WLS Holdings Limited - Proxy Solicitation & Information Statement 2015

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 WLS Holdings Limited (“ Company ”), you should at once hand this circular with the enclosed form of proxy to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.

This circular appears for information only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities of the Company.

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.

**WLS Holdings Limited 滙隆控股有限公司[*]**

(incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 8021)

(I) PROPOSED SHARE CONSOLIDATION;

(II) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (III) PLACING OF NEW CONSOLIDATED SHARES UNDER A SPECIFIC MANDATE; (IV) RE-ELECTION OF DIRECTORS; AND

(V) NOTICE OF SPECIAL GENERAL MEETING

Financial Adviser to the Company

==> picture [45 x 29] intentionally omitted <==

Placing Agent

Tanrich Securities Company Limited

A notice convening the SGM to be held at 12:00 noon on Thursday, 5 March 2015 at Rooms 1001-1006, 10th Floor, Tower A, Southmark, 11 Yip Hing Street, Wong Chuk Hang, Aberdeen, Hong Kong is set out on pages 33 to 36 of this circular. Whether or not you intend to attend the SGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time scheduled for the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending or voting in person at the SGM or any adjourned meeting thereof should you so wish.

This circular will remain on the “Latest Company Announcement” page of the GEM website at www.hkgem.com for a minimum of seven days from the date of its posting and on the website of the Company at www.wls.com.hk.

13 February 2015

For identification purposes only

CHARACTERISTICS OF THE GEM

GEM has been positioned as a market designed to accommodate companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors.

Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

– i –

CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	7
NOTICE OF SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	33

– ii –

DEFINITIONS

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

“acting in concert” has the meaning as ascribed to it in the Code on Takeovers and Mergers of Hong Kong
“associate” has the meaning as ascribed to it under the GEM Listing Rules
“Board” the board of Directors
“Business Day”
any day (not being a Saturday, Sunday or public holiday and any day on which a tropical cyclone warning signal no. 8 or above is hoisted or remains hoisted between 9:00 a.m. and 12:00 noon and is not lowered at or before 12:00 noon or on which a “black” rainstorm warning signal is hoisted or remains in effect between 9:00 a.m. and 12:00 noon and is not discontinued at or before 12:00 noon) on which licensed banks are generally open for business in Hong Kong throughout their normal business hours
“CCASS”
the Central Clearing and Settlement System established and operated by HKSCC
“Company”
WLS Holdings Limited, a company incorporated in the Cayman Islands and continued in Bermuda with limited liability, the issued Shares of which are listed on GEM
“Completion” completion of the Placing in accordance with the Placing Agreement
“Completion Date”
the date of Completion
“connected person”
has the meaning as ascribed to it under the GEM Listing Rules
“Consolidated Share(s)”
ordinary share(s) of HK$0.20 each in the share capital of the Company immediately after the Share Consolidation becoming effective
“Convertible Bonds”
the convertible bonds due 2015 in the aggregate principal amount of HK$30,000,000 issued by the Company on 28 August 2014

– 1 –

DEFINITIONS

“Director(s)”
the director(s) of the Company
“GEM”
the Growth Enterprise Market of the Stock Exchange
“GEM Listing Rules” the Rules Governing the Listing of Securities on GEM
“Group” the Company and its subsidiaries
“HKSCC” Hong Kong Securities Clearing Company Limited
“HK$”
Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”
Hong Kong Special Administrative Region of the PRC
“Increase in Authorised Share Capital”
the proposed increase in the authorised share capital of the Company from HK$100,000,000 divided into 500,000,000 Consolidated Shares to HK$400,000,000 divided into 2,000,000,000 Consolidated Shares by the creation of an additional 1,500,000,000 Consolidated Shares
“Last Trading Date”
21 January 2015, being the date of the Placing Agreement which is a business day
“Latest Practicable Date”
10 February 2015, being the latest practicable date before the printing of this circular for the purpose of ascertaining certain information contained herein
“Long Stop Date”
the day falling 30 days after the date of the SGM
“Option(s)”
share option(s) granted under the share option schemes of the Company
“Placee(s)”
any individuals, corporate, institutional investors or other investors procured by or on behalf of the Placing Agent to subscribe for any of the Placing Shares pursuant to the Placing Agreement
“Placing”
the proposed placing of a maximum of 540,000,000 Consolidated Shares pursuant to the terms of the Placing Agreement

– 2 –

DEFINITIONS

“Placing Agent”
“Placing Agreement”
“Placing Price”
“Placing Share(s)”
“PRC”
“SFO”
“SGM”
“Share(s)”
“Share Consolidation”
“Shareholder(s)”
Tanrich Securities Company Limited, a licensed corporation to carry on business in type 1 regulated activity (dealing in securities) and type 4 regulated activity (advising on securities) under the SFO
the conditional placing agreement dated 21 January 2015 entered into between the Company and the Placing Agent in relation to the Placing
HK$0.30 per Placing Share under the Placing Agreement
a maximum of 540,000,000 new Consolidated Shares to be allotted and issued pursuant to the Placing Agreement and each, a “Placing Share”
the People’s Republic of China
the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
the special general meeting of the Company convened to be held at 12:00 noon on Thursday, 5 March 2015 or any adjournment thereof, for the Shareholders to consider and, if thought fit, approve the Share Consolidation, the Increase in Authorised Share Capital, the Placing Agreement (including the grant of the Specific Mandate) and the re-election of Directors, the notice of which is set out in pages 33 to 36 of this circular
the ordinary share(s) of HK$0.04 each in the share capital of the Company as at the Latest Practicable Date and prior to the Share Consolidation becoming effective
the proposed consolidation of every five (5) issued and unissued Shares into one (1) Consolidated Share
holder(s) of the Shares and/or the Consolidated Shares, as the case may be

– 3 –

DEFINITIONS

“Specific Mandate” the specific mandate to be sought Shareholders at the SGM to grant the Board for the allotment and issue of up to Placing Shares “Stock Exchange” The Stock Exchange of Hong Kong Limited “%” cent.

the specific mandate to be sought from the Shareholders at the SGM to grant the authority to the Board for the allotment and issue of up to 540,000,000 Placing Shares

per cent.

– 4 –

EXPECTED TIMETABLE

Set out below is the expected timetable for the implementation of the Share Consolidation:

Latest date and time for lodging forms of
proxy for the SGM . . . . . . . . . . . . . . . . .	.	. . .	.	. . . . . . . . . . . . 12:00 noon on Tuesday,
				3 March 2015
Date and time of the SGM . . . . . . . . . . . . .	.	. . .	.	. . . . . . . . . . . 12:00 noon on Thursday,
				5 March 2015
Announcement of voting result of the SGM	. . .		.	. . . . . . . . . . . . . . . . . . . . . . . Thursday,
				5 March 2015
The following events are conditional	on the fulfilment of the conditions for the
implementation of the Share Consolidation:
Effective date of the Share Consolidation	.	. . .	.	. . . . . . . . . . . . . . . . . . . . . . . . . Friday,
				6 March 2015
Dealing in Consolidated Shares commences		. . .	.	. . . . . . . . . . . . . . . 9:00 a.m. on Friday,
				6 March 2015
First day for free exchange of existing share	certificates
for new share certificates for the Consolidated			Shares . . . . . . . . . . . . . . . . . . . . Friday,
				6 March 2015
Original counter for trading in the Shares in
board lots of 10,000 Shares (in the form of
existing share certificates) temporarily closes			.	. . . . . . . . . . . . . . . 9:00 a.m. on Friday,
				6 March 2015
Temporary counter for trading in the Consolidated Shares
in board lots of 2,000 Consolidated Shares
(in the form of existing share certificates) opens				. . . . . . . . . . . . . . 9:00 a.m. on Friday,
				6 March 2015
Original counter for trading in the Consolidated			Shares
in board lots of 10,000 Consolidated Shares
(in the form of new share certificates) re-opens				. . . . . . . . . . . . . . . 9:00 a.m. on Friday,
				20 March 2015
Parallel trading in the Consolidated Shares
(in the form of new share certificates and
existing share certificates) commences . .	.	. . .	.	. . . . . . . . . . . . . . . 9:00 a.m. on Friday,
				20 March 2015

– 5 –

EXPECTED TIMETABLE

Designated broker starts to stand in the market to
provide matching services for odd lots of
Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . 9:00 a.m. on Friday,
	20 March 2015
Temporary counter for trading in the Consolidated Shares
in board lots of 2,000 Consolidated Shares
(in the form of existing share certificates) closes . . . . . . . . . . . . . 4:00 p.m. on Tuesday,
	14 April 2015
Parallel trading in the Consolidated Shares
(in the form of new share certificates and
existing share certificates) ends . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday,
	14 April 2015
Designated broker ceases to stand in the market
to provide matching services for odd lots of
the Consolidated Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on Tuesday,
	14 April 2015
Last day for free exchange of existing share certificates
for new share certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Thursday,
	16 April 2015

All dates and times set out in the timetable above refer to Hong Kong time.

– 6 –

LETTER FROM THE BOARD

**WLS Holdings Limited 滙隆控股有限公司[*]**

(incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 8021)

Executive Directors: Dr. So Yu Shing (Chairman) Mr. Kong Kam Wang (Chief Executive Officer) Ms. Lai Yuen Mei, Rebecca Mr. So Wang Chun, Edmond Mr. Ng Tang Mr. Yuen Chun Fai

Independent Non-executive Directors: Mr. Lam Kwok Wing Mr. Law Man Sang Dr. Fung Ka Shuen

Registered office: Clarendon House 2 Church Street Hamilton HM 11, Bermuda

Head office and principal place of business in Hong Kong: Rooms 1001-1006 10th Floor, Tower A Southmark 11 Yip Hing Street Wong Chuk Hang Aberdeen Hong Kong

13 February 2015

To the Shareholders

Dear Sir or Madam,

(I) PROPOSED SHARE CONSOLIDATION;

(II) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (III) PLACING OF NEW CONSOLIDATED SHARES UNDER A SPECIFIC MANDATE; AND (IV) RE-ELECTION OF DIRECTORS

(I) INTRODUCTION

Reference is made to (i) the announcement of the Company dated 21 January 2015, of which the Company announced, among other things, the Share Consolidation, the Increase in Authorised Share Capital and the Placing; and (ii) the announcement dated 10 February 2015, of which the Company announced a revised timetable for the Share Consolidation.

* For identification purposes only

– 7 –

LETTER FROM THE BOARD

The purpose of this circular is to provide the Shareholders, among other things, (i) further details of the Share Consolidation; (ii) particulars of the Increase in Authorised Share Capital; (iii) further details of the Placing; (iv) relevant information regarding the re-election of Directors, and to give Shareholders notice of the SGM.

(II) PROPOSED SHARE CONSOLIDATION

The Board proposes to implement the Share Consolidation on the basis that every five (5) issued and unissued Shares of HK$0.04 each will be consolidated into one (1) Consolidated Share of HK$0.20 each.

Effects of the Share Consolidation

As at the Latest Practicable Date, the authorised share capital of the Company was HK$100,000,000 divided into 2,500,000,000 Shares of HK$0.04 each, of which 479,438,173 Shares had been allotted and issued as fully paid or credited as fully paid. Upon the Share Consolidation becoming effective, on the basis that the Company does not allot, issue or repurchase any Shares prior thereto, the authorised share capital of the Company shall become HK$100,000,000 divided into 500,000,000 Consolidated Shares of HK$0.20 each, of which 95,887,634 Consolidated Shares will be in issue.

Upon the Share Consolidation becoming effective, the Consolidated Shares shall rank pari passu in all respects with each other in accordance with the Company’s memorandum and bye-laws.

Other than the expenses incurred and/or to be incurred in relation to the Share Consolidation, the implementation thereof will not alter the underlying assets, business operations, management or financial position of the Company or the proportionate interests or rights of the Shareholders, save for any fractional Consolidated Shares to which the Shareholders may be entitled.

Conditions Precedent to the Share Consolidation

The Share Consolidation is conditional on:

(i) the passing of an ordinary resolution by the Shareholders to approve the Share Consolidation at the SGM;
(ii) the Listing Division of the Stock Exchange granting the approval for the listing of, and the permission to deal in, the Consolidated Shares upon the Share Consolidation becoming effective; and
(iii) the compliance with the relevant procedures and requirements under the Bermuda law (where applicable) and the GEM Listing Rules to effect the Share Consolidation.

– 8 –

LETTER FROM THE BOARD

Listing Application

An application has been made by the Company to the Listing Division of the Stock Exchange for the listing of, and the permission to deal in, the Consolidated Shares in issue and to be in issue upon the Share Consolidation becoming effective.

Subject to the granting of the listing of, and permission to deal in, the Consolidated Shares on the Stock Exchange upon the Share Consolidation becoming effective, as well as compliance with the stock admission requirements of the HKSCC, the Consolidated Shares will be accepted as eligible securities by HKSCC for deposit, clearance and settlement in CCASS with effect from the commencement date of dealings in the Consolidated Shares on the Stock Exchange or such other date as determined by HKSCC. Settlement of transactions between participants of the Stock Exchange on any trading day is required to take place in CCASS on the second trading day thereafter. All activities under CCASS are subject to the General Rules of CCASS and CCASS Operational Procedures in effect from time to time.

None of the Shares are listed or dealt in any other stock exchange other than the Stock Exchange, and at the time the Share Consolidation becoming effective, the Consolidated Shares in issue will not be listed or dealt in on any stock exchange other than the Stock Exchange, and no such listing or permission to deal is being or is proposed to be sought.

Reasons for the Share Consolidation

The proposed Share Consolidation will increase the nominal value of the Shares and decrease the total number of Shares currently in issue. It is expected that the Share Consolidation would bring about a corresponding upward adjustment in the trading price per board lot of the Consolidated Shares on the Stock Exchange, which will reduce the overall transaction and handling costs of dealings in the Shares. The Board also believes that the Share Consolidation may attract more investors and extend the shareholders’ base of the Company. Based on the closing prices of HK$0.104 per Share as at the Last Trading Day and HK$0.081 per Share as at the Latest Practicable Date, the value of each board lot of the Shares was HK$1,040 and HK$810 on the Last Trading Day and the Latest Practicable Date respectively. Assuming the Share Consolidation had already been effective, based on the theoretical closing prices of HK$0.520 per Consolidated Share and HK$0.405 per Consolidated Share as at the Last Trading Day and the Latest Practicable Date respectively, the value of each board lot of the Consolidated Shares would be HK$5,200 and HK$4,050 on the Last Trading Day and the Latest Practicable Date respectively. As such, the Share Consolidation would enable the Company to comply with paragraph 5.5 of the “Guide on Trading Arrangements for Selected Types of Corporate Actions” issued by Hong Kong Exchanges and Clearing Limited on 28 November 2008 (updated on 3 March 2014), pursuant to which the expected board lot value per board lot should be greater than HK$2,000 taking into account the minimum transaction costs for a securities trade. Accordingly, the Directors consider that the Share Consolidation is beneficial to and in the interests of the Company and the Shareholders as a whole.

– 9 –

LETTER FROM THE BOARD

Fractional entitlement to Consolidated Shares

Fractional Consolidated Shares will be disregarded and not issued to the Shareholders but all such fractional Consolidated Shares will be aggregated and, if possible, sold for the benefits of the Company. Fractional Consolidated Shares will only arise in respect of the entire shareholding of a holder of the Shares regardless of the number of share certificates held by such holder.

Board lot size

Currently, the Shares are traded on the Stock Exchange in the board lot size of 10,000 Shares. Upon the Share Consolidation becoming effective, the board lot size for trading in the Consolidated Shares will remain as 10,000 Consolidated Shares.

Arrangement on odd lot trading

In order to facilitate the trading of odd lots (if any) of the Consolidated Shares, the Company has appointed One China Securities Limited to provide matching service, on a best effort basis, to those Shareholders who wish to acquire odd lots of the Consolidated Shares to make up a full board lot, or to dispose of their holding of odd lots of the Consolidated Shares during the period between Friday, 20 March 2015 to Tuesday, 14 April 2015 (both days inclusive). Shareholders who wish to take advantage of this facility should contact Mr. Marco Ko of One China Securities Limited at 2/F, Cheong K. Building, 86 Des Voeux C., Central, Hong Kong at telephone number (852) 3188 9878 during office hours of such period. Shareholders should note that successful matching of the sale and purchase of odd lots of the Consolidated Shares is not guaranteed. Shareholders who are in doubt about this facility are recommended to consult their professional advisers.

Exchange of share certificates

Subject to the Share Consolidation becoming effective, Shareholders may, on or after Friday, 6 March 2015 until Thursday, 16 April 2015 (both days inclusive), submit share certificates (in pink) for the Shares to the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, to exchange, at the expense of the Company, for new share certificates (in green) for the Consolidated Shares (on the basis of five (5) Shares for one (1) Consolidated Share). Thereafter, certificates of Shares will be accepted for exchange only on payment of a fee of HK$2.50 (or such other amount as may from time to time be specified by the Stock Exchange) by the Shareholders for each share certificate for the Shares submitted for cancellation or each new share certificate issued for the Consolidated Shares, whichever the number of certificates cancelled/issued is higher. After 4:00 p.m. on Thursday, 16 April 2015, existing share certificates for the Shares will only remain effective as documents of title and may be exchanged for certificates for Consolidated Shares at any time but will not be accepted for delivery, trading and settlement purposes.

– 10 –

LETTER FROM THE BOARD

Adjustments in relation to other securities of the Company

As at the Latest Practicable Date, (i) the Company had outstanding Options entitling the holders thereof to subscribe for up to an aggregate of 21,445,000 Shares; (ii) the Company had outstanding Convertible Bonds in the outstanding principal amount of HK$30,000,000 which were convertible into 75,000,000 Shares; and (iii) the Company might grant share options to subscribe for 39,953,817 Shares under the existing 10% general limit of the share option scheme of the Company.

Assuming (i) the Share Consolidation has become effective; (ii) there are no movements of the share options granted or to be granted under the share option schemes of the Company; and (iii) the conversion rights attached to the Convertible Bonds have not been exercised, (a) the outstanding Options will entitle the holders thereof to subscribe for up to 4,289,000 Consolidated Shares; (b) the outstanding Convertible Bonds will be convertible into 15,000,000 Consolidated Shares; and (c) the Company may grant share options to subscribe for 7,990,763 Consolidated Shares under the existing 10% general scheme limit of the share option scheme of the Company.

Should the Share Consolidation becoming effective, the Company will make further announcement(s) about the relevant adjustments to the underlying securities of the Company upon review by the independent financial adviser to be appointed by the Company.

Save as disclosed above, as at the Latest Practicable Date, the Company had no other outstanding options, warrants or other securities in issue which are convertible into or giving rights to subscribe for, convert or exchange into, any Shares or Consolidated Shares, as the case may be.

(III) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

As at the Latest Practicable Date, the authorised share capital of the Company was HK$100,000,000 divided into 2,500,000,000 Shares, of which 479,438,173 Shares had been alloted and issued as fully paid or credited as fully paid.

Immediately after the Share Consolidation becoming effective, the authorised share capital of the Company will become HK$100,000,000 divided into 500,000,000 Consolidated Shares of HK$0.20 each, of which 95,887,634 Consolidated Shares will be in issue.

In order to facilitate the proposed Placing under the Specific Mandate and to provide the Company with greater flexibility for future expansion in the share capital of the Company, the Directors propose that, subject to the Share Consolidation becoming effective, the authorised share capital of the Company will be increased from HK$100,000,000 divided into 500,000,000 Consolidated Shares to HK$400,000,000 divided into 2,000,000,000 Consolidated Shares by the creation of an additional 1,500,000,000 Consolidated Shares, which will, upon issue and fully paid, shall rank pari passu in all respects with the Consolidated Shares in issue.

– 11 –

LETTER FROM THE BOARD

The Increase in Authorised Share Capital is conditional upon the passing of an ordinary resolution by the Shareholders at the SGM and the Share Consolidation becoming effective.

The Board is of the view that the Increase in Authorised Share Capital will provide flexibility to the Company in determining its future business plan, and is therefore in the interest of the Company and the Shareholders taken as a whole.

As at the Latest Practicable Date, other than the issue of Shares and/or (as the case may be) the Consolidated Shares upon (i) the exercise of the outstanding Options and conversion of the Convertible Bonds; and (ii) the proposed issue of the Placing Shares (subject to the approval of the Shareholders at the SGM), the Board had no present intention to issue any part of the increased authorised share capital of the Company as proposed. Further announcement(s) will be made by the Company if it proposes to issue any new Shares and/or (as the case may be) the Consolidated Shares in the future in accordance with the GEM Listing Rules.

(IV) PLACING OF NEW CONSOLIDATED SHARES UNDER A SPECIFIC MANDATE

The Placing Agreement

Date

21 January 2015 (after trading hours)

Issuer

The Company

Placing Agent

Tanrich Securities Company Limited

The Placing Agent has conditionally agreed, on a best effort basis and as agent for the Company, to procure not less than six Placees to subscribe for a maximum number of 540,000,000 Placing Shares at the Placing Price. The Placing Agent will receive a placing commission of 1% on the aggregate Placing Price for the Placing Shares successfully placed by the Placing Agent. Such placing commission was arrived at after arm’s length negotiations between the Company and the Placing Agent under normal commercial terms and with reference to the prevailing market rate.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, as at the Latest Practicable Date, the Placing Agent and its ultimate beneficial owners were third parties independent of and not connected with the Company and its connected persons or any of their respective associates.

– 12 –

LETTER FROM THE BOARD

Placees

The Placing Shares will be placed to not less than six Placees, who and whose ultimate beneficial owners (where appropriate) are third parties independent of the Company and not connected nor acting in concert with any of the connected persons of the Company or any of their respective associates. The Placing Agent agrees that the identity of the Placees and the number of the Placing Shares to be placed to each Placee shall be subject to the approval by the Company at its sole discretion. The Placing Agent has also undertaken to the Company that none of the Placees would, immediately upon Completion, become a substantial Shareholder (as defined in the GEM Listing Rules) of the Company.

Placing Shares

Assuming no further issue of new Shares and/or Consolidated Shares and/or repurchase of Shares and/or Consolidated Shares, the maximum number of 540,000,000 Placing Shares (with aggregate nominal value of HK$108,000,000) represented approximately 563.16% of the issued share capital of the Company comprising 95,887,634 Consolidated Shares (assuming the Share Consolidation becoming effective) as at the Latest Practicable Date and approximately 84.92% of the issued share capital of the Company comprising 635,887,634 Consolidated Shares as enlarged by the Placing Shares and after the Share Consolidation had become effective.

Ranking of the Placing Shares

The Placing Shares shall rank, upon issue, pari passu in all respects with the Consolidated Shares in issue as at the date of allotment and issue of the Placing Shares.

Placing Price

The Placing Price of HK$0.30 per Placing Share represents:

(i) a discount of approximately 42.31% to the theoretical closing price of HK$0.520 per Consolidated Share (based on the closing price of HK$0.104 per Share as quoted on the Stock Exchange on the Last Trading Date and adjusted taking into account the effect of the Share Consolidation);
(ii) a discount of approximately 41.06% to the average theoretical closing price of HK$0.509 per Consolidated Share (based on the average closing price of HK$0.1018 per Share as quoted on the Stock Exchange for the last five consecutive trading days of the Shares immediately prior to the Last Trading Date and adjusted taking into account the effect of the Share Consolidation);

– 13 –

LETTER FROM THE BOARD

(iii) a discount of approximately 81.30% to the unaudited consolidated net asset value per Consolidated Share of approximately HK$1.604 as at 31 October 2014 (“ Theoretical NAV ”) (based on the unaudited consolidated net asset value of the Group of approximately HK$153.76 million as at 31 October 2014 and 479,438,173 Shares in issue as at the Latest Practicable Date and adjusted taking into account the effect of the Share Consolidation (i.e. 95,887,634 Consolidated Shares)); and
(iv) a discount of approximately 25.93% to the theoretical closing price of HK$0.405 per Consolidated Share (based on the closing price of HK$0.081 per Share as quoted on the Stock Exchange on the Latest Practicable Date and adjusted taking into account the effect of the Share Consolidation).

The Placing Price was negotiated on an arm’s length basis between the Company and the Placing Agent with reference to the performance of the Shares, the current market conditions and the capital requirements for the future development of the Group.

In determining the Placing Price, the Directors have considered the following factors:

(i) closing prices of the Shares demonstrated a downward trend in the past six months prior to the date of the Placing Agreement. Closing price of the Shares decreased from HK$0.220 as at 22 July 2014 (being the six-month period immediately prior to the date of the Placing Agreement) to HK$0.104 as at the Last Trading Date (“ 6-Months Period ”), representing a decrease of approximately 52.73%. In addition, historical trading volume of the Shares was relatively inactive;
(ii) closing prices of the Shares ranged from HK$0.090 per Share to HK$0.304 per Share in the 6-Months Period. Closing prices of the Shares were all traded below the net asset value per Share of approximately HK$0.321 (based on the unaudited consolidated net asset value of the Group of approximately HK$153.76 million as at 31 October 2014 and 479,438,173 Shares in issue as at the Latest Practicable Date) during the 6-Months Period, representing a discount ranging from approximately 5.30% to approximately 71.96% to the net asset value per Share;

– 14 –

LETTER FROM THE BOARD

(iii) the Company acknowledged that the Placing Price is at a discount of approximately 81.30% to the Theoretical NAV. Assuming the Placing Price is to be set at a price not less than the Company’s Theoretical NAV, i.e. HK$1.604, such price would represent (a) a premium of approximately 208.46% over the theoretical closing price of HK$0.520 per Consolidated Share on the Last Trading Date; and (b) a premium of approximately 215.13% over the average theoretical closing price of HK$0.509 per Consolidated Share for the last five consecutive trading days of the Shares immediately prior to the Last Trading Date. In view of such premium, the Company considered that such pricing is unrealistic, not commercially practicable and would be less likely to attract any placing agent and potential investor for the Placing. It is an undeniable fact that the Shares might have been undervalued by the market, however, if the Placing Price had been benchmarked with the Theoretical NAV, even if a placing agent and/or potential investor(s) might be interested in investing in the Company, they would prefer buying the Shares and/or the Consolidated Shares in the market which would be at a more favorable price. In such case, no capital will be injected in the Company. Therefore, the Company believes that it is justifiable for the Placing Price to be set at this range of discount, at which investor(s) can be successfully attracted and the Placing Agreement can secure the commitment from the Placees through the efforts of the Placing Agent;
(iv) the uncertainties in the financial market in Hong Kong as a result of the uncertainties stemming from fluctuating market sentiment, capital flow, trend of interest rate, volatility in money supply in different major economies and different economic decisions made by different countries and prevailing uncertainties in global economic condition and outlook;
(v) the Group has been loss making for the past two years and only turned-around for the six months ended 31 October 2014. Despite the recent improvement in the financial performance of the Group, the Group recorded net cash outflow from operating activities for the past few years and for the six months ended 31 October 2014;
(vi) the existing tight cash position of the Group and the funding needs of the Group as disclosed in the sub-section headed ‘‘Reasons for the Placing and the Use of Proceeds’’ below; and
(vii) the market risks assumed by the Placing Agent and any Placees thereunder, on account of the fact that the Placing is subject to and cannot be completed until the approval by the Shareholders is obtained at the SGM.

Having considered the factors above, the Board is of the view that setting the Placing Price at a relatively deep discount to the prevailing market price and the Theoretical NAV would be essential to enhance the attractiveness of the Placing in order for the Placing Agent to procure Placees having regard to the size of the Placing.

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LETTER FROM THE BOARD

As disclosed in the interim report of the Company for the six months ended 31 October 2014 (“ 2014 Interim Report ”), current assets of the Group mainly comprised cash and bank balances, amount due from customers for contract work and trade and other receivables, while non-current assets of the Group mainly comprised investment properties situated in Hong Kong and property, plant and equipment (“ PPE ”). The Company considers that it is not the appropriate timing for disposing its investment properties situated in Hong Kong to provide requisite funding given that (i) the investment properties are held for investment and rental purposes for generating stable rental revenue; and (ii) the Company is optimistic about the property market in Hong Kong which shall provide capital appreciation potential to those investment properties held by the Group. In addition, in respect of the PPE of the Group, given that the PPE are essential materials and equipment for the Group’s business operation which are held for generating revenue for the Group’s scaffolding business and other services for construction and buildings work in the long run, the Company considers that disposal of those assets to provide funding will be undesirable to the future performance and development of the Group.

As such, the Board considers that the terms of the Placing Agreement (including the Placing Price and the placing commission) are fair and reasonable, on normal commercial terms, and are in the interests of the Company and its Shareholders as a whole.

Assuming the maximum number of the Placing Shares has been placed, the gross proceeds from the Placing will be HK$162,000,000 and the net proceeds from the Placing will be approximately HK$159,760,000. On such basis, the net issue price per Placing Share upon the completion of the Placing in full will be approximately HK$0.296. The aggregate nominal value of the Placing Shares under the Placing is HK$108,000,000.

Conditions Precedent to the Placing

The respective obligations of the Placing Agent and the Company under the Placing Agreement are conditional upon:

(i) the Share Consolidation and the Increase in Authorised Share Capital having become effective;
(ii) the granting by the Listing Division of the Stock Exchange of the listing of, and permission to deal in, the Placing Shares;
(iii) the Specific Mandate being obtained at the SGM;
(iv) the Company obtaining all necessary written consents and approvals (if any) from the relevant authorities in respect of the transactions contemplated under the Placing Agreement, if applicable; and
(v) all the representations and warranties given by the Company under the Placing Agreement remaining true and accurate and not misleading at Completion as if repeated at Completion and at all times between the date of the Placing Agreement and Completion.

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LETTER FROM THE BOARD

If the conditions precedent to the Placing have not been fulfilled prior to 4:00 p.m. on the Long Stop Date, all obligations of the Placing Agent and of the Company under the Placing Agreement shall cease and determine and none of the parties thereto shall have any claim against the other in relation thereto (save in respect of any antecedent breach of any obligation under the Placing Agreement).

Specific Mandate to issue the Placing Shares

The Placing Shares proposed to be issued under the Placing Agreement will be issued pursuant to the Specific Mandate to be obtained at the SGM.

Termination and force majeure of the Placing

The Placing Agent may, in its reasonable opinion, after consultation with the Company, terminate the Placing Agreement by notice in writing to the Company at any time up to 8:00 a.m. on the Completion Date if:

(i) there is any change in national, international, financial, exchange control, political, economic conditions in Hong Kong which in the reasonable opinion of the Placing Agent would be materially adverse in the consummation of the Placing; or
(ii) there is any breach of the warranties, representations and undertakings given by the Company in the Placing Agreement and such breach is considered by the Placing Agent on reasonable grounds to be material in the context of the Placing; or
(iii) there is any material change (whether or not forming part of a series of changes) in market conditions which in the reasonable opinion of the Placing Agent would materially and prejudicially affect the Placing or makes it inadvisable or inexpedient for the Placing to proceed; or
(iv) any statement contained in all announcements and circulars issued by the Company to the Stock Exchange and/or the Shareholders since the publication of the announcement of the Company relating to the interim results of the Company for the six months ended 31 October 2014 has become or been discovered to be untrue, incorrect or misleading in any material respect which in the opinion of the Placing Agent would be materially adverse in the consummation of the Placing.

Upon termination of the Placing Agreement pursuant to the above force majeure clause contained therein, all liabilities of the Company and the Placing Agent thereunder shall cease and determine and neither of them shall have any claim against the other party in respect of any matter or thing arising out of or in connection with the Placing Agreement save in respect of any antecedent breach of any obligation under the Placing Agreement.

To the best knowledge of the Directors, the Directors were not aware of the occurrence of any of such events as at the Latest Practicable Date.

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LETTER FROM THE BOARD

Completion of the Placing

Completion will take place at 10:00 a.m. in Hong Kong within five Business Days after the fulfilment of all conditions precedent as set out in the Placing Agreement or such other date as may be agreed between the Company and the Placing Agent in writing.

Listing Application

An application will be made by the Company to the Listing Division of the Stock Exchange for the listing of, and permission to deal in, the Placing Shares.

Completion of the Placing is subject to the fulfilment of the conditions precedent as set out in the Placing Agreement. As the Placing may or may not proceed and is subject to Shareholders’ approval, Shareholders and potential investors are advised to exercise caution when dealing in the Shares and/or the Consolidated Shares.

Reasons for the Placing and the Use of Proceeds

The Group is principally engaged in the provision of scaffolding and fitting out services, management contracting services, and other services for construction and buildings work.

The gross proceeds from the Placing will be HK$162.00 million. The estimated net proceeds from the Placing (after deducting the related placing commission, professional fees and all other related expenses incurred in connection with the Placing which will be borne by the Company) are expected to be approximately HK$159.76 million which will be applied in the following manner:

(i) approximately HK$30.00 million for repayment of bank loans and other loans;
(ii) approximately HK$33.00 million for repayment of the Convertible Bonds and the payment of interest accrued thereon;
(iii) approximately HK$30.00 million for financing the development of the money lending business;
(iv) approximately HK$25.00 million for purchase of factory unit for warehouse storage purpose;
(v) approximately HK$17.00 million for expansion of design and fitting out services of the Group; and
(vi) the remaining balance of approximately HK$24.76 million for general working capital of the Group.

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LETTER FROM THE BOARD

As disclosed in the 2014 Interim Report, as at 31 October 2014, the Group had (i) outstanding bank loans of approximately HK$36.58 million which will be due within one year; (ii) bank overdrafts of approximately HK$11.14 million; (iii) Convertible Bonds with outstanding principal amount of HK$30.00 million; and (iv) other unsecured loans of approximately HK$9.98 million. As at 31 October 2014, cash and bank balances of the Group was approximately HK$31.79 million (of which HK$16.00 million has already been utilised subsequent to 31 October 2014 for the subscription of the shares of AP Assets Limited, further details of which are disclosed in the announcement of the Company dated 19 November 2014).

As further disclosed in the 2014 Interim Report, finance costs in relation to debt financing of the Group for the six months ended 31 October 2014 amounted to approximately HK$2.63 million which exceeded finance costs of the Group for the year ended 30 April 2014 of approximately HK$2.10 million. The significant increase in the finance cost was mainly due to the interest on the Convertible Bonds and bank loans.

Given the tight cash position of the Group, approximately HK$30.00 million from the Placing will be used to repay the bank loans and other loans in order to reduce the indebtedness of the Group.

On 28 August 2014, the Company issued the Convertible Bonds (which will mature in August 2015) in the aggregate principal amount of HK$30.00 million which bears interest at a rate of 10% per annum. Interest of the Convertible Bonds is payable semi-annually in arrears. The Convertible Bonds are convertible into Shares at a prevailing conversion price at HK$0.40 per Share. Up to the Latest Practicable Date, none of the conversion rights attached to the Convertible Bonds had been exercised. Assuming the Convertible Bonds will be not converted into Shares and/or (where applicable) Consolidated Shares on or before its maturity date, the total amount of interest payable on the outstanding principal amount of the Convertible Bonds will be HK$3.00 million. A summary of the principal terms of the Convertible Bonds are set out in the Company’s circular dated 4 August 2014.

In view that the prevailing conversion price of the Convertible Bonds of HK$0.40 each per Share is well above the prevailing market price of the Shares, the Board considers that there is little incentive for the holder of the Convertible Bonds to exercise its conversion rights under the Convertible Bonds. Given the prospective maturity of the Convertible Bonds in August 2015, the Company estimates that it is highly likely that HK$33.00 million will be required for the repayment of the Convertible Bonds and related accrued interest.

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the current holder of the Convertible Bonds is a third party independent of the Company and its connected persons.

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LETTER FROM THE BOARD

In November 2014, Gold Medal Hong Kong Limited (“ Gold Medal ”), an indirect wholly-owned subsidiary of the Company, has been granted the money lenders licence under the Money Lenders Ordinance (Chapter 163 of the Laws of Hong Kong). Whilst the Group remains focused on developing its existing businesses, the Directors consider that it is beneficial for the Company to seek suitable investment opportunities from time to time to expand its existing business portfolio and engage in a new line of business with growth potential with a view to broadening its source of income. The Directors are of the view that engaging in the money lending business can diversify the revenue stream of the Group which is expected to benefit the Group and the Shareholders as a whole.

Gold Medal plans to conduct the money lending business in Hong Kong through provision of two main types of loan products, namely (i) unsecured loans; and (ii) secured loans to targeted customers, including individuals and corporations. Source of revenue of Gold Medal will comprise interest received from provision of loans and upfront interests (which is in the form of handling fee) at the time of entering into and disbursement of a loan. It is estimated that repayment period of the loan will be set as less than one year with tentative interest rate to be charged at 8% to 15% per annum. Gold Medal will not participate in the retail credit market and will rely on referrals as its major source of business. As at the Latest Practicable Date, no specific borrower had been identified by Gold Medal. Gold Medal has established internal credit control policy which specifies the credit approval, review and monitoring processes.

Prior to granting a loan, Gold Medal will review the financial strength, purpose of borrowing, and repayment ability of a borrower to ensure that the borrower has sound financial repayment ability. In assessing the credit profiles of each borrower, a number of factors which will influence their default probability, such as financial profile, business prospects and management, macroeconomic development, industrial and sovereign risk, and historical performance of a borrower will be analysed. Where necessary after assessment by senior management, Gold Medal will require the borrower to provide security and/or guarantee for the loan. From time to time, Gold Medal will review the financial conditions of the borrowers and/or the guarantors.

All new borrowers of Gold Medal will be subject to a set of account opening procedures which include financial background checks for credit verification purpose. Credit limit applications will be guided by a set of credit principles and these applications will be subject to regular independent review. The Directors are responsible for ensuring the credit policies and operation manual are appropriate and sufficient for the protection of Gold Medal in view of the needs of the market.

Staff of Gold Medal will report to the management of Gold Medal at least on a monthly basis on the suggested amount of impairment provision to be made based on impairment policy of Gold Medal. In the event that either (i) repayment of the principal amount of the loan and/or interest has been overdue; or (ii) the principal, accrued interest and/or future interest may not be fully secured by the fair value of its collateral (if any) at its prevailing market price, relevant loans will be considered as doubtful if they are overdue for more than 3 months and will be regarded as a loss if they are overdue for more than 6 months.

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LETTER FROM THE BOARD

In general, money lending industry in Hong Kong is affected by the general economic conditions as the demand for credit facilities correlates to both consumer sentiments to spend and corporate sentiments to invest. If there is any economic downturn in Hong Kong, the money lending business of Gold Medal may be adversely affected if it is unable to obtain satisfactory growth in its loan portfolio or recover existing loans from its borrowers. Gold Medal will monitor the market and its money lending customers closely and when it is considered that the risk of economic downturn to be imminent, it will apply more stringent criteria on loan approval or request for additional collateral security when it approves any loan applications for protecting its investment.

Money lending business generally requires readily available financial resources. The repayment period of the loan may vary and can be short or long depending on the terms of the loan agreements. In this regard, the Directors consider that applying approximately HK$30.00 million from the Placing to ensure the Group will have sufficient financial resources for provision of loans to customers will enhance the development of the Group’s money lending business and financial strength.

As mentioned in the annual report of the Company for the year ended 30 April 2014 (“ 2014 Annual Report ”), the Group, with the deployment of newly invented “Pik-Lik” scaffolding system, is confident in the prospects of the scaffolding industry. “Pik-Lik” saves up to 75% manpower compared with traditional systems and is able to ease manpower shortage problem in the scaffolding industry. The Group anticipates that the use of “Pik-Lik” scaffolding system can result in the reduction of labour costs and substantial enhancement of efficiency, in particular, for erection and dismantlement of the scaffold. The Group will further promote the usage of “Pik-Lik” to improve operational efficiency. It is the business plan of the Group to allocate more resources on the promotion of the use of “Pik-Lik” scaffoldings in sub-contracting work. The Group also plans to promote the rental of “Pik-Lik” brand scaffolding system. The components of “Pik-Lik” scaffoldings consist of post, ledgers, working platform, toeboards, access ladder, trapdoors and stair towers, which are mainly made of steel. The Group will further expand business segments with higher profit margin such as gondolas, parapet railings and access equipment installation and maintenance service segment. In addition, the Group will strengthen the logistics, warehouse and other back-up services to enhance overall profitability. In view of the Group’s business plan and development of its core businesses, including but not limited to the development of “Pik-Lik” scaffolding system, the Group intends to purchase factory unit for warehouse storage purpose. Based on the Company’s research on the property market with reference to recent transactions and prices quoted by property agents for factory units which are situated near to the current factory leased by the Group with size determined based on estimated requirement for the Group’s proposed development, it is expected that the purchase of factory unit would cost approximately HK$25.00 million. As at the Latest Practicable Date, the Company was in the course of identifying suitable factory unit for the warehousing purpose. Should appropriate factory unit be identified, it will be crucial for the Group to have readily available fund for financing such purchase in a timely manner.

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LETTER FROM THE BOARD

Currently, the Group leases a warehouse in Hong Kong with similar size to the proposed factory unit for warehouse to be acquired by the Group. The annual rental expense for the warehouse leased by the Group is approximately HK$1.80 million. In view of the increasing rental expenses in Hong Kong, the Directors consider that the renewal of existing rental agreement may result in higher rental costs. If the rental agreement cannot be renewed on terms and conditions acceptable to the Group, relocation of the Group’s warehouse will be required and hence the Group will incur relocation cost and may cause disruption to the Group’s business. Therefore, the Directors consider that purchasing rather than leasing factory unit as warehouse would be beneficial to the Group for its proposed business development.

In addition, as stated in the 2014 Interim Report, the Group also established a new 51% owned subsidiary, Sense Key Design Holdings Limited (“ Sense Key ”), for providing interior design services to residential properties in Hong Kong. Since the establishment of Sense Key in October 2014 and up to 31 December 2014, Sense Key has already been generating profit. In addition, Sense Key has entered into service contracts with its customers which are expected to be completed in 2015 with total aggregate contract value of approximately HK$15.16 million. Therefore, Sense Key is expected to contribute additional revenue and further improve the operating results of the fitting out division in the future. In order to pursue further expansion for the design and fitting out services, the Group anticipates that approximately HK$17.00 million will be required to (i) enhance customer awareness by means of advertisements and exhibitions; (ii) enhance the Group’s design capacity and office efficiency by providing training program to staffs and recruiting professional staffs; and (iii) expand the Group’s office in Hong Kong through acquisition of new showrooms or workshops.

To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the remaining 49% shareholding of Sense Key are owned by third parties independent of the Company and its connected persons.

As disclosed in the 2014 Interim Report, the total operating and administration expenses for the six months ended 31 October 2014 was approximately HK$11.00 million with the arithmetical monthly average of operational expenditure of approximately HK$1.83 million. The Company considers that it will be a merit for the Group to have additional working capital for its business operation and development. Based on the 2014 Annual Report, the Group recorded a net cash used in operating activities amounting to approximately HK$23.65 million and the trade receivable turnover days for the year ended 30 April 2014 (calculated based on average amount of trade and other receivables as at the beginning and end of the year ended 30 April 2014 divided by total turnover for the corresponding period multiplied by 365 days) was approximately 189 days. In view of the historical amount of net cash used in operating activities coupling with long trade receivable turnover days of the Group, approximately HK$24.76 million from the Placing will be applied for general working capital of the Group for payment of operational outgoings (such as payroll costs, payment to sub-contractors and suppliers, other administrative expenses and professional fees). The Directors consider that the Placing represents a good opportunity for the Company to raise necessary fund for the Company for future use without having to resort to borrowing from financial institutions which will result in finance costs to the Group. The issue of new Placing Shares under the Placing will

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LETTER FROM THE BOARD

broaden the capital base and shareholders’ base of the Company. In addition, the Placing can also improve the gearing ratio and strengthen the financial position of the Group. Accordingly, the Directors consider that the Placing is in the interest of the Company and the Shareholders as a whole.

Save as disclosed above, as at the Latest Practicable Date, the Company did not have any current plan to acquire any assets (save in the ordinary and usual course of business of the Group) or businesses.

Notwithstanding that the Placing may have a substantial dilution effect on the existing shareholdings, the Directors believe that the long-term benefits arising from the net proceeds of the Placing for the overall development of the Group will increase the value of the Consolidated Shares in the long run.

In assessing the fairness and reasonableness of the Placing, the Directors also took into account the significant dilution effect to the existing Shareholders and are of the view that:

(i) the Placing will enable the Group to enhance its financial position through strengthening its capital base and settling of the outstanding bank loans, other loans and Convertible Bonds which will be due within one year. In addition, the Placing will provide the Group with readily available fund for its future development and enhance its existing operation as described above;
(ii) given the downward trading price trend, thin trading volume of the Shares and uncertainties in the financial market in Hong Kong, in order to maintain the attractiveness of the Placing, a relatively deep discount of the Placing Price will be necessary in order to provide reasonable incentive to the Placees to subscribe for the Placing Shares;
(iii) as the pre-emptive fund raising methods are usually required to be conducted on a fully underwritten basis, the Company has attempted yet failed to secure underwriter(s) for raising funds under pre-emptive issues;
(iv) the Company will be required to put in additional effort and costs to administer the rights issue or open offer procedures, which is not cost effective from the perspective of the Company given the tight cash position of the Group;
(v) although the Placing has an inherent dilutive nature, it is subject to Shareholders’ approval, which means that the Shareholders have a right to disapprove the Placing and the Placing Agent has also undertaken to the Company that none of the Placees would, immediately upon Completion, become a substantial Shareholder (as defined in the GEM Listing Rules) of the Company; and

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LETTER FROM THE BOARD

(vi) the actual use of proceeds from previous fund raising activities completed within the past 12 months (“ Activities ”) was largely in line with the intended use of proceeds as stated in the respective announcements of the Activities, which were utilised principally for business operations and development of the Group. Capital base and shareholders base of the Group were broadened upon completion of the Activities, despite their potential dilution effects.
Based on the foregoing, the Directors considered that the dilution effect of the
Placing is justifiable.

Apart from the Placing, the Directors have considered alternative financing means, such as debt financing, rights issue or open offer. However, in view of the amount required for the implementation of the above business plans and the intended uses, debt financing will result in additional interest burden, significant increase in gearing ratio of the Group and subject the Group to repayment obligations. Rights issue and open offer are less effective in terms of time and cost and securing underwriter(s) for a rights issue and/or an open offer exercise would also be difficult. Given the proposed fund-raising scale of the Company, the Company estimates that Shareholders’ approval will be required under both the Placing and pre-emptive issues (such as rights issue and open offer). However, the documentation involves in a pre-emptive issue is more complicated, given that it will involve preparation and issue of prospectus and appointment of reporting accountants to report on unaudited pro forma financial information to be included in the prospectus. As such, preparation time of pre-emptive issues are longer as compared to the Placing. In addition, pre-emptive issues also involve a lengthy acceptance process by the Shareholders and potential investors which will involve handling of application forms and excess applications. Assuming Shareholders’ approval is obtained, the Company estimates that the Placing will be completed within 30 days as compared with pre-emptive issues which will require around 1.5 to 2 months to complete.

Moreover, pre-emptive issues will inevitably be more costly than the Placing given that additional professional fees of approximately HK$400,000 will be incurred for appointing reporting accountants, obtaining legal advice in connection with the pre-emptive issues, such as the feasibility of extending pre-emptive issues to overseas Shareholders and engaging other professional parties. Furthermore, based on the research conducted by the Group, the average underwriting commission rate of rights issue or open offer is about 3%, which is triple of the placing commission of 1% under the Placing. The Company considered that it may not be able to procure more favourable terms in commercial underwriting than the placing commission rate that the Placing Agent currently offers. The Company considered that significant reduction in commission expenses of the Company under the Placing of approximately HK$3.24 million (assuming the Placing Shares are fully placed by the Placing Agent at the commission rate of 1%) as compared with pre-emptive issues is an additional advantage, which is in the interests of the Company and the Shareholders as a whole.

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LETTER FROM THE BOARD

It is essential for the Company to secure underwriter(s) for pre-emptive issues. In fact, in the course of this fund raising exercise, the Company had considered fund raising by pre-emptive issues and had approached two securities houses in January 2015 for their provision of underwriting services for the fund raising activities by the Group through rights issue or open offer. However, neither of them showed interest in providing underwriting services. In view of the historical financial performance of the Group and Company’s failure in securing underwriters for pre-emptive issues, the Company considers that it may not be possible to procure underwriters for pre-emptive issues on acceptable terms under the prevailing market conditions.

Accordingly, the Directors decided to conduct the Placing on a best effort basis which allows the Company to secure the Placing Agent more easily at a much lower commission rate than the market norm of underwriting commission under pre-emptive issues and the documentation involved in the Placing is less complicated and thus the Placing can be completed within a short period of time subject to Shareholders’ approval. Since the Placing is subject to Shareholders’ approval, which means that the Shareholders can have a right to disapprove the Placing.

Furthermore, after October 2014, the US Federal Reserve is putting a halt to the quantitative easing (“ QE ”) strategies in the United States of America while Japan’s central bank has started its own version of QE. As such, the Directors consider that the financial markets may become volatile as a result of the uncertainties stemming from fluctuating market sentiment, monetary policies of different major economies, capital flow and trend of interest rate, etc. In this connection, having considered the concrete opportunity to raise fund under the Placing on terms acceptable to the Group as compared with uncertainties of the ability of the Group in securing underwriters under pre-emptive issues on acceptable terms, the Directors opt to take up the opportunities under the Placing to provide funding support for specific usage or specific business plans of the Group. The specific usage and/or business plans of the Group include (i) lowering the gearing level and strengthening the financial position of the Group through repayment of bank loans, other loans and the Convertible Bonds which will be due within one year; (ii) diversification of the Group’s business portfolio to money lending business; (iii) purchase of factory unit in the course of the business expansion and development of the Group’s core business; (iv) further expansion of design and fitting out division of the Group; and (v) financing the operating capital needs.

In view of the above, the Board are confident that the Placing can support the implementation of a series of concrete and specific plans of the Group as stated above and create value to the Shareholders in the long run and considers that raising funds by way of the Placing to be a preferred and feasible financing means as compared with debt financing, rights issue or open offer.

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LETTER FROM THE BOARD

Equity fund raising activities of the Company in the past 12 months

Save as disclosed below, the Company has not conducted any fund raising activities in the past twelve months immediately preceding the date of the Placing Agreement:

Date of		Intended use of
announcement	Event	net proceeds	Actual use of proceeds
21 October 2014 and	Issue of 79,900,000	The aggregate net	All	of the net proceeds
31 October 2014	new shares under a	proceeds of	have been used as
	general mandate	approximately	intended
	granted to the	HK$13.99 million
	Directors by the	was intended to be
	Shareholders at the	used to finance the
	annual general	subscription of
	meeting of the	shares of AP Assets
	Company held on	Limited
	28 August 2014
27 June 2014,	Placing of	The aggregate net	All	of the net proceeds
28 July 2014,	Convertible Bonds	proceeds of	have been used as
20 August 2014 and	in the aggregate	approximately	follows:
28 August 2014	principal amount of	HK$28.61 million
	HK$30,000,000	was intended to be	(i)	approximately
	pursuant to the	used as to (i)		HK$17.36 million
	specific mandate	approximately		had been used as
	granted to the	HK$17.36 million		intended;
	Directors by the	for the acquisition
	Shareholders at the	of 51% interest in	(ii)	approximately
	extraordinary	Dragon Oriental		HK$4.02 million had
	general meeting of	Investment		been applied for
	the Company held	Limited; and (ii)		repayment of bank
	on 20 August 2014	approximately		loans and bank
		HK$11.25 million as		overdraft of the
		general working		Group; and
		capital of the
		Group, out of	(iii)	approximately
		which (a)		HK$7.23 million had
		approximately		been applied as
		HK$3.00 million		general working
		would be allocated		capital of the Group
		for repayment of
		bank overdraft of
		the Group; and (b)
		approximately
		HK$8.25 million
		would be allocated
		for payment of
		operational
		outgoings (such as
		payroll costs, other
		administrative
		expenses and
		professional fees)

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LETTER FROM THE BOARD

Date of announcement

12 January 2014 and 29 January 2014

Intended use of net proceeds

Event

Placing of 223,950,000 The aggregate net new shares under a proceeds of general mandate approximately granted to the HK$23.06 million Directors by the was intended to be Shareholders at the applied as general annual general working capital of meeting of the the Group Company held on 29 August 2013

Actual use of proceeds

All of the net proceeds have been used as follows:

(i) approximately HK$15.00 million had been applied for repayment of bank overdraft of Wui Loong Scaffolding Works Company Limited (“ Wui Loong ”), a wholly-owned subsidiary of the Company;

(ii) approximately HK$0.50 million had been applied for the repayment of bank overdraft of Wui Luen Engineering Company Limited, a wholly-owned subsidiary of the Company; and
(iii) approximately HK$7.56 million had been applied as general working capital of Wui Loong

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LETTER FROM THE BOARD

Effects on the shareholding structure

To the best of the Directors’ knowledge, information and belief after having made all reasonable enquiries, the shareholding structure of the Company (i) as at the Latest Practicable Date; (ii) immediately after the Share Consolidation but before the Completion (assuming there is no other change in the shareholding structure before the Share Consolidation becoming effective); and (iii) immediately after the Share Consolidation and the Completion (assuming the Placing Shares are placed in full and there is no other change in the shareholding structure of the Company before the issue of the Placing Shares) are set out below.

Shareholders Directors: Dr. So Yu Shing Mr. Kong Kam Wang Ms. Lai Yuen Mei, Rebecca Mr. So Wang Chun, Edmond Mr. Ng Tang Mr. Lam Kwok Wing Placees Other public shareholders Total:	As at the Latest Practicable Date No. of Shares Approximate % 2,075,000 0.43% 2,761,250 0.58% 2,075,000 0.43% 500,000 0.10% 3,460,000 0.72% 500,000 0.10% – – 468,066,923 97.63% 479,438,173 100.00%	Immediately after the Share Consolidation but before the Completion No. of Consolidated Shares Approximate % 415,000 0.43% 552,250 0.58% 415,000 0.43% 100,000 0.10% 692,000 0.72% 100,000 0.10% – – 93,613,384 97.63% 95,887,634 100.00%	Immediately after the Share Consolidation and the Completion No. of Consolidated Shares Approximate % 415,000 0.07% 552,250 0.09% 415,000 0.07% 100,000 0.02% 692,000 0.11% 100,000 0.02% 540,000,000 84.92% 93,613,384 14.72% 635,887,634 100.00%	Immediately after the Share Consolidation and the Completion No. of Consolidated Shares Approximate % 415,000 0.07% 552,250 0.09% 415,000 0.07% 100,000 0.02% 692,000 0.11% 100,000 0.02% 540,000,000 84.92% 93,613,384 14.72% 635,887,634 100.00%
				100.00%

Note: Percentage may not add up to 100 per cent due to rounding.

(V) RE-ELECTION OF DIRECTORS

Mr. Yuen Chun Fai (“ Mr. Yuen ”) was appointed as an executive Director with effect from 5 September 2014 and Mr. Law Man Sang (“ Mr. Law ”) was appointed as an independent non-executive Director with effect from 1 December 2014. Pursuant to bye-law 83 of the bye-laws of the Company, each of Mr. Yuen and Mr. Law shall hold office only until the SGM, and being eligible, offers himself for re-election at the SGM.

– 28 –

LETTER FROM THE BOARD

The biographical details of Mr. Yuen and Mr. Law are set out below:

Mr. Yuen

Mr. Yuen, aged 36, joined the Group in April 2014 as the financial controller of the Company. Upon his appointment as an executive Director, Mr. Yuen has been mainly responsible for overseeing and monitoring the corporate exercises and accounting and finance functions of the Group. Mr. Yuen is also a director of several subsidiaries of the Company. Mr. Yuen has over 12 years’ experiences in the field of financial reporting, financial management and audit experience in Hong Kong, the PRC, Malaysia and Singapore.

Mr. Yuen holds a bachelor’s degree of science in accounting and finance awarded by The London School of Economics and Political Science in 2002. Mr. Yuen is a fellow of the Association of Chartered Certified Accountants and is also a certified public accountant of the Hong Kong Institute of Certified Public Accountants. Mr. Yuen was an executive director of Cybertowers Berhad (Stock Code: 0022. KL), a company listed in the ACE Market in Malaysia, from April 2012 to June 2013, and was appointed as a non-independent non-executive director of Cybertowers Berhad, from June 2013 to February 2014. Since 30 June 2014, Mr. Yuen has been acting as an independent non-executive director of Rui Kang Pharmaceutical Group Investments Limited, a company whose shares are listed on the GEM of the Stock Exchange (Stock Code: 8037), and has been acting as an independent non-executive director of Ping Shan Tea Group Limited, a company whose shares are listed on the Main Board of the Stock Exchange (Stock Code: 364), since 31 July 2014.

Mr. Yuen has entered into a service contract with the Company regarding his appointment as an executive Director for an initial fixed period of three years from 5 September 2014 and thereafter be continuous until terminated by either party giving to the other not less than three months’ notice in writing. The appointment is subject to retirement by rotation and re-election and other related provisions as stipulated in the bye-laws of the Company and the GEM Listing Rules.

Mr. Yuen is entitled to a remuneration of HK$48,800 per month and a discretionary bonus, which is determined by the Board from time to time with reference to his performance and the performance of the Group. The remuneration package of Mr. Yuen is determined with reference to his background, experience, his duties and responsibilities with the Group and the prevailing market conditions, and shall be subject to the review by the Board from time to time at such rate as shall be determined by the Board (and the remuneration committee of the Board).

Save as disclosed above, as at the Latest Practicable Date, Mr. Yuen had not held any other major appointment and qualifications or directorship in other listed company in the last three years, nor did he have any relationship with any Director, senior management, substantial or controlling Shareholders (having the meaning ascribed to it in the GEM Listing Rules) of the Company.

– 29 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, Mr. Yuen was beneficially interested in share options to subscribe for 3,460,000 Shares of HK$0.04 each of the Company. Save as disclosed herein, Mr. Yuen did not have any other interest in the shares of the Company within the meaning of Part XV of the SFO.

Mr. Law

Mr. Law, aged 52, has joined KGI Asia Limited since December 2004 and is currently the sales director of the same company. Since June 2005, Mr. Law has been acting as a responsible officer of each of KGI Securities (Hong Kong) Limited and KGI Asia Limited, in relation to Type 1 (dealing in securities) regulated activity under the SFO. Since September 2009, Mr. Law has been acting as a responsible officer of KGI Futures (Hong Kong) Limited, in relation to Type 2 (dealing in futures contracts) regulated activity under the SFO. Since March 2013, Mr. Law has been acting as a responsible officer of each of KGI Asia Limited and KGI Futures (Hong Kong) Limited, in relation to Type 4 (advising on securities) and Type 5 (advising on futures contracts) regulated activities under the SFO respectively. Mr. Law has extensive experiences in financial services management. Mr. Law also actively participated in various social and community organisations in both Hong Kong and the PRC.

Pursuant to the letter of appointment made between Mr. Law and the Company, Mr. Law has been appointed for a term of two years commencing from 1 December 2014 unless terminated by not less than one month’s notice in writing served by either party on the other and is subject to retirement by rotation and re-election and other related provisions as stipulated in the bye-laws of the Company and the GEM Listing Rules. Mr. Law is entitled to a monthly director’s fee of HK$7,500, which was determined with reference to his background, experience, his duties and responsibilities with the Group and the prevailing market conditions.

Mr. Law had been a director of the following private companies incorporated in Hong Kong, each of which was dissolved by striking off pursuant to section 291 of Companies Ordinance (Chapter 32 of the Laws of Hong Kong) then in force.

Company name	Date of dissolution	Principal business
America Building Materials	8 September 2006	supplying building
Limited		materials
Dong Kiu Properties	9 June 2006	project consulting
Development Limited
Sinogem Development	17 February 2006	investment holding
Limited
World First Development	8 August 2008	investment holding
Limited

– 30 –

LETTER FROM THE BOARD

To the best knowledge and belief of Mr. Law, each of the above companies was dissolved for not filing annual return to the Companies Registry in Hong Kong within the prescribed time and was solvent at the time of it being dissolved by striking off.

Save as disclosed above, as at the Latest Practicable Date, Mr. Law had not held any other major appointment and qualifications or directorship in other listed company in the last three years, nor did he have any relationship with any Director, senior management, substantial or controlling Shareholders (having the meaning ascribed to it in the GEM Listing Rules) of the Company. Other than the directorship in the Company as disclosed above, Mr. Law did not hold other positions with the Company or other members of the Company.

As at the Latest Practicable Date, Mr. Law was not interested in any shares of the Company within the meaning of Part XV of the SFO.

Save as disclosed above, there is no other matter concerning the re-election of Mr. Yuen and Mr. Law as Directors that needs to be brought to the attention of the Shareholders and the Stock Exchange and there is no other information that is required to be disclosed pursuant to any of the requirements set out in Rule 17.50(2)(h) to (v) of the GEM Listing Rules.

(VI) SGM

The Share Consolidation, the Increase in Authorised Share Capital, the Placing and the re-election of Directors are subject to the Shareholders’ approval at the SGM.

The SGM will be held at 12:00 noon on Thursday, 5 March 2015 at Rooms 1001-1006, 10th Floor, Tower A, Southmark, 11 Yip Hing Street, Wong Chuk Hang, Aberdeen, Hong Kong, for the purposes of considering, and, if thought fit, approving, inter alia , the Share Consolidation, the Increase in Authorised Share Capital, the Placing Agreement (including the grant of the Specific Mandate) and the re-election of Directors. In compliance with the GEM Listing Rules, all resolutions will be voted on by way of poll at the SGM. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, no Shareholders are required to abstain from voting on any of the resolutions to be proposed at the SGM.

As at the Latest Practicable Date, the Company had no controlling Shareholder or substantial Shareholder. As at the Latest Practicable Date, so far as the Directors were aware of, none of the Directors or their respective associates had any business or interest which competed or might compete with the business of the Group, or had or might have any other conflicts of interest with the Group.

– 31 –

LETTER FROM THE BOARD

The notice convening the SGM is set out on pages 33 to 36 of this circular. A form of proxy for use at the SGM is enclosed. Whether or not you are able to attend the SGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the office of the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in an event not less than 48 hours before the time scheduled for the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending or voting in person at the SGM or any adjourned meeting should you so wish, and in such case, the form of proxy submitted by you shall be deemed to be revoked.

(VII) RECOMMENDATION

The Board is of the opinion that the terms of the Placing Agreement which are determined based on arm’s length negotiations between the Company and the Placing Agent under the prevailing conditions, are on normal commercial terms and are fair and reasonable and that the Share Consolidation, the Increase in Authorised Share Capital, the Placing and the re-election of Mr. Yuen and Mr. Law are in the interest of the Company and the Shareholders. Accordingly, the Board recommends that all Shareholders to vote in favour of all the ordinary resolutions to be proposed at the SGM.

(VIII) RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM Listing Rules for the purpose of giving information with regard to the Group. 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.

Yours faithfully, On behalf of the Board WLS Holdings Limited So Yu Shing Chairman

– 32 –

NOTICE OF SGM

**WLS Holdings Limited 滙隆控股有限公司[*]**

(incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 8021)

NOTICE OF SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the special general meeting (“ SGM ”) of WLS Holdings Limited (“ Company ”) will be held at 12:00 noon on Thursday, 5 March 2015 at Rooms 1001-1006, 10th Floor, Tower A, Southmark, 11 Yip Hing Street, Wong Chuk Hang, Aberdeen, Hong Kong for the purposes of considering and, if thought fit, passing (with or without amendments) the following resolutions of the Company as ordinary resolutions:

ORDINARY RESOLUTIONS

“ THAT subject to and conditional upon the granting by The Stock Exchange of Hong Kong Limited of the approval for the listing of, and permission to deal in, the ordinary shares of the Company consolidated in the manner as set out in paragraph (a) of this resolution below (“ Share Consolidation ”):
(a) with effect from 8:00 a.m. (Hong Kong time) on 6 March 2015, every five (5) ordinary shares of HK$0.04 each in the share capital of the Company be consolidated into one (1) share of HK$0.20 (each a “ Consolidated Share ”), such Consolidated Share(s) shall rank pari passu in all respects with each other and have the rights and privileges and be subject to the restrictions in respect of ordinary shares contained in the constitutional documents of the Company; and
(b) the directors of the Company be and are hereby authorised to do all such acts and things and execute all such documents, including under seal where applicable, as they consider necessary, desirable or expedient for the purpose of, or in connection with, the implementation of and giving effect to the foregoing arrangements for the Share Consolidation and the matters ancillary thereto.”

* For identification purposes only

– 33 –

NOTICE OF SGM

“ THAT
(a) subject to and conditional upon (i) the passing of ordinary resolution no.1 set out in the notice convening the SGM dated 13 February 2015 and (ii) the Share Consolidation becoming effective, with effect from 6 March 2015, the authorised share capital of the Company be increased from HK$100,000,000 divided into 500,000,000 Consolidated Shares to HK$400,000,000 divided into 2,000,000,000 Consolidated Shares by the creation of an additional 1,500,000,000 Consolidated Shares (“ Increase in Authorised Share Capital ”), which shall rank pari passu in all respects with the Consolidated Shares in issue; and
(b) the directors of the Company be and are hereby authorised to do all such acts and things and execute all such documents as they consider necessary, desirable or expedient for the purpose of, or in connection with, the implementation of and giving effect to the Increase in Authorised Share Capital.”
“ THAT
(a) the conditional placing agreement dated 21 January 2015 (“ Placing Agreement ”) entered into between the Company and Tanrich Securities Company Limited (“ Placing Agent ”) pursuant to which the Placing Agent agreed to procure independent placees to subscribe for a maximum of 540,000,000 placing shares at the placing price of HK$0.30 each in the share capital of the Company upon the Share Consolidation becoming effective (“ Placing Shares ”), on a best effort basis (a copy of which has been produced to the SGM marked ‘‘A’’ and initialled by the Chairman of the Company for the purpose of identification), and all transactions contemplated thereunder be and are hereby approved, confirmed and ratified;
(b) the allotment and issue of the Placing Shares pursuant to and in accordance with the terms and conditions of the Placing Agreement be and are hereby approved; and
(c) any one director of the Company, or any two directors of the Company (where required), be and is/are hereby authorised to implement and to take all steps and do all such acts and things, to sign and execute all such further documents for and on behalf of the Company under hand or under seal, as may be necessary, desirable or expedient to give effect to the Placing Agreement and the implementation of all transactions contemplated thereunder (including the allotment and issue of the Placing Shares) and to agree to such variation, amendment or waiver as are, in the opinion of the director(s) of the Company, in the interest of the Company.”

– 34 –

NOTICE OF SGM

“ THAT Mr. Yuen Chun Fai be re-elected as an executive director of the Company.”
“ THAT Mr. Law Man Sang be re-elected as an independent non-executive director of the Company.”

On behalf of the Board WLS Holdings Limited So Yu Shing Chairman

Hong Kong, 13 February 2015

Registered office: Head office and principal place of Clarendon House business in Hong Kong: 2 Church Street Rooms 1001-1006 Hamilton HM 11, Bermuda 10th Floor, Tower A Southmark 11 Yip Hing Street Wong Chuk Hang Aberdeen Hong Kong

Notes:

Any shareholder of the Company entitled to attend and vote at the SGM shall be entitled to appoint another person as his/her/its proxy to attend and vote instead of him/her/it. A shareholder who is the holder of two or more shares may appoint more than one proxy(ies) to represent him/her/it and vote on his/her/its behalf. A proxy need not to be a shareholder of the Company.
In order to be valid, a form of proxy together with the power of attorney or other authority (if any) under which it is signed, or a certified copy thereof, must be deposited at the Company’s branch share registrar in Hong Kong, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for the SGM (or any adjournment thereof).
Completion and delivery of a form of proxy shall not preclude a shareholder of the Company from attending and voting in person at the SGM, and in such event, such form of proxy shall be deemed to be revoked.
Where there are joint holders of any shares, any one of such joint holder may vote, either in person or by proxy, in respect of such shares as if he/she/it was solely entitled thereto; but if more than one of such joint holders be present at the SGM, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint holders, and for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of such joint holding.
A form of proxy for use at the SGM is attached herewith.
Any voting at the SGM shall be taken by poll.
The form of proxy shall be signed by the shareholder of the Company or his/her attorney duly authorised in writing or, in the case of a corporation, must be either executed under its seal or under the hand of an officer, attorney or other person authorised to sign the same.

– 35 –

NOTICE OF SGM

This notice, for which the directors of the Company (“ Directors ”) collectively and individually accept full responsibility, includes particulars given in the compliance with the Rules Governing the Listing of Securities on the Growth Enterprise Market (“ GEM ”) of The Stock Exchange of Hong Kong Limited (“ Stock Exchange ”) 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 notice is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the mission of which would make any statement herein or this notice misleading.

As at the date of this notice, the Board comprises Dr. So Yu Shing (Chairman and Executive Director), Mr. Kong Kam Wang (Executive Director and Chief Executive Officer), Ms. Lai Yuen Mei, Rebecca (Executive Director), Mr. So Wang Chun, Edmond (Executive Director), Mr. Ng Tang (Executive Director), Mr. Yuen Chun Fai (Executive Director), Mr. Lam Kwok Wing (Independent Non-executive Director), Mr. Law Man Sang (Independent Non-executive Director) and Dr. Fung Ka Shuen (Independent Non-executive Director).

This notice will remain on the website of the GEM of the Stock Exchange for at least seven days from the day of its posting and on the website of the Company at www.wls.com.hk.

– 36 –

AI assistant

WLS Holdings Limited — Proxy Solicitation & Information Statement 2015

51219_rns_2015-02-12_9679668b-35ba-477c-8a59-a71019f36512.pdf

WLS Holdings Limited 滙隆控股有限公司[*]

(Stock Code: 8021)

(I) PROPOSED SHARE CONSOLIDATION;

Financial Adviser to the Company

DEFINITIONS

EXPECTED TIMETABLE

EXPECTED TIMETABLE

WLS Holdings Limited 滙隆控股有限公司[*]

(Stock Code: 8021)

To the Shareholders

(I) PROPOSED SHARE CONSOLIDATION;

(II) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL; (III) PLACING OF NEW CONSOLIDATED SHARES UNDER A SPECIFIC MANDATE; AND (IV) RE-ELECTION OF DIRECTORS

(I) INTRODUCTION

(II) PROPOSED SHARE CONSOLIDATION

Effects of the Share Consolidation

Conditions Precedent to the Share Consolidation

Listing Application

Reasons for the Share Consolidation

Fractional entitlement to Consolidated Shares

Board lot size

Arrangement on odd lot trading

Exchange of share certificates

Adjustments in relation to other securities of the Company

(III) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL

(IV) PLACING OF NEW CONSOLIDATED SHARES UNDER A SPECIFIC MANDATE

The Placing Agreement

The Company

Placing Agent

Placees

Placing Shares

Ranking of the Placing Shares

Placing Price

Conditions Precedent to the Placing

Specific Mandate to issue the Placing Shares

Termination and force majeure of the Placing

Completion of the Placing

Listing Application

Reasons for the Placing and the Use of Proceeds

Equity fund raising activities of the Company in the past 12 months

LETTER FROM THE BOARD

Date of announcement

Intended use of net proceeds

Event

Actual use of proceeds

Effects on the shareholding structure

(V) RE-ELECTION OF DIRECTORS

Mr. Yuen

Mr. Law

(VI) SGM

LETTER FROM THE BOARD

(VII) RECOMMENDATION

(VIII) RESPONSIBILITY STATEMENT

WLS Holdings Limited 滙隆控股有限公司[*]

(Stock Code: 8021)

NOTICE OF SPECIAL GENERAL MEETING

ORDINARY RESOLUTIONS

More from WLS Holdings Limited

WLS Holdings Limited Proxy Solicitation & Information Statement 2015

**WLS Holdings Limited 滙隆控股有限公司[*]**

**WLS Holdings Limited 滙隆控股有限公司[*]**

**WLS Holdings Limited 滙隆控股有限公司[*]**