C&D Property Management Group Co., Ltd — Proxy Solicitation & Information Statement 2014

Aug 26, 2014

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in CHINA SANDI HOLDINGS LIMITED, 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 whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

CHINA SANDI HOLDINGS LIMITED 中 國 三 迪 控 股 有 限 公 司

(incorporated in Bermuda with limited liability)

(Stock code: 00910)

PROPOSED VARIATIONS TO MAJOR AND CONNECTED TRANSACTIONS

Capitalised terms used in this cover shall have the same meanings as those defined in this circular.

A notice convening the SGM to be held at 11:00 a.m. on Tuesday, 16 September 2014 at 3/F., Nexxus Building, 77 Des Voeux Road Central, Hong Kong is set out on pages S-1 to S-2 of this circular. A form of proxy for use at the special general meeting is enclosed. Such form of proxy is also published on the websites of The Stock Exchange of Hong Kong Limited (www.hkexnews.hk) and the Company (www.chinasandi.com.hk).

Whether or not you are able to attend and vote at the SGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the Company’s Hong Kong branch registrar, Tricor Tengis Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as practicable but in any event not less than 48 hours before the time appointed for holding the SGM or any adjournment thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the special general meeting or any adjournment thereof (as the case may be) should you so wish.

A letter from the Board is set out on pages 5 to 11 of this circular. A letter from the Independent Board Committee is set out on pages 12 to 13 of this circular. A letter from Nuada is set out on pages 14 to 20 of this circular.

27 August 2014

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Letter from	the Independent Board Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12
Letter from	Nuada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	14
Appendix I	— Financial Information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II	— General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Notice of SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		S-1

– i –

DEFINITIONS

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

• ‘‘associates’’ has the same meaning ascribed thereto in the Listing Rules

• ‘‘Board’’ the board of Directors

• ‘‘Company’’ China Sandi Holdings Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the main board of the Stock Exchange

• ‘‘connected person(s)’’ has the meaning ascribed to it under the Listing Rules

• ‘‘Director(s)’’ director(s) of the Company

• ‘‘Fee’’ the agreed fee to be paid by Fuzhou Gaojia to Fujian Jiake in consideration for the variations of term to the Fujian Jiake JV Agreement

• ‘‘Final Cooperation Agreement’’ a final cooperation agreement entered between Fujian Jiake and the Reconstruction Office dated 30 September 2013

• ‘‘Fujian Jiake’’ 福建佳科實業有限公司 (Fujian Jiake Industrial Co., Ltd.*), a joint venture company established in the PRC and held as to 51% and 49% by Fujian Sinco and Fuzhou Gaojia respectively pursuant to the terms of the Fujian Jiake JV Agreement

• ‘‘Fujian Jiake JV Agreement’’ the joint venture agreement dated 7 August 2013 (as supplemented by a supplemental agreement dated 30 August 2013) entered into between Fujian Sinco and Fuzhou Gaojia

• ‘‘Fujian Sinco’’ 福建先科實業有限公司 (Fujian Sinco Industrial Co. Ltd.*), a company established in the PRC and an indirect whollyowned subsidiary of the Company

• ‘‘Fuzhou Gaojia’’ 福州高佳房地產開發有限公司 (Fuzhou Gaojia Real Estate Development Co., Ltd.*), a company established in the PRC and controlled by Mr. Guo

• ‘‘Group’’

• the Company and its subsidiaries

– 1 –

DEFINITIONS

• ‘‘Independent Board Committee’’

• the independent board committee of the Board comprising all the independent non-executive Directors, namely Dr. Wong Yun Kuen, Mr. Chan Yee Ping, Michael, Mr. Yu Pak Yan, Peter, Mr. Zheng Jinyun and Mr. Zheng Yurui, established to advise the Independent Shareholders in respect of the terms of the Supplemental Agreement and the transactions contemplated thereunder including the Supplemental Undertaking

• ‘‘Independent Shareholders’’

• all Shareholders other than Mr. Guo and his associates

• ‘‘Independent Third Party(ies)’’

• any person(s) or company(ies) and their respective ultimate beneficial owner(s) are third parties independent of the Company and its connected persons

• ‘‘JV Company’’

• a joint venture company to be established in the PRC and to be held as to 51% and 49% by Fujian Jiake and the potential joint venture partner, which is expected to be an Independent Third Party, respectively

• ‘‘Land’’ one plot of land located at 西安曲江大明宮遺址區 (Xi’an Qujiang Daming Palace Heritage Area*) with a total site area of approximately 40 mu (畝)

• ‘‘Land Bidding’’

• the public bidding of the Land

• ‘‘Land Bureau’’ 西安市新城區國土資源局 (The Bureau of Land and Resources of Xincheng District of Xi’an*)

• ‘‘Latest Practicable Date’’

• 22 August 2014, being the latest practicable date prior to the printing of this circular for the purpose of ascertaining certain information contained herein

• ‘‘Listing Rules’’

• the Rules Governing the Listing of Securities on the Stock Exchange

• ‘‘Mr. Guo’’ Mr. Guo Jiadi, the single largest Shareholder, the controlling shareholder of Fuzhou Gaojia and father of Ms. Amika Lan E Guo, executive Director

• ‘‘Nuada’’

• Nuada Limited, a corporation licensed under the SFO to carry out type 6 (advising on corporate finance) regulated activity as defined under the SFO, being the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders as to fairness and reasonableness of the terms of the Supplemental Agreement and transactions contemplated thereunder

– 2 –

DEFINITIONS

• ‘‘PRC’’

the People’s Republic of China

• ‘‘PRC Legal Adviser’’

• 福建博世律師事務所 (Fujian Bose Law Firm*), the PRC legal adviser of the Company

• ‘‘Previous Circular’’

the circular of the Company dated 4 September 2013

• ‘‘Project’’

• the commercial property development project to be developed on the Land

• ‘‘Remaining Capital Contribution’’

• the remaining 80% of total capital contribution of RMB84 million (equivalent to approximately HK$100.8 million) to be contributed by Fuzhou Gaojia) within 24 months from the date of establishment of Fujian Jiake (i.e. 24 September 2013) as shown on the business license of Fujian Jiake, but shall not be later than the date of the Transfer Notice

• ‘‘Reconstruction Office’’

• 西安曲江大明宮遺址區保護改造辦公室 (Xi’an Qujiang Daming Palace Heritage Area Protection And Reconstruction Office*), one of the parties to the Final Cooperation Agreement

• ‘‘SFO’’

• Securities and Future Ordinance, Cap. 571 of the Laws of Hong Kong

• ‘‘SGM’’

• the special general meeting of the Company to be convened and held to approve, among other matters, the Supplemental Agreement and the transactions contemplated thereunder including the Supplemental Undertaking

• ‘‘Shares’’ ordinary Shares of the Company of HK$0.01 each

• ‘‘Shareholder(s)’’ shareholder(s) of the Company

• ‘‘Stock Exchange’’

• The Stock Exchange of Hong Kong Limited

• ‘‘Supplemental Agreement’’

• the second supplemental agreement to the Fujian Jiake JV Agreement dated 30 July 2014 entered between Fujian Sinco and Fuzhou Gaojia

• ‘‘Supplemental Undertaking’’

• the supplemental undertaking provided by Mr. Guo to Fujian Jiake, Fujian Sinco and Fuzhou Gaojia dated 30 July 2014 in relation to delay the latest timing for taking up 49% interest in the JV Company if Fujian Jiake is unable to identify the potential joint venture partner prior to the date of the Transfer Notice

– 3 –

DEFINITIONS

• ‘‘Transfer Notice’’ the construction land use right transfer notice making by 西 安 市 新 城 區 國土 資 源 局 (The Bureau of Land and Resources of Xincheng District of Xi’an*) in relation to the Land

• ‘‘Undertaking’’ the undertaking provided by Mr. Guo to Fujian Sinco and Fuzhou Gaojia dated 7 August 2013 in respect of taking up 49% interest in the JV Company if Fujian Jiake is unable to identify the potential joint venture partner on or before 31 July 2014

• ‘‘Xi’an’’ the capital city of Shaanxi Province, the PRC

• ‘‘HK$’’ Hong Kong dollars, the lawful currency of Hong Kong ‘‘RMB’’ Renminbi, the lawful currency of the PRC ‘‘%’’ per cent.

For the purpose of this circular, conversion of RMB into HK$ is based on the exchange rate of RMB1 to HK$1.2. The exchange rate has been used, where applicable, for the purposes of illustration only and does not constitute a representation that any amount is or may have been exchanged at this or any other rates or at all.

• The English transliteration of the Chinese name(s) in this announcement, where indicated, is included for information purpose only, and should not be regarded as the official English name(s) of such Chinese name(s).

– 4 –

LETTER FROM THE BOARD

CHINA SANDI HOLDINGS LIMITED 中 國 三 迪 控 股 有 限 公 司

(incorporated in Bermuda with limited liability)

(Stock code: 00910)

Executive Directors: Mr. Chi Chi Hung, Kenneth Ms. Zhang Jianchan Ms. Amika Lan E Guo

Independent Non-Executive Directors: Dr. Wong Yun Kuen Mr. Chan Yee Ping, Michael Mr. Yu Pak Yan, Peter Mr. Zheng Jinyun Mr. Zheng Yurui

Registered office: Clarendon House 2 Church Street Hamilton HM 11 Bermuda

Head office and principal place of business in Hong Kong: Unit 3309 33/F., West Tower Shun Tak Centre 168–200 Connaught Road Central Hong Kong 27 August 2014

To the Shareholders,

Dear Sir or Madam,

PROPOSED VARIATIONS TO MAJOR AND CONNECTED TRANSACTIONS

INTRODUCTION

The purpose of this circular is to provide you with, among others, (i) details of the Supplemental Agreement and the transactions contemplated thereunder; (ii) the financial information of the Group; (iii) the advice of the independent financial adviser regarding the terms of the Supplemental Agreement and the transactions contemplated thereunder; (iv) the advice of the Independent Board Committee regarding the terms of the aforesaid transactions; (v) other information as required to be disclosed under the Listing Rules; and (vi) notice of the SGM.

Reference are made to the announcements of the Company dated 7 August 2013 and 2 October 2013 and the Previous Circular in relation to, inter alia, the formation of joint venture companies and acquisition of the land located at Xi’an for a property development project.

– 5 –

LETTER FROM THE BOARD

Reference is also made to the announcement of the Company dated 30 July 2014 regarding the proposed variations to major and connected transactions in relation to the Fujian Jiake JV Agreement.

BACKGROUND AND UPDATES ON FUJIAN JIAKE AND THE PROJECT

Upon the establishment of Fujian Jiake on 24 September 2013, Fujian Jiake entered the Final Cooperation Agreement with the Reconstruction Office. Pursuant to the terms of the Final Cooperation Agreement, Fujian Jiake is only required to pay refundable earnest monies in the amount of RMB120 million (equivalent to approximately HK$144 million) (previously in aggregate of RMB200 million (equivalent to approximately HK$240 million) as mentioned in the Previous Circular) to the Reconstruction Office within 7 days upon the signing of the Final Cooperation Agreement with an aim to demonstrate the capability and willingness of Fujian Jiake to the Reconstruction Office to participate in the Land Bidding. Fujian Jiake paid such earnest monies on 8 October 2013.

As disclosed in the Previous Circular, it is expected that Land Bureau will publish the Transfer Notice prior to 31 October 2014. In addition, Fujian Sinco and Fuzhou Gaojia will use its best endeavors to procure Fujian Jiake to set up a joint venture company, which will be owned as to 51% and 49% by Fujian Jiake and a potential joint venture partner, which is expected to be an Independent Third Party, respectively with a registered capital of RMB425 million (equivalent to approximately HK$510 million) for a term of 40 years for the development of the Project.

As understood from the Reconstruction Office, it shall take longer time for the relevant governmental departments to complete the relocation of the existing tenants including a hospital and a credit union from the Land. After assessing the progress, the Board expects that the Transfer Notice will not be published by 31 October 2014, the original expected publication date of the Transfer Notice and estimates that such relocation will be completed by no later than 31 October 2015.

In order to cope with the recent development in the Project, Fujian Sinco and Fuzhou Gaojia entered into the Supplemental Agreement to amend the capital contribution schedule for Fujian Jiake and Mr. Guo provided the Supplemental Undertaking to delay the latest time for him to take up the 49% interest in the JV Company if Fujian Jiake is unable to identify the potential joint venture partner prior to the date of the Transfer Notice.

– 6 –

LETTER FROM THE BOARD

THE TERMS OF THE SUPPLEMENTAL AGREEMENT AND THE SUPPLEMENTAL UNDERTAKING

The Supplemental Agreement

The principal terms of the Supplemental Agreement are as follows:

Date: 30 July 2014

Parties:

• (1) Fujian Sinco, an indirect wholly-owned subsidiary of the Company; and

• (2) Fuzhou Gaojia.

To the best information, knowledge and belief of the Directors after making necessary enquiries, Fuzhou Gaojia is a company incorporated in the PRC in 1999 with its headquarter situated at Fuzhou, the PRC. As at the Latest Practicable Date, Fuzhou Gaojia is owned as to approximately 96.51% and 3.49% by 郭氏投資集團有限公司 (Guo Shi Investment Group Co. Limited) (‘‘Guo Shi’’) and 福建艾建商貿有限公司 (Fujian Ai Jian Trading Co., Limited) (‘‘Fujian Ai Jian’’). Guo Shi is owned as to 95% and 5% by Mr. Guo and Mr. Guo Dehai (郭 德海), the father of Mr. Guo, respectively. Fujian Ai Jian is owned by the Independent Third Parties.

As at the date of the Latest Practicable Date, Mr. Guo is the single largest Shareholder indirectly interested in 200,000,000 Shares (by virtue of his beneficial interest in approximately 29.11% of the existing issued share capital of the Company as at the Latest Practicable Date) and the father of Ms. Amika Lan E Guo, the executive Director. Therefore, Fuzhou Gaojia is regarded as a connected person of the Company.

According to the original term of the Fujian Jiake JV Agreement, after Fujian Sinco and Fuzhou Gaojia contributing their respective 20% of the total capital contribution of RMB110 million (equivalent to approximately HK$132 million) and RMB106 million (equivalent to approximately HK$127.2 million) to Fujian Jiake, Fujian Sinco and Fuzhou Gaojia are required to contribute their respective remaining 80% of total capital contribution within 12 months from the date of establishment of Fujian Jiake (i.e. 24 September 2013) as shown on the business license of Fujian Jiake, but shall not be paid later than the time for Fujian Jiake required to pay the second tranche of the earnest monies of RMB80 million (equivalent to HK$96 million) as stipulated in the draft cooperation agreement to be entered with the Reconstruction Office as mentioned in the Previous Circular.

As at the Latest Practicable Date, Fujian Sinco and Fuzhou Gaojia have made capital contribution of RMB110 million (equivalent to approximately HK$132 million) and RMB21.2 million (equivalent to approximately HK$25.44 million) respectively, representing 100% and 20% of their respective total capital contribution as required under the Fujian Jiake JV Agreement.

– 7 –

LETTER FROM THE BOARD

To cope with the reduction in the amount of the earnest monies and the delay in timetable to carry out the Project, the aforesaid term regarding the capital contribution for Fujian Jiake contained in the Fujian Jiake JV Agreement is amended as ‘‘after contributing 20% of the respective total capital contribution by Fujian Sinco and Fuzhou Gaojia, they are required to contribute the remaining 80% of total capital contribution within 24 months from the date of establishment of Fujian Jiake (i.e. 24 September 2013) as shown on the business license of Fujian Jiake, but shall not be later than the date of the Transfer Notice’’.

As advised by the PRC Legal Adviser, according to the applicable requirements of the Company Law of the PRC, among other things, the shareholders of Fujian Jiake have the rights to amend the Articles of Fujian Jiake to cater for the aforesaid amendment, subject to obtaining the approval from two-third of the shareholders of Fujian Jiake. In addition, given the amendment made on the Fujian Jiake JV Agreement is mutually agreed by Fujian Sinco and Fuzhou Gaojia, such amendment is lawful and valid subject to, among other things, obtaining the approval from its shareholders for the proposed amendments on the Articles of Fujian Jiake and making necessary registrations or filings.

In addition, in view of Fujian Sinco has already made its entire contribution to Fujian Jiake, after arm’s length negotiation, it is agreed that Fuzhou Gaojia shall pay a fee to Fujian Jiake on any outstanding amount of the capital contribution due from it to Fujian Jiake at a rate of 6% per annum from time to time, which is determined with reference to the prevailing lending interest rates offered by the commercial banks in the PRC, and shall be payable on a quarterly basis. The Fee shall be calculated from 25 September 2014, being the date immediately after the latest date for Fuzhou Gaojia to make its Remaining Capital Contribution pursuant to the original term of the Fujian Jiake JV Agreement, onwards. The maximum Fee to be paid by Fuzhou Gaojia shall be amounted to approximately RMB5.1 million (equivalent to HK$6.1 million) to Fujian Jiake assuming Fuzhou Gaojia contributes its entire Remaining Capital Contribution by 24 September 2015.

Save for the above changes, all other terms of the Fujian Jiake JV Agreement shall remain unchanged.

Conditions of the Supplemental Agreement

The Supplemental Agreement shall be subject to the following conditions:

• (i) the passing of the relevant resolution(s) by the Independent Shareholders at the SGM approving the Supplemental Agreement and the transactions contemplated thereunder including the Supplemental Undertaking;

• (ii) obtaining the approval from two-third of the shareholders of Fujian Jiake to amend the Articles of Fujian Jiake to cater for the proposed amendments on the Supplemental Agreement and the transactions contemplated thereunder;

• (iii) all necessary registrations or filings, in respect of the amendments on the Articles of Fujian Jiake to cater for the proposed amendments on the Supplemental Agreement and transactions contemplated thereunder having been made; and

– 8 –

LETTER FROM THE BOARD

• (iv) Fujian Sinco having obtained and having been satisfied with the legal opinion issued by a PRC legal adviser confirming the legality of matters in connection with the Supplemental Agreement and the transactions contemplated thereunder.

In the event that the above conditions are not fulfilled on or before 31 December 2014 or such other date as may be agreed between the parties, the Supplemental Agreement will forthwith be of no further effect, in which case all the obligations of the parties will be released and the parties will have no claims against each other in respect of the Supplemental Agreement. For avoidance of doubt, Fujian Sinco and Fuzhou Gaojia shall act in accordance with the original terms of the Fujian Jiake JV Agreement.

The Supplemental Undertaking

As disclosed in the Previous Circular, Mr. Guo undertook that if Fujian Jiake is unable to identify the potential joint venture partner on or before 31 July 2014, he or company(ies) controlled by him will take up the 49% interest in the JV Company. In view of the delay in timetable for the Land Bidding, on 30 July 2014, Mr. Guo provided the Supplemental Undertaking to Fujian Jiake, Fujian Sinco and Fuzhou Gaojia, among other things, to undertake to take up the 49% interest in the JV Company if Fujian Jiake is unable to identify the potential joint venture partner prior to the date of the Transfer Notice. The Supplemental Undertaking shall become effective upon the completion of the Supplemental Agreement.

REASONS FOR AND BENEFITS OF THE SUPPLEMENTAL AGREEMENT AND THE SUPPLEMENTAL UNDERTAKING

Upon completion of the disposal of the traditional ecological forestry business in March 2014, the Group is principally engaged in holding of properties for investment and rental purpose and property development. Fujian Sinco is a company established in the PRC and an indirect wholly-owned subsidiary of the Company, which is principally engaged in investment, development, sale, lease, management of properties and other ancillary services in the PRC. The Directors are of the view that the continued participation in the Project by Fujian Sinco will generate long-term benefits to the business development of and revenue to the Group.

To maintain the cooperation relationship with Fuzhou Gaojia, Fujian Sinco agreed to enter into the Supplemental Agreement to amend the capital contribution schedule for Fujian Jiake and accept the proposed delay for the latest time for Mr. Guo to take up the 49% interest in the JV Company if Fujian Jiake is unable to identify the potential joint venture partner prior to the date of the Transfer Notice under the Supplemental Undertaking.

Given that the terms of the Supplemental Agreements and the Supplemental Undertaking are determined after arm’s length negotiation after taking into consideration of (i) the progress of the Projects, (ii) benefits to continue the Projects for the Group and (iii) the receipt of the Fee from Fuzhou Gaojia to Fujian Jiake, the Directors (including the independent nonexecutive Directors after taking into consideration of the advices and recommendation from Nuada, the independent financial adviser but excluding Ms. Amika Lan E Guo who had abstained from voting due to conflict of interest) consider the terms of the Supplemental Agreement and the Supplemental Undertaking are fair and reasonable and in the interests of the Shareholders as a whole.

– 9 –

LETTER FROM THE BOARD

POSSIBLE FINANCIAL EFFECTS OF THE ENTERING INTO OF THE SUPPLEMENTAL AGREEMENT AND THE SUPPLEMENTAL UNDERTAKING ON THE GROUP

The Directors consider that the entering into of the Supplemental Agreement and the Supplemental Undertaking will have no immediate material impact on the consolidated earnings or consolidated assets or liabilities of the Group, while the Fee will be received by Fujian Jiake and recorded as other income on the financial statement of Fujian Jiake.

IMPLICATIONS UNDER THE LISTING RULES

Pursuant to Rule 14.36 of the Listing Rules, any material variation of terms under the Fujian Jiake JV Agreement is subject to announcement requirement. Given the Board considers that the entering into the Supplemental Agreement and the transactions contemplated thereunder including the Supplemental Undertaking are material variations to the pervious major and connected transactions contemplated under the Fujian Jiake JV Agreement, the Company will voluntarily seek approval from Independent Shareholders at the SGM in respect the entering into the Supplemental Agreement and transactions contemplated thereunder and comply with the reporting, announcement and the independent shareholders’ approval requirements under Chapters 14 and 14A of the Listing Rules.

As Fuzhou Gaojia is controlled by Mr. Guo, who is the single largest Shareholder (by virtue of his beneficial interest in approximately 29.11% of the existing issued share capital of the Company as at the Latest Practicable Date) and the father of Ms. Amika Lan E Guo, the executive Director, and his associates, Fuzhou Gaojia is the connected person of the Company. Mr. Guo is also beneficially interested in 401,666,666 convertible preference shares of the Company conferring rights to subscribe for 401,666,666 Shares and the underlying shares of 20,558,642 from the conversion of convertible notes of the Company. Mr. Guo and his associates will abstain from voting in respect of the resolution(s) approving the entering into the Supplemental Agreement and transactions contemplated thereunder at the SGM. As Ms. Amika Lan E Guo is the executive Director, she had abstained from voting in respect of the Supplemental Agreement and transactions contemplated thereunder at the Board meeting. The Independent Board Committee, which comprises all the independent non-executive Directors, has been established to advise the Independent Shareholders in respect of the terms of the Supplemental Agreement and the transactions contemplated thereunder. An independent financial adviser, Nuada, has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the abovementioned transactions.

INDEPENDENT BOARD COMMITTEE AND INDEPENDENT FINANCIAL ADVISER

The Independent Board Committee comprising all the independent non-executive Directors, namely Dr. Wong Yun Kuen, Mr. Chan Yee Ping, Michael, Mr. Yu Pak Yan, Peter, Mr. Zheng Jinyun and Mr. Zheng Yurui, has been established to advise the Independent Shareholders regarding the terms of the Supplemental Agreement and the transactions contemplated thereunder. None of the members of the Independent Board Committee has a material interest in the Supplemental Agreement and the transactions contemplated thereunder.

– 10 –

LETTER FROM THE BOARD

Nuada has been appointed by the Company to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Supplemental Agreement and the transactions contemplated thereunder are fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole.

SGM

The SGM will be held at 11:00 a.m. on Tuesday, 16 September 2014 at 3/F., Nexxus Building, 77 Des Voeux Road Central, Hong Kong, for the purpose of considering, and if thought fit, approving the Supplemental Agreement and the transactions contemplated thereunder. The notice convening the SGM is set out on pages S-1 to S-2 of this circular and a form of proxy for use at the SGM is also enclosed with this circular.

To be valid, the enclosed form of proxy, together with any power of attorney or other authority under which it is signed must be completed in accordance with the instructions printed thereon and delivered to the Hong Kong share registrar and transfer office of the Company, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjourned meeting.

The completion and return of the form of proxy will not preclude you from attending and voting at the SGM or any adjourned meeting in person if you so wish and in such case, the form of proxy previously submitted by such member(s) shall be deemed to be revoked.

RECOMMENDATIONS

The Board believes that the Supplemental Agreement and the transactions contemplated thereunder are all in the best interest of the Company and the Shareholders as a whole. Accordingly, the Board recommends that the Independent Shareholders vote in favour of the resolution to be proposed at the SGM.

ADDITIONAL INFORMATION

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

Yours faithfully, By order of the Board Chi Chi Hung Kenneth Executive Director and Company Secretary

– 11 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

CHINA SANDI HOLDINGS LIMITED 中 國 三 迪 控 股 有 限 公 司

(incorporated in Bermuda with limited liability)

(Stock code: 00910)

27 August 2014

To the Independent Shareholders,

Dear Sir or Madam,

PROPOSED VARIATIONS TO MAJOR AND CONNECTED TRANSACTIONS

We refer to the circular to the Shareholders dated 27 August 2014 (the ‘‘Circular’’) of which this letter forms part. Terms defined in the Circular shall have the same meanings when used herein unless the context otherwise requires.

We have been authorised by the Board to form the Independent Board Committee to advise the Independent Shareholders on whether the terms of the Supplemental Agreement and transactions contemplated thereunder are on normal commercial terms, fair and reasonable and are in the interest of the Company and the Shareholders as a whole.

We wish to draw your attention to the letter from the Board set out in pages 5 to 11 of the Circular and the letter from Nuada, the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the Supplemental Agreement and the transactions contemplated thereunder, set out on pages 14 to 20 of the Circular.

Having considered the factors and reasons considered by and the opinion of Nuada stated in its letter of advice set out in the Circular, we are of the view that the terms of the Supplemental Agreement and the transactions contemplated thereunder are on normal commercial terms, fair and reasonable and are in the interests of the Company and the Shareholders as a whole.

– 12 –

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Supplemental Agreement and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of

Independent Board Committee

Dr. Wong Yun Kuen Mr. Chan Yee Ping, Michael Mr. Yu Pak Yan, Peter Independent non-executive Independent non-executive Independent non-executive Director Director Director Mr. Zheng Jinyun Mr. Zheng Yurui Independent non-executive Independent non-executive Director Director

– 13 –

LETTER FROM NUADA

The following is the full text of the letter of advice to the Independent Board Committee and Independent Shareholders from Nuada dated 27 August 2014 prepared for incorporation in this circular.

Unit 1805-08, 18/F OfficePlus@Sheung Wan 93-103 Wing Lok Street Sheung Wan, Hong Kong 香港上環永樂街93-103號 協成行上環中心18樓1805-08室

27 August 2014

• To the Independent Board Committee and the Independent Shareholders of China Sandi Holdings Limited

Dear Sirs,

PROPOSED VARIATIONS TO MAJOR AND CONNECTED TRANSACTIONS

INTRODUCTION

We refer to our appointment to advise the Independent Board Committee and the Independent Shareholders in respect of the terms of the Supplemental Agreement, details of which are set out in the letter from the Board (the ‘‘Letter’’) contained in the circular to the Shareholders dated 27 August 2014 (the ‘‘Circular’’), of which this letter forms part. Terms used in this letter have the same meanings as defined in the Circular unless the context requires otherwise.

On 30 July 2014 (after the trading hours), Fujian Sinco, an indirect wholly-owned subsidiary of the Company, entered into the Supplemental Agreement with Fuzhou Gaojia to amend the capital contribution schedule for Fujian Jiake. Pursuant to which, the latest date for Fujian Sinco and Fuzhou Gaojia to contribute the remaining 80% of total capital contribution was extended from within 12 months to 24 months from the date of establishment of Fujian Jiake (i.e. 24 September 2013) as shown on the business license of Fujian Jiake, but shall not be later than the date of the Transfer Notice.

Pursuant to Rule 14.36 of the Listing Rules, any material variation of terms under the Fujian Jiake JV Agreement is subject to announcement requirement. As stated in the Letter, the Board considers that the entering into the Supplemental Agreement and the transactions contemplated thereunder including the Supplemental Undertaking are material variations to the pervious major and connected transactions contemplated under the Fujian Jiake JV Agreement, the Company will voluntarily seek approval from Independent Shareholders at the SGM in respect the entering into the Supplemental Agreement and transactions contemplated thereunder and comply with the reporting, announcement and the independent shareholders’ approval requirements under Chapters 14 and 14A of the Listing Rules.

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LETTER FROM NUADA

Fuzhou Gaojia is controlled by Mr. Guo, who is the single largest Shareholder (by virtue of his beneficial interest in approximately 29.11% of the existing issued share capital of the Company as at the Latest Practicable Date) and the father of Ms. Amika Lan E Guo, the executive Director, and his associates, Fuzhou Gaojia is the connected person of the Company. Mr. Guo is also beneficially interested in 401,666,666 convertible preference shares of the Company conferring rights to subscribe for 401,666,666 Shares and the underlying shares of 20,558,642 from the conversion of convertible notes of the Company.

Mr. Guo and his associates will abstain from voting in respect of the resolution(s) approving the entering into the Supplemental Agreement and transactions contemplated thereunder at the SGM. As Ms. Amika Lan E Guo is the executive Director, she had abstained from voting in respect of the Supplemental Agreement and transactions contemplated thereunder at the Board meeting. The Independent Board Committee, which comprises all the independent non-executive Directors, has been established to advise the Independent Shareholders in respect of the terms of the Supplemental Agreement and the transactions contemplated thereunder.

The Independent Board Committee comprising all the independent non-executive Directors, namely Dr. Wong Yun Kuen, Mr. Chan Yee Ping, Michael, Mr. Yu Pak Yan, Peter, Mr. Zheng Jinyun and Mr. Zheng Yurui, has been established to advise the Independent Shareholders regarding the terms of the Supplemental Agreement and the transactions contemplated thereunder. None of the members of the Independent Board Committee has a material interest in the Supplemental Agreement and the transactions contemplated thereunder.

We, Nuada Limited, have been appointed by the Independent Board Committee as the independent financial adviser to give our independent opinion to the Independent Board Committee and the Independent Shareholders as to (i) whether the terms of the Supplemental Agreement are on normal commercial terms, fair and reasonable so far as the Independent Shareholders are concerned and are in the interests of the Company and the Shareholders as a whole; and (ii) how the Independent Shareholders should vote on the relevant resolution(s) to approve the Supplemental Agreement at the SGM.

BASIS OF OUR OPINION

In formulating our opinion, we have relied on the information, opinions and representations contained or referred to in the Circular and the information, opinions and representations provided to us by the management of the Company and the Directors. We have assumed that all information, opinions and representations contained or referred to in the Circular and all information, opinions and representations which have been provided by the management of the Company and the Directors, for which they are solely and wholly responsible, were true, accurate and complete at the time when they were made and continue to be so as at the Latest Practicable Date. Should there be any subsequent material changes which occurred during the period from the date of Circular up to the date of the SGM and would affect or alter our opinion, we will notify the Independent Board Committee and the Independent Shareholders as soon as possible.

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LETTER FROM NUADA

Accordingly, we have no reason to suspect that any material facts or information have been withheld or to doubt the truth, accuracy and completeness of the information and representations contained in the Circular and provided to us by the Company and the Directors, or the reasonableness of the opinions expressed by the management of the Company and the Directors. The Directors collectively and individually accept full responsibility for the accuracy of the information in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge and belief, opinions expressed in the Circular have been arrived at after due and careful consideration and there are no other facts the omission of which would make any statement in the Circular misleading. Furthermore, we relied on the Company that it has provided us with sufficient information to reach an informed view and to provide a reasonable basis for our opinion. We have relied on such information and opinions but have not, however, conducted any independent in-depth investigation into the business, financial conditions and affairs or the future prospects of the Group nor have we considered the taxation implication on the Group or the Shareholders as a result of entering of the Supplemental Agreement.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our recommendation in relation to the terms of the Supplemental Agreement, we have considered the following principal factors and reasons.

1. Reasons for and benefits of the Supplemental Agreement and the Supplemental Undertaking

2. a. Background information of the Group

According to the Letter, the Group is principally engaged in holding of properties for investment and rental purpose and property development in the PRC upon completion of the disposal of the traditional ecological forestry business in March 2014.

The table below tabulates the financial results of the Group for each of the two years ended 31 March 2014 as extracted from the Group’s annual report for the financial year ended 31 March 2014 (the ‘‘Annual Report’’).

	For the year	ended
	31 March
	2014	2013
	HK$’000	HK$’000
Revenue for continuing operations	130,798	118,658
Profit for the year from continuing operations	351,830	59,747

According to the management of the Company, the existing core business of the Group is property investment and property development in the PRC and the rental income and property management and related fee income derived from the invested property of the Group, a home improvement plaza, in Fuzhou, the PRC. As stated in the Annual Report, the Group recorded a rental income of approximately HK$46.7 million and property management and related fee income of approximately HK$84.1 million in

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LETTER FROM NUADA

financial year 31 March 2014 (‘‘FY 2014’’) whereas that for the same period in 2013 was approximately HK$43.7 million and approximately HK$75.0 million respectively. The occupancy rate of the aforesaid plaza was approximately 92.8% in FY 2014 whereas that for the same period in 2013 was approximately 81%. Based on the aforesaid financial record, we are of the view that the property investment business of the Group can provided stable return to the Group in the future.

The Group started to commence its property development business through the signing of the Fujian Jiake JV Agreement on 7 August 2013 with Fuzhou Gaojia, a company established in the PRC and controlled by Mr. Guo, the single largest Shareholders. The management of the Company consider that through the entering of the aforesaid agreement, the Group is able to capitalize on the experience of Mr. Guo and expertise of his companies and to participate in the property development business in Xi’an (development of the Land in Xi’an) and to grasp any other property development opportunities in the PRC in the future. According to the information provided by the management of the Company, we noted that Mr. Guo’s companies has over 14 years of experience in property development area and has developed 9 property projects in the PRC, including shopping mall, hotel complex, residential building and commercial building.

Based on the aforesaid, we are of the view and concur with the view of the Directors that the Group can capitalize the experience of Mr. Guo and expertise of his companies in the property development in the PRC and participate in the property development business in Xi’an.

b. The Supplemental Agreement and the Supplemental Undertaking

Please refer to the Letter for the detailed terms of the Supplemental Agreement and the Supplemental Undertaking.

The Project

According to management from the Company and the notice issued by the Reconstruction Office, we noted that it shall take longer time for the relevant governmental departments to complete the relocation of the existing tenants including a hospital and credit union from the Land. Based on the aforesaid, the management of the Company expected that the Transfer Notice will not be published by 31 October 2014 (i.e. the original expected publication date of the Transfer Notice). After discussion with the management of Fuzhou Gaojia who has plenty experience of property development in the PRC as stated above, the management of the Company consider that the expected date of the aforesaid relocation and the publication date of the Transfer Notice will be not later than 31 October 2015.

According to the Letter and the Final Cooperation Agreement, the Land would be developed for commercial usage. In order to find out the recent trend of the economic development of Xi’an, we review the recent economic performance of Xi’an. According to website of Shaanxi Provincial Bureau of Statistics (Xi’an is one of the cities in Shaanxi Province), we noted that (i) the dollar value of the fixed asset

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LETTER FROM NUADA

investment in Xi’an amounted to approximately RMB255 billion for the six month ended 30 June 2014 which represent an increase of approximately 17.5% when compared to that in the same period for previous year; (ii) the gross domestic product in Xi’an amounted to approximately RMB224.6 billion for the six month ended 30 June 2014 which represent an increase of approximately 10.0% when compared to that in the same period for previous year; and (iii) the dollar value of the spending on retail consumer products amounted to approximately RMB134.2 billion for the six month ended 30 June 2014 which represent an increase of approximately 12.9% when compared to that in the same period for previous year. Based on the aforesaid statistical information, we are of the view that the economic condition in Xi’an is experiencing a positive trend. Shareholders should note that since we cannot predict the future economic performance of Xi’an in certain, the aforesaid view are based on the recent economic data of Xi’an published by Shaanxi Provincial Bureau of Statistics.

The Supplemental Agreement

According to the Letter and the Supplemental Agreement, the amendment of the Fujian Jiake JV Agreement is the time schedule of the capital contribution of Fujian Jiake by both parties. The aforesaid amendment, which we extracted from the Letter, is as follow:

‘‘after contributing 20% of the respective total capital contribution by Fujian Sinco and Fuzhou Gaojia, they are required to contribute the remaining 80% of total capital contribution within 24 months from the date of establishment of Fujian Jiake (i.e. 24 September 2013) as shown on the business license of Fujian Jiake, but shall not be later than the date of the Transfer Notice’’

In view of Fujian Sinco has already made its entire contribution to Fujian Jiake according to the time schedule of the original term of Fujian Jiake JV Agreement, i.e. on or before 24 September 2014, it is agreed that Fuzhou Gaojia shall pay the Fee to Fujian Jiake on any outstanding amount of the capital contribution due from it to Fujian Jiake at a rate of 6% per annum from time to time. According to the Letter and the management of the Company, the Fee shall be calculated from 25 September 2014, being the date immediately after the latest date for Fuzhou Gaojia to make its Remaining Capital Contribution pursuant to the original term of the Fujian Jiake JV Agreement, onwards. The maximum Fee to be paid by Fuzhou Gaojia shall be amounted to approximately RMB5.1 million (equivalent to HK$6.1 million) to Fujian Jiake assuming Fuzhou Gaojia contributes its entire Remaining Capital Contribution by 24 September 2015.

Since (i) the amount of the Fee are calculated from the date immediately after the original payment due date according to the original term of the Fujian Jiake JV Agreement; and (ii) the rate of 6% is slightly higher than the loan prime rate in the PRC (5.76% per annum) according to the website of the Bank of China, we are of

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LETTER FROM NUADA

the view and concur with the view of the Directors that the rate of the interest of the Fee is reasonable and is in the interests of the Company and the Shareholders as a whole.

According to the final draft legal opinion prepared by the PRC Legal Adviser of the Company and discussion with the PRC Legal Adviser, we noted that (i) the amendment of the aforesaid time schedule of capital contribution to Fujian Jiake; and (ii) the aforesaid Fee is legal and enforceable according to《中華人民共和國公司法》 (Company Law of the People’s Republic of China),《中華人民共和國合同法》 (Contract Law of the People’s Republic of China) and《中華人民共和國民法通則》 (General Principal of the Civil Law of the People’s Republic of China).

Given that (i) the property development in the PRC is the core business of the Group; (ii) the Group is able to capitalize on the experience of Mr. Guo and expertises of his companies in property development area in the PRC and to participate in the property development business in Xi’an by entering the Fujian Jiake JV Agreement as stated in the paragraph headed ‘‘a. Background information of the Group’’ as stated above; (iii) the extension of the aforesaid time schedule of capital contribution can maintain the business cooperation relation with Fuzhou Gaojia; (iv) the positive trend of economic environment of Xi’an as stated in the paragraph headed ‘‘b. The Supplemental Agreement and the Supplemental Undertaking’’ as stated above; (v) the Fee to be received by Fujian Jiake as the fee for the extension of capital contribution by Fuzhou Gaojia according to the original term of the Fujian Jiake JV Agreement as stated above; and (vi) the amendment of the time schedule of capital contribution is legal and enforceable according to the relevant PRC laws, we are of the view and concur with the view of the Directors that the entering of the Supplemental Agreement is fair and reasonable and is in the interests of the Company and the Shareholders as a whole.

Supplemental Undertaking

As disclosed in the Previous Circular and the Letter, Mr. Guo undertook that if Fujian Jiake is unable to identify the potential joint venture partner on or before 31 July 2014, he or company(ies) controlled by him will take up the 49% interest in the JV Company. In view of the delay in timetable for the Land Bidding, on 30 July 2014, Mr. Guo provided the Supplemental Undertaking to Fujian Jiake, Fujian Sinco and Fuzhou Gaojia, among other things, to undertake to take up the 49% interest in the JV Company if Fujian Jiake is unable to identify the potential joint venture partner prior to the date of the Transfer Notice. The Supplemental Undertaking shall become effective upon the completion of the Supplemental Agreement.

Since (i) the entering of the Supplemental Agreement is in the interests of the Company and the Shareholders as a whole as stated above; (ii) the undertaking to take up the 49% interest in the JV Company by Fujian Gaojia if Fujian Jiake is unable to identify the potential joint venture partner prior to the date of the Transfer Notice would not affect the controlling position of Fujian Sinco in the JV Company; and (iii) the Supplemental Undertaking only extends the period of the Undertaking in

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LETTER FROM NUADA

parallel with the expected time period of Supplemental Agreement, the entering of the Supplemental Undertaking is reasonable and is in the interests of the Company and the Shareholders as a whole.

c. Possible financial effect

The entering into of the Supplemental Agreement and the Supplemental Undertaking will have no immediate material impact on the consolidated earnings or consolidated assets or liabilities of the Group. The Fees to be received by Fujian Jiake would increase the cash position of Fujian Jiake, which in turn increase the assets of the Company as the Company held 51% interest of Fujian Jiake.

RECOMMENDATION

Given that (i) the property development in the PRC is the core business of the Group; (ii) the Group is able to capitalize on the experience of Mr. Guo and expertise of his companies and to participate in the property development business in Xi’an by entering the Fujian Jiake JV Agreement as stated in the paragraph headed ‘‘a. Background information of the Group’’ as stated above; (iii) the extension of the aforesaid time schedule of capital contribution can maintain the business cooperation relation with Fuzhou Gaojia; (iv) the positive trend of economic environment of Xi’an as stated in the paragraph headed ‘‘b. The Supplemental Agreement and the Supplemental Undertaking above’’; (v) the Fee to be received by Fujian Jiake as the fee for the extension of capital contribution by Fuzhou Gaojia according to the original term of the Fujian Jiake JV Agreement as stated above; (vi) the amendment of the time schedule of capital contribution is legal according to the relevant PRC laws; (vii) the taking up of the 49% interest in the JV Company by Fujian Gaojia if Fujian Jiake is unable to identify the potential joint venture partner prior to the date of the Transfer Notice under the Supplemental Undertaking would not affect the controlling position of Fujian Sinco in the JV Company; and (viii) the Supplemental Undertaking only extends the period of the Undertaking in parallel with the expected time period of Supplemental Agreement, we are of the opinion that the terms of the Supplemental Agreement and Supplemental Undertaking are fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole. Accordingly, we recommend (i) the Independent Board Committee to advise the Independent Shareholders; and (ii) the Independent Shareholders, to vote in favor of the relevant resolutions at the SGM to approve the Supplemental Agreement and the Supplemental Undertaking and the transactions contemplated thereunder.

Yours faithfully, For and on behalf of Nuada Limited Kevin Wong Vice President

Mr. Kevin Wong is a person licensed under the SFO to carry out type 6 (advising on corporate finance) regulated activities under the SFO and regarded as a responsible officer of Nuada Limited and has over 11 years of experience in corporate finance industry.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group (i) for the year ended 31 March 2014 has been disclosed on pages 36 to 124 of the annual report of the Company for the year ended 31 March 2014; (ii) for the year ended 31 March 2013 has been disclosed on pages 34 to 120 of the annual report of the Company for the year ended 31 March 2013; and (iii) for the year ended 31 March 2012 has been disclosed on pages 32 to 112 of the annual report of the Company for the year ended 31 March 2012. All the above reports of the Company have been published on the website of the Stock Exchange (http://www.hkexnews.hk) and the website of the Company (http://www.chinasandi.com.hk/).

2. INDEBTEDNESS

At the close of business on 31 July 2014, being the latest practicable date for ascertaining the indebtedness of the Group prior to the printing of this circular, the Group had outstanding bank borrowings of approximately HK$718,800,000. Among these bank borrowings, there was a bank loan of HK$166,800,000 that was guaranteed by Mr. Guo and of HK$552,000,000 that was secured by a subsidiary’s investment property with carrying value of approximately HK$4,295,700,000.

Besides, the Group had outstanding borrowing from a third party of approximately HK$58,176,000, which was guaranteed by Mr. Guo and a company controlled by him.

In addition, the Group had zero coupon convertible notes in the principal amount of HK$61,675,926, which can be converted into Shares at an initial conversion price of HK$3 per conversion share (subject to adjustments) at any time during the period commencing from the date of issuance of the convertible notes.

Save as aforesaid and apart from intra-group liabilities, as at the close of business on 31 July 2014, the Group did not have other outstanding mortgages, charges, debentures or other loan capital, bank overdrafts or loans, other similar indebtedness, finance lease or hire purchase commitments, liabilities under acceptance or acceptance credits, guarantees or other material contingent liabilities.

3. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 March 2014, the date on which the latest published audited consolidated financial statements of the Company were made up.

4. WORKING CAPITAL

The Directors, after due and careful enquiry, are of the opinion that taking into account of the financial resources available to the Group including internally generated funds and the available banking facilities and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its present requirements, that is for at least the next twelve months from the date of this circular.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group has positioned the property investment and property development as its core businesses. For the year ended 31 March 2014, the Group recorded a turnover from its continuing operations of approximately HK$130.8 million (2013: HK$118.7 million), representing an increase of approximately 10.2% compared to that for the year ended 31 March 2013. The Group’s loss attributable to Shareholders was approximately HK$439.3 million, representing a basic loss per share of HK40 cents (2013: profit of HK$155.6 million representing a basic earnings per share of HK14 cents). The loss of the Group was mainly attributable to the loss arising from changes in fair value less costs to sell of biological assets and also loss of measurement of disposal group at initial recognition.

As the running costs of traditional ecological forestry business kept on rising and the granting of harvesting permit was very limited, the Group considered it was difficult to yield a reasonable return and no harvesting activities have been carried out during the year ended 31 March 2014. In March 2014, the Group completed to dispose the traditional ecological forestry business.

Looking forward, the Directors expect that the property investment business sector will continue to generate stable revenue and earnings to the Group and the property development business sector will generate additional revenue and earnings to the Group in future. In addition, the Directors will continue to identify new and appropriate business opportunities in the property investment and development business sectors.

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GENERAL INFORMATION

APPENDIX II

1. RESPONSIBILITY OF THE DIRECTORS

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Listing Rules for the purpose of giving information with regard to the Company. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this circular misleading.

2. DISCLOSURE OF INTERESTS

Directors and chief executives interests or short position in the Shares or short position in Shares and underlying Shares

As at the Latest Practicable Date, none of the Directors and chief executives of the Company or their associates had any interest or short position in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required (a) to be notified to the Company or the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) to be notified to the Company and the Stock Exchange pursuant to the requirements of the Model Code for Securities Transactions by Directors of Listed Issuers.

3. INTERESTS AND SHORT POSITIONS OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, according to the register kept by the Company pursuant to section 336 of SFO and so far as is known to the Directors or chief executive of the Company, the following persons (other than the Directors and the chief executive of the Company) had or were deemed or taken to have interests or short positions in the Shares or underlying shares (including any interests in options in respect of such capital), which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO:

			Approximate
			% of existing
		Number of Shares	issued share
		or underlying	capital in the
Name of Shareholder	Capacity	shares	Company
Mr. Guo	Interest of controlled	622,225,308 (L)	90.56
	corporations	(Note 1)
United Century International Limited	Beneficial owner	421,166,666 (L)	61.30
		(Note 2)

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GENERAL INFORMATION

APPENDIX II

			Approximate
			% of existing
		Number of Shares	issued share
		or underlying	capital in the
Name of Shareholder	Capacity	shares	Company
Acelead Limited	Beneficial owner	19,500,926 (L)	2.84
		(Note 3)
Deluxe Pacific Limited	Beneficial owner	1,057,716 (L)	0.15
		(Note 4)
King Partner Holdings Limited	Beneficial owner	180,500,000 (L)	26.27
		(Note 5)
Mrs. Chu Yuet Wah	Interest of controlled	42,500,000 (L)	6.19
	corporation	(Note 6)
Best China Limited	Beneficial owner	42,500,000 (L)	6.19
		(Note 7)

• (L) denotes a long position

Notes:

1. The 622,225,308 Shares include:

2. (a) the Shares of 200,000,000 and underlying shares of 221,166,666 from the conversion of convertible preference shares with principal amount of HK$663,499,998 held by United Century International Limited, which is wholly owned by Mr. Guo;

3. (b) the underlying shares of 19,500,926 from the conversion of convertible notes with principal amount of HK$58,502,778 held by Acelead Limited, which is wholly owned by Mr. Guo;

4. (c) the underlying shares of 1,057,716 from the conversion of convertible notes with principal amount of HK$3,173,150 held by Deluxe Pacific Limited, which is wholly owned by Mr. Guo; and

5. (d) the underlying shares of 180,500,000 from the conversion of convertible preference shares with principal amount of HK$541,500,000 held by King Partner Holdings Limited, which is wholly owned by Mr. Guo.

6. The 421,166,666 Shares include the shares of 200,000,000 and underlying shares of 221,166,666 from the conversion of convertible preference shares with principal amount of HK$663,499,998 held by United Century International Limited, which is wholly owned by Mr. Guo.

7. The underlying shares of 19,500,926 from the conversion of convertible notes with principal amount of HK$58,502,778 held by Acelead Limited, which is wholly owned by Mr. Guo.

8. The underlying shares of 1,057,716 from the conversion of convertible notes with principal amount of HK$3,173,150 held by Deluxe Pacific Limited, which is wholly owned by Mr. Guo.

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GENERAL INFORMATION

APPENDIX II

1. The underlying shares of 180,500,000 from the conversion of convertible preference shares with principal amount of HK$541,500,000 held by King Partner Holdings Limited, which is wholly owned by Mr. Guo.

2. The beneficial interests of Mrs. Chu Yuet Wah in 42,500,000 shares comprise corporate interest in 42,500,000 Shares, held through Best China Limited.

3. The entire issued share capital of Best China Limited is beneficially owned by Mrs. Chu Yuet Wah.

Saved as disclosed above, as at the Latest Practicable Date, the Company had not notified by any persons (other than the Directors of the Company and the chief executive of the Group) who had interests or short positions in the shares or underlying shares of the Company which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 2 and 3 Part XV of the SFO, or which were recorded in the register required to be kept by the Company under Section 336 of the SFO.

Save as disclosed above, as at the Latest Practicable Date, the Directors and the chief executive of the Company were not aware of any other person (other than the Directors and the chief executive of the Company) who had, or was deemed to have, interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO.

4. DIRECTORS’ INTEREST IN ASSETS AND/OR ARRANGEMENT

As at the Latest Practicable Date, there was no contract or arrangement subsisting in which any Director was materially interested and which was significant in relation to the business of the Group. As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which have been, since 31 March 2014 (being the date to which the latest published audited financial statements of the Group were made up), (i) acquired or disposed of by; or (ii) leased to; or (iii) proposed to be acquired or disposed of by; or (iv) proposed to be leased to, any member of the Group.

As at the Latest Practicable Date, none of the Directors or proposed Directors, directly or indirectly, had any interest in any assets which had since 31 March 2014 (being the date to which the latest published audited financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

5. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had a service contract with the Company which was not determinable by the Company within one year without payment of compensation, other than statutory compensation.

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GENERAL INFORMATION

APPENDIX II

6. COMPETING INTERESTS

Mr. Guo is the father and hence the associate of Ms. Amika Lan E Guo (‘‘Ms. Guo’’), who is an executive Director. As at the Latest Practicable Date, Mr. Guo owns and operates companies principally engaged in property development and investment businesses in the PRC (the ‘‘Competing Companies’’), mainly through Fuzhou Gaojia and 福建三迪房地產開發有限 公司 (Fujian Sandi Real Estate Development Co., Ltd.*), that may compete with the businesses of the Group. Accordingly, Ms. Guo is regarded as interested in the competing businesses of the Group.

The Directors are of the view that the Group can carry on its property investment and development businesses independently of and at arm’s length from the businesses of the Competing Companies as there is no direct competition with the Group.

Apart from the aforesaid, so far as the Directors are aware of, as at the Latest Practicable Date, none of the Directors, proposed directors or any of their respective associates had any interest in business which competes with or may compete with the businesses of the Group or had any other conflict of interests which any person has or may have with the Group.

7. LITIGATION

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.

8. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) have been entered into by any member of the Group within the two years immediately preceding the date of this circular that are or may be material:

• (a) the letter of intent entered into by the Company and an independent third party on 18 June 2013 for the purpose of negotiation with the Company and conduct due diligence review in relation to the possible disposal of Success Standard Investment Limited;

• (b) the letter of intent referred in (a) above was supplemented by the supplemental letter of intent entered into by the Company and the independent third party on 25 June 2013 to extend the due diligence review to six months;

• (c) the Fujian Jiake JV Agreement (as supplemented by a supplemental agreement dated 30 August 2013);

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GENERAL INFORMATION

APPENDIX II

• (d) the sale and purchase agreement dated 27 September 2013 (as supplemented by the supplemental agreement dated 25 October 2013) entered into between the Company, as the vendor and Billion Master Investment Limited (億霸國際有限公司), as the purchaser and Mr. Yang Jianbo* (楊劍波) as the purchaser’s guarantor in relation to the disposal of Success Standard Investments Limited and its subsidiaries;

• (e) the Final Cooperation Agreement; and

• (f) the Supplemental Agreement and the Supplemental Undertaking.

9. EXPERTS AND CONSENTS

The following are the names and qualifications of the experts who have given their opinions and advice which are included in this circular:

Name Qualification

Dominic K.F. Chan & Co. Certified Public Accountants to provide the comfort letter to confirm the sufficiency of working capital of the Group and to review the indebtedness statement contained in Appendix I of this circular

Nuada

a corporation licensed under the SFO to carry out type 6 (advising on corporate finance) regulated activity

As at the Latest Practicable Date, none of the above experts had any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, none of the above experts had any interest, direct or indirect, in the promotion of, or in any assets which since 31 March 2014, the date to which the latest published audited financial statements of the Group were made up, have been acquired or disposed of by or leased to, any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group.

Each of the above experts has given and has not withdrawn its written consent to the issue of this circular, with the inclusion of the references to its name and/or its opinion or report in the form and context in which they are included.

10. MISCELLANEOUS

• (a) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda and the head of office and principal place of business of the Company is at Unit 3309, 33/F., West Tower, Shun Tak Centre, 168–200 Connaught Road Central, Sheung Wan, Hong Kong.

– II-5 –

GENERAL INFORMATION

APPENDIX II

• (b) The branch share registrar and transfer office in Hong Kong is Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (c) The company secretary is Mr. Chi Chi Hung Kenneth. Mr. Chi is a fellow member of the Association of Chartered Certified Accountants in the United Kingdom, an associate member of the Hong Kong Institute of Certified Public Accountants, an associated member of the Hong Kong Institute of Chartered Secretaries and an associate member of the Institute of Chartered Secretaries and Administrators in the United Kingdom.

• (d) In the event of consistency, the English texts of this circular shall prevail their respective Chinese texts.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours on any weekday (except Saturdays and public holidays) at the head office and principal place of business of the Company in Hong Kong at Unit 3309, 33/F., West Tower, Shun Tak Centre, 168–200 Connaught Road Central, Sheung Wan, Hong Kong, from the date of this circular, up to and including the date of the SGM:

• (a) the memorandum of association and bye-laws of the Company;

• (b) the letter from the Independent Board Committee, the text of which is set out on pages 12 to 13 of this circular;

• (c) the letter of advice from Nuada, the text of which is set out on pages 14 to 20 of this circular;

• (d) the written consents referred to in paragraph headed ‘‘Experts and Consents’’ of this appendix;

• (e) the annual report of the Company for the two year ended 31 March 2013 and 31 March 2014 respectively;

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

• (g) this circular.

– II-6 –

NOTICE OF SGM

CHINA SANDI HOLDINGS LIMITED 中 國 三 迪 控 股 有 限 公 司

(incorporated in Bermuda with limited liability) (Stock code: 00910)

NOTICE IS HEREBY GIVEN that the special general meeting of China Sandi Holdings Limited (the ‘‘Company’’) will be held at 3/F., Nexxus Building, 77 Des Voeux Road Central, Hong Kong at 11:00 a.m. on Tuesday, 16 September 2014 for the purpose of considering and, if thought fit, passing, with or without modification, the following resolutions:

ORDINARY RESOLUTION

‘‘THAT:

the Supplemental Agreement, defined and described in the circular of the Company dated 27 August 2014 (the ‘‘Circular’’), a copy of the Supplemental Agreement marked ‘‘A’’, a copy of the Supplemental Undertaking marked ‘‘B’’ together with a copy of the Circular marked ‘‘C’’ being tabled before the meeting and initialed by the chairman of the meeting for identification purpose, and all transactions contemplated thereunder and in connection therewith, be and are hereby approved, ratified and confirmed; and any one director of the Company be and is hereby authorized for and on behalf of the Company to execute all such other documents and agreements and to do all such acts or things deemed by him to be incidental to, ancillary to or in connection with the matters contemplated under the Supplemental Agreement.’’

By order of the board of China Sandi Holdings Limited Chi Chi Hung Kenneth Executive Director and Company Secretary

Hong Kong, 27 August 2014

Registered Office: Principal Place of Business in Hong Kong: Clarendon House Room 3309 2 Church Street 33/F., West Tower Hamilton HM11 Shun Tak Centre Bermuda 168–200 Connaught Road Central Hong Kong

– S-1 –

NOTICE OF SGM

Notes:

1. A member entitled to attend and vote at the meeting convened by the above notice is entitled to appoint one or more proxy to attend and, on a poll, subject to the provisions of the bye-laws of the Company, vote in his stead. A proxy need not be a member of the Company.

2. In order to be valid, the form of proxy must be deposited together with a power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, at the office of the Company’s Hong Kong branch registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, No. 183 Queen’s Road East, Hong Kong not less than 48 hours before the time for holding the meeting or any adjourned meeting thereof.

– S-2 –