printing service, from provision of design tools and software of customised products to various kinds of printing and processing services, to meet the diverse needs of the customers.

(II) The CCT Parties

CTP is principally engaged in the business of property investment, and is owned as to 25% by Mr. She, 25% by Mr. Chong, 25% by Mr. WM Leung and 25% by an Independent Third Party respectively.

Promise Properties is principally engaged in the business of property investment, and is owned as to approximately 21.62% by Mr. She, 21.62% by Mr. Chong, 21.62% by Mr. WM Leung, 13.52% by Mr. YP Leung and 21.62% by an Independent Third Party respectively.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

VVV is principally engaged in the business of property investment, and is owned as to approximately 21.62% by Mr. She, 21.62% by Mr. Chong, 21.62% by Mr. WM Leung, 13.52% by Mr. YP Leung and 21.62% by an Independent Third Party respectively.

Profit More is principally engaged in the business of property investment, and is wholly owned by CTP.

King Profit is principally engaged in the business of property investment, and is owned as to approximately 70% by VVV and 30% by Mr. Yip Chi Man respectively.

Wilson Printing is principally engaged in the business of trading of printing equipment and printing materials, and is wholly owned by Mr. Lam ST.

Wilson (HK) is principally engaged in the business of trading of printing machinery and spare parts, and is owned as to 65% by Mr. Lam ST and 35% by other shareholders respectively.

Background of and reasons for entering into the CCT Agreements

(I) The 2019 Tenancy Agreements

As disclosed in the prospectus of the Company dated 20 November 2013 (the ‘‘Prospectus’’) and the Letter from the Board, the Group entered into certain tenancy agreements with connected persons for leasing the premises necessary for the operations of its business in Hong Kong in July 2013. Such tenancy were extended after the listing of the Company pursuant to the 2015 Tenancy Agreements for a term of three years commencing from 1 April 2016 to 31 March 2019.

According to the circular of the Company dated 30 July 2016, the then Directors proposed to acquire certain workshop units within an industrial buildings (the ‘‘Acquired Properties’’) which were subject to the 2015 Tenancy Agreements from their respective landlords with view to, among others, reduce ongoing rental payments for the Acquired Properties and avoid the possible increase in rents for the Acquired Properties upon the expiry of the 2015 Tenancy Agreements. Given that (i) the Group is principally engaged in provision of printing services and solutions in Hong Kong; (ii) the Group have been occupying the properties leased by the Landlords historically for its business operation; and (iii) the production plants and offices are located in the same industrial building or in close proximity to each other which may save time and cost for the Group, the Board considers to renew the 2015 Tenancy Agreements (except those relating to the Acquired Properties and certain properties ceased to be occupied by the Group as at the Latest Practicable Date) for a term of around three years commencing from 1 April 2019 to 31 March 2022 by entering into the 2019 Tenancy Agreements.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As set out in the Letter from the Board, the properties subject to the 2019 Tenancy Agreements comprise 25 units of industrial buildings and shop with total saleable area of approximately 40,807 sq.ft. and two car parking spaces (the ‘‘Leased Properties’’) all located at Kwun Tong and Chai Wan. As advised by the Company, the Lease Properties are currently occupied by the Group as offices, workshops, shops and car parks.

Since the change of operating address of the Group will incur renovation costs and cause interruption to the business operation of the Group as advised by the Company, we concur with the view of the Board to continue the pre-existing tenancies between the Group and the relevant landlords (whom are connected persons) upon expiry and that the entering into of the 2019 Tenancy Agreements is in the interest of the Company and the Shareholders as a whole and within the ordinary course of businesses of the Company.

(II) The 2019 Master Supply Agreement

As disclosed in the Prospectus and the Letter from the Board, the Group had started to purchase certain products (the ‘‘Products’’) including ink products, zinc printing plates, printing solutions, consumables of printing machines and spare parts and printing machine maintenance services (the ‘‘Services’’) from Wilson Printing and Wilson (HK) pursuant to the then master supply agreement dated around 27 September 2013. Such agreement was extended after the listing of the Company pursuant the 2015 Master Supply Agreement entered into between the Company, as purchaser, and Wilson Printing and Wilson (HK), as vendors, on 14 December 2015 for a term of three years commencing from 1 April 2016 to 31 March 2019.

Given that (i) the Group is principally engaged in provision of printing services and solutions in Hong Kong and Wilson Printing and Wilson (HK) have been stable suppliers of the Products and the Services which are essential to the operation of the Group, the Board considers to renew the 2015 Master Supply Agreement for a term of around three years commencing from 1 April 2019 to 31 March 2022 by entering into the 2019 Master Supply Agreement.

As advised by the Company, (i) Wilson Printing and Wilson (HK) have been supplying spare parts compatible to the Group’s printing machines and have been providing maintenance services to the Group for a long time and therefore they are more familiar with the needs of the Group; and (ii) quality and specification of ink products, zinc printing plates and consumables of printing machines would directly affect the quality and standard of colour of the Group’s end products e.g. bound books and banners and printing efficiency. Therefore we concur with the view of the Board to establish a long term business relationship Wilson Printing and Wilson (HK) in order to secure stable supply of the Products and the Services and enter into the 2019 Master Supply Agreement which is in the interest of the Company and the Shareholders as a whole and within the ordinary course of businesses of the Company.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Principal terms of the CCT Agreements

(I) The 2019 Tenancy Agreements

Date: 25 February 2019

Parties:

The 2019 Tenancy Agreements comprise two agreements entered into by different parties:

Tenancy agreement I

• (I) Lucky Gainer and Promise Network, both being subsidiaries of the Company (as tenants)

• (II) CTP, Promise Properties, VVV, Profit More and King Profit (as landlords)

Tenancy agreement II

• (I) e-banner (as tenant)

• (II) CTP (as landlord)

Subject matters:

Pursuant to the 2019 Tenancy Agreements, the landlords agreed to lease the following properties in Kwun Tong and Chai Wan with total saleable area of approximately 40,807 sq.ft to the tenants for use as offices, workshops, shops and car parks.

Term:

from 1 April 2019 and expire on 31 March 2022 (both days inclusive).

Aggregate monthly rentals:

HK$865,004, HK$916,900 and HK$972,000 for each of the three years ending 31 March 2022 (exclusive of government rent, management fees and other utilities outgoings which are payable by the relevant tenants). Such rental are determined based on the prevailing market rental of the respective properties and with reference to the valuation conducted by an independent qualified valuer.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Landlord of the			Saleable
Properties:	Location	Purpose	area (sq.ft)
I. CTP	Unit W6 on 3rd Floor of Block 1,	Warehouse	742
	Kwun Tong Industrial Centre,
	Nos.472-484 Kwun Tong Road,
	Kowloon
	Unit K2 on 2nd Floor of Block 2,	Workshop	1,084
	Kwun Tong Industrial Centre,
	Nos. 460-470 Kwun Tong Road,
	Kowloon
	Unit L2 on 2nd Floor of Block 2,	Workshop	1,355
	Kwun Tong Industrial Centre,
	Nos. 460-470 Kwun Tong Road,
	Kowloon
	Unit W1 on 2nd Floor of Block 2,	Workshop	1,440
	Kwun Tong Industrial Centre,
	Nos. 460-470 Kwun Tong Road,
	Kowloon
	Unit W2 on 2nd Floor of Block 2,	Workshop	1,200
	Kwun Tong Industrial Centre,
	Nos. 460-470 Kwun Tong Road,
	Kowloon
	Unit A3 on 1st Floor of Block 3,	Office	1,822
	Kwun Tong Industrial Centre,
	Nos. 448-458 Kwun Tong Road,
	Kowloon
	Units W1, W2, W3 and W4	Workshop	1,629
	on 2nd Floor of Block 3,
	Kwun Tong Industrial Centre,
	Nos. 448-458 Kwun Tong Road,
	Kowloon
	Unit B3 on 4th Floor of Block 3,	Workshop	1,500
	Kwun Tong Industrial Centre,
	Nos. 448-458 Kwun Tong Road,
	Kowloon
	Unit R4 on 2nd Floor of Block 4,	Workshop	1,865
	Kwun Tong Industrial Centre,
	Nos. 436-446 Kwun Tong Road,
	Kowloon

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Landlord of the			Saleable
Properties:	Location	Purpose	area (sq.ft)
	Unit M4 on 6th Floor of Block 4,	Workshop	1,300
	Nos. 436-446 Kwun Tong Road,
	Kwun Tong Industrial Centre,
	Kowloon
	Unit N4 on 6th Floor of Block 4,	Workshop	1,640
	Kwun Tong Industrial Centre,
	Nos. 436-446 Kwun Tong Road,
	Kowloon
	Unit P4 on 6th Floor of Block 4,	Workshop	1,285
	Kwun Tong Industrial Centre,
	Nos. 436-446 Kwun Tong Road,
	Kowloon
	Unit R4 on 6th Floor of Block 4,	Workshop	1,235
	Kwun Tong Industrial Centre,
	Nos. 436-446 Kwun Tong Road,
	Kowloon
	Unit B3 on 3rd Floor of Block 3,	Workshop	1,500
	Kwun Tong Industrial Centre,
	Nos.448-458 Kwun Tong Road,
	Kowloon
	Unit A on 5th Floor of Block 4,	Workshop	2,495
	Kwun Tong Industrial Centre,
	Nos. 436-446 Kwun Tong Road,
	Kowloon
II. King Profit	Car Parking Space No. 36 on	Carpark	N/A
	Basement,
	Kwun Tong Industrial Centre,
	Nos. 436-484 Kwun Tong Road,
	Kowloon
	Unit A3 (including flat roof of	Office	1,820
	appurtenant thereto)
	on 4th Floor of Block 3,
	Kwun Tong Industrial Centre,
	Nos. 448-458 Kwun Tong Road,
	Kowloon

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Landlord of the Properties: Location Purpose III. Profit More Workshop Nos. M201, M202 and M210 on 3rd Floor of Block 2, Kwun Tong Industrial Centre, Nos. 460-470 Kwun Tong Road, Kowloon Workshop IV. Promise Properties Unit W3 on 2nd Floor of Block 2, Kwun Tong Industrial Centre, Nos. 460-470 Kwun Tong Road, Kowloon Workshop Unit K3 on 3rd Floor of Block 3, Kwun Tong Industrial Centre, Nos. 448-458 Kwun Tong Road, Kowloon Workshop Unit H3 on 4th Floor of Block 3, Kwun Tong Industrial Centre, Nos. 448-458 Kwun Tong Road, Kowloon Office Unit A4 on 6th Floor of Block 4, Kwun Tong Industrial Centre, Nos. 436-446 Kwun Tong Road, Kowloon Workshop V. VVV Portion of Workshop No.1 on Ground Floor, Trend Centre, No. 29 Cheung Lee Street, Hong Kong Shop Car Parking Space No. 78 on Basement, Kwun Tong Industrial Centre, Nos. 436-484 Kwun Tong Road, Kowloon Carpark Units K4 on 3rd Floor of Block 4, Nos. 436-446 Kwun Tong Road, Kwun Tong Industrial Centre, Kowloon Workshop Total (excluding car parks):

Saleable area (sq.ft) 2,895 1,200 1,930 1,380 2,495 379 N/A 6,616

40,807

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(II) The 2019 Master Supply Agreement

Date: 25 February 2019 Parties: (i) the Company (as purchaser) (ii) Wilson Printing and Wilson (HK) (as sellers)

Subject matters:

Pursuant to the 2019 Master Supply Agreement, the Sellers agreed to sell the Products and to provide the Services to the Group for production and operation of the Printing Business.

Term: from 1 April 2019 and expire on 31 March 2022 (both days inclusive). Pursuant to the 2019 Master Supply Agreement, either party may terminate the 2019 Master Supply Agreement at any time by giving six months’ prior written notice of termination to the other.

Pricing: Pursuant to the 2019 Master Supply Agreement, the price of the Products and the Services shall be based on:

• (i) the latest selling price of similar products from Independent Third Party or service fees as quoted by other independent service providers; or

• (ii) the prices agreed between the Group and the Sellers from time to time after arm’s length negotiation and are comparable to market prices of similar products and services as set out in (i) above.

The Company and the Sellers agreed that the transactions to be contemplated under the 2019 Master Supply Agreement shall be conducted on normal commercial terms, in particular:

• (a) on terms no less favourable to the Group than terms available to or from (as appropriate) Independent Third Parties;

• (b) in the ordinary and usual course of business of the Group and conducted after arm’s length negotiations; and

• (c) will not exceed the Proposed Caps.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have analysed the key terms of the CCT Agreements in the ensuing sections, in relation to the aspects of the Proposed Caps and the measures to safeguard interests of Independent Shareholders, and formed our view in the paragraph headed ‘‘RECOMMENDATION’’.

The values of the transactions under the CCT Agreements

(I) The acquisition of right-of-use under the 2019 Tenancy Agreements

The rental payments under the 2019 Tenancy Agreements are expected to be approximately (i) HK$10,380,000 for the year ending 31 March 2020; (ii) HK$11,003,000 for the year ending 31 March 2021; and (iii) HK$11,664,000 for the year ending 31 March 2022, with the Aggregate Rental Value of approximately HK$33,047,000 (or estimated value of relevant right-of-use assets of approximately HK$31,000,000). Set out below is a table showing the historical and expected transaction amounts in respect of the rentals under the 2015 Tenancy Agreements and the 2019 Tenancy Agreements respectively.

Historical transaction amounts/

(Previous annual caps)	(Previous annual caps)		Expected	Annual Rental	Values
For the	For the	For the ten	For the	For the		For the
year emend	year ended	months ended	year ending	year ending		year ending
31 March 2017	31 March 2018	31 January 2019	31 March 2020	31 March 2021	31	March 2022
(HK$’ million)	(HK$’ million)	(HK$’ million))	(HK$’ million)	(HK$’ million)	(HK$’ million)
11.0	9.8	8.6	10.4	11.0		11.7
(12.7)	(14.0)	(15.4)

We have compared the historical transaction amounts for each of the two years ended 31 March 2018 and the ten months ended 31 January 2019 (the ‘‘Review Period’’) to the their respective annual caps. We noted that the historical transaction amount for the year ended 31 March 2017 was lower than the corresponding annual cap. As advised by the Company, such discrepancy was mainly attributable to the reduction of rental payable to CTP as a result of the Company’s acquisition of the Acquired Properties from CTP in second half of 2016 (details of which are set out in the circular of the Company dated 30 July 2016). Nevertheless, the historical transaction amount for the year ended 31 March 2018 was lower than that for the previous year and increases slightly in the ten months ended 31 January 2019 (on annualised basis). As advised by the Company, such lower-than-expected transaction amounts were mainly due to the reduction in rental payable to VVV as a result of termination of tenancy for few workshop units.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

We have discussed with the Company the basis and assumptions underlying the determination of the expected annual rental values for the three years ending 31 March 2022 (the ‘‘Expected Annual Rental Values’’) and the Aggregate Rental Value, and assessed its fairness and reasonableness. As part of our due diligence, we have obtained and reviewed a list of properties subject to the 2019 Tenancy Agreements which set out the breakdown of expected monthly rentals for each of the Leased Properties during the three years ending 31 March 2022. We noted that (i) the expected monthly rentals for the year ending 31 March 2020 are same as the current levels; (ii) all the 25 properties being leased as at the Latest Practicable Date are covered by the 2019 Tenancy Agreements; (iii) the Expected Annual Rental Value of approximately HK$10.4 million for the year ending 31 March 2020 is roughly same as the annualised historical transaction amount for the ten months ended 31 January 2019; and (iv) the Company expects an annual growth rate of 6% when determining the Expected Annual Rental Values for each of the next two years ending 31 March 2022.

As such, we have reviewed and obtained a fair rent opinion report (the ‘‘Fair Rent Report’’) prepared by an independent valuer and noted that the valuer is of the opinion that the rentals under the 2019 Tenancy Agreements reflect the prevailing market rates. As part of our due diligence work, we have performed the following steps regarding the opinion expressed by the valuer pursuant to note 1(d) to Rule 13.80 of the Listing Rules:

• (I) we have reviewed the brochure and track record of the valuer and were satisfied with their experience and expertise;

• (II) we have also reviewed the terms of engagement of the valuer and the scope of work set out therein and considered that the scope of work of the valuer is appropriate and we were also confirmed by the valuer that they have been provided with all the information necessary to their analysis and formation of advice; and

• (III) we have enquired the valuer as to any prior relationship with the Company and the CCT Parties and was confirmed that they are independent valuer.

We understand that the valuer has adopted a comparison approach by reference to comparable market rents in assessing the market rents of the properties and we have obtained a list of the comparable properties (‘‘Comparable Properties’’) from the valuer. We noted that the Comparable Properties comprising 18 properties, being industrial units in the same industrial buildings of the Leased Properties and shops located near one of the Leased Properties, being a shop in Chai Wan leased by VVV to the Group, are made reference to when assessing the market rents. We have also reviewed the public information from the source cited by the valuer and noted that the Comparable Properties are basically the exhaustive sample that could be obtained from the said public source for comparing lease of, similar type of properties in close proximity during the past few months to the Leased Properties when preparing the Fair Rent Report. Therefore we consider the Comparable Properties are representative samples. We have also compared the unit rents of the Comparable Properties in the past few months to the unit rents of the Leased Properties for the year ending 31 March 2020 according to their intended use (i.e. industrial unit and shop) and set out the details below.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Leased Properties

			Average monthly
			rental per sq.ft.
			for the year
			ending 31 March
Type		Location	2020
Industrial	units	Block 1 to 4 of Kwun Tong Industrial	HK$14.7 (gross
		Centre	floor area)

Comparable Properties (with lease commenced in past six months)

				Monthly rental
				per sq.ft.
	Type		Location	(gross floor area)
1.	Industrial	unit	Unit S02 on upper level of Block 1,	HK$15.0
			Kwun Tong Industrial Centre	(800 sq.ft.)
2.	Industrial	unit	Unit D on upper level of Block 4,	HK$15.3
			Kwun Tong Industrial Centre	(1,701 sq.ft.)
3.	Industrial	unit	Unit G on mid level of Block 1,	HK$15.7
			Kwun Tong Industrial Centre	(1,117 sq.ft.)
4.	Industrial	unit	Unit C on lower level of Block 1,	HK$15.0
			Kwun Tong Industrial Centre	(1,302 sq.ft.)
5.	Industrial	unit	Unit R on upper level of Block 3,	HK$16.1
			Kwun Tong Industrial Centre	(1,118 sq.ft.)
6.	Industrial	unit	Unit P on upper level of Block 2,	HK$15.0
			Kwun Tong Industrial Centre	(1,465 sq.ft.)
7.	Industrial	unit	Unit W1A of Block 3,	HK$15.3
			Kwun Tong Industrial Centre	(740 sq.ft.)
8.	Industrial	unit	Unit U on mid level of Block 1,	HK12.9
			Kwun Tong Industrial Centre	(2,550 sq.ft.)
9.	Industrial	unit	Unit P on upper level of Block 1,	HK$12.0
			Kwun Tong Industrial Centre	(1,465 sq.ft.)
10.	Industrial	unit	Unit L01 on mid level of Block 1,	HK$16.0
			Kwun Tong Industrial Centre	(1,800 sq.ft.)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

			Monthly rental
			per sq.ft.
	Type	Location	(gross floor area)
11.	Industrial unit	Unit J on upper level of Block 2,	HK$15.0
		Kwun Tong Industrial Centre	(2,277 sq.ft.)
12.	Industrial unit	Unit B on upper level of Block 2,	HK$12.7
		Kwun Tong Industrial Centre	(1,973 sq.ft.)
13.	Industrial unit	Unit B on upper level of Block 2,	HK$12.4
		Kwun Tong Industrial Centre	(1,973 sq.ft.)
14.	Industrial unit	Unit R on mid level of Block 2,	HK$15.8
		Kwun Tong Industrial Centre	(1,389 sq.ft.)
15.	Industrial unit	Unit H of Block 3,	HK$10.5
		Kwun Tong Industrial Centre	(1,813 sq.ft.)
16.	Industrial unit	Unit R on upper level of Block 3,	HK$17.0
		Kwun Tong Industrial Centre	(1,118 sq.ft.)
		Median unit rent of the Comparable	HK$15.0 (gross
		Properties	floor area)
Leased Properties
			Monthly rental
			per sq.ft. for the
			year ending 31
	Type	Location	March 2020
	Shop	Ground floor, Trend Centre,	HK$128.0
		Cheung Lee Road, Chai Wan	(saleable area)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Comparable Properties (with lease commenced in past six months)

				Monthly rental
				per sq.ft.
	Type	Location		(saleable area)
1.	Shop	No.341-343(B), Chai Wan Road		HK$200.0
				(310 sq.ft.)
2.	Shop	Ground floor, No.350, Chai Wan	Road	HK$90.3
				(310 sq.ft.)
		Median unit rent of the Comparable		HK$145.2
			Properties	(saleable area)

Based on the above, we consider that the rentals of the Leased Properties for the year ending 31 March 2020 under the 2019 Tenancy Agreements, on average, are within the range of and comparable to the median of the prevailing market rates and concur with the view of the valuer.

Furthermore, as regards the rentals of the Leased Properties for the next two years ending 31 March 2022, we have reviewed statistics published by RVD in respect of average rents and prices of private flatted factories. We noted that the average monthly rent of private flatted factories in Kowloon increased at (i) a compounded annual growth rate of approximately 5.5% from 2014 to 2018; and (ii) an annual growth rate of approximately 7.4% from 2017 to 2018. Therefore, we consider the 6% annual growth rate expected by the Company for determining the Expected Annual Rental Values for the two years ending 31 March 2022 is reasonable.

On the above basis, we are of the view that the terms of the 2019 Tenancy Agreements (including the Aggregate Rental Value) are fair and reasonable and in the interests of the Shareholders and the Company as a whole and the transactions contemplated under the 2019 Tenancy Agreements are to be carried out on normal commercial terms and in the ordinary and usual course of business of the Company.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

• (II) The transactions contemplated under the 2019 Master Supply Agreement and the Proposed Caps

The purchases of the Products and the Services under the 2019 Master Supply Agreement are subject to the Proposed Caps whereby the aggregate transaction value will not exceed (i) HK$12,829,000 for the year ending 31 March 2020; (ii) HK$13,472,000 for the year ending 31 March 2021; and (iii) HK$14,147,000 for the year ending 31 March 2022. Set out below is a table showing the historical transaction amounts and the Proposed Caps in respect of the purchases of the Products and the Services under the 2015 Master Supply Agreement and the 2019 Master Supply Agreement respectively.

Historical	transaction amounts/	transaction amounts/
(Previous annual caps)					Proposed Caps
For the	For the		For the ten	For the	For the	For the
year emend	year ended		months ended	year ending	year ending	year ending
31 March 2017	31 March 2018	31 January 2019		31 March 2020	31 March 2021	31 March 2022
(HK$’ million)	(HK$’ million)		(HK$’ million))	(HK$’ million)	(HK$’ million)	(HK$’ million)
11.6	13.7		10.9	12.8	13.5	14.1
(20.5)	(20.3)		(20.2)

We have compared the historical transaction amounts in the Review Period to the respective annual caps and noted that the historical transaction amount for each of the two years ended 31 March 2018 and the ten months ended 31 January 2019 (on annualised basis) were relatively stable but lower than the corresponding annual caps. As advised by the Company, such lowerthan-expected transaction amounts were mainly due to the strategy of the Company to (i) outsource more printing tasks to subcontractors in the PRC; (ii) dispose of certain old printing machines; and (iii) thus occupy less workshop units in Hong Kong, with a view to save operating costs (mainly labour costs, rentals and machine maintenance costs) and maintain its profitability. As such, we have reviewed the annual reports of the Company for the year ended 31 March 2017 and 2018 and the interim report of the Company for the six months ended 30 September 2018, and noted that although the revenue of the Company has been on increasing trend, certain direct costs (e.g. costs of materials, employee benefits expenses, operating lease rental of premises and equipment and repairs and maintenance) have been generally reduced whilst subcontracting fee have been increasing. According to the aforesaid annual reports, the Company disposed of its property, plant and equipment in the amount of approximately HK$12.5 million and HK$5.0 million during the year ended 31 March 2017 and 2018 respectively.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Furthermore, we have obtained and reviewed the breakdown of historical transactions under the 2015 Master Supply Agreement and noted that consistently over 80% of the transaction amounts for each of the year/period in the Review Period were attributable to the Group’s purchases of zinc printing plates, consumables (e.g. ink duct foils, plate gum, life imaging cylinders etc.) and ink products. As such we have reviewed, on sample basis, the invoices of transactions between Group and the Sellers and the quotation obtained by the Group from the Independent Third Parties in relation to the aforesaid key products during the Review Period. Upon comparison, we noted that the prices of such key products regularly purchased from the Sellers are comparable to those could be offered by the Independent Third Parties.

As regard the Proposed Caps to be sought for the three years ending 31 March 2022, we have discussed with the Company the basis and assumptions underlying the determination of the Proposed Caps and assessed its fairness and reasonableness. According to the Letter from the Board, the Proposed Caps for the purchases for the three years ending 31 March 2022 are determined after taking into account (i) the expected volume of the Products and the Services to be purchased by the Group from Wilson Printing and Wilson (HK); (ii) the scale of operation (i.e. the own printing volume) of the Group anticipated by the Company; and (iii) the expected average unit price of the Products and the Services for three years ending 31 March 2022.

As disclosed in the Letter from the Board, the Group’s own scale of production, in term of printing volume, for the ten months ended 31 January 2019 was approximately 2,130 tonnes of paper and we noted that, on annualised basis (i.e. approximately 2,560 tonnes of paper), it is comparable to the 2,470 tonnes of paper for the year ended 31 March 2018. We were advised by the Company that the Board expects the operating environment in Hong Kong will remain challenging in the foreseeable future and hence there is no current intention to commit any significant capital in printing machinery and the Company will pursue its strategy to outsource printing tasks to subcontractors in the PRC. Accordingly, the Company assumes a similar level of printing volume and utilisation of its own printing machinery (and thus comparable level of consumption of the Products and the Services) in near future and estimates the transaction amount for the year ending 31 March 2020 based on an annualised historical transaction amount for the ten months ended 31 January 2019 and a growth rate of 5.0%. We also noted that these annual growth rate of 5.0% was also assumed for each of the two years ending 31 March 2022 when determining the Proposed Caps. Upon our enquiry, we are given to understand that the Company has taken into account the inflation in near future and thus the unit price of the Products and the Services are expected grow at 5.0% per annum. As such, we have reviewed the composite consumer price index (the ‘‘Composite CPI’’) for the past three years and up to January 2019 as published by Census and Statistics Department of the Hong Kong government and noted that the Composite CPI increased by approximately 1.9% per annum during 2016 and 2018 and further by approximately 2.4% in January 2019 (on year-on-year basis). In addition, since the Services will require certain labour force, we have also reviewed the latest statistics of average wage rate as published by Census and Statistics Department of the Hong Kong government. We noted that the average nominal wage rate and payroll for all the selected

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

industry surveyed increased by approximately 4.1% and approximately 4.6% in September 2018 (on year-on-year basis). Having considered the abovementioned statistics, we consider the annual growth rate of 5.0% assumed by the Company is reasonable.

On the above basis, we are of the view that the terms of the 2019 Master Supply Agreement (including the Proposed Caps) are fair and reasonable and in the interests of the Shareholders and the Company as a whole and the transactions contemplated under the 2019 Master Supply Agreement are to be carried out on normal commercial terms and in the ordinary and usual course of business of the Company.

Measures to safeguard interests of the Independent Shareholders

As advised by the Company, the Company has adopted certain internal control measures to ensure that the transactions contemplated under the 2019 Master Supply Agreement are in accordance with the pricing policies and the terms thereof, and in compliance with the Listing Rules.

• (I) The procurement department of the Group would obtain quotations from three other Independent Third Party suppliers for similar products and services on a regular basis to determine if the price and terms offered by the Sellers are comparable to or no less favourable than price and terms offered by Independent Third Party suppliers;

• (II) the finance department of the Company will continuously review the terms of the transactions with connected persons and regularly monitor the transaction amounts such that it will not exceeded the Proposed Caps; and

• (III) the independent non-executive Directors shall, and the Company shall engage its external auditors to, conduct annual review of the transactions contemplated under the 2019 Master Supply Agreement and the Proposed Caps in accordance with the requirements of the Listing Rules. As advised by the Company:

• (a) the independent non-executive Directors will confirm in the Company’s annual report and accounts that the contemplated under the 2019 Master Supply Agreement have been entered into:

  • in the ordinary and usual course of business of the Group;

  • either on normal commercial terms or better; and

  • in accordance with the agreements governing them on terms that are fair and reasonable and in the interests of the Shareholders as a whole.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

• (b) each year the auditors of the Company must provide a letter to the Board (with a copy provided to the Stock Exchange at least 10 business days prior to the bulk printing of the annual report of the Company) confirming that the transactions contemplated under the 2019 Master Supply Agreement:

• have received the approval of the Board;

• have been entered into, in all material aspects, in accordance with the relevant agreement governing the continuing connected transactions; and

• have not exceeded the Proposed Caps;

Having considered, in particular, (i) the restriction of the value of transaction contemplated under the 2019 Master Supply Agreement by way of the Proposed Caps; and (ii) the ongoing review by the independent non-executive Directors and the auditors of the Company of the terms of the 2019 Master Supply Agreement and the Proposed Caps not being exceeded, we are of the view that there are appropriate measures in place to govern the conduct of the transactions contemplated under the 2019 Master Supply Agreement and safeguard the interests of the Independent Shareholders.

RECOMMENDATION

Taking into consideration of the above principal factors and reasons, we are of the opinion that the transactions contemplated under the CCT Agreements are in the ordinary and usual course of business of the Company, on normal commercial terms, and the terms thereof (including the Aggregate Rental Value and the Proposed Caps) are fair and reasonable so far as the Company and the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the Independent Shareholders, as well as the Independent Board Committee to advise the Independent Shareholders, to vote in favor of the resolution proposed at the EGM thereby approving the CCT Agreements and the Proposed Caps.

Yours faithfully, For and on behalf of

Asia Investment Management Limited Alice Kan

Managing Director

Note: Ms. Alice Kan is a responsible officer of type 6 (advising on corporate finance) regulated activity and has more than 20 years of experience in corporate finance and investment banking and has participated in and completed various advisory transactions (including connected transactions of listed companies in Hong Kong).

– 41 –

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

Directors’ and Chief Executives’ Interests in Shares

As at the Latest Practicable Date, the interests or short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company or any associated corporation (within the meaning of Part XV of the SFO) which were notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they are taken or deemed to have under such provisions of the SFO), or which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (‘‘Model Code’’) as set out in Appendix 10 to the Listing Rules are set out below:

Interests and short positions in shares, underlying shares and debentures of the Company or its associated corporation

(i) The Company

				Approximate
			Number of	percentage of
		Long position/	ordinary	shareholding in
Name of Director	Capacity	short position	shares held	the Company
Mr. She Siu Kee	Interest of controlled	Long position	313,125,000	56.93%
William	corporation (Note 1)
	Beneficial owner	Long position	1,584,000	0.29%
Mr. Chong Cheuk Ki	Interest of controlled	Long position	313,125,000	56.93%
	corporation (Note 1)
	Interest of spouse (Note 2)	Long position	712,000	0.13%
Mr. Lam Shing Kai	Interest of controlled	Long position	313,125,000	56.93%
	corporation (Note 1)
Mr. Leung Wai Ming	Interest of controlled	Long position	313,125,000	56.93%
	corporation (Note 1)

– 42 –

GENERAL INFORMATION

APPENDIX

Notes:

1. 313,125,000 Shares are held by eprint Limited. eprint Limited is held as to 21.62%, 21.62%, 21.62%, 21.62% and 13.52% by Mr. She Siu Kee (‘‘Mr. She’’), Mr. Chong Cheuk Ki (‘‘Mr. Chong’’), Mr. Lam Shing Kai (‘‘Mr. Lam’’), Mr. Leung Wai Ming (‘‘Mr. WM Leung’’) and Mr. Leung Yat Pang (‘‘Mr. YP Leung’’) (collectively, the ‘‘Concerted Shareholders’’) respectively. Pursuant to a deed of confirmation dated 2 July 2013 and entered into by them confirming the existence of their acting in concert arrangement, each of Mr. She, Mr. Chong, Mr. Lam, Mr. WM Leung and Mr. YP Leung has agreed to jointly control their respective interests in the Company. Accordingly, eprint Limited shall be accustomed to act in accordance with joint instructions of the Concerted Shareholders. Hence, each of the Concerted Shareholders is deemed to be interested in all the Shares held by eprint Limited by virtue of the SFO.

2. Mr. Chong is interested in 712,000 Shares held by his spouse, Ms. Yip Fei.

(ii) Associated corporation – eprint Limited

			Approximate
		Number of	percentage of
		ordinary	shareholding
		shares held in	in the
		the Associated	Associated
Name of Director	Nature of interest	Corporation	Corporation
Mr. She	Beneficial owner	2,162	21.62%
Mr. Chong	Beneficial owner	2,162	21.62%
Mr. Lam	Beneficial owner	2,162	21.62%
Mr. WM Leung	Beneficial owner	2,162	21.62%

• Note: The disclosed interest represents the interests in eprint Limited, the controlling shareholder of the Company, which is owned by Mr. She, Mr. Chong, Mr. Lam, Mr. WM Leung and Mr. YP Leung in the respective proportions of 21.62%, 21.62%, 21.62%, 21.62% and 13.52%.

Save as disclosed above, none of the Directors, chief executives of the Company and/or their associates had any interests or short positions in any shares, underlying shares and debentures of the Company or any of its associated corporations as at the Latest Practicable Date as recorded in the register to be kept under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

Substantial Shareholders and Other Persons’ Interests in Shares

As at the Latest Practicable Date, so far as is known to the Directors, the following persons (other than the Directors and the chief executives of the Company) had interests or short positions in the shares and underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO.

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GENERAL INFORMATION

APPENDIX

Interests or short positions in shares and underlying shares of the Company

				Approximate
			Number of	percentage of
			ordinary	shareholding in
Name	Capacity	Position	shares held	the Company
eprint Limited	Beneficial owner	Long position	313,125,000	56.93%
(Note 1)
Ms. Lo Suet Yee (Note 2)	Interest of spouse	Long position	314,709,000	57.22%
Ms. Yip Fei (Note 3)	Beneficial owner	Long position	712,000	0.13%
	Interest of spouse	Long position	313,125,000	56.93%
Ms. Yu Siu Ping	Interest of spouse	Long position	313,125,000	56.93%
(Note 4)
Ms. Chau Fung Kiu	Interest of spouse	Long position	313,125,000	56.93%
(Note 5)
Mr. Huang Xiaopeng	Interest of controlled	Long position	61,875,000	11.25%
(Note 6)	corporation
Mr. Huang Xiaojia	Interest of controlled	Long position	61,875,000	11.25%
(Note 6)	corporation
Mr. Huang Bingwen	Interest of controlled	Long position	61,875,000	11.25%
(Note 6)	corporation
Hong Kong Tung Fung	Interest of controlled	Long position	61,875,000	11.25%
Investment Company	corporation
Limited (Note 6)
Shantou Dongfeng Printing	Interest of controlled	Long position	61,875,000	11.25%
Co. Ltd. (Note 6)	corporation
Hong Kong Luck Investment	Beneficial owner	Long position	61,875,000	11.25%
Company Limited (Note 6)
Mr. YP Leung	Interest of controlled	Long position	313,125,000	56.93%
	corporation (Note 7)

Notes:

1. eprint Limited is directly interested in approximately 56.93% in the Company.

2. Ms. Lo Suet Yee is the spouse of Mr. She. Under the SFO, Ms. Lo Suet Yee is taken to be interested in the same number of Shares in which Mr. She is interested.

3. Ms. Yip Fei is the spouse of Mr. Chong. Under the SFO, Ms. Yip Fei is taken to be interested in the same number of Shares in which Mr. Chong is interested.

4. Ms. Yu Siu Ping is the spouse of Mr. Lam. Under the SFO, Ms. Yu Siu Ping is taken to be interested in the same number of Shares in which Mr. Lam is interested.

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GENERAL INFORMATION

APPENDIX

1. Ms. Chau Fung Kiu is the spouse of Mr. WM Leung. Under the SFO, Ms. Chau Fung Kiu is taken to be interested in the same number of Shares in which Mr. WM Leung is interested.

2. These 61,875,000 Shares are held by Hong Kong Luck Investment Company Limited, which is a whollyowned subsidiary of Shantou Dongfeng, an A share company listed on the main board of the Shanghai Stock Exchange. Shantou Dongfeng is 54.40% held by Hong Kong Tung Fung Investment Company Limited and 1.11% held by Mr. Huang Xiaojia. Hong Kong Tung Fung Investment Company is owned as to 34% by Mr. Huang Xiaopeng, 33% by Mr. Huang Xiaojia and 33% by Mr. Huang Bingwen. Under the SFO, each of Shantou Dongfeng, Hong Kong Tung Fung Investment Company Limited, Mr. Huang Xiaopeng, Mr. Huang Xiaojia and Mr. Huang Bingwen is taken to be interested in the same number of Shares in which Hong Kong Luck Investment Company Limited is interested.

3. These 313,125,000 shares are held through eprint Limited, a company is beneficially owned as to 13.52% by Mr. YP Leung.

Save as disclosed above, the Directors are not aware of any other persons who have interests or short positions in the shares, underlying shares or debentures of the Company or any associated corporations (within the meaning of the SFO) as recorded in the register required to be kept under section 336 of the SFO as at the Latest Practicable Date.

3. COMPETING INTERESTS

As at the Latest Practicable Date, the Directors were not aware that any of the Directors and their respective close associates has interest in any business which competes or is likely to compete, either directly or indirectly, with the businesses of the Group.

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors confirm that there has not been any material adverse change in the financial or trading position of the Company since 31 March 2018, being the date of the latest published audited financial statements of the Company.

5. LITIGATION

As at the Latest Practicable Date, none of the Company or any of its subsidiaries has received notice of any litigation or arbitration proceedings pending or threatened against the Company or any of the subsidiaries of the Company.

6. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has entered into or proposed to enter into any service contract with the Company or any of its subsidiaries which will not expire or may not be terminated by the Group within one (1) year without the payment of compensation other than statutory compensation.

– 45 –

GENERAL INFORMATION

APPENDIX

7. DIRECTORS’ INTEREST IN ASSETS OR CONTRACTS

As at the Latest Practicable Date, none of the Directors of the Company had any interest in any assets which have been since 31 March 2018 (being the date to which the latest published audited accounts of the Group were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

As at the Latest Practicable Date, none of the Directors is materially interested in any contract or arrangement subsisting at the Latest Practicable Date which is significant in relation to the business of the Group, save for the 2019 Tenancy Agreements and 2019 Master Supply Agreement.

8. EXPERT

• (a) The following is the qualification of Asia Investment Management, which has given its opinion or advice which is contained in this circular:

Name Qualification

Asia Investment Management

a licensed corporation under the SFO permitted to carry out Type 4 (advising on securities), Type 6 (advising on corporate finance) and Type 9 (Asset Management) regulated activities for the purpose of the SFO

• (b) As at the Latest Practicable Date, Asia Investment Management did not have any shareholding, direct or indirect, in the Company or any other member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in the other member of the Group, nor did it have any interest, direct or indirect, in any assets which had, since 31 March 2018, being the date up to which the latest published audited financial statements of the Group were made up, been acquired or disposed of by or leased to the Group, or were proposed to be acquired or disposed of by or leased to the Group.

Asia Investment Management has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which they appear.

– 46 –

GENERAL INFORMATION

APPENDIX

9. MISCELLANEOUS

• (a) The company secretary of the Company is Mr. Mok Chun Wa who is a member of the Hong Kong Institute of Certified Public Accountants.

• (b) The registered office of the Company is located at 4th Floor, Harbour Place, 103 South Church Street, George Town, PO Box 10240, Grand Cayman KY1-1002, Cayman Islands. The principal place of business of the Company in Hong Kong is located at Flat A3, 1/F., Phase 3, Kwun Tong Industrial Centre, Kwun Tong, Kowloon, Hong Kong.

• (c) The English text of this circular shall prevail over the Chinese text in case of any inconsistency.

10. DOCUMENTS FOR INSPECTION

Copies of the following documents will be available for inspection at the principal place of business in Hong Kong of the Company at Flat A3, 1/F., Phase 3, Kwun Tong Industrial Centre, Kwun Tong, Kowloon, Hong Kong during normal business hours on any business day for a period of 14 days from the date of this circular:

• (a) this circular;

• (b) the Articles;

• (c) the letter from the Independent Board Committee, the text of which is set out in this circular;

• (d) the letter from the Independent Financial Adviser, the text of which is set out in this circular;

• (e) the written consent of Asia Investment Management referred to in the paragraph headed ‘‘Expert’’ above;

• (f) the 2019 Tenancy Agreements;

• (g) the 2019 Master Supply Agreements; and

• (h) the 2018 Annual Report of the Company.

– 47 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [144 x 40] intentionally omitted <==

eprint GROUP LIMITED eprint 集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 1884)

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting of eprint Group Limited (the ‘‘Company’’) will be held at Units A & B, 4/F., Phase 3, Kwun Tong Industrial Centre, Nos, 448-458 Kwun Tong Road, Kowloon, Hong Kong on Saturday, 6 April 2019 at 10:00 a.m. for the purpose of considering and, if thought fit, passing the following resolutions as ordinary resolutions:

1. ‘‘THAT:

2. (a) the following tenancy agreements dated 25 February 2019 (the ‘‘2019 Tenancy Agreements’’):

   • (i) the tenancy agreement entered into between (i) CTP Limited (‘‘CTP’’), King Profit International Limited, Profit More Rich Limited, Promise Properties Limited and VVV Limited as landlords, and (ii) Lucky Gainer Limited and Promise Network Printing Limited, wholly-owned subsidiaries of the Company, as tenants, copy of which is tabled at the Meeting and marked ‘‘A1’’ and initialed by the chairman of the Meeting for identification purpose, for the leasing of a number of properties located in Kwun Tong Industrial Centre and one property in Chai Wan be and are hereby approved, confirmed and ratified;

   • (ii) the tenancy agreement entered into between CTP, as landlord, and e-banner Limited, a subsidiary owned as to 51% by the Company, as tenant, copy of which is tabled at the Meeting and marked ‘‘A2’’ and initialed by the chairman of the Meeting for identification purpose, for the leasing of a number of properties located in Kwun Tong Industrial Centre be and are hereby approved, confirmed and ratified; and

3. (b) any one director of the Company be and is hereby authorized to do all such acts or things and sign all documents deemed necessary by him/her to be incidental to, ancilliary to or in connection with the matters contemplated under the 2019 Tenancy Agreements.’’

– EGM-1 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. ‘‘THAT:

2. (a) the agreement dated 25 February 2019 (‘‘2019 Master Supply Agreement’’) entered into between the Company, Wilson Printing Equipment Limited and Wilson (Hong Kong) Limited (collectively, the ‘‘Sellers’’), a copy of which is tabled at the Meeting and marked ‘‘B’’ and initialed by the chairman of the Meeting for identification purpose, pursuant to which the Sellers shall supply the Products (as defined in the Circular) and provide the Services (as defined in the Circular) to the Company for the Printing Business (as defined in the Circular) be and is hereby approved, confirmed and ratified;

3. (b) the annual caps under the 2019 Master Supply Agreement as set out in the Circular for the three years ending 31 March 2022 be and are hereby approved and confirmed; and

4. (c) any one director of the Company be and is hereby authorized to do all such acts or things and sign all documents deemed necessary by him/her to be incidental to, ancilliary to or in connection with the matters contemplated under the 2019 Master Supply Agreement.’’

By Order of the Board eprint Group Limited Mok Chun Wa

Company Secretary

Hong Kong, 21 March 2019

– EGM-2 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. Any member of the Company entitled to attend and vote at the meeting convened by this notice shall be entitled to appoint proxy to attend and vote in his stead in accordance with the articles of association of the Company. A proxy need not be a member of the Company but must be present in person to represent the member.

2. A form of proxy for use at the above meeting is enclosed.

3. To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed, or a certified copy thereof, must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for holding the meeting. Completion and return of the form of proxy will not preclude members from attending and voting in person at the meeting or any adjournment thereof should they so wish.

4. As at the date of this notice, the Board comprises two executive Directors, namely Mr. She Siu Kee William and Mr. Lam Shing Kai; three non-executive Directors, namely Mr. Leung Wai Ming, Mr. Chong Cheuk Ki and Mr. Deng Xiaen; and three independent non-executive Directors, namely Mr. Poon Chun Wai, Mr. Fu Chung and Mr. Ma Siu Kit.

– EGM-3 –