Tai Cheung : Proposals Involving General Mandates to Repurchase Shares and to Issue Shares, Re-election of Retiring Directors and Notice of Annual General Meeting

IMPORTANT

If you are in any doubt about this circular, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold all your shares in Tai Cheung Holdings Limited (the "Company"), you should at once hand this circular and the accompanying form of proxy to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser.

This circular, for which the directors of the Company collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited 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.

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.

TAI CHEUNG HOLDINGS LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 88)

PROPOSALS INVOLVING

GENERAL MANDATES TO REPURCHASE SHARES AND TO ISSUE SHARES

RE-ELECTION OF RETIRING DIRECTORS

AND

NOTICE OF ANNUAL GENERAL MEETING ("AGM")

INTRODUCTION

The purpose of this circular is to give you notice of AGM and information relating to (i) the ordinary resolutions to renew the general mandates to repurchase shares and to issue shares; and (ii) the re-election of the retiring directors to be proposed at the forthcoming 2019 AGM.

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LETTER FROM THE BOARD

GENERAL MANDATE TO REPURCHASE SHARES

A general mandate for repurchase of the Company's own shares was granted by shareholders of the Company (the "Shareholders") at the AGM held on 30th August 2018. This general mandate will lapse at the forthcoming 2019 AGM unless the authority is renewed by ordinary resolution at that meeting. At the 2019 AGM, an ordinary resolution will be proposed to grant a general mandate to the directors of the Company (the "Directors") to exercise the powers of the Company to repurchase shares of the Company up to a maximum of 61,753,142 shares, being 10% of the aggregate number of shares of the Company in issue at the date of the passing of the resolution (the "Repurchase Mandate") on the basis that no further shares are issued or repurchased prior to the 2019 AGM. The Directors have no present intention to repurchase any shares. Details of the Repurchase Mandate are set out in the ordinary resolution no. 5 in the notice of AGM.

Information relating to the Repurchase Mandate as required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules") is set out in Appendix II hereto.

GENERAL MANDATE TO ISSUE SHARES

It will be proposed at the 2019 AGM two ordinary resolutions (i) granting to the Directors a general mandate to allot, issue and deal with shares of the Company not exceeding 123,506,285 shares, being 20% of the aggregate number of shares of the Company in issue at the date of the passing of the resolution (the "Issue Mandate") on the basis that no further shares are issued or repurchased prior to the 2019 AGM; and (ii) extending the Issue Mandate by adding to it the number of shares repurchased by the Company under the Repurchase Mandate. The Issue Mandate will provide the Company the flexibility to make such issue when appropriate and beneficial to the Company. The Directors have no immediate plans to issue new shares. Details of the Issue Mandate and extension of the Issue Mandate are set out in the ordinary resolutions no. 6 and 7 respectively in the notice of AGM.

ANNUAL GENERAL MEETING

Notice of AGM is set out on pages 8 to 10 of this circular. A form of proxy for use at the AGM is enclosed with this circular. Whether or not you intend to be present at the meeting you are requested to complete the form of proxy and return it to the Company's branch share registrar in Hong Kong in accordance with the instructions printed thereon not less than 48 hours before the time fixed for holding that meeting.

Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting if you so wish and in such event, the form of proxy will be deemed to be revoked.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of shareholders at a general meeting must be taken by poll. The Chairman of the 2019 AGM will exercise his power under Bye-law 63(a) of the Company's Bye-laws to put each of the resolutions to be proposed at the 2019 AGM to the vote by way of a poll.

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LETTER FROM THE BOARD

RE-ELECTION OF THE RETIRING DIRECTORS

Pursuant to Bye-law 84 of the Company's Bye-laws, Mr. William Wai Lim Lam and Mr. Wing Sau Li will retire by rotation at the 2019 AGM and, being eligible, offer themselves for re-election.

Details of the retiring Directors proposed to be re-elected at the AGM that are required to be disclosed under Rule 13.51(2) of the Listing Rules are set out in Appendix I hereto.

RECOMMENDATION

The Board considers that the resolutions set out in the notice of AGM are all in the interests of the Company and its Shareholders. The Board would recommend that all Shareholders should vote in favour of the proposed resolutions.

Yours faithfully,

David Pun Chan

Chairman

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Details of the retiring Directors proposed to be re-elected at the 2019 AGM are provided below:

Mr. William Wai Lim Lam, BBus MBA CPA CPA(Aust.) CPA(US) FCCA, aged 55, has been an Executive Director of the Company since 2004. Mr. Lam is also the Financial Controller of the Company and its subsidiaries (the "Group") and a director of certain subsidiaries of the Company. Mr. Lam joined the Group in 1996. He has more than 30 years' experience in auditing, accounting, corporate finance and strategic planning. Mr. Lam does not have any interests in shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. There is an employment contract between Mr. Lam and a subsidiary of the Group which can be terminated by either party giving to the other party 3 months written notice without payment of compensation. Mr. Lam is entitled to an annual emolument of approximately HK$1,951,000 including salary, discretionary bonus and provident fund benefits. The emoluments are determined with reference to his experience and responsibility as well as the prevailing market conditions. Mr. Lam also receives director's fee as approved from time to time by shareholders at AGM of the Company (2018: HK$200,000 for each Director). The basis of determining the directors' fees is by reference to the level of fees of similar nature normally paid by a listed company in Hong Kong to its directors.

Mr. Wing Sau Li, BA DipMS, aged 66, has been an Executive Director of the Company since 1997. Mr. Li is also the Controller of Project Management and Construction division of the Group, and a director of certain subsidiaries of the Company. Mr. Li joined the Group in 1994. Prior to joining the Group, he worked as project manager of a project and construction management consultant company in Canada. Mr. Li has more than 30 years' project management experience both in Hong Kong and Canada. Mr. Li has an interest of 73,000 shares of the Company within the meaning of Part XV of the Securities and Futures Ordinance. There is an employment contract between Mr. Li and a subsidiary of the Group which can be terminated by either party giving to the other party 3 months written notice without payment of compensation. Mr. Li is entitled to an annual emolument of approximately HK$2,384,000 including salary, discretionary bonus and provident fund benefits. The emoluments are determined with reference to his experience and responsibility as well as the prevailing market conditions. Mr. Li also receives director's fee as approved from time to time by shareholders at AGM of the Company (2018: HK$200,000 for each Director). The basis of determining the directors' fees is by reference to the level of fees of similar nature normally paid by a listed company in Hong Kong to its directors.

Each of the above Directors did not hold other directorships in listed companies in the last three years. They are not connected with any Directors, senior management or substantial or controlling shareholders of the Company. Under a letter of appointment entered into between each of the above Directors and the Company for service as director, each of them does not have fixed term of service with the Company and is subject to retirement by rotation and re-election at an AGM of the Company in accordance with the Company's Bye-laws. Save as disclosed above, there are no other matters that need to be brought to the attention of the shareholders of the Company in connection with the re-election of the above Directors and there is no information that should be disclosed pursuant to Rules 13.51(2)(h) to (v) of the Listing Rules.

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APPENDIX II REPURCHASE MANDATE EXPLANATORY STATEMENT

This explanatory statement contains all the information required by the Listing Rules on repurchase of shares:

Share Capital

As at 10th July 2019, being the latest practicable date prior to the printing of this circular, the issued share capital of the Company comprised 617,531,425 shares of HK$0.10 each.

Subject to the passing of the ordinary resolution to approve the Repurchase Mandate and on the basis that no further shares are issued or repurchased prior to the 2019 AGM, the Company will be allowed under the Repurchase Mandate to repurchase a maximum of 61,753,142 shares, being 10% of the aggregate number of shares of the Company in issue at the date of the passing of the resolution.

Shareholders' Approval

All repurchase of shares must be approved by Shareholders in advance by means of an ordinary resolution, either by way of a general mandate or by specific resolution in relation to specific transactions.

Reason for the Repurchase

Repurchase of shares will only be made when the Directors consider that it will benefit the Company and its shareholders. Such repurchase may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value and/or earnings per share.

Source of Funds

Repurchases must be financed out of funds legally available for the purpose in accordance with the Memorandum of Association and Bye-laws of the Company and the laws of Bermuda. The laws of Bermuda provide that the amount of capital repaid in connection with a share repurchase may only be paid out of either capital paid up on the shares to be repurchased, or the profits that would otherwise be available for dividends or distribution or the proceeds of a fresh issue of shares made for that purpose. The premiums payable on repurchase must only be paid out of either the profits that would otherwise be available for dividends or out of the share premium or contributed surplus account of the Company. It is envisaged that any repurchase of shares by the Company would be financed out of the same sources of fund as above described.

There might be material adverse impact on the working capital or gearing position of the Company (as compared with the position disclosed in the audited consolidated financial statements contained in the annual report for the year ended 31st March 2019) in the event that the proposed Repurchase Mandate were to be exercised in full at any time during the proposed repurchase period. However, the Directors do not propose to exercise the Repurchase Mandate to such extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Company or the gearing levels which in the opinion of the Directors are from time to time appropriate for the Company.

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