Aceso Life Science Group Limited — Proxy Solicitation & Information Statement 2018

Mar 22, 2018

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your shares in Hao Tian Development Group Limited (the ‘‘Company’’), you should at once hand this circular together with the enclosed form of proxy to the purchaser(s) or transferee(s), or to the bank, stockbroker or other agent through which the sale or transfer was effected for transmission to the purchaser or transferee.

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.

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 474)

(1) MAJOR TRANSACTION

IN RELATION TO

THE ACQUISITION OF THE TARGET COMPANY HOLDING A MIXED-USE PROPERTY IN THE UNITED KINGDOM AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

Capitalised terms used in this cover page shall have the same meanings as those defined in the section headed ‘‘Definitions’’ in this circular.

A letter from the Board is set out on pages 5 to 15 of this circular. A notice convening the EGM to be held at Room 2702, 27/F, The Sun’s Group Centre, No. 200 Gloucester Road, Wanchai, Hong Kong at 11:00 a.m. on Thursday, 12 April 2018, together with the form of proxy are enclosed herein. In order to be eligible to attend and vote at the EGM, all transfer documents accompanies by the relevant share certificates must be lodged with the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Friday, 6 April 2018. The register of members of the Company will be closed from Monday, 9 April 2018 to Thursday, 12 April 2018, both days inclusive, for determination of entitlements to attend and vote at the EGM and during which period no transfer of Shares will be registered.

A form of proxy for use by the shareholders of the Company at the EGM is enclosed herein. Whether or not you are able to attend the meeting in person, you are requested to complete the form of proxy in accordance with the instructions printed thereon and return it to the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting if you so wish.

23 March 2018

CONTENTS

			Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			5
APPENDIX I	–	FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . . . . .	I-1
APPENDIX II	–	ACCOUNTANTS’ REPORT OF
		THE TARGET COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	–	MANAGEMENT DISCUSSION AND
		ANALYSIS ON THE TARGET COMPANY . . . . . . . . . . . . . . . . .	III-1
APPENDIX IV	–	UNAUDITED PRO FORMA FINANCIAL INFORMATION OF
		THE ENLARGED GROUP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
APPENDIX V	–	PROPERTY VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . .	V-1
APPENDIX VI	–	GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VI-1
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			EGM-1

– i –

DEFINITIONS

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

• ‘‘Acquisition’’

the acquisition of the Sale Shares in the Target Company by the Buyer from the Seller pursuant to the terms and conditions of the Agreement

• ‘‘Agreement’’

the sale and purchase agreement dated 20 January 2018 (London time) entered into between the Buyer and the Seller in respect of the Acquisition

• ‘‘Announcement’’

• the announcement dated 21 January 2018 made by the Company in relation to the Acquisition

• ‘‘Board’’

the board of Directors

• ‘‘Business Day’’

• a day other than a Saturday or Sunday or public holiday in England, Grand Duchy of Luxembourg and Hong Kong

• ‘‘Buyer’’ or

• ‘‘Hao Tian Asia Investment’’

• Hao Tian Asia Investment Company Limited, a company incorporated in Hong Kong with limited liability and an indirectly wholly-owned subsidiary of the Company

• ‘‘Company’’

• Hao Tian Development Group Limited（昊天發展集團有限 公司）, a company incorporated in the Cayman Islands with limited liability and the issued shares of which are listed on the Main Board of the Stock Exchange (stock code: 00474)

• ‘‘Completion’’

• the completion of the Acquisition in accordance with the terms and conditions of the Agreement

• ‘‘Completion Adjustments’’

• adjustment to the Initial Consideration with reference to the Final NAV Amount, details of which are set out under the section headed ‘‘Completion Adjustments’’ in this circular

• ‘‘Deposit’’

• a deposit of £12,770,000 (equivalent to approximately HK$138,171,400) payable by the Buyer as at the date of the Agreement in accordance with the terms of the Agreement

• ‘‘Director(s)’’

• director(s) of the Company

– 1 –

DEFINITIONS

• ‘‘Enlarged Group’’

the Group and the Target Company upon Completion

• ‘‘EGM’’

• an extraordinary general meeting of the Company to be convened for the purpose of considering, and if thought fit, approving the Agreement and the transactions contemplated thereunder

• ‘‘Final NAV Amount’’

• the net asset value of the Target Company as at the date of Completion determined by the Completion Adjustments and as set out in the final completion statement

• ‘‘Group’’ the Company and its subsidiaries

• ‘‘HK$’’

• Hong Kong dollars, the lawful currency of Hong Kong

• ‘‘Hong Kong’’ the Hong Kong Special Administrative Region of the People’s Republic of China

• ‘‘Independent Third Party’’ third parties independent of the Group and its connected persons

• ‘‘Initial Consideration’’

• an initial consideration which comprises the Target Company NAV and the Intra-Group Debt payable by the Buyer before and subject to any Completion Adjustments

• ‘‘Intra-Group Debt’’

• the aggregate amount owed by the Target Company to the Seller Group as at the date of Completion and any amount owed to the Target Company from the Seller Group as at the date of Completion, as shown in the letter in an agreed form to be provided by the Seller prior to Completion

• ‘‘Latest Practicable Date’’

• 20 March 2018, being the latest practicable date for the purpose of ascertaining certain information contained in this circular

• ‘‘Listing Rules’’

means the Rules Governing the Listing of Securities on the Stock Exchange, as amended from time to time

• ‘‘Prime rate’’

means the prime rate for Hong Kong dollars as quoted from time to time and subject to fluctuation

– 2 –

DEFINITIONS

• ‘‘Property’’ the property known as ‘‘55 Mark Lane, EC3’’, situated at 52-58 Mark Lane, London, UK EC3R 7NE, the United Kingdom

• ‘‘Review Period’’ a period of 30 Business Days after delivery of the Draft Completion Statement

• ‘‘RMB’’ Renminbi, the lawful currency of the People’s Republic of China

• ‘‘Sale Shares’’ 20,000 shares in registered form with a nominal value of €1 each in the share capital of the Target Company, representing the entire issued share capital of the Target Company as at the Latest Practicable Date

• ‘‘Seller’’ or ‘‘Reignwood Europe’’ Reignwood Europe Holdings S.À.R.L., a company incorporated under the laws of Grand Duchy of Luxembourg with limited liability

• ‘‘Seller Group’’ the Seller, all of its subsidiaries, parent companies, and their subsidiaries, and all associated or connected persons with them

• ‘‘Share(s)’’ shares(s) of the Company of par value HK$0.01 each

• ‘‘Shareholder(s)’’ the holder(s) of the Shares

• ‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited

• ‘‘Target Company’’

• 55 Mark Lane S.À.R.L., a company incorporated under the laws of the Grand Duchy of Luxembourg with limited liability, which is wholly owned by the Seller as at the Latest Practicable Date

• ‘‘Target Company NAV’’

the net asset value of the Target Company as at the date of Completion as estimated and shown in an estimated balance sheet of the Target Company immediately prior to Completion in an agreed form prepared by or on behalf of the Seller immediately prior to Completion

‘‘Total Consideration’’ £ 1 3 0 , 0 0 0 , 0 0 0 ( e q u i v a l e n t t o a p p r o x i m a t e l y HK$1,406,600,000), being the maximum consideration payable by the Buyer to the Seller under the Agreement

– 3 –

DEFINITIONS

‘‘US$’’ United States dollars, the lawful currency of the United States of America ‘‘£’’ pounds sterling, the lawful currency of the United Kingdom ‘‘%’’ per cent.

In this circular, unless the context otherwise requires, the terms ‘‘associate(s)’’, ‘‘connected person(s)’’, ‘‘percentage ratio(s)’’ and ‘‘subsidiary(ies)’’ shall have the meanings given to such terms in the Listing Rules, as modified by the Stock Exchange from time to time.

For illustrative purpose of this circular only, conversion of £ to HK$ is made at the following exchange rate: £1.00 = HK$10.82.

Certain amounts and percentage figures set out in this circular have been subject to rounding adjustments. Accordingly, figures shown as totals in certain tables and the currency conversion or percentage equivalents may not be an arithmetic sum of such figures.

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LETTER FROM THE BOARD

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 474)

Executive Directors: Registered office: Mr. Xu Hai Ying Cricket Square Dr. Zhiliang Ou, JP (Australia) Hutchins Drive Mr. Fok Chi Tak P.O. Box 2681 Grand Cayman KY1-1111 Independent non-executive Directors: Cayman Islands Mr. Chan Ming Sun Jonathan Mr. Lam Kwan Sing Head office and principal place of Mr. Lee Chi Hwa, Joshua business in Hong Kong: Rooms 4917-4932, 49th Floor Sun Hung Kai Centre 30 Harbour Road, Wanchai Hong Kong 23 March 2018

To the Shareholders

Dear Sir or Madam,

(1) MAJOR TRANSACTION IN RELATION TO

THE ACQUISITION OF THE TARGET COMPANY HOLDING A MIXED-USE PROPERTY IN THE UNITED KINGDOM AND

(2) NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the voluntary announcement of the Company dated 7 December 2017 in relation to the potential acquisition of an offshore company holding a commercial property in the United Kingdom and Announcement of the Company dated 21 January 2018 in relation to, among other things, the Acquisition.

– 5 –

LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) details of the Acquisition; (ii) audited financial information of the Group and the Target Company; and (iii) a property valuation report in relation to the Property.

The notice of the EGM to the Shareholders is also enclosed in this circular.

THE AGREEMENT

The Board is pleased to announce that on 20 January 2018 (London time), Hao Tian Asia Investment, an indirectly wholly-owned subsidiary of the Company, as buyer and Reignwood Europe, an Independent Third Party, as seller, entered into the Agreement, pursuant to which the Buyer conditionally agreed to acquire, and the Seller conditionally agreed to sell, the Sale Shares (representing the entire issued share capital of the Target Company) and the Intra-Group Debt in accordance with the terms and conditions of the Agreement. The Target Company holds the Property situated in the City of London, the United Kingdom, which is currently let to a mix of office and retail tenants.

Details of the Agreement are set out below:

The Agreement

Date

20 January 2018 (London time)

Parties

• (1) Hao Tian Asia Investment, an indirectly wholly-owned subsidiary of the Company, as buyer; and

• (2) Reignwood Europe, as seller.

To the best of the Directors’ knowledge, information and belief and having made all reasonable enquiries, the Seller and its ultimate beneficial owners are Independent Third Parties.

Subject matter

The Buyer conditionally agreed to acquire, and the Seller conditionally agreed to sell, the Sale Shares (representing the entire issued share capital of the Target Company) and the Intra-Group Debt in accordance with the terms and conditions of the Agreement.

Upon Completion, the Target Company will become a wholly-owned subsidiary indirectly held by the Company and the financial results of the Target Company will be consolidated into the financial statements of the Group.

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LETTER FROM THE BOARD

Consideration

The Total Consideration for the Acquisition shall altogether be up to and no more than £130,000,000 (equivalent to approximately HK$1,406,600,000), which shall be payable by the Buyer in the following manner:

• (a) £12,770,000 (equivalent to approximately HK$138,171,400), as the deposit to the Seller’s solicitor on the date of the Agreement, which shall be released to the Seller together with any accrued interest thereon interests upon Completion as part of the payment of the Initial Consideration in accordance with the terms of the Agreement;

• (b) the balance of the Initial Consideration, being the sum of (i) the Target Company NAV and (ii) the Intra-Group Debt (which sum shall be no more than £128,000,000 (equivalent to approximately HK$1,384,960,000)), less the Deposit with any accrued interest thereon referred to in (a) above, to the Seller at Completion; and

• (c) as a result of any Completion Adjustments, any excess amount payable by the Buyer to the Seller, within 10 Business Days after the Final NAV Amount have been agreed or determined in accordance with the Agreement.

If there is any shortfall amount payable by the Seller to the Buyer as a result of any Completion Adjustments, the Seller shall pay the shortfall amount to the Buyer within 10 Business Days after the Final NAV Amount has been agreed. According to the audited accounts of the Target Company prepared in accordance with International Financial Reporting Standards as adopted by the European Union, as at 31 December 2017, the net asset value of the Target Company and the intra-group debt amount between the Target Company and the Seller Group were £36,058,496 (equivalent to approximately HK$390,152,927) and £92,754,375 (equivalent to approximately HK$1,003,602,338), respectively. The Total Consideration will be settled by a combination of internal resources and external bank financing of the Buyer.

Completion Adjustments

Pursuant to the Agreement, the Seller shall deliver a draft completion statement setting out the Final NAV Amount to the Buyer within 20 Business Days after Completion (the ‘‘Draft Completion Statement’’). If during the Review Period, the Buyer agrees with the Draft Completion Statement, the net asset value of the Target Company stated therein shall be the Final NAV Amount. If the parties do not agree on such amount within the Review Period or such further time as set out in the Agreement, either party may request an independent chartered accountant to be appointed to finally determine the same. Under the Agreement, the Total Consideration, taking into account any Completion Adjustments, shall in any event be no more than £130,000,000 (equivalent to approximately HK$1,406,600,000).

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LETTER FROM THE BOARD

Basis of the Consideration

The Total Consideration was determined after arm’s length negotiations between the Buyer and the Seller taking into account a number of factors including but not limited to (i) the net asset value of the Target Company (according to the unaudited management accounts of the Target Company) as at 31 December 2017, being £31,265,542 (equivalent to approximately HK$338,293,164); (ii) the intra-group debt amount between the Target Company and the Seller Group (according to the unaudited management accounts of the Target Company) as at 31 December 2017, being £93,483,018 (equivalent to approximately HK$1,011,486,255); (iii) the preliminary appraised value of the Property in the amount of £130,000,000 (equivalent to approximately HK$1,406,600,000), based on an independent professional valuation assuming a corporate sale; (iv) the prevailing market value of comparable commercial buildings in London and (v) the location and conditions of the Property and the rental income arising from the Property. Due to the difference in accounting policies between the Target Company and the Group, the Target Company recorded a net liability value based on the Group’s accounting policies. Further details are set out in the paragraph ‘‘Reconciliation of the Net Asset/Liability Value of the Target Company’’ below in this section of the circular.

Conditions Precedent

Completion of the Agreement is conditional upon the satisfaction of the following conditions precedent:

• (a) the passing by the Shareholders of the necessary resolution(s) in an extraordinary general meeting to approve the Agreement and the transactions contemplated thereunder; and

• (b) all necessary consents, approvals, permissions, waivers, of the Stock Exchange, which are required for the execution and performance of the Agreement or Completion, having been obtained and not having been revoked, suspended or withdrawn prior to Completion.

Neither parties to the Agreement have the right to waive the above conditions. The above conditions are expected to be satisfied on or before 12 April 2018 (or such later date as the parties to the Agreement may agree in writing) (the ‘‘Long Stop Date’’). If any of the conditions has not been satisfied by then, the Agreement shall be terminated and no party shall have any claim against the other party, except in respect of any antecedent breach.

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LETTER FROM THE BOARD

The Deposit

The Deposit shall be refunded in full to the Buyer with any accrued interest thereon if Completion does not take place due to: (i) the conditions precedent of the Agreement not being satisfied by the Long Stop Date (where Condition (b) has not been satisfied before then, the Buyer shall bear the Seller’s transaction costs up to £1,000,000 (equivalent to approximately HK$10,820,000) only, which will be deducted from the Deposit to be refunded and the Seller shall provide evidence of the Seller’s transaction costs to the Buyer); and (ii) the continued default of the Seller, provided that the requisite notice(s) have been served to the Seller in accordance with the Agreement and the Buyer (being in a position and willing to complete) having elected to terminate the Agreement. The Deposit with any accrued interest thereon will be forfeited by the Seller: (i) as to 50%, if the Completion does not take place due to Condition (a) not being satisfied for the sole reason of the majority of the Shareholders at the EGM having voted against the Agreement and transactions contemplated thereunder; and (ii) in full, if the Completion does not take place due to the continued default of the Buyer for reasons unrelated to any of the conditions precedent of the Agreement.

Completion

Subject to the satisfaction of all conditions precedent, Completion shall take place on the third Business Day following the date of the EGM.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group has been seeking investment opportunities from time to time with a view to diversify and enhance its asset portfolio, broaden its sources of income and accelerate further growth of the Group as a whole. The Property represents an excellent opportunity for the Group to invest in the property market in the United Kingdom and in a high-quality freehold commercial property in central London. As at the Latest Practicable Date, the Property is fully-let to a mix of office and retail tenants and generates a stable source of rental income. Based on the revenue comprising rental income received in the year 2017 as set out in the audited financial statements of the Target Company in Appendix II and the fair value of the Property as at 2 January 2018 as set out in the property valuation report in Appendix V, the rental yield of the Property is approximately 4.45% per annum.

The Board considers that the Acquisition is a strategic fit to the Group’s strategy on expanding its investment portfolio and is in line with the Group’s investment plan in quality assets including in the real estate sector. Given that the Property is fully-let and taking into account the location of the Property in central London, the Property is expected to contribute a stable rental income and cash flow to the Group and may have the potential to appreciate in value. The Property will be held as an investment property by the Group. The Acquisition also allows the Group to diversify its currency exposure mix with the addition of a substantial position in pounds sterling, which may benefit the Group’s financial performance should it appreciate in

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LETTER FROM THE BOARD

value against other currencies in future. As rental income of the Target Company and interest expense in relation to the external bank financing for the purpose of the Acquisition are both denominated in pounds sterling, the potential impact of any future currency depreciation risk(s) is substantially balanced off. Accordingly, the Board considers that the potential depreciation of pounds sterling against other currencies in the future would not have a material financial impact on the Group.

Based on the audited financial statements of the Target Company, there were net current liabilities for the years ended 31 December 2015, 2016 and 2017, which was due to a provision in the existing finance arrangement of the Target Company pursuant to which it (as borrower) is required to repay the loan to the lender upon request, resulting in that liability being accounted for as a current liability. Upon Completion, it is anticipated that such current loan would be replaced by non-current loans of equal amount in total, as the Acquisition would be financed by the Group by way of a non-current mortgage loan and a non-current intra-group loan(s) by the Group, such that the Target Company will not have a net current liability position immediately following Completion. The Target Company would still be in a net liability position immediately after Completion. The Group will provide financing to maintain and support the daily operations of the Target Company, if necessary.

Upon Completion, the Target Company will engage Knight Frank, a professional property manager which specialises in property and facility management, to manage the Property going forward. A team of commercial property management experts from Knight Frank will be responsible for property management and rental collection and the Directors will oversee such management after Completion. The Board and senior management of the Group comprise individuals with a variety of qualifications and experience who will provide the investment strategy and policy to the Group regarding the investment in the Property. In addition, the Company may consider recruiting one to two individuals with property management experience as employees to assist the Directors where necessary.

Taking into consideration the reasons for and benefits of the Acquisition to the Group and the valuation of the Property, the Directors (including the independent non-executive Directors) are of the view that the terms of the Agreement and the transactions contemplated therein, including the Total Consideration which have been reached after arm’s length negotiations among the parties, are on normal commercial terms or better, fair and reasonable and in the interests of the Company and its shareholders as a whole. None of the Directors had any material interest in the Acquisition nor were required to abstain from voting on the relevant resolution(s) of the Board.

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LETTER FROM THE BOARD

INFORMATION ON THE PARTIES AND THE TARGET COMPANY

Information on the Company and the Buyer

The Company is an investment holding company. As at the Latest Practicable Date, the Group is principally engaged in the business of financial services, securities investment, trading of futures, logistics and warehousing, rental and trading of construction machinery.

The Buyer is a company incorporated in Hong Kong with limited liability and an indirectly wholly-owned subsidiary of the Company. The Buyer is principally engaged in investment holding.

Information on the Seller

The Seller is a company incorporated under the laws of Grand Duchy of Luxembourg with limited liability. The Seller is principally engaged in investment holding and it directly holds the entire equity interest in the Target Company as at the Latest Practicable Date.

Information on the Target Company and the Property

The Target Company is an investment holding company incorporated under the laws of Grand Duchy of Luxembourg with limited liability, whose main asset is the Property.

The Property, namely ‘‘55 Mark Lane, EC3’’, is Grade A office, retail and ancillary accommodation arranged over basement, lower ground, ground, seven upper floors and 18 car parking spaces situated at 52-58 Mark Lane, London, EC3R 7NE with a gross floor area of approximately 161,689 square feet. As at the Latest Practicable Date, the Property is fully let to a mix of office and retail tenants. Based on the property valuation report as set out in Appendix V to this circular, the fair value of the Property was £130,000,000 as at 2 January 2018.

The Target Company has pledged the Property to a financial institution to secure a US$100,000,000 facility granted to Reignwood International Investment (Group) Company Limited, which is a member of the Seller Group. As at the Latest Practicable Date, the pledge has not been released or terminated. The pledge of the Property will be released upon Completion. The release of the pledge is an obligation of the Seller under the Agreement to be fulfilled on or before Completion. The Acquisition will not proceed to Completion if the Seller fails to arrange for the release of the pledge on or before Completion.

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LETTER FROM THE BOARD

Financial Information of the Target Company

Based on the audited financial statements of the Target Company for the year ended 31 December 2016, the net profits before and after taxation were both £478,000 (equivalent to approximately HK$5,171,960); and based on the audited financial statements of the Target Company for the year ended 31 December 2017, the net profit before taxation and net loss after taxation were both £5,000 (equivalent to approximately HK$54,100) and £67,000 (equivalent to approximately HK$724,940), respectively.

Based on the audited financial statements of the Target Company for the year ended 31 December 2017, the total asset and net liability value of the Target Company as at 31 December 2017 were £94,679,000 (equivalent to approximately HK$1,024,426,780) and £775,000 (equivalent to approximately HK$8,385,500), respectively.

RECONCILIATION OF THE VALUATION OF THE PROPERTY

Pursuant to the property valuation report as set out in Appendix V to this circular, the Property was valued at £130,000,000 by Cushman & Wakefield as at 2 January 2018. In accordance with the Target Company’s accounting policy, the Property is stated at lower of cost and net realizable value. As such, there is an appreciation of investment property of £40,877,000, representing the excess fair value of the Property over its carrying amount, which will not be included in the Target Company’s audited statement of financial position as at 31 December 2017 as set out in Appendix II to this circular.

The reconciliation of the valuation of the Property as required under Rule 5.07 of the Listing Rules is set out below:

Per property valuation report as at 2 January 2018 as set out in Appendix V to this circular Less: carrying amount of investment property per Target Company’s audited statement of financial position as at 31 December 2017 in Appendix II to this circular Appreciation of investment property	£’000 130,000 (89,123) 40,877

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LETTER FROM THE BOARD

RECONCILIATION OF THE NET ASSET/LIABILITY VALUE OF THE TARGET COMPANY

According to the audited accounts of the Target Company prepared in accordance with International Financial Reporting Standards as adopted by the European Union as at 31 December 2017, the Target Company recorded a net asset value of £36,058,000, where the Property is measured at its fair value. In accordance with the Group’s accounting policy, the Property was measured at cost less subsequent depreciation and any recognised impairment loss. As such, the Target Company recorded a net liability value of approximately £775,000, representing an excess accumulated fair value of the Property over its value based on cost model of £32,627,000 and accumulated depreciation expenses of £4,206,000.

FINANCIAL EFFECT OF THE ACQUISITION

Upon Completion, the Group will own the entire interest in the Target Company. Accordingly, the financial results of the Target Company will be consolidated into the consolidated financial statements of the Group. As shown in the unaudited pro forma financial information of the Enlarged Group set out in Appendix IV, the Acquisition will increase the total assets of the Enlarged Group by HK$797,994,000 and have no effect on the net assets of the Enlarged Group. The Acquisition will increase the total liabilities of the Enlarged Group by HK$797,994,000. The Property will be recognised by way of a cost model approach in accordance with HKAS 40 upon Completion.

Please refer to the unaudited pro forma financial information of the Enlarged Group as set out in Appendix IV for further details.

IMPLICATIONS UNDER THE LISTING RULES

As one or more of the applicable percentage ratios in respect of the Acquisition is more than 25% but are all less than 100%, the Acquisition constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and will therefore be subject to the reporting, announcement, circular and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

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LETTER FROM THE BOARD

EXTRAORDINARY GENERAL MEETING AND CLOSURE OF REGISTER OF MEMBERS

Set out on page EGM-1 to EGM-2 of this circular is a notice of the EGM to be held at Room 2702, 27/F, The Sun’s Group Centre, No. 200 Gloucester Road, Wanchai, Hong Kong at 11:00 a.m. on Thursday, 12 April 2018 for the purpose of considering and, if thought fit, passing the ordinary resolutions to approve (i) the Agreement and the transactions contemplated thereunder.

To ascertain Shareholders’ eligibility to attend and vote at the EGM, all transfers of Shares accompanied by the relevant share certificates must be lodged with the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Friday, 6 April 2018. The register of members of the Company will be closed from Monday, 9 April 2018 to Thursday, 12 April 2018, both days inclusive, for determination of entitlements to attend and vote at the EGM and during which period no transfer of Shares will be registered.

A form of proxy for use at the EGM is enclosed. Whether or not you are able to attend the EGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding the EGM or any adjournment thereof to the branch share registrar of the Company in Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish. The resolutions put to vote at the EGM will be decided by way of poll.

VOTING AT THE EGM AND BOARD MEETINGS

As at the Latest Practicable Date, to the best of the Directors’ knowledge, no Shareholder has a material interest in the Acquisition and the transactions contemplated thereunder and therefore no Shareholder is required to abstain from voting at the EGM.

Pursuant to Rule 13.39(4) of the Listing Rules, any vote of Shareholders at a general meeting must be taken by poll. Therefore, all resolutions proposed at the EGM will be voted by poll.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, no Director was in any way materially interested in the Acquisition and is required to abstain from voting in the board meeting approving the Agreement and the transactions contemplated thereunder.

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LETTER FROM THE BOARD

RECOMMENDATIONS

The Directors consider that the terms of the Acquisition are on normal commercial terms or better, fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the ordinary resolution to be proposed at the EGM to approve the Acquisition and the transactions contemplated therein.

ADDITIONAL INFORMATION

Your attention is also drawn to the additional information set out in the appendices to this circular.

WARNING

SHAREHOLDERS AND POTENTIAL INVESTORS OF THE COMPANY SHOULD BE AWARE THAT THE ACQUISITION IS SUBJECT TO CONDITIONS TO BE SATISFIED, INCLUDING BUT NOT LIMITED TO THE APPROVAL OF THE ACQUISITION AT THE EGM BY THE SHAREHOLDERS, AND CONSEQUENTLY THE ACQUISITION MAY OR MAY NOT PROCEED. ACCORDINGLY, SHAREHOLDERS AND POTENTIAL INVESTORS ARE ADVISED TO EXERCISE CAUTION WHEN THEY DEAL OR CONTEMPLATE DEALING IN THE SHARES OR OTHER SECURITIES (IF ANY) OF THE COMPANY.

Yours faithfully, By Order of the Board Hao Tian Development Group Limited Fok Chi Tak

Executive Director

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group for the three years and six months ended 30 September 2017, together with the relevant notes thereto, are disclosed in the following documents:

• The Annual Report of the Company for the 12 months ended 31 March 2015 published on 13 July 2015 (available on: http://www.hkexnews.hk/listedco/listconews/SEHK/ 2015/0713/LTN20150713217.pdf)

• The Annual Report of the Company for the 12 months ended 31 March 2016 published on 21 July 2016 (available on: http://www.hkexnews.hk/listedco/listconews/SEHK/ 2016/0721/LTN20160721535.pdf)

• The Annual Report of the Company for the 12 months ended 31 March 2017 published on 28 July 2017 (available on: http://www.hkexnews.hk/listedco/listconews/SEHK/ 2017/0728/LTN20170728312.pdf)

• The Interim Report of the Company for the six months ended 30 September 2017 published on 28 December 2017 (available on: http://www.hkexnews.hk/listedco/ listconews/SEHK/2017/1228/LTN20171228437.pdf)

2. STATEMENT OF INDEBTEDNESS

Indebtedness

As at 31 January 2018, being the latest practicable date for the purpose of ascertaining the indebtedness of the Enlarged Group prior to the printing of this circular, the Enlarged Group had outstanding indebtedness as follows:

Borrowings, corporate bonds and notes, secured notes, and charges

• (a) The Enlarged Group had an outstanding loan with principal amount of HK$20,000,000 due to a bank. The borrowing was unguaranteed and secured by a bank deposit of HK$15,000,000, bore interest at Prime Rate plus 1.0% per annum and were repayable in April 2018;

• (b) the Enlarged Group had an outstanding bank overdraft with principal amount of HK$9,871,000 due to a bank. The borrowing was unguaranteed and secured by a bank deposit of HK$10,087,000, bore interest at Prime Rate minus 1.0% per annum and was repayable in April 2018;

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

• (c) the Enlarged Group had an outstanding bank overdraft with principal amount of HK$10,000,000 due to a bank. The borrowing was unguaranteed and secured by a bank deposit of HK$10,000,000, bore interest at Prime Rate per annum and was repayable on demand;

• (d) the Enlarged Group had certain outstanding corporate bonds and notes with principal amount of HK$162,550,000 due to certain independent third parties. The notes were unsecured, unguaranteed, bore interest at fixed rate of ranging from 3.25% to 7.5% per annum and were repayable between 2018 and 2023;

• (e) the Enlarged Group had an outstanding secured note with a principal amount of US$20,000,000 (equivalent to approximately HK$155,840,000) to an independent third party. The note was unguaranteed and secured by certain of the Group’s investment held for trading of HK$517,400,000 as at 31 January 2018, bore interest at 8% per annum and was repayable in October 2018;

• (f) the Enlarged Group had an outstanding bank loan with a principal amount of HK$163,626,000 to a bank. The loan bore interest at Hong Kong Interbank Offered Rate (‘‘HIBOR’’) plus 5.6% per annum, unguaranteed and secured by the Group’s investment held for trading of HK$453,789,000 as at 31 January 2018 and was repayable in June 2018;

• (g) the Enlarged Group had an outstanding bank loan with a principal amount of HK$70,000,000 to a bank. The loan was unguaranteed and secured by the Group’s investment held for trading of HK$292,500,000 as at 31 January 2018, bore interest at 6.5% per annum and was repayable in March 2018;

• (h) the Enlarged Group had an outstanding loan with a principal amount of RMB80,000,000 (equivalent to approximately HK$98,651,000) to a trust company, an independent third party to the Group, with a term of three years. The loan is mainly intended to be used for the expansion of businesses and other general working capital for a PRC subsidiary. The loan was unguaranteed and secured by a charge over 311,505,000 shares of Fujian Nuoqi Co., Ltd and a charge over the land and building with carrying amount of RMB66,700,000 as at 31 January 2018, bore interest at 7.4% per annum and was repayable in June 2020;

• (i) the Enlarged Group had outstanding borrowings of HK$56,056,000 due to banks. The borrowings were unsecured and unguaranteed, bore interest of ranging from 3.50% to 5.00% per annum and repayable between 2018 and 2024;

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

• (j) the Enlarged Group had outstanding borrowing of JPY70,000,000 (equivalent to approximately HK$4,938,000) due to a financial institution. The borrowing was unguaranteed and secured by machineries, bore fixed interest ranging from 3.20% to 3.40% per annum and repayable in Year 2018;

• (k) The Enlarged Group had an outstanding secured note with a principal amount of HK$350,000,000 to an independent third party. The note bore interest at 9.75% per annum and was unguaranteed and secured by the entire issued share capital of a wholly-owned subsidiary of the Company;

• (l) the Enlarged Group had outstanding other borrowings of approximately HK$113,038,000. The other borrowings were unguaranteed and secured by (i) leasehold land and building with net carrying amount of approximately HK$600,000; (ii) bank deposits of approximately HK$4,600,000 and (iii) machineries with net carrying amount of approximately HK$140,560,000. The other borrowings bore interest at either fixed rate of ranging from 7.14% to 11.97% per annum or variable rate ranging from 6.69% to 9.65% per annum and repayable between 2018 and 2021;

• (m) the Enlarged Group had outstanding unsecured and unguaranteed borrowings of approximately £68,915,000 (equivalent to approximately HK$745,660,000) to a related company of the Target Company. Interest was charged at 11% per annum on £9,000,000 of the loan and 4% per annum on the remainder of the loan. The borrowings are repayable on demand.

Obligations under finance leases

• (a) the Enlarged Group had outstanding obligation under finance leases of approximately HK$13,671,000. The obligation under finance leases were unguaranteed and secured by machinery and motor vehicles with net carrying amount of approximately HK$16,858,000. The obligation under finance leases bore interest at a fixed rate of ranging from 1.41% to 9.69% per annum.

Amounts due to related companies of the Target Company

• (a) the Enlarged Group had outstanding amounts due to related companies of the Target Company of approximately £11,797,000 (equivalent to approximately HK$127,643,000) which were unsecured, unguaranteed, interest-free and repayable on demand.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Contingent liabilities

As at 31 January 2018, the Group provided corporate guarantees and performance guarantee amounting to approximately HK$654,000 and HK$11,200,000 to banks in respect of obligations under finance leases and the Group’s obligations under contracts with certain third party customers. Under the guarantees, the Group would be liable to make payments to the banks if the bank is unable to recover the amounts under these finance leases from these customers or the Group failed to perform the relevant obligations to these customers.

On 11 July 2017, a customer lodged a prosecution to a subsidiary of the Company to claim for a loss and damage of more than HK$27,000,000. After considering the evidence and the background facts in relation to this prosecution and the advice from the legal adviser in relation to this prosecution, the Directors are of the view it is a weak claim with remote prospect of success against the Group.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities, the Group and the Target Company did not have outstanding at the close of business on 31 January 2018 any other borrowings, debt securities, issued or outstanding, or authorised or otherwise created but unissued, loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges, hire purchases commitments, guarantees or other contingent liabilities.

3. SUFFICIENCY OF WORKING CAPITAL

After taking into account the available credit facilities, the Group’s internally generated funds and cash flow impact of the Acquisition, in the absence of unforeseeable circumstance, the Directors are of the opinion that the Enlarged Group will have sufficient working capital for its present requirements for at least the next twelve months following the date of this circular.

4. MATERIAL ACQUISITIONS SINCE LATEST PUBLISHED AUDITED ACCOUNTS

Since 31 March 2017 (being the date to which the latest published audited accounts of the Company have been made up), the Group has made the following material acquisitions:

• (a) On 16 January 2017, Hao Tian Management (China) Limited (‘‘Hao Tian Management (China)’’), an indirect wholly-owned subsidiary of the Company as purchaser, Tang J F T Company Limited as vendor and Mr. Tang Yiu Chi James, as the vendor’s warrantor entered into the a sale and purchase agreement in relation to the conditional sale and purchase of the 750,000,000 ordinary shares of Hao Tian International Construction Investment Group Limited (‘‘Hao Tian Construction’’, formerly known as Clear Lift Holdings Limited) (stock code: 1341), representing 75% of the its issued share capital as at the date of the agreement, for an aggregate consideration of HK$592,500,000. Hao Tian Construction is a company incorporated

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

in the Cayman Islands with limited liability and its Group is principally engaged in the construction machinery business, serving primarily the construction sector in Hong Kong. Immediately after the completion on 6 February 2017, the Company indirectly held 750,000,000 shares of Hao Tian Construction representing 75% of its issued share capital thereat and it became an indirectly non-wholly owned subsidiary of the Company. Details of the transaction are set out in the circular published by the Company dated 11 May 2017;

• (b) On 15 November 2017, the Group as the potential purchaser and the existing shareholders of Done and Dusted Productions Limited as the potential vendors entered into a non-legally binding term sheet in relation to a proposed acquisition of the entire issued share capital of Done and Dusted Productions Limited. Done and Dusted Productions Limited is a company incorporated in the United Kingdom and is principally engaged in the business of television and events production. The Group is still in the course of negotiation of the detailed terms of the proposed acquisition and have not entered into a definitive formal sale and purchase agreement. If a formal sale and purchase agreement is entered into between the Group and Done and Dusted Productions Limited, the transaction may constitute a notifiable transaction of the Company under the Listing Rules. Details of this proposal are set out in the announcement published by the Company dated 15 November 2017;

• (c) On 6 November 2017, Fujian Nuoqi Co., Ltd. (Stock code: 1353) (‘‘Nuoqi’’), a subsidiary of the Company, Zhong Hong Holdings Group Limited, a company incorporated in the Cayman Islands (the ‘‘Vendor’’), and Mr. Hu Yulin (as the Vendor’s warrantor) entered into a sale and purchase agreement, pursuant to which Nuoqi has conditionally agreed to acquire, and the Vendor has conditionally agreed to sell, the entire issued share capital in Zhong Hong International Limited（中宏國際有 限公司）(‘‘Zhong Hong’’). Zhong Hong is a company incorporated in the British Virgin Islands and, together with its subsidiaries, are principally engaged in the provision of construction services, mainly as a general contractor for residential construction projects, commercial and public works construction projects, and industrial and other construction projects, in the People’s Republic of China. The consideration payable by Nuoqi shall be HK$1,053,024,128 and shall be satisfied by Nuoqi by its allotment and issue to the Vendor of 1,541,878,659 new H shares of Nuoqi (the ‘‘Consideration Shares’’), credited as fully paid, at an issue price of HK$0.6829 per Consideration Share. Details of this transaction are set out in the announcement published by the Company dated 13 November 2017;

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

• (d) On 14 March 2018, the Group as the potential purchaser and the existing shareholders of Allied Benefit Limited and Merry Max Limited (the “898 Target Companies”) as potential vendors, entered into a non-legally binding memorandum of understanding in relation to a proposed acquisition of the entire equity interest in the 898 Target Companies. The 898 Target Companies, subject to the completion of a reorganization, will acquire subsidiaries and entities that operate the co-working space management and operation business and exchange and clearing business in China. The Group is still in the course of negotiation of the detailed terms of the proposed acquisition and have not entered into a formal and binding agreement. If a definitive formal sale and purchase agreement is entered into between the Group and the potential vendors, the transaction may constitute an acquisition and a deemed disposal of the Company under the Listing Rules. Details of this proposal are set out in the announcement published by the Company dated 14 March 2018; and

• (e) In connection with the Acquisition, the Buyer and the Seller entered into the Agreement on 20 January 2018, the details of which are set out in the section headed ‘‘Letter from the Board’’ contained in this circular.

No variation in the remuneration payable to and benefits in kind receivable by the Directors was involved in relation to the material acquisitions as set out above.

Save as disclosed above, the Group does not have any material acquisition after the latest published audited accounts of the Company.

5. MATERIAL ADVERSE CHANGE

The Directors 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 consolidated financial statements of the Group were made up).

6. FINANCIAL AND TRADING PROSPECTS

As referenced in the interim report of the Company for the six months ended 30 September 2017 (the Interim Report), the volatile stock market and the fluctuations of the property market in Hong Kong had posed new challenges to the money lending businesses of the Group. The Group will cope with such business environment where opportunities and challenges co-exist, capture the opportunities in the money lending market, strive to provide diversified, high quality and tailormade loan products and service to maintain the strength of this business segment. In view of the possible property market adjustment, the Group will also continue to strengthen the risk management on the money lending business and optimize the scale of operation.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Following the implementation of favourable financial policies and developments in Hong Kong, such as the Shanghai-Hong Kong Stock Connect, mutual recognition of funds and the Shenzhen-Hong Kong Stock Connect, the Group is optimistic about the future equity securities markets in Hong Kong. The Group will prudently capture the opportunities in connection with trading in listed securities and continue to identify more investment opportunities to broaden investment strategy and balance investment risks. Depending on the market conditions, the Group is also considering to adjust its portfolio of securities investment and asset portfolio and may further invest in other investment properties worldwide.

The recent launch of the electronic trading platforms for the trading of bullion and trading of futures enable the Group to provide a full range of financial services in Hong Kong. The Group is confident that the financial service activities offered would enable the Group to achieve synergies with the Group’s existing money lending business. In view of this, the Group has injected further capital into Hao Tian International Securities Limited in order to strengthen the equity base so as to expand the customer base and the scale of operation and hence the market share. The Group will also explore potential fund raising alternatives available in the capital market to complement the Group’s expansion plan.

In addition to the development in the financial services as mentioned above, the Group had diversified to other business sectors including the investment in Fujian Nuoqi, which is engaged in the retailing of men’s and women’s apparels and Hao Tian Construction which is mainly engaged in the rental and trading of construction machinery. For further details on Fujian Nuoqi and Hao Tian Construction, please refer to the Interim Report. Meanwhile, the Group recognizes that there is an increasing public awareness recently over the healthcare sector in the PRC and we believe that it is an opportunity for the Group to explore the related market niche. The Group has entered into an investment framework agreement to invest in the Innovative Camellia Oleifera Health Industry Project（ 創新型油茶健康產業項目）(the ‘‘Project’’) which involves the establishment of a base for the cultivation of Camellia Oleifera and the production of Camellia Oleifera-related products in Qingliu County, Fujian Province, the PRC. Although the Group is confident of the success of the Project, the Group will be cautious on the level of capital expenditure required during the pre-operation period.

The Acquisition is one of the overseas investments of the Group to diversify and enhance its asset portfolio. Upon Completion, the Enlarged Group is expected to receive a recurrent and stable rental income stream from the Property and enhance the Group’s working capital. The Group will continue to seek investment opportunities, further expand the Group’s sources of revenue, enhance the Group’s profitability, and maximize return for its shareholders.

The unaudited consolidated pro forma financial information of the Enlarged Group illustrating the financial impact of the Acquisition on the assets and liabilities of the Group is set out in Appendix IV to this circular. The pro forma financial information of the Enlarged Group has been prepared for illustrative purpose only, based on the judgments and assumptions of the Directors, and, due to its hypothetical nature, it may not give a true picture of the financial position of the Group as at the date of completion of the Acquisition or any future date.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

The following is the text of a report, prepared for the purpose of inclusion in this circular received from the independent reporting accountants, Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong.

ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION OF 55 MARK LANE S.À.R.L.

TO THE DIRECTORS OF HAO TIAN DEVELOPMENT GROUP LIMITED

Introduction

We report on the historical financial information of 55 Mark Lane S.À.R.L. (the ‘‘Target Company’’) set out on pages II-4 to II-39, which comprises the statements of financial position as at 31 December 2015, 2016 and 2017, and the statements of profit or loss and other comprehensive income, the statements of changes in equity and the statements of cash flows for each of the three years ended 31 December 2017 (the ‘‘Relevant Periods’’) and a summary of significant accounting policies and other explanatory information (together, the ‘‘Historical Financial Information’’). The Historical Financial Information set out on pages II-4 to II-39 forms an integral part of this report, which has been prepared for inclusion in the circular of Hao Tian Development Group Limited (the ‘‘Company’’) dated 23 March 2018 (the ‘‘Circular’’) in connection with the proposed acquisition of entire issued share capital of the Target Company (the ‘‘Acquisition’’).

Managers’ responsibility for the Historical Financial Information

The managers of the Target Company are responsible for the preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information, and for such internal control as the managers of the Target Company determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

The directors of the Company are responsible for the contents of this Circular in which the Historical Financial Information of the Target Company is included, and such information is prepared based on accounting policies materially consistent with those of the Company.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Reporting accountants’ responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 ‘‘Accountants’ Reports on Historical Financial Information in Investment Circulars’’ issued by the Hong Kong Institute of Certified Public Accountants (‘‘HKICPA’’). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants’ judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the managers of the Target Company, as well as evaluating the overall presentation of the Historical 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 the Historical Financial Information gives, for the purposes of the accountants’ report, a true and fair view of the Target Company’s financial position as at 31 December 2015, 2016 and 2017, and of its financial performance and cash flows for the Relevant Periods in accordance with the basis of preparation set out in Note 2 to the Historical Financial Information.

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APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

Report on matters under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Adjustments

In preparing the Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page II-4 have been made.

Dividend

We refer to note 13 to the Historical Financial Information which states that no dividend has been paid by the Target Company in respect of the Relevant Periods.

Deloitte Touche Tohmatsu

Certified Public Accountants

Hong Kong 23 March 2018

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

HISTORICAL FINANCIAL INFORMATION OF 55 MARK LANE S.À.R.L.

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountants’ report.

The financial statements of the Target Company for the Relevant Periods, on which the Historical Financial Information is based have been prepared in accordance with the accounting policies with conform with Hong Kong Financial Reporting Standards issued by the HKICPA and, were audited by us in accordance with Hong Kong Standards on Auditing issued by the HKICPA (‘‘Underlying Financial Statements’’).

The Historical Financial Information is presented in pounds sterling (‘‘GBP’’), which is the same as the function currency of the Target Company. All values are rounded to the nearest thousand (GBP’000) except when otherwise indicated.

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APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

NOTES Revenue 6 Property expenses Other income 7 Other gains and losses, net 7 Administrative expenses Finance costs 9 (Loss) profit before taxation 10 Income tax expense 12 (Loss) profit and total comprehensive (expense) income for the year	Year 2015 GBP’000 4,367 (2,276) 2,091 193 10 (240) (3,686) (1,632) – (1,632)	ended 31 December 2016 2017 GBP’000 GBP’000 5,904 5,791 (1,854) (1,796) 4,050 3,995 97 133 208 (111) (180) (246) (3,697) (3,776) 478 (5) – (62) 478 (67)

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

STATEMENTS OF FINANCIAL POSITION

NOTES Non-current assets Investment property 14 Other receivables and prepayments 15 Current assets Other receivables and prepayments 15 Amounts due from related companies 16 Bank balances and cash 17 Current liabilities Other payables 18 Amounts due to related companies 16 Borrowings 19 Tax payable Net current liabilities Total assets less current liabilities Non-current liabilities Other payables 18 Net liabilities Capital and reserves Share capital 22 Accumulated losses Total equity

As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 90,961 90,267 89,123 521 – – 91,482 90,267 89,123 2,746 4,801 5,126 1,043 6,429 – 5,355 3,391 430 9,144 14,621 5,556 1,291 1,550 2,227 25,972 25,469 11,977 74,549 78,246 80,779 – – 62 101,812 105,265 95,045 (92,668) (90,644) (89,489) (1,186) (377) (366) – 331 409 (1,186) (708) (775) 16 16 16 (1,202) (724) (791) (1,186) (708) (775)

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

STATEMENTS OF CHANGES IN EQUITY

At 1 January 2015 Loss and total comprehensive expense for the year At 31 December 2015 Profit and total comprehensive income for the year At 31 December 2016 Loss and total comprehensive expense for the year At 31 December 2017	Share capital GBP’000 16 – 16 – 16 – 16	Accumulated profit (losses) GBP’000 430 (1,632) (1,202) 478 (724) (67) (791)	Total GBP’000 446 (1,632) (1,186) 478 (708) (67) (775)

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APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

STATEMENTS OF CASH FLOWS

NOTES OPERATING ACTIVITIES (Loss) profit before taxation Adjustments for: Depreciation of investment property Interest income Exchange (gain) loss Finance costs Operating cash flows before movements in working capital Increase in other receivables and prepayments (Decrease) increase in other payables NET CASH FROM OPERATING ACTIVITIES INVESTING ACTIVITIES Prepayment of subsequent expenditure in investment property Advance to related companies Interest received NET CASH USED IN INVESTING ACTIVITIES FINANCING ACTIVITIES Payment of amendment fee for loan extension 21 Advance received from related companies 21 Repayment of advance from related companies 21	Year 2015 GBP’000 (1,632) 1,100 (52) (10) 3,686 3,092 (935) (502) 1,655 (521) (1,003) 22 (1,502) – 1,363 (1,576)	ended 31 December 2016 2017 GBP’000 GBP’000 478 (5) 1,128 1,144 (68) (55) (208) 111 3,697 3,776 5,027 4,971 (1,968) (325) 590 755 3,649 5,401 – – (5,586) – 6 – (5,580) – – (1,243) 607 1,576 (640) (8,695)

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

NOTES NET CASH USED IN FINANCING ACTIVITIES NET DECREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT END OF THE YEAR, represented by bank balances and cash	Year 2015 GBP’000 (213) (60) 5,415 5,355	ended 31 December 2016 2017 GBP’000 GBP’000 (33) (8,362) (1,964) (2,961) 5,355 3,391 3,391 430

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

NOTES TO THE HISTORICAL FINANCIAL INFORMATION

1. General information

The Target Company is a private limited company incorporated in Luxembourg on 12 February 2014. Its immediate holding company is Reignwood Europe Holdings S.À.R.L., a company incorporated in Luxembourg, its ultimate holding company is Reignwood International Holdings Limited (‘‘RIHL’’), a company incorporated in the British Virgin Islands. The ultimate controlling shareholder of the Target Company is Dr. Ruayrungruang Chanchai (‘‘Dr. Ruayrungruang’’). The address of the registered office of the Target Company is 39 Avenue John F. Kennedy, L-1855 Luxembourg. The principal place of business of the Target Company is 55 Mark Lane, London, United Kingdom.

The Target Company is engaged in property investment in London, United Kingdom.

The functional currency of the Company is pounds sterling (‘‘GBP’’) which is also the presentation currency of the Company.

2. Basis of preparation of the historical financial information

The Historical Financial Information has been prepared based on the accounting policies set out in note 4 which conform with HKFRSs issued by HKICPA.

In preparing the Historical Financial Information of the Target Company, the managers of the Target Company have given careful consideration to the future liquidity of the Target Company, in view of the fact that current liabilities exceed its current assets by GBP89,489,000 as at 31 December 2017. The managers of the Target Company are satisfied that the Target Company will have sufficient funds to meet in full its financial obligations as they fall due for the foreseeable future, after taking into consideration that the fellow subsidiary of the Target Company, Reignwood International Investment (Group) Company Limited, has agreed to provide adequate funds to the Target Company to meet in full its financial obligations up to the date of the completion of the acquisition of the entire equity interest in the Target Company (the ‘‘Acquisition’’). Moreover, upon completion of the Acquisition by Hao Tian Asia Investment Company Limited, the Company will provide financial support to the Target Company to meet in full its financial obligations as they fall due in the foreseeable future.

The Historical Financial Information of the Target Company has been prepared for inclusion in the Circular of the Company in connection with the Acquisition.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

3. Application of HKFRSs

For the purpose of preparing and presenting the Historical Financial Information for the Relevant Periods, the Target Company has consistently adopted the HKFRSs which are effective for the Target Company’s financial year beginning on 1 January 2017 throughout the Relevant Periods.

At the date of this report, the HKICPA has issued the following new and amendments to HKFRSs that are not yet effective. The Target Company has not early adopted these new and amendments to HKFRSs for the Relevant Periods.

HKFRS 9 Financial instruments[1] HKFRS 15 Revenue from contracts with customers and the related amendments[1] HKFRS 16 Leases[2] HKFRS 17 Insurance contracts[4] HK(IFRIC) – Int 22 Foreign currency transactions and advance consideration[1] HK(IFRIC) – Int 23 Uncertainty over income tax treatments[2] Amendments to HKFRS 2 Classification and measurement of share-based payment transactions[1] Amendments to HKFRS 4 Applying HKFRS 9 ‘‘Financial instruments’’ with HKFRS 4 ‘‘Insurance contracts’’[1] Amendments to HKFRS 9 Prepayment features with negative compensation[2] Amendments to HKFRS 10 Sale or contribution of assets between an investor and and HKAS 28 its associate or joint venture[3] Amendments to HKAS 28 Long-term interests in associates and joint ventures[2] Amendments to HKAS 28 As part of the annual improvements to HKFRSs 2014 – 2016 cycle[1] Amendments to HKAS 40 Transfers of investment property[1] Amendments to HKFRSs Annual improvements to HKFRSs 2015 – 2017 cycle[2]

• 1 Effective for annual periods beginning on or after 1 January 2018

• 2 Effective for annual periods beginning on or after 1 January 2019

3 Effective for annual periods beginning on or after a date to be determined

• 4 Effective for annual periods beginning on or after 1 January 2021

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

HKFRS 9 ‘‘Financial instruments’’

HKFRS 9 introduces new requirements for the classification and measurement of financial assets, financial liabilities, general hedge accounting and impairment requirements for financial assets.

Key requirements of HKFRS 9 which are relevant to the Target Company are:

• In relation to the impairment of financial assets, HKFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under HKAS 39 ‘‘Financial instruments: Recognition and measurement’’. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.

• for non-substantial modifications of financial liabilities that do not result in derecognition, the carrying amount of the relevant financial liabilities will be calculated at the present value of the modified contractual cash flows and discounted at the financial liabilities’ original effective interest rate. Transaction costs or fees incurred are adjusted to the carrying amount of the modified financial liabilities and are amortised over the remaining term. Any adjustment to the carrying amount of the financial liability is recognised in profit or loss at the date of modification. Currently, the Target Company revises the effective interest rates for non-substantial modification of financial liabilities with no gain/loss being recognised in profit or loss.

Based on the Target Company’s financial instruments and risk management policies as at 31 December 2017, the managers of the Target Company anticipate the following potential impact on initial application of HKFRS 9.

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APPENDIX II

Impairment

In general, the managers of the Target Company anticipate that the application of the expected credit loss model of HKFRS 9 will result in earlier provision of credit loss which are not yet incurred in relation to the Target Company’s financial assets measured at amortised costs and lease receivables that subject to the impairment provisions upon application of HKFRS 9 by the Target Company.

Based on the assessment by the managers of the Target Company, if the expected credit loss model were to be applied by the Target Company, the accumulated amount of impairment loss to be recognised by the Target Company as at 1 January 2018 would be slightly increased as compared to the accumulated amount recognised under HKAS 39 mainly attributable to expected credit losses provision on other receivables. Such further impairment recognised under expected credit loss model would increase the opening accumulated losses and deferred tax assets at 1 January 2018.

Non-substantial modification

Borrowing as disclosed in note 19 has been subject to non-substantial modifications that do not result in derecognition in the year ended 31 December 2017.

Based on the assessment of the managers of the Target Company, the application of the requirements of HKFRS 9 regarding how to account for such modifications will not have significant impact on the carrying value of the borrowing as at 1 January 2018 in accordance with the HKFRS 9 requirements.

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APPENDIX II

HKFRS 16 ‘‘Leases’’

HKFRS 16 introduces a comprehensive model for the identification of lease arrangements and accounting treatments for both lessors and lessees. HKFRS 16 will supersede HKAS 17 ‘‘Leases’’ and the related interpretations when it becomes effective.

HKFRS 16 distinguishes lease and service contracts on the basis of whether an identified asset is controlled by a customer. Distinctions of operating leases and finance leases are removed for lessee accounting, and is replaced by a model where a right-of-use asset and a corresponding liability have to be recognised for all leases by lessees, except for short-term leases and leases of low value assets.

HKFRS 16 substantially carries forward the lessor accounting requirements in HKAS 17, and continues to require a lessor to classify a lease either as an operating lease or a finance lease.

Furthermore, extensive disclosures are required by HKFRS 16.

The Target Company acts only as a lessor for the operating leases as disclosed in note 20. The Target Company currently considers refundable rental deposits received as at 31 December 2017 of GBP409,000 as rights and obligations under leases to which HKAS 17 applies. Based on the definition of lease payments under HKFRS 16, such deposits are not payments relating to the right to use the underlying assets, accordingly, the carrying amounts of such deposits may be adjusted to amortised cost. Adjustments to refundable rental deposits received would be considered as advance lease payments.

Except as described above, the managers of the Target Company anticipate that the application of the new and amendments to HKFRSs will have no material impact on the Target Company in the future financial statements.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

4. Significant accounting policies

The Historical Financial Information has been prepared on the historical cost basis at the end of each reporting period over the Relevant Periods, as explained in the accounting policies set out below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in this Historical Financial Information is determined on such a basis, except for share-based payment transactions that are within the scope of HKFRS 2 ‘‘Share-based payment’’, leasing transactions that are within the scope of HKAS 17 ‘‘Leases’’, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in HKAS 2 ‘‘Inventories’’ or value in use in HKAS 36 ‘‘Impairment of assets’’.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The principal accounting policies adopted are set out below.

Revenue recognition

Revenue from a transaction is recognised when it is probable that the economic benefits associated with the transaction will flow to the Target Company and these benefits can be measured reliably. The major income for the Target Company is income from properties letting under operating leases, which is recognised on a straight-line basis over the lease terms.

Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Target Company and the amount of interest can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discount estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Financial instruments

Financial assets

The Target Company classifies its financial assets into loans and receivables. The classification depends on the nature and purpose of the financial asset and is determined at the time of initial recognition.

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating the interest income over the relevant periods. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset on initial recognition.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables (including other receivables, amounts due from related companies and bank balances and cash) are carried at amortised cost using the effective interest method less impairment loss.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of the reporting period and are considered to be impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial assets, the estimated future cash flows of the financial assets have been affected.

Objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or

• breach of contract, such as default or delinquency in interest and principal payments; or

• it becoming probable that the borrower will enter bankruptcy or financial re-organisation.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Objective evidence of impairment for a portfolio of receivables could include the Target Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

The amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the financial assets’ original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets.

If in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

Financial liabilities and equity instruments

Financial liabilities and equity instruments issued by the Target Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.

Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts)through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Interest expense is recognised on an effective interest basis.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Equity instrument

An equity instrument is any contract that evidences a residual interest in the assets of the Target Company after deducting all of its liabilities. Equity instruments issued by the Target Company are recognised at the proceeds received, net of direct issue costs.

Financial liabilities

Financial liabilities including other payables, amounts due to related companies and borrowings are subsequently measured at amortised cost, using the effective interest method.

Derecognition

Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired. On derecognition of a financial asset, the difference between the asset’s carrying amount and the consideration received and receivable is recognised in profit or loss.

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires. The difference between the carrying amount of the financial liabilities derecognised and the consideration paid and payable is recognised in profit or loss.

A substantial modification of the terms of an existing financial liability is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Modification is deemed to be substantial if the net present value of the cash flows under the modified terms, including any fees paid or received, is at least 10 percent different from the net present value of the remaining cash flows of the liability prior to the modification, both discounted at the original effective interest rate of the liability prior to the modification. For non-substantial modifications of a financial liability, the effective interest rate is revised with no gain/ loss being recognised in profit or loss.

Leasing

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

The Target Company as lessor

Rental income from operating leases is recognised in profit or loss on a straightline basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset.

Income tax

Income tax represents the sum of the tax currently payable and deferred tax. The tax currently payable is based on taxable profit of the year. Taxable profit differs from accounting profit as reported in the statements of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.

The Target Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Historical Financial Information and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on tax rate (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Target Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Current and deferred tax are recognised in profit or loss.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Investment property

Investment property is property held to earn rentals and/or for capital appreciation.

Investment property is initially measured at cost, including any directly attributable expenditure. Subsequent to initial recognition, the building of investment property is stated at cost less subsequent accumulated depreciation and any accumulated impairment losses. Depreciation is recognised so as to write off the cost of investment property over its estimated useful life and after taking into account of its residual value, using the straight-line method.

Freehold land is carried at cost less any recognised impairment loss.

An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposals. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the profit or loss in the period in which the property is derecognised.

Borrowing costs

Borrowing costs that are not eligible for capitalisation are recognised in profit or loss in the period in which they are incurred.

Foreign currencies

In preparing the financial statements, transactions in currencies other than the functional currency of that entity (foreign currencies) are recognised at the rates of exchanges prevailing on the dates of the transactions. At the end of the reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences on the settlement of monetary items, and on the retranslation of monetary items are recognised in profit or loss in the period in which they arise.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

5. Critical accounting judgment

Critical judgment in applying accounting policies

The following is the critical judgment that the managers of the Target Company have made in the process of applying the Target Company’s accounting policies and that has the most significant effect on the amounts recognised in the financial statements.

Recognition of property expenses

The Target Company engaged a property management company (‘‘Property Management Company’’) to manage the daily operation of leasing the investment property. The Property Management Company entered into services agreements with various services providers on behalf of the Target Company. Pursuant to the tenancy agreements, tenants are responsible to share these property expenses by reference to the gross floor area occupied. The Target Company, through the Property Management Company, identified services providers to provide daily services to tenants of the investment property and the tenants are solely responsible for these property expenses pursuant to the tenancy agreements.

During the years ended 31 December 2015, 2016 and 2017, GBP1,010,000, GBP1,638,000 and GBP2,037,000 were received by the Property Management Company on behalf of the Target Company from tenants for these property expenses.

In the opinion of the managers of the Target Company, such payments are, in substance, reimbursement of expenses incurred by the tenants directly and hence the related expenses are not recognised in the Target Company’s profit and loss.

Hence, the amount collected from the tenants prior to settlements with the relevant services providers are included as other payables (Note 18).

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

6. Revenue and segment information

Revenue represents the fair value of amounts received and receivable from leasing out the investment property of the Target Company to tenants. For the purpose of resources allocation and performance assessment, the chief operating decision maker (i.e. the managers) reviews the overall results and financial position of the Target Company as a whole prepared based on same accounting policies as set out in note 4. Accordingly, the Target Company has only one single operating segment and no further analysis of this single segment is presented.

Geographical information

The Target Company’s revenue are all derived from an investment property located in London and all of the Target Company’s non-current assets are located in London by physical location of assets.

Information about major customers

Revenue from customers contributing over 10% of total revenue of the Target Company during the Relevant Periods are as below:

		Year	ended 31 December
		2015	2016	2017
		GBP’000	GBP’000	GBP’000
Customer	A	1,496	1,685	1,737
Customer	B	886	886	886
Customer	C	718	718	718
Customer	D	N/A*	915	598

• The corresponding revenue did not contribute over 10% of the total revenue of the Target Group.

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APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

7. Other income and other gains and losses, net

Other income

Interest income from amount due from a related company Bank interest income Sundry income	Year 2015 GBP’000 30 22 141 193	ended 31 December 2016 2017 GBP’000 GBP’000 62 55 6 – 29 78 97 133	ended 31 December 2016 2017 GBP’000 GBP’000 62 55 6 – 29 78 97 133
			133

Other gains and losses, net

Exchange gain (loss)	Year 2015 GBP’000 10	ended 31 December 2016 2017 GBP’000 GBP’000 208 (111)

8. Managers’ emoluments

Dr. Ruayrungruang, Ms. Xiaoxuan Fei, Ms. Woraphanit Ruayrungruang and Mr. Christophe Laguerre, were appointed as managers of the Target Company.

During the Relevant Periods, no emoluments had been paid to managers of the Target Company who are considered as key management of the Target Company.

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APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

9. Finance costs

Interests on borrowings Amortisation of deferred finance costs	Year 2015 GBP’000 3,387 299 3,686	ended 31 December 2016 2017 GBP’000 GBP’000 3,397 3,387 300 389 3,697 3,776	ended 31 December 2016 2017 GBP’000 GBP’000 3,397 3,387 300 389 3,697 3,776
			3,776

10. (Loss) profit before taxation

(Loss) profit before taxation has been arrived at after charging: Auditor’s remuneration Managers’ remuneration (note 8) Gross rental income under operating leases Less: Direct operating expenses that generate rental income during the year (including depreciation expenses of GBP1,100,000, GBP1,128,000 and GBP1,144,000 for the year ended 31 December 2015, 2016 and 2017 respectively) Direct operating expenses incurred for investment property that did not generate rental income during the year	Year 2015 GBP’000 11 – 4,367 (1,635) (641) 2,091	ended 31 December 2016 2017 GBP’000 GBP’000 16 12 – – 5,904 5,791 (1,663) (1,796) (191) – 4,050 3,995	ended 31 December 2016 2017 GBP’000 GBP’000 16 12 – – 5,904 5,791 (1,663) (1,796) (191) – 4,050 3,995
			3,995

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

11. (Loss) earnings per share

(Loss) earnings per share are not presented as such information is not meaningful having regard to the purpose of this Historical Financial Information.

12. Income tax expense

	Year	ended 31 December
	2015	2016	2017
	GBP’000	GBP’000	GBP’000
United Kingdom (‘‘UK’’) Income Tax
– Current tax	–	–	62

UK Income Tax is calculated at 20.0% of the estimated assessable profit for the Relevant Periods.

The tax charge for the Relevant Periods can be reconciled to the (loss) profit before taxation as follows:

(Loss) profit before taxation Tax at the domestic income tax rate of 20.0% Tax effect of income not taxable for tax purpose Tax effect of expenses not deductible for tax purpose Tax effect of tax loss not recognised Utilisation of tax loss previously not recognised Tax charge for the year	Year 2015 GBP’000 (1,632) (326) (4) 139 191 – –	ended 31 December 2016 2017 GBP’000 GBP’000 478 (5) 96 (1) (1) – 123 163 – – (218) (100) – 62	ended 31 December 2016 2017 GBP’000 GBP’000 478 (5) 96 (1) (1) – 123 163 – – (218) (100) – 62
			(1) – 163 – (100)
			62

The Target Company had unused tax losses of approximately GBP1,590,000, GBP500,000, and nil, as at 31 December 2015, 2016 and 2017 respectively, available for offset against future profits. No deferred tax assets had been recognised in respect of such losses due to unpredictability of future profit streams. Tax losses may be carried forward indefinitely.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

13. Dividend

No dividend was paid or declared by the Target Company during the Relevant Periods.

14. Investment property

COST At 1 January 2015 and 31 December 2015 Subsequent expenditure At 31 December 2016 and 2017 ACCUMULATED DEPRECIATION At 1 January 2015 Charged for the year At 31 December 2015 Charged for the year At 31 December 2016 Charged for the year At 31 December 2017 CARRYING VALUES At 31 December 2015 At 31 December 2016 At 31 December 2017	Freehold land GBP’000 37,880 – 37,880 – – – – – – – 37,880 37,880 37,880	Building and building improvement works GBP’000 55,014 434 55,448 833 1,100 1,933 1,128 3,061 1,144 4,205 53,081 52,387 51,243	Total GBP’000 92,894 434
			93,328
			833 1,100
			1,933 1,128
			3,061 1,144
			4,205
			90,961
			90,267
			89,123

The investment property comprises of freehold land, buildings and building improvement works and is situated in London.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Freehold land is carried at cost less any recognised impairment loss. The above investment property, excluded the freehold land, is depreciated on a straight-line basis at the following rates per annum:

Buildings Over 50 years Building improvement works 10 years

The fair value of the Target Company’s investment property as disclosed below has been arrived at on the basis of valuation carried out by CBRE Limited for the years ended 31 December 2015 and 2016 and Cushman & Wakefield for the year ended 31 December 2017, independent property valuers not connected with the Target Company. The Target Company’s investment property is valued using the income capitalisation method by capitalising the net income from the existing tenancies with due allowance for reversionary income potential at appropriate capitalisation rates for the property. The capitalisation rate adopted, which varies according to the type and class of property concerned, its location and position and the type of tenant in occupation, is derived by reference to the yields achieved from analysis of recent comparable property investment transactions and encapsulates future expectations of the investors regarding income and capital growth and perceive risks.

In estimating the fair value of the property, the highest and best use of the property is their current use.

The fair value of investment property of the Target Company is valued by reference to a Level 3 fair value measurement.

There are no transfers between different levels within the fair value hierarchy during the Relevant Periods.

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APPENDIX II ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

Below is a table which presents the fair value of the investment property:

	Valuation			Unobservable
Nature	method		Fair value	inputs
			GBP’000
			(Note)
Commercial	Income approach	2015:	118,825	i) Capitalisation rate; and
		2016:	121,230	ii) Capital value per square foot.
		2017:	123,900

The investment property was pledged to a financial institution for a facility granted to intermediate holding company of the Target Company, Reignwood International Investment (Group) Company Limited (‘‘RIICL’’).

15. Other receivables and prepayments

Non-current: Prepayment for improvement works on investment property Current: Amounts due from a property management company (Note a) Other receivables Prepayments Accrued income (Note b)	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 521 – – 1,869 2,752 3,368 98 297 452 67 67 24 712 1,685 1,282 2,746 4,801 5,126	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 521 – – 1,869 2,752 3,368 98 297 452 67 67 24 712 1,685 1,282 2,746 4,801 5,126
		3,368 452 24 1,282
		5,126

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Notes:

• (a) Amounts represent the payments of rental income, management fee and related value-added tax (‘‘VAT’’) collected by the Property Management Company from tenants of the Target Company’s investment property on behalf of the Target Company. The amounts were unsecured and repayable on demand.

• (b) Pursuant to respective tenancy agreements, the Target Company offered its lessees a rent-free period ranged from 3 to 32 months. Amount represents the rental income recognised over the rent-free periods.

16. Amounts due from (to) related companies

The amounts due from (to) related companies are unsecured, repayable on demand and interest-free, except for the amount due from RW VC S.À.R.L., which was unsecured, repayable on demand and carried interest of 5% per annum.

Details of the balances are as follows:

Name Amounts due from (to) related companies Reignwood Investments UK Limited (Note) RW VC S.À.R.L. (Note) Reignwood Global Investments Limited (Formerly known as Reignwood Investments Consulting (HK) Limited) (Note) Reignwood International Investment Group Company Limited (Note) Represented by: Amounts due from related companies Amounts due to related companies	As at 1 January 2015 GBP’000 (716) – (25,469) – – (26,185)	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 (503) 5,116 (334) 1,043 1,313 – (25,469) (25,469) (10,401) – – (1,242) 1,043 6,429 – (25,972) (25,469) (11,977)	Maximum amount outstanding year ended 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 860 5,116 5,116 1,083 1,313 1,313	Maximum amount outstanding year ended 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 860 5,116 5,116 1,083 1,313 1,313
				1,313

Note: They are companies ultimately controlled by Dr. Ruayrungruang.

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APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

17. Bank balances and cash

Bank balances and cash comprises cash held by the Target Company and short-term bank deposits with original maturity date less than three months, carrying effective interest at 0.41%, 0.15% and 0.01% per annum for the years ended 31 December 2015, 2016 and 2017 respectively.

18. Other payables

Non-Current: Rental deposits received Current: VAT and other payables Receipt in advance (Note) Payments received from tenants for property expenses Accruals	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 – 331 409 235 386 768 714 827 1,085 323 320 321 19 17 53 1,291 1,550 2,227	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 – 331 409 235 386 768 714 827 1,085 323 320 321 19 17 53 1,291 1,550 2,227
		768 1,085 321 53
		2,227

Note: Amounts represent the receipt in advance from tenants for rental income.

19. Borrowings

Borrowings from RIICL: Principal Accrued interest Less: Deferred finance costs	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 68,915 68,915 68,915 6,003 9,400 12,787 (369) (69) (923) 74,549 78,246 80,779	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 68,915 68,915 68,915 6,003 9,400 12,787 (369) (69) (923) 74,549 78,246 80,779
		80,779

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

On 25 March 2014, the Target Company borrowed approximately GBP68,915,000 from RIICL. Interest is charged at 11% per annum on GBP9,000,000 of the loan and 4% per annum on the remaining of the loan. The maturity date of the loan and accrued interest was on 25 March 2017. The effective interest rate of the borrowings is 5.42%

During the year ended 31 December 2017, the Target Company entered into an extension agreement with RIICL to further extend the expiry date for three years. Hence, the maturity date of the principal and accrued interests of the borrowing is extended to 25 March 2020. Amendment fee of GBP1,243,000 is charged by RIICL for this loan extension. The effective interest rate of the borrowings is revised to 5.69%.

The borrowings and relevant accrued interests are unsecured.

Pursuant to the relevant term of the borrowing agreement, the borrowings contain a repayable on demand clause. The borrowings and accrued interest payables are therefore classified as current liability in the statements of financial position.

20. Operating leases

The Target Company as lessor

Property rental income earned during the years ended 31 December 2015, 2016 and 2017 were GBP4,367,000, GBP5,904,000 and GBP5,791,000 respectively. All of the properties held have committed tenants for the next three years.

At the end of each reporting period over the Relevant Periods, the Target Company had commitment with tenants for the following future minimum lease payments:

Within one year In the second to fifth year inclusive After five years	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 4,424 6,225 6,698 23,490 22,761 21,946 16,170 12,679 10,749 44,084 41,665 39,393	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 4,424 6,225 6,698 23,490 22,761 21,946 16,170 12,679 10,749 44,084 41,665 39,393
		39,393

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APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

21. Reconciliation of liabilities from financing activities

	As at		Finance	As at 31		Finance		As at 31		Finance		As at 31
	1 January	Financing	cost	December	Financing	cost	Non-cash	December	Financing	cost	Non-cash	December
	2015	cash flow	recognised	2015	cash flow	recognised	change	2016	cash flow	recognised	change	2017
	GBP’000	GBP’000	GBP’000	GBP’000	GBP’000	GBP’000	GBP’000	GBP’000	GBP’000	GBP’000	GBP’000	GBP’000
		(Note)	(Note 9)		(Note)	(Note 9)	(Note 27)	(Note)	(Note 9)	(Note 27)
Amounts due to related companies	26,185	(213)	–	25,972	(33)	–	(470)	25,469	(7,119)	–	(6,373)	11,977
Borrowings	70,863	–	3,686	74,549	–	3,697	–	78,246	(1,243)	3,776	–	80,779

Note: The cash flows represent the net impact of advance from and repayment to related companies.

22. Share capital

Authorised, issued and fully paid ordinary shares with par value of EURO (‘‘EUR’’) 1 each: At 1 January 2015, 31 December 2015, 31 December 2016 and 31 December 2017	Number shares 20,000	Amount EUR GBP ’000 ’000 20 16

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APPENDIX II

23. Related party transactions

Save as disclosed elsewhere in the Historical Financial Information, the Target Company had the following transactions with its related parties during the Relevant Periods:

Related companies: Interest expense on borrowings Amendment fee for loan extension (note 19) Interest income Management fee Rental income	Year 2015 GBP’000 3,387 – 30 361 –	ended 31 December 2016 2017 GBP’000 GBP’000 3,397 3,387 – 1,243 62 55 469 627 274 427	ended 31 December 2016 2017 GBP’000 GBP’000 3,397 3,387 – 1,243 62 55 469 627 274 427
			1,243
			55
			627
			427

Details of the balances with related companies at the end of each reporting period are disclosed in the statements of financial position and notes 16 and 19 to the Historical Financial Information.

24. Capital risk management

The Target Company manages its capital to ensure that the Target Company will be able to continue as a going concern while maximising the return to owners through the optimisation of the debt and equity balance. The Target Company’s overall strategy remains unchanged during the Relevant Periods.

The capital structure of the Target Company consists of debt, which includes amounts due to related companies and borrowings as disclosed in notes 16 and 19, and equity of the Target Company, comprising issued share capital and accumulated losses.

The managers of the Target Company review the capital structure on a regular basis. As part of this review, the managers consider the cost of capital and the risk associated with the capital. Based on the recommendations of the managers, the Target Company will balance its overall capital structure through issuance of new shares and raise of new borrowings.

II – 33

APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

25. Financial instruments

Categories of financial instruments

Financial assets Loans and receivables (including cash and cash equivalents) Financial liabilities Amortised cost	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 8,365 12,869 4,250 100,863 104,411 93,885	As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 8,365 12,869 4,250 100,863 104,411 93,885
		93,885

Financial risk management objectives and policies

The Target Company’s financial instruments include other receivables and amounts due from (to) related companies, other payables, borrowings and bank balances and cash. Details of these financial instruments are disclosed in respective notes. The risks associated with these financial instruments and the policies on how to mitigate these risks are set out below. The management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Currency risk

An amount due from a related company is denominated in foreign currency other than the Target Company’s functional currency, i.e. GBP. The carrying amounts of the Target Company’s amount due from a related company denominated in foreign currency at the end of each reporting period are as follows:

US$	Amount due from a related company As at 31 December 2015 2016 2017 GBP’000 GBP’000 GBP’000 1,043 1,313 –

The Target Company currently does not have a foreign currency hedging policy. However, the managers of the Target Company monitor foreign exchange exposure and will consider hedging significant foreign currency exposure should the need arises.

Sensitivity analysis is prepared to illustrate the effect of foreign exchange differences by 10% change in exchange rate of GBP against US$, assuming all other variables were held constant. A positive number below indicates a decrease in post-tax loss/increase in post-tax profit where GBP weakening 10% against the relevant foreign currency of the Target Company. For a 10% strengthen of GBP against the relevant foreign currency of the Target Company, there would be an equal and opposite impact on the results for the year.

Decrease in loss/increase in profit for the year	Year 2015 GBP’000 83	ended 31 December 2016 2017 GBP’000 GBP’000 105 –

Interest rate risk

The Target Company is exposed to fair value interest rate risk in relation to fixed-rate amount due from a related company (note 16) and fixed-rate borrowings (note 19).

The Target Company is exposed to cash flow interest rate risk from bank balances (note 17) as at 31 December 2015, 2016 and 2017.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

The Target Company has not used any interest rate swaps to mitigate its exposure associated with interest rate risk. However, the managers of the Target Company monitor interest rate exposure and will consider hedging significant interest rate exposure should the need arise.

Sensitivity analysis

In the opinion of the managers of the Target Company, the expected change in interest rate will not have significant impact on the interest income on bank balances, hence sensitivity analysis is not presented.

Credit risk

The Target Company’s credit risk is primarily attributable to other receivables, amounts due from related companies and bank balances.

The Target Company’s maximum exposure to credit risk which will cause a financial loss to the Target Company due to failure to discharge the obligations by counterparties is arising from the carrying amount of the respective recognised financial assets as stated in the statements of financial position at the end of the reporting period.

The managers have delegated a team responsible for monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Target Company reviews the recoverable amount of each individual receivable at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts.

As at 31 December 2015, 2016 and 2017, the Target Company has significant concentration of credit risk in respect of amounts due from a property management company of GBP1,869,000, GBP2,752,000 and GBP3,368,000 respectively. In order to minimise the credit risk, the managers of the Target Company continuously monitor the settlement status and the level of exposure to ensure that follow-up action is taken to recover overdue debts. Under such circumstances, the managers of the Target Company consider that the Target Company’s credit risk is not material.

The credit risk for bank balances is considered as not material as such amount is placed in banks with good reputation.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

Liquidity risk

In the management of the liquidity risk, the Target Company monitors and maintains a level of cash and cash equivalents deemed adequate by the managers to finance the Target Company’s operations and mitigate the effects of unexpected fluctuations in cash flows.

The managers monitor the utilisation of borrowings and ensures compliance with loan covenants. The Target Company relies on borrowings as a significant source of liquidity. Details of which are set out in note 19.

The following table details the Target Company’s remaining contractual maturity for its non-derivative financial liabilities. The table has been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Target Company can be required to pay. The maturity dates for other non-derivative financial liabilities are based on the agreed repayment dates.

Weighted average effective interest rate % As at 31 December 2015 Non-derivative financial liabilities Other payables – Amounts due to related companies – Borrowings 5.42 As at 31 December 2016 Non-derivative financial liabilities Other payables – Amounts due to related companies – Borrowings 5.42	On demand GBP’000 342 25,972 74,918 101,232 365 25,469 78,315 104,149	More than 1 year GBP’000 – – – – 331 – – 331	Total undiscounted cash flows GBP’000 342 25,972 74,918 101,232 696 25,469 78,315 104,480	Total carrying amount GBP’000 342 25,972 74,549
				100,863
				696 25,469 78,246
				104,411

II – 37

APPENDIX II

ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

Weighted average effective interest rate % As at 31 December 2017 Non-derivative financial liabilities Other payables – Amounts due to related companies – Borrowings 5.69	On demand GBP’000 720 11,977 81,702 94,399	More than 1 year GBP’000 409 – – 409	Total undiscounted cash flows GBP’000 1,129 11,977 81,702 94,808	Total carrying amount GBP’000 1,129 11,977 80,779
				93,885

Borrowings with a repayment on demand clause are included in the ‘‘on demand’’ time band in the above maturity analysis. As at 31 December 2017, the aggregate undiscounted principal amounts of these borrowings amounted to GBP68,915,000. Taking into account the Target Company’s financial position, the managers of the Target Company do not believe that it is probable that RIICL will exercise its discretionary right to demand immediate repayment. The managers of the Target Company believe that such borrowings will be repaid after the end of the reporting period in accordance with the scheduled repayment dates set out in the loan agreements. At that time of maturity date of the borrowings, i.e. 25 March 2020, the aggregate principal and interest cash outflows will amount to GBP89,253,000.

Fair value of financial instruments

The managers of the Target Company consider that the carrying amounts of financial assets and financial liabilities recorded at amortised cost in the Historical Financial Information approximate their fair values.

26. Charged assets

As at 31 December 2015, 2016 and 2017, the Target Company has pledged its investment property to a financial institution to secure a US$100,000,000 facility granted to RIICL.

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ACCOUNTANTS’ REPORT OF THE TARGET COMPANY

APPENDIX II

27. Non-cash transactions

During the year ended 31 December 2016 and 2017, GBP470,000 and GBP6,373,000 of the Target Company amounts due to related companies were set off with same amount of amounts due from related companies respectively.

28. Subsequent financial statements

No audited financial statements of the Target Company have been prepared in respect of any period subsequent to 31 December 2017.

II – 39

MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

APPENDIX III

MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

Set out below is the management discussion and analysis of the Target Company for the three years ended 31 December 2015, 2016 and 2017, respectively. The following financial information is based on the Accountants’ Report of the Target Company as set out in Appendix II.

Overview

The Target Company is an investment holding company incorporated under the laws of the Grand Duchy of Luxembourg with limited liability, which holds the entire interest in the Property. Save as the Property, the Target Company does not have any interests in any other properties or companies.

As at the Latest Practicable Date, the Target Company is wholly-owned by the Seller. Upon Completion, the Target Company will become a wholly-owned subsidiary of the Buyer.

The Property was originally constructed in 1996 and provides office, retail, medical and ancillary storage space arranged over basement, lower ground, ground and seven upper floors. As at the Latest Practicable Date, the Property had a leasable area of 161,689 square feet, and was fully let to eight office tenants, one medical tenant and one retail tenant. The Target Company offered some of its lessees rent-free periods of up to 32 months.

Financial review

For the years ended 31 December 2015, 2016 and 2017, the Target Company had only one reportable business segment, which was investment in and leasing of the Property.

Revenue

During the years ended 31 December 2015, 2016 and 2017, the Target Company was primarily engaged in property investment in the Property in London, the United Kingdom and leasing of the Property and its main source of income was from properties letting under operating leases. The revenue of the Target Company increased from approximately £4,367,000 for the year ended 31 December 2015 to approximately £5,904,000 for the year ended 31 December 2016, which was mainly due to the increase in leasable area in 2016. The Property had been fully let to tenants in 2016. The revenue of the Target Company remained stable for the years 2016 and 2017.

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MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

APPENDIX III

Property expenses

The property expenses of the Target Company decreased from approximately £2,276,000 for the year ended 31 December 2015 to approximately £1,854,000 for the year ended 31 December 2016 and to approximately £1,796,000 for the year ended 31 December 2017. The decrease was mainly due to less unallocated service charges of vacant office which was borne by the Target Company.

Other income

The Target Company’s other income mainly comprises interest income from amount due from a related company. For the three years ended 31 December 2017, the Target Company had unsecured amounts due from the Seller Group with interest of 5% per annum, and were repayable on demand. The other income decreased from approximately £193,000 for the year ended 31 December 2015 to approximately £97,000 for the year ended 31 December 2016 mainly due to the decrease in an one-off insurance claim received in the year 2015. The other income increased from approximately £97,000 for the year ended 31 December 2016 to approximately £133,000 for the year ended 31 December 2017 due to the increase in sundry income.

Other gains and losses for the years ended 31 December 2015, 2016 and 2017 were due to the payment and repayment of intercompany loans being denominated in US$.

Administrative expenses

The administrative expenses of the Target Company mainly comprises accounting service fee, tax service fee and other legal and professional fees and sundry expenses during the years ended 31 December 2015, 2016 and 2017. The administrative expenses decreased from approximately £240,000 for the year ended 31 December 2015 to approximately £180,000 for the year ended 31 December 2016, which was mainly due to an one-off consultancy expense incurred for refurbishment works during year ended 31 December 2015. The administrative expenses increased from approximately £180,000 for the year ended 31 December 2016 to approximately £246,000 for the year ended 31 December 2017, which was mainly due to more legal and professional fee incurred.

Finance costs

The finance costs of the Target Company mainly comprises interests on borrowings due to a loan of £68,915,000 from the Seller Group to the Target Company for the year ended 31 December 2014. Interest was charged at 11% per annum on £9,000,000 of the loan and 4% per annum on the remainder of the loan. For further details of the loan, please refer to the paragraph headed ‘‘Borrowings’’ in this appendix.

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MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

APPENDIX III

Income tax expense

The income tax expense mainly represents the United Kingdom Income Tax provided for at the rate of 20.0% of the estimated assessable profit for the respective year. The income tax expense for the years ended 2015, 2016 and 2017 was nil, nil and 62,000, respectively. There were no income tax payable for the years 2015 and 2016 due to the Target Company being lossmaking in the years 2014 and 2015.

Loss/Profit for the year

As a result of the discussions above, the Target Company recorded (loss)/profits for the years ended 31 December 2015, 2016 and 2017 of approximately (£1,632,000), £478,000 and (£67,000), respectively.

Financial Position

As at 31 December 2015

The non-current assets and current assets of the Target Company as at 31 December 2015 were approximately £91,482,000 and £9,144,000, respectively. The Target Company’s non-current assets as at 31 December 2015 mainly comprised the net carrying amounts of the Target Company’s freehold land and the Property and other receivables such as prepayment for refurbishment works on the Property. The Target Company’s current assets as at 31 December 2015 mainly comprised amounts due from a property management company, prepayments, accrued rental income and management fee, amounts due from related companies and bank balances and cash.

The non-current liabilities and current liabilities of the Target Company as at 31 December 2015 was approximately nil and £101,812,000, respectively. The Target Company’s current liabilities as at 31 December 2015 mainly comprised interests payables, amount due to related companies and borrowings.

As at 31 December 2016

The non-current assets and current assets of the Target Company as at 31 December 2016 were approximately £90,267,000 and £14,621,000, respectively. The Target Company’s noncurrent assets as at 31 December 2016 mainly comprised the carrying value of the Property. The Target Company’s current assets as at 31 December 2016 mainly comprised amounts due from a property management company, prepayments, accrued rental income and management fee, amounts due from related companies and bank balances and cash.

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MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

APPENDIX III

The non-current liabilities and current liabilities of the Target Company as at 31 December 2016 was approximately £331,000 and £105,265,000, respectively. The Target Company’s noncurrent liabilities as at 31 December 2016 mainly comprised rental deposits received. The Target Company’s current liabilities as at 31 December 2016 mainly comprised other payables, amount due to related companies and borrowings.

As at 31 December 2017

The non-current assets and current assets of the Target Company as at 31 December 2017 were approximately £89,123,000 and £5,556,000, respectively. The Target Company’s non-current assets as at 31 December 2017 mainly comprised the carrying value of the Property. The Target Company’s current assets as at 31 December 2017 mainly comprised amounts due from a property management company, prepayments, accrued rental income and management fee, and bank balances and cash.

The non-current liabilities and current liabilities of the Target Company as at 31 December 2017 was approximately £409,000 and £95,045,000, respectively. The Target Company’s noncurrent liabilities as at 31 December 2017 mainly comprised rental deposits received. The Target Company’s current liabilities as at 31 December 2017 mainly comprised interests payables, tax payable, amount due to related companies and borrowings.

Liquidity and financial resources

Net current liabilities

As at 31 December 2017, the Target Company had net current liabilities of approximately £89,489,000. The net current liabilities of the Target Company for the years ended 31 December 2015, 2016 and 2017 were due to a provision in the existing finance arrangement of the Target Company pursuant to which it (as borrower) is required to repay the loan to the lender upon request, resulting in that liability being accounted for as a current liability. Upon Completion, it is anticipated that such current loan would be settled, and the Acquisition would be financed by the Group by way of a non-current mortgage loan, such that the Target Company will not have a net current liability position immediately following Completion.

The directors of the Target Company had given full consideration to the future liquidity of the Target Company and were satisfied that the Target Company will have sufficient funds to meet in full its financial obligations as they fall due for the foreseeable future, after taking into consideration that (i) the fellow subsidiary of the Target Company had agreed to provide adequate funds to the Target Company to meet in full its financial obligations up to the date of the Completion; and (ii) upon Completion, the Company will provide financial support to the Target Company to meet in full its financial obligations as they fall due in the foreseeable future.

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MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

APPENDIX III

Net cash flows

The Target Company recorded a net cash outflow of approximately £60,000 for the year ended 31 December 2015, mainly contributed by net cash from operating activities and net cash used in investing activities, such as advance to related companies. The Target Company recorded a net cash outflow of approximately £1,964,000 for the year ended 31 December 2016, mainly contributed by net cash form operating activities and net cash used in investing activities of advance to related companies. The Target Company recorded a net cash outflow of approximately £2,961,000 for the year ended 31 December 2017, mainly contributed by net cash used in repayment of advance from related companies.

Borrowings

The borrowings of the Target Company as at 31 December 2015, 31 December 2016 and 31 December 2017 was approximately £74,549,000, £78,246,000 and £80,779,000, respectively. For the year ended 31 December 2014, the Target Company borrowed approximately £68,915,000 denominated in pounds sterling from the Seller Group, which carried an interest rate of 11% per annum on £9,000,000 of the loan and 4% per annum on the remainder of the loan. The maturity date of the borrowings and accrued interest was on 25 March 2017. However, the Seller Group and the Target Company have entered into an extension agreement to further extend the maturity date of the loan for three years. Accordingly, the maturity date of the borrowings and accrued interest was extended to 25 March 2020. An amendment fee of £1,243,000 had been paid by the Target Company to the Seller Group for the loan extension. The loan and the accrued interests are unsecured and repayable on demand. Pursuant to the Agreement, such borrowings shall be settled between the Target Company and the Seller Group upon Completion.

Amounts due from (to) related companies

As at 31 December 2015, 31 December 2016 and 31 December 2017, the Target Company had amounts due to related companies of approximately £24,929,000, £19,040,000 and £11,977,000, respectively. The amounts due from (to) related companies were interest-free, unsecured and repayable on demand, except for the amount due from a related company amounted to £1,043,000, £1,313,000 and nil as at 31 December 2015, 2016 and 2017, respectively, which were unsecured, repayable on demand and with a carried interest of 5% per annum.

For further details of the amounts due from (to) related companies as at 31 December 2015, 31 December 2016 and 31 December 2017, please refer to note 16 of the Accountants’ Report of the Target Company as set out in Appendix II to this circular. Such amounts due from (to) related companies shall be settled between the Target Company and the Seller Group upon Completion.

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MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

APPENDIX III

Equity

The total equity of the Target Company as at 31 December 2015, 31 December 2016 and 31 December 2017 was approximately (£1,186,000), (£708,000) and (£775,000), respectively.

Charge on assets

As at 31 December 2015, 31 December 2016 and 31 December 2017, the Target Company has pledged the Property to a financial institution to secure a US$100,000,000 facility granted to Reignwood International Investment (Group) Company Limited, which is a member of the Seller Group. The pledge of the Property will be released upon Completion.

Contingent Liabilities

Saved as disclosed in the paragraph ‘‘charge on assets’’ above, the Target Company did not have any material contingent liabilities.

Capital management and gearing ratio

The capital structure of the Target Company consists of debt, which includes amounts due to related companies and borrowings as disclosed in notes 16 and 19 of the Accountants’ Report of the Target Company as set out in Appendix II to this circular, and equity, which includes issued share capital and accumulated losses of the Target Company.

The directors of the Target Company reviewed its capital structure on a regular basis, considering the cost of capital and the risk associated with the capital.

The gearing ratios of the Target Company, which is total liabilities divided by total equity, were approximately 8,584%, 14,915% and 12,317% as at 31 December 2015, 31 December 2016 and 31 December 2017, respectively.

Interest rate risk

The Target Company was exposed to (i) fair value interest rate risk in relation to fixed-rate amount due from a related company and fixed-rate borrowings, and (ii) cash flow interest rate risk from bank balances with floating interest rates. The Target Company has not used interest rate swaps to mitigate its exposure. The directors of the Target Company will monitor interest rate exposure and consider hedging significant interest rate exposure where necessary.

Credit risk

The Target Company’s credit risk is primarily attributable to other receivables, amounts due from related companies and bank balances.

III – 6

APPENDIX III

MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

As at 31 December 2015, 2016 and 2017, the Target Company has significant concentration of credit risk in respect of other receivable from a debtor. In order to minimise the credit risk, the managers of the Target Company continuously monitor the settlement status and the level of exposure to ensure that follow-up action is taken to recover overdue debts. In addition, the Target Company reviewed the recoverable amount receivable at the end of each reporting period to ensure that adequate impairment losses are made for irrecoverable amounts. Under such circumstances, the managers of the Target Company consider that the Target Company’s credit risk is not material. The Target Company’s liquid funds (mainly bank balances) were placed in various banks. The credit risk on liquid funds was not material as the counterparties are banks with good reputation.

Further information and quantitative data in respect of the Target Company’s exposure to credit risk are disclosed in note 25 of the Accountants’ Report of the Target Company as set out in Appendix II to this circular.

Liquidity risk

The Target Company monitored and maintained a level of cash and cash equivalents deemed adequate by management to finance the Target Company’s operations and mitigate the effects of unexpected fluctuations in cash flows. In addition, the management of the Target Company monitored the utilisation of borrowings to ensure its compliance with loan covenants. For further details on liquidity risk, please refer to note 25 of the Accountants’ Report of the Target Company as set out in Appendix II to this circular.

Foreign currency risk

During the years ended 31 December 2015 and 31 December 2016, an amount due from a related company was denominated in US$, which was not the functional currency of the Target Company. The Target Company currently does not have a foreign currency hedging policy, but directors will monitor its foreign exchange exposure closely and consider hedging significant foreign currency exposure where necessary.

Significant investment

Save and except for the Property, the Target Company did not hold any other significant investments as at 31 December 2015, 31 December 2016 and 31 December 2017.

Material acquisitions and disposals

The Target Company did not have any material acquisitions and disposal of subsidiaries and associated companies for the years ended 31 December 2015, 31 December 2016 and 31 December 2017.

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MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

APPENDIX III

Employees and remuneration policies

During the years ended 31 December 2015, 31 December 2016 and 31 December 2017, the Target Company had four employees acting as managers. No emoluments had been paid to the three employees during the same period.

Material investments

During the years ended 31 December 2015, 2016 and 2017, the Target Company did not have any material investments or plans for the same.

III – 8

APPENDIX IV

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

The following information does not form part of the accountants’ reports on the financial information of the Group from Deloitte Touche Tohmatsu, the Company’s reporting accountants, as set out in ‘‘Appendix I – Financial Information of the Group’’, and is included herein for information only. The unaudited pro forma financial information should be read in conjunction with ‘‘Appendix I – Financial Information of the Group’’.

(A) INTRODUCTION TO THE UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP

In connection with the acquisition of the entire issued share capital of 55 Mark Lane S.À.R.L. (‘‘Target Company’’) by Hao Tian Asia Investment Company Limited, a wholly-owned subsidiary of the Company (the ‘‘Acquisition’’), the unaudited pro forma consolidated statement of assets and liabilities of the Company and its subsidiaries and the Target Company (collectively referred as the ‘‘Enlarged Group’’) (the ‘‘Unaudited Pro Forma Consolidated Statement of Assets and Liabilities’’) has been prepared by the directors of the Company in accordance with paragraph 4.29 of the Listing Rules and is solely for the purpose to illustrate the effect of the Acquisition on the Group’s financial position as at 30 September 2017 as if the Acquisition had been completed on 30 September 2017.

The Unaudited Pro Forma Consolidated Statement of Assets and Liabilities is prepared based on the unaudited condensed consolidated statement of financial position of the Group as at 30 September 2017 as extracted from the interim report of the Company issued on 28 November 2017, the audited statement of financial position of the Target Company as at 31 December 2017 as extracted from the accountants’ report set out in Appendix II to this circular; and after making other pro forma adjustments relating to the Acquisition, as if the Acquisition had been undertaken as at 30 September 2017.

The Unaudited Pro Forma Consolidated Statement of Assets and Liabilities is prepared based on the aforesaid historical data after giving effect to the pro forma adjustments described in the accompanying notes. Narrative description of the pro forma adjustments of the Acquisition that are (i) directly attributable to the Acquisition; and (ii) factually supportable, is summarised in the accompanying notes.

The Unaudited Pro Forma Consolidated Statement of Assets and Liabilities has been prepared by the directors of the Company based on certain assumptions, estimates and uncertainties and for illustrative purposes only and because of its hypothetical nature, it may not give a true picture of the financial position of the Enlarged Group upon completion of the Acquisition. Accordingly, the Unaudited Pro Forma Consolidated Statement of Assets and Liabilities does not purport to describe the financial position of the Enlarged Group that would have been attained had the Acquisition been completed on 30 September 2017, nor to predict the future financial position of the Enlarged Group.

IV – 1

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX IV

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES OF THE ENLARGED GROUP

Non-current assets Investment property Property, plant and equipment Prepaid lease payment Premium over prepaid lease payment Intangible assets Available-for-sale investments Loan receivables Investment in an associate Goodwill Finance lease receivables Deferred tax assets Pledged bank deposits Other receivables and deposits Current assets Inventories Trade accounts, bills and interest receivables Other receivables, deposits and prepayments Loan receivables Finance lease receivables Consideration receivables Investment held for trading Prepaid lease payment Tax recoverable Pledged bank deposits Bank balances, trust and segregated accounts Bank balances and cash	The Group as at 30 September 2017 HK$’000 (Note 1) – 559,009 31,917 126,462 178,650 850,768 198,603 328 98,914 4,678 5,999 4,615 2,638 2,062,581 16,048 145,776 19,993 485,258 4,281 70,440 1,294,506 343 1,359 35,237 5,223 613,836 2,692,300	Pro forma adjustment Pro forma adjustment Pro forma adjustment HK$’000 HK$’000 HK$’000 (Note 2) (Note 3) (Note 4) 932,770 397,911 23,000 – – – – – – – – – – – – 932,770 – – 53,649 – – – – – – – – 4,500 (590,836) (23,000) 58,149	The Enlarged Group HK$’000 1,353,681 559,009 31,917 126,462 178,650 850,768 198,603 328 98,914 4,678 5,999 4,615 2,638
			3,416,262
			16,048 145,776 73,642 485,258 4,281 70,440 1,294,506 343 1,359 35,237 5,223 4,500
			2,136,613

IV – 2

APPENDIX IV

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Current liabilities Trade payables Other payables, deposits received and accruals Amounts due to related companies of the Target Group Consideration payable Borrowings Obligation under finance lease Financial liabilities designated at fair value through profit or loss Tax payables Net current assets (liabilities) Total assets less current liabilities Non-current liabilities Other payables Borrowings Other long term liability Obligation under finance leases Deferred tax liabilities Net assets (liabilities)	The Group as at 30 September 2017 HK$’000 (Note 1) 26,180 43,627 – – 391,798 3,959 217,652 17,391 700,607 1,991,693 4,054,274 – 335,277 110,455 6,936 145,586 598,254 3,456,020	Pro forma adjustment Pro forma adjustment Pro forma adjustment HK$’000 HK$’000 HK$’000 (Note 2) (Note 3) (Note 4) – 23,307 125,352 (125,352) – 769,757 845,441 (845,441) – – 649 994,749 (936,600) (3,830) 4,281 – – – – 4,281 (8,111)	The Enlarged Group HK$’000 26,180 66,934 – 769,757 391,798 3,959 217,652 18,040
			1,494,320
			642,293
			4,058,555
			4,281 335,277 110,455 6,936 145,586
			602,535
			3,456,020

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX IV

Notes:

• (1) Figures are extracted from the unaudited condensed consolidated statement of financial position of the Group as set out in the interim report of the Company for the six months ended 30 September 2017 issued on 28 November 2017.

• (2) Figures are extracted from the audited consolidated statement of financial position of the Target Company shown in the accountants’ report thereon as set out in Appendix II to the Circular and is translated from the presentation currency of pounds sterling to Hong Kong dollars at the rate of GBP1 to HK$10.4661, which is the prevailing exchange rate as at 30 September 2017.

• (3) Pursuant to the sale and purchase agreement (entered into between Hao Tian Asia Investment Company Limited (the ‘‘Buyer’’) and Reignwood Europe Holdings S.À.R.L., (the ‘‘Seller’’)) in respect of the Acquisition, the Buyer agreed to acquire, and the Seller agreed to sell the entire issued share capital of the Target Company and the aggregate amount that the Target Company due to the Seller, all of its subsidiaries, parent companies and their subsidiaries, and all associated or connected persons with the Seller as at the date of the completion of the Acquisition (the ‘‘Intra-Group Debt’’) for a total consideration of GBP130,000,000.

The adjustment in connection with the Acquisition represents:

Fair value of consideration (note a) Intra-Group Debt (note b) Carrying amounts of net liabilities of the Target Company (note c) Represented by: Pro forma premium on investment property (note d)	HK$’000 1,360,593 (970,793) 8,111
	397,911
	397,911

Notes:

• (a) The cash consideration of GBP130,000,000, equivalent to HK$1,360,593,000 is translated at the prevailing exchange rate as at 30 September 2017. The Group has insufficient bank balances and cash to satisfy the total cash consideration as at 30 September 2017. The shortfall in bank balances and cash of HK$769,757,000 is included as consideration payable for the purpose of the preparation of the Unaudited Pro Forma Consolidated Statement of Assets and Liabilities. The Group intends to settle the consideration payable by utilising a facility granted by a financial institution.

IV – 4

APPENDIX IV

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

• (b) Intra-Group Debt is assumed to be the following balances of the Target Company as at 31 December 2017:

  • i) borrowings and interest payable to a related company of HK$845,441,000; and

  • ii) amounts due to related companies of HK$125,352,000.

• (c) For the purpose of the preparation of the Unaudited Pro Forma Consolidated Statement of Assets and Liabilities, the fair value of the identifiable assets and liabilities (except for investment property, which is stated at cost less accumulated depreciation and any impairment losses) acquired or assumed is assumed to be the same as the carrying amounts of the assets and liabilities of the Target Company. The consideration shall be allocated to the individual identifiable assets and liabilities on the basis of their relative fair values at the date of the Acquisition upon completion.

• (d) In the preparation of the Unaudited Pro Forma Consolidated Statement of Assets and Liabilities, the excess of consideration over the fair value of the identifiable assets and liabilities (except for investment property) acquired or assumed was recognised as fair value adjustment to the investment property.

• (4) Estimated legal and professional fees and other direct expenses in relation to the Acquisition of approximately HK$23 million and will be capitalised as part of the cost of the investment property.

• (5) No adjustments have been made to reflect any trading results or other transactions of the Enlarged Group entered into subsequent to 30 September 2017.

IV – 5

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX IV

(B) INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of the assurance report received from Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, the reporting accountants of our Company, in respect of the Group’s unaudited pro forma financial information prepared for the purpose of incorporation in this prospectus.

==> picture [74 x 57] intentionally omitted <==

==> picture [81 x 38] intentionally omitted <==

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

To the Directors of Hao Tian Development Group Limited

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Hao Tian Development Group Limited (the ‘‘Company’’) and its subsidiaries (hereinafter collectively referred to as the ‘‘Group’’) prepared by the directors of the Company (the ‘‘Directors’’) for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma consolidated statement of assets and liabilities as at 30 September 2017 and related notes as set out on pages IV-2 to IV-5 of the circular issued by the Company dated 23 March 2018 (the ‘‘Circular’’) in connection with the acquisition of the entire issued capital of 55 Mark Lane S.À.R.L. (the ‘‘Acquisition’’). The applicable criteria on the basis of which the Directors have compiled the unaudited pro forma financial information are described on pages IV-4 to IV-5 of 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 condensed consolidated financial statements for the six months ended 30 September 2017, on which a review report has been published.

IV – 6

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX IV

Directors’ Responsibilities 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 7 ‘‘Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars’’ (‘‘AG 7’’) 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’’ issued by the HKICPA 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.

IV – 7

APPENDIX IV

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

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.

The purpose of unaudited pro forma financial information included in an investment circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the Group as if the event had occurred or the transaction 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 event or transaction at 30 September 2017 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 event or transaction, and to obtain sufficient appropriate evidence about whether:

• the related unaudited 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 event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances.

IV – 8

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX IV

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 purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Deloitte Touche Tohmatsu

Certificated Public Accountants

Hong Kong

IV – 9

PROPERTY VALUATION REPORT

APPENDIX V

The following is the text of a letter and valuation certificates, prepared for the purpose of incorporation in this circular received from Cushman & Wakefield, an independent property valuer, in connection with its valuation as at 2 January 2018 of the Property.

Hao Tian Asia Investment Company Limited Rooms 4917-32, 49/F. Sun Hung Kai Centre 30 Harbour Road Wanchai, Hong Kong

Dear Sirs

VALUATION REPORT

1. INSTRUCTIONS

1.1. Appointment and Purpose of Valuation

We are pleased to submit our valuation report, which has been prepared in connection with the acquisition of the Property by Hao Tian Asia Investment Company Limited (‘‘the Company’’) from Reignwood Europe Holdings S.À.R.L.. We understand the Property will be held for investment purposes.

2. BACKGROUND TO THE VALUATION

2.1. Property

We have valued the Property interest detailed in the Property Report in Part B and the Tenancy Report in Part B.

3. BASES OF VALUATION

We confirm that the valuation and valuation report have been prepared in accordance with the RICS Valuation – Global Standards, which incorporate the International Valuation Standards (‘‘IVS’’) and the RICS UK Valuation Standards (the ‘‘RICS Red Book’’) by a valuer acting as an External Valuer, as defined within the Red Book. It follows that the valuation is compliant with IVS. We have adopted an income capitalisation approach. The Valuation Date is 2 January 2018.

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PROPERTY VALUATION REPORT

APPENDIX V

3.1. Bases

The Property has been valued on the basis of Special Assumption Market Value (assuming the Property is sold in a corporate vehicle, which does not incur any stamp duty land tax liability), subject to any existing leases. Market Value is defined in VPS 4 of the RICS Valuation – Global Standards 2017 (‘‘the RICS Red Book’’) and applies the conceptual framework which is set out in IVS Framework paragraphs 30-34. Under VPS 4, the term ‘‘Market Value’’ means ‘‘The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.’’

3.2. Special Assumption Market Value Definition

We have assessed ‘‘Market Value’’ in accordance with the RICS Red Book.

The RICS Red Book defines Market Value as ‘‘the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.’’

In preparing our valuation on this basis, it is necessary for us to prepare valuations on a ‘‘Special Assumption’’. A Special Assumption is referred to in the Glossary in the RICS Red Book as an assumption that ‘‘either assumes facts that differ from the actual facts existing at the valuation date, or that would not be made by a typical market participant in a transaction on the valuation date’’. In the circumstances of this instruction, we consider the above Special Assumptions may be regarded as realistic, relevant and valid.

3.3. Market Rent Definition

We have assessed ‘‘Market Rent’’ in accordance with the Red Book.

The RICS Red Book defines Market Rent as ‘‘the estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction after proper marketing where the parties had each acted knowledgeably, prudently and without compulsion.’’

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PROPERTY VALUATION REPORT

APPENDIX V

3.4. Estimated Net Annual Rents Receivable

In the Property Report in Part B, we set out our estimates of the net annual rents currently receivable from the Property. In providing these estimates, we define ‘‘net annual rent’’ as ‘‘the current income or income estimated by the valuer:

• (a) ignoring any special receipts or deductions arising from the property;

• (b) excluding Value Added Tax and before taxation (including tax on profits and any allowances for interest on capital or loans); and

• (c) after making deductions for superior rents (but not for amortisation) and any disbursements including, if appropriate, expenses of managing the property and allowances to maintain it in a condition to command its rent.’’

Where premises are let on effective full repairing and insuring leases, the net annual rents receivable stated in the schedule are the presently contracted rents payable under those leases or agreements to lease without any deduction for the cost of management or any other expenses.

The schedule sets out our opinion of the current Estimated Net Annual Rents, which is on the basis of Market Rent. Where there are outstanding or forthcoming reviews, rental value has been assessed in accordance with the terms of the occupational lease review provisions. Otherwise, rental value has been assessed on the basis of Market Rent, assuming a new lease drawn on terms appropriate to current practice in the relevant market.

4. VALUATION METHODOLOGY

We have adopted an income capitalisation approach to assess Market Value, applying a net initial yield to the current net income. To assess the appropriate yield, we have utilised the market approach which is based on comparing the Property to similar assets for which price information is available. To assess Market Rent, we have again utilised the market approach.

5. ASSUMPTIONS, DEPARTURES AND RESERVATIONS

In valuing the Property, as per our instruction, we have made the Special Assumption that the Property is traded in a corporate vehicle, with the benefit of having nil liability to pay stamp duty land tax on the purchase (which would usually be c. 5.00% of the Net Value).

We have made no Departures from the RICS Red Book. The valuation is not subject to a reservation.

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PROPERTY VALUATION REPORT

APPENDIX V

5.1. Tenure and Tenancies

We have not inspected title deeds and we have relied on the information supplied and listed at Section 7 of this Report as being correct and complete. In the absence of information to the contrary, we have assumed the absence of unusually onerous restrictions, covenants or other encumbrances and that the property has a good and marketable title. Where supplied with legal documentation, we have considered it but we will not take responsibility for the legal interpretation of it, though we confirm that based on the legal information provided, we are not aware of any unusually onerous restrictions, covenants or other encumbrances which adversely impact our opinion of value.

• Under Title NGL706693 there is a Section 177 Licence dated 16 September 1997 issued by the Corporation of London relating to a glass entrance canopy which overhangs Mark Lane, which is a public highway. The licence can be terminated if the canopy if not maintained following receipt of a notice, or the Corporation can carry out maintenance works at the licensee’s cost. There has been no notice of any breach received.

• There is a Deed dated 23 July 1990 relating to cranes and rights of light over the Property which the draft Certificate of Title does not confirm has expired.

• There is a perpetual yearly rent charged of £45 which was created by the will of Sir John Offley Bart dated 4 October 1645. The rent charge has not been demanded or paid during the previous owner’s ownership of the Property.

• There is a missing Deed of Covenant dated 7 April 1863 relating to a boundary wall, maintenance of building lines and rights to light.

• There is a Licence dated 3 September 1997 relating to switchgear which permits UK Power Network right of access at all times after at least two working days’ notice and to install and maintain electrical switchgear and other apparatus.

• There is a telecommunications apparatus agreement dated 15 November 1999 relating to the installation and retention of telecommunications apparatus by BT. The apparatus remains in situ and the licence is continuing for the benefit of the 6th Floor occupational tenant.

• Two light obstruction notices were registered against the Property in 2011.

• The draft Certificate of Title highlights that the lower ground floor lease has not been validly contracted out of the Landlord and Tenant Act 1954.

• The draft Certificate of Title highlights that Satellite Dish lease may have terminated but the dish remains in situ and that the tenant pays a licence fee of £1,000 per annum.

• The draft Certificate of Title highlights that there is a leasehold title NGL761534 which relates to a lease which is no longer subsisting.

• Please also refer to Appendix III, Charge on Assets, relating to a current pledge of the Property.

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PROPERTY VALUATION REPORT

APPENDIX V

5.2. Structure

We have relied on the information supplied to us as listed at Section 7 of this Report. Further, no inspection has been made of the woodwork and other parts of the structures which are covered, unexposed or inaccessible. In the absence of information to the contrary, the valuation is on the basis that the property is free from defect. However, the value reflects the apparent general state of repair of the property noted during inspection, but we do not give any warranty as to the condition of the structure, foundations, soil and services. Our report should not be taken or interpreted as giving any opinion or warranty as to the structural condition or state of repair of the property, nor should such an opinion be implied.

5.3. Planning and Statutory Regulations

We have not been instructed to make formal searches with local planning authorities and we have relied on the information supplied and listed at Section 7 of this Report. We recommend that your lawyers be instructed to confirm the planning position relating to the property and review our comments on planning in the light of their findings.

5.4. Covenant

Our valuation takes into account potential purchasers’ likely opinion of the financial strength of tenants. However, we have not undertaken any detailed investigations on the covenant strength of the tenants. Unless informed to the contrary by you or in the information supplied and listed at Section 7 of this Report, we have assumed that there are no significant arrears and that the tenants are able to meet their obligations under their leases or agreements.

5.5. Floor Areas

The Company has provided us with floor areas as detailed in Section 7. We have relied on these areas and have not checked them on site. We have assumed that the areas supplied to us have been measured in accordance with the RICS Code of Measuring Practice.

5.6. Other

Our valuation takes into account the information supplied and listed at Section 7 of this Report. Subject to this information providing otherwise, we have made the following additional assumptions:

• (i) the Property and any existing buildings are free from any defect whatsoever;

• (ii) all buildings have been constructed having appropriate regard to existing ground conditions or that these would have no unusual effect on building costs, property values or viability of any development or existing buildings;

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PROPERTY VALUATION REPORT

APPENDIX V

• (iii) all the building services (such as lifts, electrical, gas, plumbing, heating, drainage and air conditioning installations and security systems) and property services (such as incoming mains, waste, drains, utility supplies, etc) are in good working order without any defect whatsoever;

• (iv) there are no environmental matters (including but not limited to actual or potential land, air or water contamination, or by asbestos or any other harmful or hazardous substance) that would affect the property, any development or any existing buildings on the property or any adjoining property, and we shall not be responsible for any investigations into the existence of the same and you are responsible for making such investigations;

• (v) any building, the building services and the property services comply with all applicable current regulations (including fire and health and safety regulations);

• (vi) the Property and any existing buildings on the property comply with all planning and building regulations, have the benefit of appropriate planning consents or other statutory authorisation for the current use and no adverse planning conditions or restrictions apply (which includes, but is not limited to, threat of or actual compulsory purchase order);

• (vii) any occupational leases are on full repairing and insuring terms, with no unusually onerous provisions or covenants that would affect value;

• (viii) in respect of any lease renewals or rent reviews, all notices have been served validly within any time limits;

• (ix) any valuation figures provided will be exclusive of VAT whether or not the building has been elected.

6. INSPECTION

We undertook a full inspection of the Property on 2 January 2018. We were able to gain access to all areas relevant for the purpose of our valuation. The Property was inspected by John Bareham MRICS and Emily Austin MRICS.

V – 6

PROPERTY VALUATION REPORT

APPENDIX V

7. SOURCES OF INFORMATION

In addition to information established by us, we have relied on the information obtained from the persons below:

Information Source

1. Floor areas Plowman Craven

2. Condition survey report Watts Group Limited

3. Copy environmental report Watts Group Limited

4. Copy draft certificate of title CMS Cameron McKenna Nabarro Olswang LLP

5. Service charge information Broadgate Estates

6. Details of recent, current or JLL proposed marketing of the Property and offers received

Cushman & Wakefield Debenham Tie Leung Limited accepts responsibility for the information contained in the Valuation Report (other than information contained in the Valuation Report which is stated to have been obtained from a third party as set out in the table above). To the best of the knowledge of Cushman & Wakefield Debenham Tie Leung Limited (having taken all reasonable care to ensure that such is the case) the information contained in this Valuation Report is in accordance with the facts and (in the reasonable opinion of Cushman & Wakefield Debenham Tie Leung Limited) does not omit anything likely to affect the import of such information.

V – 7

PROPERTY VALUATION REPORT

APPENDIX V

8. GENERAL COMMENT

Our opinion of value is based on an analysis of recent market transactions, supported by market knowledge derived from our agency experience. Our valuation is supported by this market evidence.

Where there are outstanding or forthcoming reviews, rental value has been assessed in accordance with the terms of the occupational lease review provisions. Otherwise, rental value has been assessed on the basis of Market Rent, assuming a new lease drawn on terms appropriate to current practice in the relevant market.

All valuations are professional opinions on a stated basis, coupled with any appropriate assumptions or special assumptions. A valuation is not a fact, it is an estimate. The degree of subjectivity involved will inevitably vary from case to case, as will the degree of certainty, or probability, that the valuer’s opinion of market value would exactly coincide with the price achieved were there an actual sale at the valuation date.

The purpose of the valuation does not alter the approach to the valuation.

Property values can change substantially, even over short periods of time, and so our opinion of value could differ significantly if the date of valuation was to change. If you wish to rely on our valuation as being valid on any other date you should consult us first.

Should a sale be contemplated, we strongly recommend that the property is given proper exposure to the market.

We recommend that you keep the valuation of this property under frequent review.

You should not rely on this report unless any reference to tenure, tenancies and legal title has been verified as correct by your legal advisers.

V – 8

PROPERTY VALUATION REPORT

APPENDIX V

9. VALUATION

9.1. Market Value

Our opinion of the Special Assumption Market Value of the freehold interest in the Property detailed in Part B as at 2 January 2018 is:

£130,000,000

(One Hundred and Thirty Million Pounds)

10. FCA COMPLIANCE

For the purposes of Prospectus Rule 5.5.3(R) (2)(f), we are responsible for this valuation report and we will accept responsibility for the information contained in this valuation report and confirm that to the best of our knowledge (having taken all reasonable care to ensure that such is the case), the information contained in this valuation report is in accordance with the facts and contains no omissions likely to affect its import. This valuation report complies with Rule 5.6.5G of the Prospectus Rules and paragraphs 128 to 130 of CESR’s recommendations for the consistent implementation of the European Commission’s Regulation on Prospectuses no. 809/2004.

We also confirm that for the purposes of the Listing Rules issued by the Financial Conduct Authority, neither the signatories to this report or Cushman & Wakefield Debenham Tie Leung Limited has an interest (material or otherwise) in the entity.

11. CONFIDENTIALITY

To the fullest extent permitted by the law (including any mandatory responsibility arising from the listing rules of any stock exchange) we do not assume any responsibility to and we hereby exclude all liability arising from use of and/or reliance on this report by any person or persons for the purposes of determining whether or not to take up their entitlement to new ordinary shares in the Company other than those parties to whom this report is addressed and to whom we have issued a reliance letter.

12. DISCLOSURE AND PUBLICATION

You must not disclose the contents of this valuation report to a third party in any way without first obtaining our written approval to the form and context of the proposed disclosure, other than required by the law. You must obtain our consent, even if we are not referred to by name or our valuation report is to be combined with others. We will not approve any disclosure that does not refer sufficiently to any Special Assumptions or Departures that we have made.

The liability of Cushman & Wakefield Debenham Tie Leung Limited and its directors and employees is limited to the addressee of this report only. No accountability, obligation or liability to any third parties is accepted.

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PROPERTY VALUATION REPORT

APPENDIX V

The Company agrees to indemnify and hold us harmless against and from any and all losses, claims, actions, damages, expenses, or liabilities, including reasonable attorneys’ fees, to which we may become subjects in connection with this engagement. The Company’s obligation for indemnification and reimbursement shall extend to any controlling person of Cushman & Wakefield Debenham Tie Leung Limited, including any director, officer, employee, subcontractor, affiliate or agent. In the event we are subject to any liability in connection with this engagement, regardless of legal theory advanced, such liability will be limited to an aggregate sum not exceeding the lesser of 25% of Market Value or £25 million.

You must not modify, alter (including altering the context in which the report is displayed) or reproduce the contents of this valuation report (or any part) without first obtaining our written approval. Any person who contravenes this provision shall be responsible for all of the consequences of the same, including indemnifying Cushman & Wakefield Debenham Tie Leung Limited against all consequences of the contravention. Cushman & Wakefield Debenham Tie Leung Limited accepts no liability for any use of the Report that is in contravention of this section.

Yours faithfully

John Bareham MRICS

International Partner RICS Registered Valuer

For and on behalf of

Cushman & Wakefield Debenham Tie Leung Limited

43-45 Portman Square London W1A 3BG +44 (0)20 7152 5354 John.Bareham@cushwake.com

V – 10

PROPERTY VALUATION REPORT

APPENDIX V

Part B Schedule

PROPERTY REPORT

Property held as an Investment

			Net Annual		Special
		Terms of Existing	Rents	Estimated Net	Assumption
Property/Tenure	Description	Tenancies	Receivable	Annual Rents	Market Value
55 Mark Lane,	55 Mark Lane was originally constructed	The Property has a	£6,747,003	£7,976,130	£130,000,000
London EC3	in 1996 by British Land and provides	Weighted Average	per annum	per annum
	office, retail, medical and ancillary	Unexpired Lease
The Property is held	storage accommodation arranged over	Term of 5.7 years
Freehold. No	basement, lower ground, ground and	to expiry and 3.6
ground/government	seven upper floors. The provides	years to break.
rent payable.	comprises a total of 15,025 sq m
	(161,724 sq ft).	The Property is fully
Title Number:		let to eight office
NGL706693 and	The Property is situated on the eastern	tenants, one
NGL726456	side of Mark Lane, which adjoins	medical tenant,
	Fenchurch Street to the north and Great	and one retail
The registered	Tower Street to the south.	tenant.
owner is 55 Mark
Lane S.À.R.L..	The Property is located within the
	insurance district of the City of London.

V – 11

APPENDIX V

PROPERTY VALUATION REPORT

TENANCY REPORT

								Break	Next	Net Rents	Estimated Net
Unit/Floor (Use)	Floor	Area	Tenant	Start	Expiry	Term		(L/T/M)*	Review	Receivable	Annual Rent*
	Sq ft	Sq m								(£ per annum)*	(£ per month)*
										(£ per month)*	(£ per sq ft)
										(£ per sq ft)
7th Floor (Office)	14,643	1,360	Lonmar Global Risks	01/10/2013	30/09/2023	10	years	01/10/2018	–	£591,080	£842,000
			Limited					(T)		(£49,257)	(£70,167)
										(£40.37)	(£57.50)
6th Floor (Office)	15,799	1,468	SWIFT UK and	07/08/2012	06/08/2027	15	years	–	–	£718,135	£868,900
			Ireland Limited							(£59,845)	(£72,408)
										(£45.45)	(£55.00)
5th Floor (Office)	18,467	1,716	GRF Services Limited	25/03/2006	24/03/2021	15	years	–	–	£831,015	£1,016,000
										(£69,251)	(£84,667)
										(£45.00)	(£55.00)
4th Floor (Office)	18,873	1,753	Newline Underwriting	31/07/2015	31/07/2025	10	years	31/07/2022	31/07/2020	£915,341	£1,038,000
			Management Ltd							(£76,278)	(£86,500)
										(£48.50)	(£55.00)
3rd Floor (Office)	19,481	1,810	Transatlantic	04/04/2011	03/04/2021	10	years	–	04/04/2016	£886,400	£1,071,000
			Reinsurance							(£73,867)	(£89,250)
			Company							(£45.50)	(£55.00)
2nd Floor (South)	11,261	1,046	Fitch 7City Learning	30/12/2015	29/12/2025	10	years	29/12/2020	30/12/2020	£551,740	£591,200
(Office)								(T)		(£45,978)	£9,267
										(£49.00)	(£52.50)
2nd Floor (North)	8,089	751	Reignwood	25/04/2016	24/04/2026	10	years	25/04/2021	25/04/2021	£445,000	£424,700
(Office)			Investments UK					(T)		(£37,083)	(£35,392)
										(£55.01)	(£52.50)
1st Floor (Office)	18,855	1,752	GRF Services Limited	25/03/2006	24/03/2021	15	years	–	–	£848,475	£989,900
										(£70,706)	(£82,492)
										(£45.00)	(£52.50)
Ground Floor	13,062	1,214	Assicurazioni Generali	06/06/2014	05/06/2024	10	years	06/06/2019	–	£496,356	£685,800
(Office)			S.p.A					(T)		(£41,363)	(£57,150)
										(£38.00)	(£52.50)
Ground Floor	1,239	115.1	Reception	–	–	–		–	–	–	–
Ground Floor and Basement	1,550	144	Building Management	–	–	–		–	–	£27,000	£27,000
			Accommodation							(£2,250)	(£2,250)
										(£17.42)	(£17.42)
Ground Storage (South)	292	27	Lonmar Global Risks	01/10/2013	30/09/2023	10	years	01/10/2018	–	£3,650	£4,380
(Office)			Ltd					(T)		(£304)	(365)
										(£12.50)	(£15.00)
Ground Storage East	210	20	Shaun R.J Smith Esq	22/06/2013	01/06/2020	6	years 11	27/03/2014	21/06/2018	£2,625	£3,150
(Storage)							months	(M)		(£219)	(£263)
										(£12.50)	(£15.00)
Ground Storage West	116	11	Reignwood	01/01/2017	31/12/2026	10	years	01/02/2017	–	£28,000	£28,000
(Storage) and Car Parking			Investments UK					(T)		(£2,333)	(£2,333)
Spaces (CPS) 1, 2, 3, 4,										(£3,500 pa per CPS)	(£3,500 pa per CPS)
7, 9, 11, 15
Lower Ground (Medical)	5,212	484	Shaun R.J Smith Esq.	24/05/2011	01/06/2020	9	years	–	01/06/2018	£94,663	£104,200
										(£7,889)	(£8,683)
										(£18.16)	(£20.00)
Lower Ground (Office)	3,985	370	Reignwood	25/04/2016	24/04/2026	10	years	25/04/2021	25/04/2021	£111,580	£79,700
			Investments UK					(T)		(£9,298)	(£6,642)
										(£28.00)	(£20.00)

V – 12

APPENDIX V

PROPERTY VALUATION REPORT

							Break	Next	Net Rents	Estimated Net
Unit/Floor (Use)	Floor	Area	Tenant	Start	Expiry	Term	(L/T/M)*	Review	Receivable	Annual Rent*
	Sq ft	Sq m							(£ per annum)*	(£ per month)*
									(£ per month)*	(£ per sq ft)
									(£ per sq ft)
Lower Ground	2,511	233	GRF Services Limited	25/03/2006	24/03/2021	15 years	–	–	£43,943	£50,200
									(£3,662)	(£4,183)
									(£17.50)	(£20.00)
Lower Ground and Sub	8,044	747	F.W.Evans Cycles	03/06/2015	02/06/2025	10 years	–	03/06/2020	£130,000	£130,000
Basement (Retail)			(UK) Limited						(£10,833)	(£10,833)
									(£16.16)	(£16.16)
Satellite Dish	–	–	GRF Services Limited	24/03/2006	24/03/2021	15 years	–	–	£1,000	£1,000
									(£83)	(£83)
									–	–
Car Parking Spaces	–	–	Newline Underwriting	31/07/2015	31/07/2016	1 year	01/08/2016	–	£7,000	£7,000
17 & 18			Management Ltd				(L)		(£583)	(£583)
									–	–
Car Parking Spaces	–	–	GRF Services Limited	25/03/2006	24/03/2021	15 years	–	–	£7,000	£7,000
10 & 12									(£583)	(£583)
									–	–
Car Parking Spaces	–	–	GRF Services Limited	25/03/2006	24/03/2021	15 years	–	–	£7,000	£7,000
13 & 14									(£583)	(£583)
									–	–
Car Parking Space 8	–	–	Lonmar Global Risks	01/10/2013	30/09/2023	10 years	01/10/2018	–	£0	£0
			Limited						–	–
									–	–
Car Parking Spaces	–	–	SWIFT UK and	07/08/2012	06/08/2027	15 years	–	07/08/2017	£0	£0
5 & 6			Ireland Limited						–	–
									–	–
Car Parking Space 16	–	–	Transatlantic	04/04/2011	03/04/2021	10 years	–	20/04/2016	£0	£0
			Reinsurance						–	–
			Company						–	–
Total	161,689	15,021.4							£6,747,003 pa	£7,976,130 pa
									(£562,250 pm)	(£664,678 pm)

• Rents are rounded to nearest pound

V – 13

GENERAL INFORMATION

APPENDIX VI

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 (other than those relating to the Seller) 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. DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS IN SHARES AND UNDERLYING SHARES

As at the Latest Practicable Date, the interests and short positions of the Directors 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) which were required (a) 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 under such provisions of the SFO); (b) to be recorded in the register required to be kept by the Company pursuant to section 352 of the SFO; or (c) 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’’) were as follows:

		Number of	Percentage of
		Shares and	total issued
		underlying	share capital as
		Shares held	at Latest
Name of Director	Capacity	(Long position)	Practicable Date
Fok Chi Tak	Beneficial owner	25,431,704	0.52%
Xu Hai Ying	Beneficial owner	733,752	0.02%
Ou Zhiliang	Beneficial owner	733,752	0.02%
Chan Ming Sun,	Beneficial owner	733,752	0.02%
Jonathan
Lam Kwan Sing	Beneficial owner	733,752	0.02%
Lee Chi Hwa, Joshua	Beneficial owner	733,752	0.02%

VI – 1

GENERAL INFORMATION

APPENDIX VI

Note:

1. The percentage of shareholding is calculated on the basis of 4,883,862,025 Shares in issue as at the Latest Practicable Date.

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 any Shares, underlying Shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which would be required (a) 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 would be taken or deemed to have under such provisions of the SFO); (b) to be recorded in the register required to be kept by the Company pursuant to section 352 of the SFO; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors of the Company is a director or employee of a company which has an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

3. DIRECTORS’ INTERESTS IN ASSETS AND CONTRACTS OF THE GROUP

Since 31 March 2017, the date to which the latest published audited financial statements of the Group were made up, none of the Directors or proposed Directors has, or has had, any direct or indirect interest in any assets which have been acquired or disposed of by or leased to, or proposed to be acquired or disposed of by or leased to, any member of the Group as at the Latest Practicable Date.

In addition, none of the Directors is materially interested in any contract or arrangement entered into by any member of the Group subsisting as at the Latest Practicable Date which was significant in relation to the business of the Group taken as a whole.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, (i) none of the Directors had any service contracts with the Company or any of its subsidiaries or associated companies in force which (a) were continuous contracts with a notice period of 12 months or more; or (b) were fixed term contracts with more than 12 months to run irrespective of the notice period; and (ii) none of the Directors had any existing or proposed service contract with any member of the Group which does not expire or is not determinable by such member of the Group within one year without payment of compensation (other than statutory compensation).

VI – 2

GENERAL INFORMATION

APPENDIX VI

5. DIRECTORS’ INTERESTS IN COMPETING BUSINESS

As at the Latest Practicable Date, so far is known to the Directors, none of the Directors or their close associate(s) was interested in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group.

6. LITIGATION

Claim against Inner-Mongolia Shuangxin Resources Group Co. Ltd

In connection with the sale and purchase agreement (the “Menggang Agreement”) entered into between the Group and Inner-Mongolia Shuangxin Resources Group Co., Ltd, (“Shuangxin”) for the sale and purchase of Wuhai City Menggang Industrial Development Co., Ltd. and its subsidiaries, which operated the Group’s coal mines in the Inner-Mongolia Autonomous Region in the PRC, on 16 May 2013, the Group filed an arbitration claim to the China International Economic and Trade Arbitration Commission (the “CIETAC”) for the outstanding amount of RMB80,000,000 payable by Shuangxin under the Menggang Agreement.

Shuangxin withheld the payment of the third installment in the sum of RMB80,000,000 (out of the four installment payments in total) initially on the ground of a tax demand note issued from the local tax bureau, and after revocation of the tax demand note, on the ground of non-fulfillment by the Group of certain terms and obligations under the Menggang Agreement. Shuangxin filed a counter-claim for RMB65,000,000 on 8 October 2013. An arbitral award was delivered in favour of the Group on 27 June 2014 and Shuangxin filed an application to the Beijing Second Intermediate People’s Court to set aside the arbitral award. Beijing Second Intermediate People’s Court issued a civil ruling on 18 December 2014 dismissing Shuangxin’s application for the revocation of the arbitral award. On 6 February 2015, the Group applied for the mandatory enforcement at the Ordos City Intermediate People’s Court, and the Ordos City Intermediate People’s Court has formally accepted the application on 14 May 2015.

On 22 March 2016, Shuangxin applied to the Inner-Mongolia Autonomous Regional Higher People’s Court for the temporary suspension of execution with regard to the mandatory enforcement applied by the Group on 6 February 2015 and the decision was in favour of Shuangxin. The Group then filed an appeal against such ruling on 30 March 2016, which was dismissed by the court on 5 May 2016. On 12 January 2018, the Group successfully obtained the judgment of the Inner-Mongolia Autonomous Regional Higher People’s Court ordering that the suspension of execution be lifted. As at the date of this circular, in respect of the third instalment, the Group has now received in aggregate RMB40,000,000 by enforcement, and the execution procedures for enforcing the court order for the remaining RMB40,000,000 unsettled portion of the third installment are still in progress.

VI – 3

GENERAL INFORMATION

APPENDIX VI

On 21 August 2014, Shuangxin filed a legal action at the Inner-Mongolia Autonomous Regional Higher People’s Court claiming against the Group for damages in an aggregate amount of RMB102,978,100 (the “New Civil Claim”). On 8 May 2015, the Group submitted an application of objection to the jurisdiction at the Inner-Mongolia Autonomous Regional Higher People’s Court. On 2 June 2015, the Inner-Mongolia Autonomous Regional Higher People’s Court issued a civil ruling dismissing the Group’s application. The Group then submitted an application for leave to appeal against such civil ruling at the Supreme People’s Court of the People’s Republic of China and the appeal was dismissed. The InnerMongolia Autonomous Regional Higher People’s Court commenced the hearing of the New Civil Claim on 13 April 2016 and the court hearing was in general completed in June 2016. As announced by the Company on 11 September 2017, the Group had received the written judgment of the Inner-Mongolia Autonomous Higher People’s Court dated 7 July 2017 to the effect that all the claims of Shuangxin under the New Civil Claim against the Group have been dismissed. Subsequently, on 15 September 2017, Shuangxin further appealed to the Supreme People’s Court of the PRC, which appeal is being processed between the InnerMongolia Autonomous Higher People’s Court and the Supreme People’s Court as of the date of this circular.

Separately, in June 2016, the Group filed an arbitration claim to CIETAC against Shuangxin for the return of guarantee monies（質保費）of approximately RMB7,900,000 which was previously withheld by Shuangxin. The CIETAC hearing took place on 27 September 2017 and the Group had received a written arbitral award of CIETAC dated 18 December 2017 in the Group’s favour, to the effect that Shuangxin shall return guarantee monies in the amount of RMB7,375,555.60 and pay costs related to the arbitration to the Group. On 6 February 2018, Shuangxin applied to the Beijing Second Intermediate People’s Court to cancel the CIETAC arbitral award. the Beijing Second Intermediate People’s Court decided it was appropriate for the matter to be handled by the Beijing Fourth Intermediate People’s Court, accordingly the matter is in the process of being transferred to the Beijing Fourth Intermediate People’s Court.

Claim against Up Energy Development Group Limited

On 12 August 2016, the Company claimed against Up Energy Mining Limited and Up Energy Development Group Limited (the ‘‘Defendants’’) for (i) issuance of the top-up consideration shares of Up Energy Development Group Limited (‘‘Up Energy’’) and (ii) cash payment pursuant to an agreement entered into between the Company as a vendor and the Defendants for the sale and purchase of shares in and assignment of shareholder’s loan due from Champ Universe Limited on 12 October 2012. Details of the claim are disclosed in the announcements of the Company dated 29 June 2016 and 12 August 2016, and the interim report of the Company published on 28 December 2017. To the knowledge of the Company, no material development with respect to this claim has occurred since the date of the interim report of the Company up to the date of this circular.

VI – 4

GENERAL INFORMATION

APPENDIX VI

Claim against Liu Jincheng and Xia Heting

On 1 July 2017, Hao Tian Investment (China) Co., Ltd, a wholly-owned subsidiary of the Company, filed a legal action at the Beijing Fourth Intermediate People’s Court claiming against Liu Jincheng and Xia Heting for repayment of the principal amount of the borrowings and the interest thereof in an aggregate amount of approximately RMB40,070,000 as well as other expenses. On 4 July 2017, the Beijing Fourth Intermediate People’s Court accepted the legal action. Subsequently, Hao Tian Investment (China) Co., Ltd made an application to the Beijing Fourth Intermediate People’s Court for property preservation. On 4 August 2017, the property and other interests of the defending parties, being Liu Jincheng and Xia Heting, were ordered to be sealed up, seized and frozen by the Beijing Fourth Intermediate People’s Court.

Subsequently, Liu Jincheng and Xia Heting made an application to the Beijing Fourth Intermediate People’s Court objecting to its jurisdiction, which was dismissed by the court on 9 October 2017. On 18 October 2017, Liu Jincheng and Xia Heting further appealed to Beijing Higher People’s Court against the aforesaid dismissal. The case is currently in the process of being transferred by Beijing Fourth Intermediate People’s Court to Beijing Higher People’s Court.

Claim against Chim Kee Machinery Co., Ltd

In 2012, a customer commenced litigation against Chim Kee Machinery Co., Ltd. (the ‘‘Subsidiary’’), one of the subsidiaries of the Group for alleged breach of a rental contract (the ‘‘Legal Proceedings’’). The customer claimed for overall damages of more than HK$100 million while the disputed sum claimed by the Subsidiary against the customer was approximately HK$17.5 million together with other unascertained damages. On 24 March 2016, the Court of First Instance handed down a judgment and ruled in favour of the Subsidiary and ordered the customer to pay the Subsidiary unpaid rental plus interest and costs. On 26 April 2016, the customer lodged an appeal to the Court of Appeal (the ‘‘Appeal’’) against the judgment of the Court of First Instance.

On 11 July 2017, the decisions of the Legal Proceedings and the Appeal were concluded by the Court of Appeal. The decisions were in favour of the Subsidiary and the Court of Appeal ordered the customer to settle the unpaid hire of HK$8.9 million plus interest and part of the costs of the Legal Proceedings and the Appeal. Up to the date of this Circular, the Subsidiary has received in an aggregated amount of HK$14.4 million representing the unpaid hire plus interest of HK$12.0 million and part of the costs of the Legal Proceedings and the Appeal of HK$2.4 million.

VI – 5

GENERAL INFORMATION

APPENDIX VI

On 11 July 2017, the customer lodged another prosecution against the Subsidiary claiming for loss and damage of more than HK$27,000,000. After considering the evidence and the background facts in relation to this prosecution and the advice from the legal adviser in relation to this prosecution, the Directors are of the view it is a weak claim with remote prospect of success against the Group.

Saved as disclosed, as at the Latest Practicable Date, neither the Company nor any of its subsidiaries is engaged in any litigation or arbitration of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against the Company or any of its subsidiaries.

7. MATERIAL CONTRACTS

The Group has entered into the following contracts (not being contracts entered into in the ordinary course of business) within the two years preceding the date of the Announcement until the Latest Practicable Date, which is or may be material:

• (a) On 22 May 2016, Hao Tian Management (Hong Kong) Limited (‘‘Hao Tian Management (Hong Kong)’’), an indirectly wholly-owned subsidiary of the Company, entered into a conditional subscription agreement (the ‘‘Subscription Agreement’’) with Vandi Investments Limited, pursuant to which Vandi Investments Limited agreed to subscribe for, and Hao Tian Management (Hong Kong) agreed to issue, 821 new ordinary shares in Hao Tian Management (Hong Kong) at the consideration of US$40,000,000. Upon completion of the subscription pursuant to the Subscription Agreement on 23 August 2016, Hao Tian Management (Hong Kong) remained as an indirectly non-wholly owned subsidiary of the Company;

• (b) On 31 May 2016, the Company, Hao Tian Management (Hong Kong) and Vandi Investments Limited entered into a supplemental deed to the Subscription Agreement to clarify that Vandi Investments Limited was then an indirect and wholly-owned special purpose vehicle of CCB International (Holdings) Limited;

• (c) On 7 June 2016, 昊天投資（中國）有限公司 (Hao Tian Investments (China) Co. Limited, ‘‘Hao Tian Investment’’), an indirectly wholly-owned subsidiary of the Company, entered into an investment framework agreement with 中華人民共和國福建 省清流縣人民政府 (The People’s Government of Qingliu County, Fujian Province, the Peoples’s Republic of China) relating to the project known as ‘‘Innovative Camellia Oleifera Health Industry Project*（創新型油茶健康產業項目）’’ (the ‘‘Project’’) and pursuant to the investment framework agreement, Hao Tian Investment planned to invest a total sum of not more than RMB380,000,000 in the Project;

VI – 6

GENERAL INFORMATION

APPENDIX VI

• (d) On 20 July 2016, in connection with the Subscription Agreement, the Company, Hao Tian Management (Hong Kong) and Vandi Investments Limited entered into a call option deed, pursuant to which the Company, without additional consideration, granted to Vandi Investments Limited a call option to, require the Company to allot and issue certain new shares in the Company to Vandi Investments Limited at the price of HK$0.80 per share;

• (e) On 22 July 2016, a restructuring agreement was entered into between Hao Tian Investment (China) Company Limited (‘‘Hao Tian China’’), an indirectly whollyowned subsidiary of the Company, and Fujian Nuoqi Co., Ltd. (‘‘Fujian Nuoqi’’), pursuant to which, among others, (i) Hao Tian China conditionally agreed to participate in the restructuring of Fujian Nuoqi, in replacement of a third party, as the party responsible for the restructuring under the reorganisation proposal of Fujian Nuoqi; and (ii) for the retention of the assets in Fujian Nuoqi and the transfer of 311,504,940 domestic invested shares in Fujian Nuoqi to Hao Tian China, Hao Tian China conditionally agreed to pay the an aggregate sum of RMB150,583,125.05. Upon completion of the restructuring agreement, Fujian Nuoqi was an indirectly non-wholly owned subsidiary of the Company;

• (f) On 23 September 2016, Hao Tian Management (Hong Kong) entered into a sale and purchase agreement with an independent third party, pursuant to which Hao Tian Management (Hong Kong) agreed to sell, and the independent third party agreed to purchase, 1,737,940,350 shares in China Innovative Finance Group Limited (share of which are listed on the Stock Exchange with stock code 412) held by Hao Tian Management (Hong Kong) at the consideration of HK$0.297 per share;

• (g) On 8 December 2016, Chim Kee Crane Company Limited, an indirectly wholly-owned subsidiary of the Company, and the landlord entered into a sales and purchase agreement with an independent third party in relation to the acquisition of a parcel of land situated in Yuen Long for a consideration of HK$51,749,100;

• (h) On 16 January 2017, Hao Tian Management (China), and Haitong International Securities Company Limited entered into a facility agreement (the ‘‘Facility Agreement’’) in respect of loan facilities of up to HK$495,000,000 provided by Haitong International Securities Company Limited to Hao Tian Management (China);

• (i) On 16 January 2017, Hao Tian Management (China) executed a share charge in favour of Haitong International Securities Company Limited pursuant to which Hao Tian Management (China) charged certain shares in Hao Tian Construction (formerly known as Clear Lift Holdings Limited) to Haitong International Securities Company Limited as a security to the Facility Agreement;

VI – 7

GENERAL INFORMATION

APPENDIX VI

• (j) On 16 January 2017, the Company executed a corporate guarantee in favour of Haitong International Securities Company Limited pursuant to which the Company granted a guarantee to Haitong International Securities Company Limited as a guarantee to the Facility Agreement in respect of loan facilities of up to HK$495,000,000;

• (k) On 16 January 2017, Hao Tian Management (China) as purchaser, Tang J F T Company Limited as vendor and Mr. Tang Yiu Chi James, as the vendor’s warrantor entered into the a sale and purchase agreement in relation to the conditional sale and purchase of the 750,000,000 ordinary shares of Hao Tian Construction (formerly known as Clear Lift Holdings Limited) (stock code: 1341), representing 75% of the its issued share capital as at the date of the agreement, for an aggregate consideration of HK$592,500,000;

• (l) On 5 April 2017, Fortune Jumbo Limited, an indirectly wholly-owned subsidiary of the Company placed an order with Haitong International Securities Company Limited (‘‘Haitong Securities’’), pursuant to which Haitong Securities shall subscribe for the interest in Haitong Global Investment SPC III (a segregated portfolio company) on behalf of Fortune Jumbo Limited at the subscription amount of US$30,000,000 (approximately HK$234,000,000);

• (m) On 10 May 2017, Hao Tian Construction, an indirect subsidiary of the Company, entered into a placing agreement with Hao Tian International Securities Limited and Kingston Securities as placing agents (the ‘‘Placing Agents’’), pursuant to which the Placing Agents agree, as agents of Hao Tian Construction, to procure on a best effort basis not less than six placees who and whose ultimate beneficial owners shall be Independent Third Parties to subscribe for up to 200,000,000 Shares to be placed at the price of HK$0.62 per Share;

• (n) On 6 November 2017, Fujian Nuoqi, Zhong Hong Holdings Group Limited (the ‘‘Vendor’’) and Mr. Hu Yulin, as the Vendor’s warrantor, entered into a sale and purchase agreement, pursuant to which Fujian Nuoqi has conditionally agreed to acquire, and the Vendor has conditionally agreed to sell, the entire issued share capital of Zhong Hong International Limited（中宏國際有限公司）at a consideration of HK$1,053,024,128. The consideration payable by Fujian Nuoqi shall be satisfied by way of allotment and issue of new H shares of Fujian Nuoqi at an issue price of HK$0.6829 per share; and

• (o) the Agreement.

VI – 8

GENERAL INFORMATION

APPENDIX VI

8. QUALIFICATION

The following set out the qualifications of the experts who have given opinion or advice which is contained in this circular:

Name

Qualification

Deloitte Touche Tohmatsu

Certified Public Accountants (Practising)

Cushman & Wakefield An independent qualified valuer

As at the Latest Practicable Date, each of the experts above was not beneficially interested in the share capital of any member of the Group or had any right, whether legally enforceable or not, to subscribe for or to nominate persons to subscribe for securities in any member of the Group and did not have any interest, either directly or indirectly, in any assets which have been, since 31 March 2017 (being the date to which the latest published audited financial statements of the Company were made up), acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

9. CONSENT

Each of Deloitte Touche Tohmatsu and Cushman & Wakefield has given and has not withdrawn its written consent to the issue of this circular with inclusion of its letter, report or certificate or summary of its opinion (as the case may be) and references to its name in the form and context in which they appear herein.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the principal place of business of the Company in Hong Kong at Rooms 4917-4932, 49/F., Sun Hung Kai Centre, 30 Harbour Road, Wan Chai, Hong Kong during normal business hours from 9:00 a.m. to 5:00 p.m. (except Saturdays and public holidays) from the date of this circular up to and including the date of the EGM:

• (a) the memorandum and articles of association of the Company;

• (b) the material contracts referred to in the paragraph headed ‘‘Material Contracts’’ in this appendix;

• (c) the letter from the Board, the text of which is set out on pages 5 to 15 of this circular;

VI – 9

GENERAL INFORMATION

APPENDIX VI

• (d) the accountants’ report of the Target Company prepared by Deloitte Touche Tohmatsu for each of the three years ended 31 December 2015, 2016 and 2017, the text of which is set out in Appendix II to this circular;

• (e) the unaudited pro forma financial information of the Enlarged Group prepared by Deloitte Touche Tohmatsu, the text of which is set out in Appendix IV to this circular;

• (f) the property valuation report prepared by Cushman & Wakefield on the Property, the text of which is set out in Appendix V to this circular;

• (g) the written consents as set out in the section headed ‘‘Consent’’ in this appendix;

• (h) the annual reports of the Company for each of the three financial years ended 31 March 2015, 2016 and 2017, respectively;

• (i) the interim report of the Company for the six months ended 30 September 2017;

• (j) the circular of the Company in relation to the major acquisition of 75% equity interest in Clear Lift Holdings Limited dated 12 May 2017;

• (k) the Agreement; and

• (l) this circular.

11. MISCELLANEOUS

• (a) The registered office of the Company is located at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Islands.

• (b) The head office and principal place of business of the Company in Hong Kong is at Rooms 4917-4932, 49/F., Sun Hung Kai Centre, 30 Harbour Road, Wan Chai, Hong Kong.

• (c) The share registrar and transfer office in the Cayman Islands of the Company is SMP Partners (Cayman) Limited at Royal Bank House – 3rd Floor, 24 Shedden Road, P.O. Box 1586, Grand Cayman, KY1-1110, Cayman Islands and the Hong Kong branch share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Limited at shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

• (d) The company secretary of the Company is Mr. Siu Kai Yin Edward, who is a qualified lawyer in Hong Kong and Australia.

• (e) In the event of any inconsistencies, the English text of this circular and form of proxy shall prevail over the Chinese text.

VI – 10

NOTICE OF EGM

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(Incorporated in the Cayman Islands with limited liability)

(Stock code: 474)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Hao Tian Development Group Limited (the ‘‘Company’’) will be held at Room 2702, 27/F, The Sun’s Group Centre, No. 200 Gloucester Road, Wanchai, Hong Kong at 11:00 a.m. on Thursday, 12 April 2018 (the ‘‘EGM’’) for the purpose of considering and, if thought fit, pass the following resolutions as ordinary resolutions of the Company. Capitalised terms defined in the circular dated 23 March 2018 issued by the Company (the ‘‘Circular’’) shall have the same meanings when used herein unless otherwise specified:

ORDINARY RESOLUTIONS

Resolution in relation to the Acquisition

‘‘THAT:

1. (a) the Agreement and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and

2. (b) the board of directors of the Company be and is hereby generally and unconditionally authorized to do all such acts and things and execute all such documents and to take all such steps as it considers necessary or expedient or desirable in connection with or to give effect to or in connection with paragraph (a) of this resolution no. 1.’’

Yours faithfully, By Order of the Board Hao Tian Development Group Limited Fok Chi Tak

Executive Director

Hong Kong, 23 March 2018

EGM – 1

NOTICE OF EGM

Notes:

1. In order to be eligible to attend and vote at the EGM, all transfer documents accompanied by the relevant share certificates must be lodged with the branch share registrar of the Company in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, not later than 4:30 p.m. on Friday, 6 April 2018. The register of members of the Company will be closed from Monday, 9 April 2018 to Thursday, 12 April 2018, both days inclusive, for determination of entitlements to attend and vote at the EGM and during which period no transfer of Shares will be registered.

2. Any shareholder of the Company (the ‘‘Shareholder(s)’’) entitled to attend and vote at the EGM shall be entitled to appoint another person as his proxy to attend and vote instead of him. A proxy needs not be a Shareholder.

3. The form of proxy shall be in writing under the hand of the appointer or of his attorney duly authorized in writing or, if the appointer is a corporation, either under its seal or under the hand of an officer, attorney or other person authorized to sign the same.

4. Delivery of the form of proxy shall not preclude a Shareholder from attending and voting in person at the EGM and in such event, the form of proxy shall be deemed to be revoked.

5. Where there are joint Shareholders, any one of such joint Shareholders may vote, either in person or by proxy, in respect of such shares as if he were solely entitled thereto, but if more than one of such joint Shareholders be present at the EGM the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the votes of the other joint Shareholders, and for this purpose seniority shall be determined by the order in which the names stand in the register of Shareholders of the Company in respect of the joint holding.

6. The form of proxy and (if required by the board of directors) the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power or authority, shall be delivered to the Company’s branch share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof at which the person named in the form of proxy proposes to vote or, in the case of a poll taken subsequently to the date of the EGM or any adjournment thereof, not less than 48 hours before the time appointed for the taking of the poll and in default the form of proxy shall not be treated as valid.

7. As at the date of this notice, the Board comprises three executive Directors, being Mr. Xu Hai Ying, Dr. Zhiliang Ou, JP (Australia) and Mr. Fok Chi Tak; and three independent non-executive Directors, being Mr. Chan Ming Sun Jonathan, Mr. Lam Kwan Sing and Mr. Lee Chi Hwa, Joshua.

EGM – 2