Man Sang International Limited

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 licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Man Sang International Limited, you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

(Incorporated in Bermuda with limited liability)

(Stock Code: 938)

DISCLOSEABLE AND CONNECTED TRANSACTION — PROPOSED DISPOSAL OF 100% INTEREST IN A WHOLLY-OWNED SUBSIDIARY AND

NOTICE OF SPECIAL GENERAL MEETING

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

A letter from the Independent Board Committee to the Independent Shareholders is set out on page 13 of this circular. A letter from the IFA containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 14 to 26 of this circular.

A notice convening the special general meeting of Man Sang International Limited (the ‘‘Company’’) to be held at The Garden Rooms, 2/F., The Royal Garden, 69 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Tuesday, 22 March 2016 at 12:30 p.m. is set out on pages SGM-1 to SGM-2 of this circular. Whether or not you are able to attend, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the office of the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time of the meeting. Completion and return of the proxy form will not preclude you from attending and voting at the meeting or any adjournment thereof (as the case may be) should you so wish.

3 March 2016

			Page
Definitions	. . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the	Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Letter from	the	Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	13
Letter from	the	IFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Appendix I	—	Valuation report of the Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II	—	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Notice of SGM		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	SGM-1

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DEFINITIONS

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

‘‘Actual Amount’’

the agreed amount of the Sale Loan by the Vendor and the Purchaser, following the preparation of the draft Completion Accounts as at the Completion Date

‘‘Agreement’’

the sale and purchase agreement dated 3 February 2016 entered into among the Vendor, the Purchaser and Mr. Cheng in respect of, among other things, the sale and purchase of the Sale Interest in the Target Company

‘‘associate(s)’’ has the meaning ascribed thereto under the Listing Rules
‘‘Board’’ the board of Directors
‘‘Business Day’’
A day (not being a Saturday or a Sunday, or days on which a typhoon signal No. 8 or black rainstorm warning is hosted in Hong Kong at 10:00 a.m.) on which banks are generally open for general banking business in Hong Kong
‘‘BVI’’ the British Virgin Islands
‘‘Company’’
Man Sang International Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed and traded on the main board of the Stock Exchange (stock code: 938)
‘‘Completion’’
Completion of the Disposal pursuant to the terms and conditions under the Agreement
‘‘Completion Accounts’’
the consolidated balance sheet of the Target Company Group made up as at the close of business on the Completion Date and the consolidated profit and loss account of the Target Company Group for the period from 1 April 2015 to the Completion Date, to be prepared and agreed by the parties in accordance with the terms of the Agreement
‘‘Completion Date’’
the third Business Day after the fulfillment of the conditions precedent set out in the Agreement or such other date as agreed between the Vendor and the Purchaser
‘‘connected person(s)’’
has the meaning ascribed thereto under the Listing Rules
‘‘Consideration’’
consideration of the Disposal

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DEFINITIONS

‘‘Deed of Assignment’’

the deed of assignment in respect of the Sale Loan to be made between the Vendor, the Purchaser and the Target Company, subject to such amendments as the Vendor and the Purchaser may agree

‘‘Director(s)’’ the director(s) of the Company
‘‘Disposal’’ the disposal of the Sale Interest pursuant to the terms and conditions of the Agreement
‘‘Group’’
the Company and its subsidiaries
‘‘Guaranteed Obligation(s)’’
the agreements, undertakings, guarantees, liability and obligations of the Purchaser pursuant to the Agreement
‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the PRC
‘‘IFA’’
Messis Capital Limited, a licensed corporation to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO, being the independent financial adviser appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in relation to the Disposal
‘‘Independent Board Committee’’
an independent committee of the Board comprising all the independent non-executive Directors, namely Mr. Chan Cheong Tat, Mr. Kiu Wai Ming and Mr. Lau Chi Wah, Alex to consider and advise the Independent Shareholders with regard to the Disposal
‘‘Independent Shareholder(s)’’
Shareholder(s) other than Mr. Cheng and his associates
‘‘Latest Practicable Date’’
29 February 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange
‘‘Mr. Cheng’’
Mr. Cheng Chung Hing, the ultimate controlling Shareholder and the sole shareholder and sole director of the Purchaser
‘‘PRC’’
The People’s Republic of China

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DEFINITIONS

‘‘Properties’’ means all the properties owned by the Target Company Group

‘‘Purchaser’’ Hua Yang Global Limited, a company incorporated in BVI
‘‘Sale Interest’’ collectively, the Sale Shares and the Sale Loan
‘‘Sale Loan’’ all the obligations, liabilities and debts owing or incurred by the Target Company to the Vendor on Completion as determined by the Completion Accounts whether actual, contingent or deferred and irrespective of whether or not the same is due and payable on Completion and which as at the Latest Practicable Date is approximately HK$119.6 million
‘‘Sale Shares’’ 1,001 shares in the issued share capital of the Target Company comprising 501 ordinary shares and 500 nonvoting deferred shares, representing the entire issued share capital of the Target Company immediately before Completion
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
‘‘SGM’’ the special general meeting of the Company to be convened for, among others, considering and if thought fit, approving the Agreement and the Disposal contemplated thereunder
‘‘Share(s)’’ the ordinary share(s) in the share capital of the Company
‘‘Shareholder(s)’’ shareholder(s) of the Company
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘Target Company’’ Man Sang Jewellery Company Limited, a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date
‘‘Target Company Group’’ the Target Company and its subsidiaries
‘‘Vendor’’ Man Sang Enterprise Limited, a company incorporated in BVI with limited liability and a direct wholly-owned subsidiary of the Company as at the Latest Practicable Date
‘‘%’’ per cent

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LETTER FROM THE BOARD

MAN SANG INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 938)

Executive Directors: Ms. Cheng Ka Man, Carman Mr. Cheng Sai Mr. Cheung Kwok Wai, Elton Mr. Lei Hong Wai Mr. Leung Alex

Non-executive Director: Mr. Cheng Tai Po (Chairman)

Independent Non-executive Directors: Mr. Chan Cheong Tat Mr. Kiu Wai Ming Mr. Lau Chi Wah, Alex

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Principal Place of Business: Suite 2201, 22/F., Sun Life Tower The Gateway, 15 Canton Road Tsimshatsui Kowloon Hong Kong

3 March 2016

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION — PROPOSED DISPOSAL OF 100% INTEREST IN A WHOLLY-OWNED SUBSIDIARY

We refer to the announcement of the Company dated 3 February 2016 in relation to, among other things, the Disposal.

INTRODUCTION

On 3 February 2016, the Vendor, the Purchaser and Mr. Cheng entered into the Agreement, pursuant to which (i) the Vendor has conditionally agreed to sell and the Purchaser has conditionally agreed to purchase the Sale Interest at a Consideration of approximately HK$184.6 million, comprising cash consideration of HK$65.0 million for the sale and purchase of the Sale Shares and assumption of the Sale Loan owed or incurred by the Target Company to the Vendor on Completion subject to the terms and conditions of the Agreement; and (ii) Mr. Cheng agreed to provide, inter alia, an unconditional and irrevocable guarantee in favour of the Vendor the due and punctual performance of the Guaranteed Obligations and if the

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LETTER FROM THE BOARD

Purchaser fails to perform any of its Guaranteed Obligations when due, Mr. Cheng shall perform or procure the performance of such Guaranteed Obligation immediately on the Vendor’s written demand.

The purpose of this circular is to provide you with, among other things, (i) details of the Agreement and the Disposal contemplated thereunder; (ii) the recommendation from the Independent Board Committee to the Independent Shareholders in relation to the Agreement and the Disposal contemplated thereunder; (iii) a letter of advice from the IFA to the Independent Board Committee and the Independent Shareholders; (iv) valuation report of the Properties; and (v) a notice of the SGM.

THE AGREEMENT

Date : 3 February 2016

Parties

Vendor : Man Sang Enterprise Limited, a direct wholly-owned subsidiary of the Company

Purchaser : Hua Yang Global Limited, a company wholly-owned by Mr. Cheng Guarantor : Mr. Cheng

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, as at the Latest Practicable Date, Mr. Cheng is the ultimate controlling Shareholder. Accordingly, Mr. Cheng is a connected person of the Company. Mr. Cheng is also the sole director of the Purchaser and is entitled to control the exercise of more than 30% of the voting power at the Purchaser. Therefore, the Purchaser is an associate of a connected person of the Company, and thus a connected person of the Company under Chapter 14A of the Listing Rules.

Subject Matters of the Disposal

Pursuant to the Agreement, the assets to be disposed of would be the Sale Interest which consists of:

(i) the Sale Shares being the entire issued share capital in the Target Company immediately before Completion; and
(ii) the Sale Loan being all obligations, liabilities and debts owing or incurred by the Target Company to the Vendor on Completion as determined by the Completion Accounts whether actual, contingent or deferred and irrespective of whether or not the same is due and payable on Completion.

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LETTER FROM THE BOARD

The Target Company is an indirect wholly-owned subsidiary of the Company and the Properties are owned by the Target Company Group. Upon Completion, the Group would cease to have any interest in the Target Company Group. Each member of the Target Company Group would accordingly cease to be a subsidiary of the Company.

The Consideration

The Consideration will be payable by the Purchaser in the following manner:

(i) HK$65.0 million being the total consideration payable to the Vendor for the sale and purchase of the Sale Shares and shall be payable in clear funds on Completion; and
(ii) the total consideration payable to the Vendor for the sale and purchase of the Sale Loan shall be based on the Actual Amount as at the Completion Date and shall be paid to the Vendor in clear funds within ten (10) days of the date of determination of the Sale Loan.

Basis of Determination of the Consideration

The Consideration was agreed between the Vendor and the Purchaser after arm’s length negotiations on normal commercial terms with reference to (i) the consolidated financial position of the Target Company Group; and (ii) the preliminary valuation of the Properties in the amount of HK$186.8 million as at 31 December 2015, according to an independent valuation performed by an independent property valuer.

The Directors (including the independent non-executive Directors who have given their view after receiving the advice from the IFA) consider that the Consideration is fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

Conditions Precedent

Completion of the Agreement and the transactions contemplated thereunder is conditional upon, among other things, the fulfillment (or waiver, as appropriate) of the following conditions:

(i) the Company having obtained clearance of the announcement and circular(s) required to be issued by the Company under the Listing Rules and granted all approvals, if necessary, by the Stock Exchange in respect of all the transactions contemplated therein;
(ii) the Company having complied with the relevant Listing Rules’ requirements including but not limited to the passing of the relevant resolution(s) by the Independent Shareholders at the SGM to approve the Agreement and the transactions contemplated therein;

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LETTER FROM THE BOARD

(iii) no event having occurred since the date of the Agreement to Completion, the consequence of which is to materially and adversely affect the financial position, business or property, results of operations or business prospects of the Target Company Group;
(iv) the Vendor having obtained all reasonably relevant approvals, consents, licences and/or permits for the sale of the Sale Share and Sale Loan in respect of the Agreement and the transactions contemplated thereunder; and
(v) all the representations, warranties and undertakings made by the Vendor and the Purchaser as at the date of the Agreement and the Completion Date are true, accurate and complete and not misleading at all times between the date of the Agreement and Completion.

The conditions (i) and (ii) above are not waivable and the Purchaser may at any time waive in writing all or any of the conditions (iii), (iv) and (v) as set out above.

As at the Latest Practicable Date, save for condition (i), none of the above conditions precedent had been fulfilled.

In the event that any of the above conditions have not been fulfilled or waived by the Purchaser (except conditions (i) and (ii) which are not waivable) on or before 30 April 2016 (or such later date as the Vendor and the Purchaser may agree), the parties shall not be bound to proceed with the Disposal.

Completion

Subject to the continuing fulfillment (or waiver, as appropriate) of the conditions precedent set out in the Agreement on or before 30 April 2016 (or such other date as the parties may agree), Completion shall take place at the Vendor’s office at 11 a.m. (Hong Kong time) on the third Business Day after the fulfillment or waiver of the last of the conditions specified in the Agreement or at such other place or time as the parties shall agree.

At Completion, the Vendor shall deliver or cause to be delivered to the Purchaser or the Purchaser’s solicitors, among other things, the Deed of Assignment duly executed under seal by the Vendor, the Purchaser and the Target Company and the Purchaser shall pay to the Vendor the consideration for the Sale Shares and give a promissory note to the Vendor promising to pay the consideration for the Sale Loan within ten (10) days after determination of the Actual Amount as at the Completion Date based on the Completion Accounts.

Guarantee and undertaking by Mr. Cheng

In consideration of the Vendor entering into and performing the Agreement, Mr. Cheng has agreed to provide, inter alia, an unconditional and irrevocable guarantee in favour of the Vendor the due and punctual performance of the Guaranteed Obligations and if the Purchaser fails to perform any of its Guaranteed Obligations when due, Mr. Cheng shall perform or procure the performance of such Guaranteed Obligation immediately on the Vendor’s written demand.

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LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE DISPOSAL

After taking into account the Consideration and the related transaction costs, it is estimated that a loss of approximately HK$1.6 million will be recorded. The principal business of the Group will remain the same after Completion. Following Completion, the financials of the Target Company Group will not be consolidated into those of the Company.

REASONS FOR AND BENEFITS FROM THE DISPOSAL AND USE OF PROCEEDS

The Group is principally engaged in the development, sales and leasing of properties. When the Company was first listed in 1997, the Group was engaged in the pearl and jewellery business, where the Target Company Group acquired the land, on which the Shenzhen Property (as defined below) is situated, and developed the Shenzhen Property (27 blocks in total) as the base for the manufacturing of pearl and jewellery, occupying 4 whole blocks as factory as well as certain units in another 4 blocks as staff dormitory. The remaining blocks/units have been leased out to independent third parties as factory space or staff dormitory for generating rental income. Following the discontinuance of the Group’s pearl and jewellery business as a result of a spin-off and separate listing of such business on the Stock Exchange in October 2014, the Group no longer carries on the pearl and jewellery business and hence the entire Shenzhen Property had become one of the Group’s investment properties.

Management of the Group has been intending to transform the Shenzhen Property from industrial use to commercial/residential use in order to release the intrinsic value of the land on which the Shenzhen Property is located. However, it has come to the knowledge of the management of the Company that the land on which the Shenzhen Property is located has been re-designated within the boundaries of the ecological control line (基本生態控制線) introduced by the Urban Planning, Land & Resources Commission of Shenzhen Municipality (深圳市規劃和國土資源委員會) since 2005, and such re-designation would affect the land use right of the Shenzhen Property and hence prohibit the Shenzhen Property from any redevelopment or transformation, and as a result limiting any potential capital gain the Group would otherwise enjoy from redeveloping the Shenzhen Property.

Management of the Group has had several rounds of negotiations with the relevant local government authorities regarding the potential development opportunities of the Shenzhen Property but has been advised that the re-designation of the land cannot be reversed and hence any kind of redevelopment would not be allowed. As such, it is expected the future fair value of the Shenzhen Property would gradually decline as the expiry of the Shenzhen Property’s land use right in August 2041 is approaching.

In consideration of the limitations on the future development and enhancement of value of the Shenzhen Property, management of the Group has been from time to time making enquiries for interested purchasers in the past few months. However, it failed to identify any parties who were interested in the Shenzhen Property. Mr. Cheng, being a controlling Shareholder, is willing to purchase the Shenzhen Property in order to release more flexibility in resources of the Group after Completion.

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LETTER FROM THE BOARD

In light of the above, the Company considers that the Disposal will enable the Group to realise the current value of the Shenzhen Property in cash, enhance the Company’s cashflow position and provide additional capital resources for the Company to capture other investment opportunities as and when they arise.

The net proceeds from the Disposal of approximately HK$183.0 million, after taking into account the related transaction costs of approximately HK$1.6 million, will be used by the Group for future potential investments and general working capital purposes.

The Directors (including the independent non-executive Directors who have given their view after receiving the advice from the IFA) consider that the terms of the Agreement is fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. As none of the Directors has material interest in Agreement and the Disposal contemplated thereunder, none of them had abstained from voting on the Board resolution approving the Agreement and the Disposal contemplated thereunder.

INFORMATION ON THE TARGET COMPANY AND THE PROPERTIES

The Target Company

The Target Company is an investment holding company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date. The Properties are owned by the Target Company Group.

Set out below is the unaudited financial information of the Target Company Group for the years ended 31 March 2014 and 2015.

	For the	For the
	year ended	year ended
	31 March 2015	31 March 2014
	HK$’000	HK$’000
	(Unaudited)	(Unaudited)
Revenue	43,774	211,277
Profit before taxation	3,044	30,880
Profit/(Loss) after taxation	(371)	24,367

Note: An internal group reorganization was carried out during the year ended 31 March 2015 where certain subsidiaries, which were subsidiaries of the Target Company during the year ended 31 March 2014, had been transferred out of the Target Company Group as a result of such reorganization. For the purpose of this circular, the figures presented for the year ended 31 March 2014 have been prepared on the basis that the results of the aforementioned deconsolidated subsidiaries were not included in the Target Group Company for comparison.

Furthermore, as disclosed under the section headed ‘‘Reasons for and Benefits from the Disposal and Use of Proceeds’’ above, the pearl and jewellery business has been spun-off from the Group since

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LETTER FROM THE BOARD

October 2014. Accordingly, the results of the pearl and jewellery business were included in the Target Company Group for the full year ended 31 March 2014 and six months up to September 2014 for the year ended 31 March 2015.

In order to provide the Shareholders with more relevant information on the Target Company Group to enhance readability, certain proforma financial information on the Target Company Group is presented, on the basis that only the financial performance from the letting of the Properties of the Target Company Group is taken into consideration and excluding the financial performance of the pearl and jewellery business, as follows:

For the year ended For the year ended 31 March 2015 31 March 2014 HK$’000 HK$’000 (Unaudited) (Unaudited) Revenue 14,839 12,983 Increase in fair value of the Properties 5,252 15,443

The Properties

Set out below are the details of the Properties which are owned by the Target Company Group:

(i) 27 blocks of Man Sang Industrial City (the ‘‘Shenzhen Property’’)

Location: Min Sheng Main Road, Gong Ming Zhen, Bao An District, Shenzhen, Guangdong Province, the PRC

Term of the Land Use Right: Expire on 31 August 2041

Type of Land Usage: Industrial and dormitory usage Gross Floor Area: 75,771.43 square meters

(ii) 24 units of Market Centre of Phase 1, China Pearls and Jewellery City

Location: Shanxiahu Town, Zhuji, Zhejiang Province, the PRC Term of the Land Use Right: Expire on 21 August 2046

Type of Land Usage: Commercial usage Gross Floor Area: 1,581.27 square meters

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LETTER FROM THE BOARD

INFORMATION ON THE GROUP AND THE PURCHASER

The Company is a company incorporated in Bermuda with limited liability and the Shares are listed and traded on the main board of the Stock Exchange. The Group is principally engaged in the development, sales and leasing of properties.

The Purchaser is a company incorporated in BVI with limited liability. The Purchaser is principally engaged in investment holding and is wholly-owned by Mr. Cheng.

LISTING RULES IMPLICATIONS

Pursuant to Chapter 14 of the Listing Rules, as more than one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Disposal exceed 5% but all of the ratios are less than 25%, the Disposal constitutes a discloseable transaction for the Company and is subject to the reporting and announcement requirements under the Listing Rules.

As such, the Disposal also constitutes a connected transaction of the Company. As more than one of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Disposal exceed 5% but all of the ratios are less than 25%, the Disposal is, in addition to the reporting and announcement requirements, subject to the Independent Shareholders’ approval requirement under Chapter 14A of the Listing Rules.

THE SGM

The Company will convene the SGM for the Shareholders to consider and, if thought fit, approve the Agreement and the Disposal contemplated thereunder. A notice convening the SGM to be held at The Garden Rooms, 2/F., The Royal Garden, 69 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Tuesday, 22 March 2016 at 12:30 p.m. is set out on pages SGM-1 to SGM-2 of this circular.

The Company has established an Independent Board Committee to advise the Independent Shareholders as to whether the Disposal is fair and reasonable and in the interests of the Company and the Independent Shareholders as a whole. None of the members of the Independent Board Committee has any interest or involvement in the transactions contemplated under the Agreement. The IFA has also been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders in relation to the Disposal.

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LETTER FROM THE BOARD

The votes of the Shareholders on the resolution for approving the Agreement and the Disposal contemplated thereunder will be taken by way of poll at the SGM. Mr. Cheng (together with its subsidiaries holds approximately 30.25% of the issued share capital of the Company as at the Latest Practicable Date) and his associates shall abstain from voting on the resolution approving the Agreement and the Disposal contemplated thereunder. Save as disclosed above, to the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, no other Shareholder has any material interest in the Agreement, and no other Shareholder is required to abstain from voting at the SGM in respect of the Agreement and the Disposal contemplated thereunder.

Whether or not you are able to attend, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the office of the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time of the meeting. Completion and return of the proxy form will not preclude you from attending and voting at the meeting or any adjournment thereof (as the case may be) should you so wish.

RECOMMENDATION

Your attention is drawn to (i) the letter from the Independent Board Committee set out on page 13 of this circular which contains the recommendation of the Independent Board Committee to the Independent Shareholders regarding the Agreement and the Disposal contemplated thereunder; and (ii) the letter from the IFA set out on pages 14 to 26 of this circular which contains its advice to the Independent Board Committee and the Independent Shareholders in relation to the Agreement and the Disposal contemplated thereunder, together with the principal factors and reasons considered in providing its advice.

Having taken into account the advice of the IFA, the Independent Board Committee considers that the terms of the Agreement and the Disposal contemplated thereunder are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Group and the Shareholders as a whole. Accordingly, the Directors (including the independent non-executive Directors) recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Agreement and the Disposal contemplated thereunder.

ADDITIONAL INFORMATION

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

By Order of the Board

Man Sang International Limited Leung Alex Executive Director and Company Secretary

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee setting out its recommendation to the Independent Shareholders in relation to the Disposal.

MAN SANG INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 938)

3 March 2016

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION — PROPOSED DISPOSAL OF 100% INTEREST IN A WHOLLY-OWNED SUBSIDIARY

We refer to the circular (the ‘‘Circular’’) issued by the Company to the Shareholders dated 3 March 2016 of which this letter forms part. Unless the context requires otherwise, capitalised terms used herein shall have the same meanings as those defined in the Circular. We have been appointed as members of the Independent Board Committee to consider the Agreement and the Disposal contemplated thereunder and to advise the Independent Shareholders as to the fairness and reasonableness of the same. The IFA has been appointed to advise the Independent Shareholders and us in this regard. We wish to draw your attention to the letter from the Board, as set out on pages 4 to 12 of the Circular, and the letter from the IFA which contains its advice to the Independent Shareholders and us in respect of the Agreement and the Disposal contemplated thereunder, as set out on pages 14 to 26 of the Circular.

After taking into consideration the advice from the IFA, we concur with the view of the IFA and consider that the terms of the Agreement and the Disposal contemplated thereunder were entered into on normal commercial terms and is in the interests of the Company and the Shareholders as a whole and the terms thereof are 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 which will be proposed at the SGM to approve the Agreement and the Disposal contemplated thereunder.

Yours faithfully,

Independent Board Committee

Mr. Chan Cheong Tat Mr. Kiu Wai Ming Mr. Lau Chi Wah, Alex Independent non-executive directors

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LETTER FROM THE IFA

The following is the full text of the letter from the IFA which sets out its advice to the Independent Board Committee and the Independent Shareholders for inclusion in this circular.

3 March 2016

To: The Independent Board Committee and the Independent Shareholders of Man Sang International Limited

Dear Sir/Madam,

DISCLOSEABLE AND CONNECTED TRANSACTION — PROPOSED DISPOSAL OF 100% INTEREST IN A WHOLLY-OWNED SUBSIDIARY

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Agreement and the transactions contemplated thereunder, details of which are set out in the letter from the Board (the ‘‘Letter from the Board’’) contained in the circular of the Company (the ‘‘Circular’’) to the Shareholders dated 3 March 2016, 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.

On 3 February 2016, the Vendor (a direct wholly-owned subsidiary of the Company), the Purchaser and Mr. Cheng entered into the Agreement in respect of the Disposal, pursuant to which (i) the Purchaser has conditionally agreed to purchase the Sale Interest at a consideration of approximately HK$184.6 million, comprising cash consideration of HK$65.0 million for the sale and purchase of the Sale Shares and assumption of the Sale Loan owed or incurred by the Target Company to the Vendor on Completion subject to the terms and conditions of the Agreement; and (ii) Mr. Cheng agreed to provide, inter alia, an unconditional and irrevocable guarantee in favour of the Vendor the due and punctual performance of the Guarantee Obligations and if the Purchaser fails to perform any of its Guaranteed Obligations when due, Mr. Cheng shall perform or procure the performance of such Guaranteed Obligation immediately on the Vendor’s written demand.

As more than one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Disposal exceed 5% but all of the ratios are less than 25%, the Disposal constitutes a discloseable transaction for the Company and is subject to the reporting and announcement requirements under the Listing Rules.

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LETTER FROM THE IFA

the voting power at the Purchaser. Therefore, the Purchaser is an associate of a connected person of the Company, and thus a connected person of the Company under Chapter 14A of the Listing Rules. As such, the Disposal also constitutes a connected transaction of the Company. The Disposal is, in addition to the reporting and announcement requirements, subject to the Independent Shareholders’ approval requirement under Chapter 14A of the Listing Rules.

The SGM will be convened for the purpose of considering and if thought fit, approving the Disposal. The Company has established the Independent Board Committee which comprises all the independent non-executive Directors, namely Mr. Chan Cheong Tat, Mr. Kiu Wai Ming and Mr. Lau Chi Wah, Alex, to give recommendation to the Independent Shareholders on the Agreement and the transactions contemplated thereunder. We, Messis Capital Limited, have been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard and to give our opinion in relation to whether the terms of the Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

Other than this appointment as the independent financial adviser in connection with the Agreement and the transactions contemplated thereunder, we have no relationships or interests with the Company, the Group, the Vendor, the Purchaser, Mr. Cheng, their respective associates, close associates or core connected persons and any other parties that could reasonably be regarded as relevant to our independence. We are hence independent from the Company pursuant to Rule 13.84 of the Listing Rules and accordingly, we are considered eligible to give independent advice and recommendation in respect of the Agreement and the transactions contemplated thereunder.

BASIS OF OUR ADVICE AND RECOMMANDATIONS

In arriving at our recommendations, we have relied on the statements, information, opinions and representations contained in the Circular and the information and representations provided to us by the Company, the Directors and the management of the Company. We have assumed that all information, representations and opinions contained or referred to in the Circular which have been provided by the Company, the Directors and the management of the Company and for which they are solely and wholly responsible, were true and accurate at the time when they were made and will continue to be so as at the date of the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and representation provided to us by the Company, the Directors and the management of the Company.

The Directors collectively and individually 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 reasonably arrived at after due and careful consideration and there are no other material facts not contained in the Circular, the omission of which would make any statement in the Circular misleading. We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any facts or circumstances which would render the information provided and representations made to us untrue, inaccurate or

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LETTER FROM THE IFA

misleading. We consider that we have performed all necessary steps to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion. We have not, however, carried out any independent verification of the information provided by the Company, the Directors and the management of the Company, nor have we conducted an independent investigation into the business and affairs of the Group, the Target Company and any parties to the Agreement.

This letter is issued for the information of the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the Disposal. Except for its inclusion in the Circular, this letter 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 arriving at our recommendations to the Independent Board Committee and the Independent Shareholders in respect of the Disposal, we have taken into consideration the following principal factors and reasons:

1. Background information of the Group

Financial information of the Group

The table below sets out the audited key financial information of the Group for the two years ended 31 March 2014 and 2015 and the unaudited financial information of the Group for the six months ended 30 September 2015 as extracted from the Company’s annual report for the year ended 31 March 2015 (the ‘‘Annual Report’’) and the interim report for the six months ended 30 September 2015 (the ‘‘Interim Report’’), respectively:

	For the six months	For the six months	For the year ended 31	For the year ended 31
	ended 30	September	March
	2015	2014	2015	2014
	HK$’000	HK$’000	HK$’000	HK$’000
	(Unaudited)	(Unaudited)	(Audited)	(Audited)
Revenue	118,895	27,909	73,368	82,907
Gross Profit	63,016	25,372	57,669	50,009
Profit for the period/year	30,297	9,825	16,336	85,596

Revenue of the Group was amounted to approximately HK$73.4 million for the year ended 31 March 2015, which comprised rental income of approximately HK$53.4 million and sales of properties of approximately HK$20.0 million, mainly derived from the key property project of China Pearls and Jewellery City (‘‘CP&J City’’). Rental income was the largest source of revenue of the Group which

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LETTER FROM THE IFA

accounted for approximately 72.8% and 52.5% of its total revenue for the year ended 31 March 2015 and 31 March 2014, respectively. According to the Annual Report, CP&J City contributed the most to the performance of the Group, which accounted for approximately 75.8% of total revenue to the continuing operation for the year ended 31 March 2015. Rental income increased by approximately 22.8% from approximately HK$43.5 million to approximately HK$53.4 million for the year ended 31 March 2015 as a result of the increase in rental rates from the existing tenants. The revenue from sales of properties mainly represented sales of residential apartments and factories in CP&J City and has decreased by approximately 49.2% from approximately HK$39.4 million for the year ended 31 March 2014 to approximately HK$20.0 million for the year ended 31 March 2015. Gross profit attributable to the Group increased by approximately 15.3% from approximately HK$50.0 million to approximately HK$57.7 million for the year ended 31 March 2015 as a result of the increase in rental income with relatively higher gross profit margin. The profit decreased from approximately HK$85.6 million for the year ended 31 March 2014 to approximately HK$16.3 million for the year ended 31 March 2015, which was principally due to (1) a comparatively lower increment in fair values of investment properties and investment properties under construction during the year ended 31 March 2015; (2) the incurrence of listing expenses in relation to the spin-off of its pearls and jewellery business in 2014; and (3) the discontinuation of the pearls and jewellery business of the Group since October 2014 upon completion of the said spin-off.

Revenue of the Group was approximately HK$118.9 million for the six months ended 30 September 2015, which comprised sales of properties of approximately HK$92.3 million and rental income of approximately HK$26.6 million. Sales of properties was the largest source of revenue of the Group which accounted for approximately 77.6% and 7.2% of its total revenue for the six months ended 30 September 2015 and 30 September 2014, respectively. According to the Interim report, CP&J City continues to contribute the most to the performance of the Group which accounted for approximately 93.6% of total revenue for the six months ended 30 September 2015. The revenue from sales of properties mainly represented sales of residential apartments and commercial plaza in CP&J City which were completed during the six months ended 30 September 2015 and has increased by approximately HK$90.3 million to approximately HK$92.3 million for the six months ended 30 September 2015. Rental income increased by approximately 2.7% from approximately HK$25.9 million to approximately HK$26.6 million for the six months ended 30 September 2015 as a result of the increase in rental rates from the existing tenants. Gross profit of the Group increased by approximately 148.0% from approximately HK$25.4 million to approximately HK$63.0 million during the period as a result of the increase in sales of the residential apartments and commercial plaza for the six months ended 30 September 2015. The profit for the period increased from approximately HK$9.8 million for the six months ended 30 September 2014 to approximately HK$30.3 million for the six months ended 30 September 2015 primarily due to the sales of the newly completed residential apartments and commercial units in CP&J City.

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LETTER FROM THE IFA

2. Background information of the Target Company

The Target Company

According to the Letter from the Board, the Target Company is an investment holding company incorporated in Hong Kong on 19 April 1988 with limited liability and an indirect wholly owned subsidiary of the Company as at the Latest Practicable Date. The Properties are the principle assets of the Target Company Group.

Financial information of Target Company Group

The table below summarises the unaudited financial information of the Target Company Group for the years ended 31 March 2014 and 2015:

	For the	For the
	year ended	year ended
	31 March	31 March
	2015	2014
	HK$’000	HK$’000
	(Unaudited)	(Unaudited)
Revenue	43,774	211,277
Profit before taxation	3,044	30,880
Profit/(loss) after taxation	(371)	24,367

As set out in the Letter from the Board, an internal group reorganization was carried out during the year ended 31 March 2015 where certain subsidiaries, which were subsidiaries of the Target Company during the year ended 31 March 2014, had been transferred out of the Target Company Group as a result of such reorganization. For the purpose of this Letter, the figures presented for the year ended 31 March 2014 have been prepared on the basis that the results of the aforementioned deconsolidated subsidiaries were not included in the Target Company Group for comparison.

Furthermore, the pearl and jewellery business has been spun-off from the Group since October 2014. Accordingly, the results of the pearl and jewellery business were included in the Target Company Group for the full year ended 31 March 2014 and six months up to September 2014 for the year ended 31 March 2015.

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LETTER FROM THE IFA

financial performance from the letting of the Properties of the Target Company Group is taken into consideration and excluding the financial performance of the pearl and jewellery business, as follows:

							For the	For the
							year ended	year ended
							31 March	31 March
							2015	2014
							HK$’000	HK$’000
							(Unaudited)	(Unaudited)
Revenue							14,839	12,983
Increase	in	fair	value	of	the	Properties	5,252	15,443

The Properties

Set out below are the details of the Properties which are owned by the Target Company Group:

(i) 27 blocks of Man Sang Industrial City (the ‘‘Shenzhen Property’’)

Location:	Min Sheng Main Road, Gong Ming Zhen,
	Bao An District, Shenzhen,
	Guangdong Province, the PRC
Term of the Land Use	Expire on 31 August 2041
Right:
Type of Land Usage:	Industrial and dormitory usage
Gross Floor Area:	75,771.43 square meters

(ii) 24 units of Market Centre of Phase I, China Pearls and Jewellery City (the ‘‘Zhuji Property’’)

Location: Shanxiahu Town, Zhuji, Zhejiang Province, the PRC Term of the Land Use Expire on 21 August 2046 Right: Type of Land Usage: Commercial usage Gross Floor Area: 1,581.27 square meters

As appraised by DTZ Debenham Tie Leung Limited (the ‘‘Valuer’’), the independent property valuer, the market value of the Shenzhen Property and the Zhuji Property amounted to RMB144.7 million and RMB11.0 million respectively as at 31 December 2015. Details of the valuations are set out in the valuation report in Appendix I to the Circular (the ‘‘Valuation Report’’).

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LETTER FROM THE IFA

3. Reasons for and the benefits from the Disposal and use of proceeds

As stated in the Letter from the Board, the Group is principally engaged in the development, sales and leasing of properties. When the Company was first listed in 1997, the Group was engaged in the pearl and jewellery business, where the Target Company Group acquired the land, on which the Shenzhen Property is situated, and developed the Shenzhen Property (27 blocks in total) as the base for the manufacturing of pearl and jewellery, occupying 4 whole blocks as factory as well as certain units in another 4 blocks as staff dormitory. The remaining blocks/units have been leased out to independent third parties as factory space or staff dormitory for generating rental income. Following the discontinuance of the Group’s pearl and jewellery business as a result of a spin-off and separate listing of such business on the Stock Exchange in October 2014, the Group no longer carries on the pearl and jewellery business and hence the entire Shenzhen Property has become one of the Group’s investment properties.

As advised by the Directors, management of the Group has been intending to transform the Shenzhen Property from industrial use to commercial/residential use in order to release the intrinsic value of the land on which the Shenzhen Property is located. However, it has come to the knowledge of the management of the Company that the land on which the Shenzhen Property is located has been re-designated within the boundaries of the ecological control line (基本生態控制線) introduced by the Urban Planning, Land & Resources Commission of Shenzhen Municipality (深圳市規劃和國土資源委員會) since 2005, and such re-designation would affect the land use right of the Shenzhen Property and hence prohibit the Shenzhen Property from any redevelopment or transformation, and as a result limiting any redevelopment or transformation, and as a result limiting any potential capital gain the Group would otherwise enjoy from redeveloping the Shenzhen Property. We note from the website of the Urban Planning, Land & Resources Commission of Shenzhen Municipality (http://www.szpl.gov.cn) that the Shenzhen Property is located within the boundaries of the ecological control line and the constructions within the ecological control line is subject to limitations. According to the Administrative Regulations of Shenzhen Municipality on the Essential Area of Protecting Ecology (深圳市基本生態控制線管理規定), other than (i) major road and transportation facilities; (ii) municipal and public facilities; (iii) tourist facilities; and (iv) parks, no constructions is allowed within the boundaries of the ecological control line.

Management of the Group has had several rounds of negotiations with the relevant local government authorities regarding the potential development opportunities of the Shenzhen Properties but has been advised that the re-designation of the land cannot be reversed and hence any kind of redevelopment would not be allowed. With all the unfavourable policy and measures in place, the Directors believe that the future fair value of the Shenzhen Property would gradually decline as the expiry of the Shenzhen Property’s land use right in August 2041 is approaching.

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LETTER FROM THE IFA

controlling Shareholder, is willing to purchase the Shenzhen Property in order to release more flexibility in resources of the Group after Completion. As advised by the Directors, the net proceeds from the Disposal of approximately HK$183.0 million, after taking into account the related transaction costs of approximately HK$1.6 million, will be used by the Group for future potential investments and general working capital purpose.

In the light of the above and having considered that (i) the Shenzhen Property can not be transformed to commercial/residential use for the development of the property business of the Group; (ii) the Shenzhen Property accounted for a substantial portion (in terms of market value) of the Properties; and (iii) the Disposal will enable the Group to have additional capital resources for the Group’s future investments, we concur with the view of the Directors that the Disposal is in the interests of the Company and its shareholders as a whole.

4. The Agreement

The principal terms of the Agreement are summarised as follows:

Date: 3 February 2016 Parties: (i) Man Sang Enterprise Limited, a direct wholly-owned subsidiary of the Company as the Vendor;
(ii) Hua Yang Global Limited, a company wholly-owned by Mr. Cheng as the Purchaser; and
(iii) Mr. Cheng as the Guarantor

Subject Matters of The assets to be disposed of would be the Sale Interest which the Disposal: consists of:

(i) the Sale Shares being the entire issued share capital in the Target Company immediately before Completion; and
(ii) the Sale Loan being all obligations, liabilities and debts owing or incurred by the Target Company to the Vendor on Completion as determined by the Completion Accounts whether actual, contingent or deferred and irrespective of whether or not the same is due and payable on Completion.

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LETTER FROM THE IFA

Consideration:

The Consideration will be payable by the Purchaser in the following manner:

(i) HK$65.0 million being the total consideration payable to the Vendor for the sale and purchase of the Sale Shares and shall be payable in clear funds on Completion; and
(ii) the total consideration payable to the Vendor for the sale and purchase of the Sale Loan shall be based on the Actual Amount as at the Completion Date and shall be paid to the Vendor in clear funds within ten (10) days of the date of determination of the Sale Loan.

Conditions precedent

Completion of the Agreement and the transactions contemplated thereunder is conditional upon, among other things, the fulfillment (or waiver, as appropriate) of the following conditions:

(i) the Company having obtained clearance of the announcement and circular(s) required to be issued by the Company under the Listing Rules and granted all approvals, if necessary, by the Stock Exchange in respect of all the transactions contemplated therein;
(ii) the Company having complied with the relevant Listing Rules’ requirements including but not limited to the passing of the relevant resolution(s) by the Independent Shareholders at the SGM to approve the Agreement and the transactions contemplated therein;
(iii) no event having occurred since the date of the Agreement to Completion, the consequence of which is to materially and adversely affect the financial position, business or property, results of operations or business prospects of the Target Company Group;
(iv) the Vendor having obtained all reasonably relevant approvals, consents, licenses and/or permits for the sale of the Sale Shares and Sale Loan in respect of the Agreement and the transactions contemplated thereunder; and
(v) all the representations, warranties and undertakings made by the Vendor and the Purchaser as at the date of the Agreement and the Completion Date are true, accurate and complete and not misleading at all times between the date of the Agreement and Completion.

The conditions (i) and (ii) above are not waivable and the Purchaser may at any time waive in writing all or any of the condition (iii), (iv) and (v) as set out above.

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LETTER FROM THE IFA

As at the Latest Practicable Date, save for condition (i), none of the above conditions precedent has been fulfilled.

Completion

Subject to the continuing fulfillment (or waiver, as appropriate) of the conditions precedent set out in the Agreement on or before 30 April 2016 (or such other date as the parties may agree), Completion shall take place at the Vendor’s office at 11:00 a.m. (Hong Kong time) on the third Business Day after the fulfillment or waiver of the last of the conditions specified in the Agreement or at such other place or time as the parties shall agree.

Guarantee and undertaking by Mr. Cheng

The Consideration

According to the Letter from the Board, the Consideration was agreed between the Vendor and the Purchaser after arm’s length negotiations on normal commercial terms with reference to:

(i) the consolidated financial position of the Target Company Group; and
(ii) the preliminary valuation of the Properties in the amount of HK$186.8 million as at 31 December 2015, according to an independent valuation performed by an independent property valuer.

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LETTER FROM THE IFA

As at 31 December 2015, the unaudited consolidated net asset value of the Target Company Group was approximately HK$65.0 million, including an amount due to the Vendor of approximately HK$119.6 million. As advised by the Directors, the Consideration of approximately HK$184.6 million was equivalent to the aggregation of the net asset value of the Target Company Group as at 31 December 2015 after taking into account the market value of the Properties held by the Group as evaluated by the Valuer and the outstanding amount of the Sale Loan as at 31 December 2015.

In assessing the fairness and reasonableness of the Consideration, we have reviewed the Valuation Report and discussed with the Valuer in regard to the methodology adopted and the basis and assumptions used in arriving at the valuation of the Properties held by the Target Company Group. We are given to understand that the Valuer has adopted the Investment Approach by capitalising the rental derived from the existing tenancies with due provision for the reversionary potential of the Properties, and where appropriate, Direct Comparison Approach by making reference to comparable sales evidence as available in the relevant market. In valuing the Properties, the Valuer has complied with the requirements set out in Chapter 5 and Practice Note 12 of the Listing Rules and The HKIS Valuation Standards 2012 Edition published by the Hong Kong Institutes of Surveyors. We are advised by the Valuer that the valuation approaches as adopted for valuing the Properties as specified above are common methodologies used in establishing the valuation of the Properties. We did not conduct any independent measurement on the market value of the Properties.

Furthermore, the Valuer confirmed that it is an independent third party to the parties to the Agreement and their respective core connected persons. Moreover, we understand that Mr. Philip C.Y. Tsang, the person in charge the valuation, is a registered professional surveyor who has over 23 years’ experience in the valuation of properties in the PRC. We have also reviewed the terms of the Valuer’s engagement letter and noted that the scope of work is appropriate for arriving at the opinion of market value on the Properties and we are unaware that there are any limitations on the relevant scope of work. Nothing has come to our attention that parties to the Agreement had made formal or informal representation to the Valuer that contravenes with our understanding of the information, to a material extent, as set out in the Circular.

Based on our discussion with the Valuer and our review on the Valuation Report, and having considered that (i) the methodologies being applied in the valuations; (ii) the principle bases and assumptions used in arriving at the valuations, and (iii) the qualification, expertise and experiences of the Valuer, we consider that there is no substantial factors identified which may cause us to doubt the fairness and reasonableness of the methodology adopted and the basis used in arriving at the valuation. As such, we consider that the valuations are fair references for the Independent Shareholders to assess the fairness and reasonableness of the market value of the Properties.

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LETTER FROM THE IFA

Based on the above, in particular that (i) the Consideration represents aggregation of the net assets value of the Target Company Group after taking into account the market value of the Properties as at 31 December 2015 and the outstanding amount of the Sale Loan upon Completion; and (ii) the valuation of the Properties has been assessed by an independent professional valuer under commonly adopted valuation methodologies, we concur with the view of the Directors that the Consideration is fair and reasonable so far as the Independent Shareholders are concerned.

Possible financial effects of the Disposal

Net assets value

The Directors considered that there will have no material impacts to the net assets value of the Group upon Completion. The Group will no longer consolidate the financial position of the Target Company Group’s consolidated accounts into the financial statements of the Group thereafter.

Earnings

Upon Completion, the Target Company Group will no longer be subsidiaries of the Group and the results of the Target Company Group will cease to be consolidated into the Group’s consolidated financial statements. It is noted that the Disposal is expected to record a loss of approximately HK$1.6 million upon Completion which is principally derived from the related transaction costs of the Disposal. Independent Shareholders should note that the actual amount of gain or loss on the Disposals would be calculated based on the relevant figures as at the Completion Date and the actual transaction cost and expenses incurred in respect of the Disposal.

Liquidity

The Directors expected that there will be a positive impact to the liquidity of the Group from the net proceeds of the Disposal upon Completion.

The Independent Shareholders should note that the aforementioned analyses are for illustration purposes only and do not purport to represent how the financial position of the Group will be upon Completion.

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LETTER FROM THE IFA

RECOMMENDATION

Notwithstanding that the Disposal is not in the ordinary and usual course of business of the Company, having considered the above principal factors and reasons, we are of the view that (i) the Disposal is in the interests of the Company and the Independent Shareholders as a whole; and (ii) the terms of the Agreement and the transactions contemplated thereunder are on normal commercial terms and are fair and reasonable so far as the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Agreement and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of Messis Capital Limited Vincent Cheung Executive Director

Mr. Vincent Cheung is a licensed person registered with the Securities and Futures Commission and regarded as a responsible officer of Messis Capital Limited to carry out type 6 (advising on corporate finance) regulated activities under the SFO and has over 8 years of experience in corporate finance industry.

– 26 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

The following is the text of a letter and valuation certificate prepared for the purpose of incorporation in this circular received from DTZ Debenham Tie Leung Limited, an independent property valuer, in connection with its opinion of market values of the Properties held by Man Hing Industry Development (Shenzhen) Co. Ltd. (民興實業發展(深圳)有限公司) in the PRC as at 31 December 2015.

==> picture [211 x 62] intentionally omitted <==

16th Floor Jardine House 1 Connaught Place Central Hong Kong

3 March 2016

The Directors Man Sang International Limited Suite 2201, 22/F, Sun Life Tower The Gateway, 15 Canton Road Tsim Sha Tsui Kowloon Hong Kong

Dear Sirs,

Re: 1. 27 blocks of Man Sang Industrial City, Min Sheng Main Road, Gong Ming Zhen, Bao An District, Shenzhen, Guangdong Province, the People’s Republic of China (‘‘PRC’’)
24 units of Market Centre of Phase I, China Pearls and Jewellery City (‘‘CP&J City’’), Shanxiahu Town, Zhuji, Zhejiang Province, the PRC

INSTRUCTIONS, PURPOSE & VALUATION DATE

In accordance with the instructions from Man Sang International Limited (the ‘‘Company’’) for us to carry out the valuation of the market value of the properties (the ‘‘Properties’’) held by Man Hing Industry Development (Shenzhen) Co. Ltd. (民興實業發展(深圳)有限公司) (‘‘Man Hing’’) in the PRC, we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we considered necessary for the purpose of providing you with our opinion of the market value of the Properties in existing state as at 31 December 2015 (the ‘‘valuation date’’).

DEFINITION OF MARKET VALUE

Our valuations of each of the Properties represents its Market Value. The definition of Market Value adopted in The HKIS Valuation Standards 2012 Edition follows the International Valuation Standards published by the International Valuation Standards Council (‘‘IVSC’’). Market Value is defined by the IVSC as ‘‘the estimated amount for which an asset or liability

– I-1 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion’’.

VALUATION BASIS & ASSUMPTIONS

Our valuations of the Properties exclude an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangement, special considerations or concessions granted by anyone associated with the sale, or any element of special value.

In the course of our valuations of the Properties held by Man Hing in the PRC, with reference to the PRC legal opinion of the legal adviser, Commerce & Finance Law Offices, we have prepared our valuation on the basis that transferable land use rights in respect of the Properties for their specific term at nominal annual land use fee has been granted and that any premium payable has already been fully paid. We have relied on the information and advice given by the Company and the PRC legal opinion of the Company’s legal adviser, dated 29 February 2016, regarding the titles to the Properties and the interests in the Properties. In valuing the Properties, we have prepared our valuation on the basis that the owners have enforceable title to the Properties and have free and uninterrupted rights to use, occupy or assign the Properties for the whole of the unexpired terms as granted.

No allowance has been made in our valuation for any charges, pledges or amounts owing on the Properties nor any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is valued on the basis that the Properties are free from encumbrances, restrictions and outgoings of any onerous nature which could affect their values.

METHOD OF VALUATION

In valuing the Properties, which is held by Man Hing for investment in the PRC, we have adopted the Investment Approach by capitalizing the rental derived from the existing tenancies with due provision for the reversionary potential of the Properties, and where appropriate, we have also valued the Properties by Direct Comparison Approach by making reference to comparable sales evidence as available in the relevant market.

In valuing the Properties, we have complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and The HKIS Valuation Standards 2012 Edition published by the Hong Kong Institutes of Surveyors.

SOURCE OF INFORMATION

We have relied to a very considerable extent on the information given by the Company and the opinion of the PRC legal adviser as to the PRC laws. We have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, identification of the Properties, completion dates of building, particulars of occupancy, tenancy information, site and floor areas and all other relevant matters.

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VALUATION REPORT OF THE PROPERTIES

APPENDIX I

Dimension, measurements and areas included in this valuation report are based on the information provided to us and are therefore only approximation. We have no reason to doubt the truth and accuracy of the information provided to us by the Company which is material to the valuation. We were also advised that no material facts have been omitted from the information supplied.

We would point out that the copies of documents provided to us are mainly compiled in Chinese characters and the transliteration into English represents our understanding of the contents. We would therefore advise the Company to make reference to the original Chinese edition of the documents and consult your legal adviser regarding the legality and interpretation of these documents.

TITLE INVESTIGATION

We have been provided by the Company with copies or extracts of documents. However, we have not searched the original documents to verify ownership or to ascertain any amendments. All documents have been used for reference only and all dimensions, measurements and areas are approximate.

SITE INSPECTION

Our DTZ PRC Office valuers, Ms. Eva Yin of Shenzhen office and Mr. Tom Zheng of Hangzhou office have inspected the exterior and, wherever possible, the interior of the Properties in January 2016. However, no structural survey has been made, but in the course of our inspection, we did not note any serious defects. We are not be able to report that the Properties are free of rot, infestation or any other structural defects; no tests were carried out to any of the services. We will not be able to carry out detailed on-site measurements to verify the site and floor areas of the Properties and we will assume in our valuation that the site and floor areas shown on the copies of documents handed to us are correct.

Unless otherwise stated, we have not been able to carry out detailed on-site measurements to verify the site and floor area of the Properties and we have assumed that the areas shown on the copies of documents handed to us are correct.

– I-3 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

CURRENCY

Unless otherwise stated, all sums stated in our valuation is in Renminbi, the official currency of the PRC.

We attach herewith a summary of valuations and valuation certificates.

Yours faithfully, For and on behalf of

DTZ Debenham Tie Leung Limited Philip C Y Tsang

Registered Professional Surveyor (General Practice) Registered China Real Estate Appraiser MSc, MHKIS Director

Note: Mr. Philip C Y Tsang is Registered Professional Surveyor who has over 23 years’ experience in the valuation of properties in the PRC.

– I-4 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

SUMMARY OF VALUATIONS

Property Market value in existing state as at 31 December 2015 The Company’s attributable interest RMB % Properties held by Man Hing for investment in the PRC 1. 27 blocks of Man Sang Industrial City, Min Sheng Main Road, Gong Ming Zhen, Bao An District, Shenzhen, Guangdong Province, the PRC 144,700,000 100 2. 24 units of Market Centre of Phase I, CP&J City, Shanxiahu Town, Zhuji, Zhejiang Province, the PRC 11,000,000 100 Grand Total: 155,700,000	Market value in existing state as at 31 December 2015 attributable to the Company RMB 144,700,000 11,000,000
	155,700,000

Property
Market value in
existing state as
at 31 December
2015
The Company’s
attributable
interest
RMB
%
Properties held by Man Hing for investment in the PRC
1.
27 blocks of
Man Sang Industrial City,
Min Sheng Main Road, Gong
Ming Zhen,
Bao An District,
Shenzhen,
Guangdong Province,
the PRC
144,700,000
100
2.
24 units of
Market Centre of Phase I,
CP&J City,
Shanxiahu Town, Zhuji,
Zhejiang Province,
the PRC
11,000,000
100
Grand Total:
155,700,000

Market value in
existing state as
at 31 December
2015
attributable to
the Company
RMB
144,700,000
11,000,000

155,700,000

– I-5 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

VALUATION CERTIFICATE

Properties held by Man Hing for investment in the PRC

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2015

27 blocks of The Property comprises 20 According to the RMB144,700,000 Man Sang Industrial City, blocks of 3 to 6 storey information provided Min Sheng Main Road, industrial buildings by the Company, the (100% interest Gong Ming Zhen, completed between 1992 Property is currently attributable to the Bao An District, and 2005 and 7 blocks of 5 let to various tenants Company: Shenzhen, to 9 storey residential for a total monthly RMB144,700,000) Guangdong Province, buildings completed rent of approximately the PRC between 1994 and 2005. RMB990,000.
According to all relevant Real Estate Ownership Certificates, the gross floor area of the Property is 75,771.43 square meters.
The Property is located at Min Sheng Main Road, Gong Ming Zhen, Bao An District in Shenzhen. Developments nearby are mainly industrial development. According to the Company, there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

The land use rights of the Property have been granted for a term of 50 years from 1 September 1991 to 31 August 2041 for workshop, dormitory and other ancillary uses.

– I-6 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

Notes:

(1) According to 109 Real Estate Ownership Certificates, the land use rights and building ownership of the Property, comprising a total gross floor area of 75,771.43 square meters, have been vested in Man Hing for a term of 50 years from 1 September 1991 to 31 August 2041 for industrial and dormitory use:

Certificates No. Block No. No. of Storey Usage 5000073479, 5000072691, 5000072700, 5000072702, 5000072695, 5000072696 101 6 Office/Industrial 5000072693, 5000072694, 5000072698 102 3 Industrial 5000072692, 5000072690, 5000072699 103 3 Industrial 5000071781, 5000071746, 5000071782 104 3 Industrial 5000071783, 5000071784, 5000071785 105 3 Industrial 5000071743, 5000071787, 5000071786 106 3 Industrial 5000073472, 5000073474, 5000073475, 5000073462, 5000073464 107 5 Dormitory 5000071739, 5000071789, 5000071788 108 3 Industrial 5000071741, 5000071736, 5000071757 109 3 Industrial 5000071759, 5000071758, 5000071760 110 3 Industrial 5000071762, 5000071755, 5000071765 111 3 Industrial 5000073465, 5000073467, 5000073469, 5000073478, 5000073470 112 5 Dormitory 5000073459, 5000073460, 5000073461, 5000073456, 5000073455, 5000073471, 5000073457 113* 7 Dormitory 5000073484, 5000073480, 5000073483, 5000073482, 5000073485, 5000073481 115 6 Dormitory 5000198534, 5000198536, 5000198526, 5000198524, 5000198515, 5000198849, 5000198541 116A 7 Dormitory 5000198529, 5000198545, 5000198517, 5000198512, 5000198539, 5000198531, 5000198523, 5000198521, 5000198518 116B 9 Dormitory 5000071749, 5000071763, 5000071767, 5000071769 117 4 Industrial 5000071772, 5000071771, 5000071773, 5000071753 118 4 Industrial 5000071774, 5000071751, 5000071778, 5000071776 119 4 Industrial 5000071779, 5000071780, 5000072677, 5000072675 120 4 Industrial 5000072674, 5000072673, 5000072672, 5000072671 121 4 Industrial 5000072670, 5000072668, 5000072666, 5000072661 122 4 Industrial 5000072660, 5000072662, 5000072659, 5000072665 123 4 Industrial 5000072682, 5000072681, 5000072683, 5000072680 124 4 Industrial 5000072684, 5000072685, 5000072688, 5000072679 125 4 Industrial 8000101027 126 5 Industrial and ancillary Total	Gross Floor Area (square meter(s)) 3,094.80 1,202.40 1,202.40 1,202.40 1,202.40 1,202.40 1,944.40 1,202.40 1,202.40 1,202.40 2,529.80 1,944.40 5,623.80 1,921.20 5,748.65 4,743.27 2,536.80 2,536.80 2,536.80 1,712.80 1,712.80 1,712.80 2,982.40 2,982.40 2,982.40 16,905.91
	75,771.43

Certificates No.
Block
No.
No. of
Storey
Usage
5000073479, 5000072691, 5000072700,
5000072702, 5000072695, 5000072696
101
6
Office/Industrial
5000072693, 5000072694, 5000072698
102
3
Industrial
5000072692, 5000072690, 5000072699
103
3
Industrial
5000071781, 5000071746, 5000071782
104
3
Industrial
5000071783, 5000071784, 5000071785
105
3
Industrial
5000071743, 5000071787, 5000071786
106
3
Industrial
5000073472, 5000073474, 5000073475,
5000073462, 5000073464
107
5
Dormitory
5000071739, 5000071789, 5000071788
108
3
Industrial
5000071741, 5000071736, 5000071757
109
3
Industrial
5000071759, 5000071758, 5000071760
110
3
Industrial
5000071762, 5000071755, 5000071765
111
3
Industrial
5000073465, 5000073467, 5000073469,
5000073478, 5000073470
112
5
Dormitory
5000073459, 5000073460, 5000073461,
5000073456, 5000073455, 5000073471,
5000073457
113*
7
Dormitory
5000073484, 5000073480, 5000073483,
5000073482, 5000073485, 5000073481
115
6
Dormitory
5000198534, 5000198536, 5000198526,
5000198524, 5000198515, 5000198849,
5000198541
116A
7
Dormitory
5000198529, 5000198545, 5000198517,
5000198512, 5000198539, 5000198531,
5000198523, 5000198521, 5000198518
116B
9
Dormitory
5000071749, 5000071763, 5000071767,
5000071769
117
4
Industrial
5000071772, 5000071771, 5000071773,
5000071753
118
4
Industrial
5000071774, 5000071751, 5000071778,
5000071776
119
4
Industrial
5000071779, 5000071780, 5000072677,
5000072675
120
4
Industrial
5000072674, 5000072673, 5000072672,
5000072671
121
4
Industrial
5000072670, 5000072668, 5000072666,
5000072661
122
4
Industrial
5000072660, 5000072662, 5000072659,
5000072665
123
4
Industrial
5000072682, 5000072681, 5000072683,
5000072680
124
4
Industrial
5000072684, 5000072685, 5000072688,
5000072679
125
4
Industrial
8000101027
126
5
Industrial
and ancillary
Total

Gross
Floor Area
(square
meter(s))
3,094.80
1,202.40
1,202.40
1,202.40
1,202.40
1,202.40
1,944.40
1,202.40
1,202.40
1,202.40
2,529.80
1,944.40
5,623.80
1,921.20
5,748.65
4,743.27
2,536.80
2,536.80
2,536.80
1,712.80
1,712.80
1,712.80
2,982.40
2,982.40
2,982.40
16,905.91

75,771.43

– I-7 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

As advised, Block No.113 building is divided into Nos.113 and 114 building in operation.
Man Hing is an indirect wholly-owned subsidiary of Man Sang Jewellery Company Limited which is an indirect wholly-owned subsidiary of the Company.
(2) According to Business Licence No. 440301503352114 issued by Market Supervision Administration of Shenzhen Municipality dated 10 July 2013, Man Hing was established on 6 August 1992.
(3) According to the PRC Legal Opinion:
(i) Man Hing Industry Development (Shenzhen) Co. Ltd. (民興實業發展(深圳)有限公司) has valid land use rights and building ownership rights of the Property and is the sole legal owner of the Property;
(ii) Man Hing Industry Development (Shenzhen) Co. Ltd. (民興實業發展(深圳)有限公司) has the rights to lease, transfer, pledge or other lawful measures of the land use rights and building ownership rights of the Property; and
(iii) Man Hing Industry Development (Shenzhen) Co. Ltd. (民興實業發展(深圳)有限公司) has fulfilled the necessary permit, approval and filing procedures of the Property. Seizure and other coercive measures to limit the possession and the use rights of the Property does not currently exist.
(4) The status of title and grant of major certificates, approvals and licences in accordance with the information provided by the Company are as follows:

Real Estate Ownership Certificate Yes Business License Yes

– I-8 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

VALUATION CERTIFICATE

Properties held by Man Hing for investment in the PRC

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 December 2015

24 units of Market Centre The Property comprises 24 of Phase I, CP&J City, units (2-storey) which was Shanxiahu Town, Zhuji, completed in 2009. Zhejiang Province, the PRC As advised, the Property comprises a total gross floor area of approximately 1,581.27 square meters.

The Property is located at CP&J City, Shanxiahu Town in Zhuji. Developments nearby are mainly residential and industrial development. According to the Company, there is no environmental issues and litigation dispute; there is no plan for renovation or change the use of the Property.

Portion of the RMB11,000,000 Property with a total gross floor area of (100% interest approximately 530.96 attributable to the square meters is Company: subject to a tenancy RMB11,000,000) with the expiry date on 30 June 2016 at a monthly rent of approximately RMB25,000.

The remaining portion of the Property is currently vacant.

The land use rights of the Property have been granted for a term due to expire on 21 August 2046 for commercial use.

– I-9 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

Notes:

(1) According to 24 Certificates for the Use of State-owned Land, the land use rights of the Property, comprising of a site area of 1,168.69 square meters, have been granted to Man Hing for a land use term due to expire on 21 August 2046 for commercial use.

Certificate No. Block No. Usage (2010)91108769 B1101 Commercial (2010)91108770 B1102 Commercial (2010)91108771 B1103 Commercial (2010)91108772 B1104 Commercial (2010)91108773 B1105 Commercial (2010)91108774 B1106 Commercial (2010)91108775 B1107 Commercial (2010)91108776 B1108 Commercial (2010)91108777 B1109 Commercial (2011)91109346 B1110 Commercial (2010)91108778 B1111 Commercial (2010)91108779 B1112 Commercial (2010)91108780 B1113 Commercial (2010)91108781 B1114 Commercial (2011)91109348 B1115 Commercial (2010)91108782 B1116 Commercial (2011)91109347 B1117 Commercial (2010)91108783 B1118 Commercial (2010)91108784 B1119 Commercial (2010)91108785 B1120 Commercial (2010)91108786 B1121 Commercial (2010)91108787 B1122 Commercial (2010)91108788 B1123 Commercial (2010)91108789 B1124 Commercial Total	Site Area (square meter(s)) 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 49.06 44.30 45.07
	1,168.69

Certificate No.
Block No.
Usage
(2010)91108769
B1101
Commercial
(2010)91108770
B1102
Commercial
(2010)91108771
B1103
Commercial
(2010)91108772
B1104
Commercial
(2010)91108773
B1105
Commercial
(2010)91108774
B1106
Commercial
(2010)91108775
B1107
Commercial
(2010)91108776
B1108
Commercial
(2010)91108777
B1109
Commercial
(2011)91109346
B1110
Commercial
(2010)91108778
B1111
Commercial
(2010)91108779
B1112
Commercial
(2010)91108780
B1113
Commercial
(2010)91108781
B1114
Commercial
(2011)91109348
B1115
Commercial
(2010)91108782
B1116
Commercial
(2011)91109347
B1117
Commercial
(2010)91108783
B1118
Commercial
(2010)91108784
B1119
Commercial
(2010)91108785
B1120
Commercial
(2010)91108786
B1121
Commercial
(2010)91108787
B1122
Commercial
(2010)91108788
B1123
Commercial
(2010)91108789
B1124
Commercial
Total

Site Area
(square
meter(s))
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
49.06
44.30
45.07

1,168.69

– I-10 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

(2) According to 24 Building Ownership Certificates, the building ownership of the Property, comprising a total gross floor area of 1,581.27 square meters, have been vested in Man Hing.

Certificate No. Block No. Number of Storey Usage F0000026457 B110101 2 Commercial B110201 2 Commercial F0000026428 B110102 2 Commercial B110202 2 Commercial F0000026196 B110103 2 Commercial B110203 2 Commercial F0000026427 B110104 2 Commercial B110204 2 Commercial F0000026197 B110105 2 Commercial B110205 2 Commercial F0000026458 B110106 2 Commercial B110206 2 Commercial F0000026432 B110107 2 Commercial B110207 2 Commercial F0000026459 B110108 2 Commercial B110208 2 Commercial F0000026456 B110109 2 Commercial B110209 2 Commercial F0000083019 B110110 2 Commercial B110210 2 Commercial F0000026434 B110111 2 Commercial B110211 2 Commercial F0000026455 B110112 2 Commercial B110212 2 Commercial F0000026433 B110113 2 Commercial B110213 2 Commercial F0000026431 B110114 2 Commercial B110214 2 Commercial F0000083031 B110115 2 Commercial B110215 2 Commercial F0000026195 B110116 2 Commercial B110216 2 Commercial F0000083218 B110117 2 Commercial B110217 2 Commercial F0000026429 B110118 2 Commercial B110218 2 Commercial F0000061900 B110119 2 Commercial B110219 2 Commercial F0000026691 B110120 2 Commercial B110220 2 Commercial F0000061899 B110121 2 Commercial B110221 2 Commercial F0000026198 B110122 2 Commercial B110222 2 Commercial F0000061898 B110123 2 Commercial B110223 2 Commercial F0000026430 B110124 2 Commercial B110224 2 Commercial Total	Gross Floor Area (square meters) 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 33.19 32.14 27.79 27.79 33.19
	1,581.27

Certificate No.
Block No.
Number
of Storey
Usage
F0000026457
B110101
2
Commercial
B110201
2
Commercial
F0000026428
B110102
2
Commercial
B110202
2
Commercial
F0000026196
B110103
2
Commercial
B110203
2
Commercial
F0000026427
B110104
2
Commercial
B110204
2
Commercial
F0000026197
B110105
2
Commercial
B110205
2
Commercial
F0000026458
B110106
2
Commercial
B110206
2
Commercial
F0000026432
B110107
2
Commercial
B110207
2
Commercial
F0000026459
B110108
2
Commercial
B110208
2
Commercial
F0000026456
B110109
2
Commercial
B110209
2
Commercial
F0000083019
B110110
2
Commercial
B110210
2
Commercial
F0000026434
B110111
2
Commercial
B110211
2
Commercial
F0000026455
B110112
2
Commercial
B110212
2
Commercial
F0000026433
B110113
2
Commercial
B110213
2
Commercial
F0000026431
B110114
2
Commercial
B110214
2
Commercial
F0000083031
B110115
2
Commercial
B110215
2
Commercial
F0000026195
B110116
2
Commercial
B110216
2
Commercial
F0000083218
B110117
2
Commercial
B110217
2
Commercial
F0000026429
B110118
2
Commercial
B110218
2
Commercial
F0000061900
B110119
2
Commercial
B110219
2
Commercial
F0000026691
B110120
2
Commercial
B110220
2
Commercial
F0000061899
B110121
2
Commercial
B110221
2
Commercial
F0000026198
B110122
2
Commercial
B110222
2
Commercial
F0000061898
B110123
2
Commercial
B110223
2
Commercial
F0000026430
B110124
2
Commercial
B110224
2
Commercial
Total

Gross
Floor Area
(square
meters)
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
33.19
32.14
27.79
27.79
33.19

1,581.27

– I-11 –

VALUATION REPORT OF THE PROPERTIES

APPENDIX I

(3) According to Business Licence No. 330600400011825 dated 19 July 2010, China Pearls and Jewellery International City Co. Ltd. (諸暨華東國際珠寶城有限公司) was established on 10 March 2006 with a registered capital of US$30,000,000 with a valid operation period from 10 March 2006 to 9 March 2056.
(4) According to the PRC Legal Opinion:
(i) Man Hing Industry Development (Shenzhen) Co. Ltd. (民興實業發展(深圳)有限公司) has valid land use rights and building ownership rights of the Property and is the sole legal owner of the Property;
(ii) Man Hing Industry Development (Shenzhen) Co. Ltd. (民興實業發展(深圳)有限公司) has the rights to lease, transfer, pledge or other lawful measures of the land use rights and building ownership rights of the Property; and
(iii) Man Hing Industry Development (Shenzhen) Co. Ltd. (民興實業發展(深圳)有限公司) has fulfilled the necessary permit, approval and filing procedures of the Property. Seizure and other coercive measures to limit the possession and the use rights of the Property does not currently exist.
(5) The status of the title and grant of major approvals and licenses in accordance with the information provided by the Company and the legal opinion are as follows:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes Business Licence Yes

– I-12 –

GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS IN SECURITIES

Save as disclosed below, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which, (a) were required to be notified to the Company and the Stock Exchange pursuant to provisions of Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Directors or the chief executive of the Company have taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers to be notified to the Company and the Stock Exchange.

Long positions in the Shares

							Approximate
							percentage
							of the issued
							share capital
							of the
		Number of Shares		held			Company as
		as at the	Latest Practicable		Date		at the Latest
	Capacity/nature	Direct	Deemed			Total	Practicable
Name of Director	of interest	interest	interest		interest		Date
Mr. Cheung Kwok	Interest in controlled	—	256,038,041	256,038,041			16.12%
Wai, Elton	corporations		(Note)
Mr. Lei Hong Wai	Interest in controlled	—	256,038,041	256,038,041			16.12%
	corporations		(Note)
Mr. Leung Alex	Beneficial owner	1,800,000	—		1,800,000		0.11%

Note: These Shares were directly owned by Twin Success International Limited (‘‘Twin Success’’), which is (i) 50% owned by Silver Pacific Development Limited (‘‘SP Development’’), which in turn is owned by Mr. Cheung Kwok Wai, Elton and Mr. Cheung Kwok Fan in equal shares, and (ii) 50% owned by Silver Pacific International Limited (‘‘SP International’’), which is wholly-owned by Mr. Lei Hong Wai.

– II-1 –

GENERAL INFORMATION

APPENDIX II

3. SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN SECURITIES

Save as disclosed below, as at the Latest Practicable Date, so far as was known to the Directors, there was no other person, other than the Directors or the chief executive of the Company and (in the case of the other members of the Group) other than the Company, who had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

					Approximate
					percentage of
					the issued
					share capital
					of the
		Number of	Shares held as at	the Latest	Company as
			Practicable Date		at the Latest
Name of the	Capacity/nature of	Direct	Deemed	Total	Practicable
Shareholder	interest	interest	interest	interest	Date
Mr. Cheng	Beneficial owner and	11,773,453	468,781,655	480,555,108	30.25%
Chung Hing	interest in a		(Note 1)
	controlled corporation
Rich Men	Beneficial owner	468,781,655	—	468,781,655	29.51%
Limited		(Note 1)
Twin Success	Beneficial owner	256,038,041	—	256,038,041	16.12%
		(Note 2)
SP Development	Interest in a controlled	—	256,038,041	256,038,041	16.12%
	corporation		(Note 2)
SP International	Interest in a controlled	—	256,038,041	256,038,041	16.12%
	corporation		(Note 2)
Mr. Cheung	Interest in controlled	—	256,038,041	256,038,041	16.12%
Kwok Fan	corporations		(Note 2)

Notes:

These Shares were directly owned by Rich Men Limited. Mr. Cheng Chung Hing owns 100% of the issued share capital of Rich Men Limited.
These Shares were directly owned by Twin Success, which is (i) 50% owned by SP Development, which in turn is owned by Mr. Cheung Kwok Wai, Elton and Mr. Cheung Kwok Fan in equal shares, and (ii) 50% owned by SP International, which is wholly-owned by Mr. Lei Hong Wai.

– II-2 –

GENERAL INFORMATION

APPENDIX II

4. DISCLOSURE OF OTHER INTERESTS

(i) Interests in competing business

To the best knowledge of the Directors, as at the Latest Practicable Date, none of the Directors or their respective close associates had an interest in any business, which competes or is likely to compete, either directly or indirectly, with the business of the Group which would be required to be disclosed under Rule 8.10 of the Listing Rules, as if the Directors were controlling Shareholders.

(ii) Interests in assets

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired or disposed of by or leased to, or which were proposed to be acquired or disposed of by or leased to, any member of the Group since 31 March 2015 (being the date to which the latest published audited accounts of the Company were made up).

(iii) Interests in contract or arrangement

As at the Latest Practicable Date, there was no contract or arrangement in which any Director was materially interested and which was significant in relation to the business of the Group.

5. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had entered or was proposing to enter into a service contract with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

6. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2015, being the date to which the latest published audited consolidated financial statements of the Group were made up.

– II-3 –

GENERAL INFORMATION

APPENDIX II

7. QUALIFICATIONS AND CONSENTS OF EXPERTS

The following are the qualifications of the experts who have given opinions or advices which are contained in this circular:

Name Qualification

Messis Capital Limited

licensed corporation to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO

DTZ Debenham Tie Leung Independent professional valuer Limited

Commerce & Finance Law PRC legal adviser Offices

Each of the above experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its report and/or the reference to its name or opinion in the form and context in which they respectively appear.

As at the Latest Practicable Date, none of the experts above were beneficially interested in the share capital of any member of the Group, nor did they have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, none of the above experts had any direct or indirect interest in any assets which had been acquired, disposed of by or leased to, or which were proposed to be acquired, disposed of by or leased to, any member of the Group since 31 March 2015 (being the date to which the latest published audited accounts of the Company were made up).

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the Agreement will be available for inspection during normal business hours at the Company’s principal place of business in Hong Kong at Suite 2201, 22/F., Sun Life Tower, The Gateway, 15 Canton Road, Tsimshatsui, Kowloon, from the date of this circular up to and including the date of the SGM.

– II-4 –

NOTICE OF SGM

MAN SANG INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 938)

NOTICE IS HEREBY GIVEN that the special general meeting of Man Sang International Limited (the ‘‘Company’’) will be held at The Garden Rooms, 2/F., The Royal Garden, 69 Mody Road, Tsimshatsui East, Kowloon, Hong Kong on Tuesday, 22 March 2016 at 12:30 p.m. for the purpose of considering and, if appropriate, passing with or without modifications the following resolution as ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT:

(a) the sale and purchase agreement dated 3 February 2016 (the ‘‘Agreement’’) entered into between Man Sang Enterprise Limited as vendor, Hua Yang Global Limited as purchaser and Mr. Cheng Chung Hing as guarantor (copy of which has been produced to the meeting marked ‘‘A’’ and initialed by the chairman of the meeting for the purpose of identification) in relation to the sale and purchase of the entire issued share capital of Man Sang Jewellery Company Limited and the Sale Loan (as defined in the circular of the Company dated 3 March 2016), be and is hereby approved, confirmed and ratified; and
(b) the directors of the Company (the ‘‘Directors’’) be and are hereby authorised, for and on behalf of the Company, to execute all such other documents, instruments and agreements and to do all such acts or things deemed by them to be incidental to, ancillary to or in connection with the matters contemplated under the Agreement and to agree to any amendment to any of the terms of the Agreement which in the opinion of the Directors is not of a material nature and is in the interests of the Company.’’

By Order of the Board Man Sang International Limited Leung Alex

Executive Director and Company Secretary

Hong Kong, 3 March 2016

– SGM-1 –

NOTICE OF SGM

Notes:

(1) At the special general meeting of the Company (‘‘SGM’’), the Chairman of the SGM will put each of the above resolution to be voted by way of a poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
(2) A member of the Company entitled to attend and vote at the SGM (or any adjournment thereof) is entitled to appoint another person as his/her/their proxy to attend and vote instead of him/her/them. A member who is the holder of two or more shares in the capital of the Company may appoint more than one proxy to attend and vote on the same occasion. A proxy need not be a member of the Company.
(3) To be valid, the form of proxy in the prescribed form 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’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not less than 48 hours before time fixed for holding the SGM (or any adjournment thereof). Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the meeting convened and in such event the form of proxy shall be deemed to be revoked.
(4) The register of members of the Company will be closed from Friday, 18 March 2016 to Tuesday, 22 March 2016 (both days inclusive), for the purpose of determining shareholders’ entitlement to attend and vote at the SGM, during which period no transfer of shares will be registered. In order to qualify for attending and voting at the SGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Thursday, 17 March 2016.
(5) Where there are joint holders of any share in the Company, any one of such joint holders may vote at the SGM, either in person or by proxy, in respect of such share as if he/she/they were solely entitled thereto, but if more than one of such joint holders be present at the SGM, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of other holder(s) and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.
(6) A circular containing the particulars in connection with the disposal of 100% interest in Man Sang Jewellery Company Limited has been despatched to members of the Company.
(7) As at the date of this notice, the executive directors of the Company are Ms. Cheng Ka Man, Carman, Mr. Cheng Sai, Mr. Cheung Kwok Wai, Elton, Mr. Lei Hong Wai and Mr. Leung Alex; the non-executive director of the Company is Mr. Cheng Tai Po (Chairman); and the independent non-executive directors of the Company are Mr. Chan Cheong Tat, Mr. Kiu Wai Ming and Mr. Lau Chi Wah, Alex.

– SGM-2 –

AI assistant

Man Sang International Limited — Proxy Solicitation & Information Statement 2016

49578_rns_2016-03-02_d363a8bf-4c3c-4e27-95eb-023a8b1c07d6.pdf

MAN SANG INTERNATIONAL LIMITED

DISCLOSEABLE AND CONNECTED TRANSACTION — PROPOSED DISPOSAL OF 100% INTEREST IN A WHOLLY-OWNED SUBSIDIARY AND

NOTICE OF SPECIAL GENERAL MEETING

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

CONTENTS

DEFINITIONS

DEFINITIONS

MAN SANG INTERNATIONAL LIMITED

DISCLOSEABLE AND CONNECTED TRANSACTION — PROPOSED DISPOSAL OF 100% INTEREST IN A WHOLLY-OWNED SUBSIDIARY

INTRODUCTION

THE AGREEMENT

Subject Matters of the Disposal

The Consideration

Basis of Determination of the Consideration

Conditions Precedent

Completion

Guarantee and undertaking by Mr. Cheng

FINANCIAL EFFECT OF THE DISPOSAL

REASONS FOR AND BENEFITS FROM THE DISPOSAL AND USE OF PROCEEDS

LETTER FROM THE BOARD

INFORMATION ON THE TARGET COMPANY AND THE PROPERTIES

The Target Company

The Properties

INFORMATION ON THE GROUP AND THE PURCHASER

LISTING RULES IMPLICATIONS

THE SGM

LETTER FROM THE BOARD

RECOMMENDATION

ADDITIONAL INFORMATION

MAN SANG INTERNATIONAL LIMITED

DISCLOSEABLE AND CONNECTED TRANSACTION — PROPOSED DISPOSAL OF 100% INTEREST IN A WHOLLY-OWNED SUBSIDIARY

Yours faithfully,

Independent Board Committee

DISCLOSEABLE AND CONNECTED TRANSACTION — PROPOSED DISPOSAL OF 100% INTEREST IN A WHOLLY-OWNED SUBSIDIARY

INTRODUCTION

LETTER FROM THE IFA

BASIS OF OUR ADVICE AND RECOMMANDATIONS

LETTER FROM THE IFA

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background information of the Group

Financial information of the Group

2. Background information of the Target Company

The Target Company

Financial information of Target Company Group

LETTER FROM THE IFA

The Properties

3. Reasons for and the benefits from the Disposal and use of proceeds

LETTER FROM THE IFA

4. The Agreement

Conditions precedent

Completion

Guarantee and undertaking by Mr. Cheng

The Consideration

LETTER FROM THE IFA

Possible financial effects of the Disposal

Net assets value

Earnings

Liquidity

RECOMMENDATION

INSTRUCTIONS, PURPOSE & VALUATION DATE

DEFINITION OF MARKET VALUE

VALUATION BASIS & ASSUMPTIONS

METHOD OF VALUATION

SOURCE OF INFORMATION

TITLE INVESTIGATION

SITE INSPECTION

CURRENCY

DTZ Debenham Tie Leung Limited Philip C Y Tsang

SUMMARY OF VALUATIONS

VALUATION CERTIFICATE

Properties held by Man Hing for investment in the PRC

Property

Description and tenure

Particulars of occupancy

Notes:

VALUATION CERTIFICATE

Properties held by Man Hing for investment in the PRC

Man Sang International Limited Proxy Solicitation & Information Statement 2016