Able Engineering Holdings Limited

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 licensed securities dealer or registered institution in securities, bank manager, solicitor, professional accountant or other professional adviser for independent advice.

If you have sold or transferred all your shares in Able Engineering Holdings Limited (the “ Company ”), you should at once hand this circular to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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.

ABLE ENGINEERING HOLDINGS LIMITED 安保工程控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1627)

MAJOR TRANSACTION IN RELATION TO ACQUISITION OF THE PROPERTIES

The terms used in this cover shall have the same meanings as defined in this circular. A letter from the Board is set out on pages 8 to 19 of this circular.

28 March 2018

CONTENTS

			Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM	THE	BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	8
APPENDIX I	–	FINANCIAL INFORMATION OF THE GROUP . . . . . . . .	I-1
APPENDIX II	–	UNAUDITED FINANCIAL INFORMATION OF
		THE PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	–	UNAUDITED PRO FORMA FINANCIAL
		INFORMATION OF THE GROUP . . . . . . . . . . . . . . . . .	III-1
APPENDIX IV	–	PROPERTIES VALUATION . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
APPENDIX V	–	GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . .	V-1

– i –

DEFINITIONS

In this circular, the following expressions shall have the following meanings unless the context otherwise requires:

“Acquisition”
the First Round Acquisition and the Second Round Acquisition
“Acquisition Agreements”

collectively (i) the First Round Provisional Agreements, (ii) the First Round Formal Agreements, (iii) the Second Round Provisional Agreements and (iv) the Second Round Formal Agreements, and each the “Acquisition Agreement”

“acting in concert”,

has the meaning ascribed to it under the Listing Rules

“associate(s)”,
“close associate(s)”,
“connected person”,
“controlling shareholder”,
“subsidiary(ies)” and
“Substantial shareholder(s)”
“Aggregated Consideration”

the aggregate of the First Round Consideration and the Second Round Consideration, payable by the Purchaser to the respective Vendors in respect of the Acquisition pursuant to the terms of the respective Acquisition Agreements

“Announcements”

the joint announcements issued by Vantage and the Company dated 8 January 2018 and 9 February 2018 in relation to, among other things, the Acquisition

“Board” or
the board of Directors of the Company
“Board of Directors”
“BVI”
the British Virgin Islands
“Company” or “Able Holdings”

Able Engineering Holdings Limited, (安保工程控股有限公司), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of The Stock Exchange (stock code: 1627), which is an indirect 75%-owned subsidiary of Vantage

“Completion”
completion of the First Round Acquisition and the Second Round Acquisition pursuant to the Acquisition Agreements

– 1 –

DEFINITIONS

“Completion Date”
“Director(s)”
“Expenses”
“First Round Acquisition”
“First Round Consideration”
“First Round Formal Agreements”
“First Round Provisional Agreements”
“First Round Properties”
“Fame Yield”

the date fixed for completion of the Acquisition, which is 12 April 2018, or such other date(s) the Vendors and the Purchaser may agree in writing

director(s) of the Company from time to time
estimated expenses of approximately HK$61 million paid or payable by the Purchaser and/or the Group in connection with the Acquisition (which include, among others, stamp duties, agency fees and professional fees)
the acquisition of the First Round Properties by the Purchaser from the First Round Vendors pursuant to the First Round Provisional Agreements and the First Round Formal Agreements at the First Round Consideration
HK$438,600,000, being the aggregate purchase price of the First Round Properties
the formal sale and purchase agreements in relation to the First Round Acquisition entered or to be entered into between the Purchaser and each of the First Round Vendors
the 9 provisional agreements for sale and purchase of the First Round Properties entered into between the Purchaser, each of the First Round Vendors and the Property Agent on 8 January 2018, and each the “First Round Provisional Agreement”

1st floor, 2nd floor, 3rd floor, Unit B on 4th floor, 5th floor, Units A and B on 6/F, Unit A on 7th floor, 8th floor, Portion A on 9/F, Portion B on 9th floor, 10th floor, Portion A on 11th floor and 12th floor and the roof thereof of Man Shung Industrial Building

Fame Yield International Limited, a company incorporated in Hong Kong which holds 235,000,000 Vantage Shares (representing approximately 13.96% of the issued Vantage Shares as at the Latest Practicable Date), the entire issued share capital of which is legally and beneficially owned by Mr. NGAI

– 2 –

DEFINITIONS

“First Round Vendors”
“Formal Agreements”
“Group”
“Hong Kong”
“Hong Kong dollars”, “HK$”
“Independent Third Party(ies)”
“Latest Practicable Date”
“Listing Rules”
“Man Shung Industrial Building”
the vendors of the First Round Properties, comprise Vendor A, Vendor B, Vendor C, Vendor D, Vendor E, Vendor F, Vendor G, Vendor H and Vendor I
the First Round Formal Agreements and the Second Round Formal Agreements, and each the “Formal Agreement”
the Company and its subsidiaries
the Hong Kong Special Administrative Region of The People’s Republic of China
Hong Kong dollars, the lawful currency of Hong Kong
individual(s) or company(ies) which is/are independent of and not connected with (within the meaning of the Listing Rules) any director, chief executive or substantial shareholder of the Company or any of its subsidiaries or any of their respective associates
21 March 2018, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular
the Rules Governing the Listing of Securities on The Stock Exchange as amended, supplemented or otherwise modified from time to time
the industrial building situated at No. 7, Lai Yip Street, Kwun Tong, Kowloon

– 3 –

DEFINITIONS

“Mr. NGAI”
“Profit Chain”
“Properties”
“Property Agent”
“Purchaser”
“Second Round Acquisition”
“Second Round Consideration”
Mr. NGAI Chun Hung, a controlling Shareholder of Vantage (who deemed to be interested in 1,080,011,200 Vantage Shares, which comprise (i) 6,250,800 Vantage Shares held by himself; (ii) 838,760,400 Vantage Shares held by Winhale by virtue of him being the settlor of The Xyston Trust, a discretionary trust founded by Mr. NGAI for the benefits of his family members; and (iii) 235,000,000 Vantage Shares held by Fame Yield by virtue of his beneficial interest in the entire issued share capital of Fame Yield) and the Company (who deemed to be interested in the 1,500,000,000 Shares held by Profit Chain by virtue of his deemed interest in approximately 64.17% of the entire issued capital of Vantage), an executive director and the chairman of the Board and Vantage Board
Profit Chain Investments Limited, a company incorporated in the BVI with limited liability, a direct wholly-owned subsidiary of Vantage and the direct holding company of the Company
collectively, the First Round Properties and the Second Round Properties, and each the “Property”
Ricacorp Properties Limited, an Independent Third Party which is a company incorporated in Hong Kong with limited liability and is principally engaged in property agency service
Bright Wind Limited, a company incorporated in Hong Kong with limited liability, an indirect wholly-owned subsidiary of the Company and an indirect non-wholly-owned subsidiary of Vantage
the acquisition of the Second Round Properties by the Purchaser from the Second Round Vendors pursuant to the Second Round Provisional Agreements and the Second Round Formal Agreements at the Second Round Consideration
HK$180,000,000, being the aggregate purchase price of the Second Round Properties

– 4 –

DEFINITIONS

“Second Round Formal Agreements”
“Second Round Provisional Agreements”
“Second Round Properties”
“Second Round Vendors”
“SFC”
“SFO”
“Share(s)”
“Shareholder(s)”
“Stock Exchange”
“Tenancies”
“Vantage”
“Vantage Board”
“Vantage Group”
the formal sale and purchase agreements in relation to the Second Round Acquisition entered into between the Purchaser and each of the Second Round Vendors
the 3 provisional agreements for sale and purchase of the Second Round Properties entered into between the Purchaser, each of the Second Round Vendors and the Property Agent on 9 February 2018, and each the “Second Round Provisional Agreement”
ground floor, Unit A on 4th floor and Unit B on 7th floor of Man Shung Industrial Building
the vendors of the Second Round Properties, comprise Vendor J, Vendor K and Vendor L
the Securities and Futures Commission of Hong Kong
Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), as amended, supplemented or otherwise modified from time to time
ordinary share(s) of HK$0.01 each in the share capital of the Company
holder(s) of the Share(s)
The Stock Exchange of Hong Kong Limited
in relation to each Property, the existing tenancy agreement(s) (where applicable) made between the relevant Vendor and the respective tenant(s)
Vantage International (Holdings) Limited, an exempted company incorporated in Bermuda with limited liability and the shares of which are listed on the Main Board of The Stock Exchange (stock code: 15), which is a controlling shareholder of the Company
the board of directors of Vantage
Vantage and its subsidiaries, which includes the Group

– 5 –

DEFINITIONS

“Vantage Share(s)”
“Vendor A”
“Vendor B”
“Vendor C”
“Vendor D”
“Vendor E”
“Vendor F”
“Vendor G”
ordinary share(s) of HK$0.025 each in the share capital of Vantage
Merrison Properties Investment Company Limited, an Independent Third Party which is a private company incorporated in Hong Kong with limited liability and is principally engaged in property investment, the vendor for 1st floor, 2nd floor, 5th floor and Units A and B on 6/F of Man Shung Industrial Building
Pacific Best Limited, an Independent Third Party which is a private company incorporated in Hong Kong with limited liability and is principally engaged in trading and property investment businesses, the Vendor for Unit A on 7th floor of Man Shung Industrial Building
Asian-American Agency Limited, an Independent Third Party which is a private company incorporated in Hong Kong with limited liability and is principally engaged in property investment, the vendor for 8th floor of Man Shung Industrial Building
Earnest Enterprises Limited, an Independent Third Party which is a private company incorporated in Hong Kong with limited liability and is principally engaged in property holding, the vendor for Portion A on 9/F of Man Shung Industrial Building
Golden Scene Industrial Limited, an Independent Third Party which is a private company incorporated in Hong Kong with limited liability and is engaged in property holding, the vendor for 12th floor and the roof thereof of Man Shung Industrial Building
Yuen Richard and Yuen Ying Li Chiu Lina, Independent Third Parties, the vendor for 3rd floor of Man Shung Industrial Building
Lo Yu Kam, an Independent Third Party, the vendor for Unit B on 4th floor of Man Shung Industrial Building

– 6 –

DEFINITIONS

“Vendor H”
“Vendor I”
“Vendor J”
“Vendor K”
“Vendor L”
“Vendor(s)”
“Winhale”
“%”
Ho Kan, an Independent Third Party, the vendor for Portion B on 9th floor and Portion A on 11th floor of Man Shung Industrial Building
Chan Chak Tak, Chan Chak Loy, Chan Tak Ngan, Chan Tak San and Chan Tak Ming James, Independent Third Parties, the vendor for 10th floor of Man Shung Industrial Building
City Maker Limited, an Independent Third Party which is a private company incorporated in Hong Kong with limited liability and is principally engaged in property holding, the vendor for the ground floor of Man Shung Industrial Building
Best Prosper International Limited, an Independent Third Party which is a private company incorporated in Hong Kong with limited liability and is principally engaged in property investment, the vendor for Unit A on 4th floor of Man Shung Industrial Building
Choy Yau King and Choi Siu Yor, Independent Third Parties, the vendor for Unit B on 7th floor of Man Shung Industrial Building
collectively, Vendor A, Vendor B, Vendor C, Vendor D, Vendor E, Vendor F, Vendor G, Vendor H, Vendor I, Vendor J, Vendor K and Vendor L, and each the “Vendor”
Winhale Ltd. a company incorporated in the BVI with limited liability and is ultimately beneficially wholly-owned by the Xyston Trust, which is a discretionary family trust set up by Mr. NGAI for the benefits of himself and his family
per cent

– 7 –

LETTER FROM THE BOARD

ABLE ENGINEERING HOLDINGS LIMITED 安保工程控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1627)

Directors:

Executive Directors: Mr. NGAI Chun Hung (Chairman) Mr. IP Yik Nam (Chief Executive Officer) Mr. YAU Kwok Fai Mr. YAM Kui Hung Mr. LAU Chi Fai, Daniel Mr. CHEUNG Ho Yuen

Independent Non-executive Directors: Dr. LI Yok Sheung Ms. MAK Suk Hing Ms. LEUNG Yuen Shan, Maisy

Registered Office:

PO Box 1350, Clifton House 75 Fort Street Grand Cayman KY1-1108 Cayman Islands

Head Office and Principal Place of Business:

No. 155 Waterloo Road Kowloon Tong Kowloon Hong Kong

28 March 2018

To the Shareholders

Dear Sir or Madam

MAJOR TRANSACTION IN RELATION TO ACQUISITION OF THE PROPERTIES

INTRODUCTION

Reference is made to the Announcements in relation to the Acquisition.

On 8 January 2018 (after trading hours), the Purchaser, an indirect wholly-owned subsidiary of the Company and an indirect non-wholly-owned subsidiary of Vantage, the First Round Vendors and the Property Agent entered into the First Round Provisional Agreements pursuant to which the Purchaser agreed to purchase and the First Round Vendors agreed to sell the First Round Properties at Man Shung Industrial Building at the First Round Consideration of HK$438,600,000.

– 8 –

LETTER FROM THE BOARD

In addition to the First Round Acquisition, on 9 February 2018 (after trading hours), the Purchaser, the Second Round Vendors and the Property Agent entered into the Second Round Provisional Agreements pursuant to which the Purchaser agreed to purchase and the Second Round Vendors agreed to sell the Second Round Properties at Man Shung Industrial Building at the Second Round Consideration of HK$180,000,000.

As one or more of the applicable percentage ratios in respect of the Acquisition exceed 25% but less than 100%, the Acquisition under the Acquisition Agreements constitutes a major transaction for the Company and is therefore subject to notification, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, no shareholder of the Company has a material interest in the Acquisition and the transactions contemplated thereunder. As such, no shareholder of the Company would be required to abstain from voting if a general meeting of each of the Company were convened to approve the same.

Pursuant to Rule 14.44 of the Listing Rules, the Company has obtained a written shareholders’ approval from Profit Chain, which holds 75% of the issued Shares as at the Latest Practical Date, in lieu of holding a special general meeting to approve the Acquisition and the transactions contemplated thereunder. Accordingly, no special general meeting of the Company will be convened for the purpose of approving the Acquisition and the transactions contemplated thereunder.

The main purpose of this circular is to provide the Shareholders with, among other things, details of the Acquisition and the Properties.

– 9 –

LETTER FROM THE BOARD

PRINCIPAL TERMS OF THE ACQUISITION

(1) THE FIRST ROUND ACQUISITION

Other than the First Round Vendors, the subject Property(ies) and the respective consideration, the First Round Provisional Agreements are not inter-conditional and share similar principal terms.

The principal terms of the First Round Provisional Agreements are summarised below:

Date: 8 January 2018

Parties: (i) the Purchaser;

(ii) the First Round Vendors, comprising Vendor A, Vendor B, Vendor C, Vendor D, Vendor E, Vendor F, Vendor G, Vendor H and Vendor I:

Vendor Subject Property(ies) of Man Shung Industrial Building Vendor A 1st floor, 2nd floor, 5th floor, Units A and B on 6/F Vendor B Unit A on 7th floor Vendor C 8th floor Vendor D Portion A on 9/F Vendor E 12th floor and the roof thereof Vendor F 3rd floor Vendor G Unit B on 4th floor Vendor H Portion B on 9th floor and Portion A on 11th floor Vendor I 10th floor	Respective share(s) 8/26 1/26 2/26 1/26 2/26 2/26 1/26 2/26 2/26 21/26	Estimated gross floor area The First Round Consideration (square feet) HK$ million 33,130 160.0 4,141 20.0 8,282 45.0 4,141 23.6 8,282 40.0 8,282 40.0 4,141 20.0 8,282 45.0 8,282 45.0 86,963 438.6	Estimated gross floor area The First Round Consideration (square feet) HK$ million 33,130 160.0 4,141 20.0 8,282 45.0 4,141 23.6 8,282 40.0 8,282 40.0 4,141 20.0 8,282 45.0 8,282 45.0 86,963 438.6
			438.6

; and

(iii) the Property Agent.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, the First Round Vendors, the Property Agent and their respective ultimate beneficial owner(s) (if applicable) are Independent Third Parties.

– 10 –

LETTER FROM THE BOARD

Assets to be acquired

Pursuant to the First Round Provisional Agreements, the Purchaser has conditionally agreed to acquire and the First Round Vendors have conditionally agreed to sell the interests in the First Round Properties. The First Round Properties consist of 1st floor, 2nd floor, 3rd floor, Unit B on 4th floor, 5th floor, Units A and B on 6/F, Unit A on 7th floor, 8th floor, Portion A on 9/F, Portion B on 9th floor, 10th floor, Portion A on 11th floor and 12th floor and the roof thereof Man Shung Industrial Building.

Based on the information provided by the First Round Vendors, 1st floor, 2nd floor, part of 3rd floor, 5th floor, Units A and B on 6/F, Unit A on 7th floor, 8th floor, Portion B on 9th floor, 10th floor, Portion A on 11th floor are currently leased to various third parties independent of, and not connected with, the Company and its connected persons for industrial or storage purposes for an aggregate monthly rental income of approximately HK$622,000 with the latest Tenancy expires on 14 January 2020 (subject to early termination by landlord, to the extent applicable).

The First Round Properties are sold to the Purchaser on an “as is” basis.

First Round Consideration

The First Round Consideration is HK$438,600,000, which has been or will be paid by the Purchaser by way of cash in the following manner:

(i) initial deposits of aggregate HK$21,930,000, representing 5% of the First Round Consideration, has been paid upon signing of the First Round Provisional Agreements on 8 January 2018;
(ii) further deposits of aggregate HK$21,930,000, representing 5% of the First Round Consideration, has been paid upon signing of the First Round Formal Agreements or before 8 February 2018; and
(iii) HK$394,740,000, representing the aggregate balances of the First Round Consideration, will be paid upon completion of the First Round Acquisition, which shall take place on or before 12 April 2018.

The First Round Consideration was determined after arm’s length negotiations between the Purchaser and the First Round Vendors by reference to the prevailing market conditions, as well as the location of the First Round Properties and market price of comparable properties in the same district. The Purchaser did not take into account the rental income derived from the respective Tenancies of the First Round Properties when determining the First Round Consideration. As at the Latest Practicable Date, all the initial deposits and the further deposits regarding the First Round Consideration have been settled by the Purchaser.

– 11 –

LETTER FROM THE BOARD

All stamp duties and registration fees payable in connection with the acquisition of the First Round Properties shall be borne by the Purchaser. It is expected that the First Round Consideration, together with related Expenses of the First Round Acquisition (including, among others, the agency fees and stamp duties) of approximately HK$44 million has been and will be financed by internal resources of the Group. The Board considers that the terms of the First Round Acquisition, including the First Round Consideration, are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

Agency fee

Upon Completion, the Purchaser shall pay an aggregated sum of approximately HK$6,111,000, which represents approximately 1.39% of the First Round Consideration for the First Round Acquisition, to the Property Agent as commission for the services rendered by the Property Agent for the First Round Acquisition. The agency fees were determined after arm’s length negotiations between the Purchaser, the Property Agent and each of the First Round Vendors. Such negotiations were conducted independently for each First Round Provisional Agreement and on a case-by-case basis. The Directors consider that the agency fees of the First Round Acquisition are fair and reasonable.

Conditions precedent

Completion of the First Round Acquisition is conditional upon and subject to the following condition:

The First Round Vendors have to show and prove that they have a good title to the respective First Round Properties.

Completion

Subject to satisfaction of the condition(s) to the First Round Acquisition, completion of the First Round Acquisition shall take place on or before 12 April 2018.

– 12 –

LETTER FROM THE BOARD

(2) THE SECOND ROUND ACQUISITION

Other than the Second Round Vendors, the subject Property(ies) and the respective consideration, the Second Round Provisional Agreements are not inter-conditional and share the similar principal terms.

The principal terms of the Second Round Provisional Agreements are summarised below:

Date: 9 February 2018

Parties: (i) the Purchaser;

(ii) the Second Round Vendors, comprising Vendor J, Vendor K and Vendor L:

Vendor Subject Property(ies) of Man Shung Industrial Building Vendor J Ground floor Vendor K Unit A on 4th floor Vendor L Unit B on 7th floor	Respective share(s) 2/26 1/26 1/26 4/26	Estimated gross floor area The Second Round Consideration (square feet) HK$ million 8,282 140.0 4,141 20.0 4,141 20.0 16,564 180.0	Estimated gross floor area The Second Round Consideration (square feet) HK$ million 8,282 140.0 4,141 20.0 4,141 20.0 16,564 180.0
			180.0

; and

(iii) the Property Agent.

To the best of the knowledge, information and belief of the Directors, having made all reasonable enquiries, the Second Round Vendors, the Property Agent and their respective ultimate beneficial owner(s) (if applicable) are Independent Third Parties.

Assets to be acquired

Pursuant to the Second Round Provisional Agreements, the Purchaser has conditionally agreed to acquire and the Second Round Vendors have conditionally agreed to sell the interests in the Second Round Properties. The Second Round Properties consist of ground floor, Unit A on 4th floor and Unit B on 7th floor of Man Shung Industrial Building.

Based on the information provided by the Second Round Vendors, Unit A on 4th Floor of Man Shung Industrial Building is currently leased to a third party independent of, and not connected with, the Company and its connected persons for

– 13 –

LETTER FROM THE BOARD

industrial purpose for a monthly rental income of HK$40,000 with tenure expiring on 20 November 2018 while the remaining portion of the Second Round Properties are currently not leased.

The Second Round Properties are sold to the Purchaser on an “as is” basis.

Second Round Consideration

The Second Round Consideration is HK$180,000,000, which has been or will be paid by the Purchaser by way of cash in the following manner:

(i) initial deposits of aggregate HK$9,000,000, representing 5% of the Second Round Consideration, has been paid upon signing of the Second Round Provisional Agreements on 9 February 2018;
(ii) further deposits of aggregate HK$9,000,000, representing 5% of the Second Round Consideration, has been paid upon signing of the Second Round Formal Agreements or before 23 February 2018; and
(iii) HK$162,000,000, representing the aggregate balances of the Second Round Consideration, will be paid upon completion of the Second Round Acquisition, which shall take place on or before 12 April 2018.

The Second Round Consideration was determined after arm’s length negotiations between the Purchaser and the Second Round Vendors by reference to the prevailing market conditions, as well as the location of the Second Round Properties and market price of comparable properties in the same district. The Purchaser did not take into account the rental income derived from the respective Tenancies of the Second Round Properties when determining the Second Round Consideration. As at the Latest Practicable Date, all the initial deposits and the further deposits regarding the Second Round Consideration have been settled by the Purchaser.

All stamp duties and registration fees payable in connection with the acquisition of the Second Round Properties shall be borne by the Purchaser. It is expected that the Second Round Consideration, together with related Expenses of the Second Round Acquisition (including, among others, the agency fees and stamp duties) of approximately HK$17 million has been and will be financed by internal resources of the Group. The Board considers that the terms of the Second Round Acquisition, including the Second Round Consideration, are fair and reasonable and are in the interests of the Company and its the Shareholders as a whole.

– 14 –

LETTER FROM THE BOARD

Agency fee

Upon Completion, the Purchaser shall pay an aggregated sum of approximately HK$1,840,000, which represents approximately 1.02% of the Second Round Consideration for the Second Round Acquisition, to the Property Agent as commission for the services rendered by the Property Agent for the Second Round Acquisition. The agency fees were determined after arm’s length negotiations between the Purchaser, the Property Agent and each of the Second Round Vendors. Such negotiations were conducted independently for each Second Round Provisional Agreement and on a case-by-case basis. The Director consider that the agency fees of the Second Round Acquisition are fair and reasonable.

Conditions precedent

Completion of the Second Round Acquisition is conditional upon and subject to the following condition:

The Second Round Vendors have to show and prove that they have a good title to the respective Second Round Properties.

Completion

Subject to satisfaction of the condition(s) to the Second Round Acquisition, completion of the Second Round Acquisition shall take place on or before 12 April 2018.

The Board considers that the terms of the Acquisition Agreements, including the First Round Consideration and the Second Round Consideration, are fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

THE FORMAL AGREEMENTS

As at the Latest Practical Date, the Purchaser entered into the Formal Agreements with each Vendor, except for Vendor A. The principal terms, including the conditions precedent thereunder, contained in the Formal Agreements are the same as that of the First Round Provisional Agreements and that of the Second Round Provisional Agreements set out in the Announcements and this circular. In the event that no Formal Agreements has been entered into with Vendor A, acquisition of the relevant properties at Man Shung Industrial Building will be completed according to the terms as specified in the respective First Round Provisional Agreement.

INFORMATION OF THE PROPERTIES

The Properties comprise 12 whole floors and a half-floor of the Man Shung Industrial Building, representing 25/26 equal and undivided shares of the Kwun Tong Inland Lot No. 534.

– 15 –

LETTER FROM THE BOARD

Based on the information provided by the Vendors, Vendor A, Vendor B, Vendor C, Vendor F, Vendor H, Vendor I and Vendor K were leasing part or entire portion of their respective Properties under the Tenancies for total monthly rental income of approximately HK$662,000. The latest tenancy expires in January 2020. The Group does not intend to renew the Tenancies after Acquisition.

Man Shung Industrial Building is located at Kowloon East and is close to the Ngau Tau Kok station of the Mass Transit Railway, a major public transport network of Hong Kong. Completed in 1970, Man Shung Industrial Building is a 13-storey industrial building providing approximately 8,300 square feet of spaces for each floor.

A valuation of the Properties has been carried out by CHFT Advisory And Appraisal Ltd., an independent professional valuer, which valued the market values of the First Round Properties at HK$488 million and the Second Round Properties at HK$180 million as at 8 January 2018 and 9 February 2018, respectively. The valuation report of the Properties performed by CHFT Advisory And Appraisal Ltd. is set out in Appendix IV to this circular.

INFORMATION OF THE GROUP

The Group is principally engaged in contract works business as a main contractor or sub-contractor, primarily in respect of building construction and repair, maintenance, alteration and addition works.

INFORMATION OF THE VENDORS

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, Vendor F, Vendor G, Vendor H, Vendor I and Vendor L are individuals and Vendor A, Vendor B, Vendor C, Vendor D, Vendor E, Vendor J and Vendor K are companies incorporated in Hong Kong with limited liability and are Independent Third Parties. Vendor A, Vendor C and Vendor K are principally engaged in property investment while Vendor B is principally engaged in trading and property investment and Vendor D, Vendor E, Vendor J and Vendor K are principally engaged in property holding.

FUNDING AND FINANCIAL IMPACT OF THE ACQUISITION

The Aggregated Consideration of HK$618.6 million together with the Expenses of approximately HK$61 million have been and will be funded by the Group’s internal resources.

As at the Latest Practicable Date, approximately HK$62 million of the Aggregated Consideration and approximately HK$52 million of the Expenses of have been settled by the Purchaser.

For the avoidance of doubt, the Aggregated Consideration of HK$618.6 million and the Expenses of approximately HK$61 million have not been and will not be funded by the net proceeds raised from the listing of the Company on 20 February 2017 and the net proceeds raised thereunder have been and will be applied by the Company in a manner in accordance with the use of proceeds as disclosed in the prospectus of the Company dated 26 January 2017.

– 16 –

LETTER FROM THE BOARD

Based on the interim report of the Company for the six months ended 30 September 2017, as at 30 September 2017, the Group had unaudited total assets of approximately HK$1,708 million, total liabilities of approximately HK$620 million and net current assets of approximately HK$618 million. The Group did not have any bank borrowings as at 30 September 2017.

Upon Completion, the Purchaser will become the registered owner of the Properties.

Based on the unaudited pro forma financial information of the Group as set out in Appendix III to this circular (the “ Pro Forma Financial Information ”), the unaudited pro forma consolidated net assets of the Group as at 30 September 2017 would be decreased by approximately HK$0.5 million due to the combined effect of (i) an increase in property, plant and equipment of approximately HK$679 million; and (ii) a decrease in cash and cash equivalents of approximately HK$679.5 million), assuming that the Acquisition had taken place on 30 September 2017. As the acquisition has been and will be funded by the Group’s internal resources, the Acquisition will not have any immediate effect on the liabilities of the Group.

As certain portions of the Properties have been leasing to certain Independent Third Parties for rental income under the Tenancies, the Group’s earnings are expected to increase in year 2018/19 as a result of the Acquisition, taking into account the rental income to be derived from the Properties before the termination or expiry of the Tenancies.

On the other hand, the Group’s expenses in year 2018/19 are expected to increase by approximately HK$24 million, being transaction costs of the Acquisition which are not qualified for capitalisation, and depreciation expenses of the Properties.

It should be noted that the above financial effects of the Acquisition are for illustration purpose only. The actual financial effects of the Acquisition on the Group may be different from the amounts presented in this circular and the differences may be significant.

REASONS FOR AND BENEFITS OF THE ACQUISITION

As set out in the Announcements, the existing head office of the Group is leased under an operating lease from Frason Holdings Limited, an indirect wholly-owned subsidiary of Vantage, which will expire in May 2019. Such operating lease arrangement constitutes continuing connected transactions of the Group pursuant to Chapter 14A of the Listing Rules. The Acquisition will provide a self-owned working space to the Group, including (i) provide more area to cater for the Group’s future development, e.g. a) provide enough working space for each of its employees; b) set up its own training center for staff development; c) set up project rooms for project teams to carry out meetings with sub-contractors and clients; d) set up a team focusing on Building Environment Assessment Method (“ BEAM ”) for its projects; and e) set up an innovation and technology department to carry out research and development on building materials and building processes improvements; (ii) provide space for setting up its own workshops to fulfill license requirements from relevant government departments; and (iii) reduce the Group’s exposure to future rental expenditure increment.

– 17 –

LETTER FROM THE BOARD

Taking into account of the above factors, the Directors consider that the terms of the Acquisition are on normal commercial terms and are fair and reasonable, and the Acquisition is in the interests of the Company and the Shareholders as a whole.

Upon Completion, the Group will own the entire Man Shung Industrial Building, except for Portion B on 11th floor of the building. The Group intends to acquire the remaining unit of Man Shung Industrial Building so as to be the owner of the entire building. This will allow the Group to have a better usage of the areas and further enhance the utilization of floor space. As at the Latest Practicable Date, the Group has no concrete plan on the acquisition timetable and no negotiations was taking place. The Company will make further announcement pursuant to the requirements of the Listing Rules when purchase of the remaining unit is transacted.

None of the Directors has any material interest in the Acquisition and therefore, none of them has abstained from voting on the Board resolutions which approved the Acquisition and the transactions contemplated thereunder.

LISTING RULES IMPLICATIONS

The First Round Acquisition and the Second Round Acquisition form a series of transactions involving the acquisition of units in Man Shung Industrial Building within a 12-month period, the First Round Acquisition and the Second Round Acquisition are therefore being considered to be related and are required to be aggregated and be treated as if they were one transaction under Rule 14.22 of the Listing Rules.

Upon aggregation, as one or more of the relevant percentage ratios (as defined under the Listing Rules) in respect of the Acquisition exceeds 25% but is less than 100%, the Acquisition and the transactions contemplated thereunder constitutes a major transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to the notification, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, no shareholder of the Company has a material interest in the Acquisition. As such, no shareholder of the Company would be required to abstain from voting if a general meeting of the Company was convened to approve the Acquisition and the transactions contemplated thereunder.

Pursuant to Rule 14.44 of the Listing Rules, a written Shareholders’ approval may be accepted in lieu of holding a general meeting. The Company has obtained a written shareholders’ approval from Profit Chain, which holds 75% of the issued Shares as at the Latest Practical Date, in lieu of holding a special general meeting to approve the Acquisition and the transactions contemplated thereunder. Accordingly, no special general meeting of the Company will be convened for the purpose of approving the Acquisition and the transactions contemplated thereunder.

– 18 –

LETTER FROM THE BOARD

RECOMMENDATION

The Directors (including the independent non-executive Directors) are of the view that the Acquisition is fair and reasonable and is in the interests of the Company and the Shareholders as a whole. As explained above, no general meeting of the Company will be convened for the purpose of approving the Acquisition and the transactions contemplated thereunder. However, the Directors would also recommend the Shareholders to approve the Acquisition and the transactions contemplated thereunder if a general meeting were convened.

ADDITIONAL INFORMATION

This circular is being distributed to the Shareholders. Your attention is drawn to the additional information set out in the appendices to this circular.

By Order of the Board ABLE ENGINEERING HOLDINGS LIMITED NGAI Chun Hung Chairman

– 19 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

Financial information of the Group for each of years ended 31 March 2015, 2016 and 2017 and published unaudited consolidated financial information of the Group for the six months ended 30 September 2017 are disclosed in the prospectus, annual report and the interim report of the Company, respectively. The aforesaid financial information can be accessed on the websites of The Stock Exchange (http://www.hkexnews.hk) and the Company (http://www.ableeng.com.hk/).

(i) pages I-4 to I-47 of the prospectus of the Company published on 26 January 2017 for years ended 31 March 2015 and 2016:

(http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0126/LTN20170126011.pdf);

(ii) pages 76 to 152 of the annual report of the Company for the year ended 31 March 2017 published on 21 July 2017

(http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0721/LTN20170721485.pdf); and

(iii) pages 4 to 25 of the interim report of the Company for the six months ended 30 September 2017 published on 22 December 2017

(http://www.hkexnews.hk/listedco/listconews/SEHK/2017/1222/LTN20171222261.pdf).

The said financial information are hereby incorporated by reference in, and form an integral part of, this circular.

2. INDEBTEDNESS STATEMENT

Borrowings

At the close of business on 31 January 2018, being the latest practicable date for ascertaining information regarding this indebtedness statement prior to the printing of this circular, the Group did not have any outstanding bank borrowings. The Company and certain subsidiaries of the Group provided corporate guarantees in favour of certain banks in respect of the banking facilities provided by those banks, of which approximately HK$179 million were utilised as at 31 January 2018.

Charge on Assets

At the close of business on 31 January 2018, the banking facilities granted by banks to certain members of the Group were secured by the assignment of the Group’s financial benefits under certain contract works with accounts receivable related to such contract works amounting to approximately HK$281 million.

– I-1 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Contingent liabilities

At 31 January 2018, the guarantees given by the Group to certain banks in respect of performance bonds in favour of certain contract customers amounted to approximately HK$179 million. The Group had outstanding legal cases as at 31 January 2018, details of which are set out under the section headed “Litigation” in Appendix V to this circular.

Other liabilities

Save as disclosed above and apart from intra-group liabilities and normal trade payables, at the close of business on 31 January 2018, the Group did not have any debt securities issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances, debentures, mortgages, charges, hire purchase commitments, guarantees or other material contingent liabilities.

The Directors confirm that, save as disclosed above, there was no material change in the indebtedness status of the Group since 31 January 2018 up to the Latest Practicable Date.

3. WORKING CAPITAL

The Directors, after due and careful consideration, are of the opinion that, after taking into account, the Group’s internal resources and available unutilized banking facilities, the working capital available to the Group is sufficient for the Group’s requirements for at least 12 months from the date of publication of this circular.

4. 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 March 2017, being the date to which the latest published audited financial statements of the Group were made up.

The Directors confirm that there was no material change in the indebtedness status of the Group since 31 January 2018 (being the date to which the indebtedness statement is made) and up to the Latest Practicable Date.

5. FINANCIAL AND TRADING PROSPECTS

– I-2 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

As at 30 September 2017, the Group had a total equity of approximately HK$1,088 million. The current ratio of the Group, as measured by total current assets divided by total current liabilities, stood at 2.73 as at 30 September 2017. The unutilized bank facilities and cash and cash equivalents of the Group as at 30 September 2017 amounted to approximately HK$1,046 million and HK$1,122 million respectively. The Directors expect that the Group will maintain sufficient funding both from banks and internal resources to support its business operation and expansion. After the completion of the Acquisition, the Directors expect that the Group will maintain sufficient working capital.

As the housing policy is still a prime focus of the Hong Kong Government, in view of that, the medium and long-term outlook of the construction industry in Hong Kong looks promising. The Directors believe that the Group has accumulated ample experience and know-how to be competitive in tendering the upcoming new projects. In return, create reasonable return for the Shareholders in such a changing marketplace.

The Acquisition will provide a permanent head office to the Group and benefits as mentioned in the paragraph headed “REASONS FOR AND BENEFITS OF THE ACQUISITION” in the letter from the Board in this circular.

– I-3 –

APPENDIX II UNAUDITED FINANCIAL INFORMATION OF THE PROPERTIES

PROFIT AND LOSS STATEMENT OF THE PROPERTIES

Pursuant to Rule 14.67(6)(b)(i) of the Listing Rules, on an acquisition of revenue generating assets (other than a business or a company) with an identifiable income stream or assets valuation, the Company is required to include in this circular a profit and loss statement and valuation (where available) for the 3 preceding financial years ended 31 March 2015, 2016 and 31 March 2017 and the period from 1 April 2017 to 30 September 2017 (the “ Relevant Period ”) on the identifiable income stream in relation to such assets which must be reviewed by the auditor or reporting accountants to ensure that such information has been properly compiled and derived from the underlying books and records.

For the preparation of the profit and loss statement on the identifiable income stream in relation to the Properties in strict compliance with Rule 14.67(6)(b)(i) of the Listing Rules, full access to the underlying books and records of the Vendors covering the Relevant Period is required. However, despite repeated requests made by the Purchaser, the Vendors have not agreed to grant permission for the Group and/or the Company’s auditor to gain full access to the abovementioned underlying books and records of the Vendors nor have they agreed to provide to the Purchaser or the Company the above information in relation to the Properties, except for copies of the subsisting Tenancies of certain parts of the Properties. The Vendors are individuals or private companies which the respective financial information of their Properties is not in the public domain. Without the aforesaid full access to the underlying books and records of the Properties granted by the Vendors, it would not be possible for the Company to properly compile a profit and loss statement on the identifiable income stream in relation to the Properties for inclusion in the circular as required under Rule 14.67(6)(b)(i) of the Listing Rules.

The Company has therefore applied to The Stock Exchange for a waiver and was granted by The Stock Exchange, from strict compliance with Rule 14.67(6)(b)(i) of the Listing Rules. The unaudited financial information of the Properties for the Relevant Period as set out in this appendix has been prepared by the Directors based on the review of the Tenancies provided to the Group by the Vendors and/or the Property Agent and may not give a true and complete picture of the performance of the Properties during the Relevant Period.

According to the Tenancies provided, 1st floor, 2nd floor, part of 3rd floor, Unit A on 4th floor, 5th floor, Units A and B on 6/F, Unit A on 7th floor, 8th floor, Portion B on 9th floor, 10th floor and Portion A on 11th floor of the Properties with total floor area of approximately 74,000 square feet have been leased out to various individual tenants for industrial or storage purpose for a monthly rental income of approximately HK$662,000. Based on the terms of the Tenancies, tenure of the Tenancies ranges from 14 months to 37 months, with the earliest Tenancy expires on 16 May 2018 and the latest Tenancy expires on 14 January 2020.

Pursuant to the Tenancies, the tenants are responsible for government rent and rate, building management expenses, all utilities expenses (electricity, telephone and water) and other outgoings in respect of the Properties, except for the tenancies in respect of certain floors of Man Shung Industrial Building, such as the 2nd Floor, the 4th Floor, 5th Floor, the 6th Floor and the 7th Floor which government rent and rate and building

– II-1 –

APPENDIX II

UNAUDITED FINANCIAL INFORMATION OF THE PROPERTIES

management expenses are responsible by the landlord, and the 8th Floor which government rent and rate, building management expenses and water expenses are responsible by the landlord, while the expenses in relation to insurance and other expenses are not specified. Due to the limited information provided by the Vendors, the Directors are unable to ascertain whether there were any other expenses such as insurance, maintenance and repair charges, depreciation, finance costs and taxes incurred for the Properties during the Relevant Period. As such, all the above expenses are not included in the unaudited financial information of the Properties set out in this appendix.

As the Group intends to hold the Properties for its own use, the Properties will be classified as items of “Property, plant and equipment” in its consolidated statement of financial position upon Completion and be stated at cost less accumulated depreciation and any impairment losses.

Based on the Tenancies, the rental income of the Properties for the Relevant Period is as follows:

					For the six
					months
					ended 30
		For the year ended 31		March	September
		2015	2016	2017	2017
		HK$’000	HK$’000	HK$’000	HK$’000
Rental	income	–	15	1,534	2,929

Notes:

(a) The financial information in relation to the Properties set out above is prepared using accounting policies which are materially consistent with those of the Group as set out in the published annual report of the Company for the year ended 31 March 2017.

– II-2 –

APPENDIX II

UNAUDITED FINANCIAL INFORMATION OF THE PROPERTIES

(b) The rental income for the Relevant Period is compiled from the Tenancies provided by the Vendors and/or the Property Agent. As at the Latest Practical Date, the estimated total monthly rent of the Tenancies by expiry date are as follow:

Tenancies expired on or before 31 March 2018/monthly Tenancies Tenancies expiring in the financial year ending 31 March 2019 Tenancies expiring in the financial year ending 31 March 2020	HK$’000 53 253 356
	662

As at the Latest Practicable Date, the estimated total monthly rent deriving from the top 5 tenants (in terms of monthly rent) of the Tenancies is as follow:

			HK$’000
Top	5	tenants	348

(c) Pursuant to the information provided by the building management office of Man Shung Industrial Building, the management fees of the Properties was HK$1,440,000 for each of the financial year ended 31 March 2015, 2016 and 2017 and HK$720,000 for the six months ended 30 September 2017.
(d) Pursuant to the information publicly available from the website of Rating and Valuation Department of the Government of the Hong Kong Special Administrative Region, the total government rent and rates paid and payable in respect of the Properties is estimated to be approximately HK$320,000 and HK$488,000 for the financial year ended 31 March 2016 and 2017 and approximately HK$252,000 for the six months ended 30 September 2017.
(e) The Directors engaged Ernst & Young, the auditor of the Company, to conduct certain agreed upon procedures on the rental income of the Properties for the Relevant Period in accordance with Hong Kong Standard on Related Services 4400 “Engagements to Perform Agreed-Upon Procedures Regarding Financial Information” issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”). The procedures have been determined by and are the responsibility of the Directors. The auditor of the Company performed the procedures as summarized below:
(i) obtained the summary schedule with respect to the estimated gross rental income in respect of each Tenancies from the management of the Company and checked its arithmetical accuracy;
(ii) selected 25 samples from the summary schedule obtained in procedure (i) above and compared tenant names, floor areas which were leased out, tenancy periods and the monthly rental amounts to the respective Tenancies provided by management of the Company. The 25 selected samples comprise 10 key items with the highest rental value, with the rest of 15 samples selected on a random basis if the population is more than 25 items in the particular year. The aggregate rental income sum of the samples selected is approximately HK$15,000, HK$1,491,000 and HK$2,721,000 representing 100%, 97% and 93% of the rental income of HK$15,000, HK$1,534,000 and HK$2,929,000 for the years ended 31 March 2016 and 2017, and for the six months ended 30 September 2017, respectively. In view of the high coverage by the 25 samples selected for each year/period, the Directors and the external auditor consider the sample size of 25 is fair and representative; and
(iii) compared the amounts of estimated gross rental income as set out in the circular against the summary schedule.

– II-3 –

APPENDIX II

UNAUDITED FINANCIAL INFORMATION OF THE PROPERTIES

The auditor has performed the above agreed-upon procedures set out in the relevant engagement letter with the Company and reported its factual findings based on the agreed-upon procedures to the Directors. Pursuant to the terms of the relevant engagement letter between the Company and the auditor, the reported factual findings should not be used or relied upon by any other parties for any purpose. In the opinion of the Directors, the rental income has been properly compiled based on the information from the Tenancies and the summary schedule.

The above procedures do not constitute an assurance engagement performed in accordance with Hong Kong Standards on Auditing, Hong Kong Standards on Review Engagements or Hong Kong Standards on Assurance Engagements issued by the HKICPA. Consequently, no assurance is provided by the auditor of the Company on the unaudited financial information of the Properties disclosed in this circular and the rental income for the Relevant Period.

Having taken into account the above disclosures of unaudited financial information of the Properties and the proposed use of the Properties is not for revenue generating, the Directors are of the view that omission of the profit and loss statement for the Properties would not render this circular materially incomplete, misleading or deceptive.

VALUATION OF THE PROPERTY

No valuation of the Properties for each of the financial year end and the period end within the Relevant Period has been disclosed herein as the Company has not been able to obtain the valuation reports in respect of the Properties from the Vendors. Instead a valuation of the First Round Properties and the Second Round Properties as appraised by an independent professional valuer as at 8 January 2018 and 9 February 2018 respectively is prepared and set out in the Appendix IV of this circular.

– II-4 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Introduction

This unaudited pro forma financial information (the “ Unaudited Pro Forma Financial Information ”) of the Group has been prepared for illustrative purpose only and because of its hypothetical nature, it may not give a true picture of the financial position of the Group at any future date.

The following is the Unaudited Pro Forma Financial Information of the Group illustrating how the Acquisition might have affected the financial position of the Group as if the Acquisition had been completed as at 30 September 2017. The unaudited pro forma consolidated statement of financial position of the Group as at 30 September 2017 is prepared based on the Group’s unaudited consolidated financial statements of financial position as at 30 September 2017 as extracted from the published interim report of the Group for the six months ended 30 September 2017 after making such pro forma adjustments relating to the Acquisition.

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP AFTER THE ACQUISITION

Unaudited Pro Forma Consolidated Statement of Financial Position 30 September 2017

NON-CURRENT ASSETS Property, plant and equipment Investments in a joint venture Deferred tax assets Total non-current assets CURRENT ASSETS Gross amount due from customers for contract works Accounts receivable Prepayments, deposits and other receivables Tax recoverable Cash and cash equivalents Total current assets CURRENT LIABILITIES Accounts payable Accruals of costs for contract works Tax payable Other payables and accruals Due to a joint ventures	The Group Pro forma adjustment for the Acquisition Notes HK$’000 HK$’000 (Note (1)) 5,018 678,982 (2), (3) 8,394 51 13,463 26,797 523,614 18,651 4,009 1,121,567 (679,472) (4) 1,694,638 447,158 132,441 8,082 24,729 7,313	The Group after the Acquisition HK$’000 684,000 8,394 51
		692,445
		26,797 523,614 18,651 4,009 442,095
		1,015,166
		447,158 132,441 8,082 24,729 7,313

– III-1 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred tax liabilities Total non-current liabilities Net assets EQUITY Equity attributable to owners of the parent Issued capital Reserves Total equity	The Group Pro forma adjustment for the Acquisition Notes HK$’000 HK$’000 (Note (1)) 619,723 1,074,915 1,088,378 153 153 1,088,225 20,000 1,068,225 (490) (2), (4) 1,088,225	The Group after the Acquisition HK$’000 619,723
		395,443
		1,087,888
		153
		153
		1,087,735

		20,000 1,067,735
		1,087,735

Notes:

(1) The unaudited consolidated financial statements of the Group as at 30 September 2017 is extracted from the published interim report of the Group for the period ended 30 September 2017.
(2) The adjustment represents the First Round Consideration and Second Round Consideration of the Properties amounted to HK$438,600,000 and HK$180,000,000, respectively, and the incidental costs estimated to be approximately HK$60,872,000 (including stamp duties of HK$51,781,000, agency fees of HK$7,951,000 legal and professional fees of approximately HK$650,000) and administrative expenses of approximately HK$490,000 payable in connection with the Acquisition, as if the Acquisition has been completed on 30 September 2017.
(3) In accordance with the Group’s accounting policy, property held for own use is accounted for as an item of property, plant and equipment in the Group’s financial statements.
(4) The Group intends to fund the Acquisition by its internal resources. In preparing the Unaudited Pro Forma Financial Information, the Directors had assumed that the Group will settle the Aggregated Consideration and the Expenses (approximately HK$679,472,000 in aggregate) by its internal resources.
(5) No adjustments have been made to reflect any trading results or other transactions of the Group entered into subsequent to 30 September 2017.

– III-2 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

B. INDEPENDENT REPORTING ACCOUNTANTS ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is a text of the letter from Ernst & Young, the reporting accountants, in respect of the unaudited pro forma financial information of the Group, prepared for the purpose of incorporation in this circular.

==> picture [87 x 35] intentionally omitted <==

22/F, CITIC Tower 1 Tim Mei Avenue Central, Hong Kong

28 March 2018

The Directors

Able Engineering Holdings Limited

Independent reporting accountants’ assurance report in the compilation of pro forma financial information

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Able Engineering Holdings Limited (the “ Company ”), its subsidiaries (hereinafter collectively referred to as the “ Group ”) by the directors of the Company (the “ Directors ”) for illustrative purpose only. The pro forma financial information consists of the unaudited pro forma consolidated statement of financial position of the Group as at 30 September 2017 and the related notes set out in section A of Appendix III to the circular dated 28 March 2018 (the “ Circular ”) issued by the Company (the “ Unaudited Pro Forma Financial Information ”) in connection with the Group’s acquisition of the properties (the “ Acquisition ”). The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described in notes 1 to 5 in Appendix III to the Circular.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the Acquisition on the Group’s financial position as at 30 September 2017 as if the Acquisition had taken place at 30 September 2017. As part of this process, information about the Group’s financial position has been extracted by the Directors from the Group’s unaudited condensed consolidated interim financial information for the six months ended 30 September 2017 as set out in the Interim report of the Group for the six months ended 30 September 2017.

– III-3 –

APPENDIX III

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Directors’ responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “ Listing Rules ”) and with reference to Accounting Guideline (“ AG ”) 7 Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”).

Our independence and quality control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior.

Our firm applies Hong Kong Standard on Quality Control 1 Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements , and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountants’ responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the Unaudited Pro Forma Financial Information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the Unaudited Pro Forma Financial Information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus issued by the HKICPA. This standard requires that the reporting accountants plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the Unaudited Pro Forma Financial Information, in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

– III-4 –

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

The purpose of the Unaudited Pro Forma Financial Information included in the Circular is solely to illustrate the impact of the Acquisition on unadjusted financial information of the Group as if the Acquisition had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Acquisition would have been as presented.

A reasonable assurance engagement to report on whether the Unaudited Pro Forma Financial Information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the Unaudited Pro Forma Financial Information provide a reasonable basis for presenting the significant effects directly attributable to the Acquisition, and to obtain sufficient appropriate evidence about whether:

The related pro forma adjustments give appropriate effect to those criteria; and
The Unaudited Pro Forma Financial Information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountants’ judgment, having regard to the reporting accountants’ understanding of the nature of the Group, the Acquisition in respect of which the Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma Financial Information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

(a) the Unaudited Pro Forma Financial Information has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully,

Ernst & Young Certified Public Accountants Hong Kong

– III-5 –

APPENDIX IV

PROPERTIES VALUATION

The following is the text of a letter and valuation certificate prepared for the purpose of incorporation in this circular received from CHFT Advisory And Appraisal Ltd., an independent valuer, in connection with its valuation as at 8 January 2018 and 9 February 2018 of the First Round Properties and the Second Round Properties respectively.

==> picture [30 x 29] intentionally omitted <==

�� CHFT ADVISORY AND APPRAISAL LTD. �� 77 � 8 � 8/F, 77 Wyndham Street, Central, Hong Kong �� Main +852 2301 4080 �� Fax +852 2301 4988

Date: 28 March 2018

The Board of Directors

No. 155 Waterloo Road, Kowloon Tong Kowloon, Hong Kong

Dear Sirs,

RE: Valuation of Various Properties in Man Shung Industrial Building, Kwun Tong

In accordance with a joint instruction for us to value the above properties, with details stated in the certificate attached, from Vantage International (Holdings) Limited (“ Vantage ”, together with its subsidiaries, including the Able Holdings Group (as defined below), the “ Vantage Group ”) and Able Engineering Holdings Limited (“ Able Holdings ”, together with its subsidiaries, the “ Able Holdings Group ”), we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the capital values of such properties as at 8 January 2018 and 9 February 2018 (the “ Dates of Valuation ”) for public circular purpose of Vantage and Able Holdings only in relation to the relevant major transaction(s).

Valuation Basis

Our valuation is carried out on a Market Value basis, which is defined as “the estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion.”

This valuation complies with The HKIS Valuation Standards published by the Hong Kong Institute of Surveyors (“ HKIS ”) and the International Valuation Standards (“ IVS ”) published by the International Valuation Standards Council. We have also complied with the requirements set out in Chapter 5 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

– IV-1 –

APPENDIX IV

PROPERTIES VALUATION

Valuation Methodology

We have valued the property interests by Direct Comparison, which consists of comparisons based on prices realized from comparable properties. Comparable properties of similar location, size and character are selected and then analyzed and carefully weighed against all the respective advantages and disadvantages of each property in order to arrive at a fair comparison of capital value.

Valuation Assumptions

Our valuation has been made on the assumption that the owner sells the property on the open market without the benefit or burden of a deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which would serve to affect the value of the property interests.

In our valuation, no allowance has been made in our valuation neither for any charges, mortgages or amounts owing on the property interests nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property interests are free of encumbrances, restrictions and outgoings of onerous nature which could affect their values.

Source of Information

We have caused searches at the Land Registry. We have not, however, searched the original documents to verify ownership or any amendment which did not appear on the copies handed to us. All documents have been used for reference only.

We have relied to a considerable extent on information given by the Vantage Group, in particular, but not limited to statutory notices, easements, gross floor areas, tenancies, etc.. We have taken every reasonable care both during inspecting the information provided to us and in making relevant enquiries.

Site inspection of the subject properties was carried by Mr. Alex PW Leung, MHKIS in March 2018. We have inspected the exterior, certain common parts and interior of the properties. We have not inspected all the interior of every units and such parts have been assumed to be in reasonable condition. We have not carried out on-site measurements to verify the correctness of the floor areas. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations.

In the course of our inspection, we have not carried out any structural survey or any tests on the building services. We have not carried out any investigation into past or present uses, either of the properties or of any neighboring lands, to establish whether there is any contamination or potential for contamination to the properties from these uses or sites, and have therefore assumed that none exists.

– IV-2 –

APPENDIX IV

PROPERTIES VALUATION

Limitation of Liabilities

We have had no reason to doubt the truth and accuracy of the information provided to us by the Vantage Group. We have also sought confirmation from the Vantage Group that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to arrive an informed view, and we have no reason to suspect that any material information has been withheld.

The responsible valuer is in a position to provide an objective and unbiased valuation and is competent to undertake the valuation assignment. Our findings or conclusion of values of the properties in this report are valid only for the stated purpose and at the Date of Valuation, and for the sole use of the Vantage Group. We or our personnel shall not be required to give testimony or attendance in court or to any government agency by reason of this report, and the valuer accepts no responsibility whatsoever to any other person.

Our liability for loss or damage shall be limited to such sum as we ought reasonably to pay having regard to our responsibility for the same on the basis that all other consultants and specialists, where appointed, shall be deemed to have provided to the Vantage Group contractual undertakings in respect of their services and shall be deemed to have paid to the Vantage Group such contribution as may be appropriate having regard to the extent of their responsibility for such loss or damage.

Our liability for any loss or damage arising out of the action or proceedings aforesaid shall, notwithstanding the preceding provisions, in any event be limited to a sum not exceeding ten (10) times of the amount of our agreed fee for this engagement. In no event shall we be liable for consequential, special, incidental or punitive loss, damage or expense (including without limitation, loss of profits, opportunity cost, etc.), even if it has been advised of their possible existence. For the avoidance of doubt our liability shall never exceed the lower of the sum calculated in accordance with the preceding provisions and the sum provided for in this clause.

Vantage and Able Holdings are required to indemnify and hold us and our personnel harmless from any claims, liabilities, costs and expenses (including, without limitation, attorney’s fees and the time of our personnel involved) brought against, paid or incurred by us at a time and in any way based on the information made available in connection with our engagement except to the extent that any such losses, expenses, damages or liabilities are ultimately determined to be the result of gross negligence, misconduct, willful default or fraud of our engagement team in conducting its work. This provision shall survive even after the termination of this engagement for any reason.

We enclose herewith a summary of value and our valuation certificate.

Yours faithfully, For and on behalf of CHFT Advisory And Appraisal Ltd.

Alex PW Leung MHKIS

Senior Director

Mr. Alex PW Leung is a member of the Hong Kong Institute of Surveyors. Mr. Leung has over 20 years’ experience in valuing properties in Hong Kong.

– IV-3 –

APPENDIX IV

PROPERTIES VALUATION

SUMMARY OF VALUES

Properties to be held for Occupation

Property

1st floor, 2nd floor, 3rd floor, Unit B on 4th floor, 5th floor, Units A and B on 6/F, Unit A on 7th floor, 8th floor, Portion A on 9/F and Portion B on 9th floor, 10th floor, Portion A on 11th floor, 12th floor and the roof thereof, Man Shung Industrial Building, No. 7 Lai Yip Street, Kwun Tong, Kowloon, Hong Kong

Market value as at 8 January 2018

HK$488,000,000

Market value as at 9 February 2018

Ground floor, Unit A on 4th floor and Unit B on 7th floor, Man Shung Industrial Building, No. 7 Lai Yip Street, Kwun Tong, Kowloon, Hong Kong

HK$180,000,000

– IV-4 –

APPENDIX IV

PROPERTIES VALUATION

VALUATION CERTIFICATE

Property

1st floor, 2nd floor, 3rd floor, Unit B on 4th floor, 5th floor, Units A and B on 6/F, Unit A on 7th floor, 8th floor, Portion A on 9/F and Portion B on 9th floor, 10th floor, Portion A on 11th floor, 12th floor and the roof thereof, Man Shung Industrial Building, No. 7 Lai Yip Street, Kwun Tong, Kowloon, Hong Kong

21/26 equal and undivided shares of and in Kwun Tong Inland Lot No. 534

Description and tenure

Completed in 1970, Man Shun Industry Building is a 13-storey industrial block erected on a site with a registered site area of about 11,045 square feet.

The subject property comprises nine whole floors and three half-floor spaces in the building. The total saleable area of the property is approximately 74,542 square feet plus a top roof of 6,259 square feet.

The property is held under Conditions of Sale No. UB8497 for a term of 99 years commencing from 1 July 1898 and the lease has been extended by the New Territories Leases (Extension) Ordinance until 30 June 2047.

Market value as at 8 January 2018

Occupancy details

According to information HK$488,000,000 provided by the Vantage (HONG KONG Group, various units DOLLARS with a total floor space FOUR HUNDRED equivalent to about two EIGHTY-EIGHT and a half floors were MILLION) either owner-occupied or vacant.

The remaining portions of the property have been leased to various parties at a total monthly rental of HK$621,950. The rentals are exclusive of rates and management fee in general. The latest expiry date of the leases is 14 January 2020.

The annual Government Rent payable is 3% ratable value of the property for the time being.

– IV-5 –

APPENDIX IV

PROPERTIES VALUATION

Notes:

(a) The registered owners of the property are listed as follow.

–	1st floor and 2nd floor	Merrison Properties Investment Company Limited (美信物
		業有限公司)
–	3rd floor	Yuen Richard and Yuen Ying Li Chiu Lina (as Joint Tenants)
–	Unit B on 4th floor	Lo Yu Kam
–	5th floor and Units A and B on	Merrison Properties Investment Company Limited
	6/F
–	Unit A on 7th floor	Pacific Best Limited (佳洋有限公司)
–	8th floor	Asian-American Agency Limited
–	Portion A on 9/F	Earnest Enterprises Limited (高勤企業有限公司)
–	Portion B on 9th floor	Ho Kan (何根)
–	10th floor	Chan Chak Tak (1/2), Chan Chak Loy (1/8), Chan Tak Ngan
		(1/8), Chan Tak San (1/8), and Chan Tak Ming James (1/8)
		(as Tenants in Common)
–	Portion A on 11th floor	Ho Kan (何根)
–	12th floor and the roof thereof	Golden Scene Industrial Limited

(b) As per recent land search records, the property is subject to the following encumbrances:
i. Deed of Mutual Covenant registered under Memorial No. UB887719 dated 10 May 1972;
ii. Letter by the Director of Public Works registered under Memorial No. UB926310 dated 27 July 1972;
iii. Supplementary Deed of Mutual Covenant registered under Memorial No. UB1048455 dated 28 September 1973;
iv. Regarding 1st floor to 5th floor, Deed of Mutual Grant registered under Memorial No. UB1048457 dated 28 September 1973;
v. Regarding 4th floor and 6/F, Sub-Deed of Mutual Covenant registered under Memorial No. UB5529050 dated 7 January 1992;
vi. Regarding 7th floor, Sub-Deed of Mutual Covenant registered under Memorial No. UB5880075 dated 8 December 1993;
vii. Regarding 1st floor, 2nd floor, 5th floor and 6/F, Tripartite Legal Charge/Mortgage in favour of the Standard Chartered Bank (Hong Kong) Limited for all moneys registered under Memorial No. 14012701400016 dated 21 January 2014;
viii. Regarding 1st floor and 2nd floor, Rental Assignment in favour of the Standard Chartered Bank (Hong Kong) Limited as Chargee registered under Memorial No. 14012701400020 dated 21 January 2014;
ix. Regarding Unit A on 7th floor, Mortgage for All Moneys and Assignment of Rentals both in favour of China Construction Bank (Asia) Corporation Limited registered under Memorial Nos. 15073102260213 and 15073102260229 respectively both dated 8 July 2015;

– IV-6 –

APPENDIX IV

PROPERTIES VALUATION

x. Regarding Portion A on 9/F, Mortgage for All Moneys and Assignment of Rentals both in favour of China Construction Bank (Asia) Corporation Limited registered under Memorial Nos. 13091100440030 and 13091100440042 respectively both dated 6 September 2015;
xi. Regarding 5th floor, Order Nos. “C/CP/004703/16/K” and “D01191/K/16/CP” by the Building Authority under s.24(1) and s.26 of the Buildings Ordinance registered under Memorial Nos. 17110300850018 and 17110300850029 dated 12 October 2017;
xii. Regarding Portion A on 9/F, Order Nos. “C/CP/003695/16/K” and “D0520/K/16/CP” by the Building Authority under s.24(1) and s.26 of the Buildings Ordinance registered under Memorial Nos. 16122801640094 and 16122801640108 dated 2 December 2016; and
xiii. Various Provisional Sale and Purchase Agreements Formal Sale and Purchase Agreement and Agreements for Sale and Purchase all in favour of Bright Wind Limited (晴風有限公司) with a total consideration of HK$438,600,000 registered by Memorial Nos. 18012602400013, 18012602400024, 18012602400031, 18012602400041, 18012602400057, 18012602400065, 18012602400070, 18012602400081, 18012602400092, 18020501040014, 18020501040024, 18020501040034 and 18020900890023 dated 8 January 2018, 26 January 2018, 5 February 2018 and 26 January 2018.
(c) As informed, Bright Wind Limited is an indirectly wholly-owned subsidiary of Able Holdings Group and an indirect non-wholly-owned subsidiary of Vantage.
(d)
Some salient terms under the Conditions of Sale of the subject land are as follows.
i. The lot shall be used for industrial and/or godown purposes excluding any trade which is declared to be an offensive trade;
ii. No building shall be erected except a factory and/or warehouses, ancillary offices and quarters for persons essential to the safety and security of the building; and
iii. No part of any structure erected on the lot shall exceed a height of 170 feet above Principal Datum.
(e) In our valuation, we have assumed all maintenance works in relation to the Orders (stated in Note b above) have been properly carried out and have satisfied the requirements of the Building Authority. No allowance has been made in our valuation for any outstanding works and costs.
(f) The subject land lies within an area zoned as “Other Specified” uses under an approved Kwun Tong (South) Outline Zoning Plan No. S/K14S/21 dated 3 November 2017. Areas of this planning zone are intended primarily for general business uses. Upon redevelopment on lands in this zone, new buildings shall not exceed maximum plot ratio and maximum building height of 12.0 and 100 metres (about 328 feet) above Principal Datum respectively, or the plot ratio and building height of the existing building, whichever is the greater.

– IV-7 –

APPENDIX IV

PROPERTIES VALUATION

VALUATION CERTIFICATE

Property

Ground Floor, Unit A on 4th floor and Unit B on 7th floor, Man Shung Industrial Building, No. 7 Lai Yip Street, Kwun Tong, Kowloon, Hong Kong
4/26 equal and undivided shares of and in Kwun Tong Inland Lot No. 534

Description and tenure

Completed in 1970, Man Shun Industry Building is a 13-storey industrial block erected on a site with a registered site area of about 11,045 square feet.

The subject property comprises the ground floor unit and halves of two upper floors in the building. The total saleable area of the property is approximately 13,763 square feet.

Market value as at 9 February 2018

Occupancy details

According to information HK$180,000,000 provided by the Vantage (HONG KONG Group, one of units on DOLLARS the upper floor has been ONE HUNDRED leased for a term of two EIGHTY years until 20 November MILLION) 2018 at a monthly rental of HK$40,000 inclusive of government rent, rates and management fee.

Ground floor was vacant. As informed, the remaining unit of the property was owner-occupied.

The annual Government Rent payable is 3% ratable value of the property for the time being.

– IV-8 –

APPENDIX IV

PROPERTIES VALUATION

Notes:

(a) The registered owners of the property are listed as follow.

Ground floor City Maker Limited (譽昌有限公司)
– Unit A on 4th floor Best Prosper International Limited (興昌國際有限公司) – Unit B on 7th floor Choy Yau King (3/4) and Choi Siu Yor (1/4) (as Tenants in Common)
(b) As per recent land search records, the property is subject to the following encumbrances:
i. Deed of Mutual Covenant registered under Memorial No. UB887719 dated 10 May 1972;
ii. Letter by the Director of Public Works registered under Memorial No. UB926310 dated 27 July 1972;
iii. Supplementary Deed of Mutual Covenant registered under Memorial No. UB1048455 dated 28 September 1973;
iv. Regarding 1st floor to 5th floor, Deed of Mutual Grant registered under Memorial No. UB1048457 dated 28 September 1973;
v. Regarding 4th floor, Sub-Deed of Mutual Covenant registered under Memorial No. UB5529050 dated 7 January 1992;
vi. Regarding 7th floor, Sub-Deed of Mutual Covenant registered under Memorial No. UB5880075 dated 8 December 1993;
vii. Regarding ground floor, Mortgage for all moneys and Rental Assignment both in favour of The Hongkong And Shanghai Banking Corporation Limited registered under Memorial Nos. 16102600570064 and 16102600570079 dated 28 September 2016; and
viii. Regarding Unit A on 4th floor, Mortgage for all moneys and Rental Assignment both in favour of The Hongkong And Shanghai Banking Corporation Limited registered under Memorial Nos. 16102600570107 and 16102600570113 dated 28 September 2016.
(c) Some salient terms under the Conditions of Sale of the subject land are as follows.
i. The lot shall be used for industrial and/or godown purposes excluding any trade which is declared to be an offensive trade;
ii. No building shall be erected except a factory and/or warehouses, ancillary offices and quarters for persons essential to the safety and security of the building; and
iii. No part of any structure erected on the lot shall exceed a height of 170 feet above Principal Datum.
(d) The subject land lies within an area zoned as “Other Specified” uses under an approved Kwun Tong (South) Outline Zoning Plan No. S/K14S/21 dated 3 November 2017. Areas of this planning zone are intended primarily for general business uses. Upon redevelopment on lands in this zone, new buildings shall not exceed maximum plot ratio and maximum building height of 12.0 and 100 metres (about 328 feet) above Principal Datum respectively, or the plot ratio and building height of the existing building, whichever is the greater.

– IV-9 –

APPENDIX V

GENERAL INFORMATION

1. 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) Directors’ and Chief Executive’s Interests in Securities

As at the Latest Practicable Date, details of the interests and short positions of each of the Director and chief executive of the Company 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) as 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 taken under provisions of the SFO); or required to be recorded in the register kept by the Company under section 352 of the SFO; or otherwise required to be notified to the Company and The Stock Exchange pursuant to the “Model Code for Securities Transactions by Directors of Listed Issuers” (the “ Model Code ”) as set out in Appendix 10 of the Listing Rules were as follows:

Long Position in the Shares of the Company:

		Number of	% of issued
	Capacity and	Shares	share capital of
Director	nature of interests	interested	the Company
Mr. NGAI_(note)_(“Mr. NGAI”)	As founder and	1,500,000,000	75.00%
	beneficiary of a trust
Mr. LAU Chi Fai, Daniel (“Mr. LAU”)	Personal	300,000	0.02%
Mr. CHEUNG Ho Yuen	Personal	66,875	0.00%
(“Mr. CHEUNG”)

Note: Mr. NGAI is deemed to be interested in 1,080,011,200 Vantage Shares (representing approximately 64.17% of the entire issued share capital of the Vantage), which comprise (i) 6,250,800 shares held by himself; (ii) 838,760,400 shares held by Winhale by virtue of him being the settlor of The Xyston Trust; and (iii) 235,000,000 shares held by Fame Yield by virtue of his beneficial interest in the entire issued share capital of Fame Yield. Accordingly, Mr. NGAI is deemed to be interested in 1,500,000,000 shares of the Company held by Profit Chain under the SFO by virtue of his deemed interest in approximately 64.17% of the entire issued share capital of the Vantage.

– V-1 –

APPENDIX V

GENERAL INFORMATION

Long Position in the Ordinary Shares of an Associated Corporation – Vantage:

Director Notes Capacity and nature of interest Mr. NGAI (a) As founder and beneficiary of a trust (b) Interest in a controlled corporation Personal Mr. YAU Kwok Fai (“Mr. YAU”) (c) Interest in a controlled corporation Personal Mr. LAU Personal Mr. CHEUNG Personal Notes:	Number of ordinary shares interested 838,760,400 235,000,000 6,250,800 1,080,011,200 30,888,000 8,448,000 39,336,000 300,000 240,000	% of issued share capital of Vantage 49.84% 13.96% 0.37%
		64.17%
		1.84% 0.50%
		2.34%
		0.02% 0.01%

(a) These Shares are legally and beneficially owned by Winhale, which is ultimately beneficially wholly-owned by The Xyston Trust. The Xyston Trust is a discretionary trust founded by Mr. NGAI for the benefits of his family members.
(b) These Shares are legally and beneficially owned by Fame Yield, the entire issued share capital of which is legally and beneficially owned by Mr. NGAI.
(c) These Shares are legally and beneficially owned by Business Success Limited, the entire issued share capital of which is legally and beneficially owned by Mr. YAU.

– V-2 –

APPENDIX V

GENERAL INFORMATION

Long Positions in the Underlying Shares of an Associated Corporation – Vantage:

		Number of
		Underlying
		Vantage Shares
		in respect of	% of underlying
		the share	Vantage Shares
		options granted	over issued
	Capacity and	under the 2011	share capital
Director	nature of interests	option scheme	of Vantage
		(note)
Mr. NGAI	Beneficial owner	4,500,000	0.27
Mr. YAU	Beneficial owner	4,500,000	0.27

Note: The abovementioned share options outstanding as at the Latest Practicable Date were granted on 10 September 2015 at an exercise price of HK$0.526 per share. These share options may be exercised at any time commencing on 10 March 2016, and if not otherwise exercised, will lapse on 9 September 2020.

Save as disclosed above, as at the Latest Practicable Date, the Company and its associated corporations had no outstanding share options granted to the Directors to subscribe for the securities of the Company and its associated corporations.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in the Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which was 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 taken under provisions of the SFO), or as recorded in the register kept by the Company under section 352 of the SFO, or otherwise to be notified to the Company and The Stock Exchange pursuant to the Model Code.

– V-3 –

APPENDIX V

GENERAL INFORMATION

(ii) Substantial Shareholders’ Interests in Securities

As at the Latest Practicable Date, according to the register kept by the Company pursuant to Section 336 of SFO, the following persons and companies (other than the Directors or chief executive of the Company) had an interest or short position in the Shares and the underlying Shares of the Company which fell to be disclosed to the Company under the provisions of the Divisions 2 and 3 of Part XV of the SFO:

Long Position in the Shares:

				% of issued
Name of		Capacity	Number of	share capital of
the Shareholders	Notes	and nature of interest	Shares held	the Company
Profit Chain	(a)	Beneficial owner	1,500,000,000	75.00%
Vantage	(a)	Interested in a controlled
		corporation	1,500,000,000	75.00%
Winhale	(b)	Interested in a controlled
		corporation	1,500,000,000	75.00%
Braveway Limited	(c)	Interested in a controlled
		corporation	1,500,000,000	75.00%
HSBC International	(c)	Interested in a controlled
Trustee Limited		corporation	1,500,000,000	75.00%
Ms. CHENG Wai	(d)	Interested in a controlled
Chun		corporation and spouse	1,500,000,000	75.00%

Notes:

(a) Profit Chain is wholly-owned by Vantage. As such, Vantage is deemed to be interested in the 1,500,000,000 shares of the Company owned by Profit Chain under the SFO.
(b) Winhale is deemed to be interested in 1,500,000,000 shares of the Company held by Profit Chain under the SFO by virtue of its deemed interest in approximately 49.84% of the entire issued share capital of Vantage.
(c) Braveway Limited and HSBC International Trustee Limited are deemed to be interested in the Vantage’s shares held by Winhale by virtue of the fact that Winhale is wholly-owned by the trusts of which Braveway Limited and HSBC International Trustee Limited are the trustees.
(d) Ms. Cheng Wai Chun is the sole shareholder of Braveway Limited and the spouse of Mr. NGAI. Ms. Cheng Wai Chun is deemed to be interested in 1,500,000,000 shares of the Company held by Profit Chain under the SFO.

Save as disclosed above, as at the Latest Practicable Date, no other person (other than the Directors and chief executive of the Company) had an interest or short position in the Shares and the underlying shares which fell to be disclosed to the Company under the provisions of the Divisions 2 and 3 of Part XV of the SFO, or who, as at the Latest Practicable Date, was directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

– V-4 –

APPENDIX V

GENERAL INFORMATION

(iii) Directors’ Service Contracts

As at the Latest Practicable Date, none of the Directors had entered into or proposed to enter into any service contracts with the Company or any other member of the Group (excluding contracts expiring or determinable by the Company or other members of the Group within a year without payment of any compensation (other than statutory compensation)).

(iv) Directors’ Interests in the Assets, Contracts or Arrangement Significant to the Group

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since the date to which the latest published audited financial statements of the Group were made up (i.e. 31 March 2017), acquired or disposed of by, or leased to the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by, or leased to, the Company or any of its subsidiaries.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by the Company or any member of the Group which contract or arrangement is subsisting at the date of this circular and which is significant in relation to the business of the Group.

(v) Directors’ interests in competing business

As at the Latest Practicable Date, Mr. NGAI’s son, Mr. NGAI Wing Yin, aged over 18, is a director of Lanon Development Limited (“ Lanon Development ”), Lanon Construction Limited (“ Lanon Construction ”), Lanon Building Limited (“ Lanon Building ”) and Lanon Engineering Limited (“ Lanon Engineering ”), all incorporated in Hong Kong and engaging in construction, maintenance and engineering contract works.

Meanwhile, Ms. WONG Chui Yee, Mr. NGAI Wing Yin’s wife and Mr. NGAI’s daughter-in-law, aged over 18, is also a director of Lanon Development. As at 31 January 2018, Mr. NGAI Wing Yin holds 100% beneficial interest in Lanon Development, Lanon Construction, Lanon Building and Lanon Engineering.

The power to make material business decisions for the Group is vested in the Board. Whenever the Board considers that there may be a conflict of interest between the Group and any Director (including Mr. NGAI who is an executive Director, Chairman of the Board and a controlling Shareholder of the Company), such Director will be required to abstain from voting. Therefore, the Board is capable of carrying on the Group’s business independent of, and at arm’s length, from the business of Mr. NGAI.

– V-5 –

APPENDIX V

GENERAL INFORMATION

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or their respective close associates is interested in any business which competes or was likely to compete, either directly or indirectly, with the business of the Group.

3. LITIGATION

As at the Latest Practicable Date, there were a number of claims against the Group which arose in the ordinary course of the Group’s contract works business. These claims are primarily due to personal injuries suffered by employees of the Group or the Group’s subcontractors in accidents arising out of and in the course of their employment. No settlement has been reached, nor has there been judgment made against the Group in respect of the claims up to the Latest Practicable Date. The Directors are of the opinion that such claims are covered by insurance and would not result in material adverse impact to the financial position or results and operations of the Group.

4. MATERIAL CONTRACTS

The following contracts, not being contracts entered into in the ordinary course of business carried on or intended to be carried on by the Company or any of its subsidiaries at the time being, have been entered into by members of the Group within two years immediately preceding the date of this circular and up to the Latest Practicable Date and which is or may be material:

(i) a share purchase agreement dated 12 January 2017 entered into among Profit Chain, Vantage and the Company pursuant to which Profit Chain agreed to sell one ordinary share in Vital Tool Limited (“ Vital Tool ”) to the Company at a total cash consideration of HK$7.8;
(ii) a share purchase agreement dated 12 January 2017 entered into among Profit Chain, Vantage and Vital Tool pursuant to which Profit Chain agreed to sell 10,000 ordinary shares in Able Contractors Limited to Vital Tool at a total consideration of HK$10,000 to be settled by the issue of a promissory note by Vital Tool to Profit Chain;
(iii) a share purchase agreement dated 12 January 2017 entered into among Profit Chain, Vantage and Vital Tool pursuant to which Profit Chain agreed to sell one ordinary share in Able Contracting Limited to Vital Tool at a total consideration of HK$1.00 to be settled by the issue of a promissory note by Vital Tool to Profit Chain;
(iv) a share purchase agreement dated 12 January 2017 entered into among Profit Chain, Vantage and Vital Tool pursuant to which Profit Chain agreed to sell 10,000 ordinary shares in Able Maintenance Company Limited to Vital Tool at a total consideration of HK$10,000 to be settled by the issue of a promissory note by Vital Tool to Profit Chain;

– V-6 –

APPENDIX V

GENERAL INFORMATION

(v) a share purchase agreement dated 12 January 2017 entered into among Profit Chain, Vantage and Vital Tool pursuant to which Profit Chain agreed to sell one ordinary share in Able Building Construction Limited to Vital Tool at a total consideration of HK$1.00 to be settled by the issue of a promissory note by Vital Tool to Profit Chain;
(vi) a share purchase agreement dated 12 January 2017 entered into among Profit Chain, Winhale, Mr. Yau, Dr. Castledine Douglas Alan, Vantage and Vital Tool pursuant to which (i) Profit Chain agreed to sell 758,900 ordinary shares in Able Engineering Company Limited; and (ii) Winhale Ltd., Mr. Yau and Dr. Castledine Douglas Alan agreed to sell 1,054,500, 55,500 and 11,100 non-voting deferred shares in Able Engineering Company Limited respectively to Vital Tool, at a total consideration of HK$55,931,401, of which HK$55,931,398 to be settled by Vital Tool by the issue of a promissory note by Vital Tool to Profit Chain; and (ii) HK$3.00 to be settled by Vital Tool by way of cash payment of HK$1.00 to each of Winhale, Mr. Yau and Dr. Castledine Douglas Alan;
(vii) a share purchase agreement dated 12 January 2017 entered into among Profit Chain, Vantage and Vital Tool pursuant to which Profit Chain agreed to sell one ordinary share in Able Tool Limited to Vital Tool at a total consideration of HK$1.00 to be settled by the issue of a promissory note by Vital Tool to Profit Chain;
(viii) a tripartite agreement dated 12 January 2017 entered into among Profit Chain, the Company and Vital Tool pursuant to which Profit Chain agreed to subscribe for, and the Company agreed to issue and allot 999 new Shares to settle in full the total principal amount of HK$55,951,401 due and owing by Vital Tool to Profit Chain pursuant to the promissory note set out in (ii) to (vii) of this paragraph;
(ix) an administrative services agreement dated 18 January 2017 entered into between Vantage Management Service Limited and Able Engineering Company Limited;
(x) the deed of non-competition dated 18 January 2017, executed by Vantage and Mr. NGAI in favour of the Company (for itself and as trustees for each of its subsidiaries), regarding certain non-competition undertakings;
(xi) the deed of indemnity dated 18 January 2017 executed by Vantage in favour of the Company (for its own and as trustee for each of its subsidiaries), pursuant to which Vantage has given certain tax and other indemnities in favour of the Company (for itself and as trustee for each of its subsidiaries at the time being);

– V-7 –

APPENDIX V

GENERAL INFORMATION

(xii) the public offer underwriting agreement (the “ Public Offer Underwriting Agreement ”) dated 25 January 2017 entered into by (a) the Company, (b) Vantage, (c) Ample Orient Capital Limited (“ Ample Orient ”), and (d) the public offer underwriters (collectively, the “ Public Offer Underwriters ”, being Ample Orient, Convoy Investment Services Limited, First Shanghai Securities Limited, Guoyuan Capital (Hong Kong) Limited, Pacific Foundation Securities Limited, China-Hong Kong Link Securities Company Limited, Head & Shoulders Securities Limited, Quam Securities Company Limited and Innovax Capital Limited) in respect of the offer of the Shares for subscription to the public in Hong Kong (the “ Public Offer ”);
(xiii) the price determination agreement dated 13 February 2017 entered into between Ample Orient (for itself and on behalf of the Public Offer Underwriters and the Placing Underwriters (as defined below)) and the Company for the purpose of determining and fixing the final offer price per Shares under the Public Offer and the Placing (as defined below);
(xiv) the placing underwriting agreement dated 13 February 2017 entered into by (a) the Company, (b) the executive directors of the Company, (c) Vantage, (d) Ample Capital Limited, (e) Ample Orient, and (f) the placing underwriters (being Ample Orient, Convoy Investment Services Limited and First Shanghai Securities Limited, collectively, the “ Placing Underwriters ”) in respect of the conditional offering of the Shares for and on behalf of the Company (the “ Placing ”); and
(xv) the Acquisition Agreements.

5. EXPERTS’ QUALIFICATION AND CONSENT

The following are the qualifications of the experts who had given and agreed to the inclusion of, its opinion(s) or advice in this circular:

Name Qualifications Ernst & Young Certified Public Accountants CHFT Advisory And Appraisal Ltd. Independent professional property valuer

Each of Ernst & Young and CHFT Advisory And Appraisal Ltd. has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter or report as set out in this circular and reference to its name in the form and context in which it appears.

– V-8 –

APPENDIX V

GENERAL INFORMATION

As at the Latest Practicable Date, each of Ernst & Young and CHFT Advisory And Appraisal Ltd. was not beneficially interested in the share capital of any member of the Group nor did any of them have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for any securities in any member of the Group nor did any of them have any interest, either direct or indirect, in any assets which had been acquired or disposed of or leased to, or were proposed to be acquired or disposed of or leased to, any member of the Group since 31 March 2017 (being the date to which the latest published audited financial statements of the Group were made up).

6. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection from 10:00 a.m. to 12:30 p.m. and from 2:30 p.m. to 5:00 p.m. on any weekdays (except for Saturday and public holidays) at the Company’s principal place of business in Hong Kong for a period of 14 days from the date of this circular:

(i) the Company’s memorandum of association and the articles of association;
(ii) the prospectus of the Company;
(iii) the annual report of the Company for the year ended 31 March 2017;
(iv) the interim reports of the Company for the six months ended 30 September 2017;
(v) the material contracts referred to in the section headed “Material Contracts” in this Appendix;
(vi) the report from Ernst & Young on unaudited pro forma financial information of the Group as set out in Appendix III to this circular;
(vii) the valuation certificates and report of the Properties included in Appendix IV to this circular;
(viii) the written consent(s) referred to under the section headed “Experts’ Qualification and Consent” in this Appendix; and
(ix) this circular.

7. MISCELLANEOUS

(i) The registered office of the Company is at PO Box 1350, Clifton House, 75 Fort Street, Grand Cayman KY1-1108, Cayman Islands;
(ii) The head office and principal place of business of the Company is at No. 155 Waterloo Road, Kowloon Tong, Kowloon, Hong Kong;

– V-9 –

APPENDIX V

GENERAL INFORMATION

(iii) The Company’s principal share register and transfer office is Estera Trust (Cayman) Limited at Clifton House, 75 Fort Street, PO Box 1350, Grand Cayman KY1-1108, Cayman Islands;
(iv) The Company’s branch share registrar and transfer office in Hong Kong is Tricor Investor Services Limited at Level 22, Hopewell Centre, 183 Queen’s Road East Hong Kong;
(v) As at the date of this circular, the Board comprises six executive Directors, namely Mr. NGAI Chun Hung (Chairman) , Mr. IP Yik Nam (Chief Executive Officer) , Mr. YAU Kwok Fai, Mr. YAM Kui Hung, Mr. LAU Chi Fai, Daniel and Mr. CHEUNG Ho Yuen; and three independent non-executive Directors, namely Dr. LI Yok Sheung, Ms. MAK Suk Hing and Ms. LEUNG Yuen Shan, Maisy;
(vi) The secretary of the Company is Mr. LEE Chi Fai, a member of the Hong Kong Institute of Certified Public Accountants; and
(vii) The English text of this circular prevails over the Chinese text in case of inconsistency.

– V-10 –

AI assistant

Able Engineering Holdings Limited — Proxy Solicitation & Information Statement 2018

50048_rns_2018-03-27_9b273f06-76ee-447a-accc-c7453b04fd4e.pdf

ABLE ENGINEERING HOLDINGS LIMITED 安保工程控股有限公司

MAJOR TRANSACTION IN RELATION TO ACQUISITION OF THE PROPERTIES

DEFINITIONS

ABLE ENGINEERING HOLDINGS LIMITED 安保工程控股有限公司

(Stock Code: 1627)

Directors:

Registered Office:

Head Office and Principal Place of Business:

MAJOR TRANSACTION IN RELATION TO ACQUISITION OF THE PROPERTIES

INTRODUCTION

PRINCIPAL TERMS OF THE ACQUISITION

(1) THE FIRST ROUND ACQUISITION

Assets to be acquired

First Round Consideration

Agency fee

Conditions precedent

Completion

(2) THE SECOND ROUND ACQUISITION

Assets to be acquired

Second Round Consideration

Agency fee

Conditions precedent

Completion

THE FORMAL AGREEMENTS

INFORMATION OF THE PROPERTIES

INFORMATION OF THE GROUP

INFORMATION OF THE VENDORS

FUNDING AND FINANCIAL IMPACT OF THE ACQUISITION

REASONS FOR AND BENEFITS OF THE ACQUISITION

LISTING RULES IMPLICATIONS

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS STATEMENT

Borrowings

Charge on Assets

Contingent liabilities

Other liabilities

3. WORKING CAPITAL

4. MATERIAL ADVERSE CHANGE

5. FINANCIAL AND TRADING PROSPECTS

PROFIT AND LOSS STATEMENT OF THE PROPERTIES

VALUATION OF THE PROPERTY

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Introduction

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP AFTER THE ACQUISITION

Unaudited Pro Forma Consolidated Statement of Financial Position 30 September 2017

B. INDEPENDENT REPORTING ACCOUNTANTS ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

Independent reporting accountants’ assurance report in the compilation of pro forma financial information

Directors’ responsibility for the Unaudited Pro Forma Financial Information

Our independence and quality control

Reporting Accountants’ responsibilities

Opinion

Able Engineering Holdings Limited

RE: Valuation of Various Properties in Man Shung Industrial Building, Kwun Tong

Valuation Basis

Valuation Methodology

Valuation Assumptions

Source of Information

Limitation of Liabilities

Alex PW Leung MHKIS

Senior Director

SUMMARY OF VALUES

Properties to be held for Occupation

Property

VALUATION CERTIFICATE

Property

Description and tenure

Market value as at 8 January 2018

Occupancy details

VALUATION CERTIFICATE

Property

Description and tenure

Market value as at 9 February 2018

Occupancy details

1. RESPONSIBILITY STATEMENT

2. DISCLOSURE OF INTERESTS

Able Engineering Holdings Limited Proxy Solicitation & Information Statement 2018