Kingwell Group Limited — Capital/Financing Update 2014

Jul 3, 2014

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement.

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GUOCANG GROUP LIMITED 國 藏 集 團 有 限 公 司 (Incorporated in Bermuda with limited liability) (Stock Code: 559)

DISCLOSEABLE TRANSACTION RELATING TO THE PROVISION OF LOAN

The Board announced that on 3 July 2014 (after trading hours), the Lender, an indirect wholly-owned subsidiary of the Company, entered into the Loan Agreement with the Borrower, pursuant to which the Lender has agreed to lend to the Borrower a loan of HK$50,000,000 for a period from the date of drawdown to 30 September 2014 at an interest rate of 10% per annum. The Loan is secured by the Guarantee.

As one of the relevant applicable percentage ratios in respect of the Loan is more than 5% but less than 25%, the provision of Loan constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the notification and announcement requirements under the Listing Rules.

THE LOAN AGREEMENT

Date : 3 July 2014 Lender : Cash Stand Investments Limited, an indirect wholly-owned subsidiary of the Company Borrower : An independent third party

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Borrower is an independent third party not connected with the Company and connected persons of the Company.

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Principal terms of the Loan Agreement

Amount of the Loan	:	HK$50,000,000
Term	:	From date of drawdown to 30 September 2014
Interest	:	10% per annum
Repayment	:	The outstanding principal amount and the interest incurred
		of the Loan shall be repaid on 30 September 2014
Security for the Loan	:	The Guarantee

The terms of the Loan Agreement were arrived at after arm’s length negotiations between the Lender and the Borrower. The Lender is a registered money lender holding a valid money lenders licence under the Money Lenders Ordinance (Chapter 163 of the laws of Hong Kong) and is principally engaged in the business of money lending service.

The terms of the Loan Agreement were determined with reference to the commercial practice and the terms of conducting money lender business in Hong Kong. The Loan will be funded from internal resources of the Group. The Directors consider that the transactions contemplated under the Loan Agreement are on normal commercial terms and the terms of the Loan Agreement are fair and reasonable and are in the interests of the Company and its Shareholders as a whole having considered the prevailing market borrowing rates quoted by commercial banks in Hong Kong.

Information on the Group

The Group is principally engaged in the businesses of (i) trading and distribution of liquor and wine; (ii) manufacture and trading of cable and wires; (iii) manufacture and trading of copper rods; and (iv) investments in listed securities. The Lender is a registered money lender holding a valid money lenders licence under the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong) and is principally engaged in the business of money lending services.

Information on the Borrower and the Guarantor

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, both the Borrower and the Guarantor are merchants and independent third parties.

Reasons for provision of the Loan

The Loan will provide interest income to the Lender and will be recorded as loan receivables of the Group.

The Directors consider that the provision of the Loan will result in a reasonable interest return to the Group. The Directors consider that the provision of the Loan is in the interests of the Company and the Shareholders as a whole.

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IMPLICATIONS UNDER THE LISTING RULES

As one of the relevant applicable percentage ratios in respect of the provision of the Loan is more than 5% but less than 25%, the provision of Loan constitutes a discloseable transaction for the Company under the Listing Rules and is subject to the notification and announcement requirements under the Listing Rules.

DEFINITIONS

In this announcement, unless the context otherwise requires, the following words and expressions shall have the following meanings when used herein:

‘‘Board’’	the board of Directors
‘‘Borrower’’	an independent third party
‘‘Company’’	Guocang Group Limited, a company incorporated in
	Bermuda with limited liability whose issued Shares are
	listed on the main board of the Stock Exchange
‘‘connected person(s)’’	has the meaning ascribed to it under the Listing Rules
‘‘Director(s)’’	the director(s) of the Company
‘‘Group’’	the Company and its subsidiaries
‘‘Guarantee’’	a personal guarantee executed by the Guarantor dated 3 July
	2014 in favour of the Lender to secure the payment
	obligations of the Borrower under the Loan Agreement
‘‘Guarantor’’	an independent third party
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’	Hong Kong Special Administrative Region of the People’s
	Republic of China
‘‘Lender’’	Cash Stand Investments Limited, a company incorporated in
	Hong Kong with limited liability and an indirect wholly-
	owned subsidiary of the Company
‘‘Listing Rules’’	the Rules Governing the Listing of Securities on The Stock
	Exchange of Hong Kong Limited
‘‘Loan’’	the term loan in the amount of HK$50,000,000 granted by
	the Lender to the Borrower pursuant to the terms of the
	Loan Agreement
‘‘Loan Agreement’’	the loan agreement dated 3 July 2014 entered into between
	the Lender and the Borrower relating to the granting of the
	Loan

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‘‘Share(s)’’ ordinary share(s) of HK$0.05 each in the share capital of the Company ‘‘Shareholder(s)’’ holder(s) of the Share(s) ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘%’’ per cent.

By order of the Board Guocang Group Limited Chi Chi Hung Kenneth Executive Director

Hong Kong, 3 July 2014

As at the date of this announcement, the executive Directors are Mr. Wong Hin Shek and Mr. Chi Chi Hung Kenneth; and the independent non-executive Directors are Mr. Chiu Wai On, Mr. Man Kwok Leung and Dr. Wong Yun Kuen.

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