Fourace Industries Group Holdings Limited — Proxy Solicitation & Information Statement 2021

Jul 9, 2021

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

Hong Kong Exchange 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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FOURACE INDUSTRIES GROUP HOLDINGS LIMITED 科利實業控股集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1455)

PROPOSALS FOR DECLARATION OF FINAL DIVIDEND, GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF AGM

Unless the context requires otherwise, terms used in this cover shall have the same meaning as those in the circular.

A notice convening the annual general meeting (the ‘‘AGM’’) of Fourace Industries Group Holdings Limited (the ‘‘Company’’) to be held at Crystal Room IV, 3/F, Panda Hotel, 3 Tsuen Wah Street, Tsuen Wan, Hong Kong on Monday, 9 August 2021 at 11:00 a.m. is set out on pages 15 to 19 of this circular. A form of proxy for use at the AGM is enclosed with this circular. The form of proxy is also published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.fourace.com).

Whether or not you are able to attend the AGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the AGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the AGM or any adjourned meeting should you so wish.

PRECAUTIONARY MEASURES FOR THE AGM

Please see page 1 of this circular for measures being taken at the AGM to try to prevent and control the spread of the COVID-19, including:

. compulsory temperature checks . compulsory wearing of surgical face masks . no distribution of corporate gifts and refreshments

Any person who does not comply with the precautionary measures or is subject to any Hong Kong Government prescribed quarantine may be denied entry into the meeting venue. The Company reminds that any Shareholder may appoint the chairman of the AGM as his/her/its proxy to vote on the relevant resolution(s) at the AGM as an alternative to attending the AGM in person.

9 July 2021

CONTENTS

	Page
Precautionary measures for the Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
Letter from the Board
1. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
2. Declaration of Final Dividend . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
3. General Mandate to Issue Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
4. General Mandate to Repurchase Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
5. Re-election of Retiring Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
6. Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
7. Voting Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
8. Responsibility Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
9. Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Appendix I — Explanatory Statement on Share Repurchase Mandate . . . . . . . . . . . .	9
Appendix II — Details of Retiring Directors Proposed for Re-election . . . . . . . . . . . .	13
Notice of Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	15

– i –

PRECAUTIONARY MEASURES FOR THE ANNUAL GENERAL MEETING

In view of the ongoing COVID-19 pandemic and in line with the Hong Kong Government’s directive on social distancing, personal and environmental hygiene, the Company will implement the following preventive measures at the AGM to protect attending Shareholders, staff and other stakeholders from the risk of infection:

• (i) Compulsory body temperature checks will be conducted on every Shareholder, proxy and other attendees at the entrance of the AGM venue. Any person with a body temperature of over 37.4 degrees Celsius may be denied entry into the AGM venue or be required to leave the AGM venue at the absolute discretion of the Company.

• (ii) All attendees are required to wear surgical face masks inside the AGM venue at all times, and to maintain a safe distance with other attendees.

• (iii) No refreshments will be served, and there will be no corporate gifts.

• (iv) Appropriate distancing and spacing at the AGM venue will be maintained to avoid over-crowding.

To the extent permitted under law, the Company reserves the right to deny entry into the AGM venue or require any person to leave the AGM venue in order to ensure the safety of the attendees at the AGM.

In the interests of all stakeholders’ health and safety and in response to the relevant guidelines prescribed by the Hong Kong Government on prevention and control of COVID-19 pandemic, Shareholders are reminded that physical attendance in person at the AGM is not necessary for the purpose of exercising voting rights, and are strongly encouraged to appoint the chairman of the AGM as proxy to attend and vote on the relevant resolutions at the AGM by completing form of proxy in accordance with the instructions printed thereon instead of attending the AGM or any adjourned meeting in person.

If Shareholders choosing not to attend the AGM in person have any questions relating to the AGM, or about the relevant resolutions, or about the Company or any matters for communication with the Board, Shareholders may at any time send their enquiries and concerns with contact information of the requisitionists in writing to the branch share registrar of the Company in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

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DEFINITIONS

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

‘‘AGM’’

• the annual general meeting of the Company to be held and convened at Crystal Room IV, 3/F, Panda Hotel, 3 Tsuen Wah Street, Tsuen Wan, Hong Kong on Monday, 9 August 2021 at 11:00 a.m. or any adjournment thereof

• ‘‘Articles of Association’’

• the amended and restated memorandum and articles of association of the Company currently in force

• ‘‘Board’’

• the board of Directors

• ‘‘close associate(s)’’ has the meaning ascribed to it under the Listing Rules

• ‘‘Company’’

• Fourace Industries Group Limited, a limited liability company incorporated in the Cayman Islands, the Shares of which are listed on the Main Board of the Stock Exchange (stock code: 1455)

• ‘‘core connected person(s)’’

has the meaning ascribed to it under the Listing Rules

• ‘‘Director(s)’’ the director(s) of the Company

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’

• the Hong Kong Special Administrative Region of the PRC

• ‘‘Latest Practicable Date’’

• 30 June 2021, being the latest practicable date for ascertaining certain information referred to in this circular prior to the printing of this circular

• ‘‘Listing Date’’ 15 September 2020, the date on which the Shares of the Company were listed on the Main Board of the Stock Exchange

• ‘‘Listing Rules’’

• the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

• ‘‘PRC’’ or ‘‘China’’

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

• ‘‘Prospectus’’

the prospectus of the Company dated 31 August 2020

• ‘‘SFO’’

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

– 2 –

DEFINITIONS

• ‘‘Share(s)’’

• ‘‘Shareholder(s)’’

• ‘‘Share Issue Mandate’’

• ‘‘Share Repurchase Mandate’’

• ‘‘Stock Exchange’’

• ‘‘substantial shareholder(s)’’

• ‘‘Takeovers Code’’

• ‘‘%’’

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

holder(s) of Share(s)

• the general mandate proposed to be granted to the Directors to exercise the power of the Company to allot, issue and otherwise deal with Shares not exceeding 20% of the number of issued Shares at the date of the passing of the resolution approving such mandate

• the general mandate proposed to be granted to the Directors to exercise the power of the Company to repurchase Shares not exceeding 10% of the number of issued Shares at the date of the passing of the resolution approving such mandate

The Stock Exchange of Hong Kong Limited

has the meaning ascribed to it under the Listing Rules

The Codes on Takeovers and Mergers and Share Buy-backs

per cent

– 3 –

LETTER FROM THE BOARD

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FOURACE INDUSTRIES GROUP HOLDINGS LIMITED 科利實業控股集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1455)

Executive Directors: Registered Office: Mr. Li Shu Yeh Cricket Square (Chairman and chief executive officer) Hutchins Drive Ms. Li Sen Julian P.O. Box 2681 Grand Cayman Ms. Tang Suk Yee KY1-1111 Cayman Islands

Independent Non-executive Directors: Mr. Liu Kai Yu Kenneth Mr. Leung Wai Chuen Mr. Man Yun James

Principal Place of Business in Hong Kong: Unit Nos. 1106–1107 11/F Manhattan Centre 8 Kwai Cheong Road Kwai Chung, New Territories Hong Kong

9 July 2021

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR DECLARATION OF FINAL DIVIDEND, GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES, RE-ELECTION OF RETIRING DIRECTORS AND NOTICE OF AGM

1. INTRODUCTION

The purpose of this circular is to provide the Shareholders with information relating to the proposals for (i) declaration of final dividend; (ii) granting of the Share Issue Mandate and Share Repurchase Mandate, and the extension of the Share Issue Mandate by addition thereto of the number of Shares repurchased pursuant to the Share Repurchase Mandate; (iii) the reelection of retiring Directors; and (iv) giving the Shareholders the notice of the AGM.

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LETTER FROM THE BOARD

2. DECLARATION OF FINAL DIVIDEND

As stated in the annual results announcement of the Company dated 25 June 2021, the Board has resolved to recommend the payment of a final dividend of HK3.8 cents per Share for Shareholders whose names appear on the register of members of the Company on Wednesday, 18 August 2021 subject to approval of the Shareholders at the AGM. The proposed final dividend, if approved, is expected to be paid on or about Tuesday, 31 August 2021.

For determining the entitlement to the proposed final dividend, the register of members of the Company will be closed from Monday, 16 August 2021 to Wednesday, 18 August 2021, both days inclusive, during which period no transfer of shares will be registered. In order to establish the entitlement of Shareholders to receive the final dividend, all duly completed transfer forms accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong before 4:30 p.m. on Friday, 13 August 2021.

3. GENERAL MANDATE TO ISSUE SHARES

On 21 August 2020, an ordinary resolution was passed by the Shareholders to give a general mandate to the Directors to allot, issue and deal with Shares not exceeding 20% of the total number of the Shares in issue immediately following the completion of the Global Offering (as defined in the Prospectus) and the Capitalisation Issue (as defined in the Prospectus). Such general mandate will lapse at the conclusion of the AGM. It is therefore proposed to renew such general mandate at the AGM. An ordinary resolution will be proposed at the AGM to grant a general mandate to the Directors to allot, issue and otherwise deal with additional Shares up to a limit equal to 20% of the total number of issued Shares as at the date of passing of the ordinary resolution.

As at the Latest Practicable Date, the number of issued shares of the Company was 1,250,000,000 Shares. Assuming that there is no change in the number of issued shares between the period from the Latest Practicable Date and the date of passing of the resolution approving the Share Issue Mandate, the maximum number of Shares which may be issued pursuant to the Share Issue Mandate will be 250,000,000 Shares, representing 20% of the total number of issued shares of the Company as at the date of passing of the resolution approving the Share Issue Mandate.

In addition, a separate ordinary resolution will also be proposed to approve the extension of the Share Issue Mandate by adding to the total number of Shares which may be allotted and issued by the Directors pursuant to the Share Issue Mandate by the number of Shares representing such number of Shares repurchased under the Share Repurchase Mandate.

4. GENERAL MANDATE TO REPURCHASE SHARES

On 21 August 2020, an ordinary resolution was passed by the Shareholders to give a general mandate to the Directors to exercise the powers of the Company to repurchase its own Shares not exceeding 10% of the total number of the Shares in issue immediately following the

– 5 –

LETTER FROM THE BOARD

completion of the Global Offering (as defined in the Prospectus) and the Capitalisation Issue (as defined in the Prospectus). Such general mandate will lapse at the conclusion of the AGM. It is therefore proposed to renew such general mandate at the AGM. An ordinary resolution will be proposed at the AGM to grant the Share Repurchase Mandate to the Directors, which will allow them to cause the Company to repurchase Shares of up to 10% of the total number of issued Shares as at the date of passing of the ordinary resolution approving the Share Repurchase Mandate.

As at the Latest Practicable Date, the number of issued shares of the Company was 1,250,000,000 Shares. Assuming that there is no change in the number of issued shares between the period from the Latest Practicable Date and the date of passing of the ordinary resolution approving the Share Repurchase Mandate, the maximum number of Shares which may be repurchased pursuant to the Share Repurchase Mandate will be 125,000,000 Shares, representing 10% of the total number of issued shares of the Company as at the date of passing of the resolution approving the Share Repurchase Mandate.

The Share Repurchase Mandate, if granted, will expire upon whichever is the earliest of: (a) the conclusion of the next annual general meeting of the Company; (b) the expiration of the period within which the next annual general meeting of the Company is required to be held by the Articles of Association or by other applicable law; and (c) the date on which the authority given under the ordinary resolution approving the Share Repurchase Mandate is revoked or varied by an ordinary resolution of the Shareholders.

An explanatory statement containing information relating to the Share Repurchase Mandate as required pursuant to the Listing Rules is set out in Appendix I to this circular.

5. RE-ELECTION OF RETIRING DIRECTORS

As at the Latest Practicable Date, the Board consisted of six Directors, namely Mr. Li Shu Yeh, Ms. Li Sen Julian, Ms. Tang Suk Yee, Mr. Liu Kai Yu Kenneth, Mr. Leung Wai Chuen and Mr. Man Yun James.

Pursuant to Article 84 of the Articles of Association, at each annual general meeting onethird of the Directors for the time being (or, if their number is not a multiple of three, the number nearest to but not less than one-third) shall retire from office by rotation provided that every Director shall be subject to retirement at an annual general meeting at least once every three years and shall then be eligible for re-election. Accordingly, Ms. Li Sen Julian and Ms. Tang Suk Yee, each an executive Director, shall retire at the AGM, and being eligible, offer themselves for re-election at the AGM.

The Board and nomination committee of the Company took into account the Board’s composition as well as the nomination principles and criteria set out in the Company’s Board diversity policy and nomination policy, and the qualifications, skills, character, integrity, experience and the overall contribution to the Company of each of retiring Directors; and consider that each of the retiring Directors will continue to bring valuable business experience, knowledge and professionalism to the Board for its efficient and effective functioning and diversity. Therefore, the Board (under the recommendation of the Nomination Committee) proposed each of the retiring Directors to stand for re-election as Directors at the AGM.

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LETTER FROM THE BOARD

Details of the retiring Directors who are proposed to be re-elected at the AGM are set out in Appendix II to this circular.

6. ANNUAL GENERAL MEETING

A notice convening the AGM is set out on pages 15 to 19 of this circular.

A form of proxy for use at the AGM is enclosed with this circular and such form of proxy is also published on the websites of the Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (www.fourace.com). Whether or not you are able to attend the AGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the completed form of proxy to the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the AGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting at the AGM or any adjourned meeting if you so wish.

7. VOTING ARRANGEMENTS

All the resolutions put to vote at the AGM shall be taken by poll in accordance with Rule 13.39(4) of the Listing Rules and Article 66(1) of the Articles of Association, except where the chairman, in good faith, decides to allow a resolution that relates purely to a procedural or administrative matter to be voted on by a show of hands pursuant to the Listing Rules and the Articles of Association.

An announcement on the poll results of the AGM will be made by the Company after the AGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

8. RESPONSIBILITY STATEMENT

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

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LETTER FROM THE BOARD

9. RECOMMENDATION

The Directors consider that (i) the declaration of final dividend; (ii) the grant of the Share Issue Mandate; (iii) the grant of the Share Repurchase Mandate; (iv) the extension of the Share Issue Mandate; and (v) the re-election of the retiring Directors as set out respectively in the notice of the AGM are all in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of all such resolutions to be proposed at the AGM.

Yours faithfully, For and on behalf of the Board Fourace Industries Group Holdings Limited Li Shu Yeh

Chairman and chief executive officer

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APPENDIX I EXPLANATORY STATEMENT ON SHARE REPURCHASE MANDATE

The following is an explanatory statement required by the Listing Rules to provide the Shareholders with requisite information reasonably necessary for them to make an informed decision on whether to vote for or against the ordinary resolution to be proposed at the AGM in relation to the granting of the Share Repurchase Mandate.

This explanatory statement contains all the information required pursuant to Rule 10.06(1)(b) and other relevant provisions of the Listing Rules which is set out as follows:

1. SHARE CAPITAL

As at the Latest Practicable Date, there were in issue a total of 1,250,000,000 Shares.

Under the Share Repurchase Mandate, the number of Shares that the Company may repurchase shall not exceed 10% of the total number of Shares in issue on the date of passing of the resolution approving the Share Repurchase Mandate. Assuming no further Shares will issued or repurchased after the Latest Practicable Date and before the AGM, there will be 1,250,000,000 Shares in issue, and exercise in full of the Share Repurchase Mandate would result in up to a maximum of 125,000,000 Shares being repurchased by the Company.

2. REASONS FOR REPURCHASES

The Directors believe that it is in the best interests of the Company and its Shareholders as a whole to have a general authority from the Shareholders to enable the Company to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or earnings per Share and will only be made when the Directors believe that such repurchases will benefit the Company and its Shareholders as a whole.

3. FUNDING OF REPURCHASES

The Company is empowered by its Articles of Association to repurchase its Shares. In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Articles of Association, the laws of the Cayman Islands and/or other applicable laws, as the case may be. The Directors propose that such repurchases of Shares will be appropriately financed by the Company’s distributable profits.

4. IMPACT OF REPURCHASE

There could be adverse impact on the working capital and/or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the annual results announcement of the Company for the year ended 31 March 2021) in the event that the proposed Share repurchases were to be carried out in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Share Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital of the Company or its gearing level.

– 9 –

APPENDIX I EXPLANATORY STATEMENT ON SHARE REPURCHASE MANDATE

5. SHARE PRICES

The highest and lowest prices at which the Shares were traded on the Stock Exchange during the period from the Listing Date up to the Latest Practicable Date are as follows:

	Share Prices (per Share)	Share Prices (per Share)
	Highest	Lowest
	HK$	HK$
2020
September (from the Listing Date)	1.450	0.215
October	0.325	0.190
November	0.255	0.191
December	0.239	0.192
2021
January	0.228	0.195
February	0.210	0.180
March	0.210	0.182
April	0.231	0.182
May	0.225	0.197
June (up to the Latest Practicable Date)	0.355	0.215

6. DIRECTORS’ UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, the exercise of the power of the Company to make repurchases pursuant to the Share Repurchase Mandate will be in accordance with the Listing Rules and the applicable laws of the Cayman Islands.

7. INTENTION OF DIRECTORS AND CORE CONNECTED PERSONS TO SELL SHARES

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

No core connected person has notified the Company that he or she has a present intention to sell Shares to the Company, or has undertaken not to do so, in the event that the Company is authorised to make repurchases of the Shares under the Share Repurchase Mandate.

8. EFFECT OF THE TAKEOVERS CODE

If as a result of a repurchase of Shares pursuant to the Share Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition of voting rights for the purposes of the Takeovers Code. Accordingly, a Shareholder or a group of Shareholders acting in concert (within the

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APPENDIX I EXPLANATORY STATEMENT ON SHARE REPURCHASE MANDATE

meaning under the Takeovers Code), depending on the level of increase in the Shareholder’s interest, could obtain or consolidate control of the Company and thereby become obliged to make a mandatory offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, the following substantial shareholders were interested in 10% or more of the number of issued Shares as recorded in the register required to be kept by the Company, pursuant to section 336 of the SFO:

			Percentage
			of number
			of Shares
			(assuming
			the Share
			Repurchase
		Percentage	Mandate is
	Number of	of number	exercised
Name of Shareholder	Shares held	of Shares	in full)
Ace Champion Inc.	468,750,000	37.50%	41.67%
Forever Golden Inc.	468,750,000	37.50%	41.67%
Mr. Li Shu Yeh	468,750,000	37.50%	41.67%
Ms. Sit Hor Wan	468,750,000	37.50%	41.67%
Ms. Chan Pan Pan	468,750,000	37.50%	41.67%
Mr. Loo Kin Kuen Stephen	468,750,000	37.50%	41.67%

Notes:

• (1) Ace Champion Inc. was the legal and beneficial owner of 468,750,000 Shares, representing approximately 37.5% of the issued share capital of the Company as at the Latest Practicable Date.

• (2) Forever Golden Inc. was the legal and beneficial owner of 468,750,000 Shares, representing approximately 37.5% of the issued share capital of the Company as at the Latest Practicable Date.

• (3) As at the Latest Practicable Date, Ace Champion Inc. was legally and beneficially owned by Mr. Li Shu Yeh as to 100% of its issued share capital. Mr. Li Shu Yeh was deemed to be interested in the Shares in which Ace Champion Inc. was interested pursuant to Part XV of the SFO.

• (4) As at the Latest Practicable Date, the entire issued share capital of Forever Golden Inc. was legally and beneficially owned by Ms. Sit Hor Wan, who was deemed to be interested in all the Shares held by Forever Golden Inc. by virtue of Part XV of the SFO.

• (5) Ms. Chan Pan Pan is the spouse of Mr. Li Shu Yeh. Therefore, Ms. Chan Pan Pan is deemed to be interested in the Shares in which Mr. Li Shu Yeh is interested under Part XV of the SFO.

• (6) Mr. Loo Kin Kuen Stephen is the spouse of Ms. Sit Hor Wan. Therefore, Mr. Loo Kin Kuen Stephen is deemed to be interested in the Shares in which Ms. Sit Hor Wan is interested under Part XV of the SFO.

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APPENDIX I EXPLANATORY STATEMENT ON SHARE REPURCHASE MANDATE

In the event that the Directors exercise the Share Repurchase Mandate in full, the interests of the substantial shareholders in the Company will be increased to approximately the percentages as set out in the table above. As at the Latest Practicable Date, each of Ace Champion Inc. and Forever Golden Inc. was interested in 468,750,000 Shares, representing approximately 37.5% of the issued share capital of the Company. Should the Share Repurchase Mandate be exercised in full, each of Ace Champion Inc.’s and Forever Golden Inc.’s interest in the Shares would be increased to approximately 41.67% of the issued share capital of the Company. Accordingly, as the ‘‘2% creeper’’ would be exceeded, an obligation to make a mandatory offer in accordance with Rule 26 of the Takeovers Code would be trigger on each of Ace Champion Inc. and Forever Golden Inc., and the concert party(ies) of each of them. Save as aforesaid, the Directors are not aware of any consequences which would arise under the Takeovers Code as a consequence of any share repurchases pursuant to the Share Repurchase Mandate. The Directors have no present intention to repurchase the Shares to the extent that will trigger the obligations under the Takeovers Code to make a mandatory offer.

The Directors do not intend to repurchase Shares to the extent that less than 25% of the Company’s issued share capital would be held by public (as defined in the Listing Rules).

9. SHARE REPURCHASES MADE BY THE COMPANY

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

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DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

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

MS. LI SEN JULIAN

Ms. Li Sen Julian (李晨) (‘‘Mr. Li’’), aged 45, was appointed as an executive Director on 29 March 2019 and is the general manager of the Group. Ms. Li is primarily responsible for supervising the overall operations and financial management of the Group. Ms. Li joined the Group in August 2001. Since 17 August 2017, Ms. Li has been a director of Fourace Industries Limited (‘‘HK Fourace’’), an indirect wholly-owned subsidiary of the Company. Ms. Li is the daughter of Mr. Li Shu Yeh, the Company’s chairman, an executive Director and chief executive officer and a controlling shareholder beneficially interested in approximately 37.5% of the issued share capital of the Company.

Ms. Li first joined the Group on 2 August 2001 as a sales assistant, responsible for customer management. From August 2003 to June 2006, she served as an assistant general manager of the Group, responsible for customer communications, project management and product pricing. Ms. Li has been the general manager of the Group since June 2006, responsible for the overall supervision of the sales department, quality management and customer relations. Ms. Li has more than 19 years of experience in the personal care electrical appliances industry.

Ms. Li obtained her bachelor’s degree in clinical medicine from Tianjin Medical University (天津醫科大學) in the PRC in July 2001.

Ms. Li entered into a service contract with the Company for an initial term of three years commencing from the Listing Date, subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles of Association. Pursuant to the service contract, she is entitled to receive a basic annual salary of HK$1.08 million, which is determined with reference to her responsibilities, experience, performance and the prevailing market conditions. In addition, Ms. Li is entitled to receive allowances, benefits in kind, bonuses, pension scheme contributions and social welfare.

MS. TANG SUK YEE

Ms. Tang Suk Yee (鄧淑儀) (‘‘Ms. Tang’’), aged 54, was appointed as an executive Director on 29 March 2019. Ms. Tang is primarily responsible for the overall operations and management of Shenzhen Fourace Electrical Appliances Co., Ltd. (深圳科利電器有限公司) (‘‘Shenzhen Fourace’’), an indirect wholly-owned subsidiary of the Company. Ms. Tang joined the Group on 6 June 1988 and has more than 30 years of experience in the personal care electrical appliances industry.

Ms. Tang first joined the Group on 6 June 1988 as a secretary, where she accumulated experiences of customer management, administration, shipping and operations. Since August 2000, she has served as an assistant factory manager of the Group, responsible for monitoring

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DETAILS OF RETIRING DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

production progress and shipping. She has been a director of HK Fourace since 17 August 2017 and the executive director and legal representative of Shenzhen Fourace since 22 May 2015, responsible for the overall progress management of the productions of the Group.

Ms. Tang completed her tertiary education at Sacred Heart Canossian Convent Commercial School in Hong Kong in June 1985.

Ms. Tang entered into a service contract with the Company for an initial term of three years commencing from the Listing Date, subject to retirement by rotation and re-election at the annual general meeting of the Company in accordance with the Articles of Association. Pursuant to the service contract, she is entitled to receive a basic annual salary of HK$0.6 million, which is determined with reference to her responsibilities, experience, performance and the prevailing market conditions. In addition, Ms. Tang is entitled to receive allowances, benefits in kind, bonuses, pension scheme contributions and social welfare.

Save as disclosed above, as at the Latest Practicable Date, each of the Directors above: (i) did not hold any directorship in the last three years in other public companies of which are listed on any securities market in Hong Kong or overseas; (ii) did not have any other relationships with any Directors, senior management, substantial shareholders or controlling shareholders of the Company; (iii) did not hold any other position with the Company or other members of the Group; and (iv) and did not have any interests in the Shares or underlying shares of the Company within the meaning of Part XV of the SFO.

Save as disclosed above, as at the Latest Practicable Date, there was no information to be disclosed pursuant to any of the requirements under Rule 13.51(2)(h) to (v) of the Listing Rules and there were no other matters concerning the proposed re-election of each of the Directors above that need to be brought to the attention of the Shareholders.

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NOTICE OF ANNUAL GENERAL MEETING

==> picture [88 x 33] intentionally omitted <==

FOURACE INDUSTRIES GROUP HOLDINGS LIMITED 科利實業控股集團有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1455)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting (the ‘‘AGM’’) of Fourace Industries Group Holdings Limited (the ‘‘Company’’) will be held at Crystal Room IV, 3/F, Panda Hotel, 3 Tsuen Wah Street, Tsuen Wan, Hong Kong on Monday, 9 August 2021 at 11:00 a.m. for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions as ordinary resolutions:

1. To receive and consider the audited consolidated financial statements of the Company and its subsidiaries and the reports of the directors (the ‘‘Directors’’) and the independent auditors of the Company for the year ended 31 March 2021;

2. To declare a final dividend of HK3.8 cents per ordinary share of the Company (the ‘‘Share(s)’’) for the year ended 31 March 2021;

3. (a) (i) To re-elect Ms. Li Sen Julian as an executive Director;

   • (ii) To re-elect Ms. Tang Suk Yee as an executive Director;

4. (b) To authorise the board of Directors (the ‘‘Board’’) to fix the remuneration of the Directors;

5. To re-appoint PricewaterhouseCoopers as auditors of the Company and to authorise the Board to fix their remuneration; and

To consider and if thought fit, to pass with or without modification the following resolutions as ordinary resolutions:

1. ‘‘THAT:

2. (i) subject to paragraph (iii) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and otherwise deal with additional Shares in the capital of the Company, and to make or grant offers, agreements or options (including any warrants, bonds, notes and debentures conferring any rights to subscribe for or otherwise receive Shares) which may require the exercise of such powers be and is hereby generally and unconditionally approved;

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NOTICE OF ANNUAL GENERAL MEETING

• (ii) the approval in paragraph (i) above shall be in addition to any other authorization given to the Directors and shall authorize the Directors during the Relevant Period to make or grant offers, agreements or options (including any warrants, bonds, notes and debentures conferring any rights to subscribe for or otherwise receive Shares) which may require the exercise of such power after the end of the Relevant Period;

• (iii) the aggregate number of Shares allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to options or otherwise) by the Directors during the Relevant Period pursuant to the approval in paragraph (i) or (ii) of this resolution no. 5 above, otherwise than pursuant to:

• (1) a Rights Issue (as hereinafter defined);

• (2) the grant or exercise of any option under any share option scheme of the Company (if applicable) or any other option, scheme or similar arrangements for the time being adopted for the grant or issue to the Directors, officers and/or employees of the Company and/or any of its subsidiaries and/or other eligible participants specified thereunder of options to subscribe for Shares or rights to acquire Shares;

• (3) any scrip dividend or similar arrangement providing for the allotment and issue of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association of the Company (the ‘‘Articles of Association’’) in force from time to time; or

• (4) any issue of Shares upon the exercise of rights of subscription or conversion under the terms of any existing convertible notes issued by the Company or any existing securities of the Company which carry rights to subscribe for or are convertible into Shares,

shall not exceed 20% of the total number of the issued share capital of the Company as at the date of passing this resolution and the approval shall be limited accordingly; and

• (iv) for the purpose of this resolution no. 5:

• (1) ‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earliest of:

  • a. the conclusion of the next annual general meeting of the Company;

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

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NOTICE OF ANNUAL GENERAL MEETING

     - c. the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting; and

  - (2) ‘‘Rights Issue’’ means an offer of Shares, or an offer or issue of warrants, options or other securities which carry a right to subscribe for Shares, open for a period fixed by the Directors to holders of Shares whose names appear on the register of members on a fixed record date in proportion to their holdings of Shares (subject to such exclusion or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or, having regard to any restrictions or obligations under the laws of, or the requirements of, or the expense or delay which may be involved in determining the exercise or extent of any restrictions or obligations under the laws of, or the requirements of, any jurisdiction applicable to the Company, any recognized regulatory body or any stock exchange applicable to the Company).’’

1. ‘‘THAT:

2. (i) subject to paragraph (ii) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to repurchase Shares on The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) or on any other stock exchange on which the Shares may be listed and recognized for this purpose by the Securities and Futures Commission of Hong Kong and the Stock Exchange in accordance with all applicable laws including The Codes on Takeovers and Mergers and Share Buy-Backs and The Rules Governing the Listing of Securities on the Stock Exchange, be and is hereby generally and unconditionally approved;

3. (ii) the aggregate number of Shares, which may be repurchased pursuant to the approval in paragraph (i) above of this resolution no. 6 during the Relevant Period shall not exceed 10% of the total number of the issued share capital of the Company as at the date of passing of this resolution no. 6, and the said approval shall be limited accordingly; and

4. (iii) for the purpose of this Resolution:

‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earliest of:

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

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

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NOTICE OF ANNUAL GENERAL MEETING

• (3) the revocation or variation of the authority given under this resolution by an ordinary resolution of the shareholders of the Company in general meeting.’’

• ‘‘THAT conditional upon the passing of the resolutions nos. 5 and 6, the general mandate referred to in the resolution no. 5 be and is hereby extended by the addition to the aggregate number of Shares which may be allotted, issued or otherwise dealt with or agreed conditionally or unconditionally to be allotted, issued or otherwise dealt with by the Directors pursuant to such general mandate of an amount representing the aggregate number of Shares repurchased or otherwise acquired by the Company pursuant to the general mandate pursuant to resolution no. 6, provided that such extended amount shall not exceed 10% of the total number of the issued shares of the Company as at the date of passing this resolution.’’

For and on behalf of the Board Fourace Industries Group Holdings Limited Li Shu Yeh Chairman and chief executive officer

Hong Kong, 9 July 2021

Notes:

1. All resolutions at the AGM will be taken by poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the ‘‘Listing Rules’’) and the Company’s articles of association, except where the Chairman, in good faith, decides to allow a resolution that relates purely to a procedural or administrative matter to be voted on by a show of hands pursuant to the Listing Rules. The results of the poll will be published on the websites of Hong Kong Exchanges and Clearing Limited (www.hkexnews.hk) and the Company (www.fourace.com) in accordance with the Listing Rules.

2. Any shareholder of the Company entitled to attend and vote at the AGM is entitled to appoint one or more proxies to attend and, on a poll, vote in his/her/its stead. A proxy need not be a shareholder of the Company. If more than one proxy is so appointed, the appointment shall specify the number and class of shares in respect of which each such proxy is so appointed.

3. Where there are joint holders of any share any one of such joint holders may vote, either in person or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders be present at any meeting the vote of the senior holder who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose seniority shall be determined by the order in which the names stand in the register of members in respect of the joint holding.

4. In order 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 of that power of attorney or authority, must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for the AGM or the adjourned meeting (as the case may be). Completion and return of the form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the AGM and, in such event, the instrument appointing a proxy shall be deemed to be revoked proxy will not preclude a member from attending the AGM and voting in person if he so wishes.

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NOTICE OF ANNUAL GENERAL MEETING

1. For determining the entitlement to attend and vote at the AGM, the register of members of the Company will be closed Wednesday, 4 August 2021 to Monday, 9 August 2021 (both dates inclusive), during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the AGM, unregistered holders of shares of the Company shall ensure that all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Tuesday, 3 August 2021.

2. For determining the entitlement to the proposed final dividend (subject to approval by the shareholders at the AGM), the register of members of the Company will be closed from Monday, 16 August 2021 to Wednesday, 18 August 2021 (both dates inclusive), during which period no transfer of shares will be registered. In order to qualify for the proposed final dividend, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Friday, 13 August 2021.

3. References to time and dates in this notice are to Hong Kong time and dates.

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