Wanjia Group Holdings Limited — Proxy Solicitation & Information Statement 2018

Sep 24, 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 your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Wanjia Group Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for 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.

WANJIA GROUP HOLDINGS LIMITED 萬嘉集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 401)

(1) MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF APPROXIMATELY 99.80% EQUITY INTEREST IN A SUBSIDIARY IN THE PRC; (2) RE-ELECTION OF DIRECTORS; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

Financial adviser to the Company

INCU Corporate Finance Limited

Capitalised terms used in this cover page shall have the same meanings as those defined in this circular unless otherwise stated.

A letter from the Board is set out on pages 4 to 12 of this circular. A notice convening the EGM to be held at Room 1902, 19th Floor, 101 King’s Road, Hong Kong on 19 October 2018 (Friday) at 3:00 p.m. is set out on pages EGM -1 to EGM-3 of this circular.

Whether or not you are able to attend the EGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the Company’s principal place of business in Hong Kong, at Room1902, 19th Floor, 101 King’s Road, Hong Kong as soon as possible and in any event by not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

24 September 2018

CONTENTS

		Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
APPENDIX I	– FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . .	I-1
APPENDIX II	– DETAILS OF THE RETIRING DIRECTORS PROPOSED
	TO BE RE-ELECTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	– GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . . .		EGM-1

– i –

DEFINITIONS

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

• ‘‘Board’’

the board of Directors

• ‘‘Company’’

Wanjia Group Holdings Limited, an exempted company incorporated in the Cayman Islands with limited liability and the issued Shares of which are listed on the Main Board of the Stock Exchange

• ‘‘Completion’’

• completion of the Disposal in accordance with the terms and conditions of the Disposal Agreement

• ‘‘Completion Date’’

• a date falling within thirty (30) days after the fulfillment (or waiver) of the conditions set out in the Disposal Agreement or such other date as the Vendor and the Purchaser may agree in writing

• ‘‘Consideration’’ the consideration of HK$49,000,000 payable by the Purchaser for the Disposal in accordance with the terms and conditions of the Disposal Agreement

• ‘‘Deed of Set Off’’

• the deed of set off entered into between the Company and Mr. Lam Cheong Lon on 24 August 2018 pursuant to which they agreed that the aggregate principal amount of the three unsecured loans of HK$6,200,000 be set off against part of the Consideration in the amount of HK$6,200,000 on a dollar to dollar basis

• ‘‘Director(s)’’

director(s) of the Company

• ‘‘Disposal’’

the proposed disposal of approximately 99.80% equity interest in the Target Company pursuant to the Disposal Agreement

• ‘‘Disposal Agreement’’

the conditional sale and purchase agreement dated 23 August 2018 entered into between the Purchaser and the Vendor relating to the Disposal

• ‘‘EGM’’

the extraordinary general meeting of the Company to be convened for the purpose of approving (i) the Disposal Agreement and the transactions contemplated thereunder; and (ii) the re-election of Directors

– 1 –

DEFINITIONS

• ‘‘Group’’

the Company and its subsidiaries

• ‘‘Hong Kong’’

• the Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Third Party(ies)’’

• third party(ies) who is(are) independent of and not connected with the Company and its connected persons (as defined in the Listing Rules)

• ‘‘Latest Practicable Date’’ 21 September 2018, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• ‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘Long Stop Date’’ 30 November 2018 (or such other date as the parties to the Disposal Agreement may agree in writing);

• ‘‘PRC’’

• the People’s Republic of China, which for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• ‘‘Purchaser’’ Jing Hoi Ou Investment Limited, a company incorporated in Hong Kong with limited liability and an Independent Third Party

• ‘‘Sale Capital’’ registered and paid up capital of RMB55,743,350, representing approximately 99.80% equity interest in the Target Company

• ‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ‘‘Share(s)’’ ordinary share(s) of HK$0.01 each in the share capital of the Company

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

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

– 2 –

DEFINITIONS

‘‘Target Company’’ 福建惠好四海醫藥連鎖有限責任公司 (Fujian Huihao Sihai Pharmaceutical Chain Company Limited[#] ), a company established under the laws of the PRC with limited liability and an indirect non-wholly owned subsidiary of the Company

‘‘Vendor’’ Hui Hao (HK) Group Limited, a company incorporated in Hong Kong with limited liability and an indirect whollyowned subsidiary of the Company

• ‘‘HK$’’ Hong Kong dollar(s), the lawful currency of Hong Kong ‘‘RMB’’ Renminbi, the lawful currency of the PRC ‘‘%’’ per cent.

• The English transliteration of the Chinese names in this circular, where indicated, is included for information only, and should not be regarded as the official English names of such Chinese names.

For the purpose of this circular, unless the context otherwise requires or expressly specified, conversion of Renminbi into Hong Kong dollars is based on the approximate exchange rate of RMB1.00 to HK$1.14. Such exchange rate is for the purpose of illustration only and does not constitute a representation that any amounts in Hong Kong dollars or Renminbi has been, could have been or may be converted at such or any other rate or at all.

– 3 –

LETTER FROM THE BOARD

WANJIA GROUP HOLDINGS LIMITED 萬嘉集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 401)

Executive Directors: Mr. Chen Jinshan Mr. Wang Jia Jun Independent non-executive Directors: Mr. Wong Hon Kit Dr. Liu Yongping Mr. Ho Man

Registered office: P.O. Box 10008, Williow House, Cricket Square Grand Cayman KY1-1001 Cayman Islands Head office and principal place of business in Hong Kong: Room 1902, 19th Floor 101 King’s Road Hong Kong

24 September 2018

To the Shareholders

Dear Sir/Madam,

(1) MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF APPROXIMATELY 99.80% EQUITY INTEREST IN A SUBSIDIARY IN THE PRC; (2) RE-ELECTION OF DIRECTORS; AND

(3) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcement of the Company dated 23 August 2018 in relation to the Disposal. On 23 August 2018 (after trading hours of the Stock Exchange), the Vendor and the Purchaser entered into the Disposal Agreement, pursuant to which, the Vendor conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Capital, representing approximately 99.80% equity interest in the Target Company, at the Consideration of HK$49,000,000.

– 4 –

LETTER FROM THE BOARD

Reference is also made to the announcements of the Company dated 14 February 2018 and 31 August 2018, pursuant to which Mr. Ho Man (‘‘Mr. Ho’’) and Mr. Wang Jia Jun (‘‘Mr. Wang’’) were appointed as an independent non-executive Director and executive Director with effect from 14 February 2018 and 31 August 2018 respectively.

The purpose of this circular is to provide you with, among other things, (i) further information relating to the Disposal; (ii) information regarding the retiring Directors proposed to be re-elected; (iii) a notice convening the EGM; and (iv) other information as required to be disclosed under the Listing Rules.

THE DISPOSAL AGREEMENT

The major terms of the Disposal Agreement are set out as follows:

Date: 23 August 2018 (after trading hours of the Stock Exchange) Purchaser: Jing Hoi Ou Investment Limited Vendor: Hui Hao (HK) Group Limited Target Company: 福建惠好四海醫藥連鎖有限責任公司 (Fujian Huihao Sihai Pharmaceutical Chain Company Limited[#] )

The Purchaser is a company incorporated in Hong Kong with limited liability. Based on the information provided by the Purchaser, the Purchaser is principally engaged in investment holding. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, save for the three unsecured loan agreements dated 24 April 2018, 14 June 2018 and 24 July 2018 respectively entered into between the ultimate beneficial owner of the Purchaser as lender and the Company as borrower in the aggregate principal amount of HK$6,200,000 for a term of three months and extendable for another three months at the request of the borrower and with an interest rate of 5% per annum, the Purchaser and its ultimate beneficial owner are Independent Third Parties.

The Vendor, a company incorporated in Hong Kong with limited liability, is an indirect wholly-owned subsidiary of the Company. The Vendor is an investment holding company.

Assets to be disposed of

Pursuant to the Disposal Agreement, the Vendor conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Capital, representing approximately 99.80% equity interest in the Target Company.

– 5 –

LETTER FROM THE BOARD

Basis of Consideration

The Consideration for the sale and purchase of the Sale Capital shall be HK$49,000,000 and payable by the Purchaser in the following manner:

• (a) a sum of HK$9,800,000 (the ‘‘Deposit’’), of which HK$6,200,000 was set off against the aggregate principal amount of the three unsecured loans of HK$6,200,000 on a dollar to dollar basis pursuant to the Deed of Set Off and the remaining balance of HK$3,600,000 was paid by the Purchaser in cash to the Vendor within seven days after the entering into of the Disposal Agreement as deposit and part payment of the Consideration; and

• (b) the remaining balance of HK$39,200,000 shall be payable by the Purchaser in cash on Completion.

The Consideration was determined between the Vendor and the Purchaser after arm’s length negotiation and on normal commercial terms, with reference to (i) the unaudited net assets of the Target Company as at 30 June 2018 of approximately RMB42.9 million (equivalent to approximately HK$48.9 million); (ii) the financial performance and prospect of the Target Company; and (iii) other reasons for the Disposal as discussed in the paragraph headed ‘‘REASONS FOR AND BENEFITS OF THE DISPOSAL AND USE OF PROCEEDS’’ in this circular.

Having considered the above, the Board considers that the Consideration, which was arrived at after arm’s length negotiations, is fair and reasonable and is in the interests of the Company and the Shareholders as a whole.

Conditions precedent

Completion shall be conditional upon and subject to the satisfaction or waiver of the following conditions:

• (a) if necessary, the passing of the necessary resolution(s) by the Shareholders at the EGM to be convened and held to approve the Disposal Agreement and the transactions contemplated thereunder;

• (b) all necessary consents, licences and approvals required to be obtained on the part of the Target Company, the Vendor and the Company in respect of the Disposal Agreement and the transactions contemplated thereby having been obtained and remain in full force and effect;

• (c) all necessary consents, licences and approvals required to be obtained on the part of the Purchaser in respect of the Disposal Agreement and the transactions contemplated thereby having been obtained and remain in full force and effect;

– 6 –

LETTER FROM THE BOARD

• (d) the representation and warranties given by the Vendor under the Disposal Agreement remaining true, accurate and complete in all material respects; and

• (e) the representation and warranties given by the Purchaser under the Disposal Agreement remaining true, accurate and complete in all material respects.

The Purchaser may in its absolute discretion at any time waive the condition (d) set out above. The Vendor may in its absolute discretion at any time waive the condition (e) set out above. Conditions (a), (b), and (c) set out above are incapable of being waived. As at the Latest Practicable Date, none of the conditions set out above has been fulfilled.

If the conditions set out above have not been satisfied (or as the case may be, waived) on or before the Long Stop Date, the Disposal Agreement shall cease and the Vendor shall forthwith refund the Deposit without interest to the Purchaser. Thereafter, neither party shall have any obligations and liabilities towards each other under the Disposal Agreement save for any antecedent breaches of the terms thereof.

Completion

Upon compliance with or fulfilment (or wavier) of all the above conditions, the Completion shall take place on the Completion Date.

INFORMATION OF THE TARGET COMPANY

The Target Company is a company established in the PRC with limited liability, which is principally engaged in pharmaceutical retail chain business in the PRC. As at the Latest Practicable Date, approximately 99.80% equity interest in the Target Company is owned by the Vendor and the remaining approximately 0.20% equity interest in the Target Company is owned by Independent Third Parties.

The Target Company offers a wide variety of products in its retail pharmacies including prescription medicines, over-the-counter medicines, healthcare food products, traditional Chinese medicines, medical supplies and medical devices.

– 7 –

LETTER FROM THE BOARD

FINANCIAL SUMMARY OF THE TARGET COMPANY

Set out below is a summary of the unaudited financial results of the Target Company for the two financial years ended 31 December 2016 and 31 December 2017:

	For the year	For the year
	ended	ended
	31 December	31 December
	2016	2017
	(unaudited)	(unaudited)
	RMB’000	RMB’000
Revenue	230,591	221,731
Loss before tax	(5,732)	(25,296)
Loss after tax	(5,732)	(25,296)

The unaudited net asset value of the Target Company as at 30 June 2018 was approximately RMB42.9 million (equivalent to approximately HK$48.9 million). Based on such figure, the book value attributable to the Sale Capital amounts to approximately HK$48.8 million.

FINANCIAL EFFECT OF THE DISPOSAL

Upon Completion, the Target Company will cease to be a subsidiary of the Company and the Company will cease to have any interest in the Target Company. The financial results of the Target Company will be no longer consolidated in the consolidated financial statements of the Group following the Completion.

Assets and liabilities

Having taken into account the Consideration and the unaudited net asset value of the Target Company as at 30 June 2018, it is estimated that upon Completion, the total assets of the Group will decrease by approximately HK$97.4 million. The total liabilities of Group will decrease by approximately HK$96.8 million. It is estimated that the net assets of the Group will have a slight decrease of approximately HK$0.6 million.

Earnings

Based on the net proceeds from the Disposal of approximately HK$48.2 million (without taking into account the effect of the Deed of Set Off) and the book value attributable to the Sale Capital of approximately HK$48.8 million, it is estimated that the Company will record an insignificant loss of approximately HK$0.6 million as a result of the Disposal. The actual gain or loss to be recorded by the Company is subject to final audit to be performed by the auditors of the Company.

– 8 –

LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE DISPOSAL AND USE OF PROCEEDS

The Company is an investment holding company. The Group is principally engaged in pharmaceutical wholesales and distribution and pharmaceutical retail chain business (the ‘‘Retail Business’’), and provision of hemodialysis treatment and consultancy service in the PRC.

The Board considers the financial performance of the Retail Business has been stagnant. As disclosed in the annual report of the Company for the year ended 31 March 2018, the segment of the Retail Business suffered a loss of approximately HK$36.5 million, representing a substantial increase from the loss of approximately HK$9.1 million in the previous year. As the market competition was further intensified, promotion and labour costs increased as compared with the same period of last year, hence leading to a decrease of the overall gross profit margin. For the two years ended 31 March 2017 and 31 March 2018, the segment results of the Retail Business were the lowest among different business segments of the Group.

Despite the fact that the Group has been making effort and hoping the Target Company could turn around, the financial performance of the Retail Business could not meet the expectation of the Board. In August 2018, the Company was approached by the Purchaser, which showed its interest in the Retail Business. Hence, discussions were held between the Company and the Purchaser in relation to the possibility of the Disposal.

The Board intends to utilise the net proceeds from the Disposal of approximately HK$42 million (after taking into account the effect of the Deed of set off) for partial repayment of the Group’s borrowings. As disclosed in the Company’s announcements dated 28 November 2017, 28 February 2018 and 27 June 2018, the Group has a borrowing of HK$100 million, which will be due on 28 May 2019. Such borrowing currently charges an interest rate of 1.25% per month until the repayment date, and thus the Group is facing liquidity pressure in settlement of finance costs.

Having considered that (i) the financial performance of the Retail Business has been stagnant and the prospect is uncertain; and (ii) the Disposal represents a good opportunity for the Group to repay its debt, which will then ease the debt burden of the Group, the Directors are of the view that the terms of the Disposal Agreement (including the Consideration) and the transactions contemplated thereunder are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

– 9 –

LETTER FROM THE BOARD

LISTING RULES IMPLICATION

As one or more of the applicable percentage ratios calculated in accordance with the Listing Rules in respect of the Disposal exceed 25% but below 75%, the Disposal constitutes a major disposal on the part of the Company and is subject to the reporting, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules. To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholder has any material interest in the Disposal as at the Latest Practicable Date, and as such, no Shareholder is required to abstain from voting on the resolution(s) to be proposed at the EGM to approve the Disposal.

PROPOSAL FOR RE-ELECTION OF THE RETIRING DIRECTORS

Mr. Ho and Mr. Wang were appointed as an independent non-executive Director on 14 February 2018 and an executive Director on 31 August 2018 respectively. Pursuant to article 83(3) of the articles of association of the Company (the ‘‘Articles’’), any Director appointed by the Board to fill a casual vacancy on the existing Board shall hold office until the first general meeting after his appointment and be subject to re-election at such meeting. Accordingly, Mr. Ho and Mr. Wang are subject to re-election at the EGM.

Mr. Ho and Mr. Wang, being eligible, will offer themselves for re-election as an independent non-executive Director and executive Director respectively at the EGM. Mr. Ho confirmed his independence pursuant to Rule 3.13 of the Listing rules and the Board is of the view that Mr. Ho meets the independence criteria as set out in Rule 3.13 of the Listing Rules.

Biographical information of Mr. Ho and Mr. Wang are set out in Appendix II to this circular.

EGM

The EGM will be convened and held at Room 1902, 19th Floor, 101 King’s Road, Hong Kong on 19 October 2018 (Friday) at 3:00 p.m., for the Shareholders to consider and, if thought if, approve the Disposal Agreement and the transactions contemplated thereunder and the reelection of Directors by way of poll. A notice convening the EGM is set out on pages EGM-1 to EGM-3 of this circular.

– 10 –

LETTER FROM THE BOARD

To the best knowledge, information and belief of the Directors, having made all reasonable enquiries, there is (i) no voting trust or other agreement or arrangement or understanding entered into by or binding upon any Shareholder; and (ii) no obligation or entitlement of any Shareholder as at the Latest Practicable Date, whereby it has or may have temporarily or permanently passed control over the exercise of the voting right in respect of its Shares to a third party, either generally or on a case-by-case basis.

Whether or not you are able to attend the EGM, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return the same to the Company’s principal place of business in Hong Kong, at Room 1902, 19th Floor, 101 King’s Road, Hong Kong as soon as possible and in any event by not later than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Completion and return of the form of proxy shall not preclude you from attending and voting in person at the EGM or any adjournment thereof if you so wish.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Accordingly, the voting of the ordinary resolution(s) as set out in the notice of EGM shall be taken by way of poll at the EGM. The result of the vote will be announced after the EGM.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no Shareholder has a material interest in the transactions contemplated under the Disposal Agreement and the re-election of Directors as at the Latest Practicable Date. As such, no Shareholder is required to abstain from voting under the Listing Rules at the EGM on the resolution(s) to approve the Disposal Agreement and the transactions contemplated thereunder and the re-election of Directors.

RECOMMENDATION

The Board considers that the terms of the Disposal Agreement and the transactions contemplated thereunder and the re-election of Mr. Ho and Mr. Wang as independent nonexecutive Director and executive Director respectively are fair and reasonable and are in the interests of the Company and the Shareholders as a whole. Accordingly, the Board recommends the Shareholders to vote in favour of the relevant resolution(s) to be proposed at the EGM to approve the Disposal Agreement and the transactions contemplated thereunder and the re-election of Directors.

– 11 –

LETTER FROM THE BOARD

WARNING

Shareholders and potential investor of the Company should be aware that the Disposal may or may not proceed. Shareholders and potential investors of the Company are advised to exercise caution when dealing in securities of the Company, and are recommended to consult their professional advisers if they are in doubt about their position and as to the action they should take.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information set out in the appendices to this circular. The English text shall prevail over the Chinese text in this circular.

Yours faithfully, For and on behalf of the Board Wanjia Group Holdings Limited Wang Jia Jun Executive Director

– 12 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

I. FINANCIAL INFORMATION OF THE GROUP

Details of the financial information of the Group for each of the three financial years ended 31 March 2016, 2017 and 2018 are disclosed in the following documents which have been published on the websites of the Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.wanjia-gp.com):

• annual reports of the Company for the financial years ended 31 March 2018 (pages 56 to 199)

http://www.hkexnews.hk/listedco/listconews/SEHK/2018/0716/LTN20180716293.pdf

• annual reports of the Company for the financial years ended 31 March 2017 (pages 59 to 211)

http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0703/LTN201707031611.pdf

• annual reports of the Company for the financial years ended 31 March 2016 (pages 62 to 211)

http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0629/LTN20160629269.pdf

The management discussion and analysis of the Company for each of the three financial years ended 31 March 2016, 2017 and 2018 are disclosed in the annual reports of the Company for the financial years ended 31 March 2016, 2017 and 2018 respectively.

II. INDEBTEDNESS

As at the close of business on 31 July 2018, being the latest practicable date for the purpose of preparing this indebtedness statement prior to the printing of this circular, the Group had the following outstanding indebtedness:

Current liabilities: Other borrowing – secured Other borrowings – unsecured Total	Total HK$’000 100,000 9,700
	109,700

I – 1

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

On 28 November 2017, the Company as borrower entered into a loan agreement with an independent third party (the ‘‘Lender’’) for a loan in the principal amount of HK$100,000,000 (the ‘‘Loan’’) for a term of 3 months with an option to renew for another 3 months after the maturity of the Loan.

On 28 February 2018, the Company exercised the renewal option and the Lender agreed to the extension of the Loan to another 3 months to 28 May 2018. On 27 June 2018, the Lender and the Company agreed to further extend the repayment date of the Loan to 28 May 2019.

The Loan is secured by the Debenture. The interest rate of the Loan was (i) 3.9% per month for the first month after drawing of the Loan; (ii) 1.8% per month for the second month after drawing of the Loan; (iii) 1.25% per month for the third month after drawing of the Loan; and (iv) 1.25% per month for the fourth month to the sixth month after drawing of the Loan and until the repayment of the Loan as renewed (i.e. 28 May 2019).

On 21 March 2018, the Company as borrower entered into an unsecured short term loan agreement with Ms. Yung Ka Lai, the former executive director of the Company, in the principal amount of HK$2,000,000. The loan is unsecured, interest-free and repayable on 24 September 2018.

On 24 April 2018, 14 June 2018 and 24 July 2018, the Company as borrower and Mr. Lam Cheong Lon, the ultimate beneficial owner of Purchaser, as lender entered into three unsecured loan agreements in the principal amount of HK$2,000,000, HK$2,000,000 and HK$2,200,000 respectively for a term of three months and extendable for another three months at the request of the Company and with an interest rate of 5% per annum. On 24 August 2018, the Company and Mr. Lam Cheong Lon entered into the Deed of Set Off pursuant to which the aggregate principal amount of the three loans of HK$6,200,000 was set off against part of the Consideration in the amount of HK$6,200,000 on a dollar to dollar basis.

On 24 May 2018, the Company as borrower entered into an unsecured short term loan agreement with Mr. Yung Ka Chun, the brother of the former executive director of the Company, Ms. Yung Ka Lai, in the principal amount of HK$1,500,000. The loan is unsecured, interest-free and repayable on 24 November 2018.

Charges of assets

As at the Latest Practicable Date, the Company charged to the Lender by way of first floating charge all its undertaking, property, assets, goodwill, rights and revenues, whatsoever and whosesoever, both present and future, including all book and other debts now and from time to time due or owing to the Company, the uncalled capital, goodwill and all intellectual properties and intellectual property rights, patents, patent applications, trademarks, service marks, trade names, registered designs, copyrights, licenses and ancillary and connected rights both present and future of the Company (the ‘‘Debenture’’).

I – 2

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Contingent liabilities

As at the close of business on 31 July 2018, being the latest practicable date for the purpose of this indebtedness statement, the Group had no material contingent liabilities outstanding.

Disclaimer

Save as aforesaid above, at the close of business on 31 July 2018, the directors of the Company confirmed that the Group did not have any outstanding mortgages, charges, debentures or other loan capital or bank overdrafts, loans debt securities or other similar indebtedness, liabilities under acceptances or acceptances credits or hire purchase commitments, or any guarantees or any contingent liabilities. The directors of the Company have confirmed that, save as disclosed above, there has not been any material change in the indebtedness and contingent liabilities of the Group since 31 July 2018.

III. WORKING CAPITAL

The Directors are of the opinion that taking into account the existing borrowing facilities available, the existing cash and bank balances and the effect of the Disposal, the Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of publication of this circular, in the absence of unforeseeable circumstances.

IV. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

Upon Completion, the Group will continue to be principally engaged in (i) pharmaceutical wholesale and distribution business; and (ii) provision of hemodialysis treatment and consultancy service business (the ‘‘Hemodialysis Business’’) in the PRC.

As mentioned under the paragraph headed ‘‘REASONS FOR AND BENEFITS OF THE DISPOSAL AND USE OF PROCEEDS’’ in the letter from the Board in this circular, the Directors consider that the Disposal represents a good opportunity for the Group to repay its debt, which will then ease the debt burden of the Group. Subject to the Completion taking place, it is currently intended that the net proceeds from the Disposal will be applied for partial repayment of the Group’s borrowings.

Looking forward, the Group will focus on developing the Hemodialysis Business and will explore opportunities for timely expansion of the Group’s scope of operation and investments.

I – 3

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Upon the Completion of the Disposal, the Company will centralise its resources in developing the Hemodialysis Business, which was acquired by the Group in March 2017. In respect of the Hemodialysis Business, the Group currently has three jointly-operated hemodialysis treatment centers under co-operation contracts with three hospitals in Fujian province, Shandong province and Hubei province in the PRC. Looking forward, the Group will focus on developing such segment through establishment of new self-operated centers in Fujian Province so as to expand its operating scale and further penetrate in the market. For this purpose, a business development team has been set up and has performed initial feasibility studies on the market potential in various cities or regions in Fujian Province in the PRC. Based on the preliminary assessment, the management of the Company considers that several cities, namely Fuzhou city, Putian City, Quanzhou city and Zhangzhou city in the PRC, have considerable market potential.

As at the Latest Practicable Date, the Company has no intention to downsize, cease and/or dispose of any of its remaining businesses. The Company cannot preclude any possibility of adjusting its focus in developing and expanding any particular business segment, or downsizing or even disposing any particular business segment for the overall long-term development of the Group and the benefits of the Shareholders as a whole depending on any possible opportunity that the Group may encounter in the future.

I – 4

DETAILS OF THE DIRECTOR PROPOSED TO BE RE-ELECTED

APPENDIX II

The biographical details of all the retiring Directors are as follows:

MR. HO MAN

Mr. Ho, aged 48, was appointed as an independent non-executive Director on 14 February 2018.

Mr. Ho has over 19 years of working experience in private equity investment and finance. Mr. Ho was awarded an executive master of business administration degree (EMBA) from Tsinghua University in the People’s Republic of China in July 2008, and a master of science in finance degree from the London Business School in the United Kingdom in November 1997. He is also a Chartered Financial Analyst charterholder and a Certified Public Accountant.

Mr. Ho is currently a managing director of an investment holding company. Prior to that, Mr. Ho served as an executive partner representative of a Chengdu-based private equity investment fund from December 2011 to May 2014. Mr. Ho worked for a Hong Kong-based private fund management company from January 2010 to December 2013 and was a managing director and head of China growth and expansion capital of CLSA Capital Partners (HK) Limited from August 1997 to October 2009. Mr. Ho was a non-executive director of SCUD Group Limited (stock code: 1399) from December 2006 to October 2009; and a non-executive director of Shanghai Tonva Petrochemical Co., Ltd. (stock code: 1103, previous stock code: 8251) (currently known as Shanghai Dasheng Agriculture Finance Technology Co., Ltd.) from September 2008 to October 2009, both being companies listed on the Main Board of the Stock Exchange.

Mr. Ho has been an independent non-executive director of Fantasia Holdings Group Co., Limited (stock code: 1777) since October 2009; an independent non-executive director of Fu Shou Yuan International Group Limited (stock code: 1448) since December 2013; an independent non-executive director of CIMC- TianDa Holdings Company Limited (formerly known as ‘‘China Fire Safety Enterprise Group Limited’’) (stock code: 445) since July 2015; an independent nonexecutive director of Momentum Financial Holdings Limited (formerly known as ‘‘Infinity Financial Group (Holdings) Limited’’) (stock code: 1152) since November 2016; and an independent non-executive director of Magnus Concordia Group Limited (formerly known as ‘‘Midas International Holdings Limited’’) (stock code: 1172) since January 2018, all being companies listed on the Main Board of the Stock Exchange.

Mr. Ho has been an independent director of Shenzhen Forms Syntron Information Co., Ltd. (stock code: 300468.SZ) since February 2012, a company listed on the ChiNext of Shenzhen Stock Exchange); and a director of Shenzhen Daxiang United Space Construction Co., Ltd. since September 2015 (stock code: 836604), a company listed on the National Equities Exchange and Quotations.

II – 1

DETAILS OF THE DIRECTOR PROPOSED TO BE RE-ELECTED

APPENDIX II

Save as disclosed above, Mr. Ho had not held any directorships in other public companies the securities of which are listed on any securities market in Hong Kong or overseas in the past three years preceding the Latest Practicable Date. Apart from the relationship arising from his directorship in the Company, Mr. Ho does not have any relationship with any other directors, senior management or substantial or controlling shareholders (as defined in the Listing Rules) of the Company or other major appointments and professional qualifications.

Mr. Ho has entered into a letter of appointment with the Company for a term of three years, he is subject to retirement by rotation in accordance with the Articles and the Listing Rules. The letter of appointment can be terminated by either party by giving the other party one months’ written notice in advance or otherwise in accordance with the terms of the letter of appointment.

Subject to his re-election, Mr. Ho is entitled to an annual salary of HK$120,000, which is determined with reference to his duties and responsibilities within the Company, the Company’s remuneration policy and the prevailing market conditions.

As at the Latest Practicable Date, Mr. Ho (i) did not have any interest in or is deemed to be interested in any shares or underlying shares of the Company or its associated corporations within the meaning of Part XV of the SFO; and (ii) did not hold any other positions in the Company or any of its subsidiaries.

Save as disclosed above, there are no other matters concerning the re-election of Mr. Ho that need to be brought to the attention of the Shareholders nor any information required to be disclosed pursuant to the requirements under Rule 13.51(2)(h) to (v) of the Listing Rules.

MR. WANG JIA JUN

Mr. Wang, aged 29, was appointed as an executive Director on 31 August 2018.

Mr. Wang, obtained a bachelor’s degree in Business Management from Stony Brook University in the United States of America in 2011. He also obtained a master’s degree in Health Administration from Columbia University in the United States of America in 2017. He has four years of experience in the areas of business analysis and development across major cities in the People’s Republic of China and was the Vice President (Projects Management) of the Company since 1 August 2018 and was responsible for developing and implementing business strategies in the PRC.

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DETAILS OF THE DIRECTOR PROPOSED TO BE RE-ELECTED

APPENDIX II

Mr. Wang has entered into a service contract with the Company dated 31 August 2018 for an initial term of three years renewable automatically for successive terms of one year each commencing from the day next after the expiry of the then current term of his appointment and shall be determinable by either party giving to the other not less than three months’ notice in writing.

Subject to his re-election, Mr. Wang is entitled to a monthly salary of HK$35,000 and a discretionary bonus in respect of each financial year of the Company and shall be determined by the Board in its absolute discretion. Mr. Wang’s emoluments was recommended by the remuneration committee of the Board and was determined by the Board with reference to his skill, knowledge and experience and his duties and responsibilities with the Company.

As at the Latest Practicable Date, Mr. Wang is deemed to be interested under Part XV of the SFO in 11,201,475 shares of the Company held by Power King Investment Development Limited a controlled wholly owned by Ms. Yung Ka Lai, the spouse of Mr. Wang, representing approximately 1.73% of the issued share capital of the Company.

Save as disclosed above and as at the Latest Practicable Date, Mr. Wang (i) did not hold any position with the Company or other members of the Group; (ii) did not have any relationship with the Directors, senior management, substantial or controlling Shareholders (as defined in the Listing Rules); (iii) had not held any directorship in public companies in the last three years the securities of which are listed on any securities market in Hong Kong or overseas; and (iv) did not have any interests or deemed interests in the securities of the Company which are required to be disclosed pursuant to Part XV of the SFO.

Save as disclosed above, there is no other information which is required to be disclosed pursuant to the requirements of Rule 13.51(2)(h) to (v) of the Listing Rules and there are no other matters relating to the re-election of Mr. Wang which the Board considers necessary to be brought to the attention of the Shareholders.

II – 3

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors and chief executives of the Company

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company and their associates in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to Division 7 and 8 of Part XV of the SFO (including interests which they were taken or deemed to have under such provisions of the SFO), or were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Companies of the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

Long position in shares and underlying shares of the Company

			Approximate
			Percentage of
		Number of	total
Name of Director	Nature of interests	Shares	shareholding
Mr. Wang Jia Jun	Interest of spouse	11,201,475	1.73%
	(Note)

Note:

Ms. Yung Ka Lai, the spouse of Mr. Wang Jia Jun, holds 11,201,475 shares of the Company through Power King Investment Development Limited. Power King Investment Development Limited is wholly-owned by Ms. Yung Ka Lai. Mr. Wang Jia Jun is deemed to be interested in 11,201,475 shares of the Company held by Power King Investment Development Limited under the SFO.

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GENERAL INFORMATION

APPENDIX III

(b) Interests of substantial Shareholders

As far as was known to any Director or chief executive of the Company, as at the Latest Practicable Date, the persons or companies (not being a Director or chief executive of the Company) who had interests or short positions in the Shares or underlying Shares which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO or who were directly or indirectly deemed to be interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any member of the Group, or any other substantial shareholders whose interests or short positions were recorded in the register required to be kept by the Company under Section 336 of the SFO were as follows:

Long position in shares and underlying shares of the Company

			Approximate
			Percentage of
		Number of	total
Name of Shareholder	Capacity	Shares	shareholding
New Hope International	Beneficial owner	54,914,804	8.47%
(Hong Kong) Limited (Note)
Southern Hope Enterprise	Corporate interest	54,914,804	8.47%
Company Limited# (Note)
New Hope Group	Corporate interest	54,914,804	8.47%
Company Limited# (Note)
Tibet Hengye Feng Industrial	Corporate interest	54,914,804	8.47%
Company Limited# (Note)
Mr. Liu Yonghao (Note)	Corporate interest	54,914,804	8.47%
Ms. Liu Chang (Note)	Corporate interest	54,914,804	8.47%
Ms. Li Wei (Note)	Interest of spouse	54,914,804	8.47%

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GENERAL INFORMATION

APPENDIX III

Note:

New Hope International (Hong Kong) Limited is interested in 54,914,804 shares. The issued share capital of New Hope International (Hong Kong) Limited is owned as to 75% by Southern Hope Enterprise Company Limited# which is in turn owned as to 51% by New Hope Group Company Limited# and 49% by Tibet Hengye Feng Industrial Company Limited#. Both New Hope Group Company Limited# and Tibet Hengye Feng Industrial Company Limited# are owned as to 62.34% by Mr. Liu Yonghao, as to 36.35% by Ms. Liu Chang and as to 1.31% by Ms. Li Wei. Mr. Liu Yonghao, Ms. Liu Chang and Ms. Li Wei are deemed to be interested in the shares in which New Hope International (Hong Kong) Limited is interested in.

Save as disclosed above, as at the Latest Practicable Date, the Directors and the chief executive of the Company were not aware of any other person(s) (other than the Directors and the chief executive of the Company) who had, or was deemed to have, interests or short positions in the shares, debentures or underlying shares of the Company which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO and section 336 of the SFO, or who was directly or indirectly interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other members of the Company or had any options in respect of such Shares.

3. LITIGATION

As at the Latest Practicable Date, as far as the Directors are aware, neither the Company nor any member of the Group was engaged in any litigation or arbitration or claim of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against the Company or any member of the Group.

4. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with the Company or any member of the Group which would not expire or was not determinable within one year without payment of compensation, other than statutory compensation.

5. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or any of their respective associates had any interest in business which competes with or may compete, either directly or indirectly, with the business of the Group or had any other conflict of interests which any person has or may have with the Group.

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GENERAL INFORMATION

APPENDIX III

6. DIRECTORS’ INTEREST IN ASSETS, CONTRACTS AND ARRANGEMENT OF THE GROUP

As at the Latest Practicable Date, none of the Directors were materially interested in any contract or arrangement entered into by any member of the Group which was subsisting as at the Latest Practicable Date and which was significant in relation to the business of the Group. As at the Latest Practicable Date, save as disclosed in this circular, none of the Directors had any interest, directly or indirectly, in any assets which have been, since 31 March 2018 (being the date to which the latest published audited consolidated accounts of the Company were made up), acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

7. MATERIAL CONTRACTS

The following contracts (not being contracts in the ordinary course of business) of the Group have been entered into by the members of the Group during the period commencing two years preceding the date of this circular and are or may be material:

• (i) the agreement dated 24 January 2017 entered into among Fujian Rui Mai Trading Co., Limited#（福建銳邁貿易有限公司）as the purchaser, Mr. Zheng Zhen Xian（鄭振仙） and Mr. Gao Pan（高盤）as the vendors and Fujian Rongwei Real Estate Development Co. Limited#（福建榮威房地產開發有限公司）as the guarantor relating to acquisition of the entire equity interest in Mingxi County Trading Company Limited#（明溪縣佳 維 貿 易 有 限 公 司 ）at a consideration of RMB125,000,000 (approximately HK$140,954,000);

• (ii) the sale and purchase agreement dated 21 February 2017 entered into between Fujian Province Fuzhou City Huihao Pharmaceutical Co. Limited#（福建省福州市惠好藥業有 限公司）(a wholly-owned subsidiary of the Company) and Fujian Lungchang Medical Services Company Limited#（福建隆昌醫藥服務有限公司）in relation to the disposal of 60% of the issued share capital of the Hui Hao Yi Yao (Nanping) Company Limited# #（ 惠好醫藥（ 南平）有限公司）at a consideration of RMB8,378,000 (equivalent to approximately HK$9,471,000);

• (iii) the deed of amendment dated 1 June 2017 entered into between the Company and the holders of convertible notes in the principal amount of up to HK$84,292,000 issued by the Company (the ‘‘Convertible Notes’’) in relation to the proposed alteration of certain terms of the Convertible Notes, including the maturity date, the early redemption date, the date for the payment of the outstanding interest, and the interest rate;

III – 4

GENERAL INFORMATION

APPENDIX III

• (iv) the placing agreement dated 17 July 2017 entered into between the Company and AMC Wanhai Securities Limited in relation to the placing, on a best effort basis, of up to 129,681,000 placing shares, which was lapsed on 7 August 2018.;

• (v) the loan agreement dated 28 November 2017 entered into between Grand Harbour Finance Limited as lender and the Company as borrower in relation to a loan of HK$100,000,000 with the rate of interest payable on the loan for (a) the first month after drawing shall be 3.9% per month; (b) the second month after drawing shall be 1.8% per month; (c) the third month after drawing and until the repayment date shall be 1.25% per month; and (d) subject to renewal of the loan, the rate of interest payable on the loan for the fourth month to the sixth month after drawing and until the repayment date as renewed, shall be 1.25% per month, which is supplemented by two loan extension agreements dated 28 February 2018 and 27 June 2018 respectively;

• (vi) the Disposal Agreement; and

• (vii) the Deed of Set Off.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours (i.e. from 9:30 a.m. to 6:00 p.m. from Monday to Friday) at the principal place of business of the Company in Hong Kong at Room 1902, 19th Floor, 101 King’s Road, Hong Kong from the date of this circular up to and including the date of the EGM:

• (a) the memorandum of association and articles of association of the Company;

• (b) the annual reports of the Company for the two years ended 31 March 2017 and 31 March 2018;

• (c) the material contracts disclosed in the paragraph under the heading ‘‘Material Contracts’’ in this appendix to this circular; and

• (d) this circular.

9. MISCELLANEOUS

• (a) The registered office of the Company is situated at P.O. Box 10008, Williow House, Cricket Square, Grand Cayman, KY1-1001, Cayman Islands.

• (b) The head office and principal place of business of the Company in Hong Kong is located at Room 1902, 19th Floor, 101 King’s Road, Hong Kong.

• (c) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

III – 5

GENERAL INFORMATION

APPENDIX III

• (d) The company secretary and compliance officer of the Company is Mr. Tsang Wai Wa, who is a fellow member of the Chartered Association of Certified Accountants and an associate member of the Hong Kong Institute of Certified Public Accountants.

• (e) The English text of this circular shall prevail over the Chinese text.

III – 6

NOTICE OF EXTRAORDINARY GENERAL MEETING

WANJIA GROUP HOLDINGS LIMITED 萬嘉集團控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 401)

NOTICE IS HEREBY GIVEN THAT an extraordinary general meeting (the ‘‘EGM’’) of Wanjia Group Holdings Limited (the ‘‘Company’’) will be held on 19 October 2018 (Friday) at 3:00 p.m. at Room 1902, 19th Floor, 101 King’s Road, Hong Kong for the purpose of considering and, if thought fit, passing with or without amendments, the following resolutions of the Company:

ORDINARY RESOLUTIONS

1. ‘‘THAT

2. (A) the agreement dated 23 August 2018 (the ‘‘Agreement’’) (a copy of which has been tabled at the meeting marked ‘‘A’’ and signed by the chairman of the EGM for the purpose of identification) entered into between Hui Hao (HK) Group Limited, a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company (the ‘‘Vendor’’) and Jing Hoi Ou Investment Limited, a company incorporated in Hong Kong with limited liability (the ‘‘Purchaser’’), pursuant to which the Vendor conditionally agreed to sell, and the Purchaser conditionally agreed to purchase approximately 99.80% of the registered capital in 福建惠好四海醫藥連鎖有限責任公司 (for transliteration purpose only, Fujian Huihao Sihai Pharmaceutical Chain Company Limited) (the ‘‘Disposal Company’’), for a consideration of HK$49,000,000 (the ‘‘Disposal’’) and all the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and

EGM – 1

NOTICE OF EXTRAORDINARY GENERAL MEETING

• (B) any of the director of the Company (the ‘‘Director’’) be and is hereby authorised to do all such further acts and things, negotiate, approve, agree, sign, initial, ratify and/or execute such further documents, instruments and agreements (whether under common seal or not) and to take all steps and to do all such acts or things deemed by him/her to be incidental to, ancillary to or in connection with the matters contemplated in the Agreement and the transactions contemplated thereunder as he/she may in his/her absolute discretion consider necessary, desirable or expedient to give effect to the Agreement and the implementation of all transactions contemplated thereunder and to agree with such variation, amendment or waiver as, in the opinion of the Directors, in the interest of the Company and its shareholders as a whole.’’

• THAT Mr. Ho Man be re-elected as an independent non-executive Director.

• THAT Mr. Wang Jia Jun be re-elected as an executive Director.

By order of the Board Wanjia Group Holdings Limited Wang Jia Jun Executive Director

Hong Kong, 24 September 2018 Registered office: Head office and principal place of P.O. Box 10008, business in Hong Kong: Willow House, Room 1902, 19th Floor, Cricket Square 101 King’s Road Grand Cayman KY1-1001 Hong Kong Cayman Islands

Notes:

1. A member entitled to attend and vote at the EGM is entitled to appoint one or more proxies to attend and, subject to provisions of the articles of association of the Company, to vote on his/her/its behalf. A proxy needs not be a member of the Company but must be present in person at the EGM to represent the member. If more than one proxy is so appointed, the appointment shall specify the number and class of Shares in respect of which each such proxy is so appointed.

2. A form of proxy for use at the EGM is enclosed with the circular of the Company dated 24 September 2018. Whether or not you intend to attend the EGM in person, you are encourage to complete and return the enclosed form of proxy in accordance with the instructions printed thereon. Completion and return of a form of proxy will not preclude a member from attending in person and voting at the EGM or any adjournment thereof, should he/she/ it so wish.

EGM – 2

NOTICE OF EXTRAORDINARY GENERAL MEETING

1. In order to be valid, the form of proxy, together with a power of attorney or other authority, if any, under which it is signed, or a certified copy of such power of authority must be deposited at the Company’s principal place of business in Hong Kong at Room 1902, 19th Floor, 101 King’s Road, Hong Kong not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof.

2. In the cast of joint holders of Shares, any one of such holders may vote at the EGM, either personally or by proxy, in respect of such Shares as if he/she/it was solely entitled thereto, but if more than one such joint holders are present at the EGM personally or by proxy, that one of the said persons so present whose name stands first on the register of members of the Company in respect of such Shares shall alone be entitled to vote in respect thereof.

3. The register of members of the Company will be closed from 15 October 2018 (Monday) to 19 October 2018 (Friday) (both dates inclusive) during which period no transfer of Shares will be registered. In order to qualify for attending and voting at the EGM, all relevant transfer documents accompanied by the relevant Share certificates must be lodged with the Company’s share registrar, Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong no later than 4:30 p.m. on 12 October 2018 (Friday) for registration.

4. As at the date of this notice, the board of directors of the Company comprises Mr. Chen Jinshan and Mr. Wang Jia Jun as executive Directors; Mr. Wong Hon Kit, Dr. Liu Yongping and Mr. Ho Man as independent non-executive Directors.

EGM – 3