Ta Yang Group Holdings Limited - Proxy Solicitation & Information Statement 2018

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 Ta Yang Group Holdings Limited (the ‘‘Company’’), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for onward transmission to the purchaser or the transferee.

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

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TA YANG GROUP HOLDINGS LIMITED 大洋集團控股有限公司

(Incorporated in the Cayman Islands with limited liability) (Stock Code: 1991)

PROPOSALS FOR

GENERAL MANDATES TO ISSUE AND BUY-BACK SHARES, RE-ELECTION OF DIRECTORS, PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF ANNUAL GENERAL MEETING

A notice convening the annual general meeting of the Company (the ‘‘AGM’’) to be held at Rooms 1 and 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on Thursday, 13 December 2018 at 10:00 a.m. is set out on pages 28 to 32 of this circular.

A form of proxy for the AGM or any adjournment thereof is enclosed with this circular. Whether or not you are able to attend and vote at the AGM in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited, at Suites 3301–04, 33/F., Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the AGM or any adjournment thereof (as the case may be). Completion and return of a form of proxy will not preclude you from attending and voting in person at the AGM or any adjournment thereof (as the case may be) should you so wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

14 November 2018

Page

Definitions . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board
1. Introduction . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
2. Proposed Grant of Issue Mandate, Buy-back Mandate
and Extension Mandate	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
3. Re-election of Directors .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
4. Adoption of the 2018 Share Option Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		7
5. Annual General Meeting	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9
6. Poll Voting at Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		9
7. Responsibility Statement	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
8. Recommendation . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
9. General Information . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
Appendix I — Explanatory Statement of the Buy-back Mandate . . . . . . . . . . . . . . . . . . . . . .		11
Appendix II — Details of Directors Proposed for Re-election . . . . . . . . . . . . . . . . . . . . . . . . .		14
Appendix III — Summary of the	principal terms of the 2018 Share Option Scheme . . . . . .	18
Notice of Annual General Meeting	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	28

– i –

DEFINITIONS

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

‘‘2007 Share Option Schemes’’ the share option schemes of the Company adopted pursuant to written resolutions passed by the sole Shareholder on 16 May 2007; ‘‘2018 Share Option Scheme’’ the share option scheme of the Company proposed to be or ‘‘Scheme’’ adopted by the Shareholders at the AGM; ‘‘Administration Committee’’ means the committee of the Board comprising two Directors, who are Ms. SHI Qi and Mr. SZE Wai Lun (or another Director to be nominated by Mr. Sze as his replacement); ‘‘AGM’’ the annual general meeting of the Company to be convened and held on 13 December 2018 at 10:00 a.m.; ‘‘AGM Notice’’ notice of the AGM; ‘‘Articles’’ the articles of association of the Company, as amended and restated from time to time;

‘‘Associate(s)’’, have the meaning ascribed to them under rule 1.01 of the ‘‘Chief Executive’’, Listing Rules; ‘‘Close Associate(s)’’, ‘‘Connected Person(s)’’, ‘‘Core Connected Person(s)’’, ‘‘Subsidiary(ies)’’ and ‘‘Substantial Shareholder’’ ‘‘Auditors’’ the auditors of the Company from time to time; ‘‘Board’’ the board of Directors from time to time or a duly authorised committee thereof; ‘‘business day’’ a day on which banks are generally open for business in HKSAR; ‘‘Buy-back Mandate’’ a general and unconditional mandate proposed to be granted to the Directors at the AGM to exercise all the power of the Company to buy-back Shares, during the Buy-back Period, not exceeding 10% of the aggregate number of the issued share capital of the Company as at the date of passing the relevant resolution;

– 1 –

DEFINITIONS

‘‘Buy-back Period’’ the period within which the Buy-back Mandate is exercisable, and details of which is set out in the resolution approving the Buy-back Mandate passing of the relevant resolution;
‘‘Companies Law’’
the Companies Law, Cap. 22 (Law 3 of 1961, as consolidated and revised) of the Cayman Islands, as amended from time to time;
‘‘Companies Ordinance’’
the Companies Ordinance (Cap 622 of the laws of HKSAR), as amended from time to time;
‘‘Company’’
Ta Yang Group Holdings Limited (大洋集團控股有限公司), a company incorporated in the Cayman Islands with limited liability;
‘‘decision of the any decision of the Administration Committee, which shall Administration Committee’’ be made based on the unanimous decision of all the members of the Administration Committee in their absolute discretion PROVIDED THAT for the granting of any Options to, or making of any decision relating to the Options held by, any Committee Member (the ‘‘Interested Committee Member’’), the Interested Committee Member shall abstain from making any decision and the decision of the Administration Committee shall be made by the remaining member of the Administration Committee solely;
‘‘Director(s)’’
director(s) of the Company from time to time;
‘‘Eligible Person(s)’’
means:
(1) any full time employee or director of any member of the Group and Invested Entity;
(2) any part time employee of any member of the Group and Invested Entity;
(3) any supplier, distributor, service provider, customer of the member of the Group or any Invested Entity;
(4) any shareholder of any member of the Group or any holder of any securities issued by any member of the Group;

– 2 –

DEFINITIONS

(5) any consultant or adviser of or to any member of the Group who has provided services to such member of the Group in accordance with the terms of a contractual relationship entered into between the consultant or adviser and such member of the Group;
(6) any consultant, adviser, manager, officer or entity that provides research, development or other technological support to the Group or Invested Entity;
(7) such other persons who in the sole opinion of the Administration Committee from time to time, will contribute or have contributed to the Group;
‘‘Extension Mandate’’
a general and unconditional mandate to increase the aggregate number of Shares which may be allotted and issued under the Issue Mandate by the aggregate number of Shares bought-back under the Buy-back Mandate;
‘‘Group’’
the Company and its Subsidiaries from time to time and a ‘‘member of the Group’’ shall be construed accordingly;
‘‘HK dollars’’ and ‘‘HK$’’ Hong Kong dollars, the lawful currency of HKSAR;
‘‘HKSAR’’ or ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China;
‘‘Invested Entity(ies)’’ any entity(ies) in which the Group holds any equity interest;
‘‘Issue Mandate’’
a general and unconditional mandate proposed to be granted to the Directors at the AGM to exercise all the power of the Company to allot, issue and otherwise deal with Shares or securities not exceeding 20% of the aggregate number of the issued share capital of the Company as at the date of passing the relevant resolution;
‘‘Latest Practicable Date’’ 7 November 2018, being the latest practicable date prior to the printing of this circular for the purposes of ascertaining certain information contained in this circular;
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange as amended from time to time;
‘‘Offer Date’’ the date on which an Option is offered to be granted to an Eligible Person pursuant to the Scheme;

– 3 –

DEFINITIONS

‘‘Option(s)’’ option(s) to subscribe for Shares which may be granted pursuant to the 2018 Share Option Scheme or Other Scheme(s) of the Company (if any);
‘‘Other Scheme(s)’’ other share option scheme(s) (if any) which may be adopted by any member of the Group from time to time, pursuant to which options to subscribe for Shares may be granted;
‘‘Participant(s)’’ any Eligible Person who accepts the offer of any Option in accordance with the terms of the Scheme or (where the context so permits) a person entitled to any such Option in consequence of the death of the original Participant;
‘‘PRC’’ People’s Republic of China, which for the purposes of this circular, excludes Hong Kong, the Macau Special Administrative Region and Taiwan;
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong);
‘‘Share(s)’’ shares of HK$0.10 each (or such other nominal amount resulting from any sub-division, consolidation, reclassification or re-construction of such shares from time to time) in the share capital of the Company;
‘‘Shareholder(s)’’ shareholders of the Company from time to time;
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited;
‘‘Subscription Price’’ the price per Share at which a Participant may subscribe for Shares on the exercise of an Option pursuant to the Scheme;
‘‘Takeover Code’’ the Code on Takeovers and Mergers issued by the Securities and Futures Commission of the HKSAR, as amended from time to time;
‘‘trading day’’ a day on which trading of Shares take place on the Stock Exchange; and
‘‘%’’ per cent.

– 4 –

LETTER FROM THE BOARD

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TA YANG GROUP HOLDINGS LIMITED 大洋集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1991)

Executive Directors: Shi Qi (Chairlady and Chief Executive Officer) Qiu Yonghao Zhao Ang

Non-executive Directors: Han Lei Gao Feng Sze Wai Lun

Independent Non-executive Directors: Zhang Lijuan Wu Tak Kong

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

Principal Place of Business in Hong Kong: Unit A01, 35th Floor United Centre 95 Queensway Admiralty Hong Kong

14 November 2018

To the Shareholders

Dear Sir or Madam,

PROPOSALS FOR

GENERAL MANDATES TO ISSUE AND BUY-BACK SHARES, RE-ELECTION OF DIRECTORS, PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

The purpose of this circular is to provide you with information regarding resolutions to be proposed at the AGM for, inter alia, the approval of (i) the granting of the Issue Mandate, the Buy-back Mandate and the Extension Mandate; (ii) the re-election of Directors; and (iii) the adoption of the 2018 Share Option Scheme, and to give you the AGM Notice.

– 5 –

LETTER FROM THE BOARD

2. PROPOSED GRANT OF ISSUE MANDATE, BUY-BACK MANDATE AND EXTENSION MANDATE

At the annual general meeting of the Company held on 14 December 2017, general mandates were given to the Directors to exercise power to buy-back Shares and to issue new Shares respectively. Such mandates will lapse at the conclusion of the AGM. At the AGM, separate ordinary resolutions will be proposed to seek for approval of the Shareholders to grant to the Directors:

(i) the Issue Mandate to allot, issue and otherwise deal with the Shares and securities not exceeding 20% of the aggregate number of the issued share capital of the Company as at the date of passing the relevant resolution;
(ii) the Buy-back Mandate to buy-back the Shares, during the Buy-back Period, not exceeding 10% of the aggregate number of the issued share capital of the Company as at the date of passing the relevant resolution; and
(iii) subject to the passing of the aforesaid ordinary resolutions approving the Issue Mandate and the Buy-back Mandate, the Extension Mandate to increase the aggregate number of Shares which may be allotted and issued under the Issue Mandate by the aggregate number of Shares bought-back under the Buy-back Mandate.

Each of the Issue Mandate, the Buy-back Mandate and the Extension Mandate will expire (a) at the conclusion of the next annual general meeting of the Company following the AGM; or (b) at the end of the period within which the next annual general meeting of the Company is required by the Companies Law or the Articles to be held; or (c) when the authority given to the Directors thereunder is revoked or varied by an ordinary resolution of the Shareholders in a general meeting of the Company, whichever is the earliest.

An explanatory statement containing information relating to the Buy-back Mandate as required pursuant to the Listing Rules is set out in Appendix I to this circular. This explanatory statement contains information reasonably necessary to enable Shareholders to make an informed decision on whether to vote for or against the resolution relating to the Buy-back Mandate at the AGM.

As at the Latest Practicable Date, the issued share capital of the Company comprised 871,178,000 Shares. Assuming that there is no change in the issued share capital of the Company between the period from the Latest Practicable Date and the date of passing the resolution approving the Buy-back Mandate and the Issue Mandate, the maximum number of Shares which may be bought-back pursuant to the Buy-back Mandate on the date of passing the resolution approving the Buy-back Mandate will be 87,117,800 Shares, representing 10% of the issued share capital of the Company as at the date of passing the relevant resolution, and the maximum number of Shares which may be issued pursuant to the Issue Mandate on the date of passing the resolution approving the Issue Mandate will be 174,235,600 Shares, representing 20% of the issued share capital of the Company as at the date of passing the relevant resolution.

– 6 –

LETTER FROM THE BOARD

3. RE-ELECTION OF DIRECTORS

In accordance with Article 86(3) of the Articles, Mr. Zhao Ang and Mr. Sze Wai Lun, who have been appointed by the Board as addition to the existing Board and to fill a casual vacancy on the Board respectively, will hold office until the AGM. Being eligible, they would offer themselves for re-election.

In addition, in accordance with Article 87(1) of the Articles, Mr. Gao Feng, Mr. Han Lei and Ms. Zhang Lijuan shall retire from their office as Directors at the AGM. Being eligible, they would offer themselves for re-election.

At the AGM, ordinary resolutions will be proposed to re-elect each of the above Directors as Directors.

Biographical details of each of the above Directors who offer themselves for re-election that are required to be disclosed under the Listing Rules are set out in Appendix II to this circular.

4. ADOPTION OF THE 2018 SHARE OPTION SCHEME

Reference is made to the announcement of the Company dated 13 September 2018 in relation to the proposed adoption of the 2018 Share Option Scheme.

The 2007 Share Option Schemes which were adopted pursuant to written resolutions passed by the sole Shareholder on 16 May 2007 expired on 15 May 2017. The Board proposed to adopt the 2018 Share Option Scheme for the Company at the AGM. A summary of the principal terms of the 2018 Share Option Scheme is set out in the Appendix III to this circular.

In view of the above, the Board proposes that the 2018 Share Option Scheme should be adopted to enable the Company to make further grant of Options to eligible participants to motivate them to contribute to the development of the Group. An ordinary resolution will be proposed at the AGM for approving the adoption of the 2018 Share Option Scheme with effect from the passing of such resolution. A summary of the principal terms of the 2018 Share Option Scheme is set out in the Appendix III to this circular.

The purposes of the 2018 Share Option Scheme are to recognise and acknowledge the contributions to those who had made, may have made or will make contributions to the Group. Under the rules of the 2018 Share Option Scheme, the Administration Committee may offer to grant Option(s) to subscribe for such number of Shares to any Eligible Persons as the Administration Committee may from time to time in their discretion determine on a case by case basis. The Company believes that the authority given to the Board to select the appropriate participants and to specify the terms and conditions in respect of any Options that may be granted, including the performance targets and subscription price for such Options, will serve to enhance the value of the Company as well as achieve the purposes of retaining and motivating the participants to contribute to the development and growth of the Group for the benefit of the Shareholders. Accordingly, the Directors consider that it is in the interest of the Company to adopt the 2018 Share Option Scheme.

– 7 –

LETTER FROM THE BOARD

The 2018 Share Option Scheme will be administered by the Administration Committee. None of the Directors is a trustee of the 2018 Share Option Scheme or has a direct or indirect interest in such trustee (if any). With respect to the operation of the 2018 Share Option Scheme, the Company will, where applicable, comply with the relevant requirements under Chapter 17 of the Listing Rules.

As at the Latest Practicable Date, there were no outstanding options, warrants or convertible securities which entitle the holders to subscribe for Shares.

All Options to be granted under the 2018 Share Option Scheme and any Other Scheme(s) must not in aggregate exceed 10% of the aggregate number of Shares in issue as at the date of passing the relevant resolution, unless the Company obtains the approval from Shareholders to refresh the said 10% limit, provided that the maximum number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under the 2018 Share Option Scheme and any Other Schemes must not exceed 30% of the number of Shares in issue from time to time. Taking into account the number of Shares in issue as at the Latest Practicable Date of 871,178,000 and assuming that there will be no change in the issued share capital of the Company from the Latest Practicable Date up to and including the date of passing the relevant resolution, a total of 87,117,800 Shares will be issuable upon exercise of Options that may be granted under the 2018 Share Option Scheme.

Value of the Options

The Directors consider it inappropriate to disclose the value of Options which may be granted under the 2018 Share Option Scheme as if they had been granted as at the Latest Practicable Date. Any such valuation will have to be made on the basis of certain pricing model or other methodology, which depends on various assumptions including exercise price, exercise period, interest rate, expected volatility and other variables. The Directors believe that any calculation of the value of Options as at the Latest Practicable Date based on a number of speculative assumptions will not be meaningful and may be misleading to investors.

Conditions Precedent of the 2018 Share Option Scheme

The adoption of the 2018 Share Option Scheme is conditional upon:

(A) the passing of an ordinary resolution to approve and adopt the 2018 Share Option Scheme by the Shareholders at the AGM; and
(B) the Listing Committee of the Stock Exchange granting the listing of and permission to deal in the Shares which may be issued pursuant to the exercise of Options in accordance with the terms of the 2018 Share Option Scheme.

Application for Listing

An application will be made to the Stock Exchange for the listing of, and permission to deal in, the underlying Shares which may fall to be allotted and issued pursuant to the exercise of the Share Options granted under the 2018 Share Option Scheme.

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LETTER FROM THE BOARD

Documents Available for Inspection

A copy of the 2018 Share Option Scheme will be available for inspection (i) during normal business hours at the principal place of business of the Company at Unit A01, 35th Floor, United Centre, 95 Queensway Admiralty, Hong Kong from the date of this circular to and including the date of the AGM; and (ii) at the AGM.

5. ANNUAL GENERAL MEETING

The AGM Notice is set out on pages 28 to 32 of this circular. At the AGM, resolutions will be proposed to approve, inter alia, the granting of the Issue Mandate, the Buy-back Mandate and the Extension Mandate, and the re-election of Directors and the adoption of the 2018 Share Option Scheme.

A form of proxy for the AGM is enclosed with this circular and such form of proxy is also published on the websites of the Stock Exchange (www.hkex.com.hk) and the Company (www.tayang.com). Whether or not you are able to attend and vote at the AGM in person, you are requested to complete and return the form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited, at Suites 3301–04, 33/F., Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong as soon as possible and in any event not less than 48 hours before the time fixed for the meeting or the adjournment thereof (as the case may be). The completion and return of a form of proxy will not preclude you from attending and voting in person at the AGM or any adjournment thereof (as the case may be) should you wish and in such event, the instrument appointing a proxy shall be deemed to be revoked.

In order to determine members who are entitled to attend the AGM to be held on Thursday, 13 December 2018, the register of members of the Company will be closed from Tuesday, 11 December 2018 to Thursday, 13 December 2018, both days inclusive, during which period no transfer of shares can be registered. All transfers accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, not later than 4:30 p.m. on Monday, 10 December 2018.

6. POLL VOTING AT ANNUAL GENERAL MEETING

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll except where the chairman, in good faith, decides to allow a resolution which relates purely to a procedural or administrative matter to be voted on by a show of hands. Accordingly, at the AGM, the chairman of the AGM will exercise his/her power under Article 66 of the Articles to put each of the resolutions set out in the AGM Notice to be voted by way of poll.

To the best information of the Directors after making reasonable enquiries, no Shareholder is required to abstain from voting under the Listing Rules for the resolution proposed at the AGM for the approval and adoption of the Share Option Scheme.

– 9 –

LETTER FROM THE BOARD

After the conclusion of the AGM, the results of the poll will be published on the website of the Stock Exchange at www.hkex.com.hk and the Company’s website at www.tayang.com in accordance with Rule 13.39(5) of the Listing Rules.

7. 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 purposes 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.

8. RECOMMENDATION

The Directors are of the opinion that the proposed resolutions referred in this circular and the AGM Notice are in the best interests of the Company and the Shareholders as a whole. The Directors recommend the Shareholders to vote in favour of all the resolutions as set out in the AGM Notice.

9. GENERAL INFORMATION

Your attention is drawn to the additional information set out in the Appendices to this circular. The English text of this circular shall prevail over the Chinese text if there is any discrepancy between the Chinese text and the English text.

Yours faithfully, On behalf of the Board Ta Yang Group Holdings Limited Shi Qi Chairlady and Chief Executive Officer

– 10 –

EXPLANATORY STATEMENT OF THE BUY-BACK MANDATE

APPENDIX I

This Appendix serves as an explanatory statement, as required by the Listing Rules, to enable Shareholders to make an informed decision on whether to vote for or against the resolution to be proposed at the AGM in relation to the Buy-back Mandate.

(1) GENERAL MANDATE TO BUY-BACK SHARES

At the AGM, an ordinary resolution will be proposed that the Directors be granted a general and unconditional mandate to exercise all the power of the Company to buy-back Shares up to 10% of the issued share capital of the Company as at the date of passing of the resolution. The Buy-back Mandate will continue to be in force during the Buy-back Period.

(2) EXERCISE OF THE BUY-BACK MANDATE

As at the Latest Practicable Date, the issued ordinary share capital of the Company comprised 871,178,000 Shares. Subject to the passing of the resolution granting the Buy-back Mandate and on the basis that no further Shares are issued or bought-back before the AGM, the Company would be allowed to buy-back a maximum of 87,117,800 Shares during the Buyback Period.

(3) SOURCE OF FUNDS

Buy-backs made pursuant to the Buy-back Mandate would be funded out of funds legally available for such purpose in accordance with the Articles, the Listing Rules and the applicable laws of the Cayman Islands.

(4) REASONS FOR BUY-BACKS

The Directors believe that it is in the best interests of the Company and the Shareholders as a whole to seek a general authority from the Shareholders to enable the Company to buyback its Shares on the Stock Exchange. Such buy-backs may, depending on market conditions, and funding arrangements at the time, lead to an enhancement of the net asset value of the Company and/or earnings per Share and will only be made when the Directors believe that such buy-back will benefit the Company and the Shareholders as a whole.

The Directors have no present intention to buy-back any Shares and they would only exercise the power to buy-back in circumstances where they consider that the buy-back would be in the best interests of the Company. The Directors consider that there might be a material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the consolidated financial position of the Company as at 31 July 2018, being the date to which the latest published audited financial statements of the Company have been made up) in the event that the Buy-back Mandate is exercised in full. The Directors do not propose to exercise the Buy-back Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital of the Company or its gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

– 11 –

EXPLANATORY STATEMENT OF THE BUY-BACK MANDATE

APPENDIX I

(5) SHARE PRICES

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

	Shares	prices
	Highest	Lowest
	HK$	HK$
2017
November	0.720	0.550
December	0.700	0.610
2018
January	0.640	0.540
February	0.600	0.510
March	0.570	0.490
April	0.530	0.475
May	0.550	0.485
June	0.520	0.480
July	0.550	0.355
August	0.680	0.450
September	0.700	0.600
October	0.760	0.620
November (up to and including the Latest
Practicable Date)	0.680	0.570

Source: quoted prices from the Stock Exchange’s Website (www.hkex.com.hk)

(6) TAKEOVERS CODE

If as a result of a buy-back of Shares, 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 Rule 32 of the Takeovers Code. Accordingly, a Shareholder, or group of Shareholders acting in concert, depending on the level of increase of the Shareholders’ interest, could obtain or consolidate control of the Company and become obliged to make a mandatory general offer in accordance with Rules 26 and 32 of the Takeovers Code.

As at the Latest Practicable Date, according to the register of interest kept by the Company under section 336 of the SFO and so far as was known to the Directors, Lyton Maison Limited, being a Controlling Shareholder of the Company, held 436,540,400 Shares, representing approximately 50.11% of the entire issued share capital of the Company. Ms. Shi Qi, the Chairlady, Chief Executive Officer and executive Director of the Company, is the sole director and the ultimate beneficial owner of Lyton Maison Limited. In the event that the Buyback Mandate is exercised in full, the percentage of shareholding of Lyton Maison Limited would be increased to approximately 55.68% of the issued share capital of the Company, and such an increase will not give rise to an obligation to make a mandatory general offer under Rule 26 of the Takeovers Code.

– 12 –

APPENDIX I EXPLANATORY STATEMENT OF THE BUY-BACK MANDATE

To the best knowledge and belief of the Directors, save as disclosed above, the Directors are not aware of any consequences which may arise under Rules 26 and 32 of the Takeovers Code. The Directors do not intend to exercise the Buy-back Mandate to an extent which would, in the circumstances, trigger any potential consequences under the Takeovers Code.

(7) BUY-BACK MADE BY THE COMPANY

In the six months preceding the Latest Practicable Date, the Company had not boughtback any of its Shares (whether on the Stock Exchange or otherwise).

(8) UNDERTAKING AND DISCLOSURE OF INTERESTS

To the best of the knowledge of the Directors, having made all reasonable enquiries, none of the Directors nor any of their Close Associates have any present intention to sell any Shares to the Company in the event that the Buy-back Mandate is approved at the AGM.

The Directors have undertaken to the Stock Exchange that they will only exercise the Buy-back Mandate in accordance with the Listing Rules, the applicable laws of the Cayman Islands and the regulations set out in the Articles.

No Core Connected Person of the Company has notified the Company that such a person has a present intention to sell any Shares to the Company, or has undertaken not to do so, in the event that the Buy-back Mandate is granted.

The Listing Rules prohibit a company from making buy-back on the Stock Exchange if the result of the buy-back would be that less than 25% (or such other prescribed minimum percentage as determined by the Stock Exchange) of the issued share capital would be in public hands. The Directors do not propose to buy-back Shares which would result in less than the prescribed minimum percentage of Shares in public hands.

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DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

The details of Directors proposed to be re-elected at the AGM are set out as follows:

Mr. Zhao Ang

Mr. Zhao Ang (‘‘Mr. Zhao’’), aged 31, has been an executive Director of the Company since 30 July 2018. Mr. Zhao graduated from University of Windsor in Canada with a bachelor degree of international relations and development studies in 2007. From May 2013 to May 2018, Mr. Zhao served as an executive director of Beijing Ping An Fu Bio-Engineering Technology Co., Ltd. and was principally responsible for the company’s comprehensive operation and external cooperation. He also participated in the implementation of several key domestic environmental protection projects, and took the lead in building the strategic cooperation between the company and Heilongjiang Farms & Land Reclamation Administration, Heilongjiang Cold Zone Black Glebe Group (黑龍江寒地黑土集團), Sinochem Group, Long Ping High-tech Agrochemical Branch (隆平高科農化分公司), Taiji Pharmaceutical Group (太極藥業集團) and www.dangjian.cn under the Central Propaganda Department. From March 2012 to March 2013, Mr. Zhao served as an inspector of the supervision department of Huaxia Film Distribution Co., Ltd. Ltd. (華夏電影發行有限責任公司) and was responsible for inspection of all cinema lines nationwide and implementation of administrative measures imposed on related industries by the Film Bureau under the State Administration of Radio, Film and Television. From December 2009 to December 2011, Mr. Zhao was the propaganda officer of a department of the Chinese People’s Liberation Army, and participated in a number of propaganda work projects in respect of national defense science & technology construction and development as well as published various articles in a newspaper of the People’s Liberation Army. From June 2008 to June 2009, Mr. Zhao served as the deputy director of the External Liaison Department of Beijing Zhongqiaolian Cultural Exchange Center* (北京中僑聯文化交流中心). He participated in the organisation of a number of domestic and overseas cultural exchange activities.

Mr. Zhao did not hold any other directorships in any public companies the securities of which are listed in Hong Kong or overseas in the last three years.

Mr. Zhao does not have any relationship with any Directors, senior management, substantial Shareholders or controlling Shareholders of the Company.

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

Mr. Zhao has entered into a formal service contract with the Company for a term of three years commencing from 30 July 2018. Under the service contract, Mr. Zhao receives a monthly salary of HK$100,000 for his service as an executive Director, which was approved by the Board with reference to his qualification, experience, level of responsibilities undertaken and prevailing market conditions.

There is no information which is discloseable nor is/was Mr. Zhao involved in any of the matters required to be disclosed pursuant to any of the requirements of Rules 13.51(2)(h) to 13.51(2)(v) of the Listing Rules. Save for the above, there is no other matter that needs to be brought to the attention of the Shareholders.

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DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

Mr. Gao Feng

Mr. Gao Feng (‘‘Mr. Gao’’), aged 38, has been a non-executive Director of the Company since 6 April 2016. Mr. Gao has around 10 years of experience in corporate management. He has been the general manager of Beijing Zhongmei Zhengchen Construction Limited Company (北京中煤正辰建設有限公司), which mainly engages in real estate and construction since 2012. He was the general manager of Beijing Kaiyun Zhifeng Trades Limited Company (北京凱運之峰工貿有限公司) from 2009 to 2012.

Mr. Gao did not hold any other directorships in any public companies the securities of which are listed in Hong Kong or overseas in the last three years.

Mr. Gao does not have any relationship with any Directors, senior management, substantial Shareholders or controlling Shareholders of the Company.

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

Mr. Gao has entered into a letter of appointment with the Company for a term of three years commencing from 6 April 2016. Under the letter of appointment, Mr. Gao does not entitle to any remuneration.

There is no information which is discloseable nor is/was Mr. Gao involved in any of the matters required to be disclosed pursuant to Rule 13.51(2)(h) to 13.51(2)(v) of the Listing Rules. Save for the above, there is no other matter that needs to be brought to the attention of the Shareholders.

Mr. Han Lei

Mr. Han Lei (‘‘Mr. Han’’), aged 49, has been a non-executive Director of the Company since 6 April 2016. Mr. Han has more than 21 years of entertainment and performing experience in the music industry and had received numerous awards in the industry. Mr. Han has participated in CCTV Spring Festival Evening Galas, charity performances, cultural and tourism promotion performances, etc. Other than his entertainment career, he also actively participates in various political associations and social campaigns. He was a member of the tenth session of All-China Youth Federation (中華全國青年聯合會). He was appointed as the ‘‘Celebrity of Health’’ (健康名人) by the preceding Kang Yi Wang (康易網) and the image ambassador in ‘‘Yao Yang’’ public pension project* (曜陽養老公益項目) conducted by Red Cross Society of China.

Mr. Han did not hold any other directorships in any public companies the securities of which are listed in Hong Kong or overseas in the last three years.

Mr. Han does not have any relationship with any Directors, senior management, substantial Shareholders or controlling Shareholders of the Company.

As at the Latest Practicable Date, Mr. Han did not have any interests in the Shares and underlying shares of the Company within the meaning of Part XV of the SFO.

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DETAILS OF DIRECTORS PROPOSED FOR RE-ELECTION

APPENDIX II

Mr. Han has entered into a letter of appointment with the Company for a term of three years commencing from 6 April 2016. Under the letter of appointment, Mr. Han does not entitle to any remuneration.

There is no information which is discloseable nor is/was Mr. Han involved in any of the matters required to be disclosed pursuant to Rule 13.51(2)(h) to 13.51(2)(v) of the Listing Rules. Save for the above, there is no other matter that needs to be brought to the attention of the Shareholders.

Mr. Sze Wai Lun

Mr. Sze Wai Lun (‘‘Mr. Sze’’), aged 32, has been a non-executive Director of the Company since 19 December 2017. Mr. Sze graduated from Lancaster University in the United Kingdom with a Bachelor of Finance (Honours) degree in 2009. Mr. Sze worked at the Hong Kong branch of Bank of Communications Co., Ltd. (the shares of which are listed on the Stock Exchange (stock code: 3328) from October 2009 to January 2012. Mr. Sze worked at private equity division and principal investment management division of BOCOM International Asset Management Limited (a wholly-owned subsidiary of BOCOM International Holdings Company Limited (the shares of which are listed on the Stock Exchange (stock code: 3329)) from February 2012 to February 2015. Mr. Sze later served as the vice president at the leverage & acquisition finance department of Haitong International Securities Company Limited, a whollyowned subsidiary of Haitong International Securities Group Limited (the shares of which are listed on the Stock Exchange (stock code: 665)), from March 2015 to August 2017, mainly responsible for offshore acquisition and structure finance projects. Mr. Sze is currently the senior vice president at the leveraged and acquisition finance department of Mason Securities Limited, a wholly-owned subsidiary of Mason Group Holdings Limited (the shares of which are listed on the Stock Exchange (stock code: 0273)), and mainly responsible for acquisition finance and cross-border finance business. Mr. Sze has extensive experience in the area of merger and acquisition, financing and listed company corporate actions. Mr. Sze has participated in a number of deals relating to such areas.

Mr. Sze did not hold any other directorships in any public companies the securities of which are listed in Hong Kong or overseas in the last three years.

Mr. Sze does not have any relationship with any Directors, senior management, substantial Shareholders or controlling Shareholders of the Company.

As at the Latest Practicable Date, Mr. Sze did not have any interests in the Shares and underlying shares of the Company within the meaning of Part XV of the SFO.

Mr. Sze has entered into a letter of appointment with the Company for a term of one year commencing from 19 December 2017. Mr. Sze will enter into a supplemental letter of appointment with the Company under which Mr. Sze receives a monthly director’s fee of HK$15,000 with effect from 30 October 2018. The director’s fee was approved by the Board with reference to his qualification, experience, level of responsibilities undertaken and prevailing market conditions.

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There is no information which is discloseable nor is/was Mr. Sze involved in any of the matters required to be disclosed pursuant to Rule 13.51(2)(h) to 13.51(2)(v) of the Listing Rules. Save for the above, there is no other matter that needs to be brought to the attention of the Shareholders.

Ms. Zhang Lijuan

Ms. Zhang Lijuan (‘‘Ms. Zhang’’), aged 65, has been an independent non-executive Director of the Company since 27 April 2016. She is a member of each of the audit committee, nomination committee and remuneration committee (‘‘Remuneration Committee’’) of the Company and also acts as the chairlady of the Remuneration Committee. Ms. Zhang is the executive vice president and the secretary general of Chinese Association of Geriatric Research (中國老年保健醫學研究會). She has over 10 years of experience in the healthcare and medical industry. She was the vice president and the executive vice secretary general of China National Health Association (中國民族衛生協會) from August 2005 to May 2010.

Ms. Zhang did not hold any other directorships in any public companies the securities of which are listed in Hong Kong or overseas in the last three years.

Ms. Zhang does not have any relationship with any Directors, senior management, substantial Shareholders or controlling Shareholders of the Company.

As at the Latest Practicable Date, Ms. Zhang did not have any interests in the Shares and underlying shares of the Company within the meaning of Part XV of the SFO.

Ms. Zhang has entered into a letter of appointment with the Company for a term of three years commencing from 27 April 2016. Under the letter of appointment, Ms. Zhang does not entitle to any remuneration.

There is no information which is discloseable nor is/was Ms. Zhang involved in any of the matters required to be disclosed pursuant to Rule 13.51(2)(h) to 13.51(2)(v) of the Listing Rules. Save for the above, there is no other matter that needs to be brought to the attention of the Shareholders.

For translation purpose only

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2018 SHARE OPTION SCHEME

APPENDIX III

This appendix summaries the principal terms of the 2018 Share Option Scheme and does not form, nor is intended to be, part of the 2018 Share Option Scheme nor should it be taken as affecting the interpretation of the rules of the 2018 Share Option Scheme.

The following is a summary of the principal terms of the 2018 Share Option Scheme proposed to be approved and adopted by ordinary resolution of the Shareholders at the AGM.

1. Purposes of the scheme

The purposes of the Scheme are to recognise and acknowledge the contributions to those who had made, may have made or will make contributions to the Group. The Scheme will provide the Eligible Persons opportunities to have personal stakes in the Company with the view to achieving the following objectives:

(a) motivate the Eligible Persons to optimize their performance efficiency for the benefit of the Group; and
(b) attract and retain or otherwise maintain on-going business relationship with the Eligible Persons whose contributions are or will be beneficial to the long-term growth of the Group.

2. Who may join

The Administration Committee may, at its absolute discretion, invite any person belonging to any of the following classes of participants, to take up Options to subscribe for Shares (the ‘‘Eligible Person’’):

(1) any full time employee or director of any member of the Group and Invested Entity;
(2) any part time employee of any member of the Group and Invested Entity;
(3) any supplier, distributor, service provider, customer of the member of the Group or any Invested Entity;
(4) any shareholder of any member of the Group or any holder of any securities issued by any member of the Group;
(5) any consultant or adviser of or to any member of the Group who has provided services to such member of the Group in accordance with the terms of a contractual relationship entered into between the consultant or adviser with such member of the Group;
(6) any consultant, adviser, manager, officer or entity that provides research, development or other technological support to the Group or Invested Entity;
(7) such other persons who in the sole opinion of the Administration Committee from time to time, will contribute or have contributed to the Group.

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3. Maximum number of Shares

(a) Subject to sub-paragraph 3(b), 3(c), 3(d), the total number of Shares which may be issued upon exercise of all Options to be granted under this Scheme and the Other Schemes (the ‘‘Scheme Mandate Limit’’) must not in aggregate exceed 10% of the Shares in issue as at the date of passing the relevant resolution provided that Options lapsed in accordance with the terms of this Scheme or the Other Schemes will not be counted for the purpose of calculating the Scheme Mandate Limit.
(b) Subject to the approval of Shareholders in general meeting, the Company may renew the Scheme Mandate Limit to the intent that the total number of Shares which may be issued upon exercise of all Options to be granted under this Scheme and the Other Schemes under the Scheme Mandate Limit as renewed must not exceed 10% of the Shares in issue as at the date of such Shareholders’ approval provided that Options previously granted under this Scheme and the Other Schemes (including those outstanding, cancelled, exercised or lapsed in accordance with the terms thereof) will not be counted for the purposes of calculating the Scheme Mandate Limit as renewed. In relation to the Shareholders’ approval referred to in this paragraph 3(b), the Company shall send a circular to the Shareholders containing the information required by the Listing Rules.
(c) Subject to the approval of Shareholders in general meeting, the Company may also grant Options beyond the Scheme Mandate Limit provided that the Options in excess of the Scheme Mandate Limit are granted only to Eligible Persons specifically identified by the Company before such Shareholders’ approval is sought. In relation to the Shareholders’ approval referred to in this paragraph 3(c), the Company shall send a circular to the Shareholders containing a generic description of the identified Eligible Persons, the number and terms of the Options to be granted, the purpose of granting Options to the identified Eligible Persons, an explanation as to how the terms of the such Options serve the intended purpose and such other information required by the Listing Rules.
(d) Notwithstanding the foregoing, the Company may not grant any Option if the number of Shares which may be issued upon exercise of all outstanding Options granted and yet to be exercised under this Scheme and Other Schemes exceed 30% of the Shares in issue from time to time.

4. Maximum entitlement of each participant

The total number of Shares issued and to be issued upon exercise of the Options granted to a Participant under the Scheme and the Other Schemes (including both exercised and outstanding Options) in any 12-month period must not exceed 1% of the Shares in issue from time to time, provided that if approved by Shareholders in general meeting with such Participant and his or her Close Associates (or Associates if such Participant is a Connected Person) abstaining from voting, the Company may make a further grant of Options to such Participant (the ‘‘Further Grant’’) notwithstanding that the Further Grant would result in the Shares issued and to be issued upon exercise of all Options granted and to be granted under

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2018 SHARE OPTION SCHEME

APPENDIX III

this Scheme and Other Schemes to such Participant (including exercised, cancelled and outstanding Options) in the 12-month period up to and including the date of the Further Grant representing in aggregate over 1% of the Shares in issue as at the date of Further Grant.

In relation to the Further Grant, the Company must send a circular to the Shareholders, which discloses the identity of the relevant Participant, the number and the terms of the Options to be granted (and options previously granted to such Participant under this Scheme and Other Schemes) and the information required under the Listing Rules. The number and terms (including the exercise price) of Options which is the subject of the Further Grant shall be fixed before the relevant Shareholders’ meeting and the date of decision of the Administration Committee for proposing the Further Grant should be taken as the Offer Date for the purpose of calculating the relevant Subscription Price.

5. Subscription Price and consideration for the Option

The Subscription Price shall be determined by the Administration Committee in their absolute discretion and notified to the Participant (subject to any adjustment made pursuant to paragraph 9) and shall be at least the highest of:

(i) the closing price of the Shares as stated in the Stock Exchange’s daily quotations sheet on the Offer Date, which must be a trading day;
(ii) the average closing price of the Shares as stated in the Stock Exchange’s daily quotations sheets for the 5 trading days immediately preceding the Offer Date; and
(iii) the nominal value of a Share.

A nominal consideration of HK$1 is payable on acceptance of the offer of grant of an Option and shall be received by the Company within such time as may be specified in the offer of grant of the Option, which shall not be later than 28 days from the Offer Date.

6. Grant of Options to connected persons

Any grant of Options under the 2018 Share Option Scheme to a Director, Chief Executive or Substantial Shareholder or any of their respective Associates must be approved by independent non-executive Directors (excluding any independent non-executive Director who or whose Associate is the proposed grantee of the Options).

Where any grant of Options to a Substantial Shareholder or an independent non-executive Director or any of their respective Associates would result in the Shares issued and to be issued upon exercise of all Options already granted and to be granted (including Options exercised, cancelled and outstanding) to such person in the 12-month period up to and including the date of such grant:

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

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2018 SHARE OPTION SCHEME

APPENDIX III

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

such further grant of Options must be approved by the Shareholders in general meeting.

The Company must send a circular to the Shareholders. The proposed grantee, his Associates and all Core Connected Persons of the Company must abstain from voting in favour at such general meeting, except that any such person may vote against the relevant resolution at the general meeting provided that his intention to do so has been stated in the circular. Any vote taken at the meeting to approve the grant of such Options must be taken on a poll. Any change in the terms of Options granted to a Substantial Shareholder or an independent nonexecutive Director or any of their respective Associates must be approved by the Shareholders in general meeting.

7. Time of acceptance and exercise of Option

An Option may be accepted by a participant within 28 days from the date of the offer of grant of the Option.

An Option may be exercised in accordance with the terms of the 2018 Share Option Scheme at any time during a period to be determined and notified by the Directors to each grantee, which period may commence on a day after the date on which the offer for the grant of Options is accepted but shall end in any event not later than 10 years from the date of grant of the Option subject to the provisions for early termination thereof. Unless otherwise determined by the Administration Committee and stated in the offer of the grant of Options to a grantee, there is no minimum period required under the 2018 Share Option Scheme for the holding of an Option before it can be exercised.

8. Performance target

Unless the Administration Committee otherwise determined and stated in the offer of the grant of Options to a grantee, a grantee is not required to achieve any performance targets before any Options granted under the 2018 Share Option Scheme can be vested in, or exercised by, the grantee.

9. Changes in Capital Structure

If there is any capitalisation issue, rights issue, consolidation or subdivision of Shares or reduction in the share capital of the Company (other than an issue of Shares as consideration in respect of a transaction to which any member of the Group is a party) while any Option remains exercisable, adjustment (if any) shall be made in:

(a) the number of Shares (without fractional entitlements) which is the subject of the Options so far as unexercised; and/or
(b) the Subscription Price.

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2018 SHARE OPTION SCHEME

APPENDIX III

Except in the case of a capitalisation issue, any adjustment to the number of Shares which is the subject of the Options and/or the Subscription Price shall be conditional on an independent financial adviser or the Auditors confirming in writing to the Board that such adjustment made is on the basis that the proportion of the issued share capital of the Company to which a Participant will be entitled after such alteration shall remain the same as that to which he or she was entitled before such alteration. No such adjustment shall be made to the effect of which would be to enable any Share to be issued at less than its nominal value or which would result in the aggregate amount payable on the exercise of any Option in full being increased.

10. Ranking of Shares

Shares issued upon the exercise of an Option will be subject to all the provisions of the Articles of the Company and will rank pari passu in all respects with the fully paid Shares in issue on the date on which the said Shares were issued or, if that date falls on a day when the register of members of the Company is closed, the first day of the reopening of the register of members (the ‘‘Issue Date’’), and will entitle the holders thereof to participate in all dividends or other distributions paid or made on or after the Issue Date other than any dividend or other distribution previously declared or recommended or resolved to be paid or made if the record date therefor shall be on or before the Issue Date. A Share allotted upon the exercise of an Option shall not carry voting rights until the completion of the registration of the grantee on the register of members of the Company as the holder thereof.

11. Restrictions on the time of grant of Options

No offer for grant of Options shall be made after inside information has come to the knowledge of the Company until the Company has announced the information. In particular, no offer for the grant of Options may be made during the period commencing one month immediately preceding the earlier of: (i) the date of the board meeting (as such date is first notified to the Stock Exchange under the Listing Rules) for the approval of the Company’s results for any year, quarterly or any other interim period (whether or not required under the Listing Rules); and (ii) the deadline for the Company to announce its results for any year under the Listing Rules, or quarterly or any other interim period (whether or not required under the Listing Rules), and ending on the date of the results announcement.

12. Period of the 2018 Share Option Scheme

The 2018 Share Option Scheme will remain in force for a period of 10 years commencing on the date on which the 2018 Share Option Scheme is adopted.

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2018 SHARE OPTION SCHEME

APPENDIX III

13. Rights on ceasing employment

If the grantee of an Option was an employee or director of any member of the Group or Invested Entity and ceases to be an employee or director for any reason other than death, illhealth, disability or retirement in accordance with his contract of employment or for serious misconduct, or other grounds referred to in paragraph (16), (17) or (18) below before the vesting and/or exercising his Option in full, the Option (to the extent not already vested) will lapse on the date of cessation and, in respect of Option already vested but not exercised, the grantee may exercise the Option in whole or in part within one months following the date of such cessation or termination (or such shorter period as the Administration Committee may determine), and for this purpose, the date of cessation or termination will be taken to be the last day on which the grantee was actually at work with the Group or the relevant Invested Entity whether salary is paid in lieu of notice or not.

14. Rights on death, ill-health, disability or retirement

If the grantee of an Option was an employee or director of any member of the Group or Invested Entity and ceases to be an employee or director by reason of his death, ill-health, disability or retirement in accordance with his contract of employment before the vesting and/ or exercising the Option in full, then unless the Administration Committee otherwise determine, the Option (to the extent not already vested) shall deem to be vested on the day immediately prior to his death or, as the case may be, on the last day on which the grantee was at work with the Group or the Invested Entity (whether salary is paid in lieu of notice or not), and his personal representative(s), or, as appropriate, the grantee may exercise the Option (to the extent not already exercised) in whole or in part within a period of one months (24 months in the case of death of the grantee) following the date of cessation which date shall be the last day on which the grantee was at work with the Group or the relevant Invested Entity whether salary is paid in lieu of notice or not (or such shorter period as the Administration Committee may determine).

If the grantee is an individual who is not an employee or director of any member of the Group or Invested Entity, and in the event of his ceasing to be an Eligible Person by reason of his death, illness or disability in accordance with any contract entered into between the grantee or his Associate on one part and any member of the Group or the Invested Entity on the other part before the vesting and/or exercising the Option in full, then unless the Administration Committee otherwise determine, the Option (to the extent not already vested) shall deem to be vested on the day immediately prior to his death or, as the case may be, on the date on which the grantee ceases to be an eligible participant, and his personal representative(s), or, as appropriate, the grantee may exercise the Option (to the extent not already exercised) in whole or in part within a period of one months (24 months in the case of death of the grantee) following the date of such cessation (or such shorter period as the Administration Committee may determine).

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APPENDIX III

15. Rights on termination of contract

If the grantee was an employee or director of any member of the Group or Invested Entity and in the event of his ceasing to be an Eligible Person for any reason other than his death, illhealth or disability in accordance with any contract entered into between the grantee or his Associate on one part and any member of the Group or any Invested Entity on the other part, and not on one or more of the grounds specified in paragraph (16), (17) or (18) before the vesting and/or exercising the Option in full, the Option (to the extent not already vested) shall lapse on the date of such cessation and, in respect of Option already vested but not exercised, the grantee may exercise the Option in whole or in part within one months following the date of such cessation or termination (or such shorter period as the Administration Committee may determine).

16. Right on dismissal

If the grantee of an Option is an employee or director of any member of the Group or Invested Entity and ceases to be an employee or director by reason of termination of his employment or vacation from the office of directorship on the grounds that he has been guilty of serious misconduct or breach his contract of employment, or has been convicted of any criminal offence (other than an offence which in the opinion of the Administration Committee does not bring the Group or the relevant Invested Entity into disrepute), his Option (to the extent not already vested and/or exercised) will lapse automatically and will not in any event be exercisable on or after the date of cessation to be an employee.

17. Rights on breach of contract

In respect of a grantee other than an employee or director of any member of the Group or Invested Entity, if the Administration Committee shall at their absolute discretion determine that:

(a) (1) the grantee or his Associate has committed any breach of any contract entered into between the grantee or his Associate on the one part and any member of the Group or any Invested Entity on the other part; or (2) that the grantee has committed any act of bankruptcy or has become insolvent or is subject to any winding-up, liquidation or analogous proceedings or has made any arrangement or composition with his creditors generally; or (3) the grantee could no longer make any contribution to the growth and development of the Group by reason of the cessation of its relations with the Group or any Invested Entity or by any other reason whatsoever; and
(b) the Option granted to the grantee under the 2018 Share Option Scheme shall lapse as a result of any event specified in sub-paragraphs (a)(1), (a)(2) and (a)(3) above, his Option (to the extent not already vested and/or exercised) will lapse automatically and will not in any event be exercisable on or after the date on which the Administration Committee have so determined.

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2018 SHARE OPTION SCHEME

APPENDIX III

18. Rights on ceasing to be a subsidiary or Invested Entity

If a grantee ceases to be an Eligible Person as a result of any subsidiary of the Company or Invested Entity ceasing to be a subsidiary or Invested Entity of the Company, his Option (to the extent not already vested and/or exercised) will lapse automatically and will not in any event be exercisable on or after the date on which the grantee ceases to be an Eligible Participant.

19. Rights on a general offer, a compromise or arrangement

If a general or partial offer, whether by way of take-over offer, share buy-back offer, or scheme of arrangement or otherwise in like manner is made to all the holders of Shares, or all such holders other than the offeror and/or any person controlled by the offeror and/or any person acting in association or concert with the offeror, the Company shall use all reasonable endeavours to procure that such offer is extended to all the Participants on the same terms, mutatis mutandis, and assuming that they will become, by the exercise in full of the Options granted to them, Shareholders. If such offer becomes or is declared unconditional or such scheme of arrangement is formally proposed to the Shareholders, the Option (to the extent not already vested) shall forthwith vest, and a grantee shall be entitled to exercise his Option (to the extent not already exercised) to its full extent or to the extent specified in the Participant’s notice to the Company in exercise of his Option at any time before the close of such offer (or any revised offer) or the record date for entitlements under such scheme of arrangement, as the case may be. Subject to the above, the Option (to the extent not already exercised) will lapse automatically on (a) the date on which such offer (or, as the case may be, revised offer) closes or (b) the relevant record date for entitlements under the scheme of arrangement, as the case may be.

20. Rights on winding up

In the event of a resolution being proposed for the voluntary winding-up of the Company during the option period, the Company shall give notice thereof to all Participants. Therefore each Participant shall be entitled to exercise his or her outstanding Option at any time not later than two business days prior to the proposed general meeting of the Company (to the extent not already exercised) to its full extent or to the extent specified in such notice in accordance with the provisions of the 2018 Share Option Scheme. Upon the comprise or arrangement becoming effective, all outstanding Options shall lapse except insofar as exercised. Notice of the application referred to herein and the effect thereof shall be given by the Company to all Participants as soon as practicable.

21. Cancellation of Options

Cancelled Options may be re-issued after such cancellation has been approved, provided such re-issued Options shall only be granted in compliance with the terms of the 2018 Share Option Scheme and that new Options may be issued to the Participant in place of his or her cancelled Options only if there are available unissued Options (excluding the cancelled Options) within the Scheme Mandate Limit.

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APPENDIX III

22. Termination of the 2018 Share Option Scheme

The Company by ordinary resolution in general meeting may at any time terminate the operation of the 2018 Share Option Scheme before the end of its life and in such event no further Options will be offered but the provisions of the 2018 Share Option Scheme shall remain in all other respects in full force and effect in respect of Options granted prior thereto but not yet exercised at the time of termination, which shall continue to be exercisable in accordance with their terms of grant. Details of the Options granted, including Options exercised or outstanding, under the 2018 Share Option Scheme, and (if applicable) Options that become void or non-exercisable as a result of termination must be disclosed in the circular to the Shareholders seeking approval for the first new scheme to be established after such termination.

23. Rights are personal to the grantee

An Option granted under the 2018 Share Option Scheme is personal to the grantee and shall not be transferable or assignable.

24. Lapse of Option

An Option shall lapse forthwith (to the extent not already exercised) on the earliest of:

(a) the expiry of the period referred to in paragraph (7);
(b) the expiry of the periods or dates referred to in paragraphs (13), (14), (15), (16), (17), (18), (19), and (20);
(c) the date on which the Administration Committee exercise the Company’s right to cancel the Option by reason of a breach of paragraph (23) above by the grantee.

Transfer of employment from a member of the Group to another member of the Group shall not be considered as cessation of employment. It shall not be considered as cessation of employment if a Participant is placed on such leave of absence considered by the relevant member of the Group as continuing intact the employment relationship.

If an Option lapses, the Participant shall be bound to surrender to the Company the certificate (if any) evidencing such Option.

25. Others

(a) The 2018 Share Option Scheme is conditional on the Listing Committee of the Stock Exchange granting the listing of and permission to deal in, such number of Shares to be issued pursuant to the exercise of any Options which may be granted under the 2018 Share Option Scheme.

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SUMMARY OF THE PRINCIPAL TERMS OF THE 2018 SHARE OPTION SCHEME

APPENDIX III

(b) The terms and conditions of the 2018 Share Option Scheme relating to the matters set out in Rule 17.03 of the Listing Rules shall not be altered to the advantage of grantees or prospective grantees of the Options except with the approval of the Shareholders in general meeting.
(c) Any alterations to the terms and conditions of the 2018 Share Option Scheme which are of a material nature or any change to the terms of Options granted must be approved by the Shareholders in general meeting, except where the alterations take effect automatically under the existing terms of the 2018 Share Option Scheme. The amended terms of the 2018 Share Option Scheme or the Options shall comply with the relevant requirements of the Listing Rules.
(d) Any change to the authority of the Directors or the scheme administrators in relation to any alteration to the terms of the Scheme must be approved by the Shareholders in general meeting.

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NOTICE OF ANNUAL GENERAL MEETING

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TA YANG GROUP HOLDINGS LIMITED 大洋集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1991)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that an annual general meeting (‘‘AGM’’) of Ta Yang Group Holdings Limited (the ‘‘Company’’) will be held at Rooms 1 and 2, United Conference Centre, 10/F., United Centre, 95 Queensway, Admiralty, Hong Kong on Thursday, 13 December 2018 at 10:00 a.m. to transact the following ordinary businesses:

ORDINARY RESOLUTIONS

to receive and consider the audited consolidated financial statements of the Company and its subsidiaries (the ‘‘Group’’) and the reports of the directors (the ‘‘Directors’’) and auditors of the Company for the year ended 31 July 2018;
to re-elect the following retiring Directors;
(a) Mr. Zhao Ang as an executive Director;
(b) Mr. Gao Feng as a non-executive Director;
(c) Mr. Han Lei as a non-executive Director;
(d) Mr. Sze Wai Lun as a non-executive Director; and
(e) Ms. Zhang Lijuan as an independent non-executive Director;
to authorize the board (the ‘‘Board’’) of Directors to fix the remuneration of the Directors;
to re-appoint SHINEWING (HK) CPA Limited as the auditors of the Company and authorize the Board to fix their remuneration,

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NOTICE OF ANNUAL GENERAL MEETING

and as special business, to consider and, if thought fit, pass with or without alterations, the following resolutions as ordinary resolutions:

‘‘THAT
(a) subject to paragraph (c) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares of the Company (the ‘‘Shares’’) or securities convertible into Shares, or options, warrants or similar rights to subscribe for Shares or such convertible securities, and to make or grant offers, agreements and options which would or might require the exercise of such powers be and is hereby generally and unconditionally approved;
(b) the approval in paragraph (a) above shall be in addition to any other authorisation given to the Directors and shall authorise the Directors during the Relevant Period to make or grant offers, agreements and options (including bonds, warrants, debentures and other securities convertible into Shares) which would or might require the exercise of such powers after the end of the Relevant Period;
(c) the aggregate number of Shares allotted and issued or agreed conditionally or unconditionally to be allotted and issued (whether pursuant to an option or otherwise) by the Directors pursuant to the approval in paragraph (a) of this resolution, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined); or (ii) an issue of Shares under the exercise of any options granted under any option scheme or similar arrangement for the time being adopted by the Company and/or any of its subsidiaries for the grant or issue to eligible participants thereunder or rights to acquire Shares; or (iii) any scrip dividend or similar arrangement providing for the allotment of Shares in lieu of the whole or part of a dividend on Shares in accordance with the articles of association of the Company (the ‘‘Articles’’) in force from time to time, shall not exceed 20% of the aggregate number of the share capital of the Company in issue as at the date of the passing of this resolution and the said approval shall be limited accordingly; and
(d) for the purpose of this resolution:

‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earlier of:

(i) the conclusion of the next annual general meeting of the Company;
(ii) the expiration of the period within which the next annual general meeting of the Company is required by the Articles or any applicable laws of the Cayman Islands to be held; and
(iii) the revocation or variation of the authority given under this resolution by ordinary resolution of the shareholders of the Company at general meeting.

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NOTICE OF ANNUAL GENERAL MEETING

‘‘Rights Issue’’ means the allotment, issue or grant of Shares or securities convertible into Shares pursuant to an offer of Shares open for a period fixed by the Directors to the holders of Shares or of such securities or any class thereof on the register on a fixed record date in proportion to their then holdings of such Shares or of such securities or any class thereof as at that date (subject to such exclusions or other arrangements as the Directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of any relevant jurisdiction, or the requirements of any recognized regulatory body or any stock exchange applicable to the Company).’’

‘‘THAT
(a) subject to paragraph (b) below, the exercise by the Directors during the Relevant Period (as hereinafter defined) of all the powers of the Company to buy-back its Shares on The Stock Exchange of Hong Kong Limited (the ‘‘Stock Exchange’’) or on any other stock exchange on which the Shares may be listed and recognised by the Securities and Futures Commission of Hong Kong and the Stock Exchange for this purpose, and, subject to and in accordance with all applicable laws and regulations, be and is hereby generally and unconditionally approved;
(b) the aggregate number of issued Shares to be bought-back pursuant to the approval in paragraph (a) above of this resolution during the Relevant Period shall not exceed 10% of the aggregate number of issued Shares on the date of the passing of this resolution and the said approval shall be limited accordingly; and
(c) for the purpose of this resolution, ‘‘Relevant Period’’ means the period from the passing of this resolution until whichever is the earlier of:
- (i) the conclusion of the next annual general meeting of the Company;
- (ii) the expiration of the period within which the next annual general meeting of the Company is required by the Articles or any applicable laws to be held; and
- (iii) the revocation or variation of the authority given under this resolution by ordinary resolution of the shareholders at general meeting.’’

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NOTICE OF ANNUAL GENERAL MEETING

‘‘THAT conditional upon resolutions nos. 5 and 6 being passed, the general mandate granted to the Directors to exercise the powers of the Company to allot, issue and deal with Shares and to make or grant offers, agreements and options which would or might require the exercise of such powers pursuant to resolution no. 5 be and is hereby extended by the aggregate number of issued Shares bought-back by the Company since the granting of a general mandate to the Directors to exercise the powers of the Company to buy-back such shares pursuant to resolution no. 6, provided that such number shall not exceed 10% of the aggregate number of the Shares in issue on the date of passing of this resolution and the said approval shall be limited accordingly.’’
‘‘THAT conditional upon the Stock Exchange granting approval of the listing of, and permission to deal in, the shares of the Company to be issued pursuant to the exercise of any options which may be granted under the 2018 Share Option Scheme referred to in the circular despatched to the shareholders on the same day as this notice, the rules of which are produced to the meeting and for the purpose of identification signed by the chairman (the ‘‘2018 Share Option Scheme’’), the 2018 Share Option Scheme be and is hereby approved and adopted and that the Directors of the Company be and are hereby authorised to do all such acts and to enter into all such transactions, arrangements and agreements as may be necessary or expedient in order to give effect to the transactions contemplated the 2018 Share Option Scheme.’’

By Order of the Board Ta Yang Group Holdings Limited Shi Qi Chairlady and Chief Executive Officer

Hong Kong, 14 November 2018

Registered Office:	Principal Place of Business
Cricket Square	in Hong Kong:
Hutchins Drive	Unit A01, 35th Floor
P.O. Box 2681 GT	United Centre
Grand Cayman KY1-1111	95 Queensway Admiralty
Cayman Islands	Hong Kong

As at the date hereof, the Board of the Company has three executive Directors, namely Ms. Shi Qi, Mr. Qiu Yonghao and Mr. Zhao Ang, three non-executive Directors, namely Mr. Gao Feng, Mr. Han Lei and Mr. Sze Wai Lun and two independent non-executive Directors, namely Ms. Zhang Lijuan and Mr. Wu Tak Kong.

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NOTICE OF ANNUAL GENERAL MEETING

Notes:

A shareholder of the Company entitled to attend and vote at the AGM is entitled to appoint one or more proxy(ies) (if he/she/it is the holder of two or more shares) to attend and vote on poll instead of him/her at the AGM that the appointment shall specify the number and class of shares in respect of which such proxy is so appointed. A proxy need not be a member of the Company.
In order to be valid, the instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of such power of authority, must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301– 04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong not less than 48 hours before the time appointed for holding the AGM or any adjournment thereof.
Completion and return of the form of proxy will not preclude members from attending and voting in person at the meeting or at any adjourned meeting thereof (as the case may be) should they so wish, and in such event, the form of proxy shall be deemed to be revoked.
Where there are joint registered holders of any shares, any one of such joint holders may vote, either in person or by proxy in respect of such shares as if he/she was solely entitled thereto, but if more one of such joint holders are present at the meeting, whether in person or by proxy, the joint registered holder present whose name stands first on the register of members of the Company in respect of the shares shall be accepted to the exclusion of the votes of the other registered holders.
In order to determine members who are entitled to attend the AGM to be held on Thursday, 13 December 2018, the register of members of the Company will be closed from Tuesday, 11 December 2018 to Thursday, 13 December 2018, both days inclusive, during which period no transfer of shares can be registered. All transfers accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar and transfer office in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, not later than 4:30 p.m. on Monday, 10 December 2018.
Save for resolutions approving the procedural and administrative matters, any voting of the meeting should be taken by poll.
If Typhoon Signal No. 8 or above is expected to be hoisted or a Black Rainstorm Warning Signal is expected to be in force any time after 7:30 a.m. on the date of the meeting, then the meeting will be postponed. The Company will post an announcement on the website of the Company (www.tayang.com) and the website of the Stock Exchange (www.hkexnews.hk) to notify shareholders of the date, time and place of the rescheduled meeting. The meeting will be held as scheduled when an Amber or a Red Rainstorm Warning Signal is in force. Shareholders should decide on their own whether they would attend the meeting under bad weather condition bearing in mind their own situations.

– 32 –

AI assistant

Ta Yang Group Holdings Limited — Proxy Solicitation & Information Statement 2018

50325_rns_2018-11-13_72ad538a-bce1-43d6-b92e-0bf5b08f721a.pdf

TA YANG GROUP HOLDINGS LIMITED 大 洋 集 團 控 股 有 限 公 司

PROPOSALS FOR

GENERAL MANDATES TO ISSUE AND BUY-BACK SHARES, RE-ELECTION OF DIRECTORS, PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF ANNUAL GENERAL MEETING

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

TA YANG GROUP HOLDINGS LIMITED 大 洋 集 團 控 股 有 限 公 司

(Stock Code: 1991)

PROPOSALS FOR

GENERAL MANDATES TO ISSUE AND BUY-BACK SHARES, RE-ELECTION OF DIRECTORS, PROPOSED ADOPTION OF SHARE OPTION SCHEME AND NOTICE OF ANNUAL GENERAL MEETING

1. INTRODUCTION

2. PROPOSED GRANT OF ISSUE MANDATE, BUY-BACK MANDATE AND EXTENSION MANDATE

3. RE-ELECTION OF DIRECTORS

4. ADOPTION OF THE 2018 SHARE OPTION SCHEME

LETTER FROM THE BOARD

Value of the Options

Conditions Precedent of the 2018 Share Option Scheme

Application for Listing

Documents Available for Inspection

5. ANNUAL GENERAL MEETING

6. POLL VOTING AT ANNUAL GENERAL MEETING

7. RESPONSIBILITY STATEMENT

8. RECOMMENDATION

9. GENERAL INFORMATION

(1) GENERAL MANDATE TO BUY-BACK SHARES

(2) EXERCISE OF THE BUY-BACK MANDATE

(3) SOURCE OF FUNDS

(4) REASONS FOR BUY-BACKS

(5) SHARE PRICES

(6) TAKEOVERS CODE

(7) BUY-BACK MADE BY THE COMPANY

(8) UNDERTAKING AND DISCLOSURE OF INTERESTS

Mr. Zhao Ang

Mr. Gao Feng

Mr. Han Lei

Mr. Sze Wai Lun

Ms. Zhang Lijuan

1. Purposes of the scheme

2. Who may join

3. Maximum number of Shares

4. Maximum entitlement of each participant

5. Subscription Price and consideration for the Option

6. Grant of Options to connected persons

7. Time of acceptance and exercise of Option

8. Performance target

9. Changes in Capital Structure

10. Ranking of Shares

11. Restrictions on the time of grant of Options

12. Period of the 2018 Share Option Scheme

13. Rights on ceasing employment

14. Rights on death, ill-health, disability or retirement

15. Rights on termination of contract

16. Right on dismissal

17. Rights on breach of contract

18. Rights on ceasing to be a subsidiary or Invested Entity

19. Rights on a general offer, a compromise or arrangement

20. Rights on winding up

21. Cancellation of Options

22. Termination of the 2018 Share Option Scheme

23. Rights are personal to the grantee

24. Lapse of Option

25. Others

TA YANG GROUP HOLDINGS LIMITED 大 洋 集 團 控 股 有 限 公 司

NOTICE OF ANNUAL GENERAL MEETING

ORDINARY RESOLUTIONS

By Order of the Board Ta Yang Group Holdings Limited Shi Qi Chairlady and Chief Executive Officer

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