1. Healthcare

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 Town Health International Medical Group Limited
(‘‘Company’’), you should at once hand this circular, together with the enclosed form of proxy, to the
purchasers or transferees or to the bank, stockbroker or other agent through whom the sale or transfer was
effected for transmission to the purchasers or transferees.
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.
Town Health International Medical Group Limited
康健國際醫療集團有限公司
(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)
(Stock Code: 3886)
CONTINUING CONNECTED TRANSACTIONS
AND
NOTICE OF SPECIAL GENERAL MEETING
Independent Financial Adviser to the Independent Board Committee
and the Independent Shareholders
A notice convening the special general meeting of the Company to be held at 9:30 a.m. on Monday, 23
February 2015 at 1st Floor, Town Health Technology Centre, 10-12 Yuen Shun Circuit, Siu Lek Yuen,
Shatin, New Territories, Hong Kong is set out on pages SGM-1 to SGM-3 of this circular. Whether or not
you are able to attend the meeting, you are requested to complete and return the enclosed form of proxy in
accordance with the instructions printed thereon as soon as possible and in any event not less than 48 hours
before the time appointed for holding the meeting or any adjournment thereof to the office of the Company’s
branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited at Level 22, Hopewell
Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude
you from attending and voting in person at the meeting or any adjournment thereof should you so wish, and
in such event, the instrument appointing a proxy shall be deemed to be revoked.
3 February 2015
CONTENTS
Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
Letter from the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
Letter from the Independent Financial Adviser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
15
Appendix
–
General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I-1
Notice of the SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . SGM-1
–i–
DEFINITIONS
In this circular, unless the context otherwise requires, the following expressions have the
following meanings:
‘‘Acquisition’’
the acquisition of 1,000 shares in the share capital of the
Target, representing 100% of the issued share capital of the
Target as at completion, which took place on 1 January
2015, at the consideration of HK$423,780,000
‘‘Annual Caps’’
the aggregate amount of the licence fees payable by the
Group under the Licence Agreements in each of the three
years ending 31 December 2017 in the amounts of HK$30
million, HK$30.8 million and HK$25.6 million
respectively
‘‘associates’’
has the meaning ascribed to it in the Listing Rules
‘‘Board’’
the board of Directors
‘‘Bonjour Holdings’’
Bonjour Holdings Limited, a company incorporated in the
Cayman Islands with limited liability and the ordinary
shares of which are listed on the Main Board of the Stock
Exchange (Stock Code: 653)
‘‘Bonjour Holdings Group’’
Bonjour Holdings and its subsidiaries
‘‘Broad Idea’’
Broad Idea International Limited, a company incorporated
in the BVI with limited liability
‘‘BVI’’
the British Virgin Islands
‘‘China Life’’
中國人壽保險
（集團）公司, in English for identification
purposes only, China Life Insurance (Group) Company
‘‘Company’’
Town Health International Medical Group Limited, a
company incorporated in the Cayman Islands and
continued in Bermuda with limited liability and the
ordinary shares of which are listed on the Main Board of
the Stock Exchange
‘‘connected person(s)’’
has the meaning ascribed to it under the Listing Rules
‘‘Convertible Preference Share(s)’’
perpetual non-voting redeemable convertible preference
share(s) of HK$0.01 each in the share capital of the
Company
–1–
DEFINITIONS
‘‘CPS Subscription Agreement’’
the perpetual non-voting redeemable convertible preference
shares subscription agreement dated 31 October 2014
entered into between the Company, Fubon Life, Fubon
Insurance and Broad Idea in relation to (i) Fubon Life’s
conditional subscription, and the Company’s conditional
allotment and issue, of 212,121,212 Convertible Preference
Shares at the cash consideration of HK$254,545,455; (ii)
Fubon Insurance’s conditional subscription, and the
Company’s conditional allotment and issue, of 79,545,454
Convertible Preference Shares at the cash consideration of
HK$95,454,545; and (iii) Broad Idea’s conditional
subscription, and the Company’s conditional allotment and
issue, of 83,333,333 Convertible Preference Shares at the
cash consideration of HK$100,000,000, each at the
subscription price of HK$1.20 per Convertible Preference
Share, details of which are set out in the circular of the
Company dated 28 November 2014
‘‘Director(s)’’
the director(s) of the Company
‘‘Dr. Cho’’
Dr. Cho Kwai Chee, an executive Director and the
executive vice chairman of the Company
‘‘Dr. Choi’’
Dr. Choi Chee Ming, GBS, JP, the non-executive Director
and the vice-chairman of the Company
‘‘Dr. Ip’’
Dr. Ip Chun Heng, Wilson, an executive Director
‘‘Existing HK Licence Agreement’’
the licence agreement dated 1 January 2015 in relation to
the grant by Bonjour Cosmetic Wholesale Center Limited
to Bonjour Beauty Limited of the exclusive right to use,
enjoy and occupy the Existing HK Premises
‘‘Existing HK Premises’’
the premises used and occupied by the Group under the
Existing HK Licence Agreement, details of which are
disclosed in the paragraph headed ‘‘(i) Existing HK
Licence Agreement’’ in the letter from the Board of this
circular
‘‘Fubon Insurance’’
Fubon Insurance Co., Ltd., a company incorporated in
Taiwan with limited liability
–2–
DEFINITIONS
‘‘Fubon Life’’
Fubon Life Insurance Co., Ltd., a company incorporated in
Taiwan with limited liability
‘‘Group’’
the Company and its subsidiaries
‘‘HK$’’
Hong Kong dollars, the lawful currency of Hong Kong
‘‘Hong Kong’’
the Hong Kong Special Administrative Region of the
People’s Republic of China
‘‘Independent Board Committee’’
the independent board committee comprising all the
independent non-executive Directors, i.e. Mr. Chan Kam
Chiu, Mr. Ho Kwok Wah, George, Mr. Wai Kwok
Hung, SBS, JP and Mr. Wong Tat Tung, who have no
material interest in the Licence Agreements and the
transactions contemplated thereunder, which has been
established by the Board to advise the Independent
Shareholders in relation to the Licence Agreements and the
transactions contemplated thereunder and the Annual Caps
‘‘Independent Financial Adviser’’
Goldin Financial Limited, a corporation licensed to carry
out type 6 (advising on corporate finance) regulated
activity as defined under the SFO, being the independent
financial adviser appointed by the Company to advise the
Independent Board Committee and the Independent
Shareholders in relation to the Licence Agreements and the
transactions contemplated thereunder and the Annual Caps
‘‘Independent Shareholder(s)’’
Shareholder(s) other than those who are required by the
Listing Rules to abstain from voting on the resolution
approving the Licence Agreements and the transactions
contemplated thereunder and the Annual Caps
‘‘Investment Agreement’’
the investment agreement dated 5 January 2015 entered
into between China Life and the Company in relation to
the subscription for 1,785,098,644 new Shares by China
Life, details of which are set out in the circular of the
Company dated 3 February 2015
‘‘Latest Practicable Date’’
30 January 2015, being the latest practicable date prior to
the publication of this circular for the purpose of
ascertaining certain information contained in this circular
–3–
DEFINITIONS
‘‘Licence Agreements’’
the Existing HK Licence Agreement, the Macau Licence
Agreement and the New HK Licence Agreement
‘‘Listing Rules’’
the Rules Governing the Listing of Securities on the Stock
Exchange
‘‘Macau’’
the Macau Special Administrative Region of the People’s
Republic of China
‘‘Macau Licence Agreement’’
the licence agreement dated 1 January 2015 in relation to
the grant by Full Gain Developments Limited to Speedwell
Group Limited of the exclusive right to use, enjoy and
occupy the Macau Premises
‘‘Macau Premises’’
the premises used and occupied by the Group under the
Macau Licence Agreement, details of which are disclosed
in the paragraph headed ‘‘(iii) Macau Licence Agreement’’
in the letter from the Board of this circular
‘‘New HK Licence Agreement’’
the licence agreement dated 1 January 2015 in relation to
the grant by Apex Frame Limited to Bonjour Beauty
Limited of the exclusive right to use, enjoy and occupy the
New HK Premises
‘‘New HK Premises’’
the premises to be used and occupied by the Group under
the New HK Licence Agreement, details of which are
disclosed in the paragraph headed ‘‘(ii) New HK Licence
Agreement’’ in the letter from the Board of this circular
‘‘Option Shares’’
the maximum number of Shares held by China Life and
which Shares are acquired by China Life through the
subscription for new Shares from the Company pursuant to
the Investment Agreement which when aggregated with the
then shareholding of Broad Idea in the Company
immediately before the exercise of the Put Option will
result in Broad Idea’s shareholding interest in the Company
being 29.90% of the total issued share capital of the
Company with voting rights immediately after completion
of the transfer of the Option Shares pursuant to the
exercise of the Put Option
–4–
DEFINITIONS
‘‘Put Option’’
the option entitling China Life to require Broad Idea to
purchase from China Life the Option Shares at the Put
Option Sale Price
‘‘Put Option Deed’’
the put option deed dated 5 January 2015 entered into by
Broad Idea, Dr. Cho and Dr. Choi in favour of China Life,
in relation to the grant of the Put Option, details of which
are set out in the circular of the Company dated 3 February
2015
‘‘Put Option Sale Price’’
the price at which China Life may sell the Option Shares to
Broad Idea on the exercise of the Put Option, which is
initially fixed at HK$1.20 per Option Share subject to
adjustment in accordance with the Put Option Deed
‘‘SFO’’
the Securities and Futures Ordinance (Chapter 571 of the
Laws of Hong Kong)
‘‘SGM’’
a special general meeting of the Company convened to be
held at 9:30 a.m. on Monday, 23 February 2015 at 1st
Floor, Town Health Technology Centre, 10-12 Yuen Shun
Circuit, Siu Lek Yuen, Shatin, New Territories, Hong Kong
for the purpose of considering and, if thought fit,
approving the Licence Agreements and the transactions
contemplated thereunder and the Annual Caps
‘‘Share(s)’’
ordinary share(s) of HK$0.01 each in the share capital of
the Company
‘‘Shareholder(s)’’
holder(s) of the Share(s)
–5–
DEFINITIONS
‘‘Share Subscription Agreement’’
the share subscription agreement dated 31 October 2014
entered into between the Company, Fubon Life, Fubon
Insurance and Broad Idea in relation to (i) Fubon Life’s
conditional subscription, and the Company’s conditional
allotment and issue, of 259,740,260 Shares at the cash
consideration of HK$254,545,455; (ii) Fubon Insurance’s
conditional subscription, and the Company’s conditional
allotment and issue, of 97,402,597 Shares at the cash
consideration of HK$95,454,545; and (iii) Broad Idea’s
conditional subscription, and the Company’s conditional
allotment and issue, of 102,040,816 Shares at the cash
consideration of HK$100,000,000, each at the subscription
price of HK$0.98 per Share, details of which are set out in
the circular of the Company dated 28 November 2014
‘‘SP Agreement’’
the agreement for sale and purchase dated 20 August 2014
entered into between Bonjour Group Limited as the vendor
and the Company as the purchaser in respect of the
Acquisition, details of which are set out in the circular of
the Company dated 19 November 2014
‘‘Stock Exchange’’
The Stock Exchange of Hong Kong Limited
‘‘Target’’
Bonjour Beauty International Limited, a company
incorporated in the BVI with limited liability
‘‘Target Group’’
the Target and its subsidiaries upon completion of the
Acquisition
–6–
LETTER FROM THE BOARD
Town Health International Medical Group Limited
康健國際醫療集團有限公司
(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)
(Stock Code: 3886)
Executive Directors:
Registered office:
Miss Choi Ka Yee, Crystal (Chairperson)
Canon’s Court
Dr. Cho Kwai Chee (Executive Vice Chairman)
Dr. Hui Ka Wah, Ronnie, JP (Chief Executive Officer)
22 Victoria Street
Hamilton HM12
Dr. Ip Chun Heng, Wilson
Mr. Lee Chik Yuet
Bermuda
Dr. Chan Wing Lok, Brian
Head office and principal place of
Mr. Wong Seung Ming (Chief Financial Officer)
business in Hong Kong:
6th Floor
Non-executive Director:
Dr. Choi Chee Ming, GBS, JP (Vice-Chairman)
Town Health Technology Centre
10-12 Yuen Shun Circuit
Independent non-executive Directors:
Siu Lek Yuen, Shatin
New Territories, Hong Kong
Mr. Chan Kam Chiu
Mr. Ho Kwok Wah, George
Mr. Wai Kwok Hung, SBS, JP
Mr. Wong Tat Tung
3 February 2015
To the Shareholders
Dear Sir or Madam,
CONTINUING CONNECTED TRANSACTIONS
INTRODUCTION
Reference is made to the announcement of the Company dated 1 January 2015 in which the
Company announced that, among other things, on 1 January 2015, certain subsidiaries of Bonjour
Holdings as licensors, and certain subsidiaries of the Target as licensees, entered into (i) the
Existing HK Licence Agreement; (ii) the New HK Licence Agreement; and (iii) the Macau
Licence Agreement.
–7–
LETTER FROM THE BOARD
The Group intends to continue to use the Existing HK Premises and the Macau Premises and
will use the New HK Premises under the arrangements as contemplated under the Licence
Agreements.
The purpose of this circular is to provide you with, among other things, (i) details of the
Licence Agreements and the transactions contemplated thereunder and the Annual Caps; (ii) the
recommendation of the Independent Board Committee to the Independent Shareholders regarding
the Licence Agreements and the transactions contemplated thereunder and the Annual Caps; (iii)
the advice of the Independent Financial Adviser to the Independent Board Committee and the
Independent Shareholders regarding the Licence Agreements and the transactions contemplated
thereunder and the Annual Caps; (iv) other information as required to be disclosed under the
Listing Rules; and (v) the notice of the SGM.
THE LICENCE AGREEMENTS
Set out below is a summary of each of the Licence Agreements:
(i)
Existing HK Licence Agreement
Licensor
Licensee
Date
Premises
Area of
premises
(sq. feet)
Term of licence
Authorised use of
the premises
Security
deposit
(HK$)
Monthly licence fee
1 January
Bonjour Beauty Limited, a
1. Bonjour Cosmetic Wholesale
2015
wholly-owned subsidiary of
Center Limited, a whollythe Company and a company
owned subsidiary of Bonjour
incorporated in Hong Kong
Holdings and a company
with limited liability and
incorporated in Hong Kong
principally engaged in the
with limited liability and
operation of beauty and health
principally engaged in
salons in Hong Kong
wholesaling and retailing of
beauty and health-care
products in Hong Kong (Note)
Shop B on the Ground Floor
and Offices on the First
and Second Floors of
Anho House, Nos. 22, 24,
26 and 28 Nullah Road,
Kowloon, Hong Kong
6,000
From 1 January 2015 to Lawful commercial
31 December 2017
purpose
1,559,955
(a) From 1 January 2015 to 20
March 2015: HK$519,985
(inclusive of government rent,
rates and management fees);
and (b) from 21 March 2015
to 31 December 2017:
HK$598,385 (inclusive of
government rent, rates and
management fees)
2.
First Floor, Nos. 50 and 50A
Tung Choi Street,
Mongkok, Kowloon,
Hong Kong
2,200
From 1 January 2015 to Lawful commercial
31 December 2017
purpose
47,580
(a) From 1 January 2015 to 31
March 2015: HK$15,860
(inclusive of government rent,
rates and management fees);
and (b) from 1 April 2015 to
31 December 2017:
HK$38,620 (inclusive of
government rent, rates and
management fees)
3.
Part of Ground Floors of
Nos. 40, 42, 44, 46, 48
& 50, Tung Choi Street,
Mongkok, Kowloon,
Hong Kong
5,100
From 1 January 2015 to Lawful commercial 1,979,902.50
31 December 2017
purpose
(a) From 1 January 2015 to 31
March 2015: HK$659,967.50
(inclusive of government rent,
rates and management fees);
and (b) from 1 April 2015 to
31 December 2017:
HK$759,967.50 (inclusive of
government rent, rates and
management fees)
4.
Portions on Basement of
Mirador Mansion, No. 58,
Nathan Road, Tsimshatsui,
Kowloon, Hong Kong
5,000
From 1 January 2015 to Lawful commercial
31 July 2017
purpose
1,674,420
HK$558,140 (inclusive of
government rent, rates and
management fees)
5.
Fifth and Eleventh Floors,
No. 3 Yuk Yak Street,
Tokwawan, Kowloon,
Hong Kong (‘‘Office’’)
11,588
From 1 January 2015 to Lawful commercial
30 June 2015
purpose
450,000
HK$150,000 (inclusive of
government rent, rates and
management fees)
–8–
LETTER FROM THE BOARD
(ii)
New HK Licence Agreement
Licensor
1. Apex Frame Limited, a whollyowned subsidiary of Bonjour
Holdings and a company
incorporated in Hong Kong
with limited liability and is
an investment holding
company (Note)
Licensee
Date
Premises
Bonjour Beauty Limited, a
1 January 11th Floor, Harrington
wholly-owned subsidiary of
2015
Building, Nos. 36-50
the Company and a company
Wang Wo Tsai Street,
incorporated in Hong Kong
Tsuen Wan, New
with limited liability and
Territories, Hong Kong
principally engaged in the
operation of beauty and health
salons in Hong Kong
Area of
premises
(sq. feet)
14,292
Authorised use of
the premises
Security
deposit
(HK$)
From 1 July 2015 to Lawful commercial
30 June 2017
purpose
580,423.20
Authorised use of
the premises
Security
deposit
(HK$)
Term of licence
Monthly licence fee
HK$193,474.40 (inclusive of
government rent, rates and
management fees)
(iii) Macau Licence Agreement
Licensor
Licensee
1. Full Gain Developments Limited, Speedwell Group Limited, a
a wholly-owned subsidiary of
wholly-owned subsidiary of
Bonjour Holdings and a
the Company and a company
company incorporated in the
incorporated in the BVI with
BVI with limited liability and
limited liability and
principally engaged in
principally engaged in
retailing of beauty and
provision of beauty and
healthcare products in Macau
healthcare related consultancy
(Note)
services in Macau
Date
Premises
1 January The First Floor, the Second
2015
Floor and part of the
Fifth Floor of the building
erected on 7 Domingos
Road, Macau
Area of
premises
(sq. feet)
6,512.5
Term of licence
From 1 January 2015 Commercial
to 30 September
purpose
2017
1,242,900
Monthly licence fee
HK$414,300 (inclusive of
government rent, rates and
management fees)
Note: Bonjour Holdings Group is principally engaged in the retail and wholesale of brand name beauty and
healthcare products.
Conditions precedent
Each of the Licence Agreements is conditional upon the passing of an ordinary resolution by
the Independent Shareholders at the SGM to be convened for the purpose of approving the terms
of the Licence Agreements and the transactions contemplated thereunder and the Annual Caps. If
this condition is not fulfilled by 30 April 2015 (or such other date agreed by the parties to the
relevant Licence Agreements in writing), all rights and obligations of the parties under the
relevant Licence Agreements shall cease and terminate, and no party thereto shall have any claim
against the other save for claim (if any) in respect of any antecedent breach thereof.
–9–
LETTER FROM THE BOARD
Annual Caps
Taking into account the fact that the Group intends to continue to use the Existing HK
Premises and the Macau Premises and will use the New HK Premises, it is expected that the
Annual Caps are as follows:
Annual Cap amounts
For the
For the
For the
year ending
31 December
year ending
31 December
year ending
31 December
2015
2016
2017
HK$30,000,000
HK$30,800,000
HK$25,600,000
The above Annual Caps are determined based on the licence fees payable by the Target
Group to the Bonjour Holdings Group under the Licence Agreements for the three years ending
31 December 2017.
Licence fees
The monthly licence fees under the Existing HK Licence Agreement and the Macau Licence
Agreement were determined by the parties thereto with reference to (i) the rents (which were
determined by the then prevailing market rents on the premises comparable in location, area and
permitted use) and other outgoings (such as government rents, rates and management fees) (if
any) payable by the licensors under the relevant Licence Agreements as tenant to the landlord
under the underlying tenancy agreements in relation to the Existing HK Premises and the Macau
Premises; and (ii) the area of the premises licensed under the Existing HK Licence Agreement and
the Macau Licence Agreement. In addition, the monthly licence fee under the New HK Licence
Agreement was determined by the parties to the New HK Licence Agreement with reference to
the prevailing market rents on the premises comparable in location, area and permitted use.
Reasons for the transactions
The Group is principally engaged in (i) healthcare business investments; (ii) provision and
management of healthcare and related services; and (iii) properties and securities investments and
trading.
The Target Group is principally engaged in the operation of 17 beauty and health salons
under the brands of ‘‘About Beauty’’, ‘‘Dr. Protalk’’ and ‘‘Top Comfort’’ in Hong Kong, Macau
and Shanghai, and provision of beauty and health-care related consultancy services in Hong Kong
and Macau.
– 10 –
LETTER FROM THE BOARD
The Target Group has been occupying the Existing HK Premises and the Macau Premises
before the date of the SP Agreement for the operation of the Target Group’s beauty salons and
office in Hong Kong and Macau respectively. In addition, the Target Group has decided to
relocate its office from the Office to the New HK Premises and the preparation for the renovation
of the New HK Premises has commenced before the date of the SP Agreement. It is considered
that it is in the interests of the Group for the Target Group to continue to use the Existing HK
Premises and the Macau Premises as it can shelter the Group from any potential loss due to
relocation of its existing beauty salons and office and save the relocation costs of the Group. It is
also considered that using the New HK Premises will avoid extra expenditure and time cost to be
incurred for the relocation and renovation of new office premises.
Having considered the above, the Directors (including the independent non-executive
Directors) are of the view that the terms of the Licence Agreements and the Annual Caps are fair
and reasonable and the entering into of the Licence Agreements is in the interests of the Company
and the Shareholders as a whole.
Listing Rules implications
As Bonjour Holdings is indirectly and beneficially owned as to 61.10% by Dr. Ip, a
connected person of the Company by virtue of him being an executive Director, each of Bonjour
Holdings and its subsidiaries is a connected person of the Company under the Listing Rules.
Accordingly, the transactions contemplated under the Licence Agreements constitute continuing
connected transactions for the Company under Chapter 14A of the Listing Rules.
Since certain applicable percentage ratios relating to the proposed Annual Caps for the
continuing connected transactions under the Licence Agreements exceed 5% and the Annual Caps
are more than HK$10 million, the continuing connected transactions under the Licence
Agreements are subject to the reporting, announcement, annual review and independent
shareholders’ approval requirements under Chapter 14A of the Listing Rules.
Dr. Ip has abstained from voting at the relevant Board resolution for approving the Licence
Agreements since he was deemed to have a material interest in the transactions contemplated
under the Licence Agreements for the reasons mentioned above. Save as disclosed above, none of
the other Directors has a material interest in the Licence Agreements and the transactions
contemplated thereunder.
General
The Independent Board Committee, comprising all the independent non-executive Directors
has been established to advise the Independent Shareholders in relation to the Licence
Agreements and the transactions contemplated thereunder and the Annual Caps. The Independent
Financial Adviser has been appointed by the Company to advise the Independent Board
Committee and the Independent Shareholders on the Licence Agreements and the transactions
contemplated thereunder and the Annual Caps.
– 11 –
LETTER FROM THE BOARD
As Dr. Ip is deemed to have a material interest in the transactions contemplated under the
Licence Agreements for the reasons mentioned above, Dr. Ip and his associates will be required to
abstain from voting at the SGM in respect of the resolution relating to the Licence Agreements
and the transactions contemplated thereunder and the Annual Caps. Given that (i) Bonjour Group
Limited, holding 365,327,586 Shares, which represented approximately 7.15% of the total issued
Shares as at the Latest Practicable Date, is a wholly-owned subsidiary of Bonjour Holdings,
which in turn is indirectly and beneficially owned as to 61.10% by Dr. Ip; and (ii) Promised
Return Limited, holding 10,176,000 Shares, which represented approximately 0.20% of the total
issued Shares as at the Latest Practicable Date, is wholly-owned by Deco City Limited, which is
owned as to 50% by Dr. Ip and 50% by Dr. Ip’s spouse, Bonjour Group Limited and Promised
Return Limited are associates of Dr. Ip and they will be required to abstain from voting at the
SGM in respect of the resolution relating to the Licence Agreements and the transactions
contemplated thereunder and the Annual Caps. Save as disclosed above, to the best of the
Directors’ knowledge, information and belief, having made all reasonable enquiries, no other
Shareholder has a material interest in the Licence Agreements and the transactions contemplated
thereunder and no other Shareholder will be required to abstain from voting at the SGM in respect
of the resolution relating to the Licence Agreements and the transactions contemplated thereunder
and the Annual Caps.
SGM
The SGM is convened to be held at 9:30 a.m. on Monday, 23 February 2015 at 1st Floor,
Town Health Technology Centre, 10-12 Yuen Shun Circuit, Siu Lek Yuen, Shatin, New
Territories, Hong Kong, the notice of which is set out on pages SGM-1 to SGM-3 of this circular,
for the Independent Shareholders to consider and, if thought fit, approve the Licence Agreements
and the transactions contemplated thereunder and the Annual Caps.
In compliance with the Listing Rules, the resolution will be voted on by way of poll at the
SGM.
You will find enclosed a form of proxy for use at the SGM. 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 as soon as possible and in any event not less than
48 hours before the time appointed for holding the SGM or any adjournment thereof to the office
of the Company’s branch share registrar and transfer office in Hong Kong, Tricor Tengis Limited
at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the
form of proxy will not preclude you from attending and voting in person at the SGM or any
adjournment thereof should you so wish, and in such event, the instrument appointing a proxy
shall be deemed to be revoked.
– 12 –
LETTER FROM THE BOARD
RECOMMENDATION
The Independent Board Committee, having taken into account the advice of the Independent
Financial Adviser, considers that the terms of the Licence Agreements and the Annual Caps are
fair and reasonable, on normal commercial terms so far as the Independent Shareholders are
concerned, and the entering into of the Licence Agreements are in the ordinary and usual course
of business and in the interests of the Company and the Shareholders as a whole. Accordingly,
the Independent Board Committee recommends the Independent Shareholders to vote for the
resolution to approve the Licence Agreements and the transactions contemplated thereunder and
the Annual Caps. The text of the letter from the Independent Board Committee is set out on page
14 of this circular.
Having considered the above-mentioned benefits to the Group, the Directors believe that the
terms of the Licence Agreements and the Annual Caps are fair and reasonable and in the interests
of the Company and the Shareholders as a whole. The Board recommends the Independent
Shareholders to vote in favour of the resolution as set out in the notice of the SGM.
ADDITIONAL INFORMATION
Your attention is also drawn to the additional information set out in the appendix to this
circular.
By order of the Board
Town Health International Medical Group Limited
Lee Chik Yuet
Executive Director
– 13 –
LETTER FROM THE INDEPENDENT BOARD COMMITTEE
Town Health International Medical Group Limited
康健國際醫療集團有限公司
(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)
(Stock Code: 3886)
3 February 2015
To the Independent Shareholders
Dear Sir or Madam,
CONTINUING CONNECTED TRANSACTIONS
This Independent Board Committee has been appointed to advise you on the terms of the
Licence Agreements, details of which are set out in the letter from the Board contained in the
circular to the Shareholders dated 3 February 2015 (‘‘Circular’’) of which this letter forms part.
Terms defined in the Circular shall have the same meanings when used in this letter unless the
context otherwise requires.
Having considered the terms of the Licence Agreements and the advice of the Independent
Financial Adviser in relation thereto as set out on pages 15 to 23 of the Circular, we are of the
opinion that the terms of the Licence Agreements and the Annual Caps are fair and reasonable, on
normal commercial terms so far as the Independent Shareholders are concerned, and the entering
into of the Licence Agreements are in the ordinary and usual course of business and in the
interests of the Company and the Shareholders as a whole. We therefore recommend the
Independent Shareholders to vote in favour of the ordinary resolution to be proposed at the SGM
to approve the Licence Agreements and the transactions contemplated thereunder and the Annual
Caps.
Yours faithfully,
Independent Board Committee of
Town Health International Medical Group Limited
Chan Kam Chiu
Wai Kwok Hung, SBS, JP
Ho Kwok Wah, George
Independent non-executive Directors
– 14 –
Wong Tat Tung
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
Set out below is the full text of a letter of advice from the Independent Financial Adviser to
the Independent Board Committee and the Independent Shareholders, which has been prepared
for the purpose of incorporation in this circular in respect of the continuing connected
transactions contemplated under the Licence Agreements and the proposed Annual Caps.
Goldin Financial Limited
23/F
Two International Finance Centre
8 Finance Street
Central
Hong Kong
3 February 2015
To the Independent Board Committee and
the Independent Shareholders of
Town Health International Medical Group Limited
Dear Sirs,
CONTINUING CONNECTED TRANSACTIONS
INTRODUCTION
We refer to our appointment as the Independent Financial Adviser to the Independent Board
Committee and the Independent Shareholders in relation to the Existing HK Licence Agreement,
the New HK Licence Agreement and the Macau Licence Agreement and the transactions
contemplated thereunder and the proposed Annual Caps, details of which are set out in the letter
from the Board (the ‘‘Letter from the Board’’) contained in the circular issued by the Company
to the Shareholders dated 3 February 2015 (the ‘‘Circular’’), of which this letter forms part.
Capitalized terms used in this letter shall have the same meanings as defined in the Circular
unless the context requires otherwise.
It was announced by the Company on 1 January 2015 that, among other things, on 1
January 2015, certain subsidiaries of Bonjour Holdings as licensors, and certain subsidiaries of
the Target as licensees, entered into (i) the Existing HK Licence Agreement in relation to the
grant by the licensor to the licensee of the exclusive right to use, enjoy and occupy the Existing
HK Premises; (ii) the New HK Licence Agreement in relation to the grant by the licensor to the
licensee of the exclusive right to use, enjoy and occupy the New HK Premises; and (iii) the
Macau Licence Agreement in relation to the grant by the licensor to the licensee of the exclusive
right to use, enjoy and occupy the Macau Premises.
– 15 –
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
Bonjour Holdings is indirectly and beneficially owned as to 61.10% by Dr. Ip, a connected
person of the Company by virtue of him being an executive Director, each of Bonjour Holdings
and its subsidiaries is a connected person of the Company under the Listing Rules. Accordingly,
the transactions contemplated under the Licence Agreements constitute continuing connected
transactions for the Company under Chapter 14A of the Listing Rules.
As one or more of the applicable percentage ratios (as defined under the Listing Rules and
other than the profits ratio) in respect of the proposed Annual Caps for the continuing connected
transactions under the Licence Agreements exceed 5% and the Annual Caps are more than HK$10
million, the continuing connected transactions under the Licence Agreements are subject to the
reporting, announcement, annual review and independent shareholders’ approval requirements
under Chapter 14A of the Listing Rules.
The Directors will convene the SGM to seek the approval of the Independent Shareholders
on the Licence Agreements and the transactions contemplated thereunder and the proposed
Annual Caps by way of poll in accordance with the requirements under the Listing Rules. As Dr.
Ip is deemed to have a material interest in the transactions contemplated under the Licence
Agreements for the reasons mentioned above, Dr. Ip and his associates will be required to abstain
from voting at the SGM in respect of the resolution relating to the Licence Agreements and the
transactions contemplated thereunder and the proposed Annual Caps. Given that (i) Bonjour
Group Limited, holding 365,327,586 Shares, which represented approximately 7.15% of the total
issued Shares as at the Latest Practicable Date, is a wholly-owned subsidiary of Bonjour
Holdings, which in turn is indirectly and beneficially owned as to 61.10% by Dr. Ip; and (ii)
Promised Return Limited, holding 10,176,000 Shares, which represented approximately 0.20% of
the total issued Shares as at the Latest Practicable Date, is wholly-owned by Deco City Limited,
which is owned as to 50% by Dr. Ip and 50% by Dr. Ip’s spouse, Bonjour Group Limited and
Promised Return Limited are associates of Dr. Ip and they will be required to abstain from voting
at the SGM in respect of the resolution relating to the Licence Agreements and the transactions
contemplated thereunder and the proposed Annual Caps. Save as disclosed above, to the best of
the Directors’ knowledge, information and belief, having made all reasonable enquiries, no other
Shareholder has a material interest in the Licence Agreements and the transactions contemplated
thereunder and no other Shareholder will be required to abstain from voting at the SGM in respect
of the resolution relating to the Licence Agreements and the transactions contemplated thereunder
and the proposed Annual Caps.
INDEPENDENT BOARD COMMITTEE
The Independent Board Committee comprising Mr. Chan Kam Chiu, Mr. Wai Kwok
Hung, SBS, JP, Mr. Ho Kwok Wah, George, and Mr. Wong Tat Tung, being all the independent
non-executive Directors, has been formed to advise the Independent Shareholders in relation to
the Licence Agreements and the transactions contemplated under and the proposed Annual Caps.
– 16 –
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
We, Goldin Financial Limited, have been appointed by the Company as the Independent
Financial Adviser to advise the Independent Board Committee and the Independent Shareholders
in relation to the Licence Agreements and to make a recommendation as to, among others,
whether the terms of the Licence Agreements and the transactions contemplated thereunder, and
the proposed Annual Caps are fair and reasonable, on normal commercial terms so far as the
Independent Shareholders are concerned, and the entering into of the Licence Agreements is in
the interests of the Company and the Shareholders as a whole, and as to voting in respect of the
resolution at the SGM.
BASIS OF OUR ADVICE
In formulating our opinion and recommendations, we have reviewed, inter alia, the
announcement of the Company dated 1 January 2015 and the Licence Agreements. We have also
reviewed the underlying tenancy agreements in relation to the Existing HK Premises and the
Macau Premises respectively. In addition, we have also reviewed certain information provided by
the management of the Company relating to the operations, financial condition and prospects of
the Group. We have also (i) considered such other information, analyses and market data which
we deemed relevant; and (ii) conducted verbal discussions with the management of the Company
regarding the terms of the Licence Agreements, the financials, businesses and future outlook of
the Group. We have assumed that such information and statements, and any representation made
to us, are true, accurate and complete in all material respects as of the date hereof and we have
relied upon them in formulating our opinion.
The Directors collectively and individually accept full responsibility for the accuracy of the
information contained in the Circular and confirm, having made all reasonable inquiries, that to
the best of their knowledge, opinions expressed in the Circular have been arrived at after due and
careful consideration and there are no other facts not contained in the Circular, the omission of
which would make any statement herein or in the Circular misleading. We consider that we have
been provided with, and we have reviewed, all currently available information and documents
which are available under present circumstances to enable us to reach an informed view regarding
the terms of the Licence Agreements and to justify reliance on the accuracy of the information
contained in the Circular so as to provide a reasonable basis of our opinion. We have no reason to
suspect that any material information has been withheld by the Directors or management of the
Company, or is misleading, untrue or inaccurate. We have not, however, conducted an
independent verification of the information nor have we conducted any form of in-depth
investigation into the businesses and affairs or other prospects of the Group or its associates. Our
opinion was necessarily based on financial, economic, market and other conditions in effect, and
the information made available to us, as at the Latest Practicable Date.
– 17 –
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
This letter is issued of the information for the Independent Board Committee and the
Independent Shareholders solely in connection with their consideration and approval of the
Licence Agreements and the transactions contemplated thereunder and the proposed Annual Caps,
and this letter, except for its inclusion in the Circular, is not to be quoted or referred to, in whole
or in part, nor shall this letter be used for any other purposes, without our prior written consent.
PRINCIPAL FACTORS AND REASONS CONSIDERED
In assessing the fairness and reasonableness of the Licence Agreements and the transactions
contemplated thereunder and the proposed Annual Caps, and in giving our recommendation to the
Independent Board Committee and the Independent Shareholders, we have taken into account the
following principal factors and reasons:
1.
Background to and reasons for the entering into of the Licence Agreements
The Group is principally engaged in (i) healthcare business investments; (ii) provision
and management of healthcare and related services; and (iii) properties and securities
investments and trading.
The Target Group is principally engaged in the operation of 17 beauty and health
salons under the brands of ‘‘About Beauty’’, ‘‘Dr. Protalk’’ and ‘‘Top Comfort’’ in Hong
Kong, Macau and Shanghai, and provision of beauty and health-care related consultancy
services in Hong Kong and Macau.
Bonjour Holdings is principally engaged in retail and wholesale of brand name beauty
and health-care products.
The Target Group has been occupying the Existing HK Premises and the Macau
Premises before the date of the SP Agreement for the operation of the Target Group’s beauty
salons and office in Hong Kong and Macau respectively. The Licence Agreements were
entered into between certain subsidiaries of Bonjour Holdings as licensors, and certain
subsidiaries of the Target as licensees, in relation to the licensing of the Existing HK
Premises, the Macau Premises and the New HK Premises (the ‘‘Premises’’), and the
continuing connected transactions contemplated under the Licence Agreements form an
integral part of the ordinary and usual course of business of the Group and has been
conducted on normal commercial terms and on an arm’s length basis.
As advised by the management of the Company, it is the intention of the Group to
continue to operate the Target Group’s beauty salons and office at the Existing HK Premises
and the Macau Premises since it can shelter the Group from any potential loss due to
relocation of its existing beauty salons and office and save the relocation costs of the Group.
– 18 –
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
In addition, the Target Group has decided to relocate its office from the Office to the
New HK Premises and the preparation for the renovation of the New HK Premises has
commenced before the date of the SP Agreement. As advised by the management of the
Company, using the New HK Premises will avoid extra expenditure and time cost to be
incurred for the relocation and renovation of new office premises.
In view of the profitable track record of the Target Group and the intention of the
Company to maintain and further develop the existing business of the Target Group, details
of which are set out in the circular issued by the Company dated 19 November 2014, we are
of the view that the entering into of the Licence Agreements would secure the Premises for
the business operation of the Target Group, which is important to the Group’s ongoing
business and positive to the Group’s financial performance.
In light of the foregoing, we are of the opinion that the continuing connected
transactions contemplated under the Licence Agreements which are and will be carried out
in the ordinary and usual course of business of the Group, and are in the interests of the
Company and the Shareholders as a whole.
2.
Principal terms of the Licence Agreements
The summary of each of the Licence Agreements are set out in the section headed
‘‘The Licence Agreements’’ in the Letter from the Board. Our analysis on the principal
terms of the Licence Agreements are as follows.
Licence fees
The monthly licence fees under the Existing HK Licence Agreement and the
Macau Licence Agreement were determined by the parties to the Existing HK Licence
Agreement and the Macau Licence Agreement with reference to (i) the rents (which
were determined by the then prevailing market rents on the premises comparable in
location, area and permitted use) and other outgoings (such as government rents, rates
and management fees) (if any) payable by the licensors under the relevant Licence
Agreements as tenant to the landlord under the underlying tenancy agreements in
relation to the Existing HK Premises and the Macau Premises; and (ii) the area of the
premises licensed under the Existing HK Licence Agreement and the Macau Licence
Agreement. In addition, the monthly licence fee under the New HK Licence Agreement
was determined by the parties to the New HK Licence Agreement with reference to the
prevailing market rents on the premises comparable in location, area and permitted use.
To assess the fairness and reasonableness of the licence fees as determined
between the licensors and the licensees under the relevant Licence Agreements, we
have researched on the public domain to study the recent commercial rental
atmosphere in Hong Kong and Macau.
– 19 –
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
All Existing HK Premises excluding the Office (the ‘‘Beauty Salons’’)
We have reviewed the breakdown of the monthly licence fees of the Beauty
Salons as provided by the management of the Company. In assessing the rents of the
Beauty Salons, the rental rate of each of the Beauty Salons, being the monthly licence
fee net of the rates, government rent and management fees, is used in our comparison.
As advised by the management of the Company, we were given to understand that all
the Beauty Salons are used for the operation of the Target Group’s beauty salons in
Kowloon areas. Considering the usage, nature and locations of the Beauty Salons, we
consider that the comparison between the rental rate of the Beauty Salons and the
average rents of private retail in Kowloon areas in November 2014 according to the
‘‘Hong Kong Property Review – Monthly Supplement’’ (‘‘Hong Kong Property
Review’’) published in January 2015 by the Rating and Valuation Department of the
Government of HKSAR are fair and reasonable.
In respect of the Beauty Salons, the premises as numbered 2 (‘‘Shop B’’) and 3
(‘‘Shop C’’) in the table set out in the section headed ‘‘The Licence Agreements’’ in
the Letter from the Board are adjacent to each other and we were given to understand
that the Group is currently using both Shop B and Shop C as a whole to operate
business. Therefore, the monthly licence fees of Shop B and Shop C are analysed as a
whole. We noted that the rental rates of the Beauty Salons (including Shop B and
Shop C as analysed as a whole) per square feet are lower than that of the average
rental rates of private retails in Kowloon areas (based on the conversion rate of 1
square feet = 0.09290304 square meters).
The Office and the New HK Premises
We have reviewed the breakdown of the monthly licence fees of the Office and
the New HK Premises as provided by the management of the Company. In assessing
the rents of the Office and the New HK Premises, the rental rates of the Office and the
New HK Premises, being the monthly licence fees net of the rates, government rent
and management fees, are used in our comparison. We noted that each of the
respective buildings which the Office and the New HK Premises is located is in the
industrial district of Tokwawan, Kowloon and Tsuen Wan, New Territories
respectively. Considering the usage, nature and locations of the Office and the New
HK Premises, we consider that the comparison between the rental rates of each of the
Office and the New HK Premises and the respective average rents of the transacted
leases for industrial buildings in Tokwawan, Kowloon and Tsuen Wan, New
Territories for the fourth quarter of 2014 according to the research report (‘‘Midland
Research Report’’) released on 15 January 2015 by Midland IC&I Group, one of the
leading property agency companies in Hong Kong, are fair and reasonable.
– 20 –
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
We noted that the rental rates of the Office per square feet are lower than the
average rental rates of the transacted leases for industrial buildings in Tokwawan,
Kowloon from the Midland Research Report. In respect of the New HK Premises, we
noted that the rental rates of the New HK Premises per square feet represents a slight
premium of approximately 4.02% over the average rental rates of the transacted leases
for industrial buildings in Tsuen Wan, New Territories.
Macau Premises
We have reviewed the breakdown of the monthly licence fee of the Macau
Premises as provided by the management of the Company. In assessing the rents of the
Macau Premises, the rental rate of the Macau Premises, being the monthly licence fee
net of the rates, government rent and management fees, is used in our comparison. We
noted that the Macau Premises is located at Domingos Road, being one of the premier
shopping districts in Macau. With reference to a news article released by Jones Lang
LaSalle Incorporated dated 10 July 2014 in relation to the property market in Macau, it
is stated that the overall retail rentals recorded a 7.4% year to year growth in the 2nd
quarter of 2014 and the retail rentals in S. Domingos and S. Paulo areas recorded the
strongest growth among districts.
We have researched on the public domain and on our best effort basis, have
identified one similar transaction (‘‘Comparable’’) in respect of the retail shop lease at
S. Domingos area, Macau, which was extracted from the Macao Daily News as
published on 20 November 2014. Considering the nature and location of the Macau
Premises, we consider that the comparison between the rental rate of the Macau
Premises and the rent of the Comparable relevant. We noted that the rental rate of the
Macau Premises per square feet is lower than that of the Comparable.
As stated above, we note that the monthly rental rate for most of the Premises
under the Licence Agreements are lower than the current market monthly average
rental values, save for the New HK Premises. Given that the usage of the New HK
Premises will avoid extra expenditure and time cost to be incurred for the relocation
and renovation of new office premises, we consider that the slight premium as
represented by the rental rate fee of the New HK Premises commercially justifiable.
Security deposit
The security deposits of each of the Premises contemplated under each of the
Licence Agreements is equivalent to three times of the respective monthly licence fee
for each Premises, and in the case of any revision of the monthly licence fees during
the term of the Licence Agreements, the initial monthly licence fee for such Premises,
as contemplated under each of the Licence Agreements respectively. According to the
guidelines of ‘‘Setting up your company’’ as released by InvestHK of the Government
of HKSAR, a cash security deposit of up to three months’ rent including service
– 21 –
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
charge and government rates is required when leasing an office in Hong Kong. As
such, we consider that the arrangement of the security deposit is in consistence with
the advice from Invest HK.
In light of the foregoing, we are of the view that the terms of the continuing
connected transactions contemplated under the Licence Agreements are normal
commercial terms, and fair and reasonable so far as the Independent Shareholders are
concerned.
PROPOSED ANNUAL CAPS UNDER THE LICENCE AGREEMENTS
The table below summarises the proposed Annual Caps for each of the three years ending 31
December 2015, 2016 and 2017 respectively, with respect to the transactions contemplated under
the Licence Agreements:
Annual Caps
For the year
For the year
For the year
ending 31
December 2015
ending 31
December 2016
ending 31
December 2017
HK$30,000,000
HK$30,800,000
HK$25,600,000
As stated in the Letter from the Board, the above Annual Caps are determined based on the
licence fees payable by the Target Group to the Bonjour Holdings Group under the Licence
Agreements for the three years ending 31 December 2017.
We have discussed with the Directors on the determination of the proposed Annual Caps
and noted that the proposed Annual Caps for each of the years ending 31 December 2015, 2016
and 2017 respectively is determined based on the aggregate sum of the monthly licence fees of
each of the Premises according to their respective terms as stipulated under the Licence
Agreements. The monthly licence fees payable by the Group for each of the Premises under the
Licence Agreements are fixed during their whole respective term with reference to the prevailing
market rents at the time of entering into the relevant Licence Agreements. We have reviewed the
calculation of the proposed Annual Caps and we considered that the proposed Annual Caps under
the Licence Agreements are fair and reasonable so far as the Independent Shareholders are
concerned.
– 22 –
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER
ANNUAL REVIEW OF THE CONTINUING CONNECTED TRANSACTIONS
The proposed Annual Caps will be subject to the annual review by the independent nonexecutive Directors, details of which must be included in the Company’s subsequent published
annual report and accounts. In addition, pursuant to the Listing Rules, the auditors of the
Company must provide a letter to the Board confirming, among others, that the continuing
connected transactions under the Licence Agreements are conducted in accordance with their
terms and that the proposed Annual Caps are not being exceeded. Moreover, pursuant to the
Listing Rules, the Company shall publish an announcement if it knows or has reason to believe
that the independent non-executive Directors and/or its auditors will not be able to confirm the
terms of such transactions or the relevant Annual Caps not being exceeded. We are of the view
that there are appropriate measures in place to govern the conduct of the transactions
contemplated under the Licence Agreements and safeguard the interests of the Independent
Shareholders.
RECOMMENDATIONS
Taking into consideration of the above mentioned principal factors and reasons, we consider
that the terms of the Licence Agreements and the proposed Annual Caps are fair and reasonable,
on normal commercial terms so far as the Independent Shareholders are concerned, and the
entering into of the Licence Agreements are in the ordinary and usual course of business and in
the interests of the Company and the Shareholders as a whole. Accordingly, we recommend the
Independent Shareholders, as well as the Independent Board Committee to advise the Independent
Shareholders, to vote in favour of the resolution to be proposed at the SGM to approve the
Licence Agreements and the transactions contemplated thereunder and the proposed Annual Caps.
Yours faithfully,
For and on behalf of
Goldin Financial Limited
Billy Tang
Director
*
For identification purposes only
– 23 –
APPENDIX
1.
GENERAL INFORMATION
RESPONSIBILITY STATEMENT
This circular, for which the Directors collectively and individually accept full responsibility,
includes particulars given in compliance with the Listing Rules for the purpose of giving
information with regard to the Company. The Directors, having made all reasonable enquiries,
confirm that to the best of their knowledge and belief the information contained in this circular is
accurate and complete in all material respects and not misleading or deceptive, and there are no
other matters the omission of which would make any statement herein or this circular misleading.
2.
DISCLOSURE OF INTERESTS
(i)
Interests of Directors
As at the Latest Practicable Date, the interests and short positions of the Directors and
chief executives of the Company in the Shares, underlying Shares and debentures of the
Company or its associated corporations (within the meaning of Part XV of the SFO) which
(i) were required to be notified to the Company and the Stock Exchange pursuant to
Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they
were taken or deemed to have under such provisions of the SFO); or (ii) were required,
pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii)
were required to be notified to the Company and the Stock Exchange pursuant to the Model
Code for Securities Transactions by Directors of Listed Issuers contained in the Listing
Rules were as follows:
Long position in the Shares and underlying Shares
Approximate
percentage of
the total
issued share
capital of
the Company
(Note 1)
Number of
Shares held
Number of
underlying
Shares held
1,335,243,431
(Note 2)
985,384,806
(Note 3)
42.38%
Beneficial owner
2,760,000
–
0.05%
Lee Chik Yuet
Beneficial owner
–
5,000,000
0.09%
Dr. Choi
Interest in controlled
corporation
1,335,243,431
(Note 2)
985,384,806
(Note 3)
42.38%
Dr. Ip
Interest in controlled
corporation
375,503,586
(Note 4)
–
6.85%
Name of Director
Capacity
Dr. Cho
Interest in controlled
corporation
Chan Wing Lok, Brian
I–1
APPENDIX
GENERAL INFORMATION
Notes:
1.
The total number of issued Shares as at the Latest Practicable Date (that was, 5,475,699,809 Shares)
have been used for the calculation of the approximate percentage.
2.
Such Shares were held by Broad Idea which is owned as to 50.1% by Dr. Cho and as to 49.9% by
Dr. Choi. Accordingly, Dr. Cho and Dr. Choi are both deemed to be interested in the 1,335,243,431
Shares held by Broad Idea under Part XV of the SFO. Dr. Cho and Dr. Choi are also directors of
Broad Idea.
3.
Such underlying Shares were held by Broad Idea which is owned as to 50.1% by Dr. Cho and as to
49.9% by Dr. Choi. Accordingly, Dr. Cho and Dr. Choi are both deemed to be interested in the
985,384,806 underlying Shares held by Broad Idea under Part XV of the SFO. Out of the 985,384,806
underlying Shares, (i) 83,333,333 underlying Shares represent the Shares that may be allotted and
issued to Broad Idea upon full conversion of the Convertible Preference Shares held by Broad Idea
based on the initial conversion price of HK$1.20 per Share (subject to adjustment in accordance with
the terms of the Convertible Preference Shares); and (ii) 902,051,473 underlying Shares are the
maximum number of Option Shares that may be sold by China Life to Broad Idea upon the exercise
of the Put Option to be granted to China Life under the Put Option Deed. Dr. Cho and Dr. Choi are
also directors of Broad Idea.
4.
Such Shares were held as to (i) 365,327,586 Shares by Bonjour Group Limited; and (ii) 10,176,000
Shares by Promised Return Limited. Bonjour Group Limited is wholly-owned by Bonjour Holdings.
Bonjour Holdings is owned as to 54.01% by Promised Return Limited. Promised Return Limited is
wholly-owned by Deco City Limited, which is owned as to 50% by Dr. Ip and 50% by his spouse,
Ms. Chung Pui Wan. As such, Dr. Ip is deemed to be interested in the aggregate of 375,503,586
Shares held by Bonjour Group Limited and Promised Return Limited under Part XV of the SFO.
Dr. Ip is also a director of each of Bonjour Group Limited, Bonjour Holdings, Promised Return
Limited and Deco City Limited.
Save as disclosed above, as at the Latest Practicable Date, none of the Directors or
chief executives of the Company had or was deemed to have any interests and short
positions in the Shares, underlying Shares and debentures of the Company or any of its
associated corporations (within the meaning of Part XV of the SFO) which (i) were required
to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part
XV of the SFO (including interests and short positions which they were taken or deemed to
have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the
SFO, to be entered in the register referred to therein; or (iii) were required to be notified to
the Company and the Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers contained in the Listing Rules.
I–2
APPENDIX
(ii)
GENERAL INFORMATION
Interests of substantial Shareholders
As at the Latest Practicable Date, so far as was known to the Directors, the following
parties, other than the Directors or chief executives of the Company, had interests or short
positions in the Shares and underlying Shares, which would fall to be disclosed to the
Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of
the SFO.
Long position in the Shares and underlying Shares
Number of
Shares held
Number of
underlying
Shares held
Approximate
percentage of
the total
issued share
capital of
the Company
(Note 1)
Name
Capacity
Broad Idea (Note 2)
Beneficial owner
1,335,243,431
985,384,806
(Note 3)
42.38%
Bonjour Group Limited
(Note 4)
Beneficial owner
365,327,586
(Note 5)
–
6.67%
Bonjour Holdings
Interest in controlled
corporation
365,327,586
(Note 5)
–
6.67%
Fubon Financial
Holding Co., Ltd.
(‘‘Fubon Financial’’)
Interest in controlled
corporation
357,142,857
(Note 6)
291,666,666
(Note 7)
11.84%
Fubon Life
Beneficial owner
259,740,260
(Note 6)
212,121,212
(Note 7)
8.61%
China Life
Beneficial owner
1,785,098,644
–
32.60%
Notes:
1
The total number of issued Shares as at the Latest Practicable Date (that was, 5,475,699,809 Shares)
have been used for the calculation of the approximate percentage.
2.
Broad Idea is beneficially owned as to 50.1% by Dr. Cho and as to 49.9% by Dr. Choi. They are also
directors of Broad Idea.
I–3
APPENDIX
3.
GENERAL INFORMATION
Such underlying Shares were held by Broad Idea which is owned as to 50.1% by Dr. Cho and as to
49.9% by Dr. Choi. Accordingly, Dr. Cho and Dr. Choi are both deemed to be interested in the
985,384,806 underlying Shares held by Broad Idea under Part XV of the SFO. Out of the 985,384,806
underlying Shares, (i) 83,333,333 underlying Shares represent the Shares that may be allotted and
issued to Broad Idea upon full conversion of the Convertible Preference Shares held by Broad Idea
based on the initial conversion price of HK$1.20 per Share (subject to adjustment in accordance with
the terms of the Convertible Preference Shares); and (ii) 902,051,473 are the maximum number of
Option Shares that may be sold by China Life to Broad Idea pursuant to the possible exercise of the
Put Option to be granted to China Life under the Put Option Deed. Dr. Cho and Dr. Choi are also
directors of Broad Idea.
4.
Dr. Ip, who is an executive Director, is a director of each of Bonjour Group Limited and Bonjour
Holdings.
5.
Bonjour Group Limited, a wholly-owned subsidiary of Bonjour Holdings, was the beneficial owner of
the 365,327,586 Shares. Accordingly, Bonjour Holdings is deemed to be interested in these Shares
under part XV of the SFO.
6.
Such Shares were held as to (i) 259,740,260 Shares by Fubon Life; and (ii) 97,402,597 Shares by
Fubon Insurance. Each of Fubon Life and Fubon Insurance is a wholly-owned subsidiary of Fubon
Financial. Accordingly, Fubon Financial is deemed to be interested in the aggregate of 357,142,857
Shares held by Fubon Life and Fubon Insurance under Part XV of the SFO.
7.
Such underlying Shares were held as to (i) 212,121,212 underlying Shares by Fubon Life; and (ii)
79,545,454 underlying Shares by Fubon Insurance. Each of Fubon Life and Fubon Insurance is a
wholly-owned subsidiary of Fubon Financial. Accordingly, Fubon Financial is deemed to be interested
in the aggregate of 291,666,666 underlying Shares held by Fubon Life and Fubon Insurance under
Part XV of the SFO.
Short position in the Shares and underlying Shares
Name
Capacity
China Life
Beneficial owner
Number of
Shares held
Number of
underlying
Shares held
Approximate
percentage of
the total
issued share
capital of the
Company
(Note)
–
835,735,306
15.26%
Note: The total number of issued Shares as at the Latest Practicable Date (that was, 5,475,699,809 Shares)
have been used for the calculation of the approximate percentage.
I–4
APPENDIX
GENERAL INFORMATION
Save as disclosed above, the Directors were not aware of any party who, as at the
Latest Practicable Date, had interests or short positions in the Shares and underlying Shares,
which would fall to be disclosed to the Company and the Stock Exchange under the
provisions of Divisions 2 and 3 of Part XV of the SFO.
3.
DIRECTORS’ SERVICE CONTRACTS
As at the Latest Practicable Date, none of the Directors had any existing or proposed service
contract with any member of the Group (excluding contracts expiring or determinable by the
employer within one year without payment of compensation other than statutory compensation).
4.
EXPERT AND CONSENT
The following is the qualification of the expert who has been named in this circular or have
given opinions, letters or advice contained in this circular:
Name
Qualification
Goldin Financial Limited
Goldin Financial Limited is a corporation licensed
under the SFO to carry out type 6 (advising on
corporate finance) regulated activity as defined under
the SFO
Goldin Financial Limited has given and has not withdrawn its written consent to the issue of
this circular with the inclusion therein of its letter and/or reference to its name, in the form and
context in which they appear.
As at the Latest Practicable Date, Goldin Financial Limited was not beneficially interested
in the share capital of any member of the Group nor had any right, whether legally enforceable or
not, to subscribe for or to nominate persons to subscribe for securities in any member of the
Group, nor did it have any interest, either directly or indirectly, in the assets which have been
acquired or disposed of by or leased to any member of the Group since 31 December 2013, being
the date to which the latest published audited consolidated financial statements of the Group were
made up.
5.
DIRECTORS’ COMPETING INTERESTS
To the best knowledge of the Directors, as at the Latest Practicable Date, none of the
Directors or any proposed Director nor their respective close associates had any interests in a
business, which competes or is likely to compete either directly or indirectly with the business of
the Group which would be required to be disclosed under Rule 8.10 of the Listing Rules, as if
each of them were treated as a controlling Shareholder.
I–5
APPENDIX
6.
GENERAL INFORMATION
DIRECTORS’ INTERESTS IN CONTRACTS OR ARRANGEMENTS
Save for the interests of (i) Dr. Cho, an executive Director and Dr. Choi, the non-executive
Director, under the Share Subscription Agreement, the CPS Subscription Agreement, the
Investment Agreement and the Put Option Deed; and (ii) Dr. Ip, an executive Director, under the
SP Agreement and the Licence Agreements, none of the Directors was materially interested in any
contract or arrangement subsisting as at the Latest Practicable Date which is significant in relation
to the business of the Group, nor, had any Director had any direct or indirect interests in any
assets which have been acquired or disposed of by or leased to, or are proposed to be acquired or
disposed of by or leased to, any member of the Group since 31 December 2013, being the date to
which the latest published audited consolidated financial statements of the Group were made up.
7.
NO MATERIAL ADVERSE CHANGE
The Directors confirm that as at the Latest Practicable Date, they were not aware of any
material adverse change in the financial or trading position of the Group since 31 December 2013,
being the date to which the latest published audited financial statements of the Group were made
up.
8.
GENERAL
(a)
The registered office of the Company is at Canon’s Court, 22 Victoria Street, Hamilton
HM 12, Bermuda.
(b)
The head office and principal place of business of the Company in Hong Kong is at
6th Floor, Town Health Technology Centre, 10-12 Yuen Shun Circuit, Siu Lek Yuen,
Shatin, New Territories, Hong Kong.
(c)
The company secretary of the Company is Mr. Wong Seung Ming, who is a fellow
member of the Association of Chartered Certified Accountants and a Certified Public
Accountant of the Hong Kong Institute of Certified Public Accountants.
(d)
The Company’s branch share registrar and transfer office in Hong Kong is Tricor
Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(e)
The English text of this circular shall prevail over the Chinese text.
I–6
APPENDIX
9.
GENERAL INFORMATION
DOCUMENTS AVAILABLE FOR INSPECTION
Copies of the following documents will be available for inspection during normal business
hours (Saturdays and public holidays excepted) from 10:00 a.m. to 1:00 p.m. and from 2:00 p.m.
to 5:00 p.m. at the office of Messrs. Leung & Lau at Unit 7208-10, 72nd Floor, The Center, 99
Queen’s Road C., Central, Hong Kong from the date of this circular up to and including the date
of the SGM:
(a)
the Licence Agreements;
(b)
the letter from the Independent Board Committee, the text of which is set out on page
14 of this circular;
(c)
the letter from the Independent Financial Adviser, the text of which is set out on pages
15 to 23 of this circular;
(d)
the written consent referred to in the section headed ‘‘Expert and Consent’’ in this
appendix;
(e)
the Investment Agreement;
(f)
the Put Option Deed;
(g)
the Share Subscription Agreement;
(h)
the CPS Subscription Agreement; and
(i)
the SP Agreement.
I–7
NOTICE OF THE SGM
Town Health International Medical Group Limited
康健國際醫療集團有限公司
(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)
(Stock Code: 3886)
NOTICE OF SPECIAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the special general meeting of Town Health
International Medical Group Limited (‘‘Company’’) will be held at 9:30 a.m. on Monday, 23
February 2015 at 1st Floor, Town Health Technology Centre, 10-12 Yuen Shun Circuit, Siu Lek
Yuen, Shatin, New Territories, Hong Kong to consider and, if thought fit, pass the following
resolution as an ordinary resolution:
ORDINARY RESOLUTION
‘‘THAT:
(a)
the licence agreement in relation to the grant by Bonjour Cosmetic Wholesale Center
Limited to Bonjour Beauty Limited of the exclusive right to use, enjoy and occupy the
Existing HK Premises (as defined in the circular of the Company dated 3 February
2015 (‘‘Circular’’), a copy of which is marked ‘‘A’’ and signed by the chairman of the
meeting for identification purpose has been tabled at the meeting) (‘‘Existing HK
Licence Agreement’’) (a copy of the Existing HK Licence Agreement is marked ‘‘B’’
and signed by the chairman of the meeting for identification purpose has been tabled at
the meeting) and the transactions contemplated thereunder be and are hereby approved,
confirmed and ratified;
(b)
the licence agreement in relation to the grant by Full Gain Developments Limited to
Speedwell Group Limited of the exclusive right to use, enjoy and occupy the Macau
Premises (as defined in the Circular) (‘‘Macau Licence Agreement’’) (a copy of the
Macau Licence Agreement is marked ‘‘C’’ and signed by the chairman of the meeting
for identification purpose has been tabled at the meeting) and the transactions
contemplated thereunder be and are hereby approved, confirmed and ratified;
SGM – 1
NOTICE OF THE SGM
(c)
the licence agreement in relation to the grant by Apex Frame Limited to Bonjour
Beauty Limited of the exclusive right to use, enjoy and occupy the New HK Premises
(as defined in the Circular) (‘‘New HK Licence Agreement’’, together with the
Existing HK Licence Agreement and the Macau Licence Agreement, collectively,
‘‘Licence Agreements’’) (a copy of the New HK Licence Agreement is marked ‘‘D’’
and signed by the chairman of the meeting for identification purpose has been tabled at
the meeting) and the transactions contemplated thereunder be and are hereby approved,
confirmed and ratified;
(d)
the Annual Caps (as defined in the Circular) for the three years ending 31 December
2017 be and are hereby approved; and
(e)
any one of the directors of the Company (‘‘Directors’’) be and is authorised to do all
such acts and things, to sign and execute such documents or agreements or deeds on
behalf of the Company and to do such other things and to take all such actions as he/
she considers necessary, appropriate, desirable and expedient for the purposes of
giving effect to or in connection with the Licence Agreements and all transactions
contemplated thereunder and the Annual Caps, and to agree to such variation,
amendments or waiver or matters relating thereto (including any variation, amendments
or waiver of such documents or any terms thereof, which are not fundamentally
different from those as provided in the Licence Agreements) as are, in the opinion of
such Director, in the interests of the Company and its shareholders as a whole.’’
By order of the Board
Town Health International Medical Group Limited
Lee Chik Yuet
Executive Director
Hong Kong, 3 February 2015
Registered office:
Head office and principal place of
Canon’s Court
22 Victoria Street
business in Hong Kong:
6th Floor
Hamilton HM12
Bermuda
Town Health Technology Centre
10-12 Yuen Shun Circuit
Siu Lek Yuen, Shatin
New Territories, Hong Kong
SGM – 2
NOTICE OF THE SGM
Notes:
(1)
A member of the Company entitled to attend and vote at the special general meeting convened by the above notice
is entitled to appoint one or more proxy to attend and, subject to the provisions of the bye-laws of the Company, to
vote on his/her behalf. A proxy need not be a shareholder of the Company but must be present in person at the
special general meeting to represent the shareholder. If more than one proxy is so appointed, the appointment shall
specify the number and class of shares in respect of which each such proxy is so appointed.
(2)
To be valid, the form of proxy, together with the power of attorney or other authority (if any) under which it is
signed (or a notarially certified copy thereof), must be deposited at the office of the Company’s branch share
registrar and transfer office 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 holding the meeting or any adjourned
meeting (as the case may be).
(3)
Completion and return of an instrument appointing a proxy should not preclude a member of the Company from
attending and voting in person at the meeting and/or any adjournment thereof and in such event, the instrument
appointing a proxy shall be deemed to be revoked.
(4)
As required under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, the
above resolution will be decided by way of poll.
As at the date of this notice, the executive Directors are Miss Choi Ka Yee, Crystal
(Chairperson), Dr. Cho Kwai Chee (Executive Vice Chairman), Dr. Hui Ka Wah, Ronnie, JP
(Chief Executive Officer), Dr. Ip Chun Heng, Wilson, Mr. Lee Chik Yuet, Dr. Chan Wing Lok,
Brian and Mr. Wong Seung Ming (Chief Financial Officer); the non-executive Director is Dr.
Choi Chee Ming, GBS, JP (Vice-Chairman) and the independent non-executive Directors are Mr.
Chan Kam Chiu, Mr. Ho Kwok Wah, George, Mr. Wai Kwok Hung, SBS, JP and Mr. Wong Tat
Tung.
SGM – 3