THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Finet Group Limited (the ‘‘Company’’), you should at once hand this circular together with the accompanying form of proxy to the purchaser or the transferee or to the bank, stockbroker or other agent through whom 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.

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

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FINET GROUP LIMITED 財華社集團有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 8317)

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS IN A PROPERTY HOLDING COMPANY

Financial Adviser to the Company

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

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A letter from the Board is set out on pages 5 to 15 of this circular. A letter from the Independent Board Committee containing its recommendation to the Independent Shareholders is set out on pages 16 to 17 of this circular. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders is set out on pages 18 to 37 of this circular.

A notice convening the SGM to be held at 30/F, Fortis Tower, 77–79 Gloucester Road, Wanchai, Hong Kong on Thursday, 30 September 2021 at 12: 30 p.m. (or immediately after the conclusion of an annual general meeting of the Company held at 12: 00 noon on the same day) is set out on pages SGM-1 to SGM-2 of this circular. Whether or not you are able to attend the SGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit it 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 as soon as possible and in any event not later than 48 hours before the time appointed for the holding of the SGM or any adjourned meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or at any adjourned meeting thereof should you so wish and, in such event, the relevant form of proxy shall be deemed to be revoked.

PRECAUTIONARY MEASURES FOR THE SGM

In view of the recent development of the global pandemic caused by the novel coronavirus (COVID-19) and the Prevention and Control of Disease (Prohibition on Group Gathering) Regulation (Chapter 599G of the Laws of Hong Kong), the Company will implement the following precautionary measures at the SGM, to ensure the safety of the Shareholders and other participants who will attend the SGM:

(i) seating at the SGM venue will be arranged to allow for appropriate social distancing;

(ii) at the entrance of the SGM venue, a compulsory body temperature check will be conducted on every person attending the SGM. Any person with a body temperature of over 37.3 degrees Celsius will not be admitted to the SGM venue;

(iii) no entry to the SGM venue is allowed for any attendee who is subject to quarantine order by the Government of the Hong Kong Special Administrative Region;

(iv) every attendee is required to wear a face mask at all times while within the SGM venue;

(v) should any attendee decline any of the abovementioned measures, the Company reserves the right to refuse to admit such person to the SGM; and (vi) no refreshments will be served and no corporate souvenirs will be provided at the SGM.

For the health and safety of the Shareholders, the Directors encourage them to exercise their right to vote at the SGM by appointing the Chairman of the SGM as their proxy instead of attending the SGM in person. Physical attendance is not necessary for the purpose of exercising the rights of the Shareholders.

10 September 2021

	Page
CHARACTERISTICS OF GEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	ii
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . .	16
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER . . . . . . . . . . . . . .	18
APPENDIX I — PROPERTY VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II — FINANCIAL INFORMATION OF THE GROUP . . . . . . . . . .	II-1
APPENDIX III — GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
NOTICE OF THE SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	SGM-1

– i –

CHARACTERISTICS OF GEM

GEM has been positioned as a market designed to accommodate small and mid-sized companies to which a higher investment risk may be attached than other companies listed on the Stock Exchange. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration.

Given that the companies listed on GEM are generally small and mid-sized companies, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM.

– ii –

DEFINITIONS

In this circular, unless the context otherwise requires, the following terms or expressions shall have the meanings set out below:

‘‘associates’’ has the meaning ascribed thereto in the GEM Listing Rules
‘‘Board’’ the board of Directors
‘‘Business Day(s)’’ a day (excluding Saturday, Sunday and other general holidays in Hong Kong and any day on which a tropical cyclone warning no.8 or above or a ‘‘black’’ rainstorm warning is hoisted at any time between 9: 00 a.m. and 5: 00 p.m.) on which licensed banks in Hong Kong are generally open for business
‘‘Company’’ Finet Group Limited, a company incorporated in the Cayman Islands and continued in Bermuda with limited liabilities and the issued Shares of which are listed on GEM
‘‘Completion’’ completion of the Disposal
‘‘Completion Date’’ the date which the conditions as set out in paragraph headed ‘‘2. The Provisional Agreement — Conditions precedent’’ in the letter from the Board in this circular are fulfilled or such other date to be agreed between the Vendor and Ms. Lo in writing
‘‘connected person(s)’’ has the meaning ascribed thereto under the GEM Listing Rules
‘‘Consideration’’ the consideration payable by Ms. Lo for the Sale Share and the Sale Debt in accordance with the terms of the Provisional Agreement as stated in paragraph headed ‘‘2. The Provisional Agreement — Consideration’’ in the letter from the Board in this circular
‘‘Controlling has the meaning ascribed thereto under the GEM Listing Rules Shareholder(s)’’
‘‘COVID-19’’
novel coronavirus (COVID-19), a coronavirus identified as the cause of an outbreak of respiratory illness
‘‘Director(s)’’ the director(s) of the Company
‘‘Disposal’’ the disposal of the Sale Share and the Sales Debt by the Vendor to Ms. Lo pursuant to the Provisional Agreement
‘‘Disposal Company’’ Maxon Management Limited (萬誠管理有限公司), a company incorporated in Hong Kong with limited liabilities on 24 September 2004 and an indirect wholly-owned subsidiary of the Company

– 1 –

DEFINITIONS

‘‘Financial Adviser’’ Messis Capital Limited, a corporation licensed to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), being the financial adviser to the Company in respect of the Provisional Agreement and the transactions contemplated thereunder
‘‘GEM’’ GEM operated by the Stock Exchange
‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM
‘‘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 Board the independent board committee of the Board, comprising all Committee’’ the independent non-executive Directors, established for the purpose of advising the Independent Shareholders on the Provisional Agreement and the transactions contemplated thereunder
‘‘Independent Financial Red Sun Capital Limited, a corporation licensed to carry out Adviser’’ type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong), being the independent financial adviser to the Independent Board Committee and the Independent Shareholders in respect of the Provisional Agreement and the transactions contemplated thereunder
‘‘Independent the Shareholders other than those who are required under the Shareholders’’ GEM Listing Rules to abstain from voting at the SGM for the resolutions approving the Provisional Agreement and the transactions contemplated thereunder
‘‘Latest Practicable Date’’
1 September 2021, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
‘‘Long Stop Date’’ 31 December 2021 or such date as the Vendor and Ms. Lo may agree in writing pursuant to the Provisional Agreement
‘‘Ms. Lo’’
Ms. Lo Yuk Yee, the ultimate Controlling Shareholder (as defined in the GEM Listing Rules), the chairman and the executive Director of the Company

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DEFINITIONS

‘‘Net Consideration’’ the amount of Consideration adjusted by the corresponding consideration adjustment of the Disposal Company as stated in paragraph headed ‘‘2. The Provisional Agreement — Consideration adjustment’’ in the letter from the Board in this circular
‘‘Net Tangible Asset/ the aggregate of all tangible assets of the Disposal Company Liabilities Value’’ which are readily convertible into cash or cash equivalents (excluding the Property, any intangible assets and other fixed assets and deferred tax), less the aggregate of all liabilities (actual, contingent or otherwise but excluding the Sale Debt and deferred tax) and provisions of the Disposal Company as at the Completion Date
‘‘Property’’ the property at Unit C, 11/F, Bank of East Asia Harbour View Center, Hong Kong, held by the Disposal Company which being disposed under the Disposal and further details of which are set forth in the paragraph headed ‘‘4. Information on the Disposal Company and the Property’’ in the letter from the Board in this circular
‘‘Provisional the provisional agreement for sale and purchase dated 13 August Agreement’’ 2021 entered into between the Vendor and Ms. Lo in relation to the Disposal
‘‘Sale Debt’’ all debts owing or incurred by the Disposal Company to the Vendor and its associates (if any) on or at any time as at the Completion Date which as at 31 March 2021, amounted to approximately HK$6.2 million according to the audited financial statements of the Disposal Company
‘‘Sale Share’’ 1 share of HK$1 each in the issued share capital of the Disposal Company, representing the entire issued share capital of the Disposal Company
‘‘SGM’’ the special general meeting of the Company to be convened to approve, among other things, the Provisional Agreement and the transactions contemplated thereunder
‘‘Shareholder(s)’’ holder(s) for the time being of the shares of the Company
‘‘Stock Exchange’’ the Stock Exchange of Hong Kong Limited
‘‘Valuer’’
Ascent Partners Valuation Service Limited, the valuer appointed by the Company to value the Property, and which is a company incorporated in Hong Kong

– 3 –

DEFINITIONS

‘‘Vendor’’ Source Mega Properties Limited (源利置業有限公司), a company incorporated in Hong Kong with limited liability on 11 January 2017 and an indirect wholly-owned subsidiary of the Company

‘‘Vendor Guarantor’’ the Company ‘‘%’’ per cent

– 4 –

LETTER FROM THE BOARD

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FINET GROUP LIMITED 財華社集團有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 8317)

Executive Directors: Ms. Lo Yuk Yee (Chairman) Mr. Lin Dongming

Independent non-executive Directors:

Mr. Wong Wai Kin Mr. Siu Siu Ling, Robert Mr. Leung Chi Hung

Registered office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Head office and principal place of business in Hong Kong: 30/F, Fortis Tower 77–79 Gloucester Road Wanchai Hong Kong

10 September 2021

To the Shareholders

Dear Sir/Madam,

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS IN A PROPERTY HOLDING COMPANY

1. INTRODUCTION

Reference is made to the announcement of the Company dated 13 August 2021 in relation to the Provisional Agreement and the Disposal.

The purpose of this circular is to provide you with the information, among other things, (i) details of the Provisional Agreement and the Disposal; (ii) other information as required to be disclosed under the GEM Listing Rules; (iii) the advice and recommendations from the Independent Board Committee to the Independent Shareholders in relation to the Provisional Agreement and the Disposal; (iv) the letter

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LETTER FROM THE BOARD

from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in relation to the Provisional Agreement and the Disposal; and (v) the notice of the SGM.

2. THE PROVISIONAL AGREEMENT

The major terms of the Provisional Agreement are as follows:

Date

13 August 2021 (after trading hours)

Parties

(i) Source Mega Properties Limited (源利置業有限公司), an indirect wholly-owned subsidiary of the Company, as the Vendor;
(ii) Ms. Lo, as the purchaser; and
(iii) the Company, as the Vendor Guarantor.

The Vendor is an indirect wholly-owned subsidiary of the Company and is principally engaged in investment holding. Ms. Lo is a connected person of the Company by virtue of her being the chairman, the executive Director and the Controlling Shareholder of the Company. The Disposal Company is a company incorporated in Hong Kong with limited liability, and is principally engaged in investment holding and the principal asset of the Disposal Company would be the Property. The Disposal Company is directly owned as to 100% by the Vendor.

Assets to be disposed

Pursuant to the Provisional Agreement, the Vendor conditionally agreed to sell and Ms. Lo conditionally agreed to purchase and take up an assignment of:

(i) the Sale Share, representing 100% of the entire issued share capital of the Disposal Company as at the Latest Practicable Date; and
(ii) the Sale Debt, being the right to all debts owing by the Disposal Company to the Vendor and its associates (if any) as at Completion Date. According to the audited financial statements of the Disposal Company, as at 31 March 2021, the Disposal Company was indebted to the Vendor and its associates, being the Vendor Guarantor and its subsidiaries, of approximately HK$6.2 million.

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LETTER FROM THE BOARD

Consideration

The Consideration for the Sale Share and the Sale Debt is approximately HK$58.0 million, which shall be payable in the following manner:

(i) a deposit in the amount of approximately HK$2.9 million (the ‘‘Deposit’’) has been paid on the date of the Provisional Agreement;
(ii) the balance of approximately HK$55.1 million will be paid upon the Completion (subject to the consideration adjustment as disclosed in the below paragraph); and
(iii) Ms. Lo shall have the right to offset the debts owing by the Group to her (the ‘‘Shareholder’s Loans’’) against any portion of the Consideration to be paid. As at 31 March 2021 and 31 July 2021, the Shareholder’s Loans owed by the Group to Ms. Lo amounted to approximately HK$33.5 million and HK$34.1 million, respectively.

Sets forth below the breakdown of the Shareholder’s Loans:

(a) In April 2019, the Group and Ms. Lo entered into a 2-year loan facility agreement for an unsecured and interest-free loan facility amount of approximately HK$15 million. In February 2021, the parties have subsequently renewed the 2-year loan facility agreement for an unsecured and interest-free loan facility amount of approximately HK$25 million. As at 31 March 2021 and 31 July 2021, the outstanding loan balances under the aforesaid loan facility agreement amounted to approximately HK$8.5 million and HK$8.5 million, respectively, which were drawn down by the Group of approximately HK$3.5 million in September 2019 and HK$5 million in February 2021 and were fully used as the Group’s working capital since the respective drawdown dates.
(b) As at 31 March 2019, 2020 and 2021 and 31 July 2021, the Group and Ms. Lo entered into the deeds of assignment whereas the Group, as the assignor, assigned certain liabilities of the Group (‘‘Assigned Liabilities’’) to Ms. Lo. The Assigned Liabilities being certain expenses incurred by the Group during the relevant financial years and were mainly comprised (i) the Group’s rental expenses payable to a related company of the Group which is beneficially owned by Ms. Lo; (ii) the remunerations payable to Ms. Lo as the chairman and executive Director of the Group; and (iii) the general and administrative expenses incurred by the Group and were paid by Ms. Lo on its behalf. As at 31 March 2021 and 31 July 2021, the outstanding loan balances under the aforesaid deeds of assignment amounted to approximately HK$25.0 million and HK$25.6 million, respectively, and were unsecured, interest-free and repayable in February 2023.

As confirmed by Ms. Lo, she intends to exercise the right to offset the Shareholder’s Loans against any portion of the Consideration to be paid.

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LETTER FROM THE BOARD

The Consideration was determined after arm’s length negotiation between the parties with reference to:

(i) the net assets value of the Disposal Company, with reference to the audited financial statements of the Disposal Company, in the amount of approximately HK$32.3 million as at 31 March 2021; and
(ii) the valuation of the Property, being approximately HK$50.4 million, as assessed on 31 July 2021 by the Valuer.

A valuation report of the Property is set out in Appendix I of this circular for your reference.

Guarantee

The Vendor Guarantor, as primary obligor and not merely as surety, hereby unconditionally and irrevocably guarantees to Ms. Lo, and shall, on the Completion Date, unconditionally and irrevocably guarantees to Ms. Lo and the Disposal Company, the due observance and performance by the Vendor of all the agreements, obligations, commitments and undertakings contained in the Provisional Agreement on the part of the Vendor to be observed and performed and that the warranties given or provided by the Vendor to Ms. Lo and/or the Disposal Company under the Provisional Agreement are true, accurate and correct and the Vendor Guarantor undertakes and agrees to indemnify Ms. Lo and the Disposal Company and keep Ms. Lo and the Disposal Company fully indemnified against all losses, costs, expenses and damages whatsoever which may be sustained by Ms. Lo and/or the Disposal Company by reason of or in connection with any failure of the Vendor to perform any of the guaranteed obligations or breach of any of the warranties.

Consideration adjustment

The Vendor undertakes to deliver to Ms. Lo or her solicitors at least five (5) days prior to the Completion Date the proforma accounts comprising a proforma profit and loss account of the Disposal Company for the period from the beginning of the current financial year to the Completion Date and a proforma balance sheet of the Disposal Company as at the Completion Date. If the Net Tangible Asset/Liability Value as shown in the proforma accounts are more or less than zero, the balance of the payment to be paid for settling the Consideration upon Completion shall be adjusted upwards or downwards (as the case may be) accordingly in the manner as follows:

(i) it shall be added to the balance all current and non-current tangible assets of the Disposal Company as shown in the proforma accounts including rentals receivable (if applicable) (up to and inclusive of the Completion Date), utilities and other miscellaneous deposits, prepaid rates and government rent, and other expenses relating to the Property (up to but exclusive of the Completion Date); and

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LETTER FROM THE BOARD

(ii) it shall be deducted from the balance all liabilities of the Disposal Company as shown in the proforma accounts (other than the Sale Debt and deferred tax).

The Vendor undertakes to deliver to Ms. Lo or her solicitors within 30 days from the Completion Date the financial statements audited by certified public accountants (practising) for the period from the beginning of the current financial year to the Completion Date. If the Net Tangible Asset/Liability Values as shown in the audited financial statements is more or less than the Net Tangible Asset/Liability Values as shown in the proforma accounts, Ms. Lo or the Vendor (as the case may be) shall pay the difference to the other party within five (5) days from the date of receipt of the audited financial statements.

Sets forth below the calculation of the estimated Net Consideration based on (i) the Consideration; and (ii) the Net Tangible Liabilities of the Disposal Company, with reference to its audited financial statements, as at 31 March 2021 with respect to the consideration adjustment:

Consideration Tangible assets of the Disposal Company as at 31 March 2021: Utility deposits associated with the Property Cash and cash equivalents Tangible liabilities of the Disposal Company as at 31 March 2021: Secured bank borrowings associated with the Property Net Tangible Liability Values as at 31 March 2021 Net Consideration as at 31 March 2021	HK$’000 33 36 69 (11,718)	HK$’000 58,000 (11,649) 46,351

As shown in the above table, the Net Tangible Liability Values of the Disposal Company were mainly the secured bank borrowings associated with the Property. Based on the total Net Tangible Liability Values of the Disposal Company, with reference to its audited financial statements, as at 31 March 2021 of approximately HK$11.6 million, the Net Consideration would be approximately HK$46.4 million.

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LETTER FROM THE BOARD

Conditions precedent

Completion of the Disposal is subject to and conditional upon, the fulfilment or waiver of (as the case maybe), the following conditions precedent:

(i) Ms. Lo having completed her due diligence reviews on the business, financial, legal and other aspects of the Disposal Company and satisfied with the results thereof;
(ii) the Vendor having procured the Disposal Company to give and prove a good title to the Property in accordance with Sections 13A and 13 of the Conveyancing and Property Ordinance (Cap. 219 of the Laws of Hong Kong);
(iii) the Provisional Agreement and the transactions contemplated thereunder having been approved by the Independent Shareholders at the SGM; and
(iv) the Company having completed the vetting and approval procedures required under the GEM Listing Rules in relation to the Disposal.
Save for condition precedent (iii) and (iv) above, Ms. Lo may at her absolute
discretion waive the other conditions precedent under the Provisional Agreement.

Pursuant to the terms of the Provisional Agreement, the Long Stop Date would be 31 December 2021. The Vendor and Ms. Lo shall negotiate in good faith and use all their respective reasonable endeavours to enter into a formal agreement for the Disposal on or before the Long Stop Date (or such later date as the Vendor and the Ms. Lo may agree in writing). In the event that the Vendor and Ms. Lo shall fail to reach agreement on the terms of the formal agreement on or before the Long Stop Date, the Provisional Agreement shall remain valid and of full force and effect and the parties hereto shall continue to fulfil their respective obligations.

In the event that any of the above conditions precedent is not fulfilled or waived (as the case maybe) on or before the Long Stop Date, Ms. Lo shall be entitled to cancel the transaction under the Provisional Agreement (the ‘‘Cancellation Right’’) and the Deposit shall be refunded (without interest) by the Vendor to Ms. Lo. As confirmed by Ms. Lo, she has no intention to cancel the transaction under the Provisional Agreement unless the conditions precedent (iii) and (iv) above are not fulfilled on or before the Long Stop Date.

Given that (a) the Disposal will not be further proceeded by the Group and Ms. Lo in the event that the conditions precedent (iii) and (iv) above are not fulfilled; (b) Ms. Lo, being the executive Director of the Group and the Controlling Shareholder, and her associates will be required to abstain from voting at the SGM on the resolution to approve the Provisional Agreement and the Disposal; (c) there would be no material adverse impact on the Group in the event that the Disposal is not going to proceed; (d) the Completion will be subject to the fulfillment of the conditions precedent (iii) that would protect the interests of the Company and the Shareholders as a whole; and (e)

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LETTER FROM THE BOARD

Ms. Lo confirmed that she has no intention to cancel the transaction before the Long Stop Date as aforesaid, the Directors (excluding the independent non-executive Directors who will express their view after considering the advice from the Independent Financial Adviser, and Ms. Lo who had abstained from voting on the relevant board resolution given Ms. Lo is considered to have material interest in the Disposal) consider that the terms of conditions precedent to be normal commercial terms and are fair and reasonable.

Completion

Completion shall take place within eight (8) Business Days following the date on which the last of the conditions precedent to the Provisional Agreements being fulfilled or waived (as the case may be) or such other date as the parties to the Provisional Agreements may agree in writing.

3. INFORMATION ON THE PARTIES

The Company is an investment holding company and its subsidiaries are principally engaged in (i) the development, production and provision of financial information, advertising and investor relationship service and technology solutions to corporate and retail clients in Hong Kong and the People’s Republic of China; (ii) provision of brokerage, underwriting and asset management services; (iii) money lending business; and (iv) property investments.

Ms. Lo, being the purchaser in respect of the Disposal, is the chairman, the executive Director and the Controlling Shareholder of the Company. Therefore, Ms. Lo is a connected person of the Company pursuant to Chapter 20 of the GEM Listing Rules.

The Vendor is a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company.

4. INFORMATION ON THE DISPOSAL COMPANY AND THE PROPERTY

The Disposal Company is a company incorporated in Hong Kong with limited liability on 24 September 2004 and is principally engaged in investment holding, which is wholly-owned by the Vendor and is indirectly wholly-owned by the Company. The principal asset of the Disposal Company would be the Property with a total saleable area of approximately 1,755 square foot located in Unit C, 11/F, Bank of East Asia Harbour View Center, Hong Kong. As at the Latest Practicable Date, the Property was left vacant.

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LETTER FROM THE BOARD

Set out below is a summary of the financial information of the Disposal Company for the two years ended 31 March 2020 and 2021 which were prepared in accordance with the Hong Kong Financial Reporting Standards:

		For the year	ended
		31 March
		2021	2020
		HK$’000	HK$’000
		(audited)	(audited)
Loss	before taxation	2,320	6,808
Loss	after taxation	2,325	6,907

As at 31 March 2021, the audited net assets of the Disposal Company was approximately HK$32.3 million.

The market value of the Property was approximately HK$50.4 million as at 31 July 2021 with reference to the property valuation report as set out in Appendix I of this circular.

5. REASONS FOR AND BENEFITS OF THE DISPOSAL

On 24 August 2017, the Group acquired the Disposal Company together with the Property from Pablos International Limited, a company incorporated in the British Virgin Islands with limited liability and was indirectly wholly-owned by Ms. Lo at the time, at a net consideration of approximately HK$36.2 million. Prior to the aforesaid acquisition, the Property was leased by the Group as its head office and had subsequently been used as the principal office for the Group’s securities business since the date of the aforesaid acquisition. The Group originally purchased the Disposal Company so that the Group could reduce the cash outflow related to office rental by utilising the Property as office for the Group’s securities business. However, the Group’s securities business has been experiencing a continuing downturn in recent years which was mainly due to the keen competition within the market. In view of the aforesaid downturn of the Group’s securities business, the Group decided to bring to a halt for the expansion of its securities business and has been gradually re-allocating the members of the securities business team to the Group’s current head office at Fortis Tower, Wanchai. The Property has been left vacant since June 2020. Despite the aforesaid downturn of the Group’s securities business, the Group has no intention to sell or cease its securities business or any of its current businesses in the near future.

Having considered that the Property is not essential for the Group’s future operation, the Disposal will not have a material adverse effect on the Group’s operation and therefore, the Group intended to realise the Property in order to relieve the financial burden for the administrative and running costs arising in the Property. The Group has attempted to sell or lease the Property to third parties and has appointed more than ten property agency companies, among which some are renowned real estate agency companies in Hong Kong, to arrange visits to the Property for the potential buyers and lessees since September 2020.

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LETTER FROM THE BOARD

However, it has been eventually coming to a halt after more than 90 visiting arrangements made by the Group given that there were no positive feedbacks from the potential buyers and lessees.

Upon the Completion, the Disposal Company together with its assets and liabilities, mainly the Property and the secured bank borrowings associated to the Property, will be transferred to Ms. Lo and Ms. Lo shall have the right to offset the Shareholder’s Loans against any portion of the Consideration to be paid. As such, the Disposal would enable the Group to (i) enhance the financial position of the Group by reducing the Group’s indebtedness; and (ii) reduce the financial reliance on Ms. Lo, being the Controlling Shareholder, by offsetting the Shareholder’s Loans. In addition, the net proceeds from the Disposal would also enable the Group to replenish its working capital and continue to focus on the expansion and development of its financial information, advertising and investor relationship service business.

The Directors have considered other alternatives to reduce the Group’s reliance on Ms. Lo including the raise of additional funds by debt financing or equity financing. However, having considered that (i) the Group’s fixed assets, being the Property and the investment properties of the Group, has already been pledged to the relevant banks for its bank loan facilities whereas the Group has fully utilised its bank loan facilities as at the Latest Practicable Date; (ii) the Group recorded net losses for five consecutive years ended 31 March 2021 which is considered to be difficult to raise additional funds by debt financing or equity financing; and (iii) the Property has been left vacant since June 2020 and no positive feedback from the potential buyers and lessees despite the efforts the Group put in to sell or lease the Property to third parties, the Directors are of the view that the Disposal is the most suitable way to reduce the Group’s reliance on Ms. Lo.

Having considered the above, the Directors (excluding the independent non-executive Directors who will express their view after considering the advice from the Independent Financial Adviser, and Ms. Lo who had abstained from voting on the relevant board resolution given Ms. Lo is considered to have material interest in the Disposal) consider that although the Disposal is not in the ordinary and usual course of business of the Group, the terms of the Provisional Agreement are fair and reasonable, and that the Disposal is on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

6. FINANCIAL EFFECT AND USE OF PROCEEDS

Upon Completion, the Company will cease to own any interest in the Disposal Company. The Disposal Company will cease to be a subsidiary of the Company and its assets, liabilities and financial results will no longer be consolidated into the financial statements of the Group.

The Group expects to record a net gain attributable to the Disposal of approximately HK$7.8 million, calculated taking into account the Consideration, the direct transaction costs attributable to the Disposal, the net assets value of the Disposal Company as at 31 March 2021 and the Sale Debt. The actual financial figures and financial effect resulted from the Disposal will be determined based on the financial position of the Disposal

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LETTER FROM THE BOARD

Company at Completion and subject to the review and final audit by the auditors of the Company upon Completion. The Company intends to utilise the net proceeds from the Disposal to replenish the Group’s working capital and for future business development.

7. GEM LISTING RULES IMPLICATION

As the highest of the applicable percentage ratios (as defined under the GEM Listing Rules) in respect of the Disposal exceeds 25% but is less than 75%, the Disposal constitute a major transaction of the Company and is therefore subject to the reporting, announcement and shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules.

As at the Latest Practicable Date, Ms. Lo, being the purchaser in respect of the Disposal, is the chairman, the executive Director and the Controlling Shareholder of the Company. Therefore, Ms. Lo is a connected person of the Company pursuant to Chapter 20 of the GEM Listing Rules. Accordingly, the Disposal constitutes a connected transaction of the Company and is therefore subject the reporting, announcement, circular and Independent Shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.

8. SGM

The notice convening the SGM to be held at 30/F, Fortis Tower, 77–79 Gloucester Road, Wanchai, Hong Kong on Thursday, 30 September 2021 at 12: 30 p.m. (or immediately after the conclusion of an annual general meeting of the Company held at 12: 00 noon on the same day) is set out on pages SGM-1 to SGM-2 of this circular. An ordinary resolution will be proposed at the SGM to consider and, if thought fit, to approve, among others, the Provisional Agreement and the Disposal. The resolution proposed to be approved at the SGM will be taken by poll and an announcement will be made by the Company after the SGM on the result of the SGM.

As disclosed in the paragraph headed ‘‘3. Information on the parties’’ above, Ms. Lo is a connected person of the Company. Accordingly, Ms. Lo and her associates will be required to abstain from voting at the SGM on the resolution to approve the Provisional Agreement and the Disposal. Save as aforesaid, none of the Shareholders will be required to abstain from voting at the SGM.

A form of proxy for use at the SGM is enclosed with this circular. Whether or not you are able to attend the SGM in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and deposit it 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 as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjourned meeting thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or at any adjourned meeting thereof should you so wish and, in such event, the form of proxy shall be deemed to be revoked.

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LETTER FROM THE BOARD

9. RECOMMENDATIONS

Taking into consideration of the reasons set out in the paragraph headed ‘‘5. Reasons for and benefits of the Disposal’’ above, the Directors (including the independent non-executive Directors who have expressed their views in the letter from the Independent Board Committee after taking into account the advice of the Independent Financial Adviser) consider that although the entering into the Provisional Agreement and the Disposal are not in the ordinary and usual course of the Group’s business, it is on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as far as the Company and the Shareholders are concerned. Accordingly, the Directors (including the independent non-executive Directors who have expressed their views in the letter from the Independent Board Committee after taking into account the advice of the Independent Financial Adviser) recommend the Independent Shareholders to vote in favour of the resolution to be proposed at the SGM to approve the Provisional Agreement and the Disposal.

Your attention is drawn to (i) the letter from the Independent Board Committee set out on pages 16 to 17 of this circular, (ii) the letter of advice from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders set out on pages 18 to 37 of this circular; and (iii) the information set out in the appendices of this circular.

Yours faithfully, By Order of the Board Finet Group Limited Lo Yuk Yee

Chairman and executive Director

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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FINET GROUP LIMITED 財華社集團有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 8317)

10 September 2021

To the Independent Shareholders

Dear Sir or Madam,

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS IN A PROPERTY HOLDING COMPANY

We refer to the circular (the ‘‘Circular’’) dated 10 September 2021 issued by the Company of which this letter forms part. Capitalised terms used in this letter shall have the same meanings as those defined in the Circular unless specified otherwise.

We have been formed to advise the Independent Shareholders in relation to the Provisional Agreement and the Disposal. Red Sun Capital Limited has been appointed by the Company as the Independent Financial Adviser to advise us in these regards. Details of its advice, together with the principal factors and reasons it has taken into consideration in giving its advice, are contained in its letter set out on pages 18 to 37 of the Circular. Your attention is also drawn to the letter from the Board and the additional information set out in the appendices to the Circular.

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

After taking into account the factors and reasons considered by the Independent Financial Adviser and its conclusion and advice, we concur with their views and consider that although the entering into the Provisional Agreement and the Disposal are not in the ordinary and usual course of the Group’s business, it is on normal commercial terms and are fair and reasonable and in the interests of the Company and the Shareholders as far as the Company and the Shareholders are concerned. Accordingly, we recommend that the Independent Shareholders should vote in favor of the resolution to be proposed at the SGM to approve the Provisional Agreement and the Disposal.

Yours faithfully For and on behalf of the Independent Board Committee

Mr. WONG Wai Kin Mr. SIU Siu Ling, Robert Mr. LEUNG Chi Hung Independent non-executive Directors

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of a letter of advice from Red Sun Capital Limited, the Independent Financial Adviser, to the Independent Board Committee and the Independent Shareholders for inclusion in this circular.

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Unit 3303, 33/F West Tower, Shun Tak Centre 168–200 Connaught Road Central Hong Kong

Tel: (852) 2857 9208 Fax: (852) 2857 9100

10 September 2021

To the Independent Board Committee and the Independent Shareholders of Finet Group Limited

Dear Sir/Madam,

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS IN A PROPERTY HOLDING COMPANY

INTRODUCTION

We refer to our appointment as the independent financial adviser to the Independent Board Committee and the Independent Shareholders in connection with the Disposal, details of which are set out in the letter from the Board (the ‘‘Letter from the Board’’) contained in the circular dated 10 September 2021 issued by the Company to the Shareholders (the ‘‘Circular’’), of which this letter forms part. Unless otherwise stated, capitalised terms used in this letter shall have the same meanings as those defined in the Circular.

With reference to the announcement of the Company dated 13 August 2021, on 13 August 2021 (after trading hours), the Vendor (an indirect wholly-owned subsidiary of the Company) and Ms. Lo entered into the Provisional Agreement, pursuant to which the Vendor conditionally agreed to sell and Ms. Lo conditionally agreed to purchase and take up an assignment of the Sale Share and the Sale Debt for the consideration of approximately HK$58.0 million (subject to adjustment) which shall be payable by Ms. Lo to the Vendor in cash.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

GEM LISTING RULES IMPLICATION

As the highest of the applicable percentage ratios (as defined under the GEM Listing Rules) in respect of the Disposal exceeds 25% but less than 75%, the Disposal constitutes a major transaction of the Company and are therefore subject to the reporting, announcement and shareholders’ approval requirements under Chapter 19 of the GEM Listing Rules. As at the Latest Practicable Date, Ms. Lo, being the purchaser in respect of the Disposal, is the chairman, the executive Director and the Controlling Shareholder of the Company. Therefore, Ms. Lo is a connected person of the Company pursuant to Chapter 20 of the GEM Listing Rules. Accordingly, the Disposal and the transactions contemplated thereunder will constitute connected transactions for the Company and is therefore subject the reporting, announcement, circular and Independent Shareholders’ approval requirements under Chapter 20 of the GEM Listing Rules.

THE INDEPENDENT BOARD COMMITTEE

The Independent Board Committee, comprising all three independent non-executive Directors, namely Mr. Wong Wai Kin, Mr. Siu Siu Ling, Robert and Mr. Leung Chi Hung, has been established to advise the Independent Shareholders. We have been appointed to advise the Independent Board Committee and the Independent Shareholders as to (i) whether the terms of the Provisional Agreement are fair and reasonable so far as the Independent Shareholders are concerned; (ii) whether the Provisional Agreement is conducted in the ordinary and usual course of business of the Group, on normal commercial terms, and in the interests of the Company and the Shareholders as a whole; and (iii) how the Independent Shareholders should vote on the resolution relating thereto to be proposed at the SGM, taking into account the recommendation of the Independent Financial Adviser.

INDEPENDENT FINANCIAL ADVISER

As at the Latest Practicable Date, we were independent of and not connected with the Group in accordance with Rule 17.92 of the GEM Listing Rules, and accordingly, we are qualified to give independent advice to the Independent Board Committee and the Independent Shareholders. Save for our appointment as the Independent Financial Adviser, we did not act as an independent financial adviser to the Group under the GEM Listing Rules in the past two years. Apart from the normal advisory fee payable to us in connection with our appointment as the Independent Financial Adviser, no arrangement exists whereby we shall receive any other fees or benefits from the Company.

BASIS OF OUR OPINION

In formulating our opinion, we have relied on the statements, information, opinions and representations contained in the Circular and the information and representations provided by the Company, the Directors and the management of the Company (the ‘‘Management’’). We have assumed that all statements, information, opinions and representations contained or referred to in the Circular, which have been provided by the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Company, the Directors and the Management (for which they are solely and wholly responsible), were true and accurate at the time they were made and continue to be so as at the Latest Practicable Date.

The Directors jointly and severally accept full responsibility for the accuracy of the statements, information and representations contained in the Circular and confirm, having made all reasonable enquiries, that to the best of their knowledge, opinions expressed in the Circular have been reasonably arrived at after due and careful consideration and there are no other material facts not contained in the Circular the omission of which would make any statement in the Circular misleading.

We consider that we have been provided with sufficient information in order to form a reasonable basis for our opinion. We have no reason to suspect that any relevant information has been withheld, nor are we aware of any facts or circumstances which would render the information provided and representations made to us untrue, inaccurate or misleading. We consider that we have performed all necessary steps to enable us to reach an informed view and to justify our reliance on the information provided so as to provide a reasonable basis for our opinion.

We have not, however, for the purpose of this exercise, conducted any independent verification, investigation or audit into the information provided by the Directors and the Management, business or affairs or future prospects of the Group and Ms. Lo and their respective shareholder(s) and subsidiaries or affiliates, and their respective history, experience and track records, or the prospects of the markets in which they respectively operate.

This letter is issued to the Independent Board Committee and the Independent Shareholders solely in connection with their consideration of the Provisional Agreement and, except for its inclusion in the Circular, is not to be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

PRINCIPAL FACTORS AND REASONS CONSIDERED

In arriving at our opinion and recommendation, we have taken into account the following principal factors and reasons set out below:

1. Background of the Group and the Property

1.1. Background of the Group

The principal activities of the Group are (i) the development, production and provision of financial information, advertising and investor relationship service and technology solutions to corporate and retail clients in Hong Kong and the PRC; (ii) provision of brokerage, underwriting and asset management services; (iii) money lending business; and (iv) property investments.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1.2. Financial information of the Group

As set out in the annual report of the Company for the years ended 31 March 2020 (the ‘‘2019/2020 Annual Report’’) and 31 March 2021 (the ‘‘2020/2021 Annual Report’’), the Group’s main source of revenue is advertising and investor relationship service income, which is the largest operating segment accounting for approximately 89.2%, 93.6% and 87.0% of the Group’s total revenue for the years ended 31 March 2019 (‘‘FY2019’’), 2020 (‘‘FY2020’’) and 2021 (‘‘FY2021’’), respectively.

Set out below is the summary of financial result of the Group as extracted from the 2019/2020 Annual Report and the 2020/2021 Annual Report:

	FY2019	FY2020	FY2021
	HK$’000	HK$’000	HK$’000
	(audited)	(audited)	(audited)
Revenue	19,637	25,991	17,901
— Financial information services,
advertising and investor
relationship services	17,518	24,324	15,578
— Property investment business	1,582	1,661	1,464
— Securities and futures business	274	6	856
— Money lending business	263	—	3
Gross profit	17,436	24,115	16,212
Loss attributable to owners of the
Company	(28,870)	(20,293)	(12,830)

As set out in the 2019/2020 Annual Report, the Group recorded revenue of approximately HK$26.0 million for FY2020, representing an increase of approximately 32.4% as compared to approximately HK$19.6 million for FY2019, which was mainly attributable to the increase in income from financial information services, advertising and investor relationship services of approximately HK$6.8 million.

As set out in the 2020/2021 Annual Report, the Group recorded revenue of approximately HK$17.9 million for FY2021, representing a decrease of approximately 31.1% as compared to approximately HK$26.0 million for FY2020, mainly due to the impact of COVID-19 which led to fewer event hosting activities and decreased the relevant revenue. Service income from provision of financial information service remained at a relatively low level during FY2021 as this revenue stream has scaled down in recently years. In addition, due to the keen competition within the market, the Group’s securities and futures business is still a challenging task in FY2021. Revenue during FY2021 is mainly arising from services rendered for securities transaction.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Set out below is the summary of consolidated financial position of the Group as extracted from the 2019/2020 Annual Report and the 2020/2021 Annual Report:

		As at 31 March
	2019	2020	2021
	HK$’000	HK$’000	HK$’000
	(audited)	(audited)	(audited)
Total assets	120,723	112,143	119,303
— Property, plant and equipment	55,696	53,448	51,843
— Investment properties	32,700	32,700	33,300
— Cash and cash equivalents	12,749	8,296	18,059
Total liabilities	52,351	56,032	75,940
— Borrowing — due within one year
or on demand	14,436	12,603	23,540
— Loan from shareholder	14,725	22,926	33,490
— Deferred tax liabilities	11,308	11,184	11,413
Net assets	68,342	56,111	43,363

As set out in the 2019/2020 Annual Report, as at 31 March 2020, the Group’s total assets mainly comprised of investment properties, which consisted of two properties located in Futian District, Shenzhen City, Guangdong Province, the PRC. There is no fair value change in investment property, which remained at the same valuation level of approximately HK$32.7 million during FY2020. The decrease in the Group’s total assets of approximately 7.1% from approximately HK$120.7 million to HK$112.1 million which was attributable to the combined decrease in the Group’s trade receivables and cash and cash equivalents during FY2020.

The Group’s total liabilities increased by approximately 7.0% from approximately HK$52.4 million to HK$56.0 million as at 31 March 2020, mainly due to an increase in loan from shareholder of approximately HK$8.2 million, from approximately HK$14.7 million as at 31 March 2019 to approximately HK$22.9 million as at 31 March 2020.

As set out in the 2020/2021 Annual Report, as at 31 March 2021, the Group’s total assets increased by approximately 6.4% from approximately HK$112.1 million to HK$119.3 million as at 31 March 2021, mainly due to the increase in the Group’s cash and cash equivalents of approximately HK$9.8 million. The Group’s total liabilities increased by approximately 35.5% to approximately HK$75.9 million as at 31 March 2021, which was mainly due to the combined increase in the Group’s borrowings due within one year or on demand and loans from shareholders of approximately HK$21.5 million, collectively, and loan from shareholder, being the largest component of total liabilities, was approximately HK$33.5 million as at 31 March 2021.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

1.3. Information on the Disposal Company and the Property

Set out below is a summary of key financial data of the Disposal Company:

	For the year	ended
	31 March
	2020	2021
	HK$’000	HK$’000
	(audited)	(audited)
Loss before taxation	(6,808)	(2,320)
Loss after taxation	(6,907)	(2,325)
Net assets	34,654	32,329

The principal asset of the Disposal Company would be the Property with a total saleable area of approximately 1,755 square foot located in Unit C, 11/F, Bank of East Asia Harbour View Center, Hong Kong. As at the Latest Practicable Date, the Property was left vacant.

2. Background of the Purchaser

Ms. Lo is the ultimate Controlling Shareholder (as defined in the GEM Listing Rules), the chairman, the executive Director of the Company, and a director of Maxon Management Limited (萬誠管理有限公司), a company incorporated in Hong Kong with limited liability.

3. Principal terms of the Provisional Agreement

We have reviewed the Provisional Agreement and assessed the following principal terms.

Date

13 August 2021 (after trading hours)

Parties

(i) Source Mega Properties Limited (源利置業有限公司), a company incorporated in Hong Kong and an indirect wholly-owned subsidiary of the Company, as the Vendor;
(ii) Ms. Lo, the ultimate Controlling Shareholder of the Company and a connected person of the Company, as the Purchaser; and
(iii) the Company, as the Vendor Guarantor.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

As set out in the Letter from the Board, the Vendor is an indirect wholly-owned subsidiary of the Company and is principally engaged in investment holding. Ms. Lo is a connected person of the Company by virtue of her being the chairman, the executive Director and the Controlling Shareholder of the Company. The Disposal Company is a company incorporated in Hong Kong with limited liability, and is principally engaged in investment holding and the principal asset of Disposal Company would be the Property. The Disposal Company is directly owned as to 100% by the Vendor.

3.1. Assets to be disposed

Pursuant to the Provisional Agreement, the Vendor conditionally agreed to sell and Ms. Lo conditionally agreed to purchase and take up an assignment of:

(i) the Sale Share, representing 100% of the entire issued share capital of the Disposal Company as at the Latest Practicable Date; and
(ii) the Sale Debt, being the right to all debts owing by the Disposal Company to the Vendor and its associates (if any) as at Completion Date. According to the audited financial statements of the Disposal Company, as at 31 March 2021, the Disposal Company was indebted to the Vendor and its associates, being the Vendor Guarantor and its subsidiaries, of approximately HK$6.2 million.

3.2. Consideration and payment arrangement

The Consideration for the Sale Share and the Sale Debt is approximately HK$58.0 million, which shall be payable in the following manner:

(i) the Deposit in the amount of approximately HK$2.9 million has been paid on the date of the Provisional Agreement;
(ii) the remaining balance of approximately HK$55.1 million will be paid upon the Completion (subject to the consideration adjustment as disclosed in the below paragraph); and
(iii) Ms. Lo shall have the right to offset the Shareholder’s Loans against any portion of the Consideration to be paid. As at 31 March 2021 and 31 July 2021, the Shareholder’s Loans owed by the Group to Ms. Lo amounted to approximately HK$33.5 million and HK$34.1 million, respectively.

Sets forth below are the breakdown of the Shareholder’s Loans:

(a) In April 2019, the Group and Ms. Lo entered into a 2-year loan facility agreement for an unsecured and interest-free loan facility amount of approximately HK$15.0 million. In February 2021, the parties have subsequently renewed the 2-year loan facility agreement for an unsecured and interest-free loan facility amount of approximately HK$25.0 million. As at 31 March 2021 and 31 July 2021, the outstanding loan balances under the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

aforesaid loan facility agreement amounted to approximately HK$8.5 million and HK$8.5 million, respectively, which were initially drawn down by the Group of approximately HK$3.5 million in September 2019 and approximately HK$5.0 million in February 2021 and were fully used up as the Group’s working capital since the respective drawdown dates.

(b) As at 31 March 2019, 2020 and 2021 and 31 July 2021, the Group and Ms. Lo entered into the deeds of assignment whereas the Group, as the assignor, assigned certain liabilities of the Group to Ms. Lo, being certain expenses incurred by the Group during the relevant financial years and were mainly comprised of (i) the Group’s rental expenses payable to a related company of the Group which is beneficially owned by Ms. Lo; (ii) the remunerations payable to Ms. Lo as the chairman and executive Director of the Group; and (iii) the general and administrative expenses incurred by the Group and were paid by Ms. Lo on its behalf. As at 31 March 2021 and 31 July 2021, the outstanding loan balances under the aforesaid deeds of assignment amounted to approximately HK$25.0 million and HK$25.6 million, respectively, and were unsecured, interest-free and repayable in February 2023.

As confirmed by Ms. Lo, she intends to exercise her right to offset the Shareholder’s Loans against any portion of the Consideration to be paid.

The Consideration was determined after arm’s length negotiation between the parties with reference to:

(i) the net assets value of the Disposal Company, with reference to the audited financial statements of the Disposal Company, in the amount of approximately HK$32.3 million as at 31 March 2021; and
(ii) the valuation of the Property, being approximately HK$50.4 million, as assessed on 31 July 2021 by an independent valuer appointed by the Company.

3.3. Guarantee

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3.4. Consideration adjustment

(i) it shall be added to the balance all current and non-current tangible assets of the Disposal Company as shown in the proforma accounts including rentals receivable (if applicable) (up to and inclusive of the Completion Date), utilities and other miscellaneous deposits, prepaid rates and government rent, and other expenses relating to the Property (up to but exclusive of the Completion Date); and
(ii) it shall be deducted from the balance all liabilities of the Disposal Company as shown in the proforma accounts (other than the Sale Debt and deferred tax).

The Vendor undertakes to deliver to Ms. Lo or her solicitors within 30 days from the Completion Date the financial statements audited by certified public accountants (practising) for the period from the beginning of the current financial year to the Completion Date. If the Net Tangible Asset/Liability Values as shown in the audited financial statements is more or less than the Net Tangible Asset/Liability Value as shown in the proforma accounts, Ms. Lo or the Vendor (as the case may be) shall pay the difference to the other party within five (5) days from the date of receipt of the audited financial statements.

We have reviewed and discussed with the Management the calculation of the estimated Net Consideration and understand that the Net Consideration was calculated based on (i) the Consideration; and (ii) the Net Tangible Liabilities of the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Disposal Company, with reference to its audited financial statements as at 31 March 2021 with respect to the consideration adjustment. Details of the calculation of the Net Consideration is set out below:

Consideration Tangible assets of the Disposal Company: Utility deposits associated with the Property Cash and cash equivalents Tangible liabilities of the Disposal Company: Secured bank borrowings associated with the Property Net Tangible Liability Values Net Consideration	As at 31 March 2021 HK$’000 HK$’000 58,000 33 36 69 (11,718) (11,649) 46,351

As shown in the above table, the Net Tangible Liability Values of the Disposal Company were mainly the secured bank borrowings associated with the Property. Based on the total Net Tangible Liability Values of the Disposal Company, with reference to its audited financial statements as at 31 March 2021 of approximately HK$11.6 million, the Net Consideration would be approximately HK$46.4 million.

As set out in the Letter from the Board, we understand that the above consideration adjustments (the ‘‘Consideration Adjustment’’) would be mainly determined as a result of the differences among the Consideration, the Net Tangible Asset/Liability Value as shown in the proforma accounts and audited financial statements. Moreover, we also understand that the Consideration Adjustment will be based on rentals and utility deposit, and other miscellaneous deposits, bank borrowings, accruals, receipt in advance, and liabilities for other expenses relating to the Property up to but exclusive of the Completion Date.

In assessing whether the Consideration Adjustment is a common practice for property related transaction in Hong Kong, we have conducted searches on the Stock Exchange website (www1.hkexnews.hk) and identified seven circulars published during a period of 12 months ended on and including 13 August 2021, being the date of the entering into of the Provisional Agreement, which are related to notifiable transactions that involved disposal of Hong Kong property(ies), by companies listed on the main board of the Stock Exchange (the ‘‘Main Board’’) and GEM. We note that the adjustment of consideration of those identified transactions are in line with the Consideration Adjustment that the consideration would be adjusted based on any

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

differences among their consideration, net assets value in their proforma account and net assets value in their audited account, as a result, to reflect the updated net assets value of the subject companies as at completion of the transactions.

Having considered that the Consideration Adjustment (i) is principally based on the net assets value of the Disposal Company as at the Completion Date which adjusts for the other assets or other liabilities which will be taken up by Ms. Lo upon Completion on a dollar-for-dollar basis; (ii) is a common practice for similar disposal transactions done by listed companies in Hong Kong; and (iii) will protect the interest of the Company as the Consideration will be based on the Net Tangible Asset/Liability Values as shown in the audited financial statements rather than the proforma accounts, which may not reflect the net assets value of the Disposal Company accurately, we consider that the Consideration Adjustment is fair and reasonable.

3.5. Conditions precedent

Completion of the Disposal is subject to and conditional upon, the fulfilment or waiver of (as the case may be), the following conditions precedent:

(i) Ms. Lo having completed her due diligence reviews on the business, financial, legal and other aspects of the Disposal Company and satisfied with the results thereof;
(ii) the Vendor having procured the Disposal Company to give and prove a good title to the Property in accordance with Sections 13A and 13 of the Conveyancing and Property Ordinance (Cap.219 of the Laws of Hong Kong);
(iii) the Provisional Agreement and the transactions contemplated thereunder having been approved by the Independent Shareholders at the SGM; and
(iv) the Company having completed the vetting and approval procedures required under the GEM Listing Rules in relation to the Disposal.

Save for condition precedent (iii) and (iv) above, Ms. Lo may at her absolute discretion waive the other conditions precedent under the Provisional Agreement.

As set out in the Letter from the Board and pursuant to the terms of the Provisional Agreement, the Long Stop Date would be 31 December 2021. The Vendor and Ms. Lo shall negotiate in good faith and use all their respective reasonable endeavours to enter into a formal agreement for the Disposal on or before the Long Stop Date (or such later date as the Vendor and the Ms. Lo may agree in writing). In the event that the Vendor and Ms. Lo shall fail to reach agreement on the terms of the formal agreement on or before the Long Stop Date, the Provisional Agreement shall remain valid and of full force and effect and the parties hereto shall continue to fulfil their respective obligations.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In the event that any of the above conditions precedent is not fulfilled or waived (as the case may be) on or before the Long Stop Date, Ms. Lo shall be entitled to the Cancellation Right and the Deposit shall be refunded (without interest) by the Vendor to Ms. Lo. We understand from the Management that prior to the entering into of the Provisional Agreement, the Company has explored alternative channels to the Disposal including, among others, to release the Property to secondary real estate market through certain agency arrangements. However, the Company has subsequently discovered that there were no positive feedbacks from the potential buyers or the potential consideration from the secondary real estate market was proven unsatisfactory. The Company is therefore of the view that selling the Property in secondary real estate market, in comparison to the Disposal, is not in the interests of the Company and the Shareholders as a whole. As such, we concur with the Company that in light of the aforesaid attempt and discovery, the Provisional Agreement is the most commercially sound channel for the sale of the Disposal Company as at the Latest Practicable Date and Ms. Lo has no intention to cancel the transaction under the Provisional Agreement subject to the fulfilment of conditions precedent (iii) and (iv) above on or before the Completion Date.

As set out in the Letter from the Board, given that (a) the Disposal will not be further proceeded by the Group and Ms. Lo in the event that the conditions precedent (iii) and (iv) above are not fulfilled; (b) Ms. Lo, being the executive Director of the Group and the Controlling Shareholder, and her associates will be required to abstain from voting at the SGM on the resolution to approve the Provisional Agreement and the Disposal; (c) there would be no material adverse impact on the Group in the event that the Disposal is not going to proceed; and (d) the Completion will be subject to the fulfillment of the conditions precedent (iii) that would protect the interests of the Company and the Shareholders as a whole; and (e) Ms. Lo confirmed that she has no intention to cancel the transaction before the Completion Date as aforesaid, the Directors (including the independent non-executive Directors, and Ms. Lo who had abstained from voting on the relevant board resolution given Ms. Lo is considered to have material interest in the Disposal) consider that the terms of conditions precedent to be normal commercial terms and are fair and reasonable.

As the Disposal is a major transaction that involves disposal of property by a Hong Kong listed company, we have visited the website of the Stock Exchange and identified 10 circulars published by companies listed on the Stock Exchange for major transactions that involved disposal of Hong Kong property(ies) by Hong Kong listed company during a period of 12 months ended on and including 13 August 2021, being the date of the entering into of the Provisional Agreement and noted that the conditions precedent in the majority of those circulars are in line to those in the Provisional Agreement.

Therefore, we are of the view that the conditions precedent were reached on the basis of normal commercial terms and is fair and reasonable to the Disposal.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

3.6. Completion

Pursuant to the Provisional Agreement, Completion shall take place within eight (8) Business Days following the date on which the last of the conditions precedent to the Provisional Agreements being fulfilled or waived (as the case may be) or such other date as the parties may agree in writing.

4. Valuation of the Property

Pursuant to the Letter from the Board, the valuation of the Property (the ‘‘Valuation’’) conducted by Ascent Partners Valuation Service Limited, being an independent professional valuer appointed to conduct a valuation on the Property (the ‘‘Valuer’’), is one of the factors in determining the Consideration. Given that the Disposal is a transaction regarding disposal of a property through a property holding company, we consider that the Consideration referencing to the property valuation is fair and reasonable. According to the Valuation Report, details of which are set out in Appendix I to the Circular, the market value of the Property amounted to approximately HK$50.4 million as at 31 July 2021.

When assessing the fairness and reasonableness of the valuation, we have reviewed the Valuation Report and discussed with the Valuer in relation to (i) the methodology and assumptions used in performing the valuation on the Property as well as whether such methodology and assumptions are appropriate and acceptable; (ii) their scope of work for conducting the valuation on the Property; and (iii) their relevant professional qualifications as a property valuer.

4.1. Valuation methodology

We noted from the Valuation Report that approach adopted by the Valuer was direct comparison method where comparison based on prices realised on actual sales price of comparable properties with similar size, character, and location to the Property, which are analysed and carefully weighed against all the respective advantages and disadvantages of each property in order to arrive at a fair comparison of values. According to the Valuer, in an open market where relatively abundant market information is available, the direct comparison method is deemed to be the most appropriate valuation approach for assessing the market value of the Property.

We have conducted, on a best effort basis, independent research on 31 circulars in relation to connected and/or major and/or very substantial transactions involving acquisition or disposal of (i) property assets held for sale or (ii) those companies available for sale with property assets (irrespective of the size of the transaction) published by companies listed on the Main Board and GEM over a period of 12 months ended on and including 13 August 2021, being the date of the entering into of the Provisional Agreement (the ‘‘Review Period’’). Considering that (i) recent transactions are more relevant to support the latest market practice of valuation; and (ii) all the selected samples used similar valuation methodology for their respective

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

properties, we are of the view that the 12 months review period is reasonable to assess whether direct comparison method is an appropriate valuation approach and that the number of selected samples is exhaustive and representative for our assessment.

We have obtained from the Valuer the information of the comparable properties and discussed with the Valuer. We noted that the comparable properties are located within the surrounding area of the Property and with similar usage. According to the Valuer, it has carried out thorough market research of available comparables and selected six comparable properties transactions (the ‘‘Comparable Properties’’). We understood from the Valuer that such selection criteria were commonly used in valuation practice and were considered as fair and reasonable, as they were the most relevant comparables for the purpose of the valuation. We noted that the selection of Comparable Properties had taken into account, among other, (i) time of the relevant transactions, being within approximately six months to the Valuation Date; (ii) location, which are mainly in Wanchai or nearby, where the Property is located; (iii) designated usage and grading; (iv) year of completion of construction; (v) facilities equipped; and (vi) price of the relevant transactions, which ranging from approximately HK$25,000 to HK$34,000 per square foot on saleable area (representing a mean price of approximately HK$27,000 per square foot and a median price of approximately HK$27,000 per square foot). After taking into account on the above-mentioned factors, the Valuer had adjusted the unit rate of the Property to HK$29,000 per square foot approximately. The total saleable area of the Property is approximately 1,755 square foot, representing a valuation figure of HK$50.4 million.

We also understand from the Valuer that it has adopted six comparables which are all located in Wanchai and Admiralty area and were transacted in a period of 6 months ended on and including 13 August 2021, being the date of the entering into of the Provisional Agreement. Afterwards, adjustments were made on (i) macro factors including, among others, time and location; and (ii) other microscopic factors between each of the Comparable Properties including, among others, building age, floor level, view and availability of facilities such as number of lifts (collectively, the ‘‘Valuation Adjustment Factors’’), which resulted in a percentage range of adjustments amongst the Comparable Properties of approximately +/- 11 to 27%.

In light of the above, taking into account the Valuation Adjustment Factors and their effects on the range of adjusted prices of the Comparable Properties, we are of the view that the Comparable Properties are appropriate for the Valuation, and we concur with the Valuer that the direct comparison method is appropriate and common to determine the market value of the Property.

As set out in the Valuation Report, the Valuer had carried out title searches at the Land Registry for the property interests located in Hong Kong and has been, in some instances, provided with the extracts of the documents relating to the Property. However, the Valuer has not verified ownership of the Property to verify the existence of any amendments which do not appear on the copies handed to the Valuer.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

4.2. Valuation basis and assumptions

We noted that the valuation of the Property represents its market value, which is defined 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 accordance with the HKIS Valuation Standards (2020 Edition) published by The Hong Kong Institute of Surveyors.

In conducting the Valuation, the Valuer has made assumptions, unless otherwise stated, that (i) the seller of the Property sells the property interests on the open market in their existing states without the benefit of a deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements, which could serve to affect the values of the property interests; (ii) transferable land use rights in respect of the property interests for specific terms at nominal annual land use fees have been granted and that any premium payable has already been fully paid; (iii) the owner of the Property have enforceable titles to the Property and have free and uninterrupted rights to use, occupy or assign the Property for the whole of the respective unexpired terms as granted; (iv) the property interests are free from encumbrances, restrictions and outgoings of an onerous nature, which could affect their values; and (v) the areas shown on the copies of documents handed to the Valuer are correct.

We also noted that the Valuer relied on the information given by the Group and have accepted advice from the Group on such matters, in particular, but not limited to, the sales records, tenure, planning approvals, statutory notices, easements, particulars of occupancy, site and floor areas and all other relevant matters in the identification of the property interests, on the basis that no material factors have been omitted from the information supplied as advised by the Group.

Based on our independent research, we noted that the above basis and assumptions are commonly adopted in the property valuation performed for similar properties of other listed companies on the Stock Exchange. As such, we are of the view that the basis and assumptions adopted for the valuation of the Property are fair and reasonable.

4.3. Valuer’s scope of work and competence

Having reviewed the scope of work of the Valuer detailed in its engagement letter, we are of the view that the scope of work is appropriate to the opinion required to be given and we are not aware of any limitation on the scope of work which might adversely impact on the degree of assurance given by the Valuation Report.

We have reviewed the Valuer’s qualification and experience in relation to the preparation of the Valuation Report and noted that the Valuer is a leading professional services firm that specialises in real estate with extensive experience in property valuation. In particular, the principal signing off the Valuation Report is (i) a Professional Member of The Hong Kong Institute of Surveyors and a Registered

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Professional Surveyor (General Practice Division) who has over 10 years of experience in the valuation of Property in Hong Kong and the PRC; and (ii) a valuer on the List of Property Valuers for Undertaking Valuations for Incorporation or Reference in Listing Particulars and Circulars and Valuations in Connection with Takeovers and Mergers published by The Hong Kong Institute of Surveyors.

4.4. Summary of the property valuation

In consideration of the above, we are of the view that (i) the valuation methodology adopted by the Valuer is a common approach for valuation of the Property; (ii) the valuation basis and assumptions adopted by the Valuer are fair and reasonable; (iii) the scope of work of the Valuer is sufficient and appropriate for performing the valuation on the Property; and (iv) the Valuer has sufficient experience and competency to perform the valuation of the Property. As such, we are of the view that the valuation of the Property by the Valuer is fair and reasonable.

Taking into account the factors discussed above, we are of the view that the Consideration, which reflects a premium of approximately 15.1% to the valuation of the Property under the Valuation Report, is fair and reasonable and in the interests of the Company and Shareholders as a whole.

5. Fairness and reasonableness of the Net Consideration

In determining the fairness of the Net Consideration of approximately HK$46.4 million, resulted from the deduction of Net Tangible Liabilities Value of approximately HK$11.6 million from the Consideration of approximately HK$58.0 million (details are set out in the paragraph headed ‘‘3.4. Consideration adjustment’’ in this letter), we have compared the Net Consideration to the fair transaction value for the Disposal Company. Upon our assessments on the balance sheet of the Disposal Company, we noted that (i) the majority of the Disposal Company’s assets is represented by the fair value of the Property of approximately HK$50.4 million as at 31 July 2021, making up approximately 99.9% of the total assets of the Disposal Company as at 31 July 2021 and (ii) save for the secured bank borrowings associated with the Property of approximately HK$11.1 million, being approximately 59.8% of the Disposal Company’s liabilities, the aggregate amount due to subsidiaries of the Group by the Disposal Company of approximately HK$7.0 million made up approximately 37.5% of the Disposal Company’s total liabilities, which we further understand such liabilities are for the purpose of facilitating part of the Disposal Company’s working capital for its general expenses. Taking into account its level of net assets value as set out in its unaudited management accounts as at 31 July 2021, the fair value for the Disposal is calculated to be approximately HK$38.9 million (the ‘‘Transaction Value’’) which represents:

(a) the net assets value of the Disposal Company of approximately HK$31.9 million according to the unaudited management accounts of the Disposal Company as at 31 July 2021;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(b) adding back the aggregate amount due to subsidiaries of the Group by the Disposal Company of approximately HK$7.0 million according to the unaudited management accounts of the Disposal Company as at 31 July 2021;

In light of the above, taking into account the abovementioned nature of the assets and liabilities of the Disposal Company and that the Net Consideration of approximately HK$46.4 million is higher by approximately HK$7.5 million as compared to the Transaction Value of approximately HK$38.9 million, we consider that the Net Consideration for the Disposal is 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.

6. Reasons for and benefits of entering into the Provisional Agreement

The Group is principally engaged in (i) the development, production and provision of financial information, advertising and investor relationship service and technology solutions to corporate and retail clients in Hong Kong and the PRC; (ii) provision of brokerage, underwriting and asset management services; (iii) money lending business; and (iv) property investments.

As set out in the Letter from the Board, on 24 August 2017, the Group acquired the Disposal Company together with the Property from Pablos International Limited, a company incorporated in the British Virgin Island with limited liability and was indirectly wholly-owned by Ms. Lo at the time, at a net consideration of approximately HK$36.2 million. Prior to the aforesaid acquisition, the Property was leased by the Group as its head office and had subsequently been used as the principal office for the Group’s securities business since the date of the aforesaid acquisition. The Group originally purchased the Disposal Company so that the Group could reduce the cash outflow related to office rental by utilising the Property as office for the Group’s securities and futures business. However, the Group’s securities and futures business has been experiencing a continuing downturn in recent years which was mainly due to the keen competition within the market.

In view of the aforesaid downturn of the Group’s securities business, the Group decided to bring to a halt for the expansion of its securities business and has been gradually re-allocating the members of the securities business team to the Group’s current head office at Fortis Tower, Wanchai. The Property has been left vacant since June 2020. Despite the aforesaid downturn of the Group’s securities business, the Group has no intention to sell or cease its securities business or any of its current businesses in the near future. In light of the foregoing, the Group intended to realise the Property in order to relieve the financial burden for the administrative and running costs arising in the Property.

Furthermore, as disclosed above and in the Letter from the Board, the Group has attempted to sell or lease the Property to third parties and has appointed more than ten property agency companies, among which some are renowned real estate agency companies in Hong Kong, to arrange visits to the Property for the potential buyers and lessees since September 2020, which has eventually come to a halt after more than 90 visiting arrangements made by the Group given that there were no positive feedbacks from the potential buyers and lessees.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Upon the Completion, the Disposal Company together with its assets and liabilities, mainly the Property and the secured bank borrowings associated with the Property, will be transferred to Ms. Lo and Ms. Lo shall have the right to offset the Shareholder’s Loans against any portion of the Consideration to be paid. In assessing the reasons for and benefits of the Disposal, we have considered the following factors:

(i) the Disposal enhances the financial position of the Group by reducing the Group’s indebtedness in relation to the Property;
(ii) the Disposal reduces the Group’s financial reliance on Ms. Lo, being the Controlling Shareholder, by offsetting the Shareholder’s Loans, which amount to approximately HK$34.1 million as at the Latest Practicable Date;
(iii) as set out in the circular of the Company dated the 4 August 2017, the office located at the Property was intended for the operation of the Group’s securities and futures business. We further understand from the Management that, the Disposal can enhance the Group’s cost-control in its securities and futures business by relocating its operations from the office at the Property to the Group’s main office at 30/F, Fortis Tower, 77–79 Gloucester Road, Wanchai, Hong Kong, due to the high competition within the securities and futures business market and the relatively premature revenue model of the Group’s securities and futures business, which led to declining segment revenue;
(iv) the remaining net proceeds from the Disposal would also enable the Group to replenish its working capital and continue to focus on the expansion and development of its financial information, advertising and investor relationship service business, being the largest operating segment accounting for approximately 89.2%, 93.6% and 87.0% of the Group’s total revenue for FY2019, FY2020 and FY2021, respectively; and
(v) by entering into the Provisional Agreement, the Group will not be required to engage a property agent to seek and identify another potential purchaser. As such, the Group will further save agency fees that may arise if the Group were to conduct the Disposal through a property agent.

The Directors have considered other alternatives to reduce the Group’s reliance on Ms. Lo including the raise of additional funds by debt financing or equity financing. However, having considered that (i) the Group’s fixed assets, being the Property and the investment properties of the Group, has already been pledged to the relevant banks for its bank loan facilities whereas the Group has fully utilised its bank loan facilities as at the Latest Practicable Date; (ii) the Group recorded net losses for five consecutive years ended 31 March 2021 which is considered to be relatively difficult to raise additional funds by debt financing or equity financing; and (iii) the Property has been left vacant since June 2020 and no positive feedback from the potential buyers and lessees despite the efforts the Group put in to sell or lease the Property to third parties, the Directors are of the view that the Disposal is the most suitable way to reduce the Group’s reliance on Ms. Lo.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

In addition to the above, we have reviewed research reports published by leading global real estate service providers in relation to office property market in Hong Kong, which include ‘‘Hong Kong Office Leasing — July 2021’’ prepared by Savills[1] , ‘‘Hong Kong Property Market Monitor — July 2021’’ prepared by Jones Lang LaSalle[2] and ‘‘Hong Kong MarketBeat — Q2 2021’’ prepared by Cushman & Wakefield[3] (collectively, the ‘‘Research Reports’’).

The Research Reports generally provide up-to-date information in relation to and their respective views on the office property market in Hong Kong, in which we note that the prices and rents of offices in the first quarter of 2021 have continued their declining trends, in particular the effective rents of Grade A offices in Wan Chai/Causeway Bay district dropped by approximately 3.0% quarter-on-quarter, marking the eighth consecutive quarterly decline, mainly due to (i) slow recovery in business activity level as an after-effect of COVID-19; (ii) the closure of co-working spaces in compliance with social-distancing restriction imposed by the government; (iii) the downsizing or relocation of financial institutions and business service providers; and (iv) the additional supply of over 1,600,000 square foot of Grade A offices in Hong Kong Island indicated by construction completion pipeline by the end of the fourth quarter of 2023.

We further note that those Research Reports are of relatively conservative views on the outlook of the office property market of Hong Kong in the foreseeable future, and the relevant results from the Research Reports are in line with the results obtained from Rating and Valuation Department (the ‘‘R&V Department’’) as discussed below.

Taking into account that the Research Reports might not be sufficiently objective in providing a true and fair view on the property market in Hong Kong, we conducted further research on the data available from the website of the R&V Department (www.rvd.gov.hk) and note that the rental and price indices for Grade A private offices in Wan Chai/Causeway Bay districts has been in an overall stable declining trend from approximately 248.8 as of June 2020 to approximately 230.3 as of June 2021, represented an year-on-year decrease of approximately 7.43%.

Moreover, we further note that the price index of Grade A private office in core districts (including Sheung Wan/Central, Wan Chai/Causeway Bay and Tsim Sha Tsui as defined and released by the R&V Department) was at the level of approximately 587.7 as of June 2020, while at the time when the Valuer arrived at the valuation of HK$50.4 million as at 31 July 2021, the price index of Grade A private office in core districts has decreased to the level of approximately 453.7 as of June 2021, represented a decrease of approximately 22.8%. We are of the view that such decrease reflected the relatively limited growth potential of the Grade A private office in core districts and the conservative market sentiment towards the office property market in business districts as a whole.

1 https://pdf.savills.asia/asia-pacific-research/hong-kong-research/hong-kong-office/off06–2021.pdf

2 https://www.jll.com.hk/content/dam/jll-com/documents/pdf/research/apac/ap/hong-kong-propertymarket-monitor-July-2021-en.pdf

3 https://cw-gbl-gws-prod.azureedge.net/-/media/cw/marketbeat-pdfs/2021/q2/apac-and-gc/ hong-kong-office-q2–2020-en.pdf?la=en&rev=54d72cabb0dc430daf58521f99ef46d4&hash= 5A750D722E70BB63EA4CF38E54A23AFC

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Having considered the above, the Directors consider that, although the Disposal is not in the ordinary and usual course of business of the Group, the terms of the Provisional Agreement are fair and reasonable, and that the Disposal is on normal commercial terms and in the interests of the Company and the Shareholders as a whole.

7. Financial effects of the Disposal and use of proceeds

Based on the consideration of Sale Share and the Sale Debt, the net assets value of the Disposal Company as at 31 March 2021, and the relevant transaction costs of the Disposal, the Group is expected to record a net gain attributable to the Disposal of approximately HK$7.8 million. The Company intends to utilise the net proceeds from the Disposal to replenish the Group’s working capital and for future business development.

The exact amount of the gain on the Disposal to be recorded in the consolidated financial statements of the Group for the year ending 31 March 2022 is subject to the review and final audit by the auditors of the Company. It will be calculated based on the net book value of the Property as at the date of the completion of the Disposal, net of any incidental expenses, and therefore may differ from the estimated amount of the gain set out above.

RECOMMENDATION

In view of the above principal factors and reasons, we are of the view that (i) the terms of the Provisional Agreement and the transactions contemplated thereunder are fair and reasonable; and (ii) although the entering into of the Provisional Agreement and the transactions contemplated thereunder are not in the ordinary and usual course of business of the Group, but are on normal commercial terms, and are in the interests of the Company and its Shareholders as a whole.

Accordingly, we recommend the Independent Shareholders, as well as the Independent Board Committee to advise the Independent Shareholders, to vote in favour of the resolution to be proposed at the SGM for the approval of the Disposal.

Yours faithfully, For and on behalf of Red Sun Capital Limited Robert Siu Managing Director

Mr. Robert Siu is a licensed person registered with the SFC and a responsible officer of Red Sun Capital Limited to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the SFO and has over 22 years of experience in the corporate finance industry

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APPENDIX I

PROPERTY VALUATION REPORT

The following is the text of a letter, summary of values and valuation certificates prepared for the purpose of incorporation in this Circular received from Ascent Partners Valuation Service Limited, an independent valuer, in connection with its valuation as at 31 July 2021 of the property interests held by the Group.

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Room 2102, 21/F Hong Kong Trade Centre 161–167 Des Voeux Road Central Hong Kong www.ascent-partners.com Tel: (852) 3679–3890 Fax: (852) 3579–0884

10 September 2021

The Board of Directors Finet Group Limited 30/F, Fortis Tower, 77–79 Gloucester Road Wan Chai Hong Kong

Dear Sir/Madam

INSTRUCTIONS

In accordance with your instructions for us to value the property interests (the ‘‘Property’’) located in Hong Kong which are held by Finet Group Limited (the ‘‘Company’’) or its subsidiaries (the ‘‘Group’’). We confirm that we have carried out property inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of the property interests as at 31 July 2021 (the ‘‘Valuation Date’’) for the purpose of incorporation in the Circular of the Company dated 10 September 2021.

This letter which forms part of our valuation report explains the basis and methodologies of valuation, clarifying assumptions, valuation considerations, title investigation and limiting conditions of this valuation.

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APPENDIX I

PROPERTY VALUATION REPORT

BASIS OF VALUATION

Our valuation of the property interests represents the market value (‘‘Market Value’’) which is defined 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 accordance with the HKIS Valuation Standards (2020 Edition).

Market Value is understood as the value of an asset or liability estimated without regard to costs of sale or purchase (or transaction) and without offset for any associated taxes or potential taxes.

In valuing the Property, we have complied with all the requirements set out in Chapter 8 of the Rules Governing the Listing of Securities on GEM of the Stock Exchange of Hong Kong Limited and the HKIS Valuation Standards (2020 Edition) published by The Hong Kong Institute of Surveyors.

VALUATION METHODOLOGY

We have valued the property interests on market basis and the direct comparison method is adopted where comparison based on prices realised on actual sales price of comparable property is made. Comparable properties of similar size, character, and location are analyzed and carefully weighted against all the respective advantages and disadvantages of each property in order to arrive at a fair comparison of values.

TITLE INVESTIGATION

We have carried out title searches at the Land Registry for the property interests located in Hong Kong. We have been, in some instances, provided with the extracts of the documents relating to the Property. However, we have not verified ownership of the Property to verify the existence of any amendments which do not appear on the copies handed to us. All documents have been used for reference only.

VALUATION ASSUMPTIONS

Our valuations have been made on the assumption that the seller sells the property interests on the open market in their existing states without the benefit of a deferred term contracts, leasebacks, joint ventures, management agreements or any similar arrangements, which could serve to affect the values of the property interests.

In undertaking our valuation, we have assumed that, unless otherwise stated, transferable land use rights in respect of the property interests for specific terms at nominal annual land use fees have been granted and that any premium payable has already been fully paid. We have also assumed that the owner of the Property have enforceable titles to the Property and have free and uninterrupted rights to use, occupy or assign the Property for the whole of the respective unexpired terms as granted.

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APPENDIX I

PROPERTY VALUATION REPORT

No allowance has been made in our report for any outstanding or additional land premium, charges, mortgages or amounts owing on the property interests valued nor for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the property interests are free from encumbrances, restrictions and outgoings of an onerous nature, which could affect their values.

VALUATION CONSIDERATIONS

We have relied to a considerable extent on information provided by the Group and have accepted advice given to us on such matters, in particular, but not limited to, the sales records, tenure, planning approvals, statutory notices, easements, particulars of occupancy, site and floor areas and all other relevant matters in the identification of the property interests. We have had no reason to doubt the truth and accuracy of the information provided to us by the Group. We have also been advised by the Group that no material factors have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view, and we have no reason to suspect that any material information has been withheld.

We have inspected the exterior and, wherever possible, the interior of the Property but no structural survey had been made. In the course of our inspection, we did not note any serious defects. We are not, however, able to report that the Property is free from rot, infestation or any other structural defects. Further, no test has been carried out on any of the building services. All dimensions, measurements and areas are only approximate. We have not been able to carry out detailed on-site measurements to verify the site and floor areas of the Property and we have assumed that the areas shown on the copies of documents handed to us are correct.

REMARKS

We have prepared the valuation based on pertinent information and market data made available to us at the Valuation Date. Nevertheless, we notice that the outbreak of COVID-19 has caused massive global political, social and economic disturbance on top of the recent tension over international trade dispute. The disturbance may cause fluctuations to the property market. Given the pandemic persists and it should therefore be noted that any disturbance or other unexpected circumstances after the Valuation Date may affect the values of the Property.

Unless otherwise stated, all monetary amounts stated in this report are in Hong Kong Dollars (HKD).

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APPENDIX I

PROPERTY VALUATION REPORT

Our valuation certificates in respect of the property interests is herewith attached.

Yours faithfully, For and on behalf of Ascent Partners Valuation Service Limited

Stephen Y. W. Yeung MFin BSc(Hons) Land Adm. MHKIS MCIREA RPS (GP) Principal

Mr. Stephen Y. W. Yeung is a Registered Professional Surveyor (General Practice Division) and a Professional Member of The Hong Kong Institute of Surveyors with over 10 years’ experience in valuation of properties in HKSAR and mainland China. Mr. Yeung is also a valuer on the List of Property Valuers for Undertaking Valuations for Incorporation or Reference in Listing Particulars and Circulars and Valuations in Connection with Takeovers and Mergers published by HKIS.

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APPENDIX I

PROPERTY VALUATION REPORT

VALUATION CERTIFICATE

Property held for sale by the Group in Hong Kong

Market Value in existing state Particular of as at Property Description and Tenure Occupancy 31 July 2021 Unit C on 11th Floor, The property comprises an office As advised by the HKD50,400,000 Bank of East Asia Harbour unit on the 11th floor of a Company, the View Centre, No. 56 30-storey office building completed property was (100% interest Gloucester Road, Hong in 1990. vacant. attributable to Kong the Group: As scaled off from the building HKD50,400,000) 188410/19581678th shares plans obtained from the Buildings of and in Section M and Department, the saleable area of the Remaining Portion of the property is approximately Section F of Inland Lot 1,755 square feet.

188410/19581678th shares of and in Section M and the Remaining Portion of Section F of Inland Lot No. 2817; the Remaining Portion of Section D and the Remaining Portion of Inland Lot No. 2818

Inland Lot No. 2817 is held under Government Lease for a term of 99 years renewable for 99 years commencing on 26 March 1929.

Inland Lot No. 2818 is held under Government Lease for a term of 99 years renewable for 99 years commencing on 25 May 1929.

The total Government rent payable for the lots is HKD329 per annum.

Notes:

(1) The registered owner of the property is Maxon Management Limited vide Memorial No. 07051800570026 dated 20 April 2007.
(2) The property is subject to encumbrances as follows:
(i) An Occupation Permit No. H111/90 vide Memorial No. UB4676952 dated 31 October 1990;
(ii) A Deed of Mutual Covenant and Management Agreement vide Memorial No. UB4942689 dated 3 January 1991 (previously registered by Memorial No. UB4699812 dated 3 January 1991);
(iii) A Sub-Deed of Mutual Covenant vide Memorial No. UB9121304 dated 12 January 2004;
(iv) A Sub-Sub-Deed of Mutual Covenant vide Memorial No. UB9466701 dated 10 January 2005;
(v) A Mortgage in favour of The Hongkong and Shanghai Banking Corporation Limited vide Memorial No. 07051800570032 dated 20 April 2007; and
(vi) An Assignment of Rentals in favour of The Hongkong and Shanghai Banking Corporation Limited vide Memorial No. 07051800570041 dated 20 April 2007.

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PROPERTY VALUATION REPORT

APPENDIX I

(3) The property lies within an area zoned ‘‘Commercial’’ as stated in the approved Wanchai Outline Zoning Plan No. S/H5/28 dated 4 May 2018.
(4) The property is located along Gloucester Road abutting to Jaffe Road and Luard Road in Wan Chai which is one of the prime business centres on the Island side. The locality largely comprises various office developments as well as 5-star hotels including Harcourt House, the Hong Kong Convention and Exhibition Centre, Shui On Centre, Central Plaza, Grand Hyatt Hong Kong, Renaissance Hotel, Gloucester Luk Kwok etc. Government buildings including the Immigration Tower and Revenue Tower are located in the opposite. High street shops such as luxurious car show rooms, entertainment facilities including cafe, bars and restaurants of all kinds can also be found in the immediate vicinity. Transportation is convenient, it is accessible via franchised bus, tram, public light-bus, taxi and the Wan Chai MTR Station is also within close walking distance.
(6) The inspection of the property was carried by Ms. Cindy Yan (CFA) on 25 May 2021.
(7) The Group has confirmed as follows:
(i) No options or rights of pre-emption concerning or affecting the property;
(ii) No environmental issues such as breach of environmental regulations;
(iii) No notices, pending litigation, breach of law or title defects affecting the property;
(iv) No plans for construction, renovation, improvement or development of the property; and
(v) No plans to dispose of or change the use of the property.

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APPENDIX II

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION OF THE GROUP

Details of the financial information of the Group for the three years ended 31 March 2019, 2020 and 2021 are set out in the following:

(i) the annual report of the Company for the year ended 31 March 2019 at (https://www1.hkexnews.hk/listedco/listconews/gem/2019/0628/gln20190628329.pdf);
(ii) the annual report of the Company for the year ended 31 March 2020 at (https://www1.hkexnews.hk/listedco/listconews/gem/2020/0702/2020070200801.pdf); and
(iii) the annual report of the Company for the year ended 31 March 2021 at (https://www1.hkexnews.hk/listedco/listconews/gem/2021/0630/2021063003257.pdf).

2. INDEBTEDNESS OF THE GROUP

As at the close of business on 31 July 2021, being the latest practicable date for the purpose of preparing this indebtedness statement prior to the printing of this circular, the Group had the following indebtedness:

(i) outstanding secured bank borrowings of approximately HK$23.2 million which were pledged by certain land and buildings and investment properties of the Group and a personal guarantee was given by the chairman of the Company for the Group’s borrowings;
(ii) current and non-current lease liabilities amounted to approximately HK$0.7 million and HK$0.5 million, respectively; and
(iii) outstanding loans from Ms. Lo, being the Controlling Shareholder, amounted to approximately HK$34.1 million which were unsecured, interest-free and payable on or before February 2023.

Save as aforesaid and apart from intra-group liabilities and normal trade and other payables in the ordinary course of business, as at the close of business on 31 July 2021, the Group did not have any debt securities issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptance credits, debentures, mortgages, charges, hire purchases commitments, guarantee or other material contingent liabilities.

3. WORKING CAPITAL

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

– II-1 –

APPENDIX II

FINANCIAL INFORMATION OF THE GROUP

4. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The outbreak of COVID-19 since 2020 has severely affected the global economic activities and reduced marketing spend demand. The financial market is recovering but is expected to be relatively challenging in coming year.

The Group will continue to allocate its resources to strengthen its leading position in providing financial news services. With the Group’s competitive edge and strength arising from its integrated multiple platforms in its three vertical websites and two mobile App, namely Finet.hk, FinTV.hk, Finet.com.cn, FinTV APP and Finet Finance Pro APP, the Group can achieve a further improvement in its market share in the media industry in China and Hong Kong, and further strengthen our Digital marketing business development.

The Group will continue to strengthen its sales and marketing team to boost and diversify its revenue. Moreover, FinTV is expected to provide strong support to the Group’s investor relationship business (‘‘IR business’’) which is expected to become the profitable stream of the Group in the coming years. IR business will both cover the listed companies and pre-IPO assignments. The services that the Group has been providing include the followings: (1) production of promotional videos; (2) arrangement of press conferences and celebration events; (3) arrangement of investor meetings; (4) preparing of investor relationship articles; (5) news distribution for the listed companies and pre-IPO assignments; and (6) online results announcement. The Group’s outstanding FinTV production team will continue to support the growth and expansion of the IR business. Meanwhile, Finet Securities Limited (‘‘Finet Securities’’), the Group’s securities arm, will continue to employ its current resources to leverage its services including discretionary portfolio management, investment advisory and management of private funds with the aim to generate satisfactory management fee and performance fee income from fund management business.

5. 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 2021, being the date on which the latest published audited consolidated financial statements of the Group were made up.

– II-2 –

APPENDIX III

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

This circular, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the GEM 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

(a) Directors’ and chief executive’s interests and short positions in the shares and underlying shares

As at the Latest Practicable Date, the interests and short positions of the Directors and the chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the required standard of dealings by directors of listed issuers as referred to in Rule 5.46 of the GEM Listing Rules, were as follows:

Long positions in the shares and underlying shares of the Company and its associated corporations

		Number of shares and capacity	Number of shares and capacity	in
		which the shares	were held
					Approximate
			Interest of		percentage of
	Name of Group member/		controlled		existing
Name of Director	Associate corporations	Beneficial owner	corporation		shareholding
					(Note 2)
Executive Directors:
Ms. Lo	The Company	43,458,058	391,597,678		65.27%
		(L)		(L)
Ms. Lo	Maxx Capital International	— 2 ordinary shares			100%
	Limited (‘‘Maxx Capital’’)
	(Note 1)
Ms. Lo	Pablos International Limited	1,000 ordinary		—	100%
	(‘‘Pablos’’) (Note 1)	shares
Ms. Lo	Wise Capital International	1,000 ordinary		—	100%
	Limited (Note 1)	shares
Ms. Lo	Shine Kingdom Inc Limited	2 ordinary shares		—	100%
	(Note 1)

(L) denotes long positions

– III-1 –

APPENDIX III

GENERAL INFORMATION

Notes:

343,997,678 ordinary shares were held by Maxx Capital which was wholly-owned by Pablos, and Pablos was wholly owned by Ms. Lo. 33,000,000 and 14,600,000 shares were held by Wise Capital International Limited and Shine Kingdom Inc Limited respectively. Accordingly, Ms. Lo were deemed by virtue of the SFO to be interested in 435,055,736 ordinary shares.
As at the Latest Practicable Date, the Company had 666,538,774 ordinary Shares in issue.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company nor their respective associates had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the required standard of dealings by directors of listed issuers as referred to in Rule 5.46 of the GEM Listing Rules.

(b) Substantial Shareholders’ interest and short position in the shares of the Company

As at the Latest Practicable Date, so far as the Directors are aware, persons other than Directors or chief executives of the Company who had interests or short positions in the shares or underlying shares of the Company as recorded in the register required to be kept under section 336 of the SFO, were as follows:

Long Positions in the shares and underlying shares of the Company

			Approximate
			percentage of
		Number of	existing
Name of Shareholders	Capacity	Shares held	shareholding
			(Note 2)
Substantial Shareholders:
Pablos (Note 1)	Beneficial Owner	343,997,678 (L)	51.61%
Maxx Capital	Interest of	343,997,678 (L)	51.61%
(Note 1)	Controlled
	Corporation
Broadgain International	Beneficial Owner	47,052,000 (L)	7.06%
Limited
Wang Yuan	Beneficial Owner	39,000,000 (L)	5.85%

(L) denotes long positions

Notes:

343,997,678 ordinary shares were held by Maxx Capital, which was wholly-owned by Pablos, and Pablos was wholly-owned by Ms. Lo. Ms. Lo is also a director of each of Maxx Capital and Pablos.
As at the Latest Practicable Date, the Company had 666,538,774 ordinary Shares in issue.

– III-2 –

APPENDIX III

GENERAL INFORMATION

3. DIRECTORS’ INTEREST IN COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors or substantial Shareholders or any of their respective associates had an interest in a business which competes or may compete with the business of the Group or had any other conflict of interest which any such person has or may have with the Group.

4. DIRECTORS’ INTERESTS IN CONTRACT OR ARRANGEMENT

As at the Latest Practicable Date, none of the Directors has any interest, either direct or indirect, in any assets which have been acquired or disposed of by or leased to or are proposed to acquired or disposed of by or leased to any members of the Group since 31 March 2021, being the date to which the latest published audited consolidated financial statements of the Group were made up.

Save as disclosed in this circular, there is no contract or arrangement subsisting as at the Latest Practicable Date in which any Director is materially interested and which is significant in relation to the business of the Group.

5. DIRECTORS’ SERVICE CONTRACTS

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

6. MATERIAL LITIGATION

As far as the Directors are aware, as at the Latest Practicable Date, neither the Company nor its subsidiaries was involved in any litigation or arbitration or claim of material importance and no litigation, arbitration or claim of material importance was known to the Directors to be pending or threatened by or against any member of the Group.

– III-3 –

APPENDIX III

GENERAL INFORMATION

7. EXPERT’S QUALIFICATION AND CONSENT

The following is the expert, and its qualification, who has given opinion contained in this circular:

Name

Qualification

Red Sun Capital Limited

A corporation licensed to carry out type 1 (dealing in securities) and type 6 (advising on corporate finance) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

Ascent Partners Valuation Service Limited

An independent property valuer

Each of the above experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and report and references to its name in the form and context in which it appears.

As at the Latest Practicable Date, none of the above experts had any interest, either direct or indirect, in any assets which have been, since 31 March 2021, being the date to which the latest published audited consolidated financial statements of the Group were made up, acquired or disposed of by or leased to or were proposed to be acquired or disposed of by or leased to any member of the Group nor had any shareholding directly or indirectly, in any member of the Group nor any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

8. MATERIAL CONTRACTS

Saved for the Provisional Agreement, none of the members of the Group has entered into any contracts (not being contracts entered into the ordinary course of business) within the two years immediately preceding the date of this circular that are or may be material.

9. MISCELLANEOUS

(i) the registered office of the Company is located at Clarendon House, 2 Church Street, Hamilton HM11, Bermuda.
(ii) the head office and principal place of business of the Company in Hong Kong is located at 30/F, Fortis Tower, 77–79 Gloucester Road, Wanchai, Hong Kong.
(iii) the secretary of the Company is Mr. Chan Chi Leung, a member of the Hong Kong Institute of Certified Public Accountants.
(iv) the compliance officer of the Company is Ms. Lo Yuk Yee, the chairman of the Board and the executive Director.

– III-4 –

APPENDIX III

GENERAL INFORMATION

(v) the Company’s branch share registrar and transfer office in Hong Kong is Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(vi) the English text of this circular shall prevail over the Chinese text in case of any inconsistency.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the head office and principal place of business of the Company at 30/F, Fortis Tower, 77–79 Gloucester Road, Wanchai, Hong Kong during normal business hours (Saturdays and public holidays excepted) from 10: 00 a.m. to 1: 00 p.m. and from 2: 00 p.m. to 5: 00 p.m. from the date of this circular up to and including the date of the SGM:

(a) the memorandum and articles of association of the Company;
(b) the annual report of the Company for each of the three years ended 31 March 2019, 2020 and 2021;
(c) the Provisional Agreement;
(d) the letter from the Board, the text of which is set out on pages 5 to 15 of this circular;
(e) the letter from the Independent Board Committee, the text of which is set out on pages 16 to 17 of this circular;
(f) the letter from the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders, the text of which is set out on pages 18 to 37 of this circular;
(g) the property valuation report on the Property issued by the Valuer as set out in Appendix I of this circular;
(h) the written consents referred to in the paragraph headed ‘‘Expert’s qualification and consent’’ in this appendix; and
(i) this circular.

– III-5 –

NOTICE OF THE SGM

==> picture [119 x 55] intentionally omitted <==

FINET GROUP LIMITED 財華社集團有限公司

(Incorporated in the Cayman Islands and continued in Bermuda with limited liability)

(Stock Code: 8317)

NOTICE OF THE SPECIAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that a special general meeting (the ‘‘SGM’’) of Finet Group Limited (the ‘‘Company’’) will be held at 30/F, Fortis Tower, 77–79, Gloucester Road, Wanchai, Hong Kong on Thursday, 30 September 2021 at 12: 30 p.m. (or immediately after the conclusion of an annual general meeting of the Company held at 12: 00 noon on the same day) for the purpose of considering and, if thought fit, passing the following resolution, with or without amendments, as an ordinary resolution of the Company. Capitalised terms used herein without definition have the same meanings as in the circular issued by the Company on 10 September 2021 (the ‘‘Circular’’), unless the context otherwise requires:

ORDINARY RESOLUTION

‘‘THAT:

(a) the Provisional Agreement dated 13 August 2021 entered into between the Vendor and the Purchaser and the transactions contemplated thereunder as described in the Circular (a copy of which is marked ‘‘A’’ and initialed by the chairman of the meeting for the purpose of identification), be and are hereby approved, confirmed and ratified; and
(b) any one Director be and is hereby authorised for and on behalf of the Company to do such acts and deeds in his sole and absolute discretion and opinion deemed expedient and appropriate to implement and effect the Provisional Agreement and the transactions contemplated thereunder.’’

By Order of the Board Finet Group Limited Lo Yuk Yee

Chairman and executive Director

Hong Kong, 10 September 2021

– SGM-1 –

NOTICE OF THE SGM

Notes:

A member of the Company entitled to attend and vote at the SGM is entitled to appoint one or, if he is the holder of two or more shares, more proxies to attend and vote instead of him. A proxy need not be a member of the Company.
In the case of joint holders of shares in the Company, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of the other joint holder(s), seniority being determined by the order in which names stand in the register of members.
In order to be valid, the form of proxy must be in writing under the hand of the appointor or of his attorney duly authorised in writing, or if the appointor is a corporation, either under seal, or under the hand of an officer or attorney or other person duly authorised, and must be deposited with the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong (together with the power of attorney or other authority, if any, under which it is signed or a certified copy thereof) not less than 48 hours before the time fixed for holding of the SGM.
Completion and return of a form of proxy will not preclude members of the Company from attending and voting in person at the SGM or any adjournment thereof should they so wish and, in such event, the form of proxy shall be deemed to be revoked.
For the purpose of determining the entitlement to attend and vote at the SGM, the register of members of the Company will be closed from Monday, 27 September 2021 to Thursday, 30 September 2021, both days inclusive, during which period no transfer of Shares will be registered. In order to qualify to attend and vote at the SGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, for registration not later than 4: 30 p.m. on Friday, 24 September 2021.
A form of proxy for use at the SGM is enclosed herewith.
If Typhoon Signal No. 8 or above, or a ‘‘black’’ rainstorm warning or ‘‘external conditions after super typhoons’’ announced by the Government of Hong Kong is/are in effect any time after 7: 00 a.m. on the date of the SGM, the SGM will be postponed. The Company will publish an announcement on the website of the Company at www.finet.hk and on the ‘‘Latest Company Announcements’’ page of the GEM website at www.hkgem.com to notify shareholders of the Company of the date, time and place of the rescheduled meeting.

As at the date of this notice, the executive Directors are Ms. Lo Yuk Yee, and Mr. Lin Dongming; and the independent non-executive Directors are Mr. Wong Wai Kin, Mr. Siu Siu Ling, Robert and Mr. Leung Chi Hung.

– SGM-2 –

AI assistant

E-STATION GREEN TECHNOLOGY GROUP CO., LIMITED — Proxy Solicitation & Information Statement 2021

51463_rns_2021-09-10_5508ee68-2a72-430f-b9a1-13b345b57627.pdf

FINET GROUP LIMITED 財華社集團有限公司

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS IN A PROPERTY HOLDING COMPANY

PRECAUTIONARY MEASURES FOR THE SGM

CONTENTS

DEFINITIONS

DEFINITIONS

DEFINITIONS

FINET GROUP LIMITED 財華社集團有限公司

(Stock Code: 8317)

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS IN A PROPERTY HOLDING COMPANY

1. INTRODUCTION

2. THE PROVISIONAL AGREEMENT

Date

Parties

Assets to be disposed

Consideration

Guarantee

Consideration adjustment

Conditions precedent

LETTER FROM THE BOARD

Completion

3. INFORMATION ON THE PARTIES

4. INFORMATION ON THE DISPOSAL COMPANY AND THE PROPERTY

LETTER FROM THE BOARD

5. REASONS FOR AND BENEFITS OF THE DISPOSAL

LETTER FROM THE BOARD

6. FINANCIAL EFFECT AND USE OF PROCEEDS

7. GEM LISTING RULES IMPLICATION

8. SGM

9. RECOMMENDATIONS

FINET GROUP LIMITED 財華社集團有限公司

(Stock Code: 8317)

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS IN A PROPERTY HOLDING COMPANY

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

Yours faithfully For and on behalf of the Independent Board Committee

MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE INTERESTS IN A PROPERTY HOLDING COMPANY

INTRODUCTION

GEM LISTING RULES IMPLICATION

THE INDEPENDENT BOARD COMMITTEE

INDEPENDENT FINANCIAL ADVISER

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS CONSIDERED

1. Background of the Group and the Property

1.1. Background of the Group

1.2. Financial information of the Group

1.3. Information on the Disposal Company and the Property

2. Background of the Purchaser

3. Principal terms of the Provisional Agreement

Date

Parties

3.1. Assets to be disposed

3.2. Consideration and payment arrangement

3.3. Guarantee

3.4. Consideration adjustment

3.5. Conditions precedent

3.6. Completion

4. Valuation of the Property

4.1. Valuation methodology

4.2. Valuation basis and assumptions

4.3. Valuer’s scope of work and competence

4.4. Summary of the property valuation

5. Fairness and reasonableness of the Net Consideration

6. Reasons for and benefits of entering into the Provisional Agreement

7. Financial effects of the Disposal and use of proceeds

RECOMMENDATION

INSTRUCTIONS

BASIS OF VALUATION

VALUATION METHODOLOGY

TITLE INVESTIGATION

VALUATION ASSUMPTIONS

VALUATION CONSIDERATIONS

REMARKS

VALUATION CERTIFICATE

Property held for sale by the Group in Hong Kong

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS OF THE GROUP

E-STATION GREEN TECHNOLOGY GROUP CO., LIMITED Proxy Solicitation & Information Statement 2021