Heng Tai Consumables Group Limited — Proxy Solicitation & Information Statement 2012

Dec 3, 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold all your shares in Poly Property Group Co., Limited, you should at once hand this circular to the purchaser or transferee or to the 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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Poly Property Group Co., Limited 保利置業集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 119)

DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTION – RENEWAL OF CONSTRUCTION AGREEMENT

Independent Financial Adviser

to the Independent Board Committee and the Independent Shareholders of Poly Property Group Co., Limited

A letter from the Independent Board Committee of Poly Property Group Co., Limited containing its recommendation to the Independent Shareholders of Poly Property Group Co., Limited is set out on page 9 of this circular. A letter from Messis Capital Limited containing its advice to the Independent Board Committee and the Independent Shareholders of Poly Property Group Co., Limited is set out on pages 10 to 15 of this circular.

A notice convening an extraordinary general meeting of Poly Property Group Co., Limited to be held at Room 2503, Admiralty Centre, Tower 1, 18 Harcourt Road, Hong Kong on Thursday, 20 December 2012 at 10:00 a.m. is set out in pages 22 to 23 of this circular. Whether or not you intend to attend and vote at the extraordinary general meeting in person, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon and return it to the Company’s share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not later than 48 hours before the time appointed for holding of such meeting. Completion and return of the form of proxy will not preclude you from attending and voting in person at the extraordinary general meeting or any adjourned meeting should you so wish.

4 December 2012

CONTENTS

	Page
Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Letter from the Board
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Renewal of the Construction Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Caps for the Construction Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Reasons for and Benefits for renewal of
the Construction Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Information relating to Poly Southern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Information relating to the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Implications under the Listing Rules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Extraordinary General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Right to demand a poll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Recommendation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Letter from the Independent Board Committee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Letter from Messis. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Appendix – General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Notice of Extraordinary General Meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

DEFINITIONS

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

“associate(s)” has the meaning ascribed to it under the Listing Rules “Board” the board of Directors “China Poly” 中國保利集團公司 (China Poly Group Corporation), a stateowned enterprise established in the PRC, the substantial Shareholder of the Company holding approximately 48.02% of the total issued share capital of the Company “Company” Poly Property Group Co., Limited, a company incorporated in Hong Kong with limited liability whose shares are listed on the Main Board of the Stock Exchange “connected person(s)” has the meaning ascribed to it under the Listing Rules

“Construction Agreement” the construction agreement dated 8 April 2009 entered into between the Company and Poly Southern for provision of construction work service and other services ancillary to the provision of construction work service by Poly Southern and its subsidiaries

“Directors” the directors of the Company “EGM” the extraordinary general meeting to be held on 20 December 2012 for considering and approving renewal of the Construction Agreement, the transactions contemplated thereunder and the related annual caps “Group” the Company and its subsidiaries “HK$” Hong Kong Dollar, the lawful currency of Hong Kong “Hong Kong” the Hong Kong Special Administrative Region of the PRC “Independent Board an independent committee of the Board established by the Board Committee” comprising Mr. Yao Kang, J.P. , Mr. Choy Shu Kwan and Ms. Leung Sau Fan, Sylvia (all being independent non-executive Directors) to advise the Independent Shareholders in respect of renewal of the Construction Agreement and the related annual caps “Independent Shareholders” Shareholders, other than China Poly and its associates “Latest Practicable Date” 29 November 2012, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

1

DEFINITIONS

“Listing Rules”	The Rules Governing the Listing of Securities on the Stock
	Exchange
“Messis”	Messis Capital Limited, a licensed corporation to carry out type 6
	regulated activities under the SFO, who has been appointed as the
	independent financial adviser to give advice to the Independent
	Board Committee and the Independent Shareholders in respect
	of renewal of the Construction Agreement and the related annual
	caps
“Percentage Ratios”	the percentage ratios under Rule 14.07 of the Listing Rules
“Poly Construction”	保利建設開發總公司(Poly Construction Developments
	Company), a limited liability company established in the PRC and
	wholly-owned by Poly Southern
“Poly Southern”	保利南方集團有限公司(Poly Southern Group Limited), a limited
	liability company established in the PRC and wholly-owned by
	China Poly. It is a substantial shareholder holding approximately
	7.03% of the issued shares of the Company
“PRC”	the People’s Republic of China, which for the purpose of this
	circular excludes Hong Kong, the Macau Special Administrative
	Region of the PRC and Taiwan
“RMB”	Renminbi, the lawful currency of the PRC
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong) as amended, supplemented or otherwise from time to
	time
“Shares”	shares of HK$0.50 each in the share capital of the Company
“Shareholder(s)”	holder(s) of the Shares
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“%”	per cent.

For reference purposes only, the Chinese names of the PRC entities, authorities or facilities have been translated into English in this circular. In the event of any discrepancies between the Chinese names of these PRC entities, authorities or facilities and their respective English translations, the Chinese version shall prevail.

In this circular, certain amounts quoted in RMB should be translated into Hong Kong dollars at the reference rate of HK$1.00 to RMB0.81 for information purpose only. Such translation should not be construed as a representation that the relevant amounts have been, could have been, or could be, converted at that or any other rate or at all.

2

LETTER FROM THE BOARD

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Poly Property Group Co., Limited 保利置業集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 119)

Executive Directors: Chen Hong Sheng Wang Xu Xue Ming (Chairman and Managing Director) Zhang Wan Shun Ye Li Wen

Registered office and head office: Room 2503 Admiralty Centre, Tower 1 18 Harcourt Road Hong Kong

Non-Executive Director: Ip Chun Chung, Robert

Independent Non-Executive Directors: Yao Kang, J.P. Choy Shu Kwan Leung Sau Fan, Sylvia Wong Ka Lun

4 December 2012

To the Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTION – RENEWAL OF CONSTRUCTION AGREEMENT

INTRODUCTION

The Board announced that, on 20 November 2012, the Company agreed to renew the Construction Agreement.

Under the Listing Rules, the renewal of the Construction Agreement would constitute a discloseable and continuing connected transaction for the Company. The transaction is subject to approval of independent shareholders requirements.

The Independent Board Committee (comprising three independent non-executive Directors) has been appointed to advise the Independent Shareholders, and Messis has been appointed to advise the Independent Board Committee and the Independent Shareholders in respect of the renewal of the Construction Agreement.

3

LETTER FROM THE BOARD

The purpose of this circular is to provide you with further information relating to the renewal of the Construction Agreement, to set out the advice from Messis to the Independent Board Committee and the Independent Shareholders and the recommendation of the Independent Board Committee in this respect.

RENEWAL OF THE CONSTRUCTION AGREEMENT

References were made to the announcements of the Company dated 8 April 2009 and 25 November 2010 respectively in respect of the Construction Agreement entered into between the Company and Poly Southern. At the extraordinary general meeting of the Company held on 30 December 2010, the Independent Shareholders approved the renewal of the Construction Agreement and the annual caps for two years ending 31 December 2012. The term of the renewal of the Construction Agreement commenced from the date on which the Independent Shareholders approved the renewal of the Construction Agreement (i.e. 30 December 2010) and will expire on 31 December 2012. Upon expiry of the term of the Construction Agreement, the parties may renew the Construction Agreement for further period to be agreed. In view that the Construction Agreement will expire on 31 December 2012, the Company and Poly Southern have on 20 November 2012 agreed to renew the Construction Agreement for a further period of two years from 1 January 2013 to 31 December 2014. The renewal of the Construction Agreement and the relevant annual caps for two years ending 31 December 2014 are conditional upon approval by the Independent Shareholders at the EGM.

Pursuant to the Construction Agreement, Poly Southern and its subsidiaries shall provide construction work service and other services ancillary to the provision of construction work service to the Group, the detailed terms as to the scope of service, quality and fee will be agreed from time to time under separate transactional agreements. It was also a term of the Construction Agreement that the provision of the construction services to the Group should be charged in accordance with the state-prescribed prices or where there was no state-prescribed price, on price no less favorable than those offered by Poly Southern and its subsidiaries (mainly Poly Construction) to independent third parties or those available to the Group from independent third parties.

Further renewal of the Construction Agreement

Upon expiry of the proposed renewal term of the Construction Agreement until 31 December 2014, the parties may enter into further agreement or renew the Construction Agreement for further period to be agreed. The entering into of further agreement will be subject to the applicable disclosure requirements under the Listing Rules.

4

LETTER FROM THE BOARD

CAPS FOR THE CONSTRUCTION AGREEMENT

For the financial year ended 31 December 2011 and up to 30 September 2012, the approximate construction fee payable under the Construction Agreement is as follows:

	For the	For the period from
	financial year ended	1 January 2012 to
	31 December 2011	30 September 2012
Construction fee	(audited)	(unaudited)
RMB	4,371 million	2,874 million
approximate HK$ equivalent	5,266 million	3,548 million
	(this amount was translated
	from RMB into HK$
	at the reference rate of
	HK$1.00 to RMB0.83)

The Company proposed the following caps for the construction fee payable under the Construction Agreement for the two years ending 31 December 2013 and 2014:

Construction Fee	31 December 2013	31 December 2014
Cap Amount (RMB)	3,400 million	3,400 million
Cap Amount (approximate HK$ equivalent)	4,198 million	4,198 million

The proposed annual caps are determined by reference to: (i) the outstanding contract amount for completion of existing development projects; (ii) the future property developments plans of the Group in 2013 and 2014; and (iii) the anticipated increase in construction cost and building materials.

REASONS FOR AND BENEFITS FOR RENEWAL OF THE CONSTRUCTION AGREEMENT

The Directors are of the view that renewal of the Construction Agreement is in the ordinary and usual course of business of the Group and on normal commercial terms, the terms are fair and reasonable and the renewal of the Construction Agreement is in the interest of the Company and the Shareholders as a whole since Poly Southern and its subsidiaries possess the required qualifications and experience in carrying out such services with good quality standard.

INFORMATION RELATING TO POLY SOUTHERN

Poly Southern is principally engaged in investment holding, property development and investment and construction services.

Poly Southern is wholly-owned by China Poly and is a shareholder holding approximately 7.03% of the issued share capital of the Company. China Poly and its associates (including Poly Southern) are the substantial shareholders holding approximately 48.02% of the issued share capital of the Company.

5

LETTER FROM THE BOARD

Save as aforesaid, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiry, Poly Southern and its respective ultimate beneficial owner are third parties independent of the Company and its connected persons and any of their respective associates.

INFORMATION RELATING TO THE COMPANY

The Company is an investment holding company with its subsidiaries principally engaged in the property development and investment in the PRC.

IMPLICATIONS UNDER THE LISTING RULES

Discloseable and Continuing Connected Transactions

Poly Southern is wholly-owned by China Poly and is a shareholder holding approximately 7.03% of the issued share capital of the Company. By virtue of the fact that China Poly and its associates (including Poly Southern) are the substantial shareholders holding approximately 48.02% of the issued share capital of the Company, Poly Southern is an associate of a connected person of the Company under Rule 14A.11(4) of the Listing Rules. The renewal of the Construction Agreement and the transactions contemplated thereunder therefore constitute continuing connected transactions of the Company under Rule 14A.14 of the Listing Rules.

As the applicable Percentage Ratios of the relevant caps for the construction fee payable under the Construction Agreement exceed 5% but less than 25% for the Company, renewal of the Construction Agreement also constitute discloseable transaction under Chapter 14 of the Listing Rules and are therefore subject to reporting and announcement requirements as set out in Rules 14.34 and 14.35 of the Listing Rules.

Independent Shareholders’ approval

As the applicable Percentage Ratios of the relevant caps for the construction fee payable under the Construction Agreement exceeds 5% for the Company, the renewal of the Construction Agreement and the transactions contemplated thereunder are subject to reporting, announcement and Independent Shareholders’ approval requirements set out in Rules 14A.45 to 14A.48 of the Listing Rules. Appropriate disclosure of the above transaction will be made in the next published annual report and accounts of the Company in accordance with Rules 14A.37 to 14A.40, 14A.45 and 14A.46 of the Listing Rules.

Independent Board Committee

An Independent Board Committee comprising three independent non-executive Directors (Mr. Yao Kang, J.P. , Mr. Choy Shu Kwan and Ms. Leung Sau Fan, Sylvia) has been established to advise the Independent Shareholders regarding the transactions contemplated under the Construction Agreement. Messis has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders regarding renewal of the Construction Agreement and the related annual caps.

6

LETTER FROM THE BOARD

EXTRAORDINARY GENERAL MEETING

You will find on pages 22 to 23 of this circular a notice of the EGM to be held at Room 2503, Admiralty Centre, Tower 1, 18 Harcourt Road, Hong Kong on Thursday, 20 December 2012 at 10:00 a.m. for the purpose of considering and, if thought fit, approving the renewal of the Construction Agreement and the related annual caps. As at the Latest Practicable Date, China Poly, being the substantial Shareholder holding approximately 48.02% of the issued share capital of the Company interested in the renewal of the Construction Agreement and the transactions contemplated thereunder, and its associates will abstain from voting in respect of the relevant resolutions at the EGM. Save for China Poly and its associates, no Shareholder (or his associates) has any interest in the transactions contemplated under the renewal of the Construction Agreement. Pursuant to Rule 14A.52 of the Listing Rules, the Company will procure that the Chairman of the EGM will demand all resolutions to be taken by a poll. You may refer to the paragraph headed “RIGHT TO DEMAND A POLL” for the procedure by which for you may demand a poll pursuant to the articles of association of the Company.

A form of proxy for use at the EGM is enclosed. Whether or not you intend to be present at the meeting, you are requested to complete this form of proxy in accordance with the instructions printed thereon and deposit the same at Computershare Hong Kong Investor Services Limited, the share registrars of the Company, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible and in any event not less than 48 hours before the time of the EGM or any adjourned meeting. The completion and return of the form of proxy will not preclude you from attending and voting in person should you so wish.

RIGHT TO DEMAND A POLL

Pursuant to Article 80 of the Articles of Association of the Company, at any general meeting, a resolution put to the vote of the meeting shall be decided on a show of hands unless a poll is (before or on the declaration of the results of the show of hands) demanded:

• (i) by the chairman; or

• (ii) by at least three members present in person or by proxy for the time being entitled to vote at the meeting; or

• (iii) by any member or members present in person or by proxy and representing not less than onetenth of the total voting rights of all the members having the right to vote at the meeting; or

• (iv) by a member or members present in person or by proxy and holding shares in the Company conferring a right to vote at the meeting being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right.

7

LETTER FROM THE BOARD

RECOMMENDATION

The Directors are of the view that the renewal of the Construction Agreement is on normal commercial terms and the terms are fair and reasonable and the renewal is in the interest of the Company and the Shareholders as a whole.

The Independent Board Committee comprising Mr. Yao Kang, J.P. , Mr. Choy Shu Kwan and Ms. Leung Sau Fan, Sylvia has been appointed by the Board to advise the Independent Shareholders as to the fairness and reasonableness of the terms of the Construction Agreement and the related annual caps. Messis has been appointed as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in this regard.

Your attention is drawn to the letter from the Independent Board Committee set out on page 9 of this circular. The Independent Board Committee, having taken into account the advice of Messis, the text of which is set out on pages 10 to 15 of this circular, considers that the renewal of the Construction Agreement is in the interest of the Company and the Shareholders as a whole and that the terms of the Construction Agreement are fair and reasonable so far as the Independent Shareholders are concerned. The Independent Board Committee, as stated in its letter, recommend that the Independent Shareholders to vote in favour of the resolutions to approve the renewal of the Construction Agreement and the transactions contemplated thereunder.

ADDITIONAL INFORMATION

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

Yours faithfully,

For and on behalf of the Board

POLY PROPERTY GROUP CO., LIMITED Xue Ming

Chairman and Managing Director

8

LETTER FROM THE INDEPENDENT BOARD COMMITTEE

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Poly Property Group Co., Limited 保利置業集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 119)

4 December 2012

To the Independent Shareholders

Dear Sir or Madam,

DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTION – RENEWAL OF CONSTRUCTION AGREEMENT

We have been appointed by the Board as members of the Independent Board Committee to advise the Independent Shareholders in respect of the fairness and reasonableness of the renewal of the Construction Agreement, details of which are set out in the “Letter from the Board” in the circular dated 4 December 2012 (“Circular”) to the Shareholders. Unless the context otherwise requires, terms defined in the Circular shall have the same meanings when used in this letter.

Your attention is drawn to the advice of Messis to the Independent Board Committee and the Independent Shareholders in respect of the renewal of the Construction Agreement and the related annual caps as set out in the letter from Messis in the Circular. Having taken into account the advice of Messis, we consider that the terms of the Construction Agreement are fair and reasonable so far as the interests of the Shareholders are concerned and that the renewal of the Construction Agreement is on normal commercial terms and in the interests of the Company and the Shareholders.

Accordingly, we recommend the Independent Shareholders to vote in favour of the resolutions for approval of the renewal of the Construction Agreement and the transactions contemplated thereunder at the EGM of the Company.

Yours faithfully, YAO Kang J.P. Choy Shu Kwan Independent Board Committee

Leung Sau Fan, Sylvia

9

LETTER FROM MESSIS

The following is the text of a letter from Messis in connection with the advice to the Independent Board Committee and the Independent Shareholders on the renewal of the Construction Agreement and the related new annual caps, which has been prepared for the purpose of inclusion in this circular:

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4 December 2012

To the Independent Board Committee and the Independent Shareholders of the Company

Dear Sirs,

DISCLOSEABLE AND CONTINUING CONNECTED TRANSACTIONS – RENEWAL OF CONSTRUCTION AGREEMENT

INTRODUCTION

We refer to our engagement as the independent financial adviser to advise the Independent Board Committee and the Independent Shareholders in respect of whether the renewal of the Construction Agreement and the related new annual caps are in the interests of the Company and the Shareholders as a whole and fair and reasonable so far as the Independent Shareholders are concerned, details of which are set out in the letter from the Board (the “Board Letter”) contained in the circular of the Company dated 4 December 2012 (the “Circular”) of which this letter forms part. Terms defined in the Circular shall have the same meanings in this letter unless the context of this letter otherwise requires.

References were made to the announcements of the Company dated 8 April 2009 and 25 November 2010 respectively in respect of the Construction Agreement entered into between the Company and Poly Southern. At the extraordinary general meeting of the Company held on 30 December 2010, the Independent Shareholders approved the Construction Agreement and the annual caps for two years ending 31 December 2012. In view that the Construction Agreement will expire on 31 December 2012, the Company and Poly Southern have on 20 November 2012 agreed to renew the Construction Agreement for a further period of two years from 1 January 2013 to 31 December 2014. The renewal of the Construction Agreement and the relevant annual caps for two years ending 31 December 2014 are conditional upon approval by the Independent Shareholders at the EGM. Pursuant to the Construction Agreement, Poly Southern and its subsidiaries shall provide construction work service and other services ancillary to the provision of construction work service to the Group.

Poly Southern is wholly-owned by China Poly and is a shareholder holding approximately 7.03% of the issued share capital of the Company. By virtue of the fact that China Poly and its associates (including Poly Southern) are the substantial shareholders holding approximately 48.02% of the issued share capital of the Company, Poly Southern is an associate of a connected person of the Company under the Listing Rules. The renewal of the Construction Agreement and the transactions contemplated thereunder constitute continuing connected transactions of the Company under the Listing Rules.

10

LETTER FROM MESSIS

As the applicable Percentage Ratios of the relevant caps for the construction fee payable under the Construction Agreement exceed 5% for the Company, the renewal of the Construction Agreement and the transactions contemplated thereunder are subject to reporting, announcement and Independent Shareholders’ approval requirements set out in the Listing Rules. Appropriate disclosure of the above transaction will be made in the next published annual report and accounts of the Company in accordance with the Listing Rules.

As the applicable Percentage Ratios of the relevant caps for the construction fee payable under the Construction Agreement exceed 5% but less than 25% for the Company, renewal of the Construction Agreement also constitute discloseable transaction under the Listing Rules and are therefore subject to reporting, announcement and circular requirements as set out in the Listing Rules.

China Poly and its associates, being the substantial shareholders of the Company interested in the transactions contemplated under the Construction Agreement, will abstain from voting at the EGM. Save for China Poly and its associates, no Shareholder (or his associates) has any interest in the transactions contemplated under the Construction Agreement.

The Independent Board Committee comprising the independent non-executive Directors (Mr. Yao Kang, J.P., Mr. Choy Shu Kwan and Ms. Leung Sau Fan, Sylvia) is established to advise the Independent Shareholders in relation to the renewal of the Construction Agreement and the related new annual caps. We are appointed to advise the Independent Board Committee and the Independent Shareholders in this regard.

In formulating our opinion, we have relied on the accuracy of statements, information, opinions and representations contained in the Circular and the information and representations provided to us by the Company and which the Directors consider to be complete and relevant, and have assumed that the statements made were true, accurate and complete at the time they were made and continue to be true on the date of the Circular. We have assumed that all information, representations and opinions contained or referred to in the Circular and all information, representations and opinions which have been provided by the Company are true at the time they were made and will continue to be true at the date of the despatch of the Circular.

We consider that we have received sufficient information to enable us to reach an informed view and to justify our reliance on the accuracy of the information and representations contained in the Circular and to provide a reasonable basis for our view and recommendation. We have no reason to suspect that any material information has been withheld by the Company or by the Directors. We have not, however, carried out any independent investigation into the business and affairs of the Company. Pursuant to the Listing Rules, we have taken reasonable steps to satisfy ourselves which include the following:

• (a) obtained all the information and documents relevant to an assessment of the fairness and reasonableness of the terms of the renewal of the Construction Agreement and the related new annual caps, including but not limited to, the announcements of the Company dated 8 April 2009, 25 November 2010 and 20 November 2012, the Board Letter, the Construction Agreement, the annual report of the Company for the year ended 31 December 2011, the “Construction Project Bidding Scope and Regulations” May 2000《工程建設項目招標範圍 和規模標準規定》二零零零年五月 of National Development and Reform Commission of

11

LETTER FROM MESSIS

the PRC, the internal reports of the Company on the open bids of the construction projects during 2011 and 2012, and the construction fee summaries of the Company regarding the fee charged by Poly Southern and by those available from independent third parties for similar construction work service during 2011 and up to 31 October 2012.

• (b) reviewed the reasons and background of the renewal of the Construction Agreement and the related new annual caps;

• (c) reviewed the fairness and reasonableness of the related new annual caps; and

• (d) confirmed that no third party expert opinion is relevant to the renewal of the Construction Agreement.

PRINCIPAL FACTORS TAKEN INTO ACCOUNT

In arriving at our opinions and recommendations to the Independent Board Committee and the Independent Shareholders in respect of whether the renewal of the Construction Agreement and the related new annual caps are fair and reasonable and are in the interests of the Company and the Shareholders as a whole, we have considered the principal factors and reasons set out below:

I. Background of and reasons for entering into the renewal of the Construction Agreement

References were made to the announcements of the Company dated 8 April 2009 and 25 November 2010 respectively in respect of the Construction Agreement entered into between the Company and Poly Southern. At the extraordinary general meeting of the Company held on 30 December 2010, the Independent Shareholders approved the Construction Agreement and the annual caps for two years ending 31 December 2012. The term of the Construction Agreement commenced from the date on which the Independent Shareholders approved the Construction Agreement (i.e. 30 December 2010) and will expire on 31 December 2012. Upon expiry of the term of the Construction Agreement, the parties may renew the Construction Agreement for further period to be agreed. In view that the Construction Agreement will expire on 31 December 2012, the Company and Poly Southern have on 20 November 2012 agreed to renew the Construction Agreement for a further period of two years from 1 January 2013 to 31 December 2014. The renewal of the Construction Agreement and the relevant annual caps for two years ending 31 December 2014 are conditional upon approval by the Independent Shareholders at the EGM.

Pursuant to the Construction Agreement, Poly Southern and its subsidiaries shall provide construction work service and other services ancillary to the provision of construction work service to the Group, the detailed terms as to the scope of service, quality and fee will be agreed from time to time under separate transactional agreements. It was also a term of the Construction Agreement that the provision of the construction services to the Group should be charged in accordance with the state-prescribed prices or where there was no state-prescribed price, on price no less favorable than those offered by Poly Southern and its subsidiaries (mainly Poly Construction) to independent third parties or those available to the Group from independent third parties.

12

LETTER FROM MESSIS

The Group

The Group is principally engaged in investment holding, property development, property investment and management, hotel operations and its related services, securities investment and construction services.

Poly Southern

Poly Southern is wholly-owned by China Poly and is a shareholder holding approximately 7.03% of the issued share capital of the Company. China Poly and its associates (including Poly Southern) are the substantial shareholders holding approximately 48.02% of the issued share capital of the Company.

Pursuant to the Construction Agreement, Poly Southern and its subsidiaries shall provide construction work service and other services ancillary to the provision of construction work service to the Group, the detailed terms as to the scope of service, quality and fee will be agreed from time to time under separate transactional agreements.

Reasons for the entering into the Renewed Construction Agreement

Since that (i) the Group is principally engaged in investment holding, property development, property investment and management, hotel operations and its related services, securities investment and construction services; and (ii) the Directors consider that Poly Southern and its subsidiaries possess the required qualifications and experience in carrying out such services with good quality standard; we are of the view that the Construction Agreement is in the ordinary and usual course of business of the Group.

We have reviewed the Construction Agreement and the related new annual caps and note that there is no extra-ordinary term or less favorable term to the Company. We are of the view that the entering into the Construction Agreement and the related new annual caps are on normal commercial terms.

Pursuant to the Construction Agreement, Poly Southern and its subsidiaries provides construction work service and other services ancillary to the provision of construction work service to the Group charging at price no less favorable than those available to the Group from independent third parties which has positive effects on the earnings of the Group. We are of the view that the renewal of the Construction Agreement is in the interests of the Company and the Shareholders as a whole.

We have also reviewed the “Construction Project Bidding Scope and Regulations” May 2000 of National Development and Reform Commission of the PRC and the internal reports of the Company on the open bids of the construction projects during 2011 and 2012. We note that (i) the construction work service and other services ancillary to the provision of construction work service provided by Poly Southern and its subsidiaries to the Group were concluded through open biddings with the competition of independent third parties; and (ii) Poly Southern and its subsidiaries charged the Group on price no less favorable than those available from independent third parties.

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LETTER FROM MESSIS

We are also of the view that the terms of the Construction Agreement are fair and reasonable so far as the interests of the Independent Shareholders are concerned.

Caps for the Construction Agreement

For the financial year ended 31 December 2011 and up to 30 September 2012, the approximate fee payable under the Construction Agreement (the “Construction Fee”) is as follows:

		For the period from
		1 January 2012 to
		30 September 2012
Construction Fee	31 December 2011 (audited)	(unaudited)
RMB	4,371 million	2,874 million
(approximate	5,266 million	3,548 million
HK$ equivalent)
	(this amount was translated
	from RMB into HK$ at the
	reference rate of HK$1.00
	to RMB0.83)

The Company proposed the following caps for the Construction Fee for the two years ending 31 December 2013 and 2014:-

Construction Fee	31 December 2013	31 December 2014
Cap Amount (RMB)	3,400 million	3,400 million
Cap Amount (approximate	4,198 million	4,198 million
HK$ equivalent)

The proposed Construction Fee for 2013 and 2014 is slightly below the Construction Fee level payable under the Construction Agreement in 2011 and 2012. Having considered that the proposed new caps having taken into account of (i) the outstanding contract amount of existing projects; (ii) the property development plans for 2013 and 2014; and (iii) the estimated Construction Fee for 2013 and 2014, we are of the view that the above proposed caps are reasonable.

III. RECOMMENDATION

We have taken into consideration of the above principal factors and reasons:

1. the Construction Agreement is in the ordinary course of business of the Group and is on normal commercial terms;

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LETTER FROM MESSIS

1. Poly Southern and its subsidiaries charges the Group on price no less favorable than those available from independent third parties which is in the interests of the Company and the Shareholders as a whole; and

2. the terms of the Construction Agreement including the relevant caps of the construction fee are fair and reasonable so far as the interests of the Independent Shareholders are concerned.

We are of the view that the renewal of the Construction Agreement is in the interests of the Company and the Shareholders as a whole. We are also of the view that the terms of the Construction Agreement and the related new annual caps are on normal commercial basis as well as fair and reasonable so far as the interests of the Independent Shareholders are concerned. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to approve the renewal of the Construction Agreement and the related new annual caps at the EGM.

Yours faithfully, For and on behalf of Messis Capital Limited

Michael Leung Executive Director

15

GENERAL INFORMATION

APPENDIX

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

• (i) As at the Latest Practicable Date, the following Directors or chief executives (if any) of the Company had, or was deemed to have any interests or short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of part XV of the SFO) which were required (a) to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO); or (b) pursuant to section 352 of Part XV of the SFO, to be entered in the register referred to therein; or (c) pursuant to the Model Code for Securities Transactions by Directors of Listed Company to be notified to the Company and the Stock Exchange:

Long Position

Ordinary Shares

Mr. Xue Ming is holding 1,000,000 Shares (0.03%).

Ms. Leung Sau Fan, Sylvia is holding 33,000 Shares (0%).

16

GENERAL INFORMATION

APPENDIX

Share Options

						No. of	Approximate
	Interests in the					underlying	percentage of
	Company or	Capacity				Shares	securities in
	its associated	in holding	Long/short	Date of	Exercise	pursuant to	the same class
Name of Director	corporations	interest	position	grant	price	share options	of securities
					(HK$)
CHEN Hong Sheng	Company	Beneficial	Long	14/07/2005	1.27	8,000,000	0.32%
		owner		(note 1)
				29/04/2008	4.79	3,500,000
				(note 2)
WANG Xu	Company	Beneficial	Long	29/04/2008	4.79	3,000,000	0.08%
		owner		(note 2)
XUE Ming	Company	Beneficial	Long	29/04/2008	4.79	2,650,000	0.07%
		owner		(note 2)
YE Li Wen	Company	Beneficial	Long	29/04/2008	4.79	1,600,000	0.04%
		owner		(note 2)
YAO Kang	Company	Beneficial	Long	29/04/2008	4.79	500,000	0.01%
		owner		(note 2)
CHOY Shu Kwan	Company	Beneficial	Long	14/07/2005	1.27	300,000	0.02%
		owner		(note 1)
				29/04/2008	4.79	300,000
				(note 2)

Notes:

1. As at the Latest Practicable Date, the above Directors had outstanding options to subscribe for the respective number of shares pursuant to the new share option scheme of the Company adopted on 28th May, 2003. All of such options are exercisable from the date on which the options were offered (i.e. 14th July, 2005) to 10 years after the date of grant.

2. As at the Latest Practicable Date, the above Directors had outstanding options to subscribe for the respective number of shares pursuant to the new share option scheme of the Company adopted on 28th May, 2003. All of such options are exercisable from the date on which the options were offered (i.e. 29th April, 2008) to 5 years after the date of grant.

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GENERAL INFORMATION

APPENDIX

• (ii) Save as disclosed above, as at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporation(s) (within the meaning of Part XV of the SFO) which were required (i) pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have under such provisions of the SFO) to be notified to the Company and the Stock Exchange; or (ii) pursuant to Section 352 of the SFO to be entered in the register referred to therein, or (iii) pursuant to the Model Code to be notified to the Company and the Stock Exchange.

• (iii) As at the Latest Practicable Date, none of the Directors had any direct or indirect interests in any assets which have since 31st December, 2011 (being the date to which the latest published audited consolidated accounts of the Group were made up) been acquired or disposed of by or leased to or by the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by or leased to or by the Company or any of its subsidiaries.

• (iv) As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by the Company or any of its subsidiaries, which was subsisting and was significant in relation to the business of the Group.

• (v) As at the Latest Practicable Date, none of the Directors had a material interest in the renewal of the Construction Agreement.

3. COMPETING INTERESTS

As at the Latest Practicable Date, so far as the Directors are aware of, none of themselves or their respective associates had any interest in a business which competes or may compete with the business of the Group, nor there is any conflict of interest with the Group.

4. SUBSTANTIAL SHAREHOLDERS

So far as was known to any Director or chief executive of the Company, as at the Latest Practicable date, the following persons (not being a Director, chief executive of the Company nor any member of the Group), has an interest or short positions in the Shares or underlying Shares of the Company which would fall to be disclosed under the provisions of Divisions 2 and 3 of Part XV of the SFO (including interests and short positions which they are taken or deemed to have under such provision of the SFO) or who is directly or indirectly interested in ten per cent or more of the nominal value of any class of shares carrying rights to vote in all circumstances at general meetings of any member of the Group.

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GENERAL INFORMATION

APPENDIX

Interest in the issued ordinary shares of the Company

							Approximate
							percentage of
		Number of Shares		Person having			the issued
			Held	a security			share capital
	Beneficial	Investment	by controlled	interest in		Total number	of the
Name of shareholder	owner	manager	corporation(s)	Shares		of Shares	Company
Long position
Congratulations Company Ltd.	1,037,975,080	–	–		–	1,037,975,080	28.77%
Source Holdings Limited	228,398,760	–	100,086,800		–	328,485,560	9.10%
						(Note 1)
Ting Shing Holdings Limited	–	–	1,366,460,640		–	1,366,460,640	37.87%
			(Note 2)
Poly (Hong Kong) Holdings	112,410,476	–	1,366,460,640		–	1,478,871,116	40.98%
Limited			(Note 3)
Poly Southern Group Limited	253,788,246	–	–		–	253,788,246	7.03%
China Poly Group Corporation	–	–	1,732,659,362		–	1,732,659,362	48.02%
			(Note 4)
Deutsche Bank Aktiengesellschaft	50,226,418	4,085,000	–	209,160,743		263,472,161	7.30%
Short position
Deutsche Bank Aktiengesellschaft	44,379,089	–	–	208,469,743		252,848,832	7.00%

Notes:

1. Source Holdings Limited is deemed by the SFO to be interested in 328,485,560 Shares of the Company as a result of its direct holding of 228,398,760 Shares and indirect holding of 100,086,800 Shares through its wholly-owned subsidiaries, Musical Insight Holdings Limited and Wincall Holding Limited of 44,658,800 Shares and 55,428,000 Shares respectively.

2. Ting Shing Holdings Limited is deemed by the SFO to be interested in 1,366,460,640 Shares as a result of its indirect holding of 1,366,460,640 Shares through its subsidiaries, Source Holdings Limited and Congratulations Company Ltd. of 328,485,560 Shares and 1,037,975,080 Shares, respectively.

3. Poly (Hong Kong) Holdings Limited is deemed by the SFO to be interested in 1,478,871,116 Shares as a result of its direct holding of 112,410,476 Shares and indirect holding of 1,366,460,640 Shares through itswholly-owned subsidiary, Ting Shing Holdings Limited.

4. China Poly owns 100% of Poly (Hong Kong) Holdings Limited and Poly Southern and is accordingly deemed by the SFO to be interested in the Shares directly and indirectly owned by Poly (Hong Kong) Holdings Limited and Poly Southern.

5. Mr. Chen Hong Sheng, an executive director of the Company, is the Chairman of China Poly and the deputy Chairman and manager of Poly (Hong Kong) Holdings Limited.

6. Mr. Wang Xu, an executive director of the Company, is the Chairman of Poly (Hong Kong) Holdings Limited.

7. Mr. Xue Ming, the Chairman and managing director of the Company, is a director and deputy general manager of Poly (Hong Kong) Holdings Limited.

19

GENERAL INFORMATION

APPENDIX

5. SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors has entered into any service contracts with the Company or any of its subsidiaries or associated companies, excluding contracts expiring within one year without payment of compensation other than statutory compensation.

6. 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 there was no litigation or claim of material importance known to the Directors to be pending or threatened against the Company or any of its subsidiaries.

7. EXPERTS’ DISCLOSURE OF INTEREST AND CONSENTS

• (i) As at the Latest Practicable Date, Messis, a licensed corporation under SFO permitted to engage in type 6 of the regulated activities as stipulated in the SFO, did not have any direct or indirect shareholding, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

• (ii) As at the Latest Practicable Date, Messis had no direct or indirect interests in any assets which have since 31st December, 2011 (being the date to which the latest published audited consolidated accounts of the Group were made up) been acquired or disposed of by or leased to or by the Company or any of its subsidiaries, or are proposed to be acquired or disposed of by or leased to or by the Company or any of its subsidiaries.

• (iii) Messis have given and have not withdrawn their written consent to the issue of this circular with their respective expert’s statement included in the form and context in which it appears.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during normal business hours on any weekday (public holidays excepted) at the registered office of the Company at Room 2503, Admiralty Centre Tower 1, 18 Harcourt Road, Hong Kong:

• (i) the Construction Agreement and any renewal agreements;

• (ii) the letter from Messis to the Independent Board Committee and the Independent Shareholders as set out on pages 10 to 15 of the Circular; and

• (iii) the written consent referred to in paragraph 7 of this appendix.

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GENERAL INFORMATION

APPENDIX

9. GENERAL

• (i) The Directors are not aware of any material adverse change in the Group’s financial or trading position since 31st December, 2011, the date to which the latest published audited consolidated accounts of the Group were made up.

• (ii) The registered office of the Company is Room 2503, Admiralty Centre Tower 1, 18 Harcourt Road, Hong Kong.

• (iii) The share registrars and transfer office of the Company is Computershare Hong Kong Investor Services Limited of Shops 1712-1716, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (iv) The company secretary is Ms. Tai Kar Lei, a fellow member of The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries.

• (v) The English text of the Circular shall prevail over the Chinese text.

21

NOTICE OF EXTRAORDINARY GENERAL MEETING

==> picture [93 x 33] intentionally omitted <==

Poly Property Group Co., Limited 保利置業集團有限公司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 119)

NOTICE IS HEREBY GIVEN that an extraordinary general meeting of Poly Property Group Co., Limited (the “Company”) will be held at Room 2503, Admiralty Centre, Tower 1, 18 Harcourt Road, Hong Kong on Thursday, 20 December 2012 at 10:00 a.m. for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution:

AS ORDINARY RESOLUTIONS

“ THAT :

• (a) the renewal of the Construction Agreement dated 8 April 2009 entered into between the Company and 保利南方集團有限公司 (Poly Southern Group Limited) for further term of two years from 1 January 2013 to 31 December 2014 be and is hereby generally and unconditionally approved, ratified and confirmed and the execution of renewal agreement to the Construction Agreement by the directors of the Company be ratified and confirmed;

• (b) the proposed annual caps in relation to the construction fee for the two years ending on 31 December 2014 (as set out in the circular of the Company dated 4 December 2012) be and are hereby approved; and that the directors of the Company be and are hereby authorized to sign, seal, execute, perfect, deliver and do all such documents, deeds, acts, matters and things as they may in their discretion consider necessary or desirable or expedient to implement and/or to give effect to the Construction Agreement, the proposed annual caps and the transactions thereby contemplated.”

By Order of the Board Poly Property Group Co., Limited Tai Kar Lei Company Secretary

Hong Kong, 4 December 2012

22

NOTICE OF EXTRAORDINARY GENERAL MEETING

Notes:

1. Any member of the Company entitled to attend and vote at the extraordinary general meeting is entitled to appoint one or more proxies to attend and vote in his/her stead. A proxy need not be a member of the Company. In the case of a recognised clearing house, it may authorise such person(s) as it thinks fit to act as its representative(s) at the meeting and vote in its stead.

2. In order to be valid, a 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 such power or authority, must be deposited at office of the Company’s share registrar in Hong Kong, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not less than 48 hours before the time appointed for holding the extraordinary general meeting or any adjournment thereof.

3. The form of proxy must be signed by the shareholder(s) or his/her/its/their attorney duly authorised in writing or, in the case of a corporation, must be either under its common seal or under the hand of an officer attorney duly authorised.

4. Where there are joint registered holders of any share, any one of such persons may vote at the extraordinary general meeting, either personally or by proxy, in respect of such share as if he were solely entitled thereto, but if more than one of such joint holders are present at the extraordinary general meeting either personally or by proxy, that one of the said persons so present whose name stands first on the register of members in respect of such share shall alone be entitled to vote in respect thereof.

5. As at the date hereof, the executive Directors of the Company are Mr. Chen Hong Sheng, Mr. Wang Xu, Mr. Xue Ming, Mr. Zhang Wan Shun and Mr. Ye Li Wen, the non-executive Director is Mr. Ip Chun Chung, Robert, and the independent nonexecutive Directors are Mr. Yao Kang, J.P. , Mr. Choy Shu Kwan, Ms. Leung Sau Fan, Sylvia and Mr. Wong Ka Lun.

23