(Incorporated in Hong Kong with limited liability) (Stock Code: 420)

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement. This announcement is for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for any securities. (Incorporated in Hong Kong with limited liability) (Stock Code: 420) COMPLETION OF SUBSCRIPTION OF NEW SHARES; CHANGES IN COMPOSITION OF THE BOARD AND COMMITTEES AND APPOINTMENTS OF NEW CHAIRMAN, VICE-CHAIRMAN, CHIEF EXECUTIVE OFFICER AND HONORARY CHAIRMAN; AND CHANGE OF THE AUTHORISED REPRESENTATIVE COMPLETION OF SUBSCRIPTION OF NEW SHARES The Board is pleased to announce that all the Conditions to Completion of the Subscription Agreement had been fulfilled by the parties to the Subscription Agreement and completion of the Subscription took place on 6 June 2012. Immediately after Completion, there were 1,203,046,960 Shares in issue. The shareholding structure of the Company immediately before and after Completion is set out below in this announcement in detail. CHANGES IN COMPOSITION OF THE BOARD AND COMMITTEES AND APPOINTMENTS OF NEW CHAIRMAN, VICE-CHAIRMAN, CHIEF EXECUTIVE OFFICER AND HONORARY CHAIRMAN The Board announces that pursuant to the terms of the Subscription Agreement, with effect from 6 June 2012 : (1) Mr. Ha Chung Fong has resigned as the chairman of the Board, the member of the Nomination Committee and has been appointed as the honorary chairman of the Company. Mr. Ha Chung Fong will remain as an executive Director; (2) Mr. Ha Hon Kuen has resigned as the executive Director and will remain as an employee of the Company; (3) Mr. Wong Kwong Chi has resigned as the independent non-executive Director, the chairman and member of the Remuneration Committee, the member of the Audit Committee and the member of the Nomination Committee; (4) Mrs. Fung Yeh Yi Hao, Yvette has resigned as the independent non-executive 1

Director, the member of the Remuneration Committee and the member of the Nomination Committee; (5) Mr. Ng Kwok Tung has resigned as the member of the Nomination Committee. Mr. Ng will remain as an independent non-executive Director; and (6) Mr. Chow Wing Kin, Anthony has resigned as the chairman (but will remain as a member) of the Nomination Committee and the member of the Remuneration Committee. Mr. Chow will remain as an independent non-executive Director. The Board further announces that with effect from 6 June 2012 : (i) (ii) (iii) (iv) (v) (vi) (vii) Madam Li Lan has been appointed as the chairman of the Board, an executive Director and the chairman of the Nomination Committee; Mr. Ha Kam On, Victor has been appointed as the vice-chairman of the Board and chief executive officer of the Company; Mr. Gong Zhengyi has been appointed as an executive Director and the member of the Remuneration Committee; Mr. Chen Rong has been appointed as an executive Director; Mr. Zhang Chong has been appointed as a non-executive Director and the member of the Audit Committee; Mr. Chen Minghong has been appointed as a non-executive Director; and Mr. Yang Shibin has been appointed as an independent non-executive Director, the chairman of the Remuneration Committee and the member of the Nomination Committee. CHANGE OF THE AUTHORISED REPRESENTATIVE The Board announces that with effect from 6 June 2012 :- (a) (b) (c) Mr. Ha Chung Fong has resigned as the Authorised Representative of the Company under Rule 3.05 of the Listing Rules; Mr. Ha Kam On, Victor has been appointed as the Authorised Representative of the Company to replace Mr. Ha Chung Fong; and Mr. Chan Siu Man has been appointed as an alternate to Mr. Ha Kam On, Victor as the Authorised Representative of the Company. Reference is made to the joint announcement of Fountain Set (Holdings) Limited (the Company ) and the Subscriber dated 3 April 2012, the circular of the Company dated 24 April 2012 (the Circular ) and the announcement of the Company dated 10 May 2012. Capitalized terms used herein shall have the same meanings as those defined in the Circular, unless otherwise specified. 2

COMPLETION OF SUBSCRIPTION OF NEW SHARES The Board is pleased to announce that all the Conditions to Completion of the Subscription Agreement had been fulfilled by the parties to the Subscription Agreement and completion of the Subscription took place on 6 June 2012. Immediately after Completion, there were 1,203,046,960 Shares in issue. Set out below the shareholding structure of the Company immediately before and after Completion: Immediately before Completion Immediately after Completion No. of Shares held Approx. % No. of Shares held Approx. % Chinatex (through the Nominee) - - 409,036,000 34.00 The Directors Ha Family Mr. Ha Chung Fong (Note 1) 246,388,948 31.03 246,388,948 20.48 Mr. Ha Kam On, Victor (Note 2) 90,841,096 11.44 90,841,096 7.55 Dr. Yen Gordon (Note 3) 6,400,000 0.81 6,400,000 0.53 Other Director / Former Director Mrs. Fung Yeh Yi Hao, Yvette (Note 4) 70,000 0.01 70,000 0.01 Other Shareholders 450,310,916 56.71 450,310,916 37.43 Total 794,010,960 100.00 1,203,046,960 100.00 Notes: 1. These 246,388,948 Shares comprise of 34,280,000 Shares, representing approximately 2.85% of the issued share capital of the Company as at the date of this announcement and as enlarged by the Subscription, held by Mr. Ha Chung Fong and 212,108,948 Shares, representing approximately 17.63% of the issued share capital of the Company as at the date of this announcement and as enlarged by the Subscription, which Mr. Ha Chung Fong was deemed to be interested in by virtue of the set up of the Ha Trust. 2. In addition to these 90,841,096 Shares held, Mr. Ha Kam On, Victor has also been granted share options to subscribe for 7,900,000 Shares. As at the date of this announcement, none of these share options have been exercised. 3. In addition to these 6,400,000 Shares held, Dr. Yen Gordon has also been granted share options to subscribe for 7,900,000 Shares. Being the spouse of Ms. Ha Kam Yee (the daughter of Mr. Ha Chung Fong), Dr. Yen Gordon was also deemed to be interested in share options to subscribe for 5,000,000 Shares granted to Ms. Ha Kam Yee. As at the date of this announcement, none of these share options have been exercised. 4. Mrs. Fung Yeh Yi Hao, Yvette has resigned as the independent non-executive Director, the member of the Remuneration Committee of the Company and the member of the Nomination Committee of the Company with effect from 6 June 2012. CHANGES IN COMPOSITION OF THE BOARD AND COMMITTEES AND APPOINTMENTS OF NEW CHAIRMAN, VICE-CHAIRMAN, CHIEF EXECUTIVE OFFICER AND HONORARY CHAIRMAN The Board announces that pursuant to the terms of the Subscription Agreement, with effect from 6 June 2012 : (1) Mr. Ha Chung Fong has resigned as the chairman of the Board and the member of the nomination committee of the Company (the Nomination Committee ) and has been appointed as the honorary chairman of the Company. Mr. Ha Chung Fong will remain as an executive Director; 3

(2) Mr. Ha Hon Kuen has resigned as the executive Director and will remain as an employee of the Company; (3) Mr. Wong Kwong Chi has resigned as the independent non-executive Director, the chairman and member of the remuneration committee of the Company (the Remuneration Committee ), the member of the audit committee of the Company (the Audit Committee ) and the member of the Nomination Committee; (4) Mrs. Fung Yeh Yi Hao, Yvette has resigned as the independent non-executive Director, the member of the Remuneration Committee and the member of the Nomination Committee; (5) Mr. Ng Kwok Tung has resigned as the member of the Nomination Committee. Mr. Ng will remain as an independent non-executive Director; and (6) Mr. Chow Wing Kin, Anthony has resigned as the chairman (but will remain as a member) of the Nomination Committee and the member of the Remuneration Committee. Mr. Chow will remain as an independent non-executive Director. Each of Mr. Ha Hon Kuen, Mr. Wong Kwong Chi and Mrs. Fung Yeh Yi Hao, Yvette has confirmed that he/she has no disagreement with the Board, no outstanding claims whether for compensation for loss of office or otherwise and is not aware of any matter in relation to his/her resignation that needs to be brought to the attention of the Shareholders. The Board would like to take this opportunity to express its sincere gratitude to Mr. Ha Hon Kuen, Mr. Wong Kwong Chi and Mrs. Fung Yeh Yi Hao, Yvette during their tenure of office. The Board further announces that with effect from 6 June 2012 : (i) (ii) (iii) (iv) (v) (vi) (vii) Madam Li Lan has been appointed as the chairman of the Board, an executive Director and the chairman of the Nomination Committee; Mr. Ha Kam On, Victor has been appointed as the vice-chairman of the Board and chief executive officer of the Company; Mr. Gong Zhengyi has been appointed as an executive Director and the member of the Remuneration Committee; Mr. Chen Rong has been appointed as an executive Director; Mr. Zhang Chong has been appointed as a non-executive Director and the member of the Audit Committee; Mr. Chen Minghong has been appointed as a non-executive Director; and Mr. Yang Shibin has been appointed as an independent non-executive Director, the chairman of the Remuneration Committee and the member of the Nomination Committee. 4

The biographies of the newly appointed Directors are as follows: Madam LI Lan, aged 57, was appointed as the chairman of the Board, an executive Director and the chairman of the Nomination Committee on 6 June 2012. Madam Li is currently the deputy general manager of Chinatex. Madam Li has almost 30 years of experience in the textile industry. She joined the predecessor of Chinatex, China National Textiles Import and Export Corporation* ( 中國紡織品進出口總公司 ) ( General Corporation ) in 1983 and previously held positions as deputy general manager of General Corporation, general manager of Chinatex Knitwear and Manufactured Goods Import and Export Corporation* ( 中紡針棉毛織品進出口公司 ), and deputy general manager of Chinatex Cotton and Yarn Import and Export Corporation* ( 中紡紗布進出口公司 ). Madam Li graduated with a Bachelor degree in Economics, major in French from the Faculty of French Literature, Beijing Foreign Trade College (currently known as University of International Business and Economics), China in 1983. Madam Li is currently a council member of the 2 nd annual China s Association of Economy and Trade Across Taiwan Straits. Save as disclosed above, Madam Li does not hold any directorship in other listed companies relationship with any other Directors, senior management, substantial or controlling Shareholders of the Company. Madam Li does not have any interest in the shares of the Madam Li has entered into a service agreement with the Company for an initial term of 3 years commencing on 6 June 2012 which is terminable by either the Company or Madam Li by giving no less than 6 months advance notice in writing to each other. No remuneration or emolument is payable to Madam Li under her service agreement subject to review on a periodic basis by the Board and the Remuneration Committee. Mr. GONG Zhengyi, aged 57, was appointed as an executive Director and the member of the Remuneration Committee on 6 June 2012. Mr. Gong is currently the general manager of Chinatex (H.K.) Holding Limited ( 中紡 ( 香港 ) 控股有限公司 ), a subsidiary of Chinatex. Mr. Gong has almost 28 years of experience in the textile industry. He joined the predecessor of Chinatex, the General Corporation, in 1984 and served as general manager of Chinatex Raw Materials International Trading Corporation, a subsidiary of Chinatex. He also held position as general manager of Chinatex (Australia) Wool Company Proprietary Limited ( 中紡駐澳大利亞羊毛公司 *), a subsidiary of Chinatex. Mr. Gong graduated from Hebei University, China, Faculty of Chinese Studies with a major in Chinese Literature in 1979. He obtained a Certificate of Marketing and Management in Macquarie Graduate School of Management, Australia in 1997. Mr. Gong also has obtained the qualification of Foreign Trade Management Economist. Save as disclosed above, Mr. Gong does not hold any directorship in other listed companies Shareholders of the Company. Mr. Gong does not have any interest in the shares of the Mr. Gong has entered into a service agreement with the Company for an initial term of 3 years commencing on 6 June 2012 which is terminable by either the Company or Mr. Gong 5

by giving no less than 6 months advance notice in writing to each other. No remuneration or emolument is payable to Mr. Gong under his service agreement subject to review on a periodic basis by the Board and the Remuneration Committee. Mr. CHEN Rong, aged 49, was appointed as an executive Director on 6 June 2012. Mr. Chen has over 25 years of experience in the textiles industry. He is currently the deputy general manager of Chinatex Industry-Trade United Company Limited* ( 中紡工貿有限責任公司 ), a subsidiary of Chinatex. Mr. Chen joined Chinatex in May 2010 and served as the deputy general manager of Strategy Department of Chinatex. Mr. Chen graduated with a Bachelor of Science from the Faculty of Cotton and Textile Engineering, Tianjin Institute of Textile Science and Technology, China in 1985. Save as disclosed above, Mr. Chen does not hold any directorship in other listed companies Shareholders of the Company. Mr. Chen does not have any interest in the shares of the Mr. Chen has entered into a service agreement with the Company for an initial term of 3 years commencing on 6 June 2012 which is terminable by either the Company or Mr. Chen by giving no less than 6 months advance notice in writing to each other. No remuneration or emolument is payable to Mr. Chen under his service agreement subject to review on a periodic basis by the Board and the Remuneration Committee. Mr. ZHANG Chong, aged 41, was appointed as a non-executive Director and the member of the Audit Committee on 6 June 2012. Mr. Zhang is currently the general manager of Strategy Department of Chinatex. Mr. Zhang has over 17 years of experience in the textiles industry. He joined the predecessor of Chinatex, the General Corporation in 1995 and held positions as the deputy general manager of Strategy Department and general manager of Investment Department of Chinatex, deputy general manager of Enterprise Management Department of Chinatex, officer of Policy Research Office and assistant of Manager Office of General Corporation. Mr. Zhang graduated with a Master degree in Business Management from the Faculty of Business Administration, University of International Business and Economics, China in 1995. Save as disclosed above, Mr. Zhang does not hold any directorship in other listed companies Shareholders of the Company. Mr. Zhang does not have any interest in the shares of the Mr. Zhang has entered into an appointment letter with the Company for a term of one year from 6 June 2012 to 5 June 2013. No remuneration or emolument is payable to Mr. Zhang under his appointment letter. Mr. CHEN Minghong, aged 45, was appointed as a non-executive Director on 6 June 2012. Mr. Chen has almost 20 years of experience in the textiles industry. He is currently the general manager of Chinatex Cotton Import and Export Corporation* ( Chinatex Cotton ) ( 中紡棉花進出口公司 ), a subsidiary of Chinatex. Mr. Chen joined the predecessor of 6

Chinatex, the General Corporation in March 1993. He served successively as the deputy manager and manager of Cotton Department of Chinatex Cotton, assistant to general manager and deputy general manager of Chinatex Cotton. Mr. Chen graduated with a Bachelor of Arts from the Department of Foreign Languages of Tsinghua University in 1989. Save as disclosed above, Mr. Chen does not hold any directorship in other listed companies Shareholders of the Company. Mr. Chen does not have any interest in the shares of the Mr. Chen has entered into an appointment letter with the Company for a term of one year from 6 June 2012 to 5 June 2013. No remuneration or emolument is payable to Mr. Chen under his appointment letter. Mr. YANG Shibin, aged 42, was appointed as an independent non-executive Director, the chairman of the Remuneration Committee and the member of the Nomination Committee on 6 June 2012. Mr. Yang has over 21 years of experience in the textiles industry. He is currently the deputy secretary-general of China National Textile and Apparel Council and chairman of China Knitting Industry Association ( CKIA ). Mr. Yang joined the CKIA in 2005. Between 2002 and 2005, Mr. Yang held positions as the deputy general manager, general manager of Changshu Ecoya-Soy Fiber Company Limited* ( 常熟市江河天絨絲纖維有限公司 ) of Changshu. Between 1997 and 2002, he served as the secretary-general of China Textile Industry Enterprise Management Association and deputy consultant of State Bureau of Textile Industry. Mr. Yang has been serving as an independent director of Shanghai Dragon Corporation ( 上海龍頭股份有限公司 ), a company listed in the Shanghai Stock Exchange, since 2007. Mr. Yang graduated with a Master degree in Engineering from the Faculty of Engineering, Donghua University, China in 2004. He graduated with a Master degree of Executive Master of Business Administration from China Europe International Business School, China in 2009. Save as disclosed above, Mr. Yang does not hold any directorship in other listed companies Shareholders of the Company. Mr. Yang does not have any interest in the shares of the Mr. Yang has entered into an appointment letter with the Company for a period of 1 year from 6 June 2012 to 5 June 2013. As approved by the Remuneration Committee and the Board, Mr. Yang is entitled to a director s fee of HK$200,000 per annum for the period from 6 June 2012 to 5 June 2013 under his appointment letter. The above appointments are subject to rotation and re-election at the annual general meeting of the Company in accordance with the articles of association of the Company. 7

Save as disclosed above, there are no other matters in relation to the above appointments that need to be brought to the attention of the Shareholders and there is no other information which is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Listing Rules. The Board would like to take this opportunity to express its warm welcome to each of the newly appointed Directors for joining the Company. The Board further announces that the terms of reference of the Audit Committee, Remuneration Committee and Nomination Committee have been revised and adopted by the Board with effect from 6 June 2012. CHANGE OF THE AUTHORISED REPRESENTATIVE The Board announces that with effect from 6 June 2012 :- (a) (b) (c) Mr. Ha Chung Fong has resigned as the authorised representative of the Company (the Authorised Representative ) under Rule 3.05 of the Listing Rules; Mr. Ha Kam On, Victor has been appointed as the Authorised Representative to replace Mr. Ha Chung Fong; and Mr. Chan Siu Man has been appointed as alternate to Mr. Ha Kam On, Victor as the Authorised Representative. Hong Kong, 6 June 2012 By order of the Board Fountain Set (Holdings) Limited Madam Li Lan Chairman The Directors jointly and severally accept full responsibility for the accuracy of the information contained in this announcement and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this announcement have been arrived at after due and careful consideration and there are no other facts not contained in this announcement, the omission of which would make any statement in this announcement misleading. After Completion and as at the date of this announcement, the Board comprises six executive Directors, namely, Mr. Ha Chung Fong, Madam Li Lan, Mr. Ha Kam On, Victor, Dr. Yen Gordon, Mr. Gong Zhengyi and Mr. Chen Rong; two non-executive Directors, namely, Mr. Zhang Chong and Mr. Chen Minghong; and three independent non-executive Directors, namely, Mr. Ng Kwok Tung, Mr. Chow Wing Kin, Anthony, SBS, JP, and Mr. Yang Shibin. * For identification purpose only 8