KLN Logistics Group Limited — Proxy Solicitation & Information Statement 2013

Jul 19, 2013

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt about this circular or as to the action to be taken, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Vitasoy International Holdings Limited (the “Company”), you should at once hand this circular and the accompanying form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited (the “Stock Exchange”) 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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(Incorporated in Hong Kong with limited liability) (Stock code: 345)

PROPOSALS FOR

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES,

RE-ELECTION OF DIRECTORS,

GRANT OF OPTIONS TO A DIRECTOR AND SUBSTANTIAL SHAREHOLDER AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the Annual General Meeting of the Company to be held at Salons 1, 2 & 3, Level 3, JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Thursday, 5th September, 2013 at 3:00 p.m., at which the above proposals will be considered, is being dispatched to shareholders together with this circular. Whether or not you are able to attend the Annual General Meeting, you are required to complete and return the form of proxy enclosed with the Annual Report that is being dispatched to the shareholders, in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time of the Annual General Meeting. Completion of the form of proxy shall not preclude you from attending and voting at the Annual General Meeting should you so wish.

22nd July, 2013

CONTENTS

	Page
DEFINITIONS..................................................................................................................	1
LETTER FROM THE BOARD
Introduction...............................................................................................................	3
General Mandate to Repurchase Shares ................................................................	4
General Mandate to Issue Shares
and Extension of Share Issue Mandate .............................................................	4
Re-election of Directors ..........................................................................................	4
Grant of Options to a Director and Substantial Shareholder..............................	7
Voting by way of Poll ..............................................................................................	10
Action to be taken ....................................................................................................	10
Responsibility Statement ........................................................................................	10
Recommendation ......................................................................................................	10
APPENDIX I – REPURCHASE MANDATE
EXPLANATORY STATEMENT ..........................................	11
APPENDIX II – LETTER FROM THE INDEPENDENT
NON-EXECUTIVE DIRECTORS.......................................	13
NOTICE OF ANNUAL GENERAL MEETING.........................................................	14

– i –

DEFINITIONS

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

“AGM” the annual general meeting of the Company to be held at Salons 1, 2 & 3, Level 3, JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Thursday, 5th September, 2013 at 3:00 p.m. “Associates” has the meaning ascribed to such term from time to time in the Listing Rules “Board” the board of Directors “Companies Ordinance” the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) “Company” Vitasoy International Holdings Limited (維他奶國際集團有限公司), a company incorporated in Hong Kong, whose shares are listed on the Stock Exchange “connected person” has the meaning ascribed to such term from time to time in the Listing Rules and “connected persons” shall be construed accordingly “Directors” the directors, including independent non-executive directors of the Company “Existing Options” the options which have been granted to Mr. Winston Yau-lai LO under the 2002 Share Option Scheme and remain outstanding as at the Latest Practicable Date “2002 Share Option Scheme” the Company’s existing share option scheme adopted on 4th September, 2002 “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 Shareholders” in the case of the grant of Options to Mr. Winston Yau-lai LO, the Shareholders other than Mr. Winston Yau-lai LO and his Associate(s) and the connected persons “Latest Practicable Date” 15th July, 2013, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein “Listing Rules” Rules Governing the Listing of Securities on the Stock Exchange

– 1 –

DEFINITIONS

• “2012 Share Option Scheme” the Company’s new share option scheme adopted on 28th August, 2012 “Options” the options proposed to be granted to Mr. Winston Yau-lai LO under the 2012 Share Option Scheme, entitling him to subscribe for 1,704,000 Shares

• “Proposed Date of Grant” 9th September, 2013 or such other date as the Board may determine

• “Proposed Grant” subject to the Independent Shareholders’ approval at the AGM, the proposed grant of Options to Mr. Winston Yau-lai LO under the 2012 Share Option Scheme on the Proposed Date of Grant, the terms of which are set out in the sub-section headed “Principal Terms of the Proposed Grant” under the section headed “Grant of Options to a Director and Substantial Shareholder” of the “Letter from the Board” in this circular

• “Repurchase Mandate” a general mandate to be given to the Directors to repurchase Shares not exceeding 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant resolution to approve such mandate

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

• “Shares” shares of HK$0.25 each in the capital of the Company

• “Share Issue Mandate” a general and unconditional mandate to be given to the Directors to issue, allot and deal with Shares not exceeding 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing of the relevant resolution to approve such mandate

• “Shareholders” holders of Shares

• “Stock Exchange” The Stock Exchange of Hong Kong Limited

• “Subscription Price” the price per Share at which the grantee of the Options may subscribe for the Shares on the exercise of an Option under the 2012 Share Option Scheme

• “Subsidiary” a subsidiary for the time being of the Company within the meaning of the Companies Ordinance and “Subsidiaries” shall be construed accordingly

• “Takeovers Code” The Hong Kong Codes on Takeovers and Mergers

– 2 –

LETTER FROM THE BOARD

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(Incorporated in Hong Kong with limited liability)

(Stock code: 345)

Directors :–

Mr. Winston Yau-lai LO (Executive Chairman)

Dr. the Hon. Sir David Kwok-po LI (Independent Non-executive Director)

Mr. Iain F. BRUCE (Independent Non-executive Director)

Mr. Jan P. S. ERLUND (Independent Non-executive Director)

Registered Office :– No.1 Kin Wong Street, Tuen Mun, New Territories, Hong Kong

• Mr. Valiant Kin-piu CHEUNG (Independent Non-executive Director)

• Ms. Myrna Mo-ching LO (Non-executive Director)

• Ms. Yvonne Mo-ling LO (Non-executive Director)

• Mr. Laurence P. EISENTRAGER (Executive Director)

22nd July, 2013

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES,

RE-ELECTION OF DIRECTORS,

GRANT OF OPTIONS TO A DIRECTOR AND SUBSTANTIAL SHAREHOLDER AND NOTICE OF ANNUAL GENERAL MEETING

INTRODUCTION

At the AGM, resolutions will be proposed to approve the grant of the Repurchase Mandate and the Share Issue Mandate, the extension of the Share Issue Mandate, the re-election of Directors and the proposed Grant of Options to a Director and substantial Shareholder of the Company.

The purpose of this circular is to provide you with information regarding the above proposals and to seek the approval of Shareholders for the resolutions relating to such matters at the AGM.

– 3 –

LETTER FROM THE BOARD

GENERAL MANDATE TO REPURCHASE SHARES

An ordinary resolution will be proposed at the AGM to approve the grant of a Repurchase Mandate to the Board which will continue until the first to occur of the following: the conclusion of the next annual general meeting of the Company following the passing of the resolution (unless the mandate is renewed at such meeting), or the expiration of the period within which the next annual general meeting of the Company is required by the Companies Ordinance or the Company’s Articles of Association to be held, or the time when the mandate is revoked or varied by an ordinary resolution of the Shareholders in general meeting. The Shares which may be repurchased pursuant to the Repurchase Mandate is limited to a maximum of 10% of the issued share capital of the Company at the date of the passing of the ordinary resolution approving the Repurchase Mandate. Subject to the passing of the ordinary resolution to approve the Repurchase Mandate and on the basis that the number of issued Shares as at the Latest Practicable Date was 1,029,447,500 Shares, and assuming that no further Shares will be issued or repurchased prior to the AGM, the Company will be allowed to repurchase a maximum of 102,944,750 Shares.

GENERAL MANDATE TO ISSUE SHARES AND EXTENSION OF SHARE ISSUE MANDATE

At the AGM, an ordinary resolution will be proposed to approve the grant to the Board of a Share Issue Mandate to issue further new Shares representing up to 10% of the aggregate nominal amount of the share capital of the Company in issue on the date such resolution is passed. Subject to the passing of the ordinary resolution to approve the Share Issue Mandate and on the basis that the number of issued Shares as at the Latest Practicable Date was 1,029,447,500 Shares and assuming that no further Shares will be issued or repurchased prior to the AGM, the Company will be allowed to issue a maximum of 102,944,750 Shares. In addition, an ordinary resolution will also be proposed to authorise an extension of the Share Issue Mandate to be granted to the Board to issue new Shares during the period up to the next annual general meeting of the Company or such earlier period as stated in such resolution by adding to it the number of Shares repurchased under the Repurchase Mandate.

RE-ELECTION OF DIRECTORS

Mr. Winston Yau-lai LO, Mr. Valiant Kin-piu CHEUNG, Ms. Myrna Mo-ching LO and Mr. Laurence P. EISENTRAGER will retire from office by rotation at the AGM pursuant to Article 104 of the Company’s Articles of Association and being eligible, will offer themselves for re-election, save for Mr. Laurence P. EISENTRAGER, who indicated that he would not offer himself for re-election at the AGM. The details of those three Directors who are proposed to be re-elected at the AGM are as follows:

Mr. Winston Yau-lai LO , aged 72, is the Executive Chairman of the Group. Mr. Lo was appointed an Executive Director of the Company in 1972. Mr. Lo graduated from the University of Illinois with a Bachelor of Science degree in Food Science and gained his Master of Science degree in Food Science from Cornell University. Mr. Lo is an Honorary Court Member of the Hong Kong University of Science and Technology and life member of Cornell University Council. Mr. Lo is a director of Ping Ping Investment Company Limited. He is also a director of The Bank of East Asia, Limited, a company listed on the Hong Kong Stock Exchange. He was a member of The National Committee of the Chinese People’s Political Consultative Conference. He is the brother of Ms. Myrna Mo-ching LO and Ms. Yvonne Mo-ling LO, the Non-executive Directors and substantial shareholders of the Company, the brother of Mr. Kai-tun LO and Ms. Irene CHAN, the substantial shareholders of the Company and the uncle of Mr. Peter Tak-shing LO, a substantial shareholder of the Company.

– 4 –

LETTER FROM THE BOARD

Save as disclosed above, Mr. Lo is not related to any Director, senior management or substantial or controlling shareholder of the Company. Mr. Lo holds directorships in certain companies controlled by the Company and has not held any directorship in other listed public companies in the last three years.

As at the Latest Practicable Date, Mr. Lo had a personal interest of 66,145,800 Shares, a family interest of 28,702,500 Shares and a trust interest of 72,678,300 Shares in the Company (representing 16.27 per cent of the issued share capital of the Company) within the meaning of Part XV of the SFO as recorded in the register required to be kept under section 352 of the SFO, which include 13,986,000 underlying shares attached to the share options granted by the Company.

The Director’s fee payable to Mr. Lo is determined by the Board of Directors of the Company with reference to his duties and responsibilities with the Company and the market benchmark. The Director’s fee of Mr. Lo as an Executive Chairman will be at an amount of HK$203,727 for the year of 2013/2014. Mr. Lo has entered into a letter of appointment with the Company for a term of three years till 30th June, 2016 (“Letter of Appointment”). Under the Letter of Appointment, the amount of his emoluments, inclusive of basic salary, housing allowance and other allowances, is approximately HK$3,118,284 for the year of 2013/2014, which will also be subject to annual general review by the Company. In addition, a discretionary bonus is payable under the Letter of Appointment to Mr. Lo with the amount of such bonus to be fixed at the discretion of the Company each year. The emoluments and discretionary bonus payable to Mr. Lo under the Letter of Appointment is determined by the Company with reference to the Company’s and individual performance, the industry benchmark and general market conditions. Mr. Lo is subject to retirement by rotation and re-election at the AGM in accordance with Article 104 of the Articles of Association.

Save as disclosed above, there is no information to be disclosed pursuant to the requirements of Rule 13.51(2) (h) to (v) of the Listing Rules nor are there other matters that need to be brought to the attention of the Shareholders.

Mr. Valiant Kin-piu CHEUNG , aged 67, was appointed an Independent Non-executive Director of the Company in 2010. Mr. Cheung is a fellow member of the Institute of Chartered Accountants in England and Wales and the Hong Kong Institute of Certified Public Accountants. Mr. Cheung was a partner at KPMG, a leading international accounting firm in Hong Kong, until his retirement in March 2001. He has extensive experience in the fields of assurance and corporate finance, particularly in manufacturing, trading, wholesale, distribution and retails in Hong Kong and Mainland China. Mr. Cheung is an independent nonexecutive director of Pacific Century Premium Developments Limited, Dah Chong Hong Holdings Limited and The Bank of East Asia, Limited, all being companies listed on the Hong Kong Stock Exchange. He is also an independent non-executive director of unlisted Bank of East Asia (China) Limited, a whollyowned subsidiary of The Bank of East Asia, Limited.

Save as disclosed above, Mr. Cheung is not related to any Director, senior management or substantial or controlling shareholder of the Company. Mr. Cheung has not held any positions with the Company and other members of the Group, and has not held any directorship in other listed public companies in the last three years.

As at the Latest Practicable Date, Mr. Cheung does not have any interests in the shares of the Company within the meaning of Part XV of the SFO as recorded in the register required to be kept under section 352 of the SFO.

– 5 –

LETTER FROM THE BOARD

As an Independent Non-executive Director, Mr. Cheung has not entered into any service contract with the Company.

Mr. Cheung is appointed for a specific term of not more than three years and is subject to retirement by rotation and re-election at the AGM in accordance with Article 104 of the Articles of Association. The fee payable to Mr. Cheung is determined by the Board of the Company with reference to his duties and responsibilities with the Company and the market benchmark. The Director’s fee of Mr. Cheung as an Independent Non-executive Director, the member of the Remuneration and Nomination Committee and the Audit and Corporate Governance Committee will be at an amount of HK$354,206 for the year of 2013/2014.

Save as disclosed above, there is no information to be disclosed pursuant to the requirements of Rule 13.51 (2) (h) to (v) of the Listing Rules nor are there other matters that need to be brought to the attention of the Shareholders.

Ms. Myrna Mo-ching LO , aged 74, was appointed a Non-executive Director of the Company in 1992. Ms. Lo graduated from Oberlin College in the United States with a Bachelor of Arts degree in Music. Ms. Lo is a member of the Docent Committee and Bishop White Committee of the Royal Ontario Museum in Toronto, Canada. She is the sister of Mr. Winston Yau-lai LO, the Executive Chairman and substantial shareholder of the Company, the sister of Ms. Yvonne Mo-ling LO, the Non-executive Director and substantial shareholder of the Company, the sister of Mr. Kai-tun LO and Ms. Irene CHAN, the substantial shareholders of the Company and the aunt of Mr. Peter Tak-shing LO, a substantial shareholder of the Company.

Save as disclosed above, Ms. Lo is not related to any Director, senior management or substantial or controlling shareholder of the Company. Ms. Lo has not held any positions with the Company and other members of the Group, and has not held any directorship in other listed public companies in the last three years.

As at the Latest Practicable Date, Ms. Lo had a trust interest of 100,653,000 Shares in the Company (representing 9.78 per cent of the issued share capital of the Company) within the meaning of Part XV of the SFO as recorded in the register required to be kept under section 352 of the SFO.

As a Non-executive Director, Ms. Lo has not entered into any service contract with the Company.

Ms. Lo is appointed for a specific term of not more than three years and is subject to retirement by rotation and re-election at the AGM in accordance with Article 104 of the Articles of Association. The fee payable to Ms. Lo is determined by the Board of Directors of the Company with reference to her duties and responsibilities with the Company and the market benchmark. The Director’s fee of Ms. Lo as a Nonexecutive Director and member of Remuneration and Nomination Committee will be at an amount of HK$115,870 for the year of 2013/2014.

Save as disclosed above, there is no information to be disclosed pursuant to the requirements of Rule 13.51(2) (h) to (v) of the Listing Rules nor are there other matters that need to be brought to the attention of the Shareholders.

– 6 –

LETTER FROM THE BOARD

GRANT OF OPTIONS TO A DIRECTOR AND SUBSTANTIAL SHAREHOLDER

Pursuant to Rule 17.04 of the Listing Rules, the grant of options to a Director must be approved by the independent non-executive Directors. Furthermore, where any grant of option(s) to a substantial Shareholder or an independent non-executive Director, or any of their respective Associates, would result in the Shares issued and to be issued upon exercise of all options already granted and to be granted (including options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

• (i) representing in aggregate over 0.1% of the Shares in issue; and

• (ii) having an aggregate value, based on the closing price of the Shares at the date of each grant, in excess of HK$5 million,

such further grant of options must be separately approved by the Independent Shareholders in general meeting. All connected persons of the Company must abstain from voting in favour of the resolution to approve such grant at the general meeting.

It is proposed that Options in excess of 0.1% of the total Shares in issue and having an aggregate value in excess of HK$5 million (based on the closing price of the Shares at the Proposed Date of Grant) be granted to Mr. Winston Yau-lai LO. As Mr. Winston Yau-lai LO is a Director and substantial Shareholder, the Proposed Grant falls within Rule 17.04 of the Listing Rules.

By resolutions in writing dated 28th June, 2013 signed by all Directors (with Mr. Winston Yau-lai LO abstaining from voting), including all independent non-executive Directors (“Written Board Resolutions”), the Proposed Grant was approved, subject to the Independent Shareholders’ approval at the AGM. Pursuant to the 2012 Share Option Scheme, subject to the approval of the Proposed Grant by the Independent Shareholders at the AGM, the date of the Board meeting approving the Proposed Grant shall be taken as the date of grant for the purpose of calculating the exercise price of the Options. Under the Articles of Association of the Company, a resolution in writing signed by all the Directors shall be as valid and effectual as if it had been passed at a meeting of the Directors duly convened and held. Thus, for the purpose of calculating the exercise price of the Options only, 28th June, 2013 shall be taken as the date of grant.

A resolution to approve the Proposed Grant will be proposed at the AGM and votes taken in respect of such resolution shall be taken on a poll. Mr. Winston Yau-lai LO and his Associates (collectively, controlled or were entitled to exercise the control of approximately 14.91% of the voting right of the Company as at the Latest Practicable Date), who have material interest in the Proposed Grant, and all connected persons of the Company are required to abstain from voting in favour of the resolution to approve the Proposed Grant at the AGM.

As at the Latest Practicable Date, no notice has been received by the Company from any connected person of the Company of his, her or its intention to vote against the resolution approving the grant of Options to be proposed at the AGM.

– 7 –

LETTER FROM THE BOARD

Subject to the approval of the Independent Shareholders at the AGM, the Board will offer the Options to Mr. Winston Yau-lai LO on the Proposed Date of Grant.

The Company will comply with all disclosure requirements under the Listing Rules, including the issue of an announcement in respect of the poll result of the resolution in relation to the Proposed Grant at the AGM.

Principal Terms of the Proposed Grant

The principal terms of the Proposed Grant are as follows:

			Amount
			payable on
			acceptance
		Number of	of the
	Proposed	proposed	proposed	Exercise
	Date of Grant	Options	Options	price	Exercise period
		(Note 1)		(Note 2)
Mr. Winston Yau-lai LO	9th September,	1,704,000	HK$10	HK$9.370	426,000 Shares, exercisable between
	2013			per Share	9/9/2014 and 8/9/2023
					426,000 Shares, exercisable between
					9/9/2015 and 8/9/2023
					426,000 Shares, exercisable between
					9/9/2016 and 8/9/2023
					426,000 Shares, exercisable between
					9/9/2017 and 8/9/2023

Notes:

1. 1,704,000 Shares to be issued upon exercise, representing approximately 0.17% of the total issued Shares as at the Latest Practicable Date.

2. Being the highest of (i) the closing price of HK$9.370 per Share as stated in the daily quotations sheet of the Stock Exchange on 28th June, 2013 being the date of the Written Board Resolutions; (ii) the average closing price of HK$9.104 per Share as stated in the daily quotations sheet of the Stock Exchange for the five business days immediately preceding 28th June, 2013, being the date of the Written Board Resolutions; and (iii) the nominal value of the Share.

The Shares to be allotted upon the exercise of the proposed Options shall rank pari passu in all respects with and shall have the same voting rights, rights in respect of any dividend or other distributions paid or made on or after the date of issue, rights of transfer and other rights, including those arising on liquidation of the Company as attached to the Shares in issue on the date of such allotment and will be subject to all the provisions of the Articles of Association of the Company for the time being in force.

– 8 –

LETTER FROM THE BOARD

Reasons for the Proposed Grant

Mr. Winston Yau-lai LO is the Executive Chairman of the Group. The Options proposed to be granted to him form part of the offer of options to the Group’s senior management staff in recognition of their past contribution to the business performance of the Group and as an incentive for their continuing commitment and contribution to the Group in the future. Such offer of the Options was made on the recommendation of an independent consultant. No performance targets have to be achieved before the Options can be exercised.

Information on Proposed Grant

The particulars of the options granted to Mr. Winston Yau-lai LO under the 2002 Share Option Scheme which remained outstanding as at the Latest Practicable Date are set out below.

Mr. Winston Yau-lai LO

Total number of outstanding	Percentage of the issued
options as at the	share capital of the Company
Latest Practicable Date	as at the Latest Practicable Date
13,986,000	1.36%

As at the Latest Practicable Date, Mr. Winston Yau-lai LO was interested in 153,540,600 Shares (other than his interests in the Existing Options) within the meaning of Part XV of the SFO. Upon the full exercise of the Existing Options and the proposed Options, the equity interests of Mr. Winston Yau-lai LO in the Company will be as follows:

Percentage of number Percentage shareholding of issued Shares upon upon exercise in full of the exercise in full of Existing Options and the Percentage of number the Existing Options proposed Options to the Number of issued of issued Shares and the proposed enlarged issued share Shares Mr. Winston interested to the Options to the capital of the Company Yau-lai LO is total number of total number of as enlarged by the interested issued Shares issued Shares exercise in full of the as at the Latest as at the Latest as at the Latest Existing Options and Practicable Date Practicable Date Practicable Date the proposed Options (Note) Mr. Winston Yau-lai LO 153,540,600 14.91% 16.44% 16.19%

Note:

As at the Latest Practicable Date, Mr. Winston Yau-lai LO was interested or deemed to be interested in the Shares (other than interests in Existing Options) within the meaning of the SFO, as to 52,159,800 Shares (being Shares beneficially owned by him), 28,702,500 Shares (being Shares held by his wife) and 72,678,300 Shares (being Shares held under a charitable trust of which Mr. Winston Yau-lai LO is a trustee).

– 9 –

LETTER FROM THE BOARD

VOTING BY WAY OF POLL

Pursuant to Rule 13.39(4) of the Listing Rules, all votes at the AGM will be taken by poll and the Company will announce the results of the poll in the manner prescribed under Rule 13.39(5) of the Listing Rules.

ACTION TO BE TAKEN

A form of proxy for use at the AGM is enclosed. Whether or not you intend to attend at the AGM, you are requested to complete and return the form of proxy to the registered office of the Company in accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours before the time fixed for the meeting. The completion and return of the form of proxy will not preclude you from attending and voting in person at the AGM if you so wish.

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.

RECOMMENDATION

The Board believes that the grant of the Repurchase Mandate and the Share Issue Mandate, the extension of the Share Issue Mandate and the re-election of Directors are in the best interests of the Company and the Shareholders as a whole. The independent non-executive Directors believe that the proposed Grant of Options to Mr. Winston Yau-lai Lo, a Director and substantial Shareholder, is in the best interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders (including the Independent Shareholders) to vote in favour of the resolutions to be proposed at the AGM.

Your attention is drawn to the “Letter from the Independent Non-executive Directors” in Appendix II of this circular, which sets out the recommendation of the independent non-executive Directors to the Independent Shareholders as to voting in relation to the resolution to be proposed at the AGM for the approval of the Proposed Grant.

By Order of the Board Laurence P. EISENTRAGER Executive Director

– 10 –

APPENDIX I REPURCHASE MANDATE EXPLANATORY STATEMENT

This Appendix serves as an explanatory statement, as required by the Listing Rules, to provide requisite information to you for your consideration of the Repurchase Mandate and should be read in conjunction with the Letter from the Board on pages 3 to 10 of this circular.

1. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 1,029,447,500 Shares.

Subject to the passing of the ordinary resolution to approve the Repurchase Mandate and on the basis that no further Shares will be issued or repurchased prior to the AGM, the Company will be allowed under the Repurchase Mandate to repurchase a maximum of 102,944,750 Shares.

2. FUNDING OF REPURCHASES

Repurchases would be funded entirely from the Company’s available cash flow or working capital facilities legally available for the purpose and in accordance with the laws of Hong Kong and the Memorandum and Articles of Association of the Company.

In the event that the proposed Share repurchases were to be carried out in full at any time during the proposed repurchase period there could be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the Company’s latest published audited consolidated accounts for the year ended 31st March, 2013). However, the Board does not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which, in the opinion of the Board, are from time to time appropriate for the Company.

3. SHARE PRICES

The highest and lowest prices at which the Shares have traded on the Stock Exchange in each of the previous twelve months prior to the Latest Practicable Date were as follows:–

	Per Share
	Highest	Lowest
	HK$	HK$
July 2012	6.96	6.38
August 2012	6.92	6.52
September 2012	7.03	6.50
October 2012	7.45	6.74
November 2012	8.20	7.31
December 2012	7.99	7.50
January 2013	8.54	7.92
February 2013	9.20	8.06
March 2013	8.99	8.45
April 2013	9.56	8.64
May 2013	11.34	9.39
June 2013	10.08	8.50
July 2013_(up to and including the Latest Practicable Date)_	9.68	9.12

– 11 –

REPURCHASE MANDATE EXPLANATORY STATEMENT

APPENDIX I

4. GENERAL

The Board has undertaken to the Stock Exchange to exercise the power of the Company to make repurchases pursuant to the ordinary resolution proposed at the AGM in accordance with the Listing Rules and the laws of Hong Kong.

If, on the exercise of the power to repurchase Shares pursuant to the Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. Accordingly, a Shareholder, or a group of Shareholders acting in concert, could obtain or consolidate control of the Company and become obliged to make a mandatory offer under Rule 26 of the Takeovers Code. To the best of the knowledge of the Directors having made all reasonable enquiries, as at the Latest Practicable Date, Mr. Winston Yau-lai LO and his immediate family were interested in 84,904,300 Shares, representing approximately 8% of the issued share capital of the Company, which together represented the single largest shareholding in the Company as at that date. In the event that the Repurchase Mandate is exercised in full, the interest of Mr. Winston Yau-lai LO and his immediate family would be increased to approximately 9% of the issued share capital of the Company. As such, an exercise of the Repurchase Mandate in full will not result in Mr. Winston Yau-lai LO becoming obliged to make a mandatory offer under the Takeovers Code. The Board is not aware of any consequences which may arise under the Takeovers Code as a result of any repurchase made under the Repurchase Mandate.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, their Associates, have any present intention to sell any Shares to the Company under the Repurchase Mandate if such Repurchase Mandate is approved by the Shareholders.

No connected persons has notified the Company that he/she has a present intention to sell Shares to the Company, or has undertaken not to do so, in the event that the Repurchase Mandate is approved by the Company’s Shareholders.

5. SHARE REPURCHASES MADE BY THE COMPANY

No Share has been repurchased by the Company (whether on the Stock Exchange or otherwise) in the six months prior to the Latest Practicable Date before the printing of this circular.

6. REASONS FOR REPURCHASES

The Board believes that it is in the best interests of the Company and its Shareholders as a whole to seek a general authority from the Shareholders to enable the Board to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net assets and/or earnings per Share. The number of Shares to be repurchased on any occasion and the price and other terms upon which the same are repurchased will be decided by the Board at the relevant time having regard to the circumstances then prevailing.

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APPENDIX II

LETTER FROM THE INDEPENDENT NON-EXECUTIVE DIRECTORS

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(Incorporated in Hong Kong with limited liability) (Stock code: 345)

22nd July, 2013

To the Independent Shareholders

Dear Sir or Madam,

GRANT OF OPTIONS TO A SUBSTANTIAL SHAREHOLDER UNDER THE SHARE OPTION SCHEME

We refer to the circular of Vitasoy International Holdings Limited (the “Company”) dated 22nd July, 2013 to the Shareholders of the Company (the “Circular”) of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Circular unless the context otherwise requires.

This letter sets out our recommendation to the Independent Shareholders as to voting in relation to the resolution to be proposed at the AGM for the approval of the proposed grant of share options to Mr. Winston Yau-lai LO, a Director and substantial Shareholder, on the Proposed Date of Grant (the “Proposed Grant”).

Having considered the past contribution of Mr. Winston Yau-lai LO to the business growth of the Group and also to provide an incentive for his continuing commitment and contribution towards the business development of the Group, we are of the view that the terms of the Proposed Grant are fair and reasonable and in the interest of the Company and the Independent Shareholders as a whole. The Proposed Grant was also made on the recommendation of an independent consultant. Accordingly, we recommend the Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the AGM to approve the Proposed Grant.

David Kwok-po LI

Iain F. BRUCE Jan P. S. ERLUND Valiant Kin-piu CHEUNG

Independent Non-executive Directors

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NOTICE OF ANNUAL GENERAL MEETING

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(Incorporated in Hong Kong with limited liability) (Stock code: 345)

NOTICE IS HEREBY GIVEN that the Annual General Meeting (“AGM”) of Vitasoy International Holdings Ltd. (the “Company”) will be held at Salons 1, 2 & 3, Level 3, JW Marriott Hotel Hong Kong, Pacific Place, 88 Queensway, Hong Kong on Thursday, 5th September, 2013 at 3:00 p.m. for the following purposes:

1. To receive and adopt the audited Financial Statements and the Reports of the Directors and Auditors for the year ended 31st March, 2013;

2. To approve the payment of a final dividend in respect of the year ended 31st March, 2013;

3. (a) To re-elect Mr. Winston Yau-lai LO as an Executive Director;

4. (b) To re-elect Mr. Valiant Kin-piu CHEUNG as an Independent Non-executive Director;

5. (c) To re-elect Ms. Myrna Mo-ching LO as a Non-executive Director;

6. (d) To authorise the Board of Directors of the Company to fix the remuneration of the Directors;

7. To appoint Auditors and authorise the Directors to fix their remuneration;

8. As special business, to consider and, if thought fit, to pass with or without amendments, the following resolutions as Ordinary Resolutions:

9. A. “ THAT there be granted to the Directors of the Company an unconditional general mandate to issue, allot and deal with additional shares of HK$0.25 each in the capital of the Company (“Shares”), and to make or grant offers, agreements and options in respect thereof, subject to the following conditions:

   • (a) such mandate shall not extend beyond the Relevant Period (as defined below) save that the Directors of the Company may during the Relevant Period make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period;

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NOTICE OF ANNUAL GENERAL MEETING

• (b) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors of the Company otherwise than pursuant to (i) a Rights Issue (as defined below); (ii) any scrip dividend scheme or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the Articles of Association of the Company; and (iii) an issue of Shares pursuant to the exercise of any options which may be granted under any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of Shares or rights to acquire Shares, shall not exceed the aggregate of (aa) 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this resolution plus (bb) (if the Directors of the Company are so authorised by a separate ordinary resolution of the shareholders of the Company) the nominal amount of share capital of the Company repurchased by the Company subsequent to the passing of this resolution (up to a maximum equivalent to 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution), and the said approval shall be limited accordingly; and

• (c) for the purposes of this resolution:

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

• (i) the conclusion of the next AGM;

• (ii) the expiration of the period within which the next AGM is required by the Articles of Association of the Company or any applicable laws to be held; and

• (iii) the revocation or variation of this resolution by an ordinary resolution of the shareholders of the Company in General Meeting.

“Rights Issue” means an offer of Shares open for a period fixed by the Directors of the Company made to holders of Shares on the Register of the Company on a fixed record date in proportion to their then holdings of Shares subject to such exclusions or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restriction or obligation under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, or in any territory outside, Hong Kong.”

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NOTICE OF ANNUAL GENERAL MEETING

• B. “ THAT there be granted to the Directors of the Company an unconditional general mandate to repurchase Shares, and THAT the exercise by the Directors of the Company of all powers of the Company to purchase Shares subject to and in accordance with all applicable laws, rules and regulations be and is hereby generally and unconditionally approved, subject to the following conditions:

• (a) such mandate shall not extend beyond the Relevant Period (which shall have the same meaning for the purpose of this resolution, mutatis mutandis, as given in paragraph (c) of Resolution 5A set out in the Notice of AGM);

• (b) such mandate shall authorise the Directors of the Company to procure the Company to repurchase Shares at such prices as the Directors of the Company may at their discretion determine; and

• (c) the aggregate nominal amount of Shares repurchased or agreed to be repurchased by the Company pursuant to paragraph (a) of this resolution during the Relevant Period shall not exceed 10% of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this resolution and the said approval shall be limited accordingly.”

• C. “ THAT , conditional upon the passing of Resolutions 5A and 5B set out in the Notice of AGM, the aggregate nominal amount of the Shares which are repurchased by the Company pursuant to and in accordance with Resolution 5B set out in the Notice of AGM shall be added to the aggregate nominal amount of the Shares which may be allotted or agreed, conditionally or unconditionally, to be allotted by the Directors of the Company pursuant to and in accordance with Resolution 5A set out in the Notice of AGM”.

• D. “ THAT the grant of options to subscribe for 1,704,000 Shares at an exercise price of HK$9.370 per Share to Mr. Winston Yau-lai LO, the Executive Chairman and substantial shareholder of the Company, subject to and in accordance with the terms of the share option scheme adopted by the Company on 28th August, 2012, be and is hereby approved; and THAT any director or the Company Secretary of the Company be and is hereby authorised to do all such acts and execute all such documents as may be necessary or expedient to give full effect to such grant of options”.

By Order of the Board Paggie Ah-hing TONG Company Secretary

Hong Kong, 22nd July, 2013

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

1. A shareholder entitled to attend and vote at the AGM is entitled to appoint one or more proxies to attend and vote in his stead. A proxy need not be a shareholder of the Company.

2. To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be deposited with the Company Secretary at the Registered Office of the Company at No. 1 Kin Wong Street, Tuen Mun, New Territories, Hong Kong not less than 48 hours before the appointed time for holding the AGM or any adjournment hereof (as the case may be).

3. The register of members of the Company will be closed as follows:

4. (a) For the purpose of determining shareholders who are entitled to attend and vote at the AGM, the register of members of the Company will be closed from Monday, 2nd September, 2013 to Thursday, 5th September, 2013, both days inclusive. In order to qualify for the right to attend and vote at the AGM, all transfers accompanied by the relevant share certificates must be lodged with the Company’s Share Registrar, Computershare Hong Kong Investor Services Limited of Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration no later than 4:30 p.m. on Friday, 30th August, 2013.

5. (b) For the purpose of determining shareholders who qualify for the final dividend, the register of members of the Company will be closed from Thursday, 12th September, 2013 to Tuesday, 17th September, 2013, both days inclusive. In order to qualify for the final dividend, all transfers accompanied by the relevant share certificates must be lodged with Computershare Hong Kong Investor Services Limited of Shops 17121716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong for registration no later than 4:30 p.m. on Wednesday, 11th September, 2013.

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