The board of directors of Pou Sheng International (Holdings) Limited announced that during the course of the preparation of the annual results for the year ended 31 December 2016 and the internal review of the accounting records of the company, the company discovered on 6 January 2017 certain incorrect sales records in the month of December 2016, which could potentially lead to recognition of revenue for sales transactions that did not take place before end of year 2016 (the "Incident"). The amount of purported sales under the Incident is not significant when compared to the level of revenue of the Company. The Board considers that the Incident reveals weakness over the financial controls of the Company.

The Board believes that the Incident would not materially affect any financial information already published by the company prior to the date of this announcement. As a result of the Incident and based on the preliminary review of the sales and accounting records, the Chief Financial Officer of the Company, Mr. Chen Kuo-Lung was found to have authorized and approved the purported sales under the Incident. Accordingly, the Board has decided to terminate the employment of Mr. Chen with immediate effect from 6 January 2017.

Further, the Chief Executive Officer and executive Director of the Company, Mr. Kwan, Heh-Der, having been made aware of the Incident, has tendered his resignation letter to the Board, which was accepted by the Board and took effect from 6 January 2017. Each of Mr. Chen and Mr. Kwan has confirmed that there is no disagreement with the Board. Before the suitable candidates are identified, the relevant duties of the Chief Financial Officer will be undertaken by other senior members in the accounting department of the Company and the role and responsibilities of the Chief Executive Officer will be assumed by Mr. Wu, Pan-Tsu, the executive Director and Chairman of the Board of the Company.