Gilston Group Limited — Proxy Solicitation & Information Statement 2013

Jan 4, 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in KEE Holdings Company Limited , you should at once hand this circular to the purchaser or the transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or the transfer was effected for transmission to the purchaser or the transferee.

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

KEE HOLDINGS COMPANY LIMITED 開易控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2011)

MAJOR TRANSACTION: MAIN CONTRACTOR CONTRACT REGARDING THE CONSTRUCTION OF THE INDUSTRIAL PARK

Financial Adviser to KEE Holdings Company Limited

==> picture [36 x 36] intentionally omitted <==

Shenyin Wanguo Capital (H.K.) Limited

A letter from the Board is set out on pages 3 to 8 of this circular.

4 January 2013

CONTENTS

	Pages
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Appendix I – Financial Information of the Group. . . . . . . . . . . . . . . . . . . . . . .	9
Appendix II – General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12

– i –

DEFINITIONS

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

• “Board” the board of Directors from time to time

• “Company” KEE Holdings Company Limited （開易控股有限公司）, an exempted company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the main board of the Stock Exchange

• “connected persons” has the meaning ascribed to this term under the Listing Rules

• “Director(s)” the director(s) of the Company from time to time

• “Group” the Company and its subsidiaries from time to time

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

• “Industrial Park” KEE Garment Accessories Industrial Park with the estimated gross construction area (i.e. gross floor area) of approximately 40,000 square meters, including manufacturing workshop and warehouse, staff dormitory and canteen, sewage treatment unit and other facilities, situated at the Eastern side of Longjin Road

• （龍井路以東）and the Western side of Keji Road No.4 （科技四路以西）of the Jingmen Economic Development Zone（荊門經濟開發區）in Hubei Province, PRC

• “KEE Guangdong”

• 開易（廣東）服裝配件有限公司 (KEE (Guangdong) Garment Accessories Limited[#] ), a wholly-owned subsidiary of the Company, established in Foshan City, Guangdong Province of the PRC with limited liability

• “KEE Jingmen”

• 開易（荊門）服裝配件有限公司 (KEE (Jingmen) Garment Accessories Limited[#] ), a non-wholly owned subsidiary of KEE Guangdong, established on 23 September 2011 in Jingmen City, Hubei Province of the PRC with limited liability

• “Latest Practicable Date”

• 2 January 2013, being the latest practicable date prior to the printing of this circular for ascertaining certain information herein

• “Listing Rules”

the Rules Governing the Listing of Securities on the Stock Exchange

– 1 –

DEFINITIONS

“Main Contractor”	中輝建設集團有限公司 (Zhonghui Construction	Group
	Co., Ltd.#), a company established in the PRC with
	limited liability
“Main Contractor Contract”	a construction contract dated 30 November 2012 and
	entered into between KEE Jingmen and the	Main
	Contractor in relation to the construction of the
	Industrial Park
“PRC”	the People’s Republic of China, which for the purpose
	of this circular, excludes Hong Kong, the	Macau
	Special Administrative Region of the People’s Republic
	of China and Taiwan
“Service Fee”	the service fee payable to the Main Contractor	(or its
	authorised person) by KEE Jingmen at the rate	of 3%
	of the fees for separate contracted work
“SFO”	The Securities and Futures Ordinance (Chapter	571 of
	the Laws of Hong Kong)
“Shanghai Lingfeng”	上海翎峰貿易有限公司 (Shanghai Lingfeng Trading
	Limited#), a company established under the laws	of the
	PRC with limited liability
“Shareholders”	the holders of the issued Shares from time to time
“Shares”	ordinary shares of HK$0.10 each in the share capital of
	the Company
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“HK$”	Hong Kong dollars, the lawful currency of Hong	Kong
“RMB”	Renminbi, the lawful currency of the PRC
“%”	per cent.

In this circular, save as otherwise provided, amounts quoted in RMB have been converted into HK$ at the rate of RMB1 to HK$1.233. Such exchange rate has been used, where applicable, for the purpose of illustration only and does not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all.

• Translation for identification purpose only

– 2 –

LETTER FROM THE BOARD

KEE HOLDINGS COMPANY LIMITED 開易控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock code: 2011)

Executive Directors:

Mr. Xu Xipeng Mr. Xu Xinan Mr. Chow Hoi Kwang, Albert

Non-executive Director:

Registered office: 3rd Floor, Queensgate House 113 South Church Street P.O. Box 10240 Grand Cayman KY1-1002 Cayman Islands

Mr. Yang Shaolin

Independent non-executive Directors:

Mr. Lin Bin Mr. Kong Hing Ki Mr. Tam Yuk Sang, Sammy

Headquarters in the PRC: Xiahengtian Industrial Zone Shachong Lishui Town Nanhai District Foshan Guangdong Province, PRC

Principal place of business in Hong Kong: Room 2101A, Tower 2 China Hong Kong City 33 Canton Road Tsimshatsui Kowloon, Hong Kong

4 January 2013

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION: MAIN CONTRACTOR CONTRACT REGARDING THE CONSTRUCTION OF THE INDUSTRIAL PARK

INTRODUCTION

Reference is made to the announcement of the Company dated 30 November 2012. The purpose of this circular is to provide you with the information relating to, among other things, further details of the Main Contractor Contract together with other requirements under the Listing Rules.

– 3 –

LETTER FROM THE BOARD

On 30 November 2012 (after trading hours), KEE Jingmen, a non-wholly owned subsidiary of the Company, entered into the Main Contractor Contract with the Main Contractor for the construction of the Industrial Park at the total project cost of RMB60,771,878.46 (equivalent to approximately HK$74.9 million).

It was anticipated that the Industrial Park will be made available for use at the end of 2013. The major purpose of the Industrial Park is for the Group to integrate into the manufacturing of garment accessories. Salient terms of the Main Contractor Contract are set out below:

THE MAIN CONTRACTOR CONTRACT

Date: 30 November 2012

Parties:

(i) KEE Jingmen, a non-wholly owned subsidiary of the Company, as the owner; and (ii) The Main Contractor, as the contractor

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Main Contractor and its ultimate beneficial owner are third parties independent of the Company and the connected persons of the Company.

Project location:

A piece of land located at the Eastern side of Longjin Road（龍井路以東）and the Western side of Keji Road No. 4 （科技四路以西） of the Jingmen Economic Development Zone（荊門經濟開發區）in Hubei Province, PRC

Project content:

The estimated gross construction area (i.e. gross floor area) of the Industrial Park is approximately 40,000 square metres, including manufacturing workshop and warehouse, staff dormitory and canteen, sewage treatment unit and other facilities

Scope of work:

Civil work, decoration work and outside infrastructure facilities work under the construction drawings of the Main Contractor Contract

Contract duration:

300 days

– 4 –

LETTER FROM THE BOARD

Project cost:

Service Fee:

Payment terms:

RMB60,771,878.46 (equivalent to approximately HK$74.9 million) inclusive of all labour, material and equipment costs, costs and expenses in respect of permits required for the development and construction work and repair work during warranty period but excluding the Service Fee, with adjustment provisions for any variation of work

If separate construction work would be conducted by other independent third parties, the Main Contractor shall provide cooperation and assistance for completion of the said separate construction work, and KEE Jingmen shall pay the Main Contractor (or its authorised person) a sum at the rate of 3% of the fees for such separate construction work as the service fee to the Main Contractor.

Prepayment:

KEE Jingmen shall pay the Main Contractor a project prepayment in the sum of RMB2,000,000 within 5 days upon the commencement date of the construction work agreed in the Main Contractor Contract, which will offset part of the project progress payments as mentioned below.

Project progress payments:

KEE Jingmen shall pay the Main Contractor (or its authorised person) a project progress payment each month for 80% of the total settlement cost for the amount of work completed in the month and KEE Jingmen shall pay up to 90% of the total settlement cost within 15 business days after satisfying the quality of the completed work is up to standard. KEE Jingmen shall pay up to 95% of the total settlement cost after the construction project’s completion file is lodged with KEE Jingmen and the remaining 5% shall serve as warranty payment.

60% of the warranty payment shall be returned (without interest) 2 years after the inspection and acceptance of completed work. The remaining 40% of the warranty payment shall be returned (without interest) 5 years after the inspection and acceptance of completed work.

– 5 –

LETTER FROM THE BOARD

Performance guarantee sum:

The Main Contractor shall pay to KEE Jingmen a performance guarantee in the sum of RMB5,000,000 within 5 days upon the signing of the Main Contractor Contract and the performance guarantee sum shall be returned (without interest) to the Main Contractor within 15 days after the inspection and acceptance of the completed works.

Progress report: The Main Contractor shall provide monthly reports on the progress of the construction.

Effective date of the Main 30 November 2012 Contractor Contract:

Scheduled completion date for the 31 August 2013 construction work:

The Main Contractor Contract has been awarded by the public tender to the Main Contractor who has building engineering general contract certificate qualification in the PRC. KEE Jingmen has assessed the tender price, construction qualifications and relevant construction experience of all the tenderers in order to determine the successful tenderer.

The Directors consider that the total project cost of the Main Contractor Contract (which was determined by tender process in accordance with the applicable rules and regulations of the PRC) is fair and reasonable and is in the interests of the Company and the Shareholders as a whole and the terms and conditions of the Main Contractor Contract have been negotiated after arm’s length negotiations between the parties and are on normal commercial terms.

FUNDING

The total project cost is expected to be funded by the internal resources of the Group. As at the Latest Practicable Date, nil cost had been paid to the Main Contractor.

INFORMATION OF THE GROUP, KEE JINGMEN AND THE MAIN CONTRACTOR

The Company is an investment holding company. The Group is principally engaged in the business of design, manufacture and sale of zipper products and other garment accessories in the PRC.

KEE Jingmen is a domestic company established on 23 September 2011 with limited liability under the laws of the PRC and is owned as to 80% by KEE Guangdong and as to 20% by Shanghai Lingfeng. KEE Jingmen intends to build a production base in 荊門經濟開發 區 (Jingmen Economic Development Zone) in Jingmen City of Hubei Province in the PRC, which will principally produce flat knit ribs, zippers, and other garment accessories.

– 6 –

LETTER FROM THE BOARD

The Main Contractor is a construction company established in the PRC and is principally engaged in construction contracting business such as building construction. The Main Contractor has building engineering general contract certificate qualification in the PRC. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, the Main Contractor and its ultimate beneficial owner are third parties independent of the Company and the connected persons of the Company.

REASONS FOR AND BENEFITS OF THE CONSTRUCTION OF THE INDUSTRIAL PARK

KEE Jingmen intends to construct the Industrial Park in 荊門經濟開發區 (Jingmen Economic Development Zone) in Jingmen City of Hubei Province in the PRC, in order to become involved in the production of flat knit ribs, zippers and other garment accessories and to integrate the Group’s garment accessories business. The Industrial Park is part of the overall development plan of the Group in the Jingmen Economic Development Zone. Upon completion of the construction, it is expected to provide to the Group an additional annual manufacturing capacity of approximately 40 million pieces of finished zippers, approximately 80 million pieces of sliders and approximately 13 million pieces of flat knit ribs, which will help the Group to reach its goal by raising its market share, as well as strengthen the competitiveness of the products of the Group in the PRC. The Directors believe that KEE Jingmen, which is strategically located in Hubei Province, will facilitate the Group’s expansion of markets in the central and western regions of the PRC and will establish long-term strategic demand-supply relations with the certain apparel brands and other clients of the PRC and thus will provide strong support to a sustained development of the business of the Group.

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios in respect of the Main Contractor Contract exceed 25% but are less than 100% under rule 14.08 of the Listing Rules, the entering into of the Main Contractor Contract constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting, announcement and shareholders’ approval requirements as set out in Chapter 14 of the Listing Rules.

So far as the Directors are aware after making reasonable enquires, no Shareholder is required to abstain from voting at an extraordinary general meeting of the Shareholders for such approval.

Under rule 14.40 of the Listing Rules, a major transaction must be made conditional on the approval by shareholders of an issuer. In this regard and in lieu of holding an extraordinary general meeting of the Shareholders to approve the Main Contractor Contract, the Company has, under the Listing Rules, obtained the written approval on the Main Contractor Contract from Nicco Worldwide Inc., which holds more than 50% in nominal value of the issued share capital of the Company giving the right to attend and vote at general meeting of the Company. As at the Latest Practicable Date, Nicco Worldwide Inc.

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LETTER FROM THE BOARD

was beneficially owned as to 49.75% by Mr. Xu Xipeng and as to 49.75% by Mr. Xu Xinan, the younger brother of Mr. Xu Xipeng, and was interested in 306,490,000 Shares, representing approximately 73.85% of the issued share capital of the Company.

FURTHER INFORMATION

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

Yours faithfully, For and on behalf of the Board KEE Holdings Company Limited Xu Xipeng Chairman

– 8 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group for (i) the period ended 30 June 2012 is disclosed in the interim report of the Company published on 29 August 2012; (ii) the year ended 31 December 2011 is disclosed in the annual report of the Company published on 24 April 2012; (iii) the year ended 31 December 2010 is disclosed in the annual report of the Company published on 25 April 2011; and (iv) the year ended 31 December 2009 is disclosed in the prospectus of the Company published on 31 December 2010, all of which have been published on the website of the Stock Exchange (www.hkex.com.hk) and the website of the Company (www.kee.com.cn).

2. STATEMENT OF INDEBTEDNESS OF THE GROUP

As at the close of business on 30 November 2012, being the latest practicable date for the purpose of this statement of indebtedness, the Group had no outstanding loans. As at the close of business on 30 November 2012, the Group had unutilised bank facilities amounting to RMB86 million. At the same time, certain lease prepayments and building with net book value of RMB26.7 million of the Group were pledged as securities for an unutilised bank facility of RMB26 million.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, the Group did not have outstanding at the close of business on 30 November 2012 any loan liabilities under acceptances or acceptable credits, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

3. WORKING CAPITAL OF THE GROUP

The Directors are of the opinion that, after taking into account the financial resources available to the Group, including the internally generated funds and the present available banking facilities, the Group will have sufficient working capital for its present requirements for at least the next twelve months from the Latest Practicable Date, in the absence of any unforeseen circumstances.

4. MATERIAL ADVERSE CHANGE

As disclosed in the interim report for the six months ended 30 June 2012, the decreases in the Group’s turnover and profit attributable to Shareholders for the six months ended 30 June 2012 was approximately 22.8% and 57.7% on the corresponding period in 2011 respectively.

Further, as disclosed in the announcement of the Company dated 21 December 2012, the Board has made a preliminary assessment and expects a decline in the Group’s turnover and profit attributable to Shareholders for the year ended 31 December 2012 compared to the year ended 31 December 2011, due to reasons including but not limited to the decline in economic growth in the PRC and the de-stocking policy adopted by the apparel industry in the PRC, which affected demand for zipper products. This information was not based on any figure or information that had been audited or reviewed by the Company’s auditors. The audited financial results of the Group for the financial year ended 31 December 2012 are

– 9 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

expected to be announced prior to the end of March 2013. Further management discussion and analysis on the results of the Group will be set out in the annual results announcement to be published then.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011 (being the date to which the latest published audited consolidated financial statements of the Group were made up).

5. FINANCIAL IMPACT OF THE TRANSACTION

The total project cost is expected to be funded by the internal resources of the Group. This will result in an increase in the Group’s fixed assets and a decrease in cash. There will not be any immediate impact on the earnings of the Group. Since the total project cost is expected to be financed by the internal resources of the Group, there will not be any impact on the liabilities of the Group.

As at 30 June 2012, the cash and cash equivalents of the Group amounted to HK$101.33 million. Pursuant to the Main Contractor Contract, the project cost, being approximately RMB60.77 million (approximately HK$74.9 million), will be settled in accordance with the amount of work completed each month. The entering into of the Main Contractor Contract is not expected to have any material adverse impact on the Group’s cash flow position or its business operations.

Upon completion of the construction of the Industrial Park, the annual production capacity of the Group will increase, which is expected to generate additional revenue for the Group. The construction of the Industrial Park is not expected to have any material adverse impact on earnings, assets and liabilities of the Group.

6. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

Along with the continuous economic growth in the PRC, consumer purchasing power will gradually increase, thus leading to increasing demands for products that make use of zippers such as apparel, bags, upholstery furnishings, camping equipment and sports equipment, and increasing expectations on quality for zippers.

However, in 2012, the economic growth of the PRC declined, which adversely affected the end consumption. The global financial crisis which has lasted for several years, as well as the impact from the European sovereign debt crisis, led to the slow down of growth in consumption in the apparel industry in the PRC. At the same time, the apparel industry in the PRC has adopted a de-stocking policy to reduce the high stocking pressure. All of these factors led to the decrease in demand for quality zippers in the short term.

In order to effectively respond to the slow down of economic growth, the Chinese government gradually adopted the policy of “expanding domestic demands and stabilising the growth rate”. These measures have already made initial progress, and will gradually continue to achieve material effectiveness.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

In addition, the Directors actively aim to further strengthen the Group’s position in the quality zipper market. The Group will continue to strive to achieve growth of the business and ensure that the Group remains competitive through (i) investment in product design, and research and development to broaden the variety of zipper products; (ii) development or acquisition of machinery and equipment to enhance the automation of the production process in order to increase production efficiency; (iii) targeted marketing to apparel brand owners to increase brand awareness in the market by providing regular guidance and training sessions on the use of new materials and fashion trends to sales executives and raising their awareness of the Group’s service-and solution-oriented business approach to sales and marketing; and (iv) recruiting more sales executives, implementing sales network with multi-position layout, actively expanding new markets and expanding business scale.

At the same time, the Group is also promoting the development of other garment accessories businesses, such as flat knit rib, so as to raise the market share and strengthen the competitiveness of the Group’s products.

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GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the 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

(a) Director’s interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, the following Director had or was deemed to have interests or short positions in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provision of the SFO); or (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, to be notified to the Company and the Stock Exchange to be disclosed in this circular.

			Interests in		Approximate
			number of		percentage
	Nature of	No. of	underlying		of issued
Name of Director	interest	Shares held	Shares	Position	share capital
Mr. Xu Xipeng	Interest in	306,490,000	–	Long	73.85%
	controlled	(Note 1)
	corporation
Mr. Xu Xinan	Interest in	306,490,000	–	Long	73.85%
	controlled	(Note 1)
	corporation
Mr. Chow Hoi	Beneficial	–	380,000	Long	0.09%
Kwang, Albert	owner		(Note 2)
Mr. Yang Shaolin	Beneficial	–	380,000	Long	0.09%
	owner		(Note 2)
Mr. Lin Bin	Beneficial	–	380,000	Long	0.09%
	owner		(Note 2)

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APPENDIX II

GENERAL INFORMATION

			Interests in		Approximate
			number of		percentage
	Nature of	No. of	underlying		of issued
Name of Director	interest	Shares held	Shares	Position	share capital
Mr. Kong Hing Ki	Beneficial	–	380,000	Long	0.09%
	owner		(Note 2)
Mr. Tam Yuk Sang,	Beneficial	–	380,000	Long	0.09%
Sammy	owner		(Note 2)

Notes:

1. These Shares are held by Nicco Worldwide Inc., which is beneficially owned as to 49.75% by Mr. Xu Xipeng and as to 49.75% by Mr. Xu Xinan. Therefore, Mr. Xu Xipeng and Mr. Xu Xinan are deemed to be interested in the 306,490,000 Shares held by Nicco Worldwide Inc. under Part XV of the SFO.

2. All interests in underlying Shares of the Company are interests in share options of the Company granted under the share option scheme of the Company, all of which may be exercised during the period from the day after the 2012 annual results being announced to the day the 2017 annual results being announced.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests or short positions in the Shares, underlying Shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules to be notified to the Company and the Stock Exchange to be disclosed in this circular.

(b) Persons who have an interest or short position which is discloseable under Divisions 2 and 3 of Part XV of the SFO and substantial Shareholders

So far as is known to the Directors and the chief executive of the Company, as at the Latest Practicable Date, the following persons (not being Directors or chief executive of the Company) had, or were deemed to have, interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO,

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GENERAL INFORMATION

APPENDIX II

or will be, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Group:

				Approximate
		No. of		percentage
Name of		Shares		of issued
Shareholders	Nature of interest	**held **	Position	share capital
Nicco Worldwide	Beneficial owner	306,490,000	Long	73.85%
Inc. (Note 4)		(Note 1)
Mr. Xu Xipeng	Interest in controlled	306,490,000	Long	73.85%
	corporation	(Note 1)
Mr. Xu Xinan	Interest in controlled	306,490,000	Long	73.85%
	corporation	(Note 1)
Ms. Ke Saixia	Interest of spouse	306,490,000	Long	73.85%
		(Note 2)
Ms. Lu Jiehong	Interest of spouse	306,490,000	Long	73.85%
		(Note 3)

Notes:

1. The 306,490,000 Shares are held by Nicco Worldwide Inc., which is beneficially owned as to 49.75% by Mr. Xu Xipeng and as to 49.75% by Mr. Xu Xinan. Therefore, Mr. Xu Xipeng and Mr. Xu Xinan are deemed to be interested in the 306,490,000 Shares held by Nicco Worldwide Inc. under Part XV of the SFO.

2. The 306,490,000 Shares are held by Nicco Worldwide Inc., which is beneficially owned as to 49.75% by Mr. Xu Xipeng. Therefore, Ms. Ke Saixia, being Mr. Xu Xipeng’s spouse, is deemed to be interested in the 306,490,000 Shares held by Nicco Worldwide Inc. under Part XV of the SFO.

3. The 306,490,000 Shares are held by Nicco Worldwide Inc., which is beneficially owned as to 49.75% by Mr. Xu Xinan. Therefore, Ms. Lu Jiehong, being Mr. Xu Xinan’s spouse, is deemed to be interested in the 306,490,000 Shares held by Nicco Worldwide Inc. under Part XV of the SFO.

4. As at the Latest Practicable Date, Mr. Xu Xipeng and Mr. Xu Xinan, both executive Directors, are the directors of Nicco Worldwide Inc.

Save as disclosed above, as at the Latest Practicable Date, the Directors were not aware of any other person (other than the Directors and the chief executive of the Company) who had, or was deemed to have, interest or short positions in the Shares or underlying Shares (including any interests in options in respect of such share capital), which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

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GENERAL INFORMATION

APPENDIX II

(c) Director’s interests in contracts and assets

As at the Latest Practicable Date,

• (i) There was no contract or arrangement entered into by any member of the Group subsisting at the date of this circular in which any Director was materially interested and which was significant to the business of the Group; and

• (ii) None of the Directors had any direct or indirect interest in any assets which had been acquired, disposed of by or leased to, or which were proposed to be acquired, disposed of by or leased to, any member of the Group since 31 December 2011, being the date to which the latest published audited consolidated financial statements of the Group were made up.

3. SERVICE CONTRACTS

Each of Mr. Xu Xipeng and Mr. Xu Xinan has entered into a service agreement dated 14 December 2010 with the Company for a period of three years commencing on 1 December 2010 unless terminated in accordance with the terms of the service agreements. Under the service agreements, the initial annual salary payable by the Company to Mr. Xu Xipeng and Mr. Xu Xinan are HK$528,000 and HK$475,000 respectively and may, subject to the discretion of the Board, be increased. Each of Mr. Xu Xipeng and Mr. Xu Xinan will also be entitled to a discretionary bonus as decided by the Board. The amount of the annual salary increment and the bonus payable under such service agreements is at the discretion of the Board, provided that the respective parties to such service agreements shall abstain from voting and not counted in the quorum in respect of any such determination of the Board in relation to him.

Mr. Yang Shaolin has entered into a service agreement dated 30 March 2012 with the Company for a period of three years unless terminated in accordance with the terms of the service agreement. The initial annual salary for Mr. Yang Shaolin is HK$120,000.

Mr. Chow Hoi Kwang, Albert has entered into a service agreement dated 30 March 2012 with the Company for a period of three years unless terminated in accordance with the terms of the service agreement. The initial annual salary for Mr. Chow Hoi Kwang, Albert is HK$300,000.

Each of Mr. Lin Bin, Mr. Kong Hing Ki and Mr. Tam Yuk Sang, Sammy has signed a letter of appointment dated 14 December 2010 with the Company for a period of three years unless terminated in accordance with the terms of the letters of appointment. The initial annual director’s fee for Mr. Lin Bin is HK$140,000, and for each of Mr. Kong Hing Ki and Mr. Tam Yuk Sang, Sammy is HK$120,000.

Save as disclosed above, as at the Latest Practicable Date, no Director has or had a service contract with any member of the Group which is not determinable within one year without payment of compensation other than statutory compensation.

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GENERAL INFORMATION

APPENDIX II

4. LITIGATION

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

5. COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors and their respective associates had any interests in any business which competes or was likely to compete, either directly or indirectly, with the Group’s business.

6. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business of the Group) were entered into by members of the Group within the two years immediately proceeding the date of this circular and up to the Latest Practicable Date and are or may be material:

• (i) the placing underwriting agreement dated 6 January 2011 entered into among the Company, the executive Directors of the Company, Nicco Worldwide Inc., Mr. Xu Xipeng, Mr. Xu Xinan and Shenyin Wanguo Capital (H.K.) Limited;

• (ii) the land use right transfer agreement dated 13 January 2012 entered into between KEE Jingmen and Jingmen Municipal People’s Government （荊門市人民政府） pursuant to which KEE Jingmen acquired a portion of land for a total consideration of RMB10.56 million;

• (iii) the land use right transfer agreement dated 6 August 2012 entered into between Kee Jingmen and Jingmen Municipal People’s Government （荊門市人民政府） pursuant to which KEE Jingmen acquired a portion of land for a total consideration of RMB13.6 million;

• (iv) the capital increase agreement dated 31 August 2012 entered into among KEE Jingmen, KEE Guangdong and Shanghai Lingfeng pursuant to which the registered capital of KEE Jingmen will be increased from RMB50,000,000 to RMB100,000,000; and

• (v) the Main Contractor Contract.

7. MISCELLANEOUS

• (a) The Company’s Hong Kong share registrar and transfer office of the Company is Tricor Investor Services Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.

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GENERAL INFORMATION

APPENDIX II

• (b) The joint company secretaries of the Company are Mr. Xu Haizhou and Ms. Li Yan Wing, Rita. Mr. Xu Haizhou does not possess the specified qualifications as required under Rules 3.28 and 8.17 of the Listing Rules. The Stock Exchange has granted on 22 June 2012 a waiver from strict compliance with the requirements of Rules 3.28 and 8.17 of the Listing Rules in relation to Mr. Xu Haizhou’s eligibility to act as the joint company secretary for a three-year period starting from 29 June 2012, on the condition that, among other things, Mr. Xu Haizhou will be assisted by Ms. Li Yan Wing, Rita during the waiver period. Ms. Li Yan Wing, Rita is an associate of both The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries.

• (c) The registered office of the Company is 3rd Floor, Queensgate House, 113 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands.

• (d) The English text of this circular shall prevail over the Chinese text.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours (Saturdays and public holidays excepted) at the principal place of business of the Company in Hong Kong at Room 2101A, Tower 2, China Hong Kong City, 33 Canton Road, Tsimshatsui, Kowloon, Hong Kong from the date of this circular up to and including 18 January 2013:

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

• (b) the annual reports of the Company and its subsidiaries for the two financial years ended 31 December 2010 and 2011;

• (c) the interim report of the Company and its subsidiaries for the period ended 30 June 2012;

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

• (e) the service contracts referred to in the paragraph headed “Service Contracts” in this appendix; and

• (f) this circular.

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