Kantone Holdings Limited — Proxy Solicitation & Information Statement 2017

Nov 8, 2017

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 to be taken, 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 Kantone Holdings Limited, you should at once hand this circular with the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

This circular is for information purpose only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

==> picture [72 x 72] intentionally omitted <==

KANTONE HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1059)

PROPOSALS FOR

RE-ELECTION OF DIRECTORS, GENERAL MANDATES TO ISSUE AND BUY BACK SHARES, PROPOSED CAPITAL REORGANISATION AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of Kantone Holdings Limited to be held at Rooms 1 and 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on Thursday, 28 December 2017 at 4:30 p.m. is set out on pages 27 to 33 of this circular. Whether you are able to attend the annual general meeting of the Company or not, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the annual general meeting of the Company (i.e. at or before 4:30 p.m. on Tuesday, 26 December 2017 (Hong Kong time) 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 in person at the annual general meeting of the Company or any adjourned meeting (as the case may be) if you so wish and in such event, the form of proxy shall be deemed to be revoked.

9 November 2017

CONTENTS

	Page
EXPECTED TIMETABLE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
APPENDIX I — DETAILS OF DIRECTORS PROPOSED
FOR RE-ELECTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19
APPENDIX II — EXPLANATORY STATEMENT. . . . . . . . . . . . . . . . . . . . . . .	23
AGM NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27

— i —

EXPECTED TIMETABLE

The expected timetable for the implementation of the Capital Reorganisation set out below is indicative only:

Event

2017

Latest date and time to

lodge transfer documents . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Wednesday, 20 December

Closure of register of members of the Company

for determining the identity of the Shareholders

who are entitled to attend and vote at the AGM . . . . . . . . . . . .Thursday, 21 December to Thursday, 28 December (both days inclusive)

Latest date and time for lodging forms

of proxy for the AGM . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Tuesday, 26 December

Date and time of the AGM . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Thursday, 28 December

Announcement of voting results of the AGM. . . . . . . . . . . . . . . . . .Thursday, 28 December

The following events are conditional on the fulfillment of the conditions for the implementation of the Capital Reorganisation:

Event 2018

Expected effective date* of the Capital Reorganisation . . . . . . . . . . . Wednesday, 28 March

First day for free exchange of existing share

certificates for the Existing Shares into

new share certificates for the New Shares. . . . . . . . . . . . . . . . . . . . Wednesday, 28 March

Commencement of dealings in New Shares . . . . . . . . . .9:00 a.m. on Wednesday, 28 March

Original counter for trading in Existing Shares (in the form of existing share certificates and in board lot size of 3,000) temporarily closes . . . . . . .9:00 a.m. on Wednesday, 28 March

Temporary counter for trading in New Shares (in the form of existing share certificates and

in board lot size of 600) opens . . . . . . . . . . . . . . . . . .9:00 a.m. on Wednesday, 28 March

— 1 —

EXPECTED TIMETABLE

Original counter for trading in New Shares

(in the form of new share certificates and

in board lot size of 3,000) re-opens . . . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 16 April

Parallel trading in New Shares

(in the form of new share certificates and

existing share certificates) commences . . . . . . . . . . . . . . . 9:00 a.m. on Monday, 16 April

Designated broker starts to stand in the market to provide

matching services for odd lots of New Shares . . . . . . . . . . . . . . . . . . . Monday, 16 April

Temporary counter for trading in the New Shares

(in the form of existing share certificates and

in board lot size of 600) closes. . . . . . . . . . . . . . .market closing time on Monday, 7 May

Parallel trading in the New Shares

(in the form of new share certificates and

existing share certificates) ends . . . . . . . . . . . . . .market closing time on Monday, 7 May

Designated broker ceases to stand in the market

to provide matching services for odd lots

of the New Shares . . . . . . . . . . . . . . . . . . . . . . . .market closing time on Monday, 7 May

Last day for free exchange of existing share certificates

for the Existing Shares into new share certificates

for the New Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on Wednesday, 9 May

All times and dates specified in the timetable above refer to Hong Kong times and dates. Dates or deadlines specified in expected timetable above depend on the results of the AGM and are therefore for indicative purpose only.

• The expected effective date for the Capital Reorganisation is subject to the relevant conditions precedent (including Shareholders’ approval and approval from the Court) being fulfilled.

Dates or deadlines specified in the expected timetable above may be extended or varied due to additional time required for compliance with regulatory requirements in the Cayman Islands and/or with any requirements imposed by the Court or varied by the Company. Any consequential changes to the expected timetable will be published or notified to Shareholders as and when appropriate.

— 2 —

DEFINITIONS

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

• “AGM Notice”

the notice convening the AGM as set out on pages 27 to 33 of this circular

• “AGM”

the annual general meeting of the Company to be held at Rooms 1 and 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on Thursday, 28 December 2017 at 4:30 p.m.

• “Articles of Association” the articles of association of the Company, as amended from time to time

• “associates” having the meaning ascribed thereto in the Listing Rules

• “Board”

• the board of Directors

• “Business Day”

a day (other than a Saturday, Sunday and any day on which a tropical cyclone warning no. 8 or above is hoisted or on which a “black” rainstorm warning is hoisted between 9:00 a.m. and 5:00 p.m.) on which licensed banks are generally open for business in Hong Kong throughout their normal business hours

• “Buy-back Mandate”

a general mandate proposed to be granted to the Directors at the AGM to buy back Shares not exceeding 10% of the total number of the issued Existing Shares as at the date of the passing of the relevant resolution

• “Capital Reduction”

the proposed reduction of the Company’s issued share capital whereby: (i) the issued share capital of the Company will be reduced through a cancellation of the paid-up capital of the Company to the extent of HK$4.90 on each of the Consolidated Share such that the par value of each Consolidated Share will be reduced from HK$5.00 to HK$0.10; and (ii) any fractional Consolidated Share in the issued share capital of the Company arising from the Share Consolidation shall be cancelled

— 3 —

DEFINITIONS

• “Capital Reorganisation”

• the proposed reorganisation of the share capital of the Company involving the Share Consolidation, the Capital Reduction and the Diminution and Increase

• “CCASS”

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

• “close associate(s)”

has the meaning ascribed to it under the Listing Rules

• “Closing Price”

• HK$0.330, being the closing price of the Existing Shares as at the Latest Practicable Date

• “Companies Law”

• the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands as modified from time to time

• “Company”

• Kantone Holdings Limited (Stock Code: 1059), a company incorporated in the Cayman Islands with limited liability whose Shares are listed on the main board of the Stock Exchange

• “Consolidated Share(s)”

ordinary share(s) of a par value of HK$5.00 each in the issued share capital of the Company immediately after the Share Consolidation becoming effective but before the Capital Reduction becoming effective

• “Court”

The Grand Court of the Cayman Islands

• “Director(s)”

the director(s) of the Company

• “Diminution and Increase”

the proposed cancellation of all the authorised but unissued share capital of the Company (which shall include the authorised but unissued share capital arising from the Capital Reduction) in its entirety and forthwith upon such cancellation, the authorised share capital of the Company be increased to HK$500,000,000 divided into 5,000,000,000 New Shares

• “Distributable Reserve Account” the account designated as the distributable reserve account of the Company

— 4 —

DEFINITIONS

• “Existing Share(s)”

• ordinary share(s) of a par value of HK$1.00 each in the existing share capital of the Company prior to the Capital Reorganisation becoming effective

• “Group” collectively, the Company and its subsidiaries

• “HKSCC”

• Hong Kong Securities Clearing Company Limited

• “HK$”

• Hong Kong dollars, the lawful currency of Hong Kong

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

• “Issue Mandate”

• a general mandate proposed to be granted to the Directors at the AGM to allot, issue and deal with additional Shares, not exceeding 20% of the total number of the issued Existing Shares as at the date of the passing of the relevant resolution

• “Latest Practicable Date”

• 6 November 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular

• “Listing Rules”

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

• “Memorandum”

• the memorandum of association of the Company, as amended from time to time

• “New Share(s)”

• ordinary share(s) of a par value of HK$0.10 each in the share capital of the Company immediately after the Capital Reorganisation becoming effective

• “PRC”

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

• “SFO”

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

— 5 —

DEFINITIONS

“Share Consolidation”	the proposed consolidation of every five (5) issued and
	unissued Existing Shares into one (1) Consolidated
	Share
“Share(s)”	the Existing Share(s), the Consolidated Share(s) and/
	or the New Share(s), as the case may be
“Shareholder(s)”	the holder(s) of Existing Share(s), the Consolidated
	Share(s) and/or the New Share(s), as the case may be
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“substantial shareholder(s)”	has the meaning ascribed to it under the Listing Rules
“Takeovers Code”	the Code on Takeovers and Mergers
“%”	per cent.

— 6 —

LETTER FROM THE BOARD

==> picture [72 x 72] intentionally omitted <==

KANTONE HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1059)

Executive Directors: Ms. WONG Man Winny (Chairman) Mr. LIU Ka Lim

Non-executive Director: Ms. TO Yin Fong Cecilica

Registered office: Cricket Square Hutchins Drive PO Box 2681 Grand Cayman KY1-1111 Cayman Islands

Independent Non-executive Directors: Mr. LEUNG Man Fai Ms. CHUNG Sau Wai Ada Mr. Clayton IP

Head office and principal place of business in Hong Kong: Unit 3416, 34th Floor China Merchants Tower Shun Tak Centre No. 168-200 Connaught Road Central Sheung Wan, Hong Kong

9 November 2017

To the Shareholders

Dear Sir/Madam,

PROPOSALS FOR RE-ELECTION OF DIRECTORS, GENERAL MANDATES TO ISSUE AND BUY BACK SHARES, PROPOSED CAPITAL REORGANISATION AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

The purpose of this circular is to provide you with the AGM Notice and the information in respect of (i) the re-election of Directors; (ii) the granting to the Directors of the Issue Mandate; (iii) the granting to the Directors of the Buy-back Mandate; (iv) the extension of the Issue Mandate to include Shares bought back under the Buy-back Mandate; and (v) the proposed Capital Reorganisation.

— 7 —

LETTER FROM THE BOARD

This circular contains an explanatory statement and gives all the information reasonably necessary to enable you to make an informed decision on whether to vote for or against the resolutions to approve the Buy-back Mandate.

PROPOSED RE-ELECTION OF DIRECTORS

The Board currently consists of six Directors, namely Ms. Wong Man Winny, Mr. Liu Ka Lim, Ms. To Yin Fong Cecilica, Mr. Leung Man Fai, Ms. Chung Sau Wai Ada and Mr. Clayton Ip.

Pursuant to article 87 of the Articles of Association, Mr. Liu Ka Lim will retire by rotation at the AGM and being eligible, will offer himself for re-election at the AGM.

Pursuant to article 86(3) of the Articles of Association, Ms. Wong Man Winny, Ms. To Yin Fong Cecilica, Mr. Leung Man Fai, Ms. Chung Sau Wai Ada and Mr. Clayton Ip will hold office until the AGM and each of them, being eligible, will offer themselves for reelection at the AGM.

Details of the Directors proposed to be re-elected are set out in Appendix I to this circular.

GENERAL MANDATES TO ISSUE AND BUY BACK SHARES

As at the Latest Practicable Date, the total number of Existing Shares in issue was 986,537,533 Existing Shares.

Subject to the passing of the proposed ordinary resolution approving the grant of the Issue Mandate and assuming that no further Existing Shares are issued or bought back from the Latest Practicable Date up to the date of the AGM, the Company would be allowed under the Issue Mandate to issue a maximum of 197,307,506 Existing Shares, being 20% of the issued Existing Shares as at the date of passing of the resolution. As a result and upon the Capital Reorganisation becoming effective, the Directors would be authorised to allot, issue and deal with a maximum of 39,461,501 New Shares.

Subject to the passing of the proposed ordinary resolution approving the grant of the Buyback Mandate and assuming that no further Existing Shares are issued or bought back from the Latest Practicable Date up to the date of the AGM, the Company would be allowed under the Buy-back Mandate to buy back a maximum of 98,653,753 Existing Shares, being 10% of the issued Existing Shares as at the date of passing of the resolution. As a result and upon the Capital Reorganisation becoming effective, the Company would be allowed under the Buy-back Mandate to buy back a maximum of 19,730,750 New Shares.

— 8 —

LETTER FROM THE BOARD

Conditional upon the above resolutions being passed, an ordinary resolution will be proposed to extend the number of Shares under the Issue Mandate by including the number of Shares bought back under the Buy-back Mandate. Details of these resolutions are contained in the AGM Notice.

An explanatory statement containing the information relating to the Buy-back Mandate as required by the Listing Rules is set out in Appendix II to this circular.

PROPOSED CAPITAL REORGANISATION

The Board proposes to implement the Capital Reorganisation which comprises the following:

• (1) the proposed Share Consolidation whereby every five (5) issued and unissued Existing Shares of HK$1.00 each will be consolidated into one (1) Consolidated Share of HK$5.00 each;

• (2) the total number of Consolidated Shares in the issued share capital of the Company immediately following the Share Consolidation will be 197,307,506 rounded down to a whole number by cancelling any fraction in the issued share capital of the Company which may arise from the Share Consolidation;

• (3) following the Share Consolidation, the par value of each of the issued Consolidated Shares of HK$5.00 each will be reduced from HK$5.00 to HK$0.10 per issued Consolidated Share by cancelling the paid-up capital of the Company to the extent of HK$4.90 per issued Consolidated Share;

• (4) immediately following the Capital Reduction taking effect, all the authorised but unissued share capital of the Company (which shall include the authorised but unissued share capital arising from the Capital Reduction) will be cancelled in its entirety and forthwith upon such cancellation, the authorised share capital of the Company will be increased to HK$500,000,000 by the creation of such number of additional New Shares as shall be sufficient to increase the authorised share capital of the Company to HK$500,000,000 divided into 5,000,000,000 New Shares;

• (5) the credits arising from (i) the cancellation of any fraction in the issued share capital of the Company which may arise from the Share Consolidation, and (ii) the Capital Reduction, shall be applied to set off the accumulated losses of the Company as at the effective date of the Capital Reduction and the balance (if any) will be transferred to the Distributable Reserve Account; and

— 9 —

LETTER FROM THE BOARD

• (6) the amount standing to the credit of the Distributable Reserve Account be applied in any manner as may be permitted under the Articles of Association and all applicable laws including, without limitation, eliminating or setting off the accumulated losses of the Company from time to time and/or paying dividend and/or making any other distribution out of the Distributable Reserve Account from time to time without further authorisation from the Shareholders.

Conditions of the Capital Reorganisation

The implementation of the Share Consolidation, the Capital Reduction and the Diminution and Increase are inter-conditional on each other. The implementation of the Capital Reorganisation is conditional upon, among other things:

• (1) the passing of the necessary special resolutions by the Shareholders approving the Capital Reorganisation at the AGM;

• (2) approval of the Capital Reduction by the Court;

• (3) compliance with any conditions which the Court may impose in relation to the Capital Reduction;

• (4) registration by the Registrar of Companies of the Cayman Islands of the order of the Court confirming the Capital Reduction and the minute approved by the Court containing the particulars required under the Companies Law with respect to the Capital Reduction;

• (5) the Stock Exchange granting the listing of, and permission to deal in, the New Shares;

• (6) the compliance with the relevant procedures and requirements under the Cayman Islands law and the Listing Rules to effect the Capital Reorganisation; and

• (7) the obtaining of all necessary approvals from the regulatory authorities or otherwise as may be required in respect of the Capital Reorganisation.

The Capital Reorganisation will become effective when the conditions mentioned above are fulfilled. Upon the approval by the Shareholders of the Capital Reorganisation at the AGM, the legal advisors to the Company as to Cayman Islands law will apply to the Court for hearing date(s) to confirm the Capital Reduction and a further announcement will be made by the Company as soon as practicable after the Court hearing date(s) is confirmed. The expected effective date of the Capital Reorganisation may be varied due to the availability

— 10 —

LETTER FROM THE BOARD

of the Court and additional time required for compliance with the regulatory requirements in the Cayman Islands and/or with any requirements imposed by the Court, in particular, the registration by the Registrar of Companies of Cayman Islands of the order of the Court confirming the Capital Reduction and the minute approved by the Court containing the particulars required under the Companies Law of Cayman Islands with respect to the Capital Reduction is required for the Capital Reduction to become effective.

Effects of the Capital Reorganisation

As at the date of this circular, the authorised share capital of the Company is HK$1,200,000,000 divided into 1,200,000,000 Existing Shares of a par value of HK$1.00 each, of which 986,537,533 Existing Shares are in issue. Calculated based on the Closing Price, the board lot value as at the Latest Practicable Date was HK$990. Upon the proposed Share Consolidation becoming effective and based on the issued share capital as at the date of this circular, the issued share capital of the Company will be consolidated into 197,307,506 Consolidated Shares of a par value of HK$5.00 each. Assuming the proposed Share Consolidation becoming effective and calculated based on the Closing Price, the theoretical board lot value will be HK$4,950. Upon the proposed Capital Reduction becoming effective, the par value of each issued Consolidated Share shall be reduced from HK$5.00 each to HK$0.10 each and the issued share capital of the Company shall accordingly be reduced to the extent of HK$4.90 per Consolidated Share in issue. Upon completion of the Share Consolidation and the Capital Reduction, the issued share capital of the Company will be reduced to HK$19,730,750.60 divided into 197,307,506 New Shares of a par value of HK$0.10 each.

The New Shares in issue immediately following the Capital Reorganisation becoming effective will rank pari passu in all respects with each other and the Capital Reorganisation will not result in any change in the relative rights of the Shareholders. Any fractional Share arising from the Share Consolidation will not be allocated to the Shareholders. Any fractional entitlement to the New Shares will be aggregated, sold and retained for the benefit of the Company.

Any credit arising as a result of the Capital Reduction will be transferred to the Distributable Reserve Account which, together with any credit which may arise as a result of the cancellation of any fraction in the issued share capital of the Company arising from the Share Consolidation, will then be applied by the Board to set off against the accumulated losses of the Company (if any) in full or by the amount of such credits on the date of the Capital Reorganisation becoming effective.

— 11 —

LETTER FROM THE BOARD

Assuming that there are no other changes in the issued share capital of the Company from the date of this circular until the effective date of the Capital Reorganisation, the share capital structure of the Company will be as follows:

		Immediately after
		the Capital
	As at the date	Reorganisation
	of this circular	becoming effective
Amount of authorised share capital	HK$1,200,000,000	HK$500,000,000
Par value	HK$1.00	HK$0.10
	per Existing Share	per New Share
Number of authorised shares	1,200,000,000 Existing Shares	5,000,000,000 New Shares
Amount of issued share capital	HK$986,537,533	HK$19,730,750.60
Number of issued shares	986,537,533 Existing Shares	197,307,506 New Shares
Amount of unissued share capital	HK$213,462,467	HK$480,269,249.40
Number of unissued shares	213,462,467 Existing Shares	4,802,692,494 New Shares

Note: The above share capital structure of the Company is for illustration purpose only.

Shareholders and potential investors should note that the credits arising in the books from the Capital Reorganisation will be subject to change depending on the number of the Existing Shares in issue immediately prior to the Capital Reorganisation becoming effective.

As at the date of this circular, the Company has no outstanding warrants, options or convertible securities.

— 12 —

LETTER FROM THE BOARD

The Directors may apply the credits in the Distributable Reserve Account in any manner permitted by all applicable laws and the Articles of Association in effect from time to time.

Other than the relevant expenses incurred, the implementation of the Capital Reorganisation will have no effect on the consolidated net asset value of the Group, nor will it alter the underlying assets, business, operations, management or financial position of the Group or the interests of the Shareholders as a whole, save for any fractional Consolidated Shares (if any) to which the Shareholders would otherwise be entitled to. The Board believes that the Capital Reorganisation will not have any material adverse effect on the financial position of the Company and that on the date the Capital Reorganisation is to be effected, there are no reasonable grounds for believing that the Company is, or after the Capital Reorganisation would be, unable to pay its liabilities as they become due. The Capital Reorganisation will not involve any diminution of any liability in respect of any unpaid capital of the Company or the repayment to the Shareholders of any unpaid capital of the Company, nor will it result in any change in the relevant rights of the Shareholders.

Reasons for the Capital Reorganisation

Pursuant to the Articles of Association, the Company shall not issue any shares at a price below par value. The Company may only issue new Shares below par value with an order of the Court. In order to lower the par value of the shares of the Company for facilitating possible fund raising activities in the future, it is necessary to implement the Capital Reduction which forms part of the Capital Reorganisation. The Capital Reduction effectively reduces the par value of the Consolidated Share of HK$5.00 each by 98% to HK$0.10 each for each New Share.

Pursuant to Rule 13.64 of the Listing Rules, where the market price of the securities of an issuer approaches the extremities of HK$0.01 or HK$9,995.00, the issuer may be required either to change the trading method or to proceed with a consolidation or splitting of its securities. The closing price of the Existing Shares on the Latest Practicable Date was HK$0.330. Such closing price of Existing Shares is also below the par value of Existing Share, which is HK$1.00 per Existing Share, which limited the ability for the Company to conduct any fund raising activities. In view of such trading price of the Existing Shares, the Directors consider that the Share Consolidation will enable the Company to comply with the trading requirements under the Listing Rules and provide greater flexibility to the Company to issue new Shares in the future.

— 13 —

LETTER FROM THE BOARD

The Board considers that the proposed consolidation of every five (5) issued and unissued Existing Shares into one (1) Consolidated Share without a change in board lot size is the most feasible options which would be in the interest of the Company and the Shareholders as a whole as (a) the theoretical board lot value after Share Consolidation, calculated based on the Closing Price, will be HK$4,950 which is over HK$2,000 (the minimum transaction costs for a securities trade) while not making the cost for each board lot being too high; and (b) by not increasing the board lot size it will be in the benefit of the odd lots holders as the number of New Shares require to be acquired after the Share Consolidation to make it into the original board lot of 3,000 Shares is, in any event, less than the number of New Shares require to be acquired to make it into an increased board lot.

It should however be noted that the Company currently has no projects on hand which would require equity fund raising exercise in the coming twelve months. The Company confirms that it will not carry out any further share consolidation, share subdivision or change in board lot size that may affect the trading arrangements in the shares of the Company in the next 12 months. However it takes time to conduct the Capital Reorganisation, the Board considers it is in the interest of the Company and the Shareholders as a whole to complete the exercise as soon as possible.

Furthermore, the credits in the Distributable Reserve Account arising from the Capital Reorganisation will enable the Company to set off against its accumulated losses (if any) in full or by the amount of such credits and may facilitate or be applied in any future distribution to the Shareholders or be applied in any other manner permitted by all applicable laws and the Articles of Association in effect from time to time.

The Board considers that the Capital Reorganisation is beneficial to and in the interests of the Company and the Shareholders as a whole.

Listing and dealings

Application will be made to the Stock Exchange for the granting of the listing of, and permission to deal in, the New Shares.

Subject to the granting of the listing of, and permission to deal in, the New Shares on the Stock Exchange, the New Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the New Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second settlement day thereafter.

— 14 —

LETTER FROM THE BOARD

All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

No part of the equity or debt securities of the Company is listed or dealt in on any other stock exchange other than the Stock Exchange and no such listing or permission to deal in is being currently proposed to be sought from any other stock exchange.

Free exchange of share certificates and arrangement for matching service for odd lots

Should the Capital Reorganisation become effective, Shareholders may, during the period from Wednesday, 28 March 2018 to 4:30 p.m. on Wednesday, 9 May 2018 (both days inclusive), submit existing share certificates in the colour of yellow for the Existing Shares to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, to exchange, at the expense of the Company, for new share certificates in the colour of green for the New Shares (on the basis of five (5) Existing Shares for one (1) New Share). It is expected that the new share certificates for the New Shares will be available for collection within 10 Business Days after the submission of the exiting share certificate for the Existing Shares to the branch share registrar and transfer office of the Company in Hong Kong for exchange. The new share certificates for the New Shares will be green in colour so as to distinguish them from the existing share certificate of Existing Shares which are in yellow colour.

Thereafter, certificates for the Existing Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such other amount as may from time to time be specified by the Stock Exchange) by the Shareholders for each share certificate for the Existing Shares submitted for cancellation or each new share certificate issued for the New Shares, whichever is higher.

After market closing time on Monday, 7 May 2018, trading will only be in New Shares in the form of new share certificates. Existing share certificates of the Existing Shares will cease to be accepted for delivery, trading and settlement purposes, but will remain valid and effective as documents of title and may be exchanged for certificates of New Shares at any time.

— 15 —

LETTER FROM THE BOARD

Arrangements for trading of odd lots

In order to facilitate the trading of odd lots (if any) of the New Shares arising from the Capital Reorganisation, the Company has appointed Head & Shoulders Securities Limited, as a designated broker to match the purchase and sale of odd lots of the New Shares at the relevant market price per New Share for the period from Monday, 16 April 2018 to Monday, 7 May 2018 (both days inclusive). Shareholders who wish to take advantage of this service should contact Mr. Andrew Chan of Head & Shoulders Securities Limited of Room 2511, 25/F, Cosco Tower, 183 Queen’s Road Central, Hong Kong by phone at (852) 3103 8312 or by fax at (852) 3103 8399 during office hours of such period. Holders of odd lots of the New Shares should note that successful matching of the sale and purchase of odd lots of the New Shares is not guaranteed. Any Shareholder who is in any doubt about the odd lot arrangement is recommended to consult his/her/its own professional advisers.

AGM

The AGM Notice is set out on pages 27 to 33 of this circular. All the resolutions as set out in the AGM Notice will be proposed at the AGM.

A form of proxy for the AGM is enclosed with this circular. Whether you are able to attend the AGM or not, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the AGM (i.e. at or before 4:30 p.m. on Tuesday, 26 December 2017 (Hong Kong time) or any adjournment thereof (as the case may be). 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 (as the case may be) should you so wish and in such event, the form of proxy shall be deemed to be revoked.

The chairman of the AGM will demand that all resolutions as set out in the AGM Notice be voted upon by way of poll at the AGM and an announcement will be made by the Company after the AGM on the results of the AGM.

None of the Shareholders or their associates would have any interest in the proposed Capital Reorganisation. Accordingly, no Shareholders would be required to abstain from voting on the resolutions relating to the proposed Capital Reorganisation at the AGM.

— 16 —

LETTER FROM THE BOARD

CLOSURE OF REGISTER

The register of members of the Company will be closed from Thursday, 21 December 2017 to Thursday, 28 December 2017 (both days inclusive) for the purpose of determining the eligibility of the Shareholders to attend and vote at the AGM. During the closure of the register of members of the Company, no transfer of Shares will be effected. In order to qualify for attending and voting at the AGM, all transfers of the Shares accompanied by the relevant certificates, must be lodged with the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, no later than 4:30 p.m. on Wednesday, 20 December 2017.

WARNING

Shareholders should take note that the Capital Reorganisation is conditional upon satisfaction of conditions set out in the paragraph headed “Conditions of the Capital Reorganisation” of this circular. Therefore, the Capital Reorganisation may or may not proceed. Shareholders and potential investors are advised to exercise caution when dealing in the Shares, and if they are in any doubt about their position, they should consult their professional advisers.

RECOMMENDATION

The Directors consider that the proposed resolutions as set out in the AGM Notice are in the best interests of the Company and the Shareholders as a whole, and accordingly, recommend the Shareholders to vote in favour of all the resolutions to be proposed at the AGM.

RESPONSIBILITY STATEMENT

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

— 17 —

LETTER FROM THE BOARD

GENERAL INFORMATION

Your attention is drawn to the additional information set out in the Appendices to this circular. The English text of this circular shall prevail over the Chinese text.

Yours faithfully,

For and on behalf of the Board Kantone Holdings Limited Wong Man Winny Chairman

— 18 —

APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

The biographical details of the Directors proposed to be re-elected at the AGM are set out as follows:

Mr. LIU Ka Lim (“Mr. Liu”) , Executive Director

Mr. Liu, aged 61, has been an executive Director and an authorised representative since October 2016, and he is also the chairman of the investment committee of the Company. He has over 29 years of professional experience in the field of finance and accounting. He is a fellow of the Association of Chartered Certified Accountants and an associate member of the Hong Kong Institute of Certified Public Accountants. He is also a member of the Hong Kong Securities and Investment Institute. Mr. Liu is currently an executive director of Champion Technology Holdings Limited (“ Champion ”), which is the holding company of the Company holding 64.94% of the issued shares of the Company as at the Latest Practicable Date and the issued shares of which are listed on the Main Board of the Stock Exchange. During March 2004 to August 2006, Mr. Liu was the Chairman of Galileo Capital Group Limited (now known as Sun International Resources Limited), a company listed on the GEM Board of the Stock Exchange. During October 2003 to March 2006, Mr. Liu was the Chairman of Wonderful World Holdings Limited (now known as Good Resources Holdings Limited), a company listed on the Main Board of the Stock Exchange. During January 2011 to June 2013, Mr. Liu was a non-executive director of United Pacific Industries Limited (now known as Superactive Group Company Limited), a company listed on the Main Board of the Stock Exchange.

Mr. Liu entered into a letter of appointment with the Company to act as an executive Director and his term of services with the Company is fixed for a period of 3 years commencing on the date of his appointment. The letter of appointment may be terminated by either party by written notice of not less than three months. Mr. Liu is subject to retirement by rotation of directors in the annual general meeting of the Company in accordance with the Articles of Association and the Listing Rules. Mr. Liu shall be entitled to a director’s fee in such sum as the human resources and remuneration committee of the Board may from time to time determine.

Ms. WONG Man Winny (“Ms. Wong”) , Executive Director

Ms. Wong, aged 43, has been an executive Director and the Chairman of the Board since October 2017. She is currently an executive Director and the Chairman of the board of directors of Champion. Ms. Wong served as the licensed representative of Business Securities Limited from 2003 to 2004. She has over 10 years experience in corporate management and investment.

— 19 —

APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Ms. Wong entered into a letter of appointment with the Company to act as an executive Director and has no fixed term of service with the Company. The letter of appointment may be terminated by either party by written notice of not less than three months. Ms. Wong is subject to retirement by rotation of directors in the annual general meeting of the Company in accordance with the Articles of Association and the Listing Rules. Ms. Wong shall be entitled to a director’s fee in such sum as the human resources and remuneration committee of the Company may from time to time determine.

Ms. TO Yin Fong Cecilica (“Ms. To”) , Non-executive Director

Ms. To, aged 37, has been a non-executive Director since July 2017. Ms. To is currently a Barrister-at-Law. Ms. To holds a postgraduate certificate in laws from University of Hong Kong and a graduate diploma in English and Hong Kong law from Manchester Metropolitan University. Ms. To was admitted as a barrister of the High Court of HKSAR in 2009. Ms. To has about 8 years of experience in the legal field. Ms. To is currently a non-executive director of Champion.

Ms. To entered into a letter of appointment with the Company to act as a non-executive Director and has no fixed term of service with the Company. The letter of appointment may be terminated by either party by written notice of not less than three months. Ms. To is subject to retirement by rotation of directors in the annual general meeting of the Company in accordance with the Articles of Association and the Listing Rules. Ms. To is entitled to a director’s fee of HK$180,000 per annum, which is determined with reference to the prevailing range of fees for non-executive directors of listed companies in Hong Kong.

Mr. LEUNG Man Fai (“Mr. Leung”) , Independent Non-executive Director

Mr. Leung, aged 53, has been an independent non-executive Director since October 2017, and he is also the chairman of each of the audit committee, the human resources and remuneration committee and the nomination committee of the Company. Mr. Leung has extensive experience in accounting and finance. Mr. Leung served as a financial controller and company secretary of a private company during 2003 to 2006. From 1996 to 2003, he served various roles including financial controller, company secretary and finance manager in several listed companies within the ITC Corporation Limited (now known as PT International Development Corporation Limited) (stock code: 372), the shares of which are listed on main board of the Stock Exchange. He also worked as a senior accountant during 1992 to 1996 in Hopewell Holdings Limited (stock code: 54), the shares of which are listed on main board of the Stock Exchange. Mr. Leung had also been an independent non-executive director of China Aluminum Cans Holdings Limited (stock code: 6898), the shares of which are listed on main board of the Stock Exchange, during the period from

— 20 —

APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

June 2013 to June 2016. Currently, Mr. Leung is the chief financial officer and company secretary of Da Ming International Holdings Limited (stock code: 1090), the shares of which are listed on main board of the Stock Exchange. Mr. Leung is also an independent non-executive director of Champion. Mr. Leung received a Bachelor of Arts degree in Accountancy from the City University of Hong Kong. He is a fellow member of the Hong Kong Institute of Certified Public Accountants and a fellow member of the Association of Chartered Certified Accountants.

Mr. Leung entered into a letter of appointment with the Company to act as an independent non-executive Director and has no fixed term of service with the Company. The letter of appointment may be terminated by either party by written notice of not less than three months. Mr. Leung is subject to retirement by rotation of directors in the annual general meeting of the Company in accordance with the Articles of Association and the Listing Rules. Mr. Leung is entitled to a director’s fee of HK$120,000 per annum, which is determined with reference to the prevailing range of fees for independent non-executive directors of listed companies in Hong Kong.

Ms. CHUNG Sau Wai Ada (“Ms. Chung”) , Independent Non-executive Director

Ms. Chung, aged 45, has been an independent non-executive Director since July 2017, and she is also a member of each of the audit committee, the human resources and remuneration committee, the nomination committee and the investment committee of the Company. Ms. Chung has experience in auditing and accounting. Ms. Chung held various senior positions in professional firms and commercial field, including accounting manager of a listed company in Hong Kong. Ms. Chung holds a Bachelor of Arts degree from York University and a diploma in accounting from The School of Professional and Continuing Education of The University of Hong Kong. Ms. Chung is a member of the Chartered Professional Accountants of British Columbia, Canada.

Ms. Chung entered into a letter of appointment with the Company to act as an independent non-executive Director and has no fixed term of service with the Company. The letter of appointment may be terminated by either party by written notice of not less than three months. Ms. Chung is subject to retirement by rotation of directors in the annual general meeting of the Company in accordance with the Articles of Association and the Listing Rules. Ms. Chung is entitled to a director’s fee of HK$120,000 per annum, which is determined with reference to the prevailing range of fees for independent non-executive directors of listed companies in Hong Kong.

— 21 —

APPENDIX I DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

Mr. Clayton IP (“Mr. Ip”) , Independent Non-executive Director

Mr. Ip, aged 39, has been an independent non-executive Director since June 2017, and he is also a member of each of the audit committee, the human resources and remuneration committee and the nomination committee of the Company. Mr. Ip is a business entrepreneur and has over 10 years of experience in corporate administration, management and investment. Mr. Ip is specialised in the printing and self storage industry.

Mr. Ip entered into a letter of appointment with the Company to act as an independent non-executive Director and has no fixed term of service with the Company. The letter of appointment may be terminated by either party by written notice of not less than three months. Mr. Ip is subject to retirement by rotation of directors in the annual general meeting of the Company in accordance with the Articles of Association and the Listing Rules. Mr. Ip is entitled to a director’s fee of HK$120,000 per annum, which is determined with reference to the prevailing range of fees for independent non-executive directors of listed companies in Hong Kong.

As confirmed by the above retiring Directors and save as disclosed above, as at the Latest Practicable Date, the above retiring Directors (i) do not have, and are not deemed to have any interests or short positions in any Shares, underlying Shares or debentures (as defined under Part XV of the SFO) of the Company; (ii) have no other relationship with any director, senior management or substantial or controlling shareholder of the Company (each as respectively defined in the Listing Rules); and (iii) have not held any directorship in other Hong Kong or overseas listed public companies in the last three years; and (iv) there is no other information that should be disclosed pursuant to Rule 13.51(2) of the Listing Rules, nor any other matter that needs to be brought to the attention of the shareholders of the Company.

— 22 —

EXPLANATORY STATEMENT

APPENDIX II

The following is an explanatory statement required by Rule 10.06(1)(b) of the Listing Rules to provide the Shareholders with all the information reasonably necessary to enable 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 Buy-back Mandate.

1. SHARE CAPITAL

As at the Latest Practicable Date, the total number of Existing Shares in issue was 986,537,533 Existing Shares.

Subject to the passing of the proposed ordinary resolution approving the grant of the Buy-back Mandate and assuming that no further Shares are issued or bought back from the Latest Practicable Date up to the date of the AGM, the Company would be allowed under the Buy-back Mandate to buy back a maximum of 98,653,753 Existing Shares, being 10% of the issued Existing Shares as at the date of passing of the resolution. As a result and upon the Capital Reorganisation becoming effective, the Company would be allowed under the Buy-back Mandate to buy back a maximum of 19,730,750 New Shares.

The Buy-back Mandate will expire on the earlier 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 and the applicable laws; and (c) the date on which such authority is revoked or varied by an ordinary resolution of the Shareholders in general meeting.

2. SOURCE OF FUNDS

The Company is empowered by its Memorandum and Articles of Association to repurchase its Shares. The Cayman Islands law provides that the amount of capital repaid in connection with a share repurchase may only be paid out of profits or share premium of the Company or out of a fresh issue of shares made for the purpose of the repurchase or, subject to the Company remaining solvent in compliance with the Companies Law, out of capital and, in the case of any premium payable on the repurchase, out of the profits of the Company or from sums standing to the credit of the share premium account of the Company or, subject to the Company remaining solvent in compliance with the Companies Law, out of capital. Under the Cayman Islands law, the repurchased shares may be cancelled and if cancelled, they will remain part of the authorised but unissued share capital of the Company.

The Directors intend to apply the capital paid up on the relevant Shares or the profit that would otherwise be available for distribution by way of dividend for any purchase of its shares.

— 23 —

EXPLANATORY STATEMENT

APPENDIX II

3. REASONS FOR BUY-BACKS

The Directors believe that it is in the best interests of the Company and the Shareholders as a whole to seek a general authority from the Shareholders to enable the Company to buy back its Shares on the Stock Exchange. Such buy-backs may, depending on the 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 buy-backs will benefit the Company and the Shareholders as a whole.

4. IMPACT OF BUY-BACK

There might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the annual report of the Company for the year ended 30 June 2017) in the event that the proposed buy-back of Shares were to be carried out in full at any time during the proposed buy-back period. However, the Directors do not propose to exercise the Buy-back Mandate to buy back Shares to such an extent as would, in the circumstances, have a material adverse effect on the working capital or the gearing position of the Company which, in the opinion of the Directors, are from time to time appropriate for the Company.

5. SHARES PRICES

The following table shows the highest and lowest prices at which the Existing Shares have been traded on the Stock Exchange in each of the last twelve months before the Latest Practicable Date:

	Price	per Share
	Highest	Lowest
	HK$	HK$
2016
November	0.90	0.78
December	0.84	0.71

— 24 —

EXPLANATORY STATEMENT

APPENDIX II

	Price	per Share
	Highest	Lowest
	HK$	HK$
2017
January	0.72	0.59
February	0.80	0.63
March	0.75	0.63
April	0.64	0.59
May	0.67	0.57
June	0.65	0.57
July	0.58	0.50
August	0.52	0.40
September	0.42	0.34
October	0.42	0.30
November (up to the Latest Practicable Date)	0.40	0.30

6. EFFECT OF THE TAKEOVERS CODE

A buy-back of Shares by the Company may result in an increase in the proportionate interest of a substantial shareholder in the voting rights of the Company.

As at the Latest Practicable Date, to the best of the knowledge and belief of the Directors, Champion, who held approximately 64.94% of the Shares, was the only substantial shareholder holding more than 10% of the issued Shares. On the basis that no further Existing Shares are issued or bought back by the Company prior to the AGM and in the event that the Directors exercise in full the power to buy back Shares which is proposed to be granted pursuant to the resolution, its shareholding in the Company would be increased to approximately 72.16% of the issued Shares and such increase would not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code.

7. DIRECTORS, THEIR CLOSE ASSOCIATES AND CORE CONNECTED PERSONS

To the best of the knowledge of the Directors, having made all reasonable enquiries, none of the Directors nor any of their respective close associates (as defined in the Listing Rules) have any present intention to sell any Shares to the Company in the event that the Buy-back Mandate is approved by the Shareholders.

The Company has not been notified by any core connected persons (as defined in the Listing Rules) of the Company that they have a present intention to sell any Shares to the Company, or that they have undertaken not to sell any Shares held by them to the Company in the event that the granting of the Buy-back Mandate is approved by the Shareholders.

— 25 —

EXPLANATORY STATEMENT

APPENDIX II

8. UNDERTAKING

The Directors have undertaken to the Stock Exchange that, so far as the same may be applicable, they will exercise the power of the Company to make buy-backs of Shares pursuant to the Buy-back Mandate in accordance with the Listing Rules and the applicable laws of the Cayman Islands.

9. BUY-BACK OF SHARES MADE BY THE COMPANY

The Company has not bought back any Existing Shares whether on the Stock Exchange or otherwise in the six months preceding the Latest Practicable Date.

10. GENERAL

The Listing Rules prohibit a company from making buy-back on the Stock Exchange if the result of the buy-back would be that less than 25% (or such other prescribed percentage as determined by the Stock Exchange) of the company’s issued share capital would be in public hands. The Directors do not intend to buy back Shares which would result the number of Shares held in the public hands falling below the prescribed limit as approved by the Stock Exchange.

— 26 —

AGM NOTICE

==> picture [72 x 72] intentionally omitted <==

KANTONE HOLDINGS LIMITED

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1059)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the annual general meeting (the “ Meeting ”) of Kantone Holdings Limited (the “ Company ”) will be held at Rooms 1 and 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on Thursday, 28 December 2017 at 4:30 p.m. for the following purposes:

1. To receive and adopt the audited financial statements and the reports of the directors of the Company (the “ Directors ”) and independent auditor of the Company for the year ended 30 June 2017.

2. (i) To re-elect Mr. Liu Ka Lim as an executive Director;

3. (ii) To re-elect Ms. Wong Man Winny as an executive Director;

4. (iii) To re-elect Ms. To Yin Fong Cecilica as a non-executive Director;

5. (iv) To re-elect Mr. Leung Man Fai as an independent non-executive Director;

6. (v) To re-elect Ms. Chung Sau Wai Ada as an independent non-executive Director;

7. (vi) To re-elect Mr. Clayton Ip as an independent non-executive Director; and

8. (vii) To authorise the board of Directors to fix the Directors’ remuneration.

9. To re-appoint Moore Stephens CPA Limited as the auditor of the Company and to authorise the board of Directors to fix their remuneration.

— 27 —

AGM NOTICE

ORDINARY RESOLUTIONS

As special business, to consider and, if thought fit, pass the following resolutions (with or without modification) as ordinary resolutions of the Company:

1. “ THAT :

2. (a) subject to paragraph (c) of this resolution, the exercise by the Directors during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares of the Company (the “ Shares ”), to grant rights to subscribe for or convert any securities (including bonds, warrants, debentures, notes) into Shares and to make or grant offers, agreements and options which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;

3. (b) the approval in paragraph (a) of this resolution shall be in addition to any other authorisation given to the Directors and shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options which would or might require the exercise of such powers after the end of the Relevant Period;

4. (c) the total number of Shares allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise pursuant to:

   • (i) a Rights Issue (as defined below);

   • (ii) the grant or exercise of options under any share option scheme of the Company;

   • (iii) the exercise of rights of subscription or conversion under the terms of any securities issued by the Company which are convertible or exercisable into Shares; or

   • (iv) any scrip dividend scheme or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association of the Company from time to time,

— 28 —

AGM NOTICE

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

• (d) for the purposes of this resolution:

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

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

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable law to be held; and

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

“ Rights Issue ” means an offer of Shares open for a period fixed by the Directors to holders of Shares or any class thereof on the register of members of the Company on a fixed record date in proportion to their then holdings of such Shares or class thereof (subject to such exclusions 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 any regulatory body or any stock exchange in, any territory outside Hong Kong).”

1. “ THAT :

2. (a) subject to paragraph (b) of this resolution, the exercise by the Directors during the Relevant Period (as defined below) of all powers of the Company to buy back its own Shares, subject to and in accordance with all applicable laws and the requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited as amended from time to time, be and is hereby generally and unconditionally approved;

— 29 —

AGM NOTICE

• (b) the total number of Shares which may be bought back by the Company pursuant to the approval in paragraph (a) of this resolution during the Relevant Period (as defined below) shall not exceed 10% of the total number of the issued Shares as at the date of the passing of this resolution and the said approval shall be limited accordingly; and

• (c) for the purposes of this resolution:

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

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

• (ii) the expiration of the period within which the next annual general meeting of the Company is required by the articles of association of the Company or any applicable law to be held; and

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

• “ THAT conditional upon the passing of resolutions numbered 4 and 5 as set out in the notice convening the Meeting (the “ Notice ”), the general mandate referred to in the resolution numbered 4 as set out in the Notice be and is hereby extended by the addition to the total number of Shares which may be allotted and issued by the Directors pursuant to such general mandate of an amount representing the total number of the Shares bought back by the Company pursuant to the general mandate referred to in the resolution numbered 5 above, provided that such amount shall not exceed 10% of the total number of the issued Shares as at the date of the passing of this resolution.”

— 30 —

AGM NOTICE

SPECIAL RESOLUTION

To consider and, if thought fit, pass the following resolution as a special resolution:

1. “ THAT subject to and conditional upon (i) the approval of the Capital Reduction (as defined below) by the Grand Court of the Cayman Islands (“ Court ”); (ii) the compliance with any conditions which the Court may impose in relation to the Capital Reduction; (iii) the registration by the Registrar of Companies of the Cayman Islands of the order of the Court confirming the Capital Reduction and the minute approved by the Court containing the particulars required under the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands with respect to the Capital Reduction; and (iv) The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”) granting the listing of, and permission to deal in, the New Shares (as defined below) arising from the Capital Reorganisation (as defined below), with effect from the date on which the aforesaid conditions are fulfilled (“ Effective Date ”):

2. (a) every five (5) issued and unissued ordinary share(s) with a par value of HK$1.00 each in the existing share capital of the Company (“ Existing Share(s) ”) be consolidated (“ Share Consolidation ”) into one (1) ordinary share with a par value of HK$5.00 each (“ Consolidated Share(s) ”), and where applicable, the total number of Consolidated Shares in the issued share capital of the Company immediately following the Share Consolidation will be rounded down to a whole number by cancelling any fraction in the issued share capital of the Company which may arise from the Share Consolidation;

3. (b) immediately following the Share Consolidation, (i) the issued and paid-up share capital of the Company be reduced by reducing the par value of each of the issued Consolidated Shares of HK$5.00 each from HK$5.00 to HK$0.10 per issued Consolidated Share on the Effective Date by cancelling the paidup capital of the Company to the extent of HK$4.90 per issued Consolidated Share, with each such reduced share being treated as one fully paid new share with a par value of HK$0.10 each (“ New Shares ”); and (ii) any fraction in the issued share capital of the Company arising from the Share Consolidation shall be cancelled (collectively, the “ Capital Reduction ”);

4. (c) immediately following the Capital Reduction becoming effective, all the authorised but unissued share capital of the Company (which shall include the authorised but unissued share capital arising from the Capital Reduction) will be cancelled in its entirety and forthwith upon such cancellation, the authorised share capital of the Company will be increased to HK$500,000,000 by the creation of such number of additional New Shares as shall be sufficient to increase the authorised share capital of the Company to HK$500,000,000 divided into 5,000,000,000 New Shares (“ Diminution and Increase ”);

— 31 —

AGM NOTICE

• (d) the credits arising from the Capital Reduction shall be applied to set off the accumulated losses of the Company as at the Effective Date and the balance (if any) will be transferred to the account designated as the distributable reserve account of the Company (“ Distributable Reserve Account ”), and the directors of the Company (the “ Director(s) ”) be and are hereby authorised to use the amount standing to the credit of the Distributable Reserve Account in any manner as may be permitted under the articles of association of the Company in effect from time to time and all applicable laws including, without limitation, eliminating or setting off the accumulated losses of the Company from time to time and/or paying dividend and/or making any other distribution out of the Distributable Reserve Account from time to time without further authorisation from the shareholders of the Company and all actions in relation thereto be approved, ratified and confirmed;

• (e) all of the New Shares resulting from the Capital Reorganisation (as defined below) shall rank pari passu in all respects with each other and have the rights and privileges and be subject to the restrictions contained in the memorandum and articles of association of the Company; and

• (f) the Directors be and are hereby authorised to do all such acts and things and execute all such documents on behalf of the Company, including affixing of the common seal of the Company where applicable, as they may consider necessary or expedient to give effect to or in connection with the implementation of the Share Consolidation, the Capital Reduction and the Diminution and Increase (the “ Capital Reorganisation ”) and (where applicable) to aggregate all fractional New Shares and sell them for the benefits of the Company.

By Order of the Board Kantone Holdings Limited Wong Man Winny Chairman

Hong Kong, 9 November 2017

— 32 —

AGM NOTICE

Registered office: Cricket Square Hutchins Drive PO Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Unit 3416, 34th Floor China Merchants Tower Shun Tak Centre No. 168-200 Connaught Road Central Sheung Wan, Hong Kong

Notes:

• (i) In order to be eligible to attend and vote at the Meeting (or at any adjournment thereof), all transfer documents accompanied by the relevant share certificates must be lodged with the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration no later than 4:30 p.m. on Wednesday, 20 December 2017.

• (ii) A member entitled to attend and vote at the Meeting is entitled to appoint one proxy or, if he/she/it is a holder of two or more Shares may appoint more than one proxy to attend and vote instead of him/her/it. A proxy needs not be a member of the Company.

• (iii) Where there are joint holders of any Share, any one of such joint holder may vote at the Meeting, either personally or by proxy, in respect of such Share as if he/she/it was solely entitled thereto, but if more than one of such joint holders be present at the Meeting personally or by proxy, that 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 of the Company in respect of the joint holding.

• (iv) To be valid, the instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a certified copy of such power or authority, must be lodged with the branch share registrar and transfer office of the Company in Hong Kong, Tricor Secretaries Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not less than 48 hours before the time appointed for holding the Meeting (i.e. at or before 4:30 p.m., on Tuesday, 26 December 2017 (Hong Kong time) or any adjournment thereof (as the case may be).

• (v) Completion and return of the form of proxy will not preclude a member of the Company from attending and voting in person at the Meeting or any adjournment thereof (as the case may be) if he/she/it so desires. If a member of the Company attends the Meeting after having deposited the form of proxy, his/ her/its form of proxy will be deemed to have been revoked.

As at the date of this notice, the executive Directors are Ms. Wong Man Winny and Mr. Liu Ka Lim; the non-executive Director is Ms. To Yin Fong Cecilica; and the independent non-executive Directors are Mr. Leung Man Fai, Ms. Chung Sau Wai Ada and Mr. Clayton Ip.

— 33 —