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 of this circular or as to the action to be taken, you should consult your stockbroker or other registered dealer 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, together with the enclosed form of proxy, to the purchasers or transferees or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchasers or transferees.

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

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KINGWELL GROUP LIMITED 京 維 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1195)

REFRESHMENT OF GENERAL MANDATE AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

Grand Vinco Capital Limited

(A wholly-owned subsidiary of Vinco Financial Group Limited)

A letter from the board of directors of Kingwell Group Limited is set out on pages 3 to 7 of this circular. A letter of advice from Vinco Capital to the Independent Board Committee and the Independent Shareholders is set out on pages 9 to 18 of this circular.

A notice convening the extraordinary general meeting of Kingwell Group Limited to be held at 10:30 a.m. on 23 October 2014 at Units 314–315, Wing On Plaza, 62 Mody Road, TST East, Kowloon, Hong Kong, is set out on page 19 of this circular. If you are unable to attend the extraordinary general meeting in person, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon. In order to be valid, the proxy form must be deposited by hand or post to Company’s Hong Kong branch share registrar and transfer office, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, not less than 48 hours before the time appointed for holding the extraordinary general meeting or adjourned meeting or not less than 24 hours before the time appointed for taking the poll (as the case may be). If the proxy form is signed by a person under a power of attorney or other authority, a notarially certified copy of that power of attorney or authority shall be deposited at the same time as mentioned in the proxy form. Completion and return of the proxy form will not preclude you from subsequently attending and voting at the extraordinary general meeting or any adjournment thereof should you so wish.

26 September 2014

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
Letter from Vinco Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
Notice of Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	19

– i –

DEFINITIONS

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

‘‘AGM’’	the annual general meeting of the Company held on 20
	December 2013 for the Shareholders to approve, inter alia, the
	Current General Mandate
‘‘Articles’’	the existing Articles of Association of the Company as may be
	amended from time to time
‘‘associates’’	has the meaning ascribed to it under the Listing Rules
‘‘Board’’	the board of Directors
‘‘Company’’	Kingwell Group Limited, a company incorporated in the
	Cayman Islands with limited liability, the issued shares of
	which are listed on the main board of the Stock Exchange
‘‘connected person(s)’’	has the meaning ascribed to it under the Listing Rules
‘‘controlling Shareholder(s)’’	has the meaning ascribed to it under the Listing Rules
‘‘Current General Mandate’’	the general mandate approved by the Shareholders at the AGM
	to grant to the Directors general authority to allot and issue
	Shares not exceeding 20% of the issued share capital of the
	Company as at the date of AGM
‘‘Directors’’	the directors of the Company from time to time
‘‘EGM’’	the extraordinary general meeting of the Company to be
	convened and held on 23 October 2014 to consider and, if
	thought fit, approve the ordinary resolution contained in the
	notice of the meeting which are set out on pages 19 to 21 of
	this circular
‘‘Group’’	the Company and its subsidiaries
‘‘HK$’’	Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’	the Hong Kong Special Administrative Region of the People’s
	Republic of China
‘‘Independent Board Committee’’	an independent board committee of the Board, comprising the
	independent non-executive Directors, formed to advise the
	Independent Shareholders as to, inter alia, the fairness and
	reasonableness of the grant of the New General Mandate

– 1 –

DEFINITIONS

• ‘‘Independent Shareholders’’

• Shareholders other than any controlling Shareholders and their associates or, where there are no controlling Shareholders, any Directors (excluding independent non-executive Directors) and the chief executive of the Company and their respective associates who shall hold Shares as at the date of the EGM

• ‘‘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 of Hong Kong Limited

• ‘‘New General Mandate’’

• the general mandate proposed to be granted to the Directors at the EGM to allot and issue Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the resolution at the EGM

• ‘‘Refreshment of General Mandate’’

• the proposed refreshment of the Current General Mandate and grant of the New General Mandate

• ‘‘SFO’’

• the Securities and Futures Ordinance, Chapter 571 of the laws of Hong Kong

• ‘‘Share(s)’’

• ordinary share(s) of HK$0.10 each in the share capital of the Company

• ‘‘Shareholder(s)’’ holder(s) of Share(s)

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

• ‘‘Vinco Capital’’

• Grand Vinco Capital Limited, a wholly-owned subsidiary of Vinco Financial Group Limited (Stock code: 8340), a licensed corporation under the SFO to conduct type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of General Mandate

• ‘‘%’’

per cent.

– 2 –

LETTER FROM THE BOARD

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KINGWELL GROUP LIMITED

京 維 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1195)

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

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

Independent Non-Executive Directors:

Mr. Huang Jian Zi

Mr. Cheung Chuen

Ms. Wong Lai Wing

Principal place of business:

Units 314–315 Wing On Plaza 62 Mody Road Tsimshatsui East Kowloon, Hong Kong

26 September 2014

To the Shareholders

Dear Sir or Madam,

REFRESHMENT OF GENERAL MANDATE

INTRODUCTION

The purpose of this circular is to provide you with the information relating to (i) the Refreshment of General Mandate; (ii) the recommendation from the Independent Board Committee to the Independent Shareholders in respect of the Refreshment of General Mandate; (iii) the letter of advice from Vinco Capital to the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of General Mandate; and (iv) the notice of the EGM.

– 3 –

LETTER FROM THE BOARD

CURRENT GENERAL MANDATE

At the AGM, the Shareholders approved, among other things, an ordinary resolution to grant to the Directors the Current General Mandate to allot and issue not more than 437,689,579 Shares, being 20% of the aggregate nominal amount of the issued share capital of the Company of 2,188,447,897 Shares as at the date of passing of such resolution.

Fund raising activities under the Current General Mandate

Save for the fund raising activity mentioned below, the Company has not carried out other fund raising activities under the Current General Mandate since the AGM up to the Latest Practicable Date.

				Actual use of
		Estimated net		proceeds as at the
Date of		proceeds	Intended use of	Latest Practicable
announcement	Event	(approximately)	proceeds	Date
21/05/2014	Issuing of	HK$3.60 million	To be used for the	Used as intended
	370,000,000 warrants		reduction of interest-
	under general mandate		bearing bank and other
			borrowings, general
			working capital and
			future investments of
			the Group

Extent of Current General Mandate utilised

Subsequent to the completion of the issuing of 370,000,000 warrants under general mandate as set out above, there only remains 67,689,579 Shares issuable under the Current General Mandate as at the Latest Practicable Date. Such number only represents approximately 2.93% of the issued Shares as at the Latest Practicable Date.

As at the Latest Practicable Date, the Company has not made any refreshment of the Current General Mandate since the AGM.

PROPOSED GRANT OF NEW GENERAL MANDATE

In accordance with the Listing Rules, principally Rule 13.36(4), the Company will be convening the EGM at which ordinary resolution will be proposed to seek the approval of the Independent Shareholders to grant the New General Mandate such that the Directors be granted general authority to allot and issue new Shares not exceeding 20% of the issued share capital of the Company as at the date of passing the relevant ordinary resolution.

– 4 –

LETTER FROM THE BOARD

REASONS FOR THE REFRESHMENT OF GENERAL MANDATE

The Group’s principal activity is the manufacture and sale of rigid printed circuit boards, property development and gold mining. The Company is also an investment holding company.

The Board believes that the Refreshment of the General Mandate is in the best interests of the Company and the Shareholders as a whole by maintaining the financial flexibility necessary for the Group’s future business development. The Board considers equity financing to be one of the important fund raising channels of the Group. While the Board has no concrete fund raising proposal as at the Latest Practicable Date, the Board is now proposing to seek the approval of the Independent Shareholders at the EGM of the grant of the New General Mandate such that should funding needs arise or attractive terms for investment in the Shares become available from potential investors, the Board will be able to respond to the market and such investment opportunities promptly without having first to obtain the consent of the Shareholders in general meeting and to avoid the uncertainties in such circumstances that specific mandate may not be obtained in a timely manner.

EXTRAORDINARY GENERAL MEETING

As the New General Mandate is to be proposed to the Shareholders before the Company’s next annual general meeting, under Rule 13.36(4) of the Listing Rules, this proposal will be subject to the Independent Shareholders’ approval by way of an ordinary resolution at the EGM at which any of the controlling Shareholders and their associates, or where there are no controlling Shareholders, Directors (excluding independent non-executive Directors) and the chief executives of the Company and all their respective associates shall abstain from voting in favour of the resolution approving the proposed grant of the New General Mandate. As at the Latest Practicable Date, the Company has no controlling Shareholders. Mr. Hui Lung Hing and Mr. Sze Ming Yee, being executive Directors with shareholding interests in the Company, together with their respective associates are required to abstain from voting in favour of the resolution approving the proposed grant of the New General Mandate.

The notice convening the EGM is set out on pages 19 to 21 of this circular. At the EGM, ordinary resolution will be proposed to approve the proposed grant of the New General Mandate. A form of proxy for use at the EGM is also enclosed with this circular. To be valid, the form of proxy must be completed in accordance with the instructions printed thereon and deposited, together with the power of attorney or other authority at the Company’s Hong Kong branch share registrar and transfer office, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and delivery of the form of proxy will not preclude you from attending and voting in person at the EGM if you so wish.

– 5 –

LETTER FROM THE BOARD

VOTING BY POLL

Under Rule 13.39 of the Listing Rules, any votes of the Shareholders at a general meeting must be taken by poll. Therefore, the chairman of the EGM will demand a poll for the resolution put forward at the EGM pursuant to the articles of association of the Company. The Company will appoint Hong Kong Registrars Limited as scrutineer to handle vote-taking procedures at the EGM. An announcement will be made by the Company following the conclusion of the EGM to inform the Shareholders of the results of the EGM.

INDEPENDENT BOARD COMMITTEE

The Independent Board Committee comprising Mr. Huang Jian Zi, Mr. Cheung Chuen and Ms. Wong Lai Wing, being all the independent non-executive Directors, has been established to advise the Independent Shareholders on the Refreshment of the General Mandate.

Vinco Capital has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of the General Mandate.

The Independent Board Committee, having taken into account the advice of Vinco Capital in relation to the Refreshment of the General Mandate, is of the opinion that the Refreshment of the General Mandate is in the interests of the Company and the Shareholders as a whole, and is fair and reasonable so far as the Independent Shareholders are concerned, and accordingly recommends the Independent Shareholders to vote in favour of the ordinary resolution which will be proposed at the EGM for approving the Refreshment of the General Mandate.

The text of the letter from the Independent Board Committee is set out on page 8 of this circular and the text of the letter from Vinco Capital containing its advice is set out on pages 9 to 18 of this circular.

GENERAL INFORMATION

Your attention is drawn to the letter of advice from Vinco Capital set out on pages 9 to 18 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in connection with the Refreshment of the General Mandate and the letter of the Independent Board Committee set out on page 8 of this circular which contains its recommendation to the Independent Shareholders in relation to the Refreshment of the General Mandate.

– 6 –

LETTER FROM THE BOARD

RESPONSIBILITY STATEMENT

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

Yours faithfully, For and on behalf of the Board Kingwell Group Limited Hui Lung Hing Chairman

– 7 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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KINGWELL GROUP LIMITED 京 維 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1195)

26 September 2014

To the Independent Shareholders

Dear Sir or Madam,

REFRESHMENT OF GENERAL MANDATE

We refer to the circular of the Company dated 26 September 2014 (the ‘‘Circular’’) of which this letter forms part. Unless the context requires otherwise, capitalized terms used herein shall have the same meanings as defined in the Circular.

We have been appointed by the Board to consider the Refreshment of General Mandate and advise you as to the fairness and reasonableness of the same and to recommend how the Independent Shareholders should vote at the EGM. Vinco Capital has been appointed as the independent financial adviser to advise us in this respect.

Having considered the principal reasons and factors considered by, and the advice of, Vinco Capital, as set out in its letter of advice to us on pages 9 to 18 of the Circular, we are of the opinion that the Refreshment of the General Mandate is in the interests of the Company and the Shareholders as a whole and fair and reasonable so far as the Company and the Independent Shareholders are concerned. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Refreshment of the General Mandate.

Yours faithfully,

Independent Board Committee Mr. Huang Jian Zi Mr. Cheung Chuen Ms. Wong Lai Wing

– 8 –

LETTER FROM VINCO CAPITAL

The following is the text of a letter of advice from Vinco Capital to the Independent Board Committee and Independent Shareholders in relation to the Refreshment of General Mandate which has been prepared for the purpose of incorporation in this circular:

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Grand Vinco Capital Limited Units 4909–4910, 49/F., The Center 99 Queen’s Road Central, Hong Kong

26 September 2014

To the Independent Board Committee and the Independent Shareholders of Kingwell Company Limited

Dear Sirs,

REFRESHMENT OF GENERAL MANDATE

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders with respect to the Refreshment of General Mandate, details of which are set out in the letter from the Board (the ‘‘Letter from the Board’’) contained in the circular issued by the Company to the Shareholders dated 26 September 2014 (the ‘‘Circular’’), of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless the context otherwise requires.

At the AGM, the Shareholders approved, among other things, the purposed ordinary resolution to grant the Company’s directors the Current General Mandate. As at the date of passing of the resolution, there were a total of 2,188,447,897 Shares in issue and the Directors were authorised to allot and issue 20% of the issued Shares, being 437,689,579 Shares under the Current General Mandate. During the period from the grant of the Current General Mandate to the Latest Practicable Date, the Current General Mandate has been utilised as to 370,000,000 unlisted warrants issued pursuant to the subscription agreement dated 21 May 2014 at HK$0.01 each, there only remains 67,689,579 Shares issuable under the Current General Mandate as at the Latest Practicable Date. Such number only represents approximately 2.93% of the issued Shares as at the Latest Practicable Date. The Company has not purposed any refreshment of the Current General Mandate since the AGM held on 20 December 2013 and has utilised approximately 84.53% of the provision of the Current General Mandate.

In order to allow the flexibility to raise further capital through the issue of new Shares to finance its future business development if and when an opportunity arises, the Company is now in line to propose the ordinary resolution of Refreshment General Mandate and will convene

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LETTER FROM VINCO CAPITAL

Independent Shareholders at the EGM for discussion and approval. Subject to the passing of the ordinary resolution for the approval of the Refreshment of General Mandate prior the next annual general meeting, the Company would be allowed under the New General Mandate to allot and issue up to 461,303,979 Shares, being 20% of the Shares in issue at the Latest Practicable Date.

Under Rule 13.36(4) of Listing Rules, any proposed Refreshment of General Mandate prior to the Company’s next annual general meeting must be approved by Independent Shareholders at the EGM, at which the controlling Shareholders and their associates, or where there are no controlling Shareholders, Directors (excluding independent non-executive Directors) and the chief executives of the Company as well as all their respective associates shall be abstained from voting in favour of the resolution approving the Refreshment of General Mandate. As at the Latest Practicable Date, there is no controlling shareholder. Mr. Hui Lung Hing and Mr. Sze Ming Yee, being the executive Directors with shareholding interests in the Company as well as their respective associates are as a result abstained from voting in favour of the resolution approving the proposed grant of the New General Mandate.

The Independent Board Committee, comprising Mr. Huang Jian Zi, Mr. Cheung Chuen and Ms. Wong Lai Wing, all being the independent non-executive Directors, has been established to advise the Independent Shareholders as to whether the terms of the proposed grant of the New General Mandate are fair and reasonable so far as the Independent Shareholders are concerned and whether the Refreshment of General Mandate are in the interests of the Company and the Independent Shareholders as a whole. We have been appointed, and approved by the Independent Board Committee, as the independent financial advisor to advise the Independent Board Committee and the Independent Shareholders in respect of the Refreshment of General Mandate.

In our capacity as the independent financial advisor to the Independent Board Committee and the Independent Shareholders for the purposes of the Listing Rules, our role is to give an independent opinion as to whether the granting of the New General Mandate are in the interests of the Company and the Shareholders as a whole, are fair and reasonable so far as the Shareholders are concerned, and whether the Independent Board Committee should recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM for approving the Refreshment of General Mandate.

BASIS OF OUR OPINION AND RECOMMENDATION

In formulating our opinion and recommendation to the Independent Board Committee and the Independent Shareholders in relation to the Refreshment of General Mandate, we have relied on the information, facts and representations contained or referred to in the Circular and the information, facts and representations provided by, and the opinions expressed by the Directors, management of the Company and its subsidiaries. We have assumed that all information, facts, opinions and representations made or referred to in the Circular were true, accurate and complete at the time they were made and continued to be true, accurate and complete up to and including the date of the EGM and that all expectations and intentions of the Directors, management of the Company and its subsidiaries, will be met or carried out as the case may be. We have no reason to doubt the truth, accuracy and completeness of the information, facts, opinions and representations provided to us by

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LETTER FROM VINCO CAPITAL

the Directors, management of the Company and its subsidiaries. The Directors jointly and severally accept full responsibility for the accuracy of the information contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts not contained in the Circular, the omission of which would make any statement in the Circular misleading. We have also sought and received confirmation from the Directors that no material facts have been omitted from the information supplied and opinions expressed.

We consider that we have been provided with, and we have reviewed sufficient information to reach an informed view, to justify relying on the accuracy of the information contained in the Circular and to provide a reasonable basis for our opinion. We have no reason to doubt that any relevant material facts have been withheld or omitted from the information provided and referred to in the Circular or the reasonableness of the opinions and representations provided to us by the Directors, management of the Company and its subsidiaries. We have not, however, conducted any independent verification of the information provided, nor have we carried out any independent investigation into the business, financial conditions and affairs of the Company or its future prospects.

Based on the foregoing, we confirm that we have taken all reasonable steps, which are applicable to the Refreshment of General Mandate, as referred to in Rule 13.80 of the Listing Rules (including the notes thereof) in formulating our opinion and recommendation.

This letter is issued for the information for the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the terms of the Refreshment of General Mandate and, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED IN RELATION TO THE REFRESHMENT OF GENERAL MANDATE

In arriving at our opinion and recommendation to the Independent Board Committee and the Independent Shareholders in relation to the Refreshment of General Mandate, we have considered the principal factors and reasons set out below:

Background to and reasons for the Refreshment of General Mandate

The Company’s principal activities are manufacturing and selling rigid printed circuit boards, property development and gold mining. The Company is also an investment holding company.

At the AGM, the Shareholders approved, among other things, the purposed ordinary resolution to grant the Company’s directors the Current General Mandate. As at the date of passing of the resolution, there were a total of 2,188,447,897 Shares in issue and the Directors were authorised to allot and issue 20% of the issued Shares, being 437,689,579 Shares under the Current General Mandate. During the period from the grant of the Current General Mandate to the Latest Practicable

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LETTER FROM VINCO CAPITAL

Date, the Current General Mandate has been utilised as to 370,000,000 unlisted warrants issued pursuant to the subscription agreement dated 21 May 2014 at HK$0.01 each. The Company has not proposed any refreshment of the Current General Mandate since the AGM held on 20 December 2013 and has utilised approximately 84.53% of the provision of the Current General Mandate.

Given that the Current General Mandate granted to the Directors has been substantially utilised upon completion of the issue of unlisted warrants during May 2014, if the Current General Mandate is not refreshed, the Directors would only be allowed to allot and issue 67,689,579 Shares which represents approximately 2.93% of the issued Shares as at the Latest Practicable Date until the next annual general meeting of the Company. In order to maintain a flexible mean for the Company to maintain a better general working capital and to raise funds through the issue of new Shares for it continuous business development in future when any opportunity arises, the Company is now in line to propose the ordinary resolution of Refreshment General Mandate and will convene Independent Shareholders at the EGM for discussion and approval. Subject to the passing of the ordinary resolution for the approval of the Refreshment of General Mandate prior the next annual general meeting, the Company would be allowed under the New General Mandate to allot and issue up to 461,303,979 Shares, being 20% of the Shares in issue at the Latest Practicable Date.

As disclosed in the Letter from the Board, the Board believes that the Refreshment of the General Mandate is in the best interests of the Company and the Shareholders as a whole by maintaining the financial flexibility necessary for the Company’s future business development. As discussed with the Directors, the Group considers equity financing to be one of the important funding raising channels of the Company and the grant of the New General Mandate would allow the Company to respond to the market and such investment opportunities promptly without having first to obtain the consent of the Shareholders in general meeting and to avoid the uncertainties in such circumstances that specific mandate may not be obtained in a timely manner when there is certain funding needs arise or attractive terms for investment in the Shares become available.

According to the interim report of the Company for the six months ended 31 December 2013 (the ‘‘Interim Report 2013’’), the Company is currently seeking and assessing different investment opportunities, and is keen to diversify its investment portfolio, particularly on the gold mining industry. On 26 August 2014, the Company announced that it has entered into letter of intent to acquire Shanghai Gongxie Jingmao Development Limited (上海工協經貿發展有限公司) and Shanghai Xinbo Investment Limited (上海鑫博投資有限公司) and is now considering the possibility to finance the possible acquisition by issuing new Shares. After discussing with the Directors, we have been advised by them that consider that the Refreshment of the Current General Mandate would enable the Company to respond in a timely manner to meet the possible capital commitment. According to them, should the possible acquisition be materialised, the Company can utilise its expertise and resources to develop its market share in the mainland navigation system. Besides the possible acquisition of the aforementioned mainland companies specialising in navigation system, the Company is also in line to expand its investment in gold mining as the Directors would like to leverage their success into the mainland gold mining market after its

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LETTER FROM VINCO CAPITAL

acquisition of a gold mining company in Russian Federation in August 2012. The Directors have been identifying different investment opportunities of several mainland gold mining companies and are keen to sanction possible acquisition when attractive investment opportunities arise. After our discussion with the Directors, we understand that the Group has not identified any attractive investment opportunities as of the Latest Practicable Date.

In addition, the Directors consider that the Refreshment of General Mandate will provide the Company with an additional financing alternative in a less costly and a relatively flexible way as it would not create any payment of interest obligations on the Company as compared with debt financing, and is less time costly than raising funds by other forms of pro rata equity financing method such as rights issue or open offer.

Taken the above-mentioned into account, as the reasons for the Refreshment of General Mandate are in line with the long term expansion strategy of the Company, we are of the view that the Refreshment of General Mandate is in the interest of the Company and the Shareholders as a whole.

Financial flexibility

(i) in terms of capital-raising amount

The Current General Mandate has been utilised as to issuance of 370,000,000 unlisted warrants and leaving only 67,689,579 Shares that can be issued. If the Refreshment of General Mandate is approved and on the basis that no further Shares will be issued and/or repurchased by the Company between the Latest Practicable Date and the date of the EGM, up to 461,303,979 Shares, representing 20% of the Shares in issue as at the Latest Practicable Date, could be allotted and issued under the New General Mandate.

As at the Latest Practicable Date, although the Company has not entered into any legally binding agreements in relation to any investments, Refreshment of General Mandate provides an alternative means of equity financing to the Company when capturing potential acquisitions, particularly that the Current General Mandate has been substantially utilised up to approximately 84.53%. In this respect, we consider that the Refreshment of General Mandate will maintain and/or enhance the financial flexibility for raising capital and capturing potential investment opportunities for the Company, if and when required, by way of issue of new Shares, and the terms of the Refreshment of General Mandate are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

(ii) in terms of time required for raising capital

The Directors advised that, as at the Latest Practicable Date, no immediate funding was required for the operation of the business of the Company, and no legally binding agreements in relation to any investments have been entered. However, the Directors advised that the Company would review business opportunities and investments from time to time to enhance the Shareholders’ value and believes that funding requirements or appropriate investment opportunities

– 13 –

LETTER FROM VINCO CAPITAL

to expand and diversify existing business portfolios may arise from time to time, and such funding or investment decisions may have to be met or made within a short period of time. Moreover, the Directors advised that if any potential investors offer attractive terms for investment in the Shares and subject to the then market conditions, the Directors will consider and may conduct an equity fund raising exercise by issuing new Shares. Accordingly, we believe that the Refreshment of General Mandate will provide the Company with the financial flexibility as allowed under the Listing Rules to allot and issue new Shares as consideration for funding the business development opportunities in the future as and when such opportunities arise.

Hence, taking into account any funding requirement or appropriate investment opportunities that may happen from time to time and any share placement exercise that are dependent, to a large extent, on market conditions and such opportunities may not always arise, we are of the view that the Refreshment of General Mandate could (i) enhance the financing flexibility of the Company to respond to potential investment opportunities; and (ii) allow the Company to raise capital or make prompt investment decisions within a short period of time, if and when any equity financing should be required.

Liquidity of the Company

As stated in the Interim Report 2013, in face of the challenging market conditions in the PRC, such as the rising raw material and labour costs, the shortage of labour force and environmental production requirements increased production costs, the Directors understand the importance of diversifying its business operations in more profitable areas, namely the gold mining market, and thus has continuously been seeking to increase investment in its gold mining operation. However, there is no guarantee that cash resources available to the Company will be sufficient or be available for such business and/or investment development in the future. In the event that the Company identifies suitable businesses and/or investment development opportunities with insufficient financial resources on hand, or is unable to obtain loan financing on acceptable terms, or cannot find other financing alternatives in a timely manner, the Company may lose its chances to capture an otherwise favourable opportunity and/or favourable investment to expand its business portfolio. We thus consider that it is reasonable for the Company to maintain a strong capital base while securing additional means for fund raising for possible acquisition and/or investment opportunities as and if they arise. In addition, without the Refreshment of General Mandate, the Company may have to pay cash or settle the investment or acquisition consideration in other means and lose the financial flexibility to use consideration shares.

Based on the foregoing, we concur with the Directors’ view that the Refreshment of General Mandate is in the ordinary and usual course of the business, and the terms of the Refreshment of General Mandate are fair and reasonable to the Company, and in the interests of the Company and Shareholders as a whole.

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LETTER FROM VINCO CAPITAL

Fund raising activities in the past twelve months

Set out below is the fund raising activities conducted by the Company in the past twelve months prior to the Latest Practicable Date:

				Actual use of
				proceeds as at
Date of		Net proceeds raised	Intended use of	the Latest
announcement	Fund raising activities	(approximate)	net proceeds	Practicable Date
18 November	Placement of	HK$144.62 million	To be used for the	Used as intended
2013	302,746,064 new		reduction of interest
	shares under general		borrowings and
	mandate		general working
			capital of the Group
21 May 2014	Issuing of 370,000,000	HK$3.60 million	To be used for the	Used as intended
	unlisted warrants		reduction of interest-
	under general		bearing bank and
	mandate		other borrowings,
			general working
			capital and future
			investments of the
			Group

Save as and expect for the above, the Directors confirmed that the Company has not conducted any other equity fund raising activities in the past twelve months immediately prior to the Latest Practicable Date.

The net proceeds obtained from the previous fund raising activities were applied to be used for the reduction of interest borrowings and general working capital of the Company. The Directors contend that the Refreshment of General Mandate is solely intended to provide financial flexibility to the Company and will only apply to the possible acquisition, if and when it materialises, as referred to the discussion above or to other potential investment opportunities as and when they arise.

In view of the above, the Directors consider the use of general mandate is crucial in a competitive business environment and the New General Mandate, which may or may not be utilised, is in the best interests of the Company and Shareholders as a whole.

We are of the view that the Refreshment of General Mandate is fair and reasonable and in the best interest of the Company and the Shareholders as a whole as (i) it would allow the Company to finance its interest expenses whilst maintaining a better working capital; and (ii) it contributes the Company a higher degree of financial flexibility and readiness of issuing Shares when attractive investment opportunities arise.

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LETTER FROM VINCO CAPITAL

Potential dilution to the shareholding interests of the Shareholders

The table below depicts the shareholding structure of the Company as at the Latest Practicable Date, and for illustrative purpose, the shareholding structure of the Company assuming (i) full utilisation of the New General Mandate, assuming no other Shares are issued and/or repurchased by the Company; and (ii) upon full utilisation of the New General Mandate, assuming that the subscription rights attaching to the 370,000,000 unlisted warrants are exercised in full before the date of the EGM and no other Shares would be issued and/or repurchased by the Company.

Shareholders Yin Jia Tang Directors Sze Ming Yee Hui Lung Hing Public Shareholders Warrant subscribers (Note 1) Other public Shareholders Subtotal Shares to be issued under New General Mandate Total	As at the Latest Practicable Date No. of Shares Approximate % 138,200,000 5.99% 345,778,539 14.99% 250,000,000 10.84% 0 0.00% 1,572,541,358 68.18% 2,306,519,897 100.00% — — 2,306,519,897 100.00%	Upon full utilisation of the New General Mandate (assuming that no other Shares would be issued and/or repurchased by the Company from the Latest Practicable Date up to the date of EGM) No. of Shares Approximate % 138,200,000 4.99% 345,778,539 12.49% 250,000,000 9.03% 0 0.00% 1,572,541,358 56.82% 2,306,519,897 83.33% 461,303,979 16.67% 2,767,823,876 100.00%	Upon full utilisation of the New General Mandate (assuming that the subscription rights attaching to the 370,000,000 unlisted warrants are exercised in full before the date of EGM and no other Shares would be issued and/or repurchased by the Company) No. of Shares Approximate % 138,200,000 4.30% 345,778,539 10.77% 250,000,000 7.78% 370,000,000 11.52% 1,572,541,358 48.96% 2,676,519,897 83.33% 535,303,979 16.67% 3,211,823,876 100.00%	Upon full utilisation of the New General Mandate (assuming that the subscription rights attaching to the 370,000,000 unlisted warrants are exercised in full before the date of EGM and no other Shares would be issued and/or repurchased by the Company) No. of Shares Approximate % 138,200,000 4.30% 345,778,539 10.77% 250,000,000 7.78% 370,000,000 11.52% 1,572,541,358 48.96% 2,676,519,897 83.33% 535,303,979 16.67% 3,211,823,876 100.00%
				100.00%

Notes:

1. 370,000,000 unlisted warrants were allotted to six public investors under the Current General Mandate on 21 May 2014.

Shareholders should be aware that the Current General Mandate will be revoked upon approval at the EGM of the Refreshment of General Mandate, and will be and continue to be in force until the earliest of (i) the conclusion of the Company’s next annual general meeting; (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Company’s memorandum of association or bye-laws or any applicable law to be held; and (iii) the revocation or variation of the authority given under the relevant resolution to be proposed at the EGM of the Company by ordinary resolution of the Independent Shareholders in general meeting. Such duration is in compliance with Rule 13.36(3) of the Listing Rules.

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LETTER FROM VINCO CAPITAL

Scenario 1: Upon full utilisation of the New General Mandate (assuming that no other Shares would be issued and/or repurchased by the Company from the Latest Practicable Date up to the date of the EGM)

Upon full utilisation of the New General Mandate, 461,303,979 Shares will be issued, representing 20% of the existing issued share capital of the Company as at the Latest Practicable Date and approximately 16.67% of the issued share capital of the Company as enlarged by the Shares issued under the New General Mandate. Assuming no Shares will be issued and/or repurchased by the Company between the Latest Practicable Date and the date of the EGM, the aggregate shareholding of the other public Shareholders will decrease from approximately 68.18% to 56.82% upon full utilisation of the New General Mandate. The other public Shareholders will have a potential maximum decrease in shareholding of approximately 11.36% following the full utilisation of the New General Mandate.

Scenario 2: Upon full utilisation of the New General Mandate (assuming that the subscription rights attaching to the 370,000,000 unlisted warrants are exercised in full before the date of the EGM and no other Shares would be issued and/or repurchased by the Company)

Upon full of the New General Mandate, 461,303,979 Shares will be issued, representing 20% of the existing issued share capital of the Company as at the Latest Practicable Date and approximately 16.67% of the issued share capital of the Company as enlarged by the Shares issued under the New General Mandate. Assuming that the subscription rights attaching to the 370,000,000 unlisted warrants are fully exercised between the Latest Practicable Date and the date of the EGM, the aggregate shareholding of the other public Shareholders will decrease from approximately 68.18% to 48.96% upon full utilisation of the New General Mandate. The other public Shareholders will have a potential maximum decrease in shareholding of approximately 19.22% following the full utilisation of the New General Mandate.

Under both scenarios, the maximum dilution effect on the shareholding is limited to 20% of the existing issued capital of the company as at the date of EGM or 16.67% of the enlarged issued share capital of the Company immediately upon full utilisation of the New General Mandate.

Taking into account the benefits of the Refreshment of General Mandate as discussed above and the fact that the shareholding of all the Shareholders will be diluted to the same extent upon any utilisation of the New General Mandate, with all other things being equal, we consider such dilution or potential dilution of shareholding of the Independent Shareholders to be acceptable.

RECOMMENDATION

Having taken into consideration the above principal factors and reasons regarding the Refreshment of General Mandate, in particular:

• (i) during the period from the grant of the Current General Mandate to the Latest Practicable Date, approximately 84.53% of the Current General Mandate has been utilised;

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LETTER FROM VINCO CAPITAL

• (ii) the New General Mandate allows the Company to raise capital by allotment and issuance of additional new Shares;

• (iii) the New General Mandate enhances financial flexibility for the Company to raise capital or capture potential investment opportunities within a short period of time if and when any equity financing should be required;

• (iv) the New General Mandate enhances financial flexibility for the Company to reduce interest borrowing and general working capital of the Company; and

• (v) the acceptable potential dilution to shareholdings of the Independent Shareholders,

we are of the opinion that the Refreshment of General Mandate is in the interests of the Company and the Shareholders as a whole, and the terms of the Refreshment of General Mandate are fair and reasonable and are on the ordinary and usual course of business so far as the Shareholders are concerned. Accordingly, we advise the Independent Board Committee and the Independent Shareholders to vote in favour of the ordinary resolution in relation to the Refreshment of General Mandate to be proposed at the EGM.

Independent Shareholders are, however, reminded to note the potential dilution effect of the full utilisation of the Refreshment of General Mandate on their shareholding interests in the Company.

Yours faithfully, For the on behalf of Grand Vinco Capital Limited Alister Chung Managing Director

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NOTICE OF EXTRAORDINARY GENERAL MEETING

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

KINGWELL GROUP LIMITED

京 維 集 團 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1195)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘EGM’’) of Kingwell Group Limited (the ‘‘Company’’) will be held at Units 314-315, Wing On Plaza, 62 Mody Road, TST East, Kowloon, Hong Kong on 23 October 2014 at 10:30 a.m. for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution as ordinary resolution:

ORDINARY RESOLUTION

‘‘THAT:

• (a) subject to paragraph (c) below, the exercise by the directors of the Company (the ‘‘Directors’’) during the Relevant Period (as defined below) of all the powers of the Company to allot, issue and deal with additional shares in the capital of the Company and to make and grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into Shares) which might require the exercise of such powers be and is hereby generally and unconditionally approved;

• (b) the approval in paragraph (a) of this resolution shall authorize the Directors during the Relevant Period to make or grant offers, agreements and options (including warrants, bonds, debentures, notes and other securities which carry rights to subscribe for or are convertible into Shares) which might require the exercise of such powers after the end of the Relevant Period;

• (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to options or otherwise) by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to (i) a Right Issue (as defined below); or (ii) the exercise of rights of subscription or conversion under the terms of any warrants issued by the Company or any securities which are convertible into shares of the Company; or (iii) the exercise of any option under any share option scheme or similar arrangement for time being adopted for the grant or issue of officers, employees of the Company and/or any of its subsidiaries or other eligible participants of shares or rights to acquire shares in the Company; or (iv) any script dividend or similar arrangement providing for the allotment of shares in lieu of

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NOTICE OF EXTRAORDINARY GENERAL MEETING

the whole or part of the cash payment for a dividend on shares of the Company in accordance with the Articles of Association of the Company, shall not exceed 20 per cent. of the aggregate nominal amount of the issued share capital of the Company in issue at the date of 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 earliest 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 or any applicable law to be held; or

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

‘‘Right Issue’’ means an offer of shares or other securities of the Company open for a period fixed by the Directors to holders of shares of the Company or any class thereof on the register 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 recognized regulatory body or any stock exchange in, any territory outside the Hong Kong Special Administrative Region of the People’s Republic of China).’’

By Order of the Board Kingwell Group Limited Poon Yan Wai Company Secretary

Hong Kong, 26 September 2014

Notes:

• (1) Any member entitled to attend and vote at the EGM of the Company shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares may appoint more than one proxy to represent him and vote on his behalf at the EGM. A proxy need not be a member. A proxy or proxies representing either a member who is an individual or a member which is a corporation shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.

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

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NOTICE OF EXTRAORDINARY GENERAL MEETING

• (3) A form of proxy for use at the EGM is enclosed herewith.

• (4) The form of proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of such power of attorney must be lodged at the Company’s Hong Kong branch share registrar and transfer office, Hong Kong Registrars Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong, not less than 48 hours before the time appointed for holding the EGM or adjourned meeting or not less than 24 hours before the time appointed for taking the poll (as the case may be) and in default the form of proxy shall not be treated as valid. Completion and return of the form of proxy shall not preclude members from attending and voting in person at the EGM or at any adjourned meeting (as the case may be) should they so wish.

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