Soundwill Holdings Limited — Proxy Solicitation & Information Statement 2009

Apr 28, 2009

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

If you have sold or transferred all your shares in Soundwill Holdings Limited (the “Company”), you should at once hand this circular, together with the accompanying form of proxy, to the purchaser or to the transferee or to the bank, the licensed securities dealer or other agent through whom the sale was effected for transmission to the purchaser or the transferee.

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

SOUNDWILL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 878)

PROPOSAL FOR GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES AND INFORMATION ON DIRECTORS TO BE RE-ELECTED

A letter from the board of directors of Soundwill Holdings Limited is set out in pages 3 to 5 of this circular.

A notice convening the annual general meeting (the “AGM”) of Soundwill Holdings Limited (the “Company”) to be held at Unit 06, 10th Floor, Soundwill Plaza, 38 Russell Street, Causeway Bay, Hong Kong at 3:30 p.m. on Monday, 8 June 2009 at which the above proposal will be considered, is contained in the 2008 Annual Report of the Company accompanying this circular.

If you are not able to attend the AGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s principal office in Hong Kong at 21/F., Soundwill Plaza, 38 Russell Street, Causeway Bay, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the AGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the AGM should you so wish.

29 April 2009

	CONTENTS
		Pages
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
1.	Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
2.	Granting of the Share Repurchase Mandate,
	the Share Issue Mandate and the Extension of Share Issue Mandate . .	4
3.	Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
4.	Re-election of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
5.	Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix I	— Explanatory Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
Appendix II — Details of Directors proposed to be re-elected. . . . . . . . . . . .		10

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DEFINITIONS

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

“AGM” or “Annual	the annual general meeting of the Company to be held at
General Meeting”	Unit 06, 10th Floor, Soundwill Plaza, 38 Russell Street,
	Causeway Bay, Hong Kong at 3:30 p.m. on Monday, 8 June
	2009;
“AGM Notice”	the notice convening the AGM as contained in the 2008
	Annual Report of the Company accompanying this circular;
“Board”	the board of Directors;
“Bye-laws”	the bye-laws of the Company, as amended from time to
	time;
“Company”	Soundwill Holdings Limited, a company incorporated in
	Bermuda with limited liability, the securities of which are
	listed on the Stock Exchange;
“Director(s)”	the director(s) of the Company;
“Extension of Share Issue	the extension of the Share Issue Mandate by the addition
Mandate”	thereto of an amount representing the aggregate number of
	Shares repurchased by the Company under the authority
	granted pursuant to the Share Repurchase Mandate provided
	that such extended amount shall not exceed 10 per cent.
	of the number of Shares in issue at the date of passing of
	resolution no. 5C set out in the AGM Notice;
“Hong Kong”	the Hong Kong Special Administrative Region of the
	People’s Republic of China;
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong;
“Latest Practicable Date”	24 April 2009, being the latest practicable date prior to
	the printing of this circular for the purpose of ascertaining
	certain information for inclusion in this circular;

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DEFINITIONS

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;

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

• “Share(s)” ordinary share(s) of HK$0.10 each in the share capital of the Company (or of such other nominal amount as shall result from a sub-division, consolidation, reclassification or reconstruction of the share capital of the Company from time to time);

• “Share Issue Mandate” a general mandate to the Directors to exercise the power of the Company to allot and issue Shares during the relevant period up to 20 per cent. of the number of Shares in issue as at the date of passing of resolution no. 5B set out in the AGM Notice;

• “Share Registrar” Tricor Standard Limited at 26th Floor, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong, being the Hong Kong branch share registrar and transfer office of the Company;

• “Share Repurchase the general mandate to the Directors to exercise the power Mandate” of the Company to repurchase Shares during the relevant period up to 10 per cent. of the number of Shares in issue as at the date of passing of the resolution no. 5A set out in the AGM Notice;

• “Shareholder(s)” holder(s) of the Share(s);

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

• “Takeovers Code” the Hong Kong Codes on Takeovers and Mergers and Share Repurchases.

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LETTER FROM THE BOARD

SOUNDWILL HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 878)

Executive Directors: FOO Kam Chu, Grace, Chairman CHAN Wai Ling TSE Chun Kong, Thomas KWAN Chai Ming

Registered Office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Non Executive Directors: LIANG Yanfeng, Non Executive Vice Chairman MENG Qinghui

Independent Non Executive Directors: CHAN Kai Nang KWAN Kai Cheong HO Suk Yin

Head Office and Principal Place of Business: 21st Floor, Soundwill Plaza 38 Russell Street Causeway Bay Hong Kong

29 April 2009

To the Shareholders

Dear Sir or Madam,

PROPOSAL FOR

GENERAL MANDATES TO ISSUE AND REPURCHASE SHARES AND

INFORMATION ON DIRECTORS TO BE RE-ELECTED

1. INTRODUCTION

The Directors are proposing to seek the approvals of the Shareholders at the AGM in relation to:

• (a) the granting of the Share Issue Mandate and the Share Repurchase Mandate;

• (b) the Extension of Share Issue Mandate; and

• (c) the re-election of Director(s).

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with information in respect of the granting of the Share Repurchase Mandate, the Share Issue Mandate, the Extension of Share Issue Mandate and the information on directors to be re-elected at the forthcoming AGM.

2. GRANTING OF THE SHARE REPURCHASE MANDATE, THE SHARE ISSUE MANDATE AND THE EXTENSION OF SHARE ISSUE MANDATE

The general mandates given at the annual general meeting of the Company on 23 May 2008 to the Directors to exercise the powers of the Company to repurchase its own Shares, issue Shares and extend the authority to issue Shares by the amount of Shares repurchased will lapse at the conclusion of the AGM.

To facilitate future allotment and issue of Shares by the Directors on behalf of the Company, the Directors will seek the approval of the Shareholders for the grant of the Share Issue Mandate and the Extension of Share Issue Mandate at the AGM. Assuming that (i) no other Shares are issued or repurchased by the Company from the Latest Practicable Date up to the AGM and (ii) the Share Issue Mandate is approved by the Shareholders at the AGM, the Share Issue Mandate will allow the Directors to exercise the power of the Company to allot and issue not more than 47,848,827 Shares.

The Directors will also seek the approval of the Shareholders at the AGM for the grant of the Share Repurchase Mandate in accordance with the requirements set out in the Listing Rules. Pursuant to the requirements of the Listing Rules, Appendix I to this circular sets out the explanatory statement to provide the Shareholders with the requisite information reasonably necessary to enable the Shareholders to make an informed decision in considering the voting on the grant of the Share Repurchase Mandate.

Details of the Share Repurchase Mandate, the Share Issue Mandate and the Extension of Share Issue Mandate are set out in resolutions nos. 5A, 5B and 5C in the AGM Notice. The Share Repurchase Mandate and the Share Issue Mandate shall be valid from the passing of the relevant resolutions (the “Resolutions”) by the Directors at the AGM until whichever the earlier of (i) the conclusion of the next annual general meeting of the Company; or (ii) the expiration of the period within which the next annual general meeting of the Company is required by the applicable laws of Bermuda or the Company’s Bye-laws to be held; or (iii) the date on which the authority set out in the Resolutions are revoked or varied by ordinary resolutions of the Shareholders in general meeting.

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LETTER FROM THE BOARD

3. ANNUAL GENERAL MEETING

The AGM Notice is set out in the 2008 Annual Report of the Company accompanying this circular. At the AGM, ordinary resolutions will be proposed to approve the Share Repurchase Mandate, the Share Issue Mandate, the Extension of Share Issue Mandate and to re-elect Directors.

A form of proxy for the AGM is enclosed with this circular. If you are not able to attend the AGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the Company’s principal office at 21/F, Soundwill Plaza, 38 Russell Street, Causeway Bay, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the AGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting at the AGM should you so wish.

Pursuant to Rule 13.39 of the Listing Rules, all votes of the shareholders at the general meeting must be taken by poll.

4. RE-ELECTION OF DIRECTORS

Pursuant to Bye-law 86(2) & 87(1), Madam Foo Kam Chu, Grace, Ms. Chan Wai Ling, Mr. Tse Chun Kong, Thomas and Mr. Chan Kai Nang, existing Directors of the Company, will be retiring from office at the AGM. They all are eligible and will be proposed for re-election at the AGM. Information on these Directors proposed to be re-elected at the AGM are set out in Appendix II to this circular.

5. RECOMMENDATION

The Directors believe that the Share Repurchase Mandate, the Share Issue Mandate, the Extension of Share Issue Mandate and the re-election of Directors are in the interests of the Company and the Shareholders. Accordingly, the Directors recommend the Shareholders to vote in favour of the relevant resolutions to be proposed at the AGM.

Yours faithfully,

By order of the Board

Soundwill Holdings Limited

Kwan Chai Ming

Executive Director

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EXPLANATORY STATEMENT

APPENDIX I

This Appendix I serves as an explanatory statement, as required by the Listing Rules, to provide requisite information to Shareholders for consideration of the Share Repurchase Mandate and should be read in conjunction with the letter from the Board hereinbefore appearing.

1. LISTING RULES

The Listing Rules permit companies whose primary listings are on the Stock Exchange to repurchase their shares on the Stock Exchange or on any other stock exchange on which the shares of the companies may be listed and recognised for the purpose by the Securities and Futures Commission of Hong Kong and the Stock Exchange subject to certain restrictions, the most important of which are summarized below:

• (a) The shares proposed to be purchased by the company are fully-paid up.

• (b) The company has previously sent to its shareholders an explanatory statement complying with the Listing Rules.

• (c) The shareholders of the company have given a specific approval or a general mandate to the directors of the company to make such purchase, by way of an ordinary resolution which complies with the Listing Rules and which has been passed at a general meeting of the company duly convened and held and the company has delivered a copy of such resolution, together with the necessary supporting documentation, to the Stock Exchange in accordance with the Listing Rules.

2. SHARE CAPITAL

As at the Latest Practicable Date, the issued share capital of the Company comprised 239,244,135 Shares. Subject to the passing of the ordinary resolution to approve the Share Repurchase Mandate and on the assumption that no further Shares are issued or repurchased prior to the AGM, the Company would be allowed under the Share Repurchase Mandate to repurchase up to a limit of 23,924,413 Shares.

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EXPLANATORY STATEMENT

APPENDIX I

3. REASON FOR REPURCHASES

Repurchases of Shares will only be made when the Directors believe that such a repurchase will benefit the Company and its Shareholders. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net value of the Company and its assets and/or its earnings per Share.

4. FUNDING OF REPURCHASES

In repurchasing Shares, the Company may only apply funds legally available for such purpose in accordance with its Bye-laws, the laws of the jurisdiction in which the Company is incorporated and the Listing Rules.

The Companies Act 1981 of Bermuda provides that the amount of capital repaid in connection with a share repurchase may only be paid out of either the capital paid up on the relevant Shares or the funds of the Company which would otherwise be available for dividend or distribution or the proceeds of a fresh issue of Shares made for the purpose. The amount of premium payable on repurchase may only be paid out of the funds of the Company which would otherwise be available for dividend or distribution or out of the share premium account of the Company before the Shares are repurchased.

5. FINANCIAL EFFECT OF REPURCHASE OF SHARES

There might be material adverse effect on the working capital or gearing position of the Company (as compared with the position disclosed in the audited accounts contained in the Annual Report for the year ended 31 December 2008) in the event that the proposed repurchase of Shares was to be carried out in full at any time during the proposed repurchase period. However, the Directors have no current intention to exercise the Share Repurchase Mandate to an extent as would, having regard to the relevant circumstances, have a material adverse effect on the working capital or gearing position of the Company.

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EXPLANATORY STATEMENT

APPENDIX I

6. SHARE PRICES

The highest and lowest prices at which the Shares have been traded on the Stock Exchange during each of the twelve months preceding the Latest Practicable Date were as follows:

	Shares
	Highest	Lowest
	HK$	HK$
2008
April	5.45	4.90
May	5.44	5.16
June	5.30	4.85
July	4.99	4.61
August	4.81	4.10
September	4.33	2.96
October	3.00	1.44
November	1.90	1.46
December	1.87	1.47
2009
January	2.03	1.80
February	2.06	1.84
March	2.08	1.78
April (up to the Latest Practicable Date)	2.25	1.83

7. GENERAL

The Directors have undertaken to the Stock Exchange that, they will exercise Share Repurchase Mandate in accordance with the Listing Rules, the Bye-laws of the Company and the applicable laws of Bermuda.

If as a result of a share repurchase pursuant to the Share Repurchase Mandate, a Shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. As a result, a Shareholder or a group of Shareholders acting in concert, depending on the level of increase of the interest of such Shareholder(s), could obtain or consolidate control of the Company and become obliged to make a mandatory offer in accordance with Rule 26 of the Takeovers Code.

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EXPLANATORY STATEMENT

APPENDIX I

As at the Latest Practicable Date, Ko Bee Limited was beneficially interested in 170,940,028 Shares representing approximately 71.45 per cent. of the issued share capital of the Company. In the event that the Share Repurchase Mandate was exercised in full, the shareholding of Ko Bee Limited would be increased to approximately 79.39 per cent. of the issued share capital of the Company. In the opinion of the Directors, such increase would not give rise to a mandatory offer in accordance with the Takeovers Code. However the Directors have no current intention to exercise the Share Repurchase Mandate in full or to the extent that will result in the number of Shares held by the public being reduced to less than 25 per cent.

None of the Directors nor, to the best of their knowledge having made all reasonable enquiries, any of their associates (as defined in the Listing Rules), presently intend to sell any Shares to the Company under the Share Repurchase Mandate in the event that the Share Repurchase Mandate is approved by the Shareholders.

The Company has not been notified by any connected persons (as defined in the Listing Rules) that they have a present intention to sell any Shares, or that they have undertaken not to sell any Shares held by them to the Company in the event that the Share Repurchase Mandate is approved by the Shareholders.

8. SHARE REPURCHASE MADE BY THE COMPANY

During the six months preceding the Latest Practicable Date, there was no repurchase of its Shares made by the Company (whether on the Stock Exchange or otherwise).

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DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

The following are the particulars of the Directors proposed to be re-elected at the Annual General Meeting to be held on 8 June 2009:

1. FOO Kam Chu, Grace, aged 65, is the founder and Chairman of the Group and Executive Director of the Company. She is the sole shareholder of the controlling shareholder of the Company. Madam Foo has extensive experience in property market. She has been engaged in the property business in Hong Kong since early 1970s, particularly specialized in the acquisition of old buildings for redevelopment into commercial or residential buildings. Madam Foo is mother of Ms. Chan Wai Ling, Executive Director of the Company. Madam Foo is currently responsible for the Group’s overall development direction and strategies. Furthermore, she serves as a standing committee member of Guangzhou Committee of the Chinese People’s Political Consultative Conference and has been elected as an honorary citizen of Guangzhou and executive committee member of Guangdong Province (Women) Members Association. She is familiar with the political and economic affairs in the PRC. Madam Foo has not held directorships in other listed public companies in the last three years.

Save as disclosed above, Madam Foo does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Madam Foo has the following interests in shares of the Company within the meaning of Part XV of the SFO, details of which are set out in the Report of the Directors and note 38 to the financial statements in the 2008 Annual Report of the Company accompanying this circular:

(i) Long Position in shares

Approximate Percentage Number of Shares of Shareholding 171,036,028 71.49

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DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

• (ii) Long Position in underlying shares of equity derivatives — share options granted and outstanding

Number of Share Options

1,200,000

Approximate Percentage of interest in Shares 0.50

Madam Foo has not entered into a service contract with the Company. Madam Foo’s appointment is not for a specific term but subject to retirement by rotation and re-election in accordance with the Bye-laws. The emoluments of Madam Foo is determined in accordance with prevailing market conditions and her role and responsibility. The total emoluments of Madam Foo for the year ended 31 December 2008 amounts to HK$2,597,000.

Save as disclosed above, there is no information that is required to be disclosed pursuant to any of the requirements of Rules 13.51(2)(h) to (w) of the Listing Rules.

Finally, there is no other matter that needs to be brought to the attention of the Shareholders in respect of Madam Foo’s appointment.

1. CHAN Wai Ling, aged 38, is the executive director of the Company. She is in charge of the property department and is responsible for the property development and leasing of the Group. She graduated from the University of Toronto, Canada with a bachelor degree in commerce and also obtained a Master of Business Administration Degree from University of Strathclyde, United Kingdom. Before joining the Group in September 1998, she had worked in an international property consultant firm and had operated her own property investment business for more than five years. She is currently the board member of the Executive Board of Entrepreneurs’ Organization — Hong Kong Chapter and Trustee of the St. Paul’s Convent School Alumni Association Charitable Trust. She is also the daughter of the Group’s Chairman. Ms. Chan has not held directorships in other listed public companies in the last three years.

Save as mentioned above, Ms. Chan does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

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DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

As at the Latest Practicable Date, Ms. Chan has the following interests in shares of the Company within the meaning of Part XV of the SFO, details of which are set out in the Report of the Directors and note 38 to the financial statements in the 2008 Annual Report of the Company accompanying this circular:

Long Position in underlying shares of equity derivatives — share options granted and outstanding

Approximate Percentage Number of Share Options of interest in Shares

4,000,000

1.67

Ms. Chan has not entered into a service contract with the Company. Ms. Chan’s appointment is not for a specific term but subject to retirement by rotation and re-election in accordance with the Bye-laws. The emoluments of Ms. Chan is determined in accordance with prevailing market conditions and her role and responsibility. The total emoluments of Ms. Chan for the year ended 31 December 2008 amounts to HK$1,390,000.

Save as disclosed above, there is no information that is required to be disclosed pursuant to any of the requirements of Rules 13.51(2)(h) to (w) of the Listing Rules.

Finally, there is no other matter that needs to be brought to the attention to the Shareholders in respect of Ms. Chan’s appointment.

1. TSE Chun Kong, Thomas, aged 47, is the Executive Director in charge of the Group’s property investment. Mr. Tse graduated from McMaster University, Canada with a bachelor degree in Civil Engineering, and also obtained his master degree of Business Administration from the City University of New York, USA. He joined the Company in 1997 and has over 20 years experience in the Hong Kong and Mainland property market. Mr. Tse has not held directorships in other listed public companies in the last three years.

Mr. Tse does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

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DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

As at the Latest Practicable Date, Mr. Tse has the following interests in shares of the Company within the meaning of Part XV of the SFO, details of which are set out in the Report of the Directors and note 38 to the financial statements in the 2008 Annual Report of the Company accompanying this circular:

(i) Long Position in shares

	Approximate Percentage
Number of Shares	of Shareholding
66,723	0.03

• (ii) Long Position in underlying shares of equity derivatives — share options granted and outstanding

	Approximate Percentage
Number of Share Options	of interest in Shares
450,000	0.19

Mr. Tse has not entered into a service contract with the Company. Mr. Tse’s appointment is not for a specific term but subject to retirement by rotation and reelection in accordance with the Bye-laws. The emoluments of Mr. Tse is determined in accordance with prevailing market conditions and his role and responsibility. The total emoluments of Mr. Tse for the year ended 31 December 2008 amounts to HK$1,661,000.

Save as disclosed above, there is no information that is required to be disclosed pursuant to any of the requirements of Rules 13.51(2) (h) to (w) of the Listing Rules.

Finally, there is no other matter that needs to be brought to the attention of the Shareholders in respect of Mr. Tse’s appointment.

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DETAILS OF DIRECTORS PROPOSED TO BE RE-ELECTED

APPENDIX II

1. CHAN Kai Nang, aged 63, appointed as Independent Non-Executive Director of the Company on 11 March 2009. He received a Postgraduate Diploma in Management Studies from The University of Hong Kong and Bachelor of Laws from the University of London. Mr. Chan is an associate member of The Chartered Institute of Management Accountants in the UK and a fellow member of The Association of Chartered Certified Accountants in the UK and The Hong Kong Institute of Certified Public Accountants. Mr. Chan has been a top level executive with substantial experience in major multinational and local corporations. He had been the regional controller and senior executive of these corporations for many years. He is currently an adviser of K. Wah Construction Materials Limited.

Mr. Chan was the executive director of Galaxy Entertainment Group Limited (formerly known as K. Wah Construction Materials Limited) and managing director of K. Wah Construction Materials Limited. The shares of the above-named company are listed on the Stock Exchange of Hong Kong Limited (the “Stock Exchange”). Save as disclosed above, Mr. Chan did not hold any directorship in other public listed companies in the past three years.

Mr. Chan does not have any relationship with any directors, senior management or substantial or controlling shareholders of the Company.

As at the Latest Practicable Date, Mr. Chan did not have any interest in the shares of the Company within the meaning of Part XV of SFO.

Mr. Chan has entered into a service contract with the Company. Subject to retirement by rotation in accordance with the Bye-laws, the term of service will continue until terminated by either party serving not less than three months’ notice. The annual emoluments of Mr. Chan amounts to HK$80,000. The emoluments of Mr. Chan is determined in accordance with prevailing market conditions and his role and responsibility.

Save as disclosed above, there is no information that is required to be disclosed pursuant to any of the requirements of Rules 13.51(2) (h) to (w) of the Listing Rules.

Finally, there is no other matter that needs to be brought to the attention of the Shareholders in respect of Mr. Chan’s appointment.

The Board is not aware of any other matter relating to the proposed re-election of the abovenamed Directors that need to be brought to the attention of the Shareholders.

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