Advanced Card : (1) Proposed Rights Issue on the Basis of One Rights Share for Every Eight Existing Shares Held on The Record Date and (2) Closure of Register of Members

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.

Distribution of this announcement into jurisdictions other than Hong Kong may be restricted by law. Persons into whose possession this announcement comes should inform themselves of and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction for which Advanced Card Systems Holdings Limited (the "Company") will not accept any liability.

The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act") or the laws of any state of the United States, and may not be offered or sold within the United States, absent registration or an exemption from the registration requirements of the U.S. Securities Act and applicable state laws. There is no intention to register any portion of the rights issue or any securities described herein in the United States or to conduct a public offering of securities in the United States.

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

(incorporated in the Cayman Islands with limited liability)

1. PROPOSED RIGHTS ISSUE ON THE BASIS OF ONE RIGHTS SHARE FOR EVERY EIGHT EXISTING SHARES HELD ON THE RECORD DATE AND
2. CLOSURE OF REGISTER OF MEMBERS

* For identification purposes only

The Company proposes to raise approximately HK$40.5 million, before expenses, by way of a rights issue of 35,507,210 Rights Shares on the basis of one Rights Share for every eight existing Shares held by the Qualifying Shareholders on the Record Date at the Subscription Price of HK$1.14 per Rights Share payable in full on acceptance.

The net proceeds from the Rights Issue after deducting expenses are estimated to be approximately HK$38.5 million, which are intended to be applied as to (i) approximately HK$22.0 million for development of Java cards and related payment applications, banking POS terminals and new products for the AFC and ITS markets; and (ii) approximately HK$16.5 million for general working capital purposes.

The Rights Shares will be fully underwritten by the Underwriter, other than those that will be provisionally allotted and taken up by the Undertaking Covenantors pursuant to the Irrevocable Undertakings.

To qualify for the Rights Issue, the Shareholders must be registered as members of the Company at the close of business on the Record Date and not be Non-Qualifying Shareholders. In order to be registered as members of the Company on the Record Date, the Shareholders must lodge any transfer of Shares (with relevant share certificates) with the Share Registrar by 4:30 p.m. on Monday, 17 October 2016 so as to enable them to be registered as members of the Company on the Record Date. The Company will send the Issue Documents to the Qualifying Shareholders and, to the extent permitted under the relevant laws and regulations and reasonably practicable, the Prospectus, for information purposes only, to the Non-Qualifying Shareholders on the Despatch Date.

The Company will apply to the Listing Committee of the Stock Exchange for the grant of the approval for the listing of, and permission to deal in, the Rights Shares, in both their nil-paid and fully-paid forms.

As at the date of this announcement, (i) Ms. Tsui, an executive Director, the chairman of the Board and the controlling Shareholder, held 113,612,122 Shares; (ii) Mr. Wong Chi Ho, an executive Director, a co-chief executive officer of the Group and a son of Ms. Tsui, held 26,415,252 Shares; (iii) Mr. Wong Chi Kit, an executive Director, a co-chief executive officer of the Group and a son of Ms. Tsui, held 26,203,200 Shares; and (iv) Ms. Chan Angelica Sheung Ying, the wife of Mr. Wong Chi Kit, held 8,144,000 Shares, representing approximately 40.00%, 9.30%, 9.22% and 2.87% of the total issued Shares, respectively.

Pursuant to the respective Irrevocable Undertakings, each of the Undertaking Covenantors has provided an irrevocable and unconditional undertaking to the Company, among other things, (i) to subscribe for the Rights Shares provisionally allotted to him/her under the PAL; (ii) to lodge the relevant PAL together with remittance for the full amount payable on acceptance of subscription of such Rights Shares in accordance with the instructions for acceptance to be contained in the Issue Documents on or before the Acceptance Date; and

(iii) not to transfer or otherwise dispose of the existing Shares held by them or acquire any Shares on or before the Record Date unless with the prior written consent of the Company.

Pursuant to the Underwriting Agreement, the Underwriter has conditionally agreed to subscribe or procure subscribers to subscribe for all the Underwritten Shares that are not taken up, subject to the terms and conditions set out in the Underwriting Agreement, in particular the fulfillment of the conditions contained therein.

The register of members of the Company will be closed from Tuesday, 18 October 2016 to Thursday, 20 October 2016 (both days inclusive) for determining the entitlements to the Rights Issue. No transfer of any issued Shares will be registered during this period.

Since the Rights Issue would not increase either the total issued Shares or the market capitalisation of the Company by more than 50%, the Rights Issue is not required to be approved by the Shareholders in a general meeting under the Listing Rules.

The Issue Documents containing further details of the Rights Issue are expected to be despatched to the Qualifying Shareholders on or around Friday, 21 October 2016, and the Prospectus will be despatched to the Non-Qualifying Shareholders, for information purposes only, to the extent permitted under the relevant laws and regulations and reasonably practicable.

The Company proposes to raise approximately HK$40.5 million, before expenses, by way of a rights issue of 35,507,210 Rights Shares on the basis of one Rights Share for every eight existing Shares held by the Qualifying Shareholders on the Record Date at the Subscription Price of HK$1.14 per Rights Share payable in full on acceptance.

Basis of the Rights Issue : one Rights Share for every eight existing Shares held

on the Record Date and payable in full on acceptance

Subscription Price : HK$1.14 per Rights Share

Number of the Shares in

issue as at the date of this announcement

: 284,057,682 Shares

Number of the Rights Shares : 35,507,210 Rights Shares

Aggregate nominal value of

the Rights Shares to be issued

: HK$3,550,721

Fund to be raised before expenses

: approximately HK$40.5 million

Underwriter : Quam Securities Company Limited

As at the date of this announcement, the Company has no outstanding convertible securities, warrants, options, derivatives or other securities convertible into or exchangeable for any Shares. The Company has no intention to issue or grant any convertible securities, warrants and/or options on or before the Record Date.

Assuming no new Shares are allotted and issued on or before the Record Date, the 35,507,210 Rights Shares represent approximately 12.50% of the total number of Shares in issue as at the date of this announcement and approximately 11.11% of the Shares in issue as enlarged by the Rights Issue.