Kingwell Group Limited — Proxy Solicitation & Information Statement 2014

Sep 25, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Kingwell Group Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, licensed securities dealer, registered institution in securities or other agent through whom the sale or 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 and the accompanying form of proxy, make no representation as to their 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 and the accompanying form of proxy.

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

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KINGWELL GROUP LIMITED

京 維 集 團 有 限 公 司

(Incorporated in Cayman Islands with limited liability)

(Stock Code: 1195)

MAJOR TRANSACTION DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF SUPERFORD HOLDING LIMITED

Financial Adviser

A letter from the board of directors of Kingwell Group Limited (the ‘‘Company’’) is set out on pages 4 to 9 of this circular.

A notice convening the extraordinary general meeting of the Company to be held at Units 314–315, Wing On Plaza, 62 Mody Road, TST East, Kowloon, HK on 23 October 2014 at 11:30 a.m. is set out on page 19 of this circular. A form of proxy for the extraordinary general meeting is enclosed herein. Whether or not you are able to attend the extraordinary general meeting, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong as soon as possible, but in any event not less than 48 hours before the time appointed for the holding of the extraordinary general meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or any adjourned meeting thereof should you so wish.

26 September 2014

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX I — FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . . . . . . . .	10
APPENDIX II — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following terms shall have the following meaning:

• ‘‘Announcement’’

• the announcement of the Company dated 27 August 2014 in relation to the Disposal

• ‘‘Board’’ the board of Directors of the Company

‘‘Business Day(s)’’ a day (other than a Saturday, a Sunday, a public holiday and a day on which a tropical cyclone warning signal no. 8 or above or a ‘‘black rainstorm warning signal’’ is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.) on which banks are open for banking business in Hong Kong

• ‘‘Company’’ Kingwell Group Limited, a company incorporated in Cayman Islands with limited liability whose issued Shares are listed on the Main Board of the Stock Exchange (stock code: 1195)

• ‘‘Completion’’ completion of the Sale and Purchase Agreement

• ‘‘Consideration’’ the total consideration of HK$700,000 (equivalent to approximately RMB557,000) payable by the Purchaser for acquiring the Sale Shares

• ‘‘Director(s)’’ director(s) of the Company from time to time ‘‘Disposal’’ disposal of the Sale Shares pursuant to the terms and conditions of the Sale and Purchase Agreement

• ‘‘Encumbrances’’ any claim, charge, mortgage, security, lien, option, equity, power of sale, hypothecation or other third party rights, retention of title, right of pre-emption, right of first refusal or security interest of any kind

• ‘‘EGM’’ the extraordinary general meeting of the Company to be held on 23 October 2014 for the Shareholders to consider and, if thought fit, approve the Disposal and the transactions contemplated under the Sale and Purchase Agreement

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC

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

– 1 –

DEFINITIONS

• ‘‘Independent Third Party(ies)’’

• persons(s) or company(ies) together with its/their beneficial owner(s) who or which is/are, to the best of the Directors’ knowledge, information and belief, having made all reasonable enquiry, are third parties independent of the Company and connected person(s) (as defined in the Listing Rules) of the Company

• ‘‘Latest Practicable Date’’ 23 September 2014, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular

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

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

• ‘‘Remaining Group’’ the Group excluding the Sale Group after the Disposal

• ‘‘RMB’’ Renminbi, the lawful currency of the PRC

• ‘‘Sale and Purchase Agreement’’ the conditional sale and purchase agreement dated 27 August 2014 entered into between the Vendor and the Purchaser in relation to the sale and purchase of the Sale Shares

• ‘‘Sale Entity’’ Superford Holding Limited, a company incorporated in the British Virgin Islands with limited liability and a whollyowned subsidiary of the Company as at the Latest Practicable Date

• ‘‘Sale Group’’ the Sale Entity and its subsidiaries

• ‘‘Sale Shares’’ being the entire issued share capital of the Sale Entity

• ‘‘Share(s)’’ ordinary share(s) of HK$0.10 each in the issued share capital of the Company

• ‘‘Shareholder(s)’’ holder(s) of the Shares

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

• ‘‘%’’ per cent.

– 2 –

DEFINITIONS

This circular contains translation of HK$ to RMB at the rate of HK$1.2576 = RMB1 for the purpose of illustration only. The translation shall not be taken as representation that any amounts in HK$ or RMB could be converted at such rate or at any other rate.

In the event of any inconsistency, the English text of this circular shall prevail over the Chinese text.

– 3 –

LETTER FROM THE BOARD

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KINGWELL GROUP LIMITED 京 維 集 團 有 限 公 司

(Incorporated in Cayman Islands with limited liability)

(Stock Code: 1195)

Board of Directors

Executive Directors

Mr. Hui Lung Hing (Chairman) Mr. Xiang Song (Chief Executive Officer) Mr. Sze Ming Yee Mr. Lin Wan Xin Ms. Xu Yue Yue Mr. Yang Xue Jun

Independent Non-executive Directors

Mr. Huang Jian Zi Mr. Cheung Chuen Ms. Wong Lai Wing

Registered office

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong

Units 314–315 Wing On Plaza 62 Mody Road Tsim Sha Tsui East Kowloon, Hong Kong

26 September 2014

To the Shareholders,

Dear Sir or Madam,

MAJOR TRANSACTION DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF SUPERFORD HOLDING LIMITED

INTRODUCTION

Reference is made to the Announcement dated 27 August 2014 in relation to the Disposal.

On 27 August 2014 (after trading hours), the Vendor and the Purchaser entered into the Sale and Purchase Agreement, pursuant to which the Vendor conditionally agreed to sell, and the Purchaser conditionally agreed to purchase the Sale Shares free from Encumbrances at the Consideration in cash. The Sale Shares represent the entire issued share capital of the Sale Entity.

– 4 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you, among other things, (i) further information regarding the Disposal; (ii) other information as required under the Listing Rules; and (iii) the notice of the EGM to be convened for the purpose of considering and, if thought fit, approve the Disposal and the transactions contemplated thereunder Sale and Purchase Agreement.

THE DISPOSAL

The Sale and Purchase Agreement

Date: 27 August 2014 (after trading hours)

Parties: (i) The Company as the Vendor; and (ii) Splendid Vantage Limited as the Purchaser;

The Purchaser is a company incorporated in Samoa with limited liability. The principal business activity of the Purchaser is investment holding. The Purchaser and its ultimate beneficial owners and their associates does not hold any interests in the Company. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are Independent Third Parties.

Assets to be disposed

The Sale Shares represent the entire issued share capital of the Sale Entity.

Consideration

The Consideration of HK$700,000 shall be payable by the Purchaser to the Vendor in cash upon Completion.

The Consideration was determined after arm’s length negotiations between the Purchaser and the Vendor with the reference to (i) the net liabilities of the Sale Group as at 30 June 2014; (ii) the historical performance of the Sale Group; (iii) the future prospects and earnings outlook of the business of the Sale Group; and (iv) the reasons for the Disposal as discussed in the section headed ‘‘Reasons for the Disposal’’ in this ‘‘Letter from the Board’’.

Condition precedent

Completion is conditional upon the passing by the Shareholders at the EGM an ordinary resolution to approve the Disposal and the transactions contemplated under the Sale and Purchase Agreement in accordance with the Listing Rules and the applicable laws and regulations.

If the condition precedent has not been fulfilled on or before 31 December 2014 (or such later date as the parties may agree in writing), the rights and obligations of the parties of the Sale and Purchase Agreement shall lapse and be of no further effect except for any antecedent breaches of the terms thereof.

– 5 –

LETTER FROM THE BOARD

Completion

Completion shall take place on or before 31 October 2014 or on the fifth Business Day after the above condition has been satisfied, whichever is earliest (or such other time and/or date as the Vendor and the Purchaser may agree in writing).

The Vendor shall on Completion (i) cause persons nominated by the Purchaser to be appointed as directors and/or company secretary of the Sale Entity; and (ii) cause the existing directors of the Sale Entity as requested by the Purchaser to resign.

The Purchaser shall not be obliged for Completion unless the Vendor complies fully with the requirements under the Sale and Purchase Agreement. If any provision under the Sale and Purchase Agreement is not complied with by the Vendor on 31 October 2014, the Purchaser may (i) defer Completion for not more than 28 days; or (ii) proceed to Completion so far as practicable.

INFORMATION OF THE SALE GROUP

The Sale Entity is incorporated in the British Virgin Islands with limited liability and a wholly-owned subsidiary of the Company.

The Sale Group is principally engaged in manufacturing and selling of rigid printed circuit boards and flexible printed circuit boards.

No audited financial information was prepared for the Sale Group. The unaudited consolidated financial information of the Sale Group for the years ended 30 June 2012, 2013 and 2014 are set out as follows:

	For the	year ended 30	June
	2012	2013	2014
	RMB’000	RMB’000	RMB’000
	(Unaudited)	(Unaudited)	(Unaudited)
Revenue	111,777	77,064	72,187
Net loss before tax	(306,855)	(87,920)	(123,773)
Net loss after tax	(335,279)	(87,920)	(123,773)

The unaudited net liabilities of the Sale Group as at 30 June 2014 amounted to approximately RMB55.35 million, while the unaudited net asset value of the Sale Group as at 30 June 2013 amounted to approximately RMB68.11 million. The subdued financial position was due to the net effect of (a) the net loss of approximately RMB52.00 million from operation for the Sale Group for the year 30 June 2014; (b) the loss of approximately RMB72.96 million from the waiving amount due from inter-group companies; (c) the gain of approximately RMB1.19 million from the exempted amount due to a fellow subsidiary.

– 6 –

LETTER FROM THE BOARD

The amount due from inter-group companies mainly consist of cash advance made from the Sale Group to the Company to support its’s daily operation. In order to increase effectiveness and reduce the unnecessary burdensome in preparing the Group’s consolidated account, the management resolved to restructure inter-companies accounts, as a result, the amount due from the Company to the Sale Group for the year ended 30 June 2014 were written-off.

The Remaining Group will benefit from the restructure of inter-companies accounts with positive income and reduced the liabilities.

FINANCIAL EFFECT OF THE DISPOSAL

Upon Completion, the Company will cease to be engaged in the electronic business, the Sale Entity would cease to be subsidiary of the Company and the financial information of the Sale Group would no longer be consolidated in the accounts of the Company.

The unaudited total assets and total liabilities of the Sale Group amounted to approximately RMB273.67 million and RMB329.02 million as at 30 June 2014. Upon Completion, it is expected that the Company will reduce the total assets by approximately RMB273.67 million and reduce the total liabilities by approximately RMB329.02 million, respectively.

It is expected that the Company will record a profit on disposal (before deducting the related transaction costs) of approximately RMB55.91 million which is calculated based on the Consideration less unaudited consolidated net liabilities of the Sale Group of approximately RMB55.35 million as at 30 June 2014. The proceeds from the Disposal would be used for general working capital of the Group. It is expected that the Company will reduce the revenue and net loss before impairment approximately RMB72.19 million and RMB52.00 million, respectively, after disposal of Sale Group.

After Completion, the Group will have disposed of its electronic business, which contributed 82.4% and 76.2% net loss of the Group for the year ended 30 June 2013 and for the six months period ended 31 December 2013, respectively.

REASONS FOR THE DISPOSAL

The Group is principally engaged in (i) the electronic business; (ii) property development; and (iii) gold mining business.

The Sale Group is capital and labour intensive. As set out in the annual report for the year ended 30 June 2013, the unfavourable market condition in the global economy continued to pose various challenges to the electronic business, both the Group’s orders and average selling prices were under pressure amid intense market competition. The demand for electronic products recovered at a slow pace and customers were still cautious in placing orders which added to the downward pressure of average selling prices.

– 7 –

LETTER FROM THE BOARD

The growing inflation rate in the PRC led to rising raw material and labour costs, while the Sale Group also experienced a shortage of labour force. In addition, due to new environmental protection requirements in the Fujian Province, the Group has employed an environmental protection company to review the existing situation of the Fujian plant and capital investment is expected to be incurred to fulfill the environmental protection requirements.

The rise of raw material and labour costs, shortage of labour force and new environmental protection requirements increased production costs and undermined the profitability of the Sale Group.

In another hand, the Group will continue to implement its diversified development strategy and proactively search for potential investment opportunities, particularly in gold mining projects.

Having considered all of the above factors, and Sale Group has been in a loss making position for the past 5 years, the Board is of the view that the terms of the Sale and Purchase Agreement are fair and reasonable and the entering into of the Sale and Purchase Agreement is in the interest of the Company and Shareholders as a whole.

LISTING RULES IMPLICATIONS

As the relevant percentage ratios of the Disposal are more than 25% but less than 75%, the Disposal constitutes a major transaction for the Company under the Listing Rules and is therefore subject to reporting, announcement and Shareholders’ approval requirements under the Listing Rules.

To the best knowledge, information and belief of the Directors having made all reasonable enquires, no Shareholders is required to abstain from voting for the resolution to be proposed at the EGM to approve the Disposal.

EGM

The EGM will be convened and held at Units 314–315, Wing On Plaza, 62 Mody Road, TST East, Kowloon, HK on 23 October 2014 at 11:30 a.m. for the Shareholders to consider and, if thought fit, approve the Disposal and the transactions contemplated under the Sale and Purchase Agreement.

A notice convening the EGM is set out on page 19 of this circular. Whether or not you intend to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the office of the Company’s branch share registrar in Hong Kong, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, as soon as possible and in any event not less than 48 hours before the appointed time for holding the meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM and any adjournment thereof (as the case may be) should you so wish.

– 8 –

LETTER FROM THE BOARD

RECOMMENDATION

The Directors consider the Disposal and the transactions contemplated under the Sale and Purchase Agreement are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions at the EGM.

ADDITIONAL INFORMATION

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

By Order of the Board KINGWELL GROUP LIMITED Hui Lung Hing Executive Director

– 9 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. THREE-YEAR FINANCIAL SUMMARY OF THE GROUP

The audited financial information of the Group for (i) the year ended 30 June 2013 is disclosed in pages 29 to 115 of the annual report of the Company for the year ended 30 June 2013; (ii) the year ended 30 June 2012 is disclosed in pages 33 to 115 of the annual report of the Company for the year ended 30 June 2012; and (iii) the year ended 30 June 2011 is disclosed in pages 31 to 107 of the annual report of the Company for the year ended 30 June 2011. The unaudited financial information of the Group for the six months ended 31 December 2013 is disclosed in pages 5 to 30 of the interim report of the Company for six months ended 31 December 2013. All of which have been published on the Stock Exchange’s website (www.hkexnews.hk) and the website of the Company (http://kingwell.todayir.com).

2. STATEMENT OF INDEBTEDNESS

Borrowings

As at the close of business on 31 August 2014, being the latest practicable date for the purpose of this indebtedness statement, the Group had (1) bank borrowings of approximately RMB134.53 million, which was secured by certain buildings and leasehold land of the Group and supported by guarantees provided by third parties and (2) unsecured other borrowings from third parties and a director of approximately RMB21.1 million and approximately RMB1.99 million, respectively.

Contingent Liabilities

On 31 August 2014, guarantees given to the banks by the Group in connection with facilities granted to the buyers of certain properties developed by the Group was approximately RMB2.12 million.

For the purpose of the statement of Indebtedness, foreign currency amounts have been translated into Renminbi at the rates of exchange prevailing at the close of business on 31 August 2014.

Disclaimer

Save as disclosed above, the Group did not have any outstanding mortgages, charges, debenture or other loan capital or bank overdrafts, loans or other similar indebtedness or hire purchase commitments, liabilities under acceptances or acceptances credits or any guarantees or other material contingent liabilities at the close of business on 31 August 2014.

– 10 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. WORKING CAPITAL OF THE GROUP

The Directors are of the opinion that, after due and careful enquiry, after taking into account the Group’s internal resources and in the absence of unforeseeable circumstances, the Group, after the completion of the Disposal, will have sufficient working capital for its present requirements for a period of twelve months from the date of this circular.

4. MATERIAL ADVERSE CHANGE

The Directors confirm that there is no material adverse change in the financial or trading position or outlook of the Group since 30 June 2013 (being the date to which the latest published audited financial statements of the Group were prepared) and up to and including the Latest Practicable Date.

5. FINANCIAL AND TRADING PROSPECT OF THE REMAINING GROUP

The Group is principally engaged in (i) the electronic business; (ii) property development; and (iii) gold mining business.

For the year ended 30 June 2013, the audited net loss for the Group amounted to approximately RMB106.7 million, while unaudited net loss of the Sale Group amounted to approximately RMB87.9 million. For the six months period ended 31 December 2013, the unaudited net loss for the Group amounted to approximately RMB34.9 million, while unaudited net loss of the Sale Group amounted to approximately RMB26.6 million.

After Completion, the Group will be have disposed of its electronic business, which contributed to 82.4% and 76.2% of the net losses of the Group for the year ended 30 June 2013 and for the six months period ended 31 December 2013, respectively. The Group will focus on its property development and gold mining businesses, as well as proactively search for potential investment opportunities.

Property Development

The residential development project at Anlu city has contributed RMB83.2 million and RMB12.5 million for the year ended 30 June 2013 and for the six months period ended 31 December 2013 representing approximately 51.9% and 24.7% of the Group’s total revenue respectively, which marked the successful entry by the Group into the property development business.

Gold Mining Business

The Company acquired 51% equity interest in a gold mining company in Russian Federation on 15 August 2012. The gold mining company currently operates and owns the legal and beneficial interest in a mining project related to the gold mine, with an aggregate

– 11 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

mining area of about 309.3 km[2] and is estimated to have sand gold reserve of (C1 category) 35 tonnes. The gold mining company is in process of devising its production and exploitation plan.

On 11 January 2013, the Company and an independent third party entered into a sale and purchase agreement in relation to the acquisition of 100% equity interest of Port First Limited, which in turn holds 70% equity interest of gold mines in Shandong Province of the PRC, at a consideration of HK$460 million, where completion is subject to the fulfillment of certain conditions.

Other Business

On 7 May 2014, the Company and an independent third party entered into a letter of intent, in relation to the acquisition of 51% equity interest in a company, which provides online payment services to and receives fee income from banks in the PRC, and is developing payment platforms for integration with gold trading and financial settlements. The Company is currently conducting due diligence work.

On 10 June 2014, the Company and an independent third party entered into a letter of intent, in relation to the acquisition of 51% equity interest in the Beidou New Application Technology Co., Ltd, which engages in the research and development of Beidou satellite navigation system, Beidou satellite communication system and provision of related services. The Company is currently conducting due diligence work.

On 26 August 2014, the Company and independent third parties entered into a letter of intent, in relation to the acquisition of 45% equity interest in Shanghai Beidou Satellite Navigation Platform Limited, a netvigation platform company, which is principally engaged in providing navigation, precise timing, message communication and other application based on the Beidou satellite navigation platform. The Company is currently conducting due diligence work.

Further announcement(s) will be made by the Company on the progress of the proposed acquisitions as and when appropriate.

– 12 –

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 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.

2. DISCLOSURE OF DIRECTORS’ INTERESTS

As at the Latest Practicable Date, the interests and short positions of Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company and its associated corporation(s) (within the meaning of Part XV of the SFO) which (a) 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 and short positions which Directors and the chef executives of the Company were taken or deemed to have under such provisions of the SFO); (b) were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the ‘‘Model Code’’) contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

					Total
				Number of	approximate
			Number of	Shares and	% of
		Number of	underlying	underlying	the issued
Name	Capacity	Shares held	Shares	Shares	share capital
Sze Ming Yee	Interest held as	345,778,539	2,000,000	347,778,539	15.08%
(Note 1)	beneficial owner
	and through
	controlled
	corporation
Hui Lung Hing	Beneficial owner	250,000,000	8,000,000	258,000,000	11.19%
			(Note 2)
Xu Yue Yue	Beneficial owner	—	8,000,000	8,000,000	0.35%
			(Note 3)

Notes:

1. Mr. Sze Ming Yee, an executive Director, is a director and the controlling shareholder of Union Day Group Limited (‘‘Union Day’’) holding 72% of its issued share capital. As at the Latest Practicable Date, Union Day is interested in 345,778,539 Shares. By virtue of the SFO, Mr. Sze is deemed to have interested in the 345,778,539 Shares. Mr. Sze Ming Yee is also interested in 2,000,000 share options which, upon exercise in full, will be convertible into 2,000,000 Shares.

– 13 –

GENERAL INFORMATION

APPENDIX II

1. Mr. Hui Lung Hing is interested in 8,000,000 share options which, upon exercise in full, will be convertible into 8,000,000 Shares.

2. Ms. Xu Yue Yue is interested in 8,000,000 share options which, upon exercise in full, will be convertible into 8,000,000 Shares.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executives of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company and its associated corporation(s) (within the meaning of Part XV of the SFO) which had to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which he/she was taken or deemed to have under such provisions of the SFO) or which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or which were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.

3. DISCLOSURE OF SUBSTANTIAL SHAREHOLDERS’ INTERESTS

So far as is known to the Directors or chief executive of the Company, the following persons (other than a Director or chief executive of the Company) who, as at the Latest Practicable Date, had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed under provisions of Division 2 and 3 of Part XV of the SFO, or who, as at the Latest Practicable Date, was directly and 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 member the Group.

Long Position in the shares and underlying shares of the Company

					Total
				Total number	approximate
			Number of	of Shares and	% of the
		Number of	underlying	underlying	issued share
Name	Capacity	Shares held	Shares	Shares	capital
Union Day	Beneficial owner	345,778,539	—	345,778,539	14.99%
Group
Limited
(Note 1)
Yin Jia Tang	Beneficial owner	138,200,000	31,666,667	169,866,667	7.36%
			(Note 2)

Notes:

1. Mr. Sze Ming Yee, an executive Director, is a director and the controlling shareholder of Union Day, holding 72% of its issued share capital. By virtue of the SFO, Mr. Sze is deemed to have interested in the 345,778,539 Shares held by Union Day. Mr. Sze Ming Yee is also interested in 2,000,000 share options which, upon exercise in full, will be convertible into 2,000,000 Shares.

– 14 –

GENERAL INFORMATION

APPENDIX II

1. As at the Latest Practicable Date, Mr. Yin Jia Tang is interested in 8,000,000 non-redeemable convertible preferred shares which are convertible into 26,666,667 conversion shares at HK$0.30 per conversion share, and is also interested in 5,000,000 share options which, upon exercise in full, will be convertible into 5,000,000 Shares.

Long position in the shares/registered capital of the member of the Group

				Total
				approximate
				% of the
Name of member of	Name of	Capacity/nature	Number of	issued share
the Group	shareholder	of interest	shares	capital
Commerce Prosper Limited	Araik Khachatryan	Beneficial owner	32,885	49%

Note:

As at the Latest Practicable Date, the Company is interested in 51% issued share capital of Commerce Prosper Limited

Save as disclosed above, as at the Latest Practicable Date, the Directors and chief executive of the Company 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, interests or short positions in the Shares or underlying Shares (including any interests in options in respect of such 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, or who was 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 member of the Group.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with the Group which does not expire or is not terminable by such member of the Group within one year without payment of compensation (other than statutory compensation).

5. COMPETING INTEREST

As at the Latest Practicable Date, so far as the Directors were aware, none of the Directors or their respective associates was considered to have interest in any business which competes or may compete, either directly or indirectly, with the business of the Group.

– 15 –

GENERAL INFORMATION

APPENDIX II

6. DIRECTORS’ INTEREST IN CONTRACTS AND ASSETS

As at the Latest Practicable Date:

• (i) none of the Directors had any direct or indirect interests in any assets which have since 30 June 2013 (being the date to which the latest published audited consolidated financial statements of the Group) been acquired or disposed of by or leased to any members of the Group, or are proposed to be acquired or disposed of by or leased to any members of the Group; and

• (ii) none of the Directors was materially interested in any contracts or arrangements entered into by any members of the Group subsisting as at the Latest Practicable Date which is significant in relation to the business of the Group.

7. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or claims of material importance known to the Directors to be pending or threatened against any member of the Group.

8. MATERIAL CONTRACTS

The Group had entered into the following contracts within two years immediately preceding the date of this circular which are contracts not being in the ordinary course of business of the Company or may be material:

• (a) The Sale and Purchase Agreement;

• (b) On 26 August 2014, the Company and Shanghai Gongxie Jingmao Development Limited and Shanghai Xinbo Investment Limited entered into a non-binding letter of intent in relation to the acquisition of the entire equity interest in Shanghai Xingdi Inter Satellite Navigation Limited, which in turn holds 45% equity interest in Shanghai Beidou Satellite Navigation Platform Limited (‘‘Shanghai Beidou’’). Shanghai Beidou is principally engaged in providing navigation, precise timing, message communication and other application based on the Beidou satellite navigation platform. The consideration of the proposed acquisition shall be satisfied by the issue and allotment of 375,000,000 consideration Shares by the Company to the vendors at the issue price of HK$1.00 per Share. The terms of the proposed acquisition are subject to further negotiation and are not yet finalized as at the Latest Practicable Date;

• (c) On 10 June 2014, the Company and an independent third party entered into a nonbinding letter of intent, in relation to the acquisition of 51% equity interest in the Beidou New Application Technology Co., Ltd, which engages in the research and development of Beidou satellite navigation system, Beidou satellite communication system and provision of related services. The terms of the proposed acquisition are subject to further negotiation and are not yet finalized as at the Latest Practicable Date;

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GENERAL INFORMATION

APPENDIX II

• (d) On 9 May 2014, the Company and six subscribers entered into warrant subscription agreements (the ‘‘Warrant Subscription Agreements’’) pursuant to which the subscribers conditionally agreed with the Company to subscribe up to 430,000,000 warrants. Upon the exercise of the subscription rights attaching to the warrants in full, a maximum of 430,000,000 new shares will be issued and allotted, the issue price per warrant is HK$0.01 and the subscription price is HK$0.75 per new share. Completion of the subscription took place on 21 May 2014, 370,000,000 warrants have been issued to the subscribers pursuant to the Warrant Subscription Agreements;

• (e) On 7 May 2014, the Company and a PRC citizen entered into a non-binding letter of intent in relation to the acquisition of 51% equity interest in a company which engages in providing online payment services to and receives fee income from banks in the PRC, and is developing payment platforms for integration with gold trading and financial settlements. The consideration of the proposed acquisition will be a combination of cash and convertible bonds for an aggregate amount of an equivalent of RMB200 million, and such other profit incentives. The terms of the proposed acquisition are subject to further negotiation and are not yet finalized as at the Latest Practicable Date;

• (f) On 11 November 2013, the Company entered into placing agreements with not less than six placees for the placement of an aggregate of 302,746,064 placing shares at the placing price of HK$0.48 per placing share. Completion of the placing took place on 18 November 2013;

• (g) On 31 May 2013, the Company and Brazilian Gold Corporation (‘‘BGC’’) entered into a non-binding letter of intent in relation to the Company proposed to make a general cash offer to the shareholders of BGC for not less than 50.95% of the outstanding common shares of BGC at a price of Canada dollar of $0.27 per share. BGC is a Canadian-based public company with a focus on the acquisition, exploration and development of gold properties located in northern Brazil. The terms of the proposed acquisition are subject to further negotiation and are not yet finalized as at the Latest Practicable Date; and

• (h) On 11 January 2013, the Company and Mr. Wu Fong Shing, an Independent Third Party, entered in to an agreement (the ‘‘Share Purchase Agreement’’) in relation to the acquisition of the entire equity interest in Port First Limited, which in turn holds 70% equity interest of gold mines in Shandong Province of the PRC, at a consideration of HK$460 million.

On 30 September 2013, 28 November 2013 and 30 June 2014, the above parties entered into three supplemental agreements to extend the long stop date to 31 December 2014 and amend certain terms and conditions of the Share Purchase Agreement.

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GENERAL INFORMATION

APPENDIX II

9. MISCELLANEOUS

• (i) The registered office of the Company is at Royal Bank of Canada Trust Company (Cayman) Limited, 4th Floor, Royal Bank House, 24 Shedden Road, George Town, KY11111, Cayman Islands and the head office and principal place of business in Hong Kong is at Units 314–315, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong.

• (ii) The secretary of the Company is Mr. Poon Yan Wai, who is a Fellow Member of The Hong Kong Institute of Certified Public Accountants. He also holds a Bachelor’s degree in Accountancy and a Master’s degree in Corporate Finance from Hong Kong Polytechnic University.

• (iii) The Hong Kong branch share registrar of the Company is Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (iv) The English text of this circular, the notice of the EGM and the accompanying form of proxy shall prevail over their respective Chinese texts in case of inconsistency.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours at the head office and principal place of business of the Company in Hong Kong at Units 314–315, Wing On Plaza, 62 Mody Road, Tsim Sha Tsui East, Kowloon, Hong Kong from the date of this circular up to and including the date of the EGM:

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

• (ii) the annual reports of the Company for each of the two years ended 30 June 2012 and 2013;

• (iii) the interim report of the Company for the six months period ended 31 December 2013;

• (iv) all material contracts referred to in the paragraph headed ‘‘Material contracts’’ in this appendix; and

• (v) this circular.

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NOTICE OF EGM

==> picture [69 x 69] intentionally omitted <==

KINGWELL GROUP LIMITED 京 維 集 團 有 限 公 司

(Incorporated in Cayman Islands with limited liability)

(Stock Code: 1195)

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the ‘‘EGM’’) of Kingwell Group Limited (the ‘‘Company’’) will be held at 11:30 a.m. at Units 314–315, Wing On Plaza, 62 Mody Road, TST East, Kowloon, HK on 23 October 2014 for the purpose of considering and, if thought fit, passing with or without modifications, the following resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT the Sale and Purchase Agreement dated 27 August 2014 entered into between the Company (the ‘‘Vendor’’) and Splendid Vantage Limited (the ‘‘Purchaser’’) (the details of which are set out in the circular dated 26 September 2014 (the ‘‘Circular’’) dispatched by the Company to its shareholders and a copy of which has been produced to the meeting marked ‘‘X’’and signed by the chairman of the meeting for identification purpose) in respect of the Disposal by the Company to Splendid Vantage Limited of the entire issued share capital of Superford Holding Limited and all transactions contemplated under the Sale and Purchase Agreement, including but not limited to the Disposal (as defined in the Circular) be and are hereby approved, ratified and confirmed and the director(s) of the Company be and are hereby authorized to take all actions and to sign, execute and deliver all such agreements, deeds and documents for and on behalf of the Company as it may in its discretion consider necessary or desirable for the purpose of effecting the Sale and Purchase Agreement and the transactions contemplated thereby or incidental thereto, including but not limited to the Disposal.’’

By Order of the Board KINGWELL GROUP LIMITED Hui Lung Hing

Executive Director

Hong Kong, 26 September 2014

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