Win Hanverky Holdings Limited — Proxy Solicitation & Information Statement 2010

Jun 9, 2010

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 Win Hanverky Holdings Limited, you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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.

WIN HANVERKY HOLDINGS LIMITED 永嘉集團控股有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 3322)

REVISED CAPS FOR CONTINUING CONNECTED TRANSACTION

Independent financial adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Board is set out on pages 4 to 8 of this circular.

A letter from the Independent Board Committee, containing its recommendation to the Independent Shareholders, is set out on pages 9 to 10 of this circular.

A letter from the Independent Financial Adviser, containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 11 to 16 of this circular.

10 June 2010

CONTENTS

	Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1-3
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4-8
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	9-10
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11-16
Appendix - General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17-21

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DEFINITIONS

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

“2008 Announcement” the announcement of the Company dated 19 November 2008 in relation to, among others, the Umbro Product Sales Transaction

• “2010 Announcement”

• the announcement of the Company dated 26 May 2010 in relation to the Umbro Product Sales Transaction

“Annual Cap(s)” the maximum aggregate annual values with respect to the Umbro Product Sales Transaction for each of the three years ending 31 December 2011 as disclosed in the 2008 Announcement

• “associates” has the meaning as ascribed to it under the Listing Rules

• “Board” the board of Directors

• “Company” Win Hanverky Holdings Limited

• “Connected Person(s)” has the meaning as ascribed to it under the Listing Rules

• “Directors” directors of the Company

• “Group” the Company and its subsidiaries

• “Hong Kong” the Hong Kong Special Administrative Region of the PRC

• “HK$” Hong Kong dollars, the lawful currency of Hong Kong

“Independent Board Committee” an independent committee of the Board, comprising all the independent non-executive Directors, who have no material interests in the Umbro Product Sales Transaction, namely Dr. Chan Kwong Fai, Mr. Kwan Kai Cheong, Mr. Ma Ka Chun and Mr. Wun Kwang Vincent, established to advise the Independent Shareholders in relation to the Umbro Product Sales Transaction (including the Revised Annual Caps)

“Independent Financial Adviser”

Ample Capital Limited, the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the Umbro Product Sales Transaction (including the Revised Annual Caps)

“Independent Shareholders”

has the meaning as ascribed to it under the Listing Rules

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DEFINITIONS

• “Independent Third Parties”

third parties which, together with their respective beneficial owner(s) (if any) and to the best of the Director’s knowledge, information and belief after having made reasonable enquiries, are independent of the Company and their respective Connected Persons

• “Latest Practicable Date” 7 June 2010, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rule(s)” the Rules Governing the Listing of Securities on the Stock Exchange as effective on the date of this circular

• “Master Agreement” the master agreement between WH Sportswear and Umbro International executed on 19 November 2008 in relation to the Umbro Product Sales Transaction

• “Percentage Ratios” shall have the meaning as ascribed to it under Chapter 14 of the Listing Rules

• “PRC” the People’s Republic of China

• “Pre-IPO Share Option(s)”

• the options granted by the Company to certain employees and a consultant of the Group prior to the listing of the Shares on the main board of the Stock Exchange on 6 September 2006

• “Previous Rules” the Rules Governing the Listing of Securities on the Stock Exchange prior to the changes to such rules announced by the Stock Exchange on 20 May 2010 becoming effective on 3 June 2010

• “Quinta” Quinta Asia Limited, a company incorporated in the British Virgin Islands and is beneficially owned as to 70% by Mr. Li Kwok Tung Roy and 30% by Mr. Lai Ching Ping

“Revised Annual Caps” the new Annual Caps revised by the Company as described in the 2010 Announcement

• “SFO”

• the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong)

• “Shares” shares of HK$0.10 each in the capital of the Company

• “Shareholders” holders of the Shares

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

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DEFINITIONS

“T&S HK” Team & Sports Limited, a limited company incorporated under the laws of Hong Kong, being an indirect 60%-owned subsidiary of the Company “Umbro Group” Umbro International and its affiliates “Umbro International” Umbro International Limited, a limited company incorporated under the laws of the United Kingdom, being a substantial shareholder of T&S HK and a Connected Person of the Company “Umbro Product Sales transactions between WH Sportswear and Umbro Transaction” International for the supply of Umbro Products to the Umbro Group as described in the paragraph headed “Umbro Product Sales Transaction” of this circular “Umbro Products” products bearing the UMBRO brand for the Umbro Group’s distribution in the European Union “WH Sportswear” Win Hanverky Sportswear Company Limited, a limited liability company incorporated under the laws of the British Virgin Islands, being a direct wholly-owned subsidiary of the Company

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LETTER FROM THE BOARD

WIN HANVERKY HOLDINGS LIMITED 永嘉集團控股有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 3322)

Executive Directors: Li Kwok Tung Roy Lai Ching Ping Lee Kwok Leung Cheung Chi

Independent Non-executive Directors:

Registered Office: Codan Trust Company (Cayman) Limited Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Chan Kwong Fai Kwan Kai Cheong Principal Place of Business in Hong Kong: Ma Ka Chun 6th Floor, Phase 6 Wun Kwang Vincent Hong Kong Spinners Industrial Building 481-483 Castle Peak Road Kowloon Hong Kong 10 June 2010

To the Shareholders

Dear Sir or Madam,

REVISED CAPS FOR CONTINUING CONNECTED TRANSACTION

INTRODUCTION

Reference is made to the 2008 Announcement, the circular of the Company dated 1 December 2008 and the 2010 Announcement as regards the Umbro Product Sales Transaction. Pursuant to the Master Agreement, WH Sportswear agreed to supply and/or procure its affiliates to supply Umbro Products to the Umbro Group.

The purpose of this circular is to provide you with (i) the particulars of the Umbro Product Sales Transaction (including the Revised Annual Caps); (ii) the letter of recommendation from the Independent Board Committee to the Independent Shareholders; (iii) the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders; and (iv) other information required by the Listing Rules.

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LETTER FROM THE BOARD

UMBRO PRODUCT SALES TRANSACTION

Details of the Master Agreement are as follows:

Date : 19 November 2008 Parties : WH Sportswear, a direct wholly-owned subsidiary of the Company, and Umbro International Description : Supply of Umbro Products by WH Sportswear and/or its affiliates to the Umbro Group Term : From 1 January 2009 to 31 December 2011

Pricing basis and settlement

The price chargeable to the Umbro Group will be based principally on terms negotiated on an arm’s length basis as agreed between the Group and the Umbro Group on an order-by-order basis. The Umbro Group compares factors including pricing, quality of products and timeliness of products and timeliness of delivery with various suppliers of Umbro Products, before orders are placed with the Group. Final decision on the choice of supplier lies solely with the Umbro Group.

Settlement may be effected by cash or as may be agreed between parties from time to time.

The terms of the Master Agreement remain unchanged.

Historical figures

For the years ended 31 December 2008 and 2009 and the three months ended 31 March 2010, the aggregate amount received/receivable by the Group amounted to approximately HK$41,213,000, HK$70,559,000 and HK$49,150,000, respectively.

REVISED ANNUAL CAPS

The resolutions relating to the approval of, among others, the Umbro Product Sales Transaction and the Annual Cap HK$89,000,000 and HK$107,000,000 for each of the two years ending 31 December 2011 were duly passed by way of poll at the extraordinary general meeting of the Company held on 18 December 2008.

The demand for Umbro Products from the Umbro Group has increased and is expected to increase, significantly, due to the restructuring of the Umbro Group’s supply chain with effect from December 2009. Prior to the restructuring, the Umbro Group and its licencees would make purchases of Umbro Products directly from various suppliers including the Group. With effect from December 2009, to the best of the knowledge of the Directors, the Umbro Group has undergone restructuring as to its supply chain whereby (1) the Umbro Group will centralise most of the purchases of its

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LETTER FROM THE BOARD

licencees and will make purchases of Umbro Products (on behalf of itself and its licencees) from the authorised suppliers including the Group; and (2) the Umbro Group will onward sell the Umbro Products to its licencees. As a result of the aforementioned restructuring, the sales of Umbro Products to the Umbro Group have increased, and are expected to increase, significantly.

While the Annual Cap for 2010 has not been exceeded as of the Latest Practicable Date, it is expected the amount to be received by the Group in relation to sales of Umbro Products to the Umbro Group for the years ending 31 December 2010 and 2011, respectively, will exceed the Annual Caps. The Company therefore proposed to increase the Annual Caps to the Revised Annual Caps of HK$180,000,000 for each of the two years ending 31 December 2011.

The Revised Annual Caps are calculated and determined after taking into account the amount of actual sales of Umbro Products to the Umbro Group for the three months ended 31 March 2010, and the expected increase in demand of Umbro Products from the Umbro Group as a result of the restructuring of the Umbro Group’s supply chain mentioned above.

REASONS FOR THE UMBRO PRODUCT SALES TRANSACTION

The Group has been an authorised supplier of the Umbro Group for Umbro Products for the Umbro Group’s distribution in the European Union since August 2004. The Directors believe that such transactions are beneficial to the Group as a whole as they will provide the Group with an additional source of revenue.

The Directors, excluding the independent non-executive Directors (whose opinion on the Umbro Product Sales Transaction (including the Revised Annual Caps) after taking into account the advice from the Independent Financial Adviser is included in the letter of recommendation from the Independent Board Committee set out in pages 9 to 10 of this circular), are of the view that the Umbro Product Sales Transaction (including the Revised Annual Caps) are (i) on an arm’s length basis and on normal commercial terms which are not less favourable to the Group than the terms available from the Independent Third Parties and (ii) fair and reasonable and in the interests of the Group and the Shareholders as a whole.

No Director has a material interest in the Umbro Product Sales Transaction and accordingly, no Director needs to abstain from voting on the board resolutions for approving the Revised Annual Caps.

LISTING RULES IMPLICATION

Umbro International is a substantial shareholder of a subsidiary of the Company and hence a Connected Person of the Company. The Umbro Product Sales Transaction therefore constitutes a continuing connected transaction of the Company under Chapter 14A of the Listing Rules.

As each of the Revised Annual Caps is more than HK$10 million and over 5% (2.5% under the Previous Rules) under the applicable Percentage Ratios on an annual basis, the Umbro Product Sales Transaction (including the Revised Annual Caps) is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of both the Previous Rules and the Listing Rules.

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LETTER FROM THE BOARD

INDEPENDENT SHAREHOLDERS’ APPROVAL

The Company has submitted an application to the Stock Exchange for, and the Stock Exchange has granted, a waiver from the requirement to hold a general meeting pursuant to Rule 14A.43 of the Listing Rules to approve the Revised Annual Caps on the basis that (i) to the best of the Director’s knowledge, information and belief having made all reasonable enquiries, none of the Shareholders or their associates has any interest in the Umbro Product Sales Transaction, and accordingly, no Shareholders needs to abstain from voting as regards the Revised Annual Caps; and (ii) Quinta, being a major shareholder having a direct interest in approximately 58.64% of the issued share capital of the Company, has approved the Revised Annual Caps.

INFORMATION OF THE GROUP

The Group is an integrated sportswear manufacturer, distributor and retailer for international sports brands in Europe, North America, Hong Kong and the PRC.

INFORMATION OF UMBRO INTERNATIONAL

To the best knowledge of the Directors, the principal activities of Umbro International are the designing, manufacturing and sale of football apparel, footwear and equipment.

GENERAL

To the best of the Directors’ knowledge, information and belief, having made reasonable enquiries, save as disclosed above, there is no other transaction entered into between any member of the Group and the Connected Person disclosed above and its ultimate beneficial owners within 12 months period from the date of the 2010 Announcement or otherwise related, which would be, together with the Umbro Product Sales Transaction disclosed in the 2010 Announcement, regarded as a series of transactions and treated as if they are one transaction under Rules 14A.25 of the Listing Rules.

Details of the Umbro Product Sales Transaction will be included in each published annual report of the Company as required by the Listing Rules. The Company will comply with the requirements as regards to annual review of the Umbro Product Sales Transaction under the Listing Rules.

ADDITIONAL INFORMATION

Your attention is drawn to (i) the letter from the Independent Board Committee set out in this circular which contains the recommendations of the Independent Board Committee to the Independent Shareholders on the terms of the Umbro Product Sales Transaction (including the Revised Annual Caps); and (ii) the letter from the Independent Financial Adviser set out in this circular which contains its recommendations to the Independent Board Committee and the Independent Shareholders in relation to the terms of the Umbro Product Sales Transaction (including the Revised Annual Caps).

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LETTER FROM THE BOARD

Your attention is also drawn to the general information as set out in the appendix of this circular.

Yours faithfully, By order of the Board Win Hanverky Holdings Limited Li Kwok Tung Roy Chairman

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

WIN HANVERKY HOLDINGS LIMITED 永嘉集團控股有限公司

(incorporated in the Cayman Islands with limited liability)

(Stock code: 3322)

10 June 2010

To the Independent Shareholders

Dear Sir or Madam,

REVISED CAPS FOR CONTINUING CONNECTED TRANSACTION

We have been appointed as members of the Independent Board Committee to advise you in connection with the Umbro Product Sales Transaction (including the Revised Annual Caps), details of which are set out in the “Letter from the Board” in the circular issued by the Company to its Shareholders dated 10 June 2010 (the “ Circular ”) of which this letter forms part. Terms defined in the Circular have the same meanings when used in this letter unless the context otherwise requires.

Your attention is drawn to the “Letter from the Board”, the advice of the Independent Financial Adviser in its capacity as the independent financial adviser to the Independent Shareholders and the Independent Board Committee in respect of the Umbro Product Sales Transaction (including the Revised Annual Caps) as set out in the “Letter from the Independent Financial Adviser” as well as other additional information set out in other parts of the Circular.

We acknowledge that the Company has applied to the Stock Exchange for, and the Stock Exchange has granted, a waiver from the requirement to hold a general meeting pursuant to Rule 14A.43 of the Listing Rules to approve the Revised Annual Caps on the basis that (i) to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, none of the Shareholders or their associates has any interest in the Umbro Product Sales Transaction, and accordingly, no Shareholder needs to abstain from voting as regards the Revised Annual Caps; and (ii) Quinta, being a major shareholder having a direct interest in approximately 58.64% of the issued share capital of the Company, has approved the Revised Annual Caps.

Having taken into account the advice of, and the principal factors and reasons considered by the Independent Financial Adviser in relation thereto as stated in its letter, we consider the Umbro Product Sales Transaction (including the Revised Annual Caps) to be fair and reasonable and in the interests

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

of the Group and the Shareholders as a whole, and accordingly we recommend you to approve the Umbro Product Sales Transaction (including the Revised Annual Caps) and would recommend you to vote in favour of the resolutions to approve the same if a physical shareholders’ meeting were to be held.

Yours faithfully, Independent Board Committee of Win Hanverky Holdings Limited

Chan Kwong Fai Kwan Kai Cheong Independent non-executive Director Independent non-executive Director Ma Ka Chun Wun Kwang Vincent Independent non-executive Director Independent non-executive Director

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter of advice from the Independent Financial Adviser in respect of the Umbro Product Sales Transaction (including the Revised Annual Caps) and is prepared for the purpose of incorporation into this circular.

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Ample Capital Limited Unit A, 14th Floor Two Chinachem Plaza 135 Des Voeux Road Central Hong Kong

10 June 2010

To the Independent Board Committee and the Independent Shareholders of Win Hanverky Holdings Limited

Dear Sirs,

REVISED CAPS FOR CONTINUING CONNECTED TRANSACTION

INTRODUCTION

We refer to our engagement by the Company to advise the Independent Board Committee and the Independent Shareholders in respect of the Revised Annual Caps, the particulars of which have been set out in a circular to the Shareholders dated 10 June 2010 (the “ Circular ”) and in which this letter is reproduced. Unless the context requires otherwise, terms used in this letter shall have the same meanings as given to them in the Circular.

Ample Capital Limited has been appointed as the independent financial adviser to the Independent Board Committee and the Independent Shareholders to (i) give our recommendation as to whether the Revised Annual Caps are fair and reasonable so far as the Independent Shareholders are concerned and on normal commercial terms; (ii) give our recommendations as to whether the Umbro Product Sales Transaction (including the Revised Annual Caps) are in the interest of the Company and the Shareholders as a whole and in the ordinary and usual course of business of the Group; and (iii) advise the Independent Shareholders on how to vote if a physical shareholder’s meeting were to be held. Details of the reasons for the Umbro Product Sales Transaction and the Revised Annual Caps are set out in the section headed “Letter from the Board” in the Circular (the “ Letter from the Board ”).

As stated in the Letter from the Board, Umbro International and WH Sportswear have entered into the Master Agreement on 19 November 2008. On 1 December 2008, the Company has issued a circular in connection with, among other things, the Master Agreement. The Master Agreement governs the terms of the supply of Umbro Products by WH Sportswear and/or its affiliates to the Umbro Group.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Due to the restructuring of the Umbro Group’ supply chain with effect from December 2009, the sales of Umbro Products to the Umbro Group have increased, and are expected to increase significantly. The Directors expect that the Annual Cap of HK$89,000,000 and HK$107,000,000 for each of the two years ending 31 December 2011 as described in the 2008 Announcement will not be sufficient to meet the demand of the Umbro Products from the Umbro Group. The Directors therefore propose to increase the Annual Caps to the Revised Annual Caps of HK$180,000,000 for each of the two years ending 31 December 2011.

The Company is incorporated in the Cayman Islands with limited liability whose shares are listed on the Main Board of the Stock Exchange. The Group is an integrated sportswear manufacturer, distributor and retailer for international sports brands in Europe, North America, Hong Kong and the PRC.

Umbro International is a substantial shareholder of a subsidiary of the Company and hence a Connected Person of the Company. The Umbro Product Sales Transaction therefore constitutes a continuing connected transaction of the Company under Chapter 14A of the Listing Rules.

As each of the Revised Annual Caps is more than HK$10 million and over 5% (2.5% under the Previous Rules) applicable percentage ratios on an annual basis, the Umbro Product Sales Transaction (including the Revised Annual Caps) is subject to the reporting, announcement and Independent Shareholders’ approval requirements under Chapter 14A of both the Previous Rules and the Listing Rules.

The Company has submitted an application to the Stock Exchange for, and the Stock Exchange has granted, a waiver from the requirement to hold a general meeting pursuant to Rule 14A.43 of the Listing Rules to approve the Revised Annual Caps on the basis that (i) to the best of the Director’s knowledge, information and belief having made all reasonable enquiries, none of the Shareholders or their respective associates has any interest in the Umbro Product Sales Transaction, and accordingly, no Shareholders needs to abstain from voting as regards the Revised Annual Caps; and (ii) Quinta, being a major shareholder having a direct interest in approximately 58.64% of the issued share capital of the Company, has approved the Revised Annual Caps.

BASIS OF ADVICE

In formulating our opinions and recommendations, we have relied on the information supplied to us by the Company, the opinions expressed by, and the representations of, the Directors and the management of the Company, including those set out in the Circular. We have no reason to doubt the truth, accuracy and completeness of the information and presentation provided to us by the Directors.

We consider that we have been provided with sufficient information on which to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any fact or circumstance which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all the necessary steps to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion. The Directors have confirmed that, to the best of their knowledge, they believe that no material fact or information has been omitted from the information supplied and that the representations made or opinions expressed have been arrived at after due and careful consideration and there are no other facts or representations the omission of which would make any statement in the Circular, including this letter, misleading.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

While we have taken reasonable steps to satisfy the requirements under the Listing Rules, we have not carried out any independent verification of the information, opinions or representations given or made by or on behalf of the Company, nor have we conducted an independent investigation into the business affairs or assets and liabilities of the Group or any of the other parties involved in the Umbro Product Sales Transaction.

In the event of inconsistency, the English text of this letter shall prevail over the Chinese translation of this letter.

PRINCIPAL FACTORS CONSIDERED

In arriving at our opinion in relation to the Continuing Connected Transactions, we have taken into consideration the following factors:

1. Information on the Group

As mentioned earlier, the Group is an integrated sportswear manufacturer, distributor and retailer for international sports brands in Europe, North America, Hong Kong and the PRC. Set out below is selected audited key financial information as extracted from the Group’s annual report for the year ended 31 December 2009 (the “ Annual Report ”):

Revenue Net profit attributable to Shareholders Total assets (as at period end) Total liabilities (as at period end) Net assets attributable to Shareholders (as at period end)	Year ended 31 December 2009 2008 HK$’000 (audited) HK$’000 (audited) 2,888,002 3,487,342 121,539 33,325 2,661,412 2,777,168 573,769 747,974 1,856,472 1,784,992

We note that the Company recorded a consolidated revenue of approximately HK$2,888,002,000 for the year ended 31 December 2009, representing an approximately 17.19% decrease when compared with the consolidated revenue of approximately HK$3,487,342,000 recorded during the year ended 31 December 2008. Despite the decrease in revenue, the Group generated net profit attributable to Shareholders of approximately HK$121,539,000 during the year ended 31 December 2009, representing an increase of approximately 264.71% when compared with the net profit attributable to Shareholders of approximately HK$33,325,000 recorded during the year ended 31 December 2008. In the Annual Report, the Directors commented that “Operating profit for last year (2008) included significant amount of provision for impairment losses on certain assets resulting from the global financial turmoil in 2008 and such provision has been greatly reduced upon the recovery of global economy in current year (2009).” As at 31 December 2009, the Company had consolidated total assets, total liabilities and net assets attributable to Shareholders of approximately HK$2,661,412,000, HK$573,769,000 and HK$1,856,472,000 respectively.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

2. Reasons for the Umbro Product Sales Transaction

As stated in the Letter from the Board, the Group has been an authorised supplier of the Umbro Group for Umbro Products for the Umbro Group’s distribution in the European Union since August 2004. The Directors believe that such transactions are beneficial to the Group as a whole as they will provide the Group with an additional source of revenue.

The Directors, excluding the independent non-executive Directors (whose opinion on the Umbro Product Sales Transaction (including the Revised Annual Caps) is included in the letter of recommendation from the Independent Board Committee set out in the Circular), are of the view that the Umbro Product Sales Transaction (including the Revised Annual Caps are (i) on an arm’s length basis and on normal commercial terms which were not less favourable to the Group than the terms available from the Independent Third Parties and (ii) fair and reasonable and in the interests of the Group and the Shareholders as a whole.

3. Reasons for the Revised Annual Caps

The resolutions relating to the approval of, among others, the Umbro Product Sales Transaction and the Annual Cap of HK$89,000,000 and HK$107,000,000 for each of the two years ending 31 December 2011 were duly passed by way of poll at the extraordinary general meeting of the Company held on 18 December 2008.

The demand for Umbro Products from the Umbro Group has increased and is expected to increase, significantly, due to the restructuring of the Umbro Group’s supply chain with effect from December 2009. Prior to the restructuring, the Umbro Group and its licencees would make purchases of Umbro Products directly from various suppliers including the Group. With effect from December 2009, to the best of the knowledge of the Directors, the Umbro Group has undergone restructuring as to its supply chain whereby (1) the Umbro Group will centralise most of the purchases of its licencees and will make purchases of Umbro Products (on behalf of itself and its licencees) from the authorised suppliers including the Group; and (2) the Umbro Group will onward sell the Umbro Products to its licencees. As a result of the aforementioned restructuring, the sales of Umbro Products to the Umbro Group have increased, and are expected to increase significantly.

While the Annual Cap for 2010 has not been exceeded as of the Latest Practicable Date, it is expected the amount to be received by the Group in relation to sales of Umbro Products to the Umbro Group for the years ending 31 December 2010 and 2011, respectively, will exceed the Annual Caps. The Company therefore proposed to increase the Annual Caps to the Revised Annual Caps of HK$180,000,000 for each of the two years ending 31 December 2011.

The Revised Annual Caps are calculated and determined after taking into account the amount of actual sales of Umbro Products to the Umbro Group for the three months ended 31 March 2010, and the expected increase in demand of Umbro Products from the Umbro Group as a result of the restructuring of the Umbro Group’s supply chain mentioned above.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4. Terms of the Master Agreement

• 4.1 Principal terms

Date : 19 November 2008 Parties : WH Sportswear, a direct wholly-owned subsidiary of the Company, and Umbro International Description : Supply of Umbro Products by WH Sportswear and/or its affiliates to the Umbro Group Term : From 1 January 2009 to 31 December 2011 4.2 Pricing basis

The price chargeable to the Umbro Group will be based principally on terms negotiated on an arm’s length basis as agreed between the Group and the Umbro Group on an order-by-order basis. The Umbro Group compares factors including pricing, quality of products and timeliness of products and timeliness of delivery which various suppliers of Umbro Products, before orders are placed with the Group. Final decision of the choice of supplier lies solely with the Umbro Group.

To determine the fairness and reasonableness of the pricing under the Master Agreement, the Group has provided, and we have examined a number of sample invoices of the Group issued to Umbro International and certain Independent Third Parties customers of the Group. From the examination of these sample invoices, we note that the per-unit-price charged to Umbro International and the Independent Third Parties are identical. As mentioned earlier, the price chargeable to the Umbro Group will be based principally on terms negotiated on an arm’s length basis as agreed between the Group and the Umbro Group on an order-by-order basis. In a discussion with the Group’s management, we understand that pricing for each order must be acceptable to both the Group and the Umbro Group. In the unlikely event that an agreeable pricing cannot be reached between the Group and the Umbro Group, the Group may decline the acceptance of that particular order. Accordingly, we believe that the interest of the Group has been properly safeguarded as the Group is not obligated to supply the Umbro Products to the Umbro Group pursuant to the Master Agreement if an agreeable pricing cannot be reached.

Having considered the above, we consider that the terms of the Master Agreement are fair and reasonable and in the interest of the Company and the Shareholders as a whole.

5. The Revised Annual Caps

As mentioned earlier, it is expected the amount to be received by the Group in relation to sales of Umbro Products to the Umbro Group for 2010 and 2011 will exceed the Annual Caps. The Company therefore proposed to increase the Annual Caps to the Revised Annual Caps of HK$180,000,000 for each of the two years ending 31 December 2011.

For the years ended 31 December 2008 and 2009 and the three months ended 31 March 2010, the aggregate amount received/receivable by the Group amounted to approximately HK$41,213,000, HK$70,559,000 and HK$49,150,000, respectively.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Pursuant to the Master Agreement, the role of the Group is to supply the Umbro Products to the Umbro Group. As discussed earlier, it is expected that the demand for Umbro Products from the Umbro Group will increase due to the restructuring of the Umbro Group’s supply chain with effect from December 2009. Prior to the restructuring, the Umbro Group and its licencees would make purchases of Umbro Products directly from various suppliers including the Group. With effect from December 2009, to the best of the knowledge of the Directors, the Umbro Group has undergone restructuring as to its supply chain whereby (1) the Umbro Group will centralise most of the purchases of its licencees and will make purchases of Umbro Products (on behalf of itself and its licencees) from the authorised suppliers including the Group; and (2) the Umbro Group will onward sell the Umbro Products to its licencees. As a result of the restructuring, the Group’s sales of the Umbro Products would be made to the Umbro Group instead of the licensees, therefore significantly increasing sales under the Master Agreement.

We note that during the three months ended 31 March 2010, the Group’s sales of Umbro Products to the Umbro Group already amounted to approximately HK$49,150,000. Based on this figure, annualised sales for the year ending 31 December 2010 would become approximately HK$196,600,000 (the “ Annualised Sales ”). Having considered that (i) the Revised Annual Caps of HK$180,000,000 for each of the two years ending 31 December 2011 is comparable to the Annualised Sales; (ii) the terms of the Master Agreement is fair and reasonable; and (iii) the Umbro Product Sales Transaction is conducted in the Group’s ordinary and usual course of business, we consider that the Revised Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole.

CONCLUSION

Having considered the above principal factors, we are of the opinion that the Revised Annual Caps are fair and reasonable and in the interests of the Company and the Shareholders as a whole. In addition, we consider that the Umbro Product Sales Transaction is on normal commercial terms and in the ordinary and usual course of business of the Group.

As stated in the Letter from the Board, the Company has submitted an application to the Stock Exchange for, and the Stock Exchange has granted, a waiver from the requirement to hold a general meeting under Rule 14A.43 of the Listing Rules to approve the Revised Annual Caps. Accordingly, the Company will not hold a shareholders’ meeting to seek for the approval of the Revised Annual Caps. If the Company were to convene a general meeting in respect of the Revised Annual Caps, we would recommend (i) the Independent Board Committee to advise the Independent Shareholders; and (ii) the Independent Shareholders, to vote in favor of the ordinary resolution(s) to approve the Revised Annual Caps.

Yours faithfully, For and on behalf of Ample Capital Limited H. W. Tang Andrew Cheng President Managing Director

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GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ DISCLOSURE OF INTERESTS

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executive(s) of the Company (if any) in the shares, underlying shares and debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO), which (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they have taken or deemed to have taken under such provisions of the SFO); or (b) were required to be recorded in the register maintained by the Company pursuant to section 352 of the SFO; or (c) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the “ Model Code ”) adopted by the Company, to be notified to the Company and the Stock Exchange, were as follows:

Directors’ interests and short positions in the shares, underlying shares and debentures of the Company and its associated corporations

Long positions in the Shares and underlying Shares

			Number of
			underlying
			Shares		Percentage
			(Pre-IPO		of interest
		Number of	Share		in the
Name of Director	Capacity	Shares	Options)	Total	Company
Mr. Li Kwok Tung Roy	Interests in controlled	743,769,967	—	743,769,967	58.64%
	company			(Note 1)
Mr. Lai Ching Ping	Personal interest	4,186,000	—	4,186,000	0.33%
Mr. Cheung Chi	Personal interest	650,000	10,000,000	10,650,000	0.84%
			(Note 2)
Mr. Lee Kwok Leung	Personal interest	—	2,000,000	2,000,000	0.16%
			(Note 3)

Notes:

1. Mr. Li Kwok Tung Roy holds 70% of the issued share capital of Quinta. Mr. Li Kwok Tung Roy has a controlling interest in Quinta and is therefore deemed to be interested in Quinta’s interest in the Company for the purposes of the SFO. Mr. Lai Ching Ping holds the remaining 30% of the issued share capital of Quinta (representing an indirect interest in 223,130,990 Shares or approximately 17.59% shareholding in the Company). Both Mr. Li Kwok Tung Roy and Mr. Lai Ching Ping are the directors of Quinta.

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APPENDIX

GENERAL INFORMATION

1. The exercise price for the Pre-IPO Share Options is HK$1.596 and the exercise period is from 6 September 2006 to 9 May 2016.

2. The exercise price for the Pre-IPO Share Options is HK$2.28 and the exercise period is from 6 September 2006 to 9 May 2016.

Long positions in the shares of associated corporations of the Company (as defined in the SFO)

				Percentage of
				interest in
	Associated		Number of	associated
Name of Director	corporation	Capacity	shares	corporation
Mr. Li Kwok Tung Roy	Quinta	Personal interest	7	70%
Mr. Lai Ching Ping	Quinta	Personal interest	3	30%

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive(s) of the Company (if any) had any interests or short positions, whether beneficial or non-beneficial, in the shares, underlying shares and debentures of the Company and its associated corporation (within the meaning of Part XV of the SFO) which: (a) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have taken under such provisions of the SFO); or (b) were required to be recorded in the register maintained by the Company pursuant to section 352 of the SFO; or (c) were required, pursuant to the Model Code adopted by the Company, to be notified to the Company and the Stock Exchange.

Save as disclosed herein, none of the Directors holds any directorship or employment in a company which has an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

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GENERAL INFORMATION

APPENDIX

3. INTERESTS AND SHORT POSITIONS WHICH ARE DISCLOSEABLE UNDER DIVISIONS 2 AND 3 OF PART XV OF THE SFO

As at the Latest Practicable Date, so far as the Directors were aware, the following persons (other than the Director or chief executive(s) of the Company (if any)) had interests or short positions in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who is, directly or indirectly, interested in 10 per cent. or more of the nominal value of any class of share capital carry rights to vote in all circumstances at general meeting of any other member of the Group, or in any option, in respect of such securities were as follows:

Long positions in the Shares of the Company

							Percentage of
						Number of	interest in the
Name				Capacity		Shares	Company
Quinta				Beneficial	interest	743,769,967	58.64%
Templeton	Asset	Management	Ltd.	Investment	manager	165,191,579	13.02%

Saved as disclosed above, as at the Latest Practicable Date, there was no other person (other than the Directors or the chief executive(s) of the Company (if any)) who had interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, who was, directly or indirectly, interested in 10 per cent. or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or in any options, in respect of such share capital.

4. DIRECTORS INTEREST IN ASSETS/CONTRACTS AND OTHER INTERESTS

None of the Directors have any interest, direct or indirect, in any asset which have since 31 December 2009, being the date to which the latest published audited accounts of the Company were made up, up to the Latest Practicable Date, been acquired or disposed of by, or leased to, any member of the Group, or are proposed to be acquired or disposed of by, or leased to, any member of the Group.

As at the Latest Practicable Date, none of the Directors is materially interested in any contract or arrangement subsisting at the date of this circular which is significant in relation to the business of the Group.

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors and their respective associates were considered to have interests in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group or have any other conflicts of interest with the Group pursuant to the Listing Rules.

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GENERAL INFORMATION

APPENDIX

6. DIRECTORS’ SERVICE CONTRACTS

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

7. EXPERT’S QUALIFICATION, CONSENT AND INTERESTS

The following is the qualification of the expert who has given opinion or advice which is contained in this circular:

Qualification

Name Qualification Ample Capital Limited A corporation licensed under the SFO to carry out business in types 4, 6 and 9 (advising on securities, corporate finance and asset management respectively) regulated activities

Ample Capital Limited, the Independent Financial Adviser, has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter and references to its name in the form and context in which they are included. The letter and recommendation given by the Independent Financial Adviser are given as of the date of this circular for incorporation herein.

As at the Latest Practicable Date, the Independent Financial Adviser:

• (a) had no direct or indirect interest in any asset which has since 31 December 2009, being the date to which the latest published audited accounts of the Company were made up, been acquired or disposed of by, or leased to, any member of the Group, or was proposed to be acquired or disposed of by, or leased to, any member of the Group; and

• (b) was not beneficially interested in the share capital of any member of the Group nor did they have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

8. MATERIAL ADVERSE CHANGE

As at the Latest Practicable date, the Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2009, being the date to which the latest published audited accounts of the Company were made up.

9. DOCUMENTS FOR INSPECTION

Copy of the Master Agreement is available for inspection during the normal business hours at the principal place of business of the Company at 6th Floor, Phase 6, Hong Kong Spinners Industrial Building, 481-483 Castle Peak Road, Kowloon, Hong Kong for a period of 14 days (except public holidays) from the date of this circular.

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GENERAL INFORMATION

APPENDIX

10. GENERAL

• (a) The registered office of the Company is Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

• (b) The Company’s Hong Kong branch share registrar and transfer office is Tricor Investor Services Limited located at 26/F., Tesbury Centre, 28 Queen’s Road East, Hong Kong.

• (c) The company secretary of the Company is Mr. Cheung Chi, a fellow member of Hong Kong Institute of Certified Public Accountant and the Association of Chartered Certified Accountant.

• (d) The English text of this circular will prevail over the Chinese text in the event of inconsistency.

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