Galaxy Entertainment Group Limited - Proxy Solicitation & Information Statement 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in New World Development Company Limited (新世界發展有限公司), you should at once hand this circular together with the enclosed form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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(incorporated in Hong Kong with limited liability)

(Stock Code: 0017)

MAJOR TRANSACTION

IN RELATION TO THE DISPOSALS

AND

NOTICE OF EGM

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

A letter from the Board is set out on pages 8 to 20 of this circular.

A notice convening the EGM to be held at Meeting Room N201 (Expo Drive Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong, at 11:30 a.m. on Wednesday, 17 February 2016 is set out on pages 63 to 65 of this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding of the EGM or any adjournment thereof (as the case may be). Completion and return of a proxy form will not preclude you from attending and voting at the EGM or any adjournment thereof if you so wish.

19 January 2016

CONTENTS

			Page
DEFINITIONS	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . .	8
APPENDIX I	— PROPERTY VALUATION OF THE TARGETS	. . . . . . . . . . . . . . . . . . . .	21
APPENDIX II	— FINANCIAL INFORMATION OF THE GROUP	. . . . . . . . . . . . . . . . . . . .	43
APPENDIX III	— GENERAL INFORMATION OF THE GROUP	. . . . . . . . . . . . . . . . . . . . .	47
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		. . . . . . . . . . . . . . . . . . . . .	63

– i –

DEFINITIONS

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

‘‘affiliates’’
a party is an affiliate of another party if it has the ability to control, jointly control or exercise significant influence over the other party in making financial or operation decisions. Parties are also considered to be affiliates if they are subject to common control, joint control or significant influence
‘‘Announcement’’
the joint announcement of the Company and NWCL dated 29 December 2015 in relation to the Disposals
‘‘Board’’
the board of Directors
‘‘Chengdu Completion’’
the completion of the sale and purchase of the Chengdu Sale Share and the Chengdu Subject Loan
‘‘Chengdu Completion Date’’
18 February 2016 (or such other date as shall be agreed between the Vendor and the Purchaser)
‘‘Chengdu Conditions Precedent’’
the conditions precedent for the Chengdu Disposal specified in the Chengdu SP Agreement
‘‘Chengdu Consideration’’
the aggregate consideration for the Chengdu Sale Share and the Chengdu Subject Loan
‘‘Chengdu Disposal’’

the disposal of the Chengdu Sale Share and Chengdu Subject Loan by the Vendor to the Purchaser pursuant to the terms and conditions of the Chengdu SP Agreement

‘‘Chengdu Longstop Date’’
two months from the date of the Chengdu SP Agreement, ending on 29 February 2016
‘‘Chengdu Project’’
the Chengdu New World Riverside project (成都河畔新世界項目) developed by Chengdu Xinyi, further details of which are set out under ‘‘Information on the Parties’’ in the ‘‘Letter from the Board’’ of this circular
‘‘Chengdu Sale Share’’

the one ordinary share in the share capital of Chengdu Target, representing the entire issued share capital of Chengdu Target

‘‘Chengdu SP Agreement’’
the sale and purchase agreement dated 29 December 2015 entered into between the Purchaser and the Vendor in relation to the Chengdu Disposal

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DEFINITIONS

‘‘Chengdu Subject Loan’’
the amount of approximately HK$1,427.2 million repayable by the Chengdu Target to the Vendor and its affiliates as at the date of the Chengdu SP Agreement and the Chengdu Completion Date
‘‘Chengdu Target’’ Rise Eagle Worldwide Limited (振鷹環球有限公司), a company incorporated in the British Virgin Islands with limited liability, a wholly-owned subsidiary of the Vendor as at the date of the Chengdu SP Agreement
‘‘Chengdu Target Group’’

the Chengdu Target and Chengdu Xinyi

‘‘Chengdu Xinyi’’
Chengdu Xinyi Real Estate Development Co., Ltd. (成都心怡房地產開發有限公司), an equity joint venture enterprise established under the laws of the PRC which was held as to 60% by the Chengdu Target as at the date of the Chengdu SP Agreement
‘‘close associate(s)’’
has the meaning ascribed to it in the Listing Rules
‘‘Company’’
New World Development Company Limited (新世界發展有限公司), a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 0017), and the holding company of NWCL
‘‘connected person(s)’’
has the meaning ascribed to it in the Listing Rules
‘‘Consideration Adjustment’’
adjustment which may have to be made to the Guiyang Consideration or (as the case may be) the Chengdu Consideration in accordance with the increase or decrease in the attributable net assets value of the Guiyang Target Group or (as the case may be) the Chengdu Target Group, respectively, as at the Guiyang Completion Date and the Chengdu Completion Date, respectively, as compared with the attributable net assets value as at 30 November 2015
‘‘Director(s)’’
the director(s) of the Company
‘‘Disposals’’
all or any of the Guiyang Disposal and the Chengdu Disposal, as the case may be
‘‘EGM’’

the extraordinary general meeting of the Company convened to be held on Wednesday, 17 February 2016 at 11:30 a.m., the notice of which is set out on pages 63 to 65 of this circular

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DEFINITIONS

‘‘Evergrande’’
Evergrande Real Estate Group Limited (Stock Code: 3333), a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange, being the ultimate holding company of the Purchaser
‘‘Exchange Rate’’
the mid-point rate of exchange for RMB into HKD as quoted by Bank of China (Hong Kong) Limited on the day immediately preceding the relevant date of payment
‘‘Executive’’
the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director
‘‘Group’’ the Company and its subsidiaries from time to time
‘‘Guiyang Completion’’
the completion of the sale and purchase of the Guiyang Sale Shares and the Guiyang Subject Loan
‘‘Guiyang Completion Date’’
18 February 2016 (or such other date as shall be agreed between the Vendor and the Purchaser)
‘‘Guiyang Conditions Precedent’’
the conditions precedent for the Guiyang Disposal specified in the Guiyang SP Agreement
‘‘Guiyang Consideration’’
the aggregate consideration for the Guiyang Sale Shares and the Guiyang Subject Loan
‘‘Guiyang Disposal’’
the disposal of the Guiyang Sale Shares and the Guiyang Subject Loan by the Vendor to the Purchaser pursuant to the terms and conditions of the Guiyang SP Agreement
‘‘Guiyang Longstop Date’’
two months from the date of the Guiyang SP Agreement, ending on 29 February 2016
‘‘Guiyang Project’’
the Guiyang Jinyang Sunny Town project (貴陽金陽新世界項目) developed by the Guiyang Target Group, further details of which are set out under ‘‘Information on the Parties’’ in the ‘‘Letter from the Board’’ of this circular

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DEFINITIONS

‘‘Guiyang Sale Shares’’
‘‘Guiyang SP Agreement’’
‘‘Guiyang Subject Loan’’
‘‘Guiyang Target’’
‘‘Guiyang Target Group’’
‘‘HK$’’ or ‘‘HKD’’
‘‘Hong Kong’’
‘‘independent third party(ies)’’
‘‘Knight Frank’’
‘‘Latest Practicable Date’’
‘‘Listing Rules’’
‘‘NWCL’’
‘‘NWCL EGM’’
‘‘NWCL Group’’
the 10,000 ordinary shares in the share capital of Guiyang Target, representing the entire issued share capital of Guiyang Target
the sale and purchase agreement dated 29 December 2015 entered into between the Purchaser and the Vendor in relation to the Guiyang Disposal
the amount of approximately HK$3,713.2 million repayable by the Guiyang Target to the Vendor and its affiliates as at the date of the Guiyang SP Agreement and the Guiyang Completion Date
Triumph Hero International Limited (勝雄國際有限公司), a company incorporated in the British Virgin Islands with limited liability, a wholly-owned subsidiary of the Vendor as at the date of the Guiyang SP Agreement
the Guiyang Target, its subsidiaries and joint venture
Hong Kong dollars, the lawful currency of Hong Kong
The Hong Kong Special Administrative Region of the PRC
a third party independent of and not connected with the Company and its connected persons
Knight Frank Petty Limited, a firm of qualified valuer, and an independent third party
14 January 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular
the Rules Governing the Listing of Securities on the Stock Exchange
New World China Land Limited, a company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange (Stock Code: 0917), a non-wholly owned subsidiary of the Company
the extraordinary general meeting of NWCL convened to be held on Wednesday, 17 February 2016 at 12:15 p.m.
NWCL and its subsidiaries from time to time

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DEFINITIONS

‘‘NWCL Shares’’ ordinary shares of HK$0.10 each in the issued share capital of NWCL

‘‘NWCL Shareholders’’ the registered holders of NWCL Shares
‘‘NWCL Share Options’’ the outstanding, vested and unvested, share option(s), each relating to the NWCL Share(s), granted under the share option schemes adopted by NWCL on 26 November 2002 and 22 November 2011 respectively
‘‘NWDS’’ New World Department Store China Limited, a non-wholly owned subsidiary of the Company and the shares of which are currently listed on the Main Board of the Stock Exchange (stock code: 0825)
‘‘NWS’’ NWS Holdings Limited, a non-wholly owned subsidiary of the Company and the shares of which are currently listed on the Main Board of the Stock Exchange (stock code: 0659)
‘‘Offeror’’ Easywin Enterprises Corporation Limited (義榮企業有限公司), a company incorporated in Hong Kong with limited liability, being a wholly-owned subsidiary of the Company
‘‘Offers’’ the Share Offer and the Option Offer
‘‘Offers Announcement’’ the joint announcement of the Company, the Offeror and NWCL dated 6 January 2016 in relation to the Offers
‘‘Option Offer’’ an appropriate offer to be made by the Offeror to the optionholders of NWCL in compliance with Rule 13 of the Takeovers Code to cancel all the outstanding NWCL Share Options held by the optionholders of NWCL in accordance with the terms set out in the Offers Announcement

‘‘Participation Agreement’’ the participation agreement dated 11 September 2006 entered into between NWCL, Solar Leader Limited (a wholly-owned subsidiary of the Company) and the Company in respect of Solar Leader Limited’s 50% participating interest in NWCL Group’s interest in certain projects (including the Guiyang Project and the Chengdu Project), details of which are set out in the announcement of NWCL dated 11 September 2006 and in the circular of NWCL dated 29 September 2006

– 5 –

DEFINITIONS

‘‘PRC’’

the People’s Republic of China, and for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan
‘‘Previous Announcement’’ the joint announcement of the Company and NWCL dated 2 December 2015 in relation to the Previous Disposals
‘‘Previous Disposals’’ the disposals set out in the Previous Announcement and in the circular of NWCL dated 23 December 2015 relating to the disposals of NWCL Group’s interests in the property projects in Wuhan, Huiyang and Haikou, the PRC
‘‘Previous Sale and Purchase the sale and purchase agreements dated 2 December 2015 in Agreements’’ relation to the Previous Disposals
‘‘Purchaser’’ Shengyu (BVI) Limited, a company incorporated in British Virgin Islands with limited liability, which is an indirect wholly-owned subsidiary of Evergrande
‘‘Rights Issue’’ the issue, by way of rights, of one new Share for every three Shares held on 31 March 2014 at a subscription price of HK$6.20 each, details of which are disclosed in the prospectus of the Company dated 3 April 2014
‘‘RMB’’ Renminbi, the lawful currency of the PRC
‘‘Sale and Purchase Agreements’’ the Guiyang SP Agreement and the Chengdu SP Agreement
‘‘SFC’’ the Securities and Futures Commission of Hong Kong
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
‘‘Shares’’ ordinary shares in the issued share capital of the Company with no par value
‘‘Shareholders’’ the registered holders of Shares
‘‘Share Offer’’ the voluntary conditional cash offer by the Offeror to acquire all the NWCL Shares in accordance with the terms and conditions set out in the Offers Announcement

‘‘Share Option Scheme’’ the share option scheme adopted by the Company on 24 November 2006 and amended on 13 March 2012

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DEFINITIONS

‘‘Share Options’’ the options to subscribe for Shares granted under the Share Option Scheme
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited ‘‘subsidiary’’ has the meaning ascribed to it under the Companies Ordinance (Chapter 622 of the Laws of Hong Kong)
‘‘Takeovers Code’’ the Code on Takeovers and Mergers published by the SFC and administered by the Executive
‘‘Targets’’ the Guiyang Target and the Chengdu Target ‘‘Vendor’’ New World Development (China) Limited (新世界發展 (中國) 有限公司), a company incorporated in Hong Kong with limited liability, which holds the entire issued share capital of the Guiyang Target and the Chengdu Target as at the date of the Sale and Purchase Agreements, and a wholly-owned subsidiary of NWCL
‘‘sq m’’ square metres ‘‘US$’’ United States dollars, the lawful currency of the United States of America
‘‘%’’ per cent.

For the purpose of this circular, the following exchange rates have been used: (i) as of 30 June 2014: HK$1.00 equivalent to RMB0.79; (ii) as of 30 June 2015: HK$1.00 equivalent to RMB0.8; and (iii) as of the Latest Practicable Date: HK$1.00 equivalent to RMB0.835. Such exchange rates have been used, where applicable, for illustration only and do not constitute a representation that any amounts were or may have been exchanged at this or any other rates or at all.

This circular has been printed in English and Chinese. In the event of any inconsistency, the English text of this circular shall prevail over its Chinese text.

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LETTER FROM THE BOARD

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(incorporated in Hong Kong with limited liability)

(Stock Code: 0017)

Executive Directors:

Dr. Cheng Kar-Shun, Henry GBS (Chairman)
Dr. Cheng Chi-Kong, Adrian
(Executive Vice-chairman and Joint General Manager)

Registered office: 30th Floor, New World Tower 18 Queen’s Road Central Hong Kong

Mr. Chen Guanzhan (Joint General Manager)
Ms. Ki Man-Fung, Leonie SBS JP
Mr. Cheng Chi-Heng
Ms. Cheng Chi-Man, Sonia
Mr. Au Tak-Cheong

Non-executive Directors:

Mr. Doo Wai-Hoi, William JP (Non-executive Vice-chairman)

Mr. Cheng Kar-Shing, Peter

Independent Non-executive Directors:

Mr. Yeung Ping-Leung, Howard
Mr. Cha Mou-Sing, Payson JP
(Alternate director to Mr. Cha Mou-Sing, Payson:
Mr. Cha Mou-Zing, Victor)
Mr Ho Hau-Hay, Hamilton
Mr. Lee Luen-Wai, John BBS JP
Mr. Liang Cheung-Biu, Thomas

19 January 2016

To the Shareholders and for information only, the holders of the outstanding Share Options

Dear Sir or Madam,

MAJOR TRANSACTION IN RELATION TO THE DISPOSALS

INTRODUCTION

Reference is made to the Announcement.

On 29 December 2015, the Vendor (a direct wholly-owned subsidiary of NWCL and an indirect non-wholly owned subsidiary of the Company) entered into the Guiyang SP Agreement in

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LETTER FROM THE BOARD

respect of the Guiyang Disposal and the Chengdu SP Agreement in respect of the Chengdu Disposal with the Purchaser. The Purchaser is an indirect wholly-owned subsidiary of Evergrande.

The Disposals constitute a major transaction for each of the Company and NWCL that is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules. Completion of each of the Disposals will be subject to, among other matters, approval by the Shareholders to be sought at the EGM and the approval by the NWCL Shareholders to be sought at the NWCL EGM.

The purpose of this circular is to provide you with, among other things: (i) further information regarding the Disposals; (ii) other information as required by the Listing Rules; and (iii) the notice of the EGM.

THE DISPOSALS

The Guiyang SP Agreement

Date

29 December 2015

Parties

(a) New World Development (China) Limited, as the Vendor; and
(b) Shengyu (BVI) Limited, as the Purchaser.

Assets to be disposed of

The Guiyang Sale Shares and the Guiyang Subject Loan shall be transferred to the Purchaser together with all rights and benefits accrued thereto as at the Guiyang Completion Date.

Guiyang Consideration

The Guiyang Consideration amounts to RMB5,300 million (equivalent to approximately HK$6,347.3 million) (subject to Consideration Adjustment) and has been or (as the case may be) shall be paid by the Purchaser to the Vendor in cash in the following manner:

(a) RMB1,100 million has been settled in its equivalent amount in HKD on 6 January 2016 in the amount of approximately HK$1,283.5 million as deposit and part payment of the Guiyang Consideration; and
(b) RMB4,200 million is payable on Guiyang Completion Date (or any other date as may be agreed by the Vendor and the Purchaser in writing) as balance of the Guiyang Consideration.

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LETTER FROM THE BOARD

Save as may be agreed between the Purchaser and the Vendor to effect the payment of any part of the Guiyang Consideration in the PRC in RMB, the payment of the Guiyang Consideration shall be made in Hong Kong in RMB or its equivalent amount in HKD determined based on the Exchange Rate.

If the Purchaser fails to pay the Guiyang Consideration in the manner as required under the Guiyang SP Agreement, it shall pay the Vendor an overdue charge on the relevant overdue amount of the Guiyang Consideration calculated at a rate of 30% per annum (determined based on commercial negotiation between the parties with emphasis on the deterrent effect of a high default rate) accrued on a daily basis, unless and until the relevant overdue amount of the Guiyang Consideration has been fully paid.

Basis of the Guiyang Consideration

The Guiyang Consideration was arrived at after arm’s length negotiations between the Purchaser and the Vendor by reference to (i) the property valuation of the Guiyang Project amounting to approximately RMB7,112.8 million as at 30 June 2015 performed by Knight Frank; (ii) improvement in market conditions during the period from July to November 2015; and (iii) underlying net liabilities value (other than its properties) of the Guiyang Target Group amounting to approximately RMB2,143.7 million as at 30 November 2015. The Guiyang Consideration represented a premium of approximately 49% over the consolidated net assets value of the Guiyang Target Group as at 30 June 2015.

Guiyang Conditions Precedent

The Guiyang Completion is subject to the following Guiyang Conditions Precedent being fulfilled and/or waived (as the case may be):

(a) the respective board of directors of the Vendor, NWCL and the Company having approved the Guiyang SP Agreement and the transactions contemplated thereunder. If required by the Listing Rules or the Stock Exchange, NWCL and/or the Company shall, pursuant to the Listing Rules, pass all necessary shareholder’s resolutions (in the form of written approval from shareholders or by passing an ordinary resolution at a general meeting (if such written approval is not obtained)) to approve the Guiyang SP Agreement and the transactions contemplated thereunder, comply with the relevant announcement requirements under the Listing Rules, and obtain all other necessary approvals or waivers as required (if applicable);
(b) the Vendor shall obtain all necessary approvals required to be obtained from third parties (including the consent of certain lender banks of the Guiyang Target Group) in relation to the transactions contemplated under the Guiyang SP Agreement (if necessary);
(c) the respective board of directors of the Purchaser and Evergrande having approved the Guiyang SP Agreement and the transactions contemplated thereunder. If required by the Listing Rules or the Stock Exchange, the ultimate holding company of the Purchaser, i.e.

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LETTER FROM THE BOARD

Evergrande, shall, pursuant to the Listing Rules, pass all necessary shareholder’s resolutions (in the form of written approval from shareholders or by passing an ordinary resolution at a general meeting (if such written approval is not obtained)) to approve the Guiyang SP Agreement and the transactions contemplated thereunder, comply with the relevant announcement requirements under the Listing Rules, and obtain all other necessary approvals or waivers as required (if applicable); and

(d) the Purchaser shall obtain all necessary approvals required to be obtained from third parties in relation to the transaction contemplated under the Guiyang SP Agreement (if necessary).

The Vendor shall use its best endeavours to procure that paragraphs (a) and (b) of the Guiyang Conditions Precedent above are fulfilled, while the Purchaser shall use its best endeavours to procure that paragraphs (c) and (d) of the Guiyang Conditions Precedent above are fulfilled. The Purchaser may waive paragraph (b) of the Guiyang Conditions Precedent above and the Vendor may waive paragraph (d) of the Guiyang Conditions Precedent above, by written notice to the other party at any time before the Guiyang Completion.

If any of the Guiyang Conditions Precedent is not fulfilled or (where applicable) waived on or before the Guiyang Completion Date, the Vendor and the Purchaser may extend the Guiyang Completion Date to the first business day immediately after the date on which the Guiyang Conditions Precedent are fulfilled or (where applicable) waived, but in any event shall not be later than the Guiyang Longstop Date.

If any of the Guiyang Conditions Precedent is not fulfilled or (where applicable) waived on or before the Guiyang Longstop Date, Guiyang SP Agreement shall forthwith cease and terminate and neither the Vendor nor the Purchaser shall have any claim against the other, save as to any antecedent breach.

Termination

The Guiyang SP Agreement shall be terminated under the following circumstances:

(a) the performance of the Guiyang SP Agreement having been completed;
(b) if required under applicable law;
(c) the Guiyang SP Agreement not being capable of performance for more than three months as a result of a force majeure event and the Vendor and the Purchaser having agreed in writing to terminate the Guiyang SP Agreement; or
(d) the Guiyang Conditions Precedent not having been fulfilled or (where applicable) waived on or before the Guiyang Longstop Date.

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LETTER FROM THE BOARD

Guiyang Completion

The Guiyang Completion shall take place on Guiyang Completion Date. Upon the Guiyang Completion, the Guiyang Target, its subsidiaries and joint venture will cease to be subsidiaries and joint venture of the Vendor.

Participation Agreement

Pursuant to the Participation Agreement entered into in 2006, Solar Leader Limited, a whollyowned subsidiary of the Company, has taken up a participating interest representing 50% of the total interest held by the NWCL Group in the Guiyang Project.

Prior to the Guiyang Completion, given (a) the NWCL Group holds 100% equity interest in the Guiyang Target which, in turn and through its subsidiaries, holds 100% interest in the Guiyang Project, (b) Solar Leader Limited has a participating interest representing 50% of the NWCL Group’s total interest in the Guiyang Project pursuant to the Participation Agreement, NWCL has in effect 50% attributable interest in the Guiyang Project.

Given that the Company has approximately 69.56% attributable interest in NWCL as at the Latest Practicable Date and 100% interest in Solar Leader Limited, the Company has (a) an indirect attributable interest of approximately 34.78% in the Guiyang Target Group through NWCL; and (b) participating interest of 50% in the Guiyang Target Group through Solar Leader Limited, therefore, the Company has in aggregate approximately 84.78% attributable interest in the Guiyang Project as at the Latest Practicable Date.

After the Guiyang Completion, each of the Company and NWCL will cease to have any interest in the Guiyang Project.

FINANCIAL EFFECT OF THE GUIYANG DISPOSAL

After the Guiyang Completion, the Guiyang Target and other members of the Guiyang Target Group will cease to be subsidiaries and joint venture of the Company and NWCL and their financial results, assets and liabilities will no longer be included in the consolidated financial statements of the Group.

The estimated indicative net gain arising from the Guiyang Disposal is expected to be approximately HK$1,429.6 million for the Company, and such gain represents approximately 84.78% of the entire gain from the Guiyang Disposal which has been determined by reference to the difference between the Guiyang Consideration and the consolidated net assets value of the Guiyang Target Group amounting to approximately HK$4,273.7 million as at 30 June 2015 (as included in the audited consolidated financial statements of NWCL for the year ended 30 June 2015) and taking into account the estimated tax payable, being calculated at a rate of 10% on the difference between the Guiyang Consideration and the NWCL Group’s cost of investment in the Guiyang Target in accordance with the relevant tax laws in the PRC. The consolidated net assets value of the Group is expected to increase accordingly. The actual gain to be recorded by the

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LETTER FROM THE BOARD

Company can only be ascertained when the attributable consolidated net assets value of the Guiyang Target Group and the incidental transaction costs are determined upon the Guiyang Completion.

The Chengdu SP Agreement

Date

29 December 2015

Parties

(a) New World Development (China) Limited, as the Vendor; and
(b) Shengyu (BVI) Limited, as the Purchaser.

Assets to be disposed of

The Chengdu Sale Share and the Chengdu Subject Loan shall be transferred to the Purchaser together with all rights and benefits accrued thereto as at the Chengdu Completion Date.

Chengdu Consideration

The Chengdu Consideration amounts to RMB2,000 million (equivalent to approximately HK$2,395.2 million) (subject to Consideration Adjustment) and has been or (as the case may be) shall be paid by the Purchaser to the Vendor in cash in the following manner:

(a) RMB400 million has been settled in its equivalent HKD amount on 6 January 2016 in the amount of approximately HK$466.7 million as deposit and part payment of the Chengdu Consideration; and
(b) RMB1,600 million is payable on Chengdu Completion Date (or any other date as may be agreed by the Vendor and the Purchaser in writing) as balance of the Chengdu Consideration.

Save as may be agreed between the Purchaser and the Vendor to effect the payment of any part of the Chengdu Consideration in the PRC in RMB, the payment of the Chengdu Consideration shall be made in Hong Kong in RMB or its equivalent amount in HKD determined based on the Exchange Rate.

If the Purchaser fails to pay the Chengdu Consideration in the manner as required under the Chengdu SP Agreement, it shall pay the Vendor an overdue charge on the relevant overdue amount of the Chengdu Consideration calculated at a rate of 30% per annum (determined based on commercial negotiation between the parties with emphasis on the deterrent effect of a high default rate) accrued on a daily basis, unless and until the relevant overdue amount of the Chengdu Consideration has been fully paid.

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LETTER FROM THE BOARD

Basis of the Chengdu Consideration

The Chengdu Consideration was arrived at after arm’s length negotiations between the Purchaser and the Vendor by reference to (i) the attributable property valuation of the Chengdu Project amounting to approximately RMB2,147.6 million as at 30 June 2015 performed by Knight Frank; (ii) improvement in market conditions during the period from July to November 2015; and (iii) underlying attributable net liabilities value (other than its properties) of the Chengdu Target Group amounting to approximately RMB359.6 million as at 30 November 2015. The Chengdu Consideration represented a premium of approximately 10% over the consolidated attributable net assets value of the Chengdu Target Group as at 30 June 2015.

Chengdu Conditions Precedent

The Chengdu Completion is subject to the following Chengdu Conditions Precedent being fulfilled and/or waived (as the case may be):

(a) the respective board of directors of the Vendor, NWCL and the Company having approved the Chengdu SP Agreement and the transactions contemplated thereunder. If required by the Listing Rules or the Stock Exchange, NWCL and/or the Company shall, pursuant to the Listing Rules, pass all necessary shareholder’s resolutions (in the form of written approval from shareholders or by passing an ordinary resolution at a general meeting (if such written approval is not obtained)) to approve the Chengdu SP Agreement and the transactions contemplated thereunder, comply with the relevant announcement requirements under the Listing Rules, and obtain all other necessary approvals or waivers as required (if applicable);
(b) the Vendor shall obtain all necessary approvals required to be obtained from third parties (including the consent of certain lender banks of the Chengdu Target Group) in relation to the transactions contemplated under the Chengdu SP Agreement (if necessary);
(c) the respective board of directors of the Purchaser and Evergrande having approved the Chengdu SP Agreement and the transactions contemplated thereunder. If required by the Listing Rules or the Stock Exchange, the ultimate holding company of the Purchaser, i.e. Evergrande, shall, pursuant to the Listing Rules, pass all necessary shareholder’s resolutions (in the form of written approval from shareholders or by passing an ordinary resolution at a general meeting (if such written approval is not obtained)) to approve the Chengdu SP Agreement and the transactions contemplated thereunder, comply with the relevant announcement requirements under the Listing Rules, and obtain all other necessary approvals or waivers as required (if applicable); and
(d) the Purchaser shall obtain all necessary approvals required to be obtained from third parties in relation to the transaction contemplated under the Chengdu SP Agreement (if necessary).

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LETTER FROM THE BOARD

The Vendor shall use its best endeavours to procure that paragraphs (a) and (b) of the Chengdu Conditions Precedent above are fulfilled, while the Purchaser shall use its best endeavours to procure that paragraphs (c) and (d) of the Chengdu Conditions Precedent above are fulfilled. The Purchaser may waive paragraph (b) of the Chengdu Conditions Precedent above and the Vendor may waive paragraph (d) of the Chengdu Conditions Precedent above, by written notice to the other party at any time before the Chengdu Completion.

If any of the Chengdu Conditions Precedent is not fulfilled or (where applicable) waived on or before the Chengdu Completion Date, the Vendor and the Purchaser may extend the Chengdu Completion Date to the first business day immediately after the date on which the Chengdu Conditions Precedent are fulfilled or (where applicable) waived, but in any event shall not be later than the Chengdu Longstop Date.

If any of the Chengdu Conditions Precedent is not fulfilled or (where applicable) waived on or before the Chengdu Longstop Date, the Chengdu SP Agreement shall forthwith cease and terminate and neither the Vendor nor the Purchaser shall have any claim against the other, save as to any antecedent breach.

Termination

The Chengdu SP Agreement shall be terminated under the following circumstances:

(a) the performance of the Chengdu SP Agreement having been completed;
(b) if required under applicable law;
(c) the Chengdu SP Agreement not being capable of performance for more than three months as a result of a force majeure event and the Vendor and the Purchaser having agreed in writing to terminate the Chengdu SP Agreement; or
(d) the Chengdu Conditions Precedent not having been fulfilled or (where applicable) waived on or before the Chengdu Longstop Date.

Chengdu Completion

The Chengdu Completion shall take place on Chengdu Completion Date. Upon the Chengdu Completion, the Chengdu Target and Chengdu Xinyi will cease to be subsidiaries of the Vendor.

Participation Agreement

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LETTER FROM THE BOARD

Prior to the Chengdu Completion, given (a) the NWCL Group holds 100% equity interest in the Chengdu Target, which in turn holds 60% equity interest in Chengdu Xinyi, (b) Chengdu Xinyi is the direct holding entity of 100% interest in the Chengdu Project, and (c) Solar Leader Limited has a participating interest representing 50% of the NWCL Group’s total interest in the Chengdu Project pursuant to the Participation Agreement, NWCL has in effect 30% attributable interest in the Chengdu Project.

Given that the Company has approximately 69.56% attributable interest in NWCL as at the Latest Practicable Date and 100% interest in Solar Leader Limited, the Company has (a) an indirect attributable interest of 20.87% in the Chengdu Target Group through NWCL; and (b) participating interest of 30% in the Chengdu Target Group through Solar Leader Limited, therefore, the Company has in aggregate approximately 50.87% attributable interest in the Chengdu Project as at the Latest Practicable Date.

After the Chengdu Completion, each of the Company and NWCL will cease to have any interest in the Chengdu Project.

FINANCIAL EFFECT OF THE CHENGDU DISPOSAL

After the Chengdu Completion, the Chengdu Target and Chengdu Xinyi will cease to be subsidiaries of the Company and NWCL and their financial results, assets and liabilities will no longer be included in the consolidated financial statements of the Group.

The estimated indicative net gain arising from the Chengdu Disposal is expected to be approximately HK$36.9 million for the Company, and such gain represents approximately 50.87% of the entire gain from the Chengdu Disposal which has been determined by reference to the difference between the Chengdu Consideration and the consolidated net assets value of the Chengdu Target Group amounting to approximately HK$2,168.1 million as at 30 June 2015 (as included in the audited consolidated financial statements of NWCL for the year ended 30 June 2015) and taking into account the estimated tax payable, being calculated at 10% on the difference between the Chengdu Consideration and the NWCL Group’s cost of investment in the Chengdu Target in accordance with the relevant tax laws in the PRC. The consolidated net assets value of the Group is expected to increase accordingly. The actual gain to be recorded by the Company can only be ascertained when the attributable consolidated net assets value of the Chengdu Target Group and the incidental transaction costs are determined upon the Chengdu Completion.

REASONS FOR AND BENEFITS OF THE DISPOSALS AND USE OF PROCEEDS

The Disposals enable the Group to realise cash resources and unlock the value in its investment in the property projects held by the Guiyang Target Group and the Chengdu Target Group with faster churn. The Disposals also signify the Group’s strategy of optimising its project development and investment portfolio by scaling down certain investment in second and third-tier cities and projects with lower gross profit margin and by focusing more resources in first-tier and 1.5-tier cities and mid-sized property projects. The net proceeds to be received by the Vendor from

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LETTER FROM THE BOARD

the Disposals will be applied towards the working capital and investment requirements of the Group as appropriate. As at the Latest Practicable Date, there was no negotiation for potential acquisition or investment by the Group in relation to the use of net proceeds from the Disposals.

INFORMATION ON THE PARTIES

The Purchaser

To the best knowledge of the Directors, the Purchaser is an investment company incorporated in the British Virgin Islands and is indirectly wholly-owned by Evergrande. Evergrande is principally engaged in the development of large scale residential properties and integrated commercial properties in the PRC.

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner, i.e. Evergrande, are independent of and not connected with the Company or its connected persons.

The Vendor

The Vendor is a company incorporated in Hong Kong and is principally engaged in investment holding. It is a direct wholly-owned subsidiary of NWCL. As NWCL is a non-wholly owned subsidiary of the Company, the Vendor is also an indirect non-wholly owned subsidiary of the Company.

The Group is principally engaged in property, infrastructure, hotel operation, department store operation, services, as well as telecommunications and technology businesses.

The Guiyang Target

The Guiyang Target is a company incorporated in the British Virgin Islands. The Guiyang Target is an investment holding company and through its subsidiaries holds 100% interests in the Guiyang Project. The Guiyang Project is located in Jinyang New District, Guiyang, the PRC with a total site area of approximately 2,152,684 sq m for residential, office, commercial and public amenities development. The total developable gross floor area of the Guiyang Project is approximately 4,067,727 sq m, of which construction of approximately 933,658 sq m had been completed, approximately 715,135 sq m was under construction, and the remaining of approximately 2,418,934 sq m was not yet developed as at 30 October 2015.

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LETTER FROM THE BOARD

As at 30 June 2015, the unaudited consolidated total net assets of the Guiyang Target Group was approximately HK$4,273.7 million. The consolidated profit before and after tax of the Guiyang Target Group included in the audited consolidated financial statements of NWCL for the financial year ended 30 June 2014 was approximately HK$9.5 million and HK$3.2 million, respectively and the consolidated loss before and after tax of the Guiyang Target Group included in the audited consolidated financial statements of NWCL for the financial year ended 30 June 2015 was approximately HK$72.0 million and HK$115.7 million, respectively.

The Chengdu Target

The Chengdu Target is a company incorporated in the British Virgin Islands and is principally engaged in the holding of 60% equity interest in Chengdu Xinyi, a joint venture enterprise incorporated in the PRC. The remaining 40% equity interest in Chengdu Xinyi is held by two joint venture partners, each an independent third party save and except for their respective interests in Chengdu Xinyi. The principal business of Chengdu Xinyi is the development of the Chengdu Project located in Shuangliu County, Chengdu, the PRC which comprises residential, commercial, hotel and ancillary developments with a total site area of approximately 950,072 sq m. The total developable gross floor area of the Chengdu Project is approximately 3,040,231 sq m, of which construction of approximately 472,837 sq m had been completed, approximately 574,660 sq m was under construction, and approximately 1,992,734 sq m was not yet developed as of 30 November 2015.

As at 30 June 2015, the unaudited consolidated attributable total net assets value of the Chengdu Target Group was approximately HK$2,168.1 million. The consolidated attributable profit before and after tax of the Chengdu Target Group included in the audited consolidated financial statements of NWCL for the financial year ended 30 June 2014 was approximately HK$104.9 million and HK$13.2 million, respectively and the consolidated attributable loss before and after tax of the Chengdu Target Group included in the audited consolidated financial statements of NWCL for the financial year ended 30 June 2015 was approximately HK$11.6 million and HK$24.3 million, respectively.

LISTING RULES IMPLICATIONS

The Vendor is a direct wholly-owned subsidiary of NWCL and NWCL is a non-wholly owned subsidiary of the Company. The Company is interested in the Disposals by virtue of its interest in NWCL and the participating interest in the Guiyang Project and the Chengdu Project under the Participation Agreement. The Disposals constitute notifiable transactions for the Company.

Given that the Sale and Purchase Agreements and the Previous Sale and Purchase Agreements were entered into by the Vendor with the same party, i.e. the Purchaser, within a 12 month period, the Disposals and the Previous Disposals are required to be aggregated pursuant to Rule 14.22 of the Listing Rules.

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LETTER FROM THE BOARD

As the highest applicable percentage ratio (as defined under Rule 14.07 of the Listing Rules) in respect of the Disposals and the Previous Disposals (on an aggregated basis) exceeds 25% but is less than 75% for the Company, the Disposals constitute a major transaction for the Company that is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The Company will convene the EGM to seek for approval from the Shareholders for the Disposals. As at the Latest Practicable Date, the Company was not aware, having made all reasonable enquiries, that any Shareholder would be required to abstain from voting on the resolutions to be proposed at the EGM for approving the Disposals.

THE EGM

A notice convening the EGM to be held at Meeting Room N201 (Expo Drive Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong, at 11:30 a.m. on Wednesday, 17 February 2016 is set out on pages 63 to 65 of this circular. Whether or not you are able to attend the EGM, you are requested to complete the accompanying proxy form in accordance with the instructions printed thereon and return the same to the Company’s share registrar, Tricor Tengis Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding of the EGM or any adjournment thereof (as the case may be). Completion and return of a proxy form will not preclude you from attending and voting at the EGM or any adjournment thereof if you so wish.

Each of the resolutions proposed at the EGM will be taken by way of poll. An announcement on the poll results will be made by the Company after the EGM in the manner prescribed under Rule 13.39(5) of the Listing Rules.

RECOMMENDATION

The Directors (including the independent non-executive Directors) believe that the terms of the Guiyang SP Agreement and the Chengdu SP Agreement have been negotiated on an arm’s length basis and on normal commercial terms and are fair and reasonable and in the interests of the Group and the Shareholders as a whole. Accordingly, the Directors (including the independent nonexecutive Directors) recommend that all Shareholders should vote in favour of all the resolutions to be proposed at the EGM.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

The attention of the Shareholders is drawn to the additional information set out in the appendices to this circular.

As each of the Guiyang Disposal and the Chengdu Disposal is subject to the fulfillment of various conditions precedent which may or may not be fulfilled, there is no assurance that all or any of the Disposals will be completed. Shareholders and potential investors should exercise caution when dealing in the securities of the Company.

Yours faithfully,

For and on behalf of

New World Development Company Limited (新世界發展有限公司) Dr. Cheng Kar-Shun, Henry Chairman

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PROPERTY VALUATION OF THE TARGETS

APPENDIX I

The following is the text of a letter, summary of values and valuation report prepared for the purpose of incorporation in this circular received from Knight Frank Petty Limited in connection with the market values of the Targets as at 30 November 2015.

Knight Frank Petty Ltd 4/F, Shui On Centre 6-8 Harbour Road Wan Chai Hong Kong Tel: 2840 1177 Fax: 2840 0600

19 January 2016

Board of Directors of New World Development Company Limited 30th Floor

New World Tower I 18 Queen’s Road Central Hong Kong

Dear Sirs

VALUATION OF VARIOUS PROPERTIES IN THE PEOPLE’S REPUBLIC OF CHINA

In accordance with your instructions for us to value various property interests held by New World Development Company Limited (the ‘‘Company’’) and/or its subsidiaries, its associated companies and its joint ventures (hereinafter together referred to as the ‘‘Group’’) in the People’s Republic of China (the ‘‘PRC’’), we confirm that we have carried out 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 values of these property interests as at 30 November 2015 for the purpose of incorporation into the circular issued by the Group.

BASIS OF VALUATION

Our valuation is our opinion of the market value of each of the property which we would define as intended to mean ‘‘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 wherein the parties had each acted knowledgeably, prudently and without ’’ compulsion .

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such

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APPENDIX I

as atypical financing, sale and leaseback arrangements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of a property is also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.

VALUATION METHODOLOGIES

In valuing property Nos. 1 and 2, we have valued such property interests with reference to sales evidence as available in the market and where appropriate, on the basis of capitalization of the net income shown on the documents handed to us. We have allowed for outgoings and, in appropriate cases, made provisions for reversionary income potential.

In valuing property No. 3, we have valued the property interest under the basis of on-going concern, and we have adopted income approach by making reference to its historical performance of the past years. During the course of the valuation, we have relied on the gross operating profit generated from the operation during corresponding periods and made reference to the require rate of return of similar form of investment.

In valuing property Nos. 4 and 5, we have valued such property interests on the basis that it will be developed and completed in accordance with the Group’s latest development proposals provided to us. We have assumed that approvals for the proposals will be granted without onerous conditions. In arriving at our opinion of value, we have adopted Direct Comparison Approach by making reference to comparable transactions in the locality and have also taken into account the construction costs that will be expended to complete the development to reflect the quality of the completed development.

TITLE DOCUMENTS AND ENCUMBRANCES

We have been provided with extracts of documents in relation to the titles to the property interests. However, we have not inspected the original documents to ascertain any amendments which may not appear on the copies handed to us. We have relied on the information provided by the Group and its PRC legal advisor, Jun He Law Office, regarding the titles to the properties.

No allowance has been made in our report for any charges, mortgages or amounts owing on any property interests nor for any expenses or taxation which may be incurred in affecting 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.

SOURCE OF INFORMATION

We have relied to a very considerable extent on the information given by the Group and the legal opinion of the Group’s PRC legal adviser. We have no reason to doubt the truth and the accuracy of the information provided by the Group and/or its PRC legal adviser which is material to the valuation. We have accepted advice given by the Group on such matters as planning approvals or statutory notices, tenure, ownership, completion date of the buildings, joint-venture

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agreements/contracts, tenancy particulars, development schemes, total and incurred construction costs, floor and site areas and all other relevant matters. Dimension, measurements and areas included in the valuation report attached are based on information provided to us and are therefore only approximations. We have not been able to carry out on-site measurements to verify the correctness of the site and floor areas of the property and we have assumed that the site and the floor areas shown on the documents handed to us are correct. We were also advised by the Group that no material facts have been omitted from the information provided.

INSPECTION AND STRUCTURAL CONDITION

We have inspected the exteriors and, where possible, the interiors of the properties valued and the inspection was carried out by our Ocean Ruan and Peter Liang in December 2015. However, we have not carried out site investigations to determine the suitability of ground conditions and services, etc for any future development. Our valuations are prepared on the assumption that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during construction period. Moreover, no structural survey has been made, but in the course of our inspection, we did not note any serious defects, we are not, however, able to report that the properties are free from rot, infestation or any other structural defects. No tests were carried out on any of the services.

IDENTITY OF PROPERTY TO BE VALUED

We exercised reasonable care and skill (but will not have an absolute obligation to you) to ensure that the property interests, identified by the property address in your instructions, is the properties inspected by us and contained within our valuation report. If there is ambiguity as to the property address, or the extent of the properties to be valued, this should be drawn to our attention in your instructions or immediately upon receipt of our report.

ENVIRONMENTAL ISSUES

We are not environmental specialists and therefore we have not carried out any scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor have we undertaken searches of public archives to seek evidence of past activities that might identify potential for contamination. In the absence of appropriate investigations and where there is no apparent reason to suspect potential for contamination, our valuation is prepared on the assumption that the properties are unaffected. Where contamination is suspected or confirmed, but adequate investigation has not been carried out and made available to us, then the valuation will be qualified.

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COMPLIANCE WITH RELEVANT ORDINANCES AND REGULATIONS

We have assumed that the properties had been constructed, occupied and used in full compliance with, and without contravention of any ordinances, statutory requirements and notices except only where otherwise stated. We have further assumed that, for any use of the properties upon which this report is based, any and all required licences, permits, certificates, consents, approvals and authorisations have been obtained, except only where otherwise stated.

REMARKS

In preparing our valuation report, we have complied with the requirements contained within relevant provisions of Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and The HKIS Valuation Standards 2012 Edition published by the Hong Kong Institute of Surveyors.

CURRENCY

Unless otherwise stated, all currency adopted in this report is in Renminbi.

Our summary of values and valuation report are attached.

Yours faithfully For and on behalf of Knight Frank Petty Limited Clement W M Leung MCIREA MHKIS MRICS RPS (GP) Executive Director Head of China Valuation

Remarks: Clement W M Leung, MCIREA MHKIS MRICS RPS (GP), has been a qualified valuer and has about 22 years’ experience in the valuation of properties in Hong Kong, Macau and Asia Pacific Region and has 19 years’ experience in the valuation of properties in the People’s Republic of China.

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APPENDIX I

SUMMARY OF VALUES

Group I — Properties held by the Group for Investment in the PRC

Property 1 Retail, Kindergarten and Car Parking Portions of Guiyang Jinyang Sunny Town 1 Jinzhu Road Jinyang New District, Guiyang Guizhou Province The PRC 2 Car Parking Portion of Chengdu New World Riverside Guang Fu Village Hua Yang Town Shuangliu County, Chengdu Sichuan Province The PRC Sub-total:	Market value in existing state as at 30 November 2015 Interest attributable to the Group RMB1,061,000,000 84.80% RMB111,000,000 50.88% RMB1,172,000,000	Market value in existing state attributable to the Group as at 30 November 2015 RMB899,728,000 RMB56,476,800
		RMB956,204,800

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Property Market value in existing state as at 30 November 2015 Interest attributable to the Group Group II — Hotel held by the Group in the PRC 3 New World Guiyang Hotel Block G of West Commercial Buildings Guiyang Jinyang Sunny Town 1 Jinzhu Road Jinyang New District, Guiyang Guizhou Province The PRC RMB639,000,000 84.80% Sub-total: RMB639,000,000	Market value in existing state attributable to the Group as at 30 November 2015 RMB541,872,000
	RMB541,872,000

Group III — Property held by the Group for future development in the PRC

4 Guiyang Jinyang Sunny Town 1 Jinzhu Road Jinyang New District, Guiyang Guizhou Province The PRC 5 Chengdu New World Riverside Guang Fu Village Hua Yang Town Shuangliu County, Chengdu Sichuan Province The PRC Sub-total: Grand Total:	RMB5,646,300,000 84.80% RMB3,686,000,000 50.88% RMB9,332,300,000 RMB11,143,300,000	RMB4,788,062,400 RMB1,875,436,800
		RMB6,663,499,200
		RMB8,161,576,000

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APPENDIX I

VALUATION REPORT

Group I — Properties held by the Group for Investment in the PRC

				Market Value
			Particulars of	in existing state as at
	Property	Description and tenure	occupancy	30 November 2015
1	Retail, Kindergarten	Guiyang Jinyang Sunny Town (the	Retail portion of the	RMB1,061,000,000
	and Car Parking	‘‘Development’’) is a commercial/	property with a total
	Portions of Guiyang	residential composite development	gross floor area of	(84.80% effective
	Jinyang Sunny Town	planned to be developed in various	approximately 51,367.20	interest* attributable to
	1 Jinzhu Road	phases, erected upon two parcels of	sq m is subject to various	the Group:
	Jinyang New District	irregular-shaped sites with a total	tenancies with the last	RMB899,728,000)
	Guiyang	site area of approximately	tenancy expiring in
	Guizhou Province	2,149,849.30 sq m.	November 2034, yielding
	The PRC		a total monthly rental of
		The property comprises various	approximately
		portions of retail area, kindergarten	RMB544,000, exclusive
		and car parking portion of the	of management fees.
		Development completed from 2010
		to 2014. The property comprises the	The kindergarten portion
		following approximate gross floor	of the property is subject
		area:	to a tenancy for a term
			expiring in June 2023,
		Approximate	yielding a total monthly
		Gross Floor	rental of approximately
		Area	RMB30,000, exclusive of
		(sq m)	management fees.
		Retail 89,455.33	The remaining portion of
		Kindergarten 2,681.39	the property is currently
		Non-saleable	vacant.
		ancillary
		facilities 210.09
		92,346.81

The property also comprises 1,824 car parking spaces.

Land use rights of the Development have been granted for terms of 70 years for residential use, 40 years for commercial use and 50 years for other uses.

Notes:

Pursuant to the Business Licence No. 520100400043942 dated 18 December 2014, Guiyang New World Real Estate Co., Ltd., a wholly-owned subsidiary of the Company, was incorporated with a registered capital of US$301,350,000.
This represents (a) the interest held in this property project through NWCL of which the Company has 69.59% attributable interest as at the date of valuation and (b) the interest held in this property project through Solar Leader Limited (‘‘Solar Leader’’), a wholly-owned subsidiary of the Group, under which Solar Leader has a participating interest representing 50% of the total interest held by the NWCL Group in this property project.

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APPENDIX I

Pursuant to 6 State-owned Land Use Right Certificates issued by Guiyang Land Resources Bureau, the land use rights of the Development with a total site area of 1,863,181.20 sq m was granted to Guiyang New World Real Estate Co., Ltd. for various land use right terms. Details of the State-owned Land Use Right Certificates are as follows:

Certificate No.	Date of Issuance	Land Use	Site Area	Expiry Date
			(sq m)
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	368,161.10	19 May 2046
(2010) Di 0098		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	368,682.70	19 May 2046
(2010) Di 2550		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	491,598.60	19 May 2046
(2010) Di 0100		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	22 June 2011	Commercial/	439,131.30	19 May 2046
(2011) Di 5486		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	20 November 2009	Commercial/Office	84,771.30	11 July 2057
(2009) Di 1843
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/Office	110,836.20	11 July 2057
(2010) Di 0101

Pursuant to the Building Ownership Certificate No. Zhu Fang Quan Zheng Jin Yang Xin Zi Di 010286873 issued by Guiyang Real Estate Title Supervision Bureau dated 30 December 2011, the building ownership of portion of the property with a total gross floor area of 2,681.39 sq m was vested in Guiyang New World Real Estate Co., Ltd..
Pursuant to 12 Construction Works Completion Certificates issued by Guiyang Housing and Urban-Rural Development Committee, portion of the Development with a total construction scale of 591,288.48 sq m was completed.
We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the followings:
(i) Guiyang New World Real Estate Co., Ltd. has legally obtained the land use rights of the property and is the sole owner of the land use rights of the property;
(ii) Guiyang New World Real Estate Co., Ltd. is entitled to transfer, lease, mortgage or in other ways dispose of the land use rights of the property;
(iii) Guiyang New World Real Estate Co., Ltd. has legally obtained the building ownership of portion of the property as mentioned in Note (3) and is entitled to transfer, lease, mortgage or in other ways dispose of such portion of the property;

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(iv) Guiyang New World Real Estate Co., Ltd. has obtained the State-owned Land Use Rights Certificates, the relevant constructions permits and completion certificates. There will be no legal obstacle for Guiyang New World Real Estate Co., Ltd. in obtaining the Building Ownership Certificates for portion of the property as mentioned in Note (4) after compliance with relevant regulations and procedures; and
(v) the property is free from mortgages and other encumbrances.

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APPENDIX I

Market Value
Particulars of in existing state as at
Property Description and tenure occupancy 30 November 2015
2 Car Parking Portion Chengdu Riverside New World (the The property is currently RMB111,000,000 of Chengdu New ‘‘Development’’) is erected upon an vacant. World Riverside irregular-shaped site with a site area (50.88% effective Guang Fu Village of approximately 950,072.10 sq m. interest* attributable to Hua Yang Town The Development is planned to be the Group: Shuangliu County developed into a massive RMB56,476,800) Chengdu residential/commercial composite Sichuan Province development in various phases. The PRC
The property comprises 1,010 car parking spaces of the Development completed in 2010.

Land use rights of the Development have been granted for a term of 70 years for residential use and 40 years for commercial use.

Notes:

Pursuant to the Business Licence No. 510100400018780 dated 22 May 2015, Chengdu Xinyi Real Estate Development Co., Ltd., a subsidiary of the Company, was incorporated with a registered capital of US$99,500,000.
Pursuant to 2 State-owned Land Use Right Certificates issued by Shuangliu Land Resources Bureau, the title to the land use rights of the Development with a total site area of 950,072.10 sq m was granted to Chengdu Xinyi Real Estate Development Co., Ltd. for residential and commercial uses. Details of the State-owned Land Use Right Certificates are stated as follows:

Certificate No. Site Area Land Use and Term Date of Issuance (sq m) Shuang Guo Yong (2006) 186,478.77 Residential: 26 January 2076; 31 May 2006 Di 01024 Commercial: 26 January 2046 Cheng Tian Guo Yong (2014) 763,593.33 26 January 2076 17 July 2014 Di 1945

This represents (a) the interest held in this property project through NWCL of which the Company has 69.59% attributable interest as at the date of valuation and (b) the interest held in this property project through Solar Leader Limited (‘‘Solar Leader’’), a wholly-owned subsidiary of the Group, under which Solar Leader has a participating interest representing 50% of the total interest held by the NWCL Group in this property project.

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APPENDIX I

Pursuant to 2 Building Lists issued by Shuangliu Property Administration Bureau, the building ownership of portion of the Development with a total gross floor area of 38,001.04 sq m were vested in Chengdu Xinyi Real Estate Development Co., Ltd.. Details of the Building Lists are as follows:

Certificate No. Gross Floor Area Land Use Date of Issuance (sq m) Jian Zheng 1255511 7,992.17 Car parking 3 July 2013 Jian Zheng 1250764 30,008.87 Car parking 19 June 2013

Portion of the property under State-owned Land Use Right Certificate No. Cheng Tian Guo Yong (2014) Di 1945 is subject to mortgage.
We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the followings:
(i) Chengdu Xinyi Real Estate Development Co., Ltd. has legally obtained the land use rights of the property and is the sole owner of the land use rights of the property;
(ii) Chengdu Xinyi Real Estate Development Co., Ltd. is entitled to transfer, lease, mortgage or in other ways dispose of the non-mortgaged land use rights of the property. For the mortgaged land use rights, Chengdu Xinyi Real Estate Development Co., Ltd. has to obtain the mortgagee’s prior written consent before transferring such portion of land use rights of the property; and
(iii) Chengdu Xinyi Real Estate Development Co., Ltd. has legally obtained the building ownership of the property and is entitled to transfer, lease, mortgage or in other ways dispose of the buildings of the property.

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Group II — Hotel held by the Group in the PRC

Property Description and tenure
3 New World Guiyang Guiyang Jinyang Sunny Town (the Hotel ‘‘Development’’) is a commercial/ Block G of residential composite development West Commercial planned to be developed in various Buildings phases, erected upon two parcels of Guiyang Jinyang irregular-shaped sites with a total Sunny Town site area of approximately 1 Jinzhu Road 2,149,849.30 sq m. Jinyang New District, Guiyang The property comprises a hotel with Guizhou Province a gross floor area of approximately The PRC 39,521.00 sq m completed in 2014. The land use rights of the development have been granted for a term of 70 years for residential use, 40 years for commercial use and 50 years for other uses.

Market Value Particulars of in existing state as at occupancy 30 November 2015 The property is an RMB639,000,000 operating hotel. (84.80% effective interest* attributable to the Group: RMB541,872,000)

Notes:

Pursuant to the Business Licence No. 520100400043942 dated 18 December 2014, Guiyang New World Real Estate Co., Ltd., a wholly-owned subsidiary of the Company, was incorporated with a registered capital of US$301,350,000.

This represents (a) the interest held in this property project through NWCL of which the Company has 69.59% attributable interest as at the date of valuation and (b) the interest held in this property project through Solar Leader Limited (‘‘Solar Leader’’), a wholly-owned subsidiary of the Group, under which Solar Leader has a participating interest representing 50% of the total interest held by the NWCL Group in this property project.

– 32 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

Pursuant to 6 State-owned Land Use Right Certificates issued by Guiyang Land Resources Bureau, the land use rights of the Development with a total site area of 1,863,181.20 sq m was granted to Guiyang New World Real Estate Co., Ltd. for various land use right terms. Details of the State-owned Land Use Right Certificates are as follows:

Certificate No.	Date of Issuance	Land Use	Site Area	Expiry Date
			(sq m)
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	368,161.10	19 May 2046
(2010) Di 0098		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	368,682.70	19 May 2046
(2010) Di 2550		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	491,598.60	19 May 2046
(2010) Di 0100		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	22 June 2011	Commercial/	439,131.30	19 May 2046
(2011) Di 5486		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	20 November 2009	Commercial/Office	84,771.30	11 July 2057
(2009) Di 1843
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/Office	110,836.20	11 July 2057
(2010) Di 0101

Pursuant to the Construction Works Completion Certificate No. Jian 2014-59 issued by Guiyang Housing and Urban Rural Development Bureau dated 25 June 2014, construction works of the property with a total gross floor area of 70,584.50 sq m was complete.
We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the followings:
(i) Guiyang New World Real Estate Co., Ltd. has legally obtained land use rights of the property and is the sole owner of the land use rights;
(ii) Guiyang New World Real Estate Co., Ltd. is entitled to transfer, lease, mortgage or in other ways dispose of land use rights of the property;
(iii) Guiyang New World Real Estate Co., Ltd. has obtained the State-owned Land Use Right Certificates, the relevant constructions permits and completion certificates. There will be no legal obstacle for Guiyang New World Real Estate Co., Ltd. in obtaining the Building Ownership Certificates for portion of the property as mentioned in Note (3) after compliance with relevant regulations and procedures;
(iv) the property is subject to mortgage; and
(v) the property can be transferred by Guiyang New World Real Estate Co., Ltd. subject to the approval from the mortgagee.

– 33 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

Group III — Property held by the Group for future development in the PRC

Property Description and tenure

Particulars of occupancy

Market Value in existing state as at 30 November 2015

4 Guiyang Jinyang Sunny Town 1 Jinzhu Road Jinyang New District, Guiyang Guizhou Province The PRC

Guiyang Jinyang Sunny Town (the ‘‘Development’’) is a commercial/ residential composite development to be developed in various phases. The Development is erected upon two parcels of irregular-shaped sites with a total site area of approximately 2,149,849.30 sq m.

The property comprises the unsold completed portion (the ‘‘Unsold Completed Portion’’) of the Development completed from 2008 to 2013, portion of the Development which are under construction (the ‘‘Portion Under Construction’’) and the planned remaining phase (the ‘‘Planned Remaining Phase’’) of the Development.

The Unsold Completed RMB5,646,300,000 Portion is currently vacant and held for sale. (84.80% effective The Portion Under interest* attributable to Construction is currently the Group: under construction and is RMB4,788,062,400) scheduled to complete in July 2018, while the (please see note 9, 11) Planned Remaining Phase is pending for development.

Unsold Completed Portion comprises the following approximate gross floor area:

Unsold Completed Portion Residential Retail Sub-total:	Approximate Gross Floor Area (sq m) 5,398.69 13,704.33
	19,103.02

The Unsold Completed Portion also comprises 2,005 car parking spaces.

This represents (a) the interest held in this property project through NWCL of which the Company has 69.59% attributable interest as at the date of valuation and (b) the interest held in this property project through Solar Leader Limited (‘‘Solar Leader’’), a wholly-owned subsidiary of the Group, under which Solar Leader has a participating interest representing 50% of the total interest held by the NWCL Group in this property project.

– 34 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

Description and tenure	Description and tenure
Portion Under Construction and
Planned Remaining Phase will
comprises the following
approximate planned gross floor
area upon completion:
	Approximate
		Planned
	Gross Floor
		Area
		(sq m)
Portion Under
Construction
Residential		640,565.03
Retail		25,217.16
Serviced apartment		16,209.81
Hotel		10,203.00
Saleable ancillary
facilities		5,540.63
Non-Saleable
ancillary
facilities		17,399.19
Sub-total:		715,134.82
Planned Remaining
Phase
Residential	1,620,308.00
Retail		290,688.34
Office		466,090.00
Saleable ancillary
facilities		21,160.00
Non-Saleable
ancillary
facilities		20,687.74
Sub-total:	2,418,934.08

Market Value Particulars of in existing state as at occupancy 30 November 2015

Portion Under Construction and Planned Remaining Phase will provide 22,691 car parking spaces upon completion.

The land use rights of the Development have been granted for terms of 70 years for residential use, 40 years for commercial use and 50 years for other uses.

– 35 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

Notes:

Pursuant to the Business Licence No. 520100400043942 dated 18 December 2014, Guiyang New World Real Estate Co., Ltd., a wholly owned subsidiary of the Company, was incorporated with a registered capital of US$301,350,000.
Pursuant to 6 State-owned Land Use Rights Certificates issued by Guiyang Land Resources Bureau, the land use rights of the Development with a total site area of 1,863,181.20 sq m were granted to Guiyang New World Real Estate Co., Ltd. for various land use rights terms. Details of the State-owned Land Use Rights Certificates are as follows:

Certificate No.	Date of Issuance	Land Use	Site Area	Expiry Date
			(sq m)
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	368,161.10	19 May 2046
(2010) Di 0098		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	368,682.70	19 May 2046
(2010) Di 2550		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/	491,598.60	19 May 2046
(2010) Di 0100		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	22 June 2011	Commercial/	439,131.30	19 May 2046
(2011) Di 5486		Composite/		19 May 2056
		Residential		19 May 2076
Qian Zhu Gao Xin Guo Yong	20 November 2009	Commercial/Office	84,771.30	11 July 2057
(2009) Di 1843
Qian Zhu Gao Xin Guo Yong	8 April 2010	Commercial/Office	110,836.20	11 July 2057
(2010) Di 0101

Pursuant to the Notice on the Assignment of the State-Owned Land Use Right by Means of Bid and Auction, State-owned Construction Land Use Right Grant Contract No. Qian Zhu Gao Xin (Jin Gua) 2006002 and its use conditions, the land use rights of a parcel of land located at Jiangjunshan with a site area of approximately 430 mu shall be allocated to Guiyang New World Real Estate Co., Ltd. for park and school uses.
Pursuant to 2 Construction Land Use Planning Permits issued by Guiyang Planning Bureau, portion of the Development is permitted to be developed. Details of Construction Land Use Planning Permits are stated as follows:

Permit No.	Date of Issuance	Site Area
Jin Yang (2006)-36	9 August 2006	2,935.13 mu
Jin Yang (2008)-02	22 February 2008	245,322 sq m

– 36 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

Pursuant to 8 Construction Engineering Planning Permits issued by Guiyang Planning Bureau, portion of the property was permitted to be constructed. Details of Construction Planning Permits are stated as follows:

Permit No.	Date of Issuance	Gross Floor Area
		(sq m)
Jian Zi Di 520000201334668	5 December 2013	477,739.35
Zhu Gui Jian Zi 2013 (Guan Shan Hu) 041
Jian Zi Di 520000201432651	12 June 2015	313,090.24
Zhu Gui Jian Zi 2015-0117
Jian Zi Di 520000201432569	16 March 2015	92,853.46
Zhu Gui Jian Zi 2015-0051
Jian Zi Di 520000201024693	30 November 2010	55,253.62
Zhu Gui Jian Zi 2010 (Jin Yang) 033
Jian Zi Di 520000201425148	12 December 2014	11,688.59
Zhu Gui Jian Zi 2014-0609
Jian Zi Di 520000201425219	12 December 2014	12,805.99
Zhu Gui Jian Zi 2014-0610
Jian Zi Di 520000201429771	23 July 2014	168,434
Zhu Gui Jian Zi 2014-0207
Jian Zi Di 520000201432804	14 December 2015	469,092.68
Zhu Gui Jian Zi 2015-0324

Pursuant to 14 Construction Works Commencement Permits issued by Guiyang Housing and Urban-Rural Development Committee, construction works of portion of the property was permitted to be commenced. Details of the Construction Works Commencement Permits are stated as follows:

Permit No.	Date of Issuance	Gross Floor Area
		(sq m)
520101201312091501 (Guan)	17 December 2013	133,477.90
520101201312091401 (Guan)	17 December 2013	102,396.00
520101201312091301 (Guan)	17 December 2013	104,608.00
520101201312091201 (Guan)	17 December 2013	137,257.00
520115201506260101	26 June 2015	147,607.98
520115201506260201	26 June 2015	165,482.26
520101201012270201	12 November 2014	27,264.97
520101201012270101 (Yi Bu)	8 July 2015	27,988.65
520115201503250101	25 March 2015	92,853.46
520115201412310101	31 December 2014	12,805.99
520115201412310201	31 December 2014	11,688.59
520101201008020119	19 August 2010	1,213,842.00
520115201411100101	10 November 2014	N/A
520115201411100201	10 November 2014	N/A

Pursuant to 22 Construction Works Completion Certificates issued by Guiyang Housing and Urban-Rural Development Committee, portion of the Development with a total construction scale of 923,073.31 sq m was completed.
Pursuant to 6 Commodity Housing Pre-sale Permits issued by Guiyang Housing and Urban Rural Development Bureau, portion of the property with a gross floor area of 423,524.24 sq m was permitted to pre-sell.

– 37 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

According to the information provided by the Group, portion of the Portion Under Construction with a total gross floor area of approximately 12,805.99 sq m (9,745.65 sq m above ground and 3,060.34 sq m below ground) was planned to construct as ancillary facilities. After completing the construction, the ownership and use rights of such portion should be handed over to the public. In the course of our valuation, we have not given any commercial value to such portions of the property.
As advised by the Group, the construction cost incurred and the projected outstanding construction cost of the Portion Under Construction and the Planned Remaining Phase as at the valuation date were approximately RMB1,919,446,000 and RMB10,319,704,000 respectively. Accordingly, we have taken into account the aforesaid cost in our valuation. In our opinion, the gross development value of the proposed developments of the Portion Under Construction and the Planned Remaining Phase, assuming they were completed as at the valuation date, was estimated approximately as RMB24,424,900,000.
As advised by the Group, portion of the property with a total gross floor area of 301,210.10 sq m have been pre-sold at a total consideration of RMB1,697,258,153. According to the Company’s instruction, the pre-sold units are included in this valuation. We have also taken this into consideration in the course of our valuation.
We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the followings:
(i) save and except for the portion as mentioned in Note (9), Guiyang New World Real Estate Co., Ltd. has legally obtained the land use rights of the property in granted nature and is the sole owner of the land use rights of the property;
(ii) save and except for the portion as mentioned in Note (9), Guiyang New World Real Estate Co., Ltd. is entitled to transfer, lease, mortgage or in other ways dispose of the land use rights of the property in granted nature;
(iii) Guiyang New World Real Estate Co., Ltd. has the rights to legally occupy and use portion of the property in allocated nature in accordance with the land use after obtaining relevant title proof for the land use rights. After obtaining the permit from the government and settling land premium, Guiyang New World Real Estate Co., Ltd. is entitled to transfer such portion of the property. Guiyang New World Real Estate Co., Ltd. can lease such portion of the property, nevertheless, has to reimburse portion of the rental pertaining to the allocated land use rights to the government;
(iv) Guiyang New World Real Estate Co., Ltd. has obtained the State-owned Land Use Rights Certificates, the relevant constructions permits and completion certificates. There will be no legal obstacle for Guiyang New World Real Estate Co., Ltd. in obtaining the Building Ownership Certificates for portion of the property as mentioned in Note (7) after compliance with relevant regulations and procedures; and
(v) the property is free from mortgages and other encumbrances.

– 38 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

Property

Description and tenure

Particulars of occupancy

Market Value
in existing state as at 30 November 2015
5 Chengdu New World Chengdu Riverside New World (the Riverside ‘‘Development’’) is erected upon an Guang Fu Village irregular-shaped site with a site area Hua Yang Town of approximately 950,072.10 sq m, Shuangliu County and is planned to develop into a Chengdu massive residential/commercial Sichuan Province composite development of various The PRC phases.

The property comprises the unsold completed portion of the Development (the ‘‘Unsold Completed Portion’’) completed from 2012 to 2015, portion of the property which is under construction (the ‘‘Portion Under Construction’’) and the planned remaining phase (the ‘‘Planned Remaining Phase’’) of the Development.

The Unsold Completed RMB3,686,000,000 Portion is currently vacant and held for sale. (50.88% effective The Portion Under interest* attributable to Construction is under the Group: construction and is RMB1,875,436,800) scheduled to complete in June 2018, while the (please see note 11) Planned Remaining Phase is pending for future development.

Unsold Completed Portion comprises following approximate gross floor area:

gross floor area:
Unsold Completed Portion Residential Club house Kindergarten	Approximate Gross Floor Area (sq m) 36,251.94 6,908.00 4,818.00
	47,977.94

This represents (a) the interest held in this property project through NWCL of which the Company has 69.59% attributable interest as at the date of valuation and (b) the interest held in this property project through Solar Leader Limited (‘‘Solar Leader’’), a wholly-owned subsidiary of the Group, under which Solar Leader has a participating interest representing 50% of the total interest held by the NWCL Group in this property project.

– 39 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

Property Description and tenure Portion Under Construction and Planned Remaining Phase will comprise following approximate planned gross floor area upon completion:

Market Value Particulars of in existing state as at occupancy 30 November 2015

	Approximate
	Planned
	Gross Floor
	Area
	(sq m)
Portion Under
Construction
Residential	394,002.00
Retail	120,663.00
Hotel	59,995.00
	574,660.00
Planned Remaining
Phase
Residential	1,934,500.00
Retail	13,234.00
Non-saleable
ancillary facilities	45,000.00
	1,992,734.00
Portion Under Construction and
Planned Remaining Phase will
provide approximately 29,257 car
parking spaces upon completion.
The land use rights of the
Development have been granted for
terms of 70 years for	residential use
and 40 years for commercial use.

Notes:

Pursuant to the Business Licence No. 510100400018780 dated 22 May 2015, Chengdu Xinyi Real Estate Development Co., Ltd., a subsidiary of the Company, was incorporated with a registered capital of US$99,500,000.

– 40 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

Pursuant to 2 State-owned Land Use Right Certificates issued by Shuangliu Land Resources Bureau, the title to the land use rights of the Development with a total site area of 950,072.10 sq m was granted to Chengdu Xinyi Real Estate Development Co., Ltd. for residential and commercial uses. Details of the State-owned Land Use Rights Certificates are stated as follows:

Certificate No.	Site Area	Land Use and Term	Date of Issuance
	(sq m)
Shuang Guo Yong (2006)	186,478.77	Residential: 26 January 2076;	31 May 2006
Di 01024		Commercial: 26 January 2046
Cheng Tian Guo Yong (2007)	763,593.33	26 January 2076	17 July 2014
Di 4067

Pursuant to 2 Building Lists issued by Shuangliu Property Administration Bureau, the building ownership of the property with a total gross floor area of 289.65 sq m were vested in Chengdu Xinyi Real Estate Development Co., Ltd.. Details of the Building Lists are stated as follows:

	Gross Floor
Certificate No.	Area	Use	Date of Issuance
	(sq m)
Quan 0887908	148.10	Residential	N/A
Quan 0887908	141.55	Residential	N/A

Pursuant to the Construction Land Use Planning Permit No. (2006) Di 085 issued by Shuangliu Planning Administration Bureau dated 31 May 2006, the Development with a site area of approximately 1,425 mu was permitted to be developed.
Pursuant to 6 Construction Engineering Planning Permits, portion of the Development with a total construction scale of 970,505.43 sq m is permitted to be developed.
Pursuant to 5 Construction Works Commencement Permits issued by Shuangliu Urban-Rural Construction Bureau, construction works of the Development was permitted to be commenced. Details of the Construction Works Commencement Permits are stated as follows:

Permit No.	Date of Issuance	Gross Floor Area
		(sq m)
Shen Ji Keng [2013] 004	4 July 2013	42,411.80
Shuang Shi [2013] 153	18 October 2013	54,452.06
Shuang Shi [2013] 154	18 October 2013	73,507.96
Shuang Shi [2013] 159	24 October 2013	117,284.39
Shuang Shi [2013] 164	5 November 2013	60,527.56

Pursuant to 4 Construction Works Completion Certificates issued by Chengdu Development Administration Committee, portion of the Development with a total gross floor area of 85,078.94 sq m was completed.
Pursuant to 8 Commodity Housing Pre-sale Permits issued by Chengdu Housing and Urban Rural Development Bureau, portion of the property with a gross floor area of 217,106.50 sq m was permitted to pre-sell.
Portion of the property under State-owned Land Use Right Certificate No. Cheng Tian Guo Yong (2014) Di 1945 is subject to mortgage.

– 41 –

PROPERTY VALUATION OF THE TARGETS

APPENDIX I

As advised by the Group, the construction cost incurred and the projected outstanding construction cost of the Portion Under Construction and the Planned Remaining Phase as at the valuation date were approximately RMB852,385,000 and RMB9,210,397,000 respectively. Accordingly, we have taken into account the aforesaid cost in our valuation. In our opinion, the gross development value of the proposed developments of the Portion Under Construction and the Planned Remaining Phase, assuming they were completed as at the valuation date, was estimated approximately as RMB20,606,800,000.
As advised by the Group, portion of the property with a total gross floor area of 29,259.62 sq m have been pre-sold at a total consideration of RMB194,701,029. According to the Company’s instruction, the pre-sold units are included in this valuation. We have also taken this into consideration in the course of our valuation.
We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the followings:
(i) Chengdu Xinyi Real Estate Development Co., Ltd. has legally obtained the land use rights of the property and is the sole owner of the land use rights of the property;
(ii) Chengdu Xinyi Real Estate Development Co., Ltd. is entitled to transfer, lease, mortgage or in other ways dispose of the non-mortgaged land use rights of the property. For the mortgaged land use rights, Chengdu Xinyi Real Estate Development Co., Ltd. has to obtain the mortgagee’s prior written consent before transferring;
(iii) Chengdu Xinyi Real Estate Development Co., Ltd. has obtained the Construction Land Use Planning Permit, Construction Engineering Planning Permit and Construction Works Commencement Permit. There will be no legal obstacle for Chengdu Xinyi Real Estate Development Co., Ltd. in obtaining the real estate title proof after compliance with relevant regulations and procedures; and
(iv) for the land use rights and construction works mentioned in Note (9), Chengdu Xinyi Real Estate Development Co., Ltd. has to obtain the mortgagee’s prior written consent before transferring such portion of the property.

– 42 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

1. INDEBTEDNESS

Borrowings

As at the close of business on 30 November 2015, being the latest practicable date for the purpose of this statement of indebtedness, the Group had outstanding borrowings of approximately HK$132,919.1 million, details of which are set out as follows:

Bank loans Secured Unsecured Other loans Secured Unsecured Fixed rate bonds and notes payable Loans from non-controlling shareholders, unsecured Total	HK$ million 21,310.7 64,910.4 1,000.0 1,712.8 40,630.1 3,355.1
	132,919.1

Bank loans and other loans of approximately HK$21,310.7 million and HK$1,000.0 million, respectively, were secured by the Group’s certain investment properties, property, plant and equipment, land use rights, intangible concession rights, properties under development, properties for development and bank deposits.

Contingent liabilities

As at the close of business on 30 November 2015, the Group’s financial guarantee contracts were as follows:

Mortgage facilities for certain purchasers of properties (Note a) Guarantees for credit facilities granted to — Joint ventures and associated companies (Note b) — A related company Indemnity to non-wholly owned subsidiaries for Mainland China tax liabilities (Note c) Total	HK$ million 2,626.1 5,515.3 49.7 1,353.0
	9,544.1

– 43 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Notes:

(a) At the close of business on 30 November 2015, the Group had provided guarantees in respect of mortgage facilities granted by certain banks relating to the mortgage loans arranged for certain purchasers of properties developed by certain subsidiaries of the Group. The outstanding mortgage loans under these guarantees amounted to approximately HK$2,626.1 million. Pursuant to the terms of the guarantees, upon default in mortgage payments by these purchasers, the Group is responsible to repay the outstanding mortgage principals together with accrued interest owed by the defaulted purchasers to the banks and the Group is entitled to take over the legal title and possession of the related properties.
(b) At the close of business on 30 November 2015, the Group had contingent liabilities of approximately HK$5,515.3 million relating to corporate guarantees given in respect of bank loan facilities extended to certain joint ventures and associated companies. As at 30 November 2015, the Group’s attributable portion of the outstanding amount under these bank loan facilities granted to the joint ventures and associated companies was approximately HK$4,472.3 million.
(c) In July 1999, a deed of tax indemnity was entered into between the Company and NWCL, whereby the Company has undertaken to indemnify certain subsidiaries of NWCL in respect of, inter alia, certain PRC corporate income tax and land appreciation tax payable in consequence of the disposal of certain properties held by NWCL as at 31 March 1999. At the close of business on 30 November 2015, the Company’s share of such obligation to NWCL for Mainland China tax liabilities was approximately HK$1,353.0 million.
(d) Share of contingent liabilities of joint ventures not included above are HK$19.4 million.

Save as aforesaid and apart from intra-group liabilities, at the close of business on 30 November 2015, the Group did not have any material debt securities issued and outstanding, and authorised or otherwise created but unissued, or term loans or other borrowings or indebtedness in the nature of borrowing or acceptances or hire purchase commitments, or outstanding mortgages and charges, or contingent liabilities or guarantees.

Since 30 November 2015, there has been no material increase in the indebtedness of the Group. As set out in the Offers Announcement, the Offeror intends to finance the cash required for the Offers from its (or the Company’s) own cash reserves. In addition, The Hongkong and Shanghai Banking Corporation Limited (in its capacity as lender) has granted a credit facility of HK$21,467.0 million to the Offeror which may be used to finance the cash required for the Offers in full.

2. WORKING CAPITAL

The Directors are of the opinion that, taking the effect of the Disposals and taking into consideration the financial resources available to the Group, including internally generated funds and external borrowings, the Group will have sufficient working capital for its present requirements, that is for at least the next twelve months from the date of this circular.

3. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group continues to adopt prudent and cautious financial management policies and enhances its cash flow management capability through realisation of the Group’s developing assets. By striving to achieve a well-balanced leverage, the Group endeavours to monitor and maintain a healthy financial position.

– 44 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

The Group will continue enhancing its cash flow capability so as to better position itself to grasp market opportunities for the long term benefits of the Shareholders.

For property development in Hong Kong, following the launch of a series of finely-designed projects which received overwhelming market responses, and leveraging the sound performance in property sales in the fiscal year ended 30 June 2015, the Group will work hard on the preparations for new launches.

In July 2015, the Group launched ‘‘SKYPARK’’ in Mong Kok, which offers a total of 439 residential units. Strategically located at the core district of Kowloon, the project enjoys geographical advantage. Meanwhile, ‘‘Double Cove Grandview’’, phase 4 under the ‘‘Double Cove’’ series in Ma On Shan, was launched in August 2015, offering a total of 474 residential units.

Leveraging New World brand equity in Yuen Long where a number of new projects with outstanding sales performance had been launched in recent years, the Group rolled out ‘‘THE PARKHILL’’ which offers a total of 141 residential units in October 2015. The ultra-luxury project ‘‘55 Conduit Road’’ in Mid-levels west, was launched in December 2015 with good market responses.

Apart from the aforesaid projects, the Group also plans to launch its ‘‘MOUNT PAVILIA’’ in Clear Water Bay Road, ‘‘BOHEMIAN HOUSE’’ in Western District, ‘‘FLEUR PAVILIA’’ in North Point, ‘‘Double Cove’’ phase 5 in Ma On Shan, and the remaining special units of ‘‘The Masterpiece’’ in Tsim Sha Tsui.

The Group has made use of multiple channels to replenish its Hong Kong landbank so as to maintain a stable supply of land resources to the Group for property development as well as strategic planning in the long run. For sustaining a quality landbank in Hong Kong, the Group will carefully identify and select development opportunities to expand its landbank in Hong Kong with reference to future market supply and consumption preference of home buyers. Taking into account the flexibility provided for under the development conditions of the respective projects, the Group will strive to secure unique land resources of premium quality to support the Group’s sustainable development. The Group will continue to enhance its development resources through public auction and tender, old building redevelopment and agricultural land conversion.

For property rental business in Hong Kong, in response to the changing structure and consumption patterns of local consumers and those from Mainland China, the Group pioneered in creating the original brand K11 in 2009, offering new shopping experience to the high-spending middle class. In recent years, the Group has further introduced the refinements and quality enhancement programs to its investment projects, D. Park Shopping Centre is now undergoing the final stages of overhaul. Efforts have been made to upgrade the tenant mix and improve the physical facilities, for bringing fresh and comfortable shopping experiences to its consumers upon completion.

– 45 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

For office buildings, New World Tower and Manning House, both being Grade A office buildings under the Group investment properties portfolio located in the traditional prime commercial area on Queen’s Road Central in Central, achieved satisfactory performance in terms of occupancy and rental rates. New World Tower is undergoing an asset enhancement programme to meet the new market leasing demand. Its office lobbies and other major facilities will be upgraded.

The redevelopment of New World Centre, located at the core area of Tsim Sha Tsui promenade, the construction is being carried out as scheduled. Upon completion, the project is expected to become a key landmark in Hong Kong.

NWS, NWCL and NWDS, the listed subsidiaries of the Group, are expected to be benefited from the stable and healthy development of China’s economy in the medium to-long term under its structural optimisation, enhancement and alteration. Meanwhile, the Group will also strive to collaborate closely with its listed subsidiaries to effectively utilise and leverage the brand equity and synergy of the New World Group, bringing forth positive effects to operations.

After the completion of the Disposals and the Previous Disposals, the Group will receive net proceeds from these disposals amounting to approximately HK$25,106.1 million. These disposals signify the Group’s strategy of optimising its property development and investment portfolio in the PRC has been firmly realised. The strategy calls for focusing resources in first and 1.5-tier cities and high-growth cities, while reducing investment in some projects with prolonged development cycle. The Group believes the move match with the Group’s ongoing development strategy in choosing high-end high-quality projects with better gross profit margin, increasing assets churn, and developing more mid-sized property projects in the PRC. The revenue from the transactions will provide NWCL with ample cash reserve for new round of investment in the near future, while improving the overall operating cash flow.

At present NWCL has a comprehensive property development and investment portfolio, and also has mature operating teams in first-tier cities of Beijing, Shanghai, Guangzhou and Shenzhen, and has a competitive property development portfolio in high-growth cities. The transactions could strengthen the Group resources and support the Group in penetrating the market in first and 1.5-tier cities and other high-growth cities in which the brand has already been well recognised and established, strengthening its brand positioning, presenting a clearer portfolio strategy, and are expected to improve the average project gross profit margin and assets churn in the PRC.

Upon completion of the Disposals and the Previous Disposals, NWCL has landbank of approximately 10.9 million sq m gross floor area which is sufficient for five years of development.

Uplifting the competitiveness of its core property business and its brand equity is the clear and unified goals of the Group. Going forward, the Group will remain its pursuit of ongoing innovation and excellence, attend to every detail of customers’ needs, and maximise interests of its shareholders.

– 46 –

GENERAL INFORMATION OF THE GROUP

APPENDIX III

1. RESPONSIBILITY STATEMENT

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

2. INTERESTS OF DIRECTORS

(A) Interests in shares, underlying shares and debentures of the Company and its associated corporations

As at the Latest Practicable Date, the interests and short positions of the Directors in the shares or underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO), which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions, if any which they were taken or deemed to have under such provisions of the SFO); or (b) to be entered in the register kept by the Company under Section 352 of the SFO; or (c) to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (the ‘‘Model Code’’) of the Listing Rules were as follows:

(aa) Long position in shares

The Company
(ordinary shares)
Dr. Cheng Kar-Shun, Henry
Mr. Doo Wai-Hoi, William
Mr. Cheng Kar-Shing, Peter
Mr. Ho Hau-Hay, Hamilton
Mr. Liang Cheung-Biu, Thomas
Ms. Ki Man-Fung, Leonie
NWCL
(ordinary shares of HK$0.10 each)
Mr. Doo Wai-Hoi, William
Mr. Cheng Kar-Shing, Peter
Mr. Lee Luen-Wai, John
Ms. Ki Man-Fung, Leonie

Number of shares
Approximate
% of
shareholding
Personal
interests
Family
interests
Corporate
interests
Total
—
600,000
—
600,000
0.01
—
—
7,955,000(1)
7,955,000
0.09
—
506,545
—
506,545
0.01
—
—
878,353(2)
878,353
0.01
10,429
—
—
10,429
0.00
90,000
—
—
90,000
0.00
1,254,663
—
1,317,000(3)
2,571,663
0.03
755,961
—
—
755,961
0.01
387,448
—
—
387,448
0.00
45,000
—
—
45,000
0.00

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

NWDS (ordinary shares HK$0.10 each) Ms. Ki Man-Fung, Leonie Ms. Cheng Chi-Man, Sonia NWS (ordinary shares HK$1.00 each) Dr. Cheng Kar-Shun, Henry Mr. Doo Wai-Hoi, William Mr. Cheng Kar-Shing, Peter Ms. Ki Man-Fung, Leonie Sun Legend Investments Limited (ordinary shares) Mr. Cheng Kar-Shing, Peter	Number of shares Approximate % of shareholding Personal interests Family interests Corporate interests Total 20,000 — — 20,000 0.00 92,000 — — 92,000 0.01 18,349,571 — 12,000,000(4) 30,349,571 0.80 1,939,834 — 8,330,782(3) 10,270,616 0.27 295,838 — 5,973,374(5) 6,269,212 0.16 15,000 — — 15,000 0.00 — — 500(6) 500 50.00

Notes:

(1) These shares are beneficially owned by companies which are wholly-owned by Mr. Doo Wai-Hoi, William.
(2) These shares are beneficially owned by a company in which Mr. Ho Hau-Hay, Hamilton owns 40.0% of its issued share capital.
(3) These shares are beneficially owned by a company which is wholly-owned by Mr. Doo Wai-Hoi, William.
(4) These shares are beneficially owned by a company which is wholly-owned by Dr. Cheng Kar-Shun, Henry.
(5) These shares are beneficially owned by a company which is wholly-owned by Mr. Cheng Kar-Shing, Peter.
(6) These shares are beneficially owned by a controlled corporation of Mr. Cheng Kar-Shing, Peter.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

(bb) Long position in underlying shares — share options

(i) The Company

Name of Director
Date of grant
Exercisable
period
(Note)
Dr. Cheng Kar-Shun, Henry
19 March 2012
(1)
Mr. Doo Wai-Hoi, William
22 January 2014
(2)
Dr. Cheng Chi-Kong, Adrian
19 March 2012
(1)
Mr. Chen Guanzhan
19 March 2012
(1)
Mr. Yeung Ping-Leung, Howard
19 March 2012
(1)
Mr. Cha Mou-Sing, Payson
19 March 2012
(1)
Mr. Cheng Kar-Shing, Peter
19 March 2012
(1)
Mr. Ho Hau-Hay, Hamilton
19 March 2012
(1)
Mr. Lee Luen-Wai, John
19 March 2012
(1)
Mr. Liang Cheung-Biu, Thomas
19 March 2012
(1)
Ms. Ki Man-Fung, Leonie
19 March 2012
(1)
Mr. Cheng Chi-Heng
19 March 2012
(1)
Ms. Cheng Chi-Man, Sonia
19 March 2012
(1)
Mr. Au Tak-Cheong
19 March 2012
(1)
22 January 2014
(2)

Number of
share
options
Exercise
price per
share
(HK$)
10,675,637
9.152
532,982
9.756
3,736,471
9.152
3,736,471
9.152
533,779
9.152
533,779
9.152
533,779
9.152
533,779
9.152
533,779
9.152
533,779
9.152
3,202,688
9.152
533,779
9.152
3,202,688
9.152
1,346,693
9.152
532,982
9.756
30,703,065

Notes:

(1) Divided into 4 tranches exercisable from 19 March 2012, 19 March 2013, 19 March 2014 and 19 March 2015 respectively to 18 March 2016.
(2) Divided into 4 tranches exercisable from 22 January 2014, 22 January 2015, 22 January 2016 and 22 January 2017 respectively to 21 January 2018.
(3) The cash consideration paid by each Director for the grant of share options is HK$10.0.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

(ii) NWCL

Name of Director Date of grant Exercisable period (Note) Dr. Cheng Kar-Shun, Henry 18 January 2011 (1) Dr. Cheng Chi-Kong, Adrian 18 January 2011 (2) Mr. Cheng Kar-Shing, Peter 18 January 2011 (1) Mr. Lee Luen-Wai, John 18 January 2011 (1)	Number of share options Exercise price per share (HK$) 2,077,922 3.036 935,066 3.036 831,169 3.036 311,688 3.036 4,155,845

Notes:

(1) Divided into 5 tranches exercisable from 19 February 2011, 19 February 2012, 19 February 2013, 19 February 2014 and 19 February 2015, respectively to 18 February 2016.
(2) Divided into 3 tranches exercisable from 19 February 2013, 19 February 2014 and 19 February 2015, respectively to 18 February 2016.
(3) The cash consideration paid by each of the above Directors for each grant of share options is HK$10.0.

(iii) NWS

			Number of	Exercise
		Exercisable	share	price per
Name of Director	Date of grant	period	options	share
		(Note)		(HK$)
Dr. Cheng Kar-Shun, Henry	9 March 2015	(1)	7,407,925	14.145

Notes:

(1) 60.0% of the share options are exercisable from 9 May 2015 to 8 March 2020 while the remaining 40.0% of the share options are divided into 2 tranches exercisable from 9 March 2016 and 9 March 2017 respectively to 8 March 2020.
(2) The cash consideration paid by the above Director for the grant of share options is HK$10.0.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

(cc) Long position in underlying shares — debentures
(i) Fita International Limited (‘‘Fita’’)

Name of Director Mr. Doo Wai-Hoi, William Mr. Lee Luen-Wai, John	Amount	of debentures	in US$ issued by Fita Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Corporate interests Total US$ US$ 12,890,000(1) 15,790,000 2.11 — 2,000,000 0.27 12,890,000 17,790,000
	Personal interests US$ — 1,000,000 1,000,000	Family interests US$ 2,900,000 1,000,000 3,900,000

Note:

(1) These debentures are beneficially owned by companies which are wholly-owned by Mr. Doo Wai-Hoi, William.
(ii) NWCL

Name of Director Mr. Doo Wai-Hoi, William Mr. Cheng Kar-Shing, Peter	Amount of debentures issued by NWCL Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total RMB RMB RMB RMB — 65,896,000(1) 1,142,041,200(2) 1,207,937,200 12.89 — 12,256,000(3) 16,000,000(4) 28,256,000 0.30 — 78,152,000 1,158,041,200 1,236,193,200
	Personal interests RMB — — —

Notes:

(1) These debentures are held by the spouse of Mr. Doo Wai-Hoi, William, of which RMB42,896,000 debentures were issued in US$ and had been translated into RMB using the rate of US$1.0=RMB6.128.
(2) These debentures are held by companies which are wholly-owned by Mr. Doo Wai-Hoi, William, of which RMB584,611,200 debentures were issued in US$ and had been translated into RMB using the rate of US$1.0=RMB6.128 and RMB118,800,000 were issued in HK$ and had been translated into RMB using the rate of HK$1.0=RMB0.8.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

(3) These debentures are jointly-held by Mr. Cheng Kar-Shing, Peter and his spouse, all of which were issued in US$ and had been translated into RMB using the rate of US$1.0=RMB6.128.
(4) These debentures are beneficially owned by a company which is wholly-owned by Mr. Cheng Kar-Shing, Peter.

(iii) NWD (MTN) Limited

Name of Director Mr. Doo Wai-Hoi, William Ms. Ki Man-Fung, Leonie	Amount of debentures issued by NWD (MTN) Limited Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total HK$ HK$ HK$ HK$ — 23,400,000(1) 156,000,000(2) 179,400,000 0.96 11,800,000(3) — — 11,800,000 0.06 11,800,000 23,400,000 156,000,000 191,200,000

Notes:

(1) These debentures were issued in US$ and had been translated into HK$ using the rate of US$1.0=HK$7.8.
(2) These debentures are beneficially owned by a company which is wholly-owned by Mr. Doo WaiHoi, William and were issued in US$ and had been translated into HK$ using the rate of US$1.0=HK$7.8.
(3) HK$7,800,000 debentures were issued in US$ and had been translated into HK$ using the rate of US$1.0=HK$7.8.

(iv) Rosy Unicorn Limited

Name of Director Mr. Doo Wai-Hoi, William	Amount of debentures in US$ issued by Rosy Unicorn Limited Approximate % to the total amount of debentures in issue as at the Latest Practicable Date Personal interests Family interests Corporate interests Total US$ US$ US$ US$ — 51,500,000 22,840,000(1) 74,340,000 14.87

Note:

(1) These debentures are beneficially owned by a company which is wholly-owned by Mr. Doo WaiHoi, William.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

Save as disclosed in this circular, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had or deemed to have any interest 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) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including the interests and short positions in which they were deemed or taken to have under such provisions of the SFO), or which were required, pursuant to Section 352 of the SFO, to be entered in the register maintained by the Company referred to therein, or which were required, pursuant to the Model Code contained in the Listing Rules, to be notified to the Company and the Stock Exchange.

(B) Interests in assets of the Group

(a) On 24 August 2015, an agreement (the ‘‘Dragon Merchant Agreement’’) was entered into between Catchy Investments Limited (‘‘Catchy’’, a wholly-owned subsidiary of the Company) and FSE Management Company Limited (‘‘FSE’’, a majority-controlled company (as defined in the Listing Rules) of Mr. Doo Wai-Hoi, William) pursuant to which Catchy agreed to sell and assign, and FSE agreed to purchase and accept the assignment of, the entire issued share capital of Dragon Merchant Limited (‘‘Dragon Merchant’’) and the entire amount of the unsecured and non-interest bearing shareholder’s loan owing from Dragon Merchant to Catchy as at the date of completion of the Dragon Merchant Agreement (the ‘‘Dragon Merchant Completion’’) at an aggregate cash consideration of HK$258.0 million (subject to adjustment). The main asset of Dragon Merchant and its subsidiary is the property situate at 8th Floor, Chevalier Commercial Centre, 8 Wang Hoi Road, Kowloon Bay, Kowloon, Hong Kong. Details of the Dragon Merchant Agreement were set out in the announcement of the Company dated 24 August 2015. The Dragon Merchant Completion took place upon signing of the Dragon Merchant Agreement and thereafter, Dragon Merchant and its subsidiary ceased to be subsidiaries of the Company. The consideration was adjusted to approximately HK$255.3 million.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

(b) Dr. Cheng Kar-Shun, Henry, Mr. Doo Wai-Hoi, William, Dr. Cheng Chi-Kong, Adrian, Mr. Cheng Kar-Shing, Peter, Mr. Cheng Chi-Heng and Ms. Cheng ChiMan, Sonia are members of the Cheng’s family which holds interest in Cheng Yu Tung Family (Holdings) Limited and Cheng Yu Tung Family (Holdings II) Limited which in turn indirectly control Chow Tai Fook Enterprises Limited (‘‘CTF’’), the controlling shareholder of the Company within the meaning of the Listing Rules. The Group had entered into the following transactions with CTF and/or its subsidiaries since 30 June 2015:
(i) On 3 July 2015, the Vendor entered into a sale and purchase agreement with CTF pursuant to which the Vendor agreed to sell and CTF agreed to acquire the entire issued share capital of, and the outstanding shareholder’s loans owing to the Vendor from, New World Hotel Management (BVI) Limited (‘‘NWHM’’) for a cash consideration of HK$1,963 million (the ‘‘NWHM Disposal’’). NWHM is the holding company of certain companies which are principally engaged in the provision of hotel management services. The NWHM Disposal was completed on 29 December 2015;
(ii) On 20 November 2015, the Company entered into a sale and purchase agreement with CTF pursuant to which CTF agreed to sell and assign, and the Company agreed to purchase and accept the assignment of 36% of the issued shares of Beames Holdings Limited (‘‘Beames’’) and the entire amount of unsecured and non-interest bearing shareholder’s loan owing from Beames to CTF for a total adjusted consideration of approximately HK$3,592.8 million (the ‘‘Beames Acquisition’’). The Beames Acquisition was completed on 23 November 2015; and
(iii) There are lease agreements regarding rental of properties between members of CTF group and members of the Group. The aggregate amount of such transactions are covered under the master services agreement dated 11 April 2014 made between the Company and CTF as disclosed in the Company’s 2015 annual report.

As at the Latest Practicable Date, save as set out above, none of the Directors had any direct or indirect interests in any assets which had been acquired or disposed of by, or leased to, or which were proposed to be acquired or disposed of by, or leased to, any member of the Group since 30 June 2015, being the date to which the latest published audited accounts of the Group were made up.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

(C) Competing interests

As at the Latest Practicable Date, the following Directors had interests in the following businesses which are considered to compete or are likely to compete, either directly or indirectly, with the businesses of the Group other than those businesses where the Directors were appointed as directors to represent the interests of the Company and/or the Group:

Name of
Director
Dr. Cheng Kar-
Shun, Henry
Mr. Doo Wai-
Hoi, William

Business which are considered to compete or likely to
compete with the businesses of the Group
Nature of interest
of the Director in
the entity
Name of entity
Description of businesses
CTF group of companies
Property investment and
development, hotel operations,
transport and aircraft leasing
Director
FSE Holdings Limited group of
companies
Property and carpark management
and landscaping
Director and
shareholder
International Entertainment
Corporation group of companies
Hotel operations
Director
Supreme Harvest Development
Limited group of companies
Property investment and
development
Director
Silver City International Limited
group of companies
Property investment and food and
beverage operations
Director
Sunshine Dragon Group Limited
group of companies
Property investment
Director
Amelia Gold Limited group of
companies
Property investment
Director and
shareholder
Fortune Success Limited group of
companies
Property investment
Director and
shareholder
FSE Holdings Limited group of
companies
Property and carpark management
and landscaping
Shareholder
Fung Seng Enterprises Investment
Company Limited group of
companies
Property investment
Director and
shareholder
Fung Seng Enterprises Limited
group of companies
Property investment and
management
Director and
shareholder
Golden Wealth Investment Limited
group of companies
Property investment and
development
Director and
shareholder
Lifestyle International Holdings
Limited group of companies
Department stores operations and
property investment
Director

– 55 –

GENERAL INFORMATION OF THE GROUP

APPENDIX III

Name of
Director
Dr. Cheng Chi-
Kong,
Adrian
Mr. Cheng Kar-
Shing, Peter
Mr. Cha Mou-
Sing, Payson
Mr. Cha Mou-
Zing, Victor

Business which are considered to compete or likely to
compete with the businesses of the Group
Nature of interest
of the Director in
the entity
Name of entity
Description of businesses
Silver City International Limited
group of companies
Property investment and food and
beverage operations
Director and
shareholder
Silver Success Company Limited
group of companies
Hotel operations
Director and
shareholder
Sunshine Dragon Group Limited
group of companies
Property investment
Director and
shareholder
Cheung Hung Development
(Holdings) Limited
Property investment and
development
Director
CTF group of companies
Property investment and
development, hotel operations,
transport and aircraft leasing
Director
Grandhope Properties Limited
Property investment
Director and
shareholder
International Entertainment
Corporation group of companies
Hotel operations
Director
CTF group of companies
Property investment and
development, hotel operations,
transport and aircraft leasing
Director
Long Vocation Investments Limited
group of companies
Property investment
Director and
shareholder
HKR International Limited
group of companies
Property investment and
development and property
management
Director and
shareholder
Hanison Construction Holdings
Limited group of companies
Construction, property investment
and development
Director and
shareholder
HKR International Limited
group of companies
Property investment and
development and property
management
Director and
shareholder
Hanison Construction Holdings
Limited group of companies
Construction, property investment
and development
Shareholder

– 56 –

GENERAL INFORMATION OF THE GROUP

APPENDIX III

Name of
Director
Mr. Ho Hau-
Hay,
Hamilton
Mr. Lee Luen-
Wai, John
Mr. Liang
Cheung-Biu,
Thomas
Mr. Cheng Chi-
Heng

Business which are considered to compete or likely to
compete with the businesses of the Group
Nature of interest
of the Director in
the entity
Name of entity
Description of businesses
Honorway Investments Limited
Property investment and
development
Director and
shareholder
Tak Hung (Holding) Company
Limited
Property investment and
development
Director and
shareholder
Lippo Limited
Property investment, development
and management
Director
Lippo China Resources Limited
Property investment, development
and management
Director
Hongkong Chinese Limited
Property investment, development
and management
Director
Bermuda Investments Limited
Property investment
Director
Bonaventure Properties Limited
Property investment
Spouse interest
(director and
shareholder)
Greenwich Investors Limited
Property investment
Director
Lambda Enterprises Limited
Property management
Director
Wideland Investors Limited
Property investment
Spouse interest
(director and
shareholder)
CTF group of companies
Property investment and
development, hotel operations,
transport and aircraft leasing
Director

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and their respective close associates had interest in any business apart from the business of the Group, which is considered to compete or is likely to compete, either directly or indirectly, with that of the Group.

As the Board is independent of the boards of the above-mentioned entities and none of the above Directors can control the Board, the Group is therefore capable of carrying on its business independently of, and at arm’s length from the business of these entities.

– 57 –

GENERAL INFORMATION OF THE GROUP

APPENDIX III

(D) Interests in contracts or arrangements

Save for contracts amongst group companies and save for the Offers, as at the Latest Practicable Date, none of the Directors was materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group subsisting at the date of this circular and which is significant in relation to the business of the Group.

(E) Common directors

The following is a list of Directors who, as at the Latest Practicable Date, were also directors of the companies which had interests or short positions in the shares or underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

Name of Common Director Name of Company Dr. Cheng Kar-Shun, Henry Cheng Yu Tung Family (Holdings) Limited Mr. Cheng Kar-Shing, Peter Dr. Cheng Kar-Shun, Henry Cheng Yu Tung Family (Holdings II) Limited Mr. Cheng Kar-Shing, Peter Dr. Cheng Kar-Shun, Henry Chow Tai Fook Capital Limited Mr. Cheng Kar-Shing, Peter Dr. Cheng Kar-Shun, Henry Chow Tai Fook (Holding) Limited Dr. Cheng Chi-Kong, Adrian Mr. Cheng Kar-Shing, Peter Mr. Cheng Chi-Heng Dr. Cheng Kar-Shun, Henry CTF Dr. Cheng Chi-Kong, Adrian Mr. Cheng Kar-Shing, Peter Mr. Cheng Chi-Heng

3. DIRECTORS’ SERVICE AGREEMENTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contract with any member of the Group which was not determinable by the employer within one year without payment of compensation (other than statutory compensation).

– 58 –

GENERAL INFORMATION OF THE GROUP

APPENDIX III

4. MATERIAL CONTRACTS

The following contracts (being contracts entered into outside the ordinary course of business carried on by the Group) have been entered into by members of the Group within the two years immediately preceding the date of this circular and are, or may be, material:

(a) a conditional underwriting agreement dated 13 March 2014 entered into between the Company, The Hongkong and Shanghai Banking Corporation Limited (‘‘HSBC’’) and CTF in relation to the Rights Issue, details of which are disclosed in the announcement of the Company dated 13 March 2014;
(b) an amended and restated underwriting agreement dated 27 March 2014 entered into between the Company, HSBC, Standard Chartered Securities (Hong Kong) Limited and CTF in relation to the Rights Issue, details of which are disclosed in the announcement of the Company dated 27 March 2014;
(c) a share purchase agreement dated 15 May 2014 entered into between a third party and Sino-French Holdings (Hong Kong) Limited (‘‘SFH’’, a 50.0% owned joint venture of NWS) and pursuant to which SFH agreed to sell 90.0% of the issued share capital in Sino-French Energy Development Company Limited (‘‘SFED’’) together with the assignment of the shareholder loans owed by SFED to SFH at an aggregate cash consideration of US$612.0 million. SFED owns approximately 42.2% interest in Companhia de Electricidade de Macau — CEM, S.A.;
(d) a share purchase agreement dated 30 January 2015 entered into between Natal Global Limited, (‘‘Natal Global’’, an indirect wholly-owned subsidiary of NWS), Zion Sky Holdings Limited (‘‘Zion Sky’’, a wholly-owned subsidiary of CTF), Investec Bank plc (‘‘Investec’’) and Goshawk Aviation Limited (‘‘Goshawk’’ a company engaged in commercial aircraft leasing) in relation to the purchase by Natal Global of (i) 144,810,506 preference shares of Goshawk held by Zion Sky, representing 40% of the total issued share capital of Goshawk and (ii) the loan notes in the outstanding principal amount of approximately US$60.9 million issued by GAL Dutch Finance B.V. under the senior notes deed dated 12 May 2014 and enter into between GAL Dutch Finance B.V. as issuer and, among others, Zion Sky and Investec as noteholders from Zion Sky at a total cash consideration of approximately US$222.5 million;
(e) agreements dated 29 April 2015 entered into between the Company and/or its subsidiaries, namely Beames, Park New Astor Hotel Limited and Great TST Limited, and HIP Company Limited (‘‘HIP’’) in relation to the establishment of a new joint venture company (the ‘‘JVC’’) in which Beames and HIP will each (directly or indirectly) hold 50.0% of the issued share capital and into which the entire ownership of three hotels, namely, Grand Hyatt Hong Kong, Renaissance Harbour View Hotel, Hong Kong and Hyatt Regency Hong Kong, Tsim Sha Tsui will be injected with effect from

– 59 –

GENERAL INFORMATION OF THE GROUP

APPENDIX III

the completion of the agreements at the total consideration of HK$18.5 billion (subject to customary closing adjustments), details of which are disclosed in the announcements of the Company dated 30 April 2015 and 15 June 2015;

(f) a sale and purchase agreement dated 3 July 2015 entered into between the Vendor and CTF whereby the Vendor conditionally agreed to sell and CTF conditionally agreed to acquire the entire issued share capital of, and the outstanding shareholder’s loans owing from, NWHM for a consideration of HK$1,963 million;
(g) a sale and purchase agreement dated 20 November 2015 entered into between the Company as purchaser and CTF as vendor in relation to the acquisition of shares in the issued share capital of, and shareholder’s loan owing by, Beames for a total adjusted consideration of approximately HK$3,592.8 million, details of which are disclosed in the announcement of the Company dated 20 November 2015;
(h) a sale and purchase agreement dated 2 December 2015 entered into between the Purchaser and the Vendor in relation to the disposals of NWCL Group’s interests in the property project in Haikou, the PRC for a total consideration of RMB8,600 million, details of which are set out in the Previous Announcement and the circular of NWCL dated 23 December 2015;
(i) a sale and purchase agreement dated 2 December 2015 entered into between the Purchaser and the Vendor in relation to the disposal of NWCL Group’s interests in the property projects in Huiyang, the PRC for a total consideration of RMB1,100 million, details of which are set out in the Previous Announcement and the circular of NWCL dated 23 December 2015;
(j) a sale and purchase agreement dated 2 December 2015 entered into between the Purchaser and the Vendor in relation to the disposal of NWCL Group’s interests in the property projects in Hankou, Wuhan city, Hubei province, the PRC for a total consideration of RMB3,800 million, details of which are set out in the Previous Announcement and the circular of NWCL dated 23 December 2015;
(k) a subscription agreement dated 23 December 2015 entered into between (i) Sherson Limited, a wholly-owned subsidiary of the Company, and Vivid China Investment Limited, a wholly-owned subsidiary of NWCL, as purchasers and (ii) Evergrande as issuer, pursuant to which Sherson Limited and Vivid China Investment Limited agreed to subscribe for the perpetual securities issued by Evergrande in an aggregate principal amount of US$900 million, for a consideration of US$450 million and US$450 million, respectively, details of which are disclosed in the joint announcements of the Company and NWCL dated 23 December 2015 and 29 December 2015;
(l) the Guiyang SP Agreement; and
(m) the Chengdu SP Agreement.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

Save as disclosed above, as at the Latest Practicable Date, no contracts (not being contracts entered into in the ordinary course of business) had been entered into by the Company or its subsidiaries within the two years immediately preceding the issue of this circular which are, or may be, material to the Group.

5. LITIGATION

As at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance, and so far as the Directors were aware, no litigation or claim of material importance was pending or threatened against the Company or any of its subsidiaries.

6. EXPERT’S CONSENT AND QUALIFICATIONS

Knight Frank, an independent qualified valuer, has given its opinion or advice as set out in Appendix I to this circular.

As at the Latest Practicable Date, Knight Frank did not have any shareholding in any member of the Group nor did it have the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, and it did not have any direct or indirect interest in any assets which had been, since 30 June 2015 (being the date to which the latest published audited accounts 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.

Knight Frank has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and reports and references to its name in the form and context in which they respectively appear.

7. GENERAL

(a) The registered office of the Company is situated at 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong.
(b) The Company’s share registrar and transfer office is Tricor Tengis Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
(c) The company secretary of the Company is Mr. Wong Man-Hoi, a member of the Law Society of Hong Kong and has been a qualified solicitor in Hong Kong since 1994. Mr. Wong obtained his Bachelor of Science (Engineering) degree from the University of Hong Kong in 1981, Bachelor of Laws degree from the University of London in 1990 and passed the Solicitors’ Final Examination of the Law Society of England and Wales in 1992.

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection at the office of the Company at 30th Floor, New World Tower, 18 Queen’s Road Central, Hong Kong from 9:30 a.m. to 5:30 p.m., Monday to Friday (other than public holidays) from the date of this circular up to and including 17 February 2016:

(a) the articles of association of the Company;
(b) the property valuation report from Knight Frank, the texts of which are set out in Appendix I to this circular;
(c) the material contracts referred to in the paragraph headed ‘‘4. Material Contracts’’ in this Appendix III;
(d) the annual reports of the Company for each of the two financial years ended 30 June 2014 and 2015;
(e) the consent letter of Knight Frank referred to in the paragraph headed ‘‘6. Expert’s Consent and Qualifications’’ in this Appendix III; and
(f) this circular.

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NOTICE OF EGM

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(incorporated in Hong Kong with limited liability)

(Stock Code: 0017)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of New World Development Company Limited (新世界發展有限公司) (the ‘‘Company’’) will be held at Meeting Room N201 (Expo Drive Entrance), Hong Kong Convention and Exhibition Centre, 1 Expo Drive, Wanchai, Hong Kong, at 11:30 a.m. on Wednesday, 17 February 2016 to consider and, if thought fit, pass the following resolutions as ordinary resolutions (with or without modification) of the Company:

ORDINARY RESOLUTIONS

‘‘THAT:
(A) the sale and purchase agreement dated 29 December 2015 entered into between (i) New World Development (China) Limited and (ii) Shengyu (BVI) Limited (the ‘‘Guiyang SP Agreement’’) (a copy of which marked ‘‘A’’ has been produced to the meeting and signed by the chairman of the meeting for the purpose of identification) in relation to, among other matters, the disposal by New World Development (China) Limited of interests in the property project in Jinyang New District, Guiyang, the PRC and the transactions contemplated thereunder, details of which are described in the Company’s circular dated 19 January 2016 (a copy of which marked ‘‘C’’ has been produced to the meeting and signed by the chairman of the meeting for the purpose of identification), be and are hereby approved, ratified and confirmed;
(B) any one director of the Company be and is hereby authorised for and on behalf of the Company to take all steps necessary or expedient in his/her opinion to implement and/or give effect to the terms of the Guiyang SP Agreement and all transactions contemplated thereunder and all other matters incidental thereto or in connection therewith; and
(C) any one director of the Company be and is hereby authorised for and on behalf of the Company to execute all such documents, instruments and agreements and to do all such acts or things incidental to, ancillary to or in connection with the matters contemplated under the Guiyang SP Agreement.’’

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NOTICE OF EGM

‘‘THAT:
(A) the sale and purchase agreement dated 29 December 2015 entered into between (i) New World Development (China) Limited and (ii) Shengyu (BVI) Limited (the ‘‘Chengdu SP Agreement’’) (a copy of which marked ‘‘B’’ has been produced to the meeting and signed by the chairman of the meeting for the purpose of identification) in relation to, among other matters, the disposal by New World Development (China) Limited of interests in the property project in Shuangliu County, Chengdu, the PRC and the transactions contemplated thereunder, details of which are described in the Company’s circular dated 19 January 2016 (a copy of which marked ‘‘C’’ has been produced to the meeting and signed by the chairman of the meeting for the purpose of identification), be and are hereby approved, ratified and confirmed;
(B) any one director of the Company be and is hereby authorised for and on behalf of the Company to take all steps necessary or expedient in his/her opinion to implement and/or give effect to the terms of the Chengdu SP Agreement and all transactions contemplated thereunder and all other matters incidental thereto or in connection therewith; and
(C) any one director of the Company be and is hereby authorised for and on behalf of the Company to execute all such documents, instruments and agreements and to do all such acts or things incidental to, ancillary to or in connection with the matters contemplated under the Chengdu SP Agreement.’’

By order of the Board Wong Man-Hoi Company Secretary

Hong Kong, 19 January 2016

Notes:

Any member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies (who must be individuals) to attend and speak and, on a poll, vote instead of him at the meeting, and separate proxies may be appointed by a member to represent the respective number of shares held by him as specified in the relevant proxy form. A proxy need not be a member of the Company.
In order to be valid, the form of proxy, together with any power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power or authority, must be deposited at the Company’s share registrar, Tricor Tengis Limited, at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof (as the case may be).
Delivery of an instrument appointing a proxy will not preclude such member of the Company from attending and voting in person at the above meeting or any adjournment thereof and, in such event, the instrument appointing a proxy will be deemed to be revoked.

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NOTICE OF EGM

In the case of joint holders of a share, any one of such joint holders may vote at the above meeting, either in person or by proxy, in respect of such share as if he/she/it were solely entitled thereto. If more than one of such joint holders are present at the above meeting, whether in person or by proxy, that one of such joint holders so present whose name stands first on the register of members of the Company in respect of such share shall alone be entitled to vote in respect thereof.
Voting on the above resolutions will be taken by poll.
The translation into Chinese language of this notice is for reference only. In case of any inconsistency, the English version shall prevail.
As at the date of this notice (a) the executive directors of the Company are Dr. Cheng Kar-Shun, Henry, Dr. Cheng Chi-Kong, Adrian, Mr. Chen Guanzhan, Ms. Ki Man-Fung, Leonie, Mr. Cheng Chi-Heng, Ms. Cheng Chi-Man, Sonia and Mr. Au Tak-Cheong; (b) the non-executive directors of the Company are Mr. Doo Wai-Hoi, William and Mr. Cheng Kar-Shing, Peter; and (c) the independent non-executive directors of the Company are Mr. Yeung PingLeung, Howard, Mr. Cha Mou-Sing, Payson (alternate director to Mr. Cha Mou-Sing, Payson: Mr. Cha Mou-Zing, Victor), Mr. Ho Hau-Hay, Hamilton, Mr. Lee Luen-Wai, John and Mr. Liang Cheung-Biu, Thomas.

– 65 –

AI assistant

Galaxy Entertainment Group Limited — Proxy Solicitation & Information Statement 2016

48883_rns_2016-01-18_aa9645e0-fa8a-4024-a687-721f90d41282.pdf

MAJOR TRANSACTION

IN RELATION TO THE DISPOSALS

AND

NOTICE OF EGM

DEFINITIONS

DEFINITIONS

‘‘PRC’’

(incorporated in Hong Kong with limited liability)

(Stock Code: 0017)

MAJOR TRANSACTION IN RELATION TO THE DISPOSALS

INTRODUCTION

THE DISPOSALS

The Guiyang SP Agreement

Date

Parties

Assets to be disposed of

Guiyang Consideration

Basis of the Guiyang Consideration

Guiyang Conditions Precedent

Termination

Guiyang Completion

Participation Agreement

FINANCIAL EFFECT OF THE GUIYANG DISPOSAL

The Chengdu SP Agreement

Date

Parties

Assets to be disposed of

Chengdu Consideration

Basis of the Chengdu Consideration

Chengdu Conditions Precedent

Termination

Chengdu Completion

Participation Agreement

LETTER FROM THE BOARD

FINANCIAL EFFECT OF THE CHENGDU DISPOSAL

REASONS FOR AND BENEFITS OF THE DISPOSALS AND USE OF PROCEEDS

LETTER FROM THE BOARD

INFORMATION ON THE PARTIES

The Purchaser

The Vendor

The Guiyang Target

LETTER FROM THE BOARD

The Chengdu Target

LISTING RULES IMPLICATIONS

LETTER FROM THE BOARD

THE EGM

RECOMMENDATION

ADDITIONAL INFORMATION

VALUATION OF VARIOUS PROPERTIES IN THE PEOPLE’S REPUBLIC OF CHINA

BASIS OF VALUATION

VALUATION METHODOLOGIES

TITLE DOCUMENTS AND ENCUMBRANCES

SOURCE OF INFORMATION

INSPECTION AND STRUCTURAL CONDITION

IDENTITY OF PROPERTY TO BE VALUED

ENVIRONMENTAL ISSUES

COMPLIANCE WITH RELEVANT ORDINANCES AND REGULATIONS

REMARKS

CURRENCY

SUMMARY OF VALUES

Group I — Properties held by the Group for Investment in the PRC

Group III — Property held by the Group for future development in the PRC

VALUATION REPORT

Group I — Properties held by the Group for Investment in the PRC

Group II — Hotel held by the Group in the PRC

Group III — Property held by the Group for future development in the PRC

Property Description and tenure

Property

Description and tenure

Particulars of occupancy

1. INDEBTEDNESS

Borrowings

Contingent liabilities

2. WORKING CAPITAL

3. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

1. RESPONSIBILITY STATEMENT

2. INTERESTS OF DIRECTORS

Galaxy Entertainment Group Limited Proxy Solicitation & Information Statement 2016