hmvod Limited — Proxy Solicitation & Information Statement 2018

Aug 16, 2018

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Trillion Grand Corporate Company Limited, you should at once hand this circular, together with the enclosed form of proxy, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale 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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Trillion Grand Corporate Company Limited 萬 泰 企 業 股 份 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF

THE TARGET COMPANY

AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

A notice convening the extraordinary general meeting of the Company (the ‘‘EGM’’) to be held at Jasmine Road, 3/F, Best Western Plus Hotel Hong Kong, 308 Des Voeux Road West, Hong Kong on Tuesday, 11 September 2018 at 9: 30 a.m. is set out on pages EGM-1 to EGM-3 of this circular. Whether or not you intend to attend the EGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time scheduled for the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending or voting in person at the EGM or any adjourned meeting thereof should you so wish.

This circular will remain on the GEM website at http://www.hkgem.com on the ‘‘Latest Company Announcements’’ page for at least 7 days from the date of its posting and on the website of the Company at http://www.trilliongrand.com.

17 August 2018

CHARACTERISTICS OF GEM

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

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

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CONTENTS

	Page
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
APPENDIX I — FINANCIAL INFORMATION OF THE GROUP . . . . . . .	14
APPENDIX II — VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
APPENDIX III — GENERAL INFORMATION OF THE GROUP . . . . . . . . .	40
NOTICE OF EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

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DEFINITIONS

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

• ‘‘associates’’ has the meaning ascribed to it under the GEM Listing Rules ‘‘Board’’ the board of Directors ‘‘Business Day(s)’’ a day on which banks are generally open for business in Hong Kong, except a Sunday and a Saturday or a day on which a tropical cyclone warning signal no. 8 or above or a ‘‘black’’ rainstorm warning signal is hoisted in Hong Kong at any time between 9: 00 a.m. and 5: 00 p.m.

• ‘‘BVI’’ British Virgin Islands ‘‘BVI Subsidiary’’ or Billion Ray Investments Limited, a company incorporated in the ‘‘Billion Ray’’ BVI with limited liability

• ‘‘Company’’ Trillion Grand Corporate Company Limited (Stock Code: 8103), a company incorporated in the Cayman Islands with limited liability, the Shares of which are listed on GEM

• ‘‘Completion’’ completion of the Disposal ‘‘Completion Date’’ 3rd Business Days after all conditions as set out in the SPA are being satisfied on which Completion shall take place

• ‘‘connected person(s)’’ has the meaning ascribed to it under the GEM Listing Rules ‘‘Consideration’’ the total consideration in the sum of HK$100,000,000 for the Disposal under the SPA

• ‘‘Director(s)’’ director(s) of the Company ‘‘Disposal’’ the disposal of the Sale Shares by the Vendor to the Purchaser pursuant to the SPA

• ‘‘EGM’’ the extraordinary general meeting to be convened by the Company for the Shareholders to consider and, if thought fit, approve the SPA and the transactions contemplated thereunder

• ‘‘GEM’’ GEM of the Stock Exchange ‘‘GEM Listing Rules’’ the Rules Governing the Listing of Securities on GEM ‘‘Group’’ the Company and its subsidiaries ‘‘HK Subsidiary’’ Allied Star Creation Limited, a company incorporated in Hong Kong with limited liability

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DEFINITIONS

‘‘HK$’’

Hong Kong dollar, the lawful currency of Hong Kong

• ‘‘Hong Kong’’

the Hong Kong Special Administrative Region of the PRC

• ‘‘Independent Third third party(ies) who is/are independent of, and not connected Party(ies)’’ with, the Company and its connected persons

• ‘‘Latest Practicable 15 August 2018, being the latest practicable date prior to the Date’’ printing of this circular for the purpose of ascertaining certain information contained in this circular

• ‘‘Long Stop Date’’ 30 September 2018 (or any other date as the Vendor and the Purchaser may agree in writing)

• ‘‘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

• ‘‘PRC Subsidiary’’ Shantou City Li Chao Tourism Development Limited* (汕頭市麗 潮旅遊開發有限公司), a wholly foreign owned company with limited liability established under the laws of the PRC

• ‘‘Project Company’’ Shantou City Chaoren Port Yacht Club Limited* (汕頭市潮人碼 頭遊艇俱樂部有限公司), a limited liability company established under the laws of the PRC

• ‘‘Project Group’’ collectively, BVI Subsidiary, HK Subsidiary, PRC Subsidiary and Project Company

• ‘‘Promissory Note’’ the promissory note dated 17 July 2017 issued by the Company in favour of the Purchaser in the aggregate principal amount of HK$100,000,000 due on 8 May 2020 and carrying interest of 4% per annum

• ‘‘Purchaser’’ or Sminent International Ltd, a company incorporated in the ‘‘Sminent’’ Marshall Islands with limited liability

• ‘‘Sale Shares’’ 2 issued shares of US$1.00 each in the share capital of the Target Company, representing the entire issued share capital of the Target Company

• ‘‘SFC’’

• the Securities and Futures Commission of Hong Kong

• ‘‘SFO’’

• the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)

• ‘‘Share(s)’’ ordinary share(s) of HK$0.001 each in the share capital of the Company

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DEFINITIONS

• ‘‘Shareholder(s)’’

holder(s) of Share(s)

• ‘‘SPA’’

• the conditional sale and purchase agreement dated 21 May 2018 and entered into by the Vendor and the Purchaser in respect of the Disposal

• ‘‘Stock Exchange’’

The Stock Exchange of Hong Kong Limited

• ‘‘Target Company’’ or ‘‘Jovial’’

• Jovial Tycoon Holdings Limited, a company incorporated in the BVI with limited liability, which is owned as to 100% by the Vendor as at the Latest Practicable Date and an indirect whollyowned subsidiary of the Company

• ‘‘Target Group’’

• the Target Company and its 20% shareholding interest of the Project Group

• ‘‘Vendor’’

• Eastern Robust Limited, a company incorporated in the BVI with limited liability and is a direct wholly-owned subsidiary of the Company

‘‘%’’

• per cent.

• For identification purpose only

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LETTER FROM THE BOARD

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Trillion Grand Corporate Company Limited 萬 泰 企 業 股 份 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

Executive Directors: Mr. Lau Kelly (Chief Executive Officer) Ms. Ho Chi Na Mr. Yuen Koon Tung

Independent Non-executive Directors: Dr. Wan Ho Yuen, Terence Mr. Hau Chi Kit Mr. Ma Stephen Tsz On

Mr. Ho Siu King, Stanley

Registered office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong:

Unit B, 29/F CKK Commercial Centre 289–295 Hennessy Road Wanchai, Hong Kong

17 August 2018

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION IN RELATION TO THE DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF THE TARGET COMPANY AND

NOTICE OF EXTRAORDINARY GENERAL MEETING

INTRODUCTION

Reference is made to the announcements of the Company dated 21 May 2018, 22 June 2018 and 20 July 2018 in relation to, among other things, the Disposal.

On 21 May 2018 (after trading hours), the Vendor (a direct wholly-owned subsidiary of the Company) and the Purchaser entered into the SPA, pursuant to which the Purchaser has conditionally agreed to acquire the Sale Shares and the Vendor has conditionally agreed to sell the Sale Shares at the total Consideration of HK$100,000,000. The Sale Shares represent the entire issued share capital of the Target Company.

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LETTER FROM THE BOARD

The purpose of this circular is to provide you with, among other things, (i) further details of the SPA and the transactions contemplated thereunder; (ii) other information as required under the GEM Listing Rules; and (iii) notice of the EGM.

THE SPA

Date

21 May 2018 (after trading hours)

Parties

(i) Vendor : Eastern Robust Limited; and (ii) Purchaser: : Sminent International Ltd

The Purchaser is a company incorporated in the Marshall Islands with limited liability and is an investment holding company. As at the Latest Practicable Date, the Purchaser owns 30% of the shareholding interest of the Project Group. As at the Latest Practicable Date, to the best of the Directors’knowledge, information and belief after having made all reasonable enquiries, each of the Purchaser and its ultimate beneficial owner(s) are Independent Third Parties.

Assets to be disposed

Pursuant to the SPA, the Purchaser has conditionally agreed to acquire the Sale Shares and the Vendor has conditionally agreed to sell the Sale Shares. The Sale Shares represent the entire issued share capital of the Target Company. As at the Latest Practicable Date, the Target Company owns 20% shareholding interest of the Project Group. Further details of the Project Group are set out in the section headed ‘‘Information on the Target Group’’ in this circular.

Consideration

Pursuant to the terms of the SPA, the Consideration of HK$100,000,000 will be satisfied upon Completion by way of setting off with the principal value of Promissory Note in full. Moreover, upon Completion, the Purchaser will waive all interest accrued on the Promissory Note payable by the Company to the Purchaser.

As at 30 June 2018, the aggregate outstanding principal and accrued interests of the Promissory Note was approximately HK$104,570,000, which comprised of outstanding principal of HK$100,000,000 and outstanding interests accrued on the Promissory Note of approximately HK$4,570,000. Pursuant to the terms of the Promissory Note, interest thereupon shall be payable on an annual basis. Following issuance of the Promissory Note on 9 May 2017, and up to the Latest Practicable Date, the Company has not pay any interest accrued on the Promissory Note since the issuance of the Promissory Note.

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LETTER FROM THE BOARD

The Consideration was arrived at based on normal commercial terms after arm’s length negotiations between the Purchaser and the Vendor and was determined with reference to among others, (i) the preliminary valuation of 20% shareholding interest of the Project Group held by the Target Company as an associate in the amount of HK$97,000,000 as at 31 March 2018 (the ‘‘Valuation’’) prepared by an independent valuer based on the income approach; and (ii) the reasons for and benefits of the Disposal as stated under the section headed ‘‘Reasons for and benefits of the Disposal’’ in this circular.

The Consideration represents a premium of approximately 3.1% over the Valuation. The Directors have reviewed the Valuation and discussed with the valuer for the assumptions and the methodology used for the Valuation. For details of the valuation methodology and major assumptions adopted by the independent valuer in the Valuation, please refer to section headed ‘‘7. MAJOR ASSUMPTIONS’’ and section headed ‘‘8. VALUATION METHODOLOGY’’ of the valuation report as set out in Appendix II to this circular.

It is understood by the Board from the Valuer that among the different valuation approaches, the selection of the valuation approach in valuing the Project Group is based on, among other criteria, the quantity and quality of the information provided, accessibility to available data, availability of relevant market information, uniqueness of the Project Group’s business operations and nature of the industry the Project Group is participating, professional judgment and technical expertise. The income approach was considered to be the most appropriate valuation approach in this Valuation, as it takes the future growth potential and firm-specific issues of the Project Group into consideration. Under the income approach, the Discounted Cash Flow method is adopted.

Besides, based on the valuation (the ‘‘Acquisition Valuation’’) for the Acquisition (as defined below) as set out in the circular of the Company dated 13 April 2017 (the ‘‘Circular’’) and the Valuation, it is noted by the Board that the Valuation for the Disposal of HK$97 million, which represents an decrease of approximately 4.0% of the fair value of 20% equity interest of the Project Group as of 30 November 2016 of HK$101 million. The Board has enquired into and the valuer explained that the following are the key reasons causing the difference in the valuation amount:

• (i) The increase of approximately 5.6% in the discount rate of 9.5% adopted for the Valuation as compared to the discount rate of 9.0% adopted for the Acquisition Valuation. The valuer had adopted the weighted average cost of capital (the ‘‘WACC’’) as the discount rate for the Project Group. The change in WACC was mainly contributed to those inputs which were taking market data as reference, and those market data was subject to overall condition of the economy.

• (ii) The increase in the exchange rate of Renminbi against Hong Kong Dollar (the ‘‘Exchange Rate’’) used for the Valuation as compared to the Exchange Rate used for the Acquisition Valuation. The Board are advised by the valuer that it is a macro factor that subject to overall condition of the economy.

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LETTER FROM THE BOARD

• (iii) The decrease in the estimated occupancy rate of the shopping boulevard (the ‘‘Occupancy Rate’’) ranged from 70% to 90% adopted in the Valuation as compared to the Occupancy Rate ranged from 85% to 90% adopted in the Acquisition Valuation. The Directors are given to understand from the valuer that the possible delay in construction work schedule may somehow affect the prospective clients’ strategic plan in setting up their branches in the region. The Management (as defined below) had conservatively considered that the shops with higher rental fee might be affected and hence would have a lower occupancy rate.

Based on the discussion with the valuer and the review on the Valuation as set out in the Appendix II, the Directors are of the view that the assumption for the Valuation and the methodology adopted by the valuer are fair and reasonable.

In view of the above, the Directors consider that the Consideration is fair and reasonable.

Conditions precedent

The SPA shall be conditional upon and subject to the fulfilment and satisfaction of the following conditions precedent:

• (i) all necessary consents, waivers, licences and approvals required to be obtained from relevant governmental authority and relevant third party, including but not limited to those from the Stock Exchange and/or SFC, on the part of the Vendor, the Purchaser, the Target Company and the Project Group in respect of the SPA and the transactions contemplated thereby having been obtained and remain in full force and effect;

• (ii) the Board approving and authorising the Disposal; and

• (iii) if so required by the GEM Listing Rules, the passing of the necessary resolution(s) by the Shareholders at the relevant EGM approving and authorising the Disposal.

None of the above conditions precedent is waivable. In the event any of the above conditions are not being fulfilled on or before the Long Stop Date, the Vendor may at its sole and absolute discretion by written notice to the Purchaser terminate the SPA, the SPA shall become void and of no further effect and, save in respect of any antecedent breaches, all liabilities and obligations of the parties shall cease and determine provided that such termination shall be without prejudice to any rights or remedies of the parties thereto which shall have accrued prior to such termination.

As at the Latest Practicable Date, save for condition precedent (ii), none of the conditions precedent set out above has been fulfilled.

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LETTER FROM THE BOARD

Completion

Subject to all the conditions precedent being fulfilled on or before the Long Stop Date to the satisfaction of the Vendor, Completion shall take place at or before 5 p.m. on the 3rd Business Day following the day when all the conditions precedent have been fulfilled at the office of the Vendor’s solicitors (or at such time or at such place as the parties may otherwise agree in writing).

As at the Latest Practicable Date, the Target Company is the indirect wholly-owned subsidiary of the Company. Upon Completion, the Company will cease to hold any interest in the Target Group.

INFORMATION ON THE TARGET GROUP

The Target Company is an investment holding company incorporated in BVI on 6 July 2016 and the sole asset of the Target Company is its 20% shareholding interest of the Project Group.

The Project Group is principally engaged in the business of development and management of the project named as Build-Operate-Transfer Project of Shantou City Chaoren Port Cultural Park* (汕頭市潮人碼頭文化公園特許經營項目) (the ‘‘Project’’). The Project Group has been granted an exclusive right to build and operate the Project over 42.25 years.

The site of the Project covers a total area of over 90,000 square meters located at the center of Shantou City, the Guangdong Province, the PRC. It is located in front of the Chao Hai Guan Bell House (潮海關鐘樓), a historical and cultural heritage listed among the Historical and Cultural Site Protected at the Provincial Level, east to Hai Jun Port (海 軍碼頭), and west to Yuan Xi Di Car and Ferry Port* (原西堤汽車輪渡碼頭). The Project plans to construct buildings with a total floor area of approximately 38,000 square meters, including a yacht terminal, a shopping mall, a business facility, a cultural facility, a public entertainment area and a parking area. The major income of the Project shall be the rental income from the shopping mall and the income from the yacht terminal and marina club.

The Target Company acquired the 20% of shareholding interest of Project Group (the ‘‘Acquisition’’) at a consideration of HK$100,000,000 which was satisfied by issuance of the Promissory Note to Sminent, the then vendor of the Acquisition and the Purchaser of the Disposal. The Acquisition was completed on 9 May 2017.

As disclosed in the Circular, in the course of considering the Acquisition, the Company was of the view that the Acquisition represented a good investment opportunity for the Group and would enable it to expand the income base of the Group and diversify its business portfolio.

Please refer to the announcements of the Company dated 30 December 2016, 27 January 2017, 17 February 2017, 13 March 2017, 31 March 2017 and 9 May 2017 and the Circular for details of the Acquisition.

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LETTER FROM THE BOARD

Financial information of the Target Company

Set out below are the unaudited financial information of the Target Company as prepared in accordance with Hong Kong Financial Reporting Standards for the two financial years ended 31 March 2017 and 2018:

	For the year ended	For the year ended
	31 March 2018	31 March 2017
	approximate	approximate
	HK$’000	HK$’000
	(unaudited)	(unaudited)
Revenue	—	—
Net loss before taxation	(204)	(13)
Net loss after taxation	(204)	(13)

According to the unaudited financial information of the Target Company as at 16 May 2018, the Target Company recorded an unaudited net assets of approximately HK$99.8 million.

The unaudited carrying value of the Group’s investment in the Target Company as at 16 May 2018 as approximately HK$99.8 million.

FINANCIAL EFFECT OF THE DISPOSAL AND USE OF PROCEEDS

As at the Latest Practicable Date, the Target Company is an indirect wholly-owned subsidiary of the Company. Upon Completion, the Company will cease to hold any interest in the Target Group.

No proceeds in cash will be received by the Group from the Disposal as the Consideration for the Disposal shall be settled by way of setting off the principal of the Promissory Note and waiver of all interest accrued on the Promissory Note.

For illustrative purpose, upon Completion, it is estimated that the Company will realise an unaudited loss on the Disposal of approximately HK$0.8 million, being the difference between the Consideration and the unaudited carrying amount of the Group’s investment in the Target Company amounting to approximately HK$99.8 million as at 16 May 2018 and deducting the expenses attributable to the Disposal of approximately HK$1 million.

Based on the management accounts of the Target Company as at 16 May 2018, it recorded total assets of approximately HK$99.8 million and did not have any liabilities. As at 30 June 2018, the aggregate outstanding principal and accrued interest of the Promissory Note was approximately HK$104,570,000. Based on the foregoing information, it expected that as a result of the Disposal, the Group’s total assets will be reduced by approximately HK$99.8 million as a result of de-consolidation of the Target Company and total liabilities of the Group will be reduced by approximately HK$104,570,000 following set-off of the Promissory Note upon Completion.

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LETTER FROM THE BOARD

Nevertheless, Shareholders should note that the exact financial effect of the Disposal is subject to the review and approval of the auditors of the Company.

REASONS FOR AND BENEFITS OF THE DISPOSAL

The Group is principally engaged in system development, professional services, proprietary trading business, money lending business, property investment and over the top (‘‘OTT’’) services.

As disclosed in the Circular, the construction work of the Project was expected to take 2.5 years from the date of commencement of the construction work and was initially targeted to fully operate in late 2018 or early 2019. In October 2017, the Board was informed by the management of the Project Group (the ‘‘Management’’) regarding a possible delay in the Project. At the time of considering the Acquisition by the Board, according to the initial development plan (the ‘‘Initial Development Plan’’) prepared by the Management, it was estimated that the Project Group would obtain all necessary licenses, approvals and permits for the construction of the Project (the ‘‘Necessary Licenses’’) from relevant PRC authorities by early October 2017. However, due to the processing time for the relevant PRC authorities to approve the Necessary Licenses applications was much longer than expected, the construction of the Project may not be completed as scheduled and will be delayed by around one year (the ‘‘Unexpected Delay’’). As advised by the Management, the Project Group encountered the Incident (as defined below), which resulted in unexpected lengthy time in obtaining the Necessary Licenses.

In August 2017, the Project Group submitted application for construction work commencement permit* (建設工程施工許可證) for the sea construction work, (being one of the Necessary Licenses) to the relevant PRC authority (the ‘‘Application’’) for approval in accordance with the Initial Development Plan. Upon making enquiry of the status of the Application by the Project Group, the relevant PRC authority indicated to the Management that it was not the responsible department for processing the Application (the ‘‘Incident’’). After noticing the Incident, in October 2017, the Project Group sought for assistance from Shantou Tourism Bureau (the party which granted the Project Group the exclusive right to build and operate the Project) to coordinate relevant government authorities to resolve the Incident and to clarify the procedural matters for processing the Application.

Prior to and subsequent to completion of the Acquisition, the Project Group has endeavoured to obtain the Necessary Licenses. Up to August 2017, the Project Group has submitted relevant applications for obtaining the Necessary Licenses in accordance with the Initial Development Plan. Major developments of the Project are as follows:

• (i) construction planning permit* (建設工程規劃許可證) was granted in April 2015;

• (ii) approval for revised project establishment* (立項) was granted in September 2016; and

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LETTER FROM THE BOARD

• (iii) applications for construction work commencement permits* (建設工程施工許可 證) for the land construction work and sea construction work was submitted as scheduled in September 2016 and August 2017 respectively.

Since the Company first aware of the Unexpected Delay, the Company had subsequently made follow up enquiries with the Management and was given to understand that the Management had sought assistance from Shantou Tourism Bureau since October 2017 and continued to contact with it on the status of the Application from time to time.

The Directors consider that the possible delay in the construction work schedule may lower the expected return on the investment. The total investment cost of the Group on the Project Group would be HK$112 million (the ‘‘Total Investment’’), which comprised of the principal amount of the Promissory Note of HK$100 million and the 3 years interests accrued on the Promissory Note of approximately HK$12 million. For the purpose of assessing investment return from the Group’s investment in the Project Group, assuming (i) the Total Investment would be recovered upon declaration of dividends by the Project Group; and (ii) the Project Group would procure 100% of the net profit for each financial year declared as dividends payable to the shareholders of the Project Group (the ‘‘100% Dividend Payout’’), based on the forecast prepared by the Management for the Acquisition (the ‘‘Previous Forecast’’), in the course of considering the Acquisition, the Board expected the investment payback period for the Project Group would be in 2025. By end of 2025, the estimated accumulated dividends to be received by the Group from the Project Group since the commencement of the operation of the Project in late 2018 (assuming 100% Dividend Payout) would begin to exceed the Total Investment. Due to the Unexpected Delay, based on the latest forecast prepared by the Management for the Project (the ‘‘Latest Forecast’’), assuming 100% Dividend Payout, the time to achieve investment payback point will be prolonged to 2027.

In addition, the Board considers the annual internal rate of return (the ‘‘IRR’’) to evaluate the investment return of the Project before and after the Unexpected Delay. Based on the Previous Forecast and the Latest Forecast, at the end of the special operation period of the Project granted by the PRC government, the IRR of the Project would decrease by approximately 14.2% from a yield of approximately 14.8% before the Unexpected Delay to approximately 12.7% after the Unexpected Delay.

Despite the short period of time between the Acquisition and the Disposal and there are expenses incurred for the Disposal, the Board considers that (i) the investment return of the Project deviates from that initially expected as a result of the Unexpected Delay; (ii) the Purchaser is willing to acquire the Target Group by offsetting the Promissory Note and will waive all interest accrued on the Promissory Note payable by the Company to the Purchaser which would be equivalent to the Total Investment; and (iii) the Consideration represents a premium of the Valuation, the Company considers it is appropriate to realise its investment in the Target Group.

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LETTER FROM THE BOARD

Furthermore, it has been the business strategy of the Group to look for opportunities to create shareholders’ value through making investments into and/or acquiring interests in companies or projects that have promising outlook and prospects. The Directors are of the view that the Disposal represents a good opportunity for the Group to divest the Target Group such that more resources can be allocated to other investment opportunities with better prospects.

At the time of conducting due diligence review on the Acquisition, the Board had reviewed the Initial Development Plan. At that time, the Company had discussed the basis of estimating the timetable of the Initial Development Plan with the Management and was given to understand the procedures, status of relevant application and estimated time needed for obtaining all the Necessary Licenses.

In addition, as part of the due diligence exercise for the Acquisition, the Company had engaged a PRC legal adviser for conducting legal due diligence on the PRC Subsidiary and compiling the legal due diligence report in this regard (the ‘‘Legal Advice’’). Based on the Legal Advice obtained at the time of the Acquisition, despite the Project Group had not yet obtained all the Necessary Licenses, the PRC legal adviser was not aware of any circumstances existed at that time which would result in impediment to proceed with the Project.

In the course of considering the Acquisition, the Board understood that the Project Group was in the process of making applications for the Necessary Licenses in accordance with the lnitial Development Plan. Based on the foregoing, the Board has conducted adequate due diligence on the Acquisition.

The delay in obtaining all the Necessary Licenses is unexpected that cannot be considered at the time of the Acquisition and entirely out of the Company’s control.

Notwithstanding that no proceeds in cash will be received by the Group from the Disposal as the Consideration would be set off against the principal of the Promissory Note and the waiver of all accrued interest on the Promissory Note, the Board considers that the Disposal could help improving the gearing ratio and increasing the liquidity of the Group by reducing the debt burden and interest expenses associated with the Promissory Note.

In view of the above, the Directors are of the view that the terms of the Disposal are fair and reasonable, which have been arrived at after arm’s length negotiations and are in the interests of the Company and the Shareholders as a whole.

GEM LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined under the GEM Listing Rules) in respect of the Disposal exceeds 25% but all applicable percentage ratios are below 100%, the Disposal constitutes a major transaction for the Company and is therefore subject to the reporting, announcement, circular and shareholders’approval requirements under Chapter 19 of the GEM Listing Rules.

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LETTER FROM THE BOARD

GENERAL

The EGM will be held at Jasmine Road, 3/F, Best Western Plus Hotel Hong Kong, 308 Des Voeux Road West, Hong Kong on Tuesday, 11 September 2018 at 9: 30 a.m., for the Shareholders to consider, and if thought fit, approving the SPA and the transactions contemplated thereunder.

In compliance with the GEM Listing Rules, the resolution will be voted on by way of poll at the EGM.

To the best of the Directors’knowledge, information and belief, having made all reasonable enquiries, no Shareholder or any of its close associates has any material interest in the SPA and the transactions contemplated thereunder, and therefore no Shareholder is required to abstain from voting on the resolution(s) in respect of the SPA at the EGM.

A notice convening the EGM is set out on pages EGM-1 to EGM-3 of this circular. A form of proxy for use at the EGM is enclosed herewith. Whether or not you intend to attend the EGM, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the Company’s branch share registrar in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong as soon as possible but in any event not less than 48 hours before the time scheduled for the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending or voting in person at the EGM or any adjourned meeting thereof should you so wish.

RECOMMENDATION

The Directors are of the opinion that the terms of the SPA are fair and reasonable and the Disposal is in the interests of the Company and the Shareholders as a whole and recommend the Shareholders to vote in favour of the resolution to be proposed at the EGM.

ADDITIONAL INFORMATION

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

By order of the Board Trillion Grand Corporate Company Limited Lau Kelly

Executive Director

– 13 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. THREE-YEAR FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group for each of the three financial years ended 31 March 2016, 2017 and 2018 were disclosed in the annual reports of the Company for the years ended 31 March, 2016 (pages 32 to 98), 2017 (pages 42 to 113) and 2018 (pages 43 to pages 113). The aforementioned financial information of the Group has been published on both the website of the Stock Exchange (www.hkex.com.hk) and the website of the Company (www.trilliongrand.com). Please refer to the hyperlinks as stated below:

2016 annual report:

http://www.hkexnews.hk/listedco/listconews/GEM/2016/0628/GLN20160628103.pdf

2017 annual report:

http://www.hkexnews.hk/listedco/listconews/GEM/2017/0614/GLN20170614045.pdf

2018 annual report:

http://www.hkexnews.hk/listedco/listconews/GEM/2018/0702/GLN20180702011.pdf

2. INDEBTEDNESS STATEMENT

At the close of business on 30 June 2018, the indebtedness of the Group was as follows:

Bonds

The Group had outstanding bonds with total principal amount of approximately HK$20,332,000 as at 30 June 2018. Part of the bonds in sum of HK$10,005,000 is carrying coupon interest of 4.85% per annum and matures on 15 July 2022. Another part of the bonds in sum of HK$527,000 is carrying coupon interest of 4.85% per annum and matures on 16 July 2022. The remaining part in sum of HK$9,800,000 is carrying coupon interest of 6% per annum and matures on 13 September 2019.

Short term loans

The Group had outstanding short-term loans with total principal amount of approximately HK$184,044,000.

Promissory note

The Group had outstanding promissory note with total principal amount of approximately HK$113,400,000.

Part of the promissory note with principal sum of HK$13,400,000 is carrying coupon interest of 6% per annum and matures on 22 November 2019. The remaining promissory note with principal sum of HK$100,000,000 is carrying coupon interest of 4% per annum and matures on 8 May 2020.

Save as aforesaid and apart from intra-group liabilities and normal trade payables in the ordinary course of business, the Group did not have any loan capital issued or agreed to be issued, bank overdrafts, loans, debt securities issued and outstanding, and

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

authorised or otherwise created but unissued and term loans or other borrowings, indebtedness in the nature of borrowings, liabilities under acceptance (other than normal trade bills) or acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, which are either guaranteed, unguaranteed, secured or unsecured, guarantees or other material contingent liabilities outstanding as at 30 June 2018.

3. WORKING CAPITAL

The Directors are of the opinion that, after taking into account the existing cash and bank balances and other internal resources available and also the effect of the Disposal, the Group has sufficient working capital for its present requirements and for at least 12 months from the date of this circular in the absence of unforeseen circumstances.

4. FINANCIAL AND TRADING PROSPECT OF THE REMAINING GROUP

The Group will continue to seek for opportunities to create Shareholders’ value through investments into and/or acquiring interests in companies or projects that have promising outlooks and prospects. The Group is broadening its perspective beyond the IT sector and potentially also investing into and/or acquisitions in other industries (including renewable energy and other ‘‘green’’ businesses, the financial industry, and more traditional non-IT businesses) so long as such investments can deliver value and are beneficial to the Company and its shareholders as a whole. It goes without saying that the Company will also continue to focus on existing businesses to bring further value to Shareholders.

For system development and professional services, the Company was facing the fierce competition of thermal powered electricity supply market in the PRC during the year ended 31 March 2018 and management expects this phenomenon will continue in the foreseeable future. On 27 July 2018, the Group disposed entire issued share capital of Tongfang Electronic Company Limited (‘‘Tongfang’’) (the ‘‘Tongfang Disposal’’). Tongfang and its subsidiaries (the ‘‘Tongfang Group’’) are principally engaged in research, development and provision of integrated management information system for power plants and for banks in the PRC. In view of the loss-making financial results of the Tongfang Group which are no longer satisfactory for the Company, together with the uncertainty of the system development in thermal powered electricity supply industry, the Group realized its investment the Tongfang Group.

In view of the change of business environment, the Company has strategically broadened its professional services in cyber security services and solutions (the ‘‘Security Services’’). The Security Services offered by the Group cover services and solutions in cyber security, including ramp up model advisory, physical and cyber security assessments, build and design of secured IT architecture, implementation of security devices and IT business policy controls. The Security Services specialize in enterprise cyber security solutions and risk management, providing a full range of security services and solutions to corporations in the Greater China and Asia Pacific region.

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APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Following completion of the Tongfang Disposal, the Group ceased its system development business and the Security Services become the focus within the Group’s professional service business.

For proprietary trading business, the global market has been highly volatile in 2018. Although Asian market including Hong Kong has attracted capital inflow across the world, the market is still filled with a lot of uncertainties such as the trigger of trade war and the effect of contractionary monetary policy from US. The Group will adopt a prudent approach in identifying opportunities in securities investment which will create value and will be beneficial to the Group and Shareholders. The Group also maintains a risk management policy in which key risk factors such as government and politic risks, country risks, price risks, interest rate risks, currency risks and economic risks have been identified and will be closely monitored.

For money lending business, though the loan and credit market became very active and intense competition existed during the past few years as a result of the rapid booming housing market in Hong Kong and the global low interest rate environment, the Board is confident that through its long established relationship, history, reputation, network and synergy, the Group is able to participate in the market share of the money lending business and it will become one of the drivers of its future profits of the Group. In view of the above, the Board will invest more resources into the business once financing resources have been obtained. In addition to the consumable loan, the Company is planning to offer a variety of loan products to secured mortgage loans to individual, unsecured loan, small and medium sized enterprises loans, debts consolidation loan and corporate loans.

On 10 July 2018, the Group completed the swap of the Group’s property interest in an investment property situated at the 9th Floor, Global Trade Square, No. 21 Wong Chuk Hang Road, Hong Kong, together with 3 car parking spaces at Global Trade Square with a creditor of the Group for the settlement of loan and grant of a new credit facility by such creditor to the Group (the ‘‘Swap’’). Upon completion of the Swap, the Group ceased to have any investment property.

For OTT Services, upon completion of the acquisition of Full Wealthy International Limited and its subsidiaries on 28 June 2017, it is principally engaged in the business of providing multi-media related services and content in the PRC via different platforms. In view of the growing penetration and the expansion of multi-media segment, the Group is optimistic to such business segment. In addition, consumers are moving beyond traditional media, the multimedia platform is an option used by many companies to brand and market their products. As such, the multi-media platform is playing an increasingly vital role in business marketing strategy.

The Directors are optimistic towards the future prospect of the professional services and the OTT services (collectively, the ‘‘Services’’), as such the Directors would pursue the strategy of strengthening the Services business and will continue to look for investment opportunities in the Services business from time to time so as to maximize return and enhance Shareholders’ value.

– 16 –

APPENDIX II

VALUATION REPORT

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Unit 2603, 26/F, Tung Wai Commercial Building, 109–111 Gloucester Road, Wanchai, Hong Kong Tel: (852) 2511 2010 Email: info@access-partner.com

17 August 2018

The Board of Directors Trillion Grand Corporate Company Limited Unit B, 29/F., CKK Commercial Centre, 289 Hennessy Road, Wanchai, Hong Kong

Dear Sirs/Madams,

Valuation of 20% Equity Interest of Billion Ray Investments Limited and its subsidiaries as of 31 March 2018

INSTRUCTION

This report has been prepared solely for Trillion Grand Corporate Company Limited (the ‘‘Company’’), which has engaged Access Partner Consultancy & Appraisals Limited (‘‘Access Partner’’ or ‘‘we’’) to perform a valuation of 20% equity interest of Billion Ray Investments Limited (the ‘‘Target’’) and Shantou City Li Chao Tourism Development Limited (汕頭市麗潮旅遊開發有限公司) (the ‘‘Project Company’’, together with the Target are collectively referred to the ‘‘Target Group’’) as of 31 March 2018 (the ‘‘Date of Valuation’’).

This report states the purpose of valuation, basis of valuation, scope of work, source of information, an overview of the Target Group, an overview of the industry, major assumptions, valuation methodology, sensitivity analysis, limiting conditions, remarks and opinion of value.

– 17 –

APPENDIX II

VALUATION REPORT

1. PURPOSE OF VALUATION

This report is prepared solely for the use of the directors and management of the Company. In addition, Access Partner acknowledges that this report may be made available to the Company for public documentation purpose and used as reference on the Company’s circular dated 17 August 2018 (the ‘‘Circular’’).

We will not accept any responsibility or liability to any third party to whom in respect of, or arising out of, the contents of this report may be shown.

2. BASIS OF VALUATION

Our valuation is based on a fair value basis. Fair value is defined as ‘‘the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.’’

3. SCOPE OF WORK

Our valuation conclusion is based on the assumptions stated herein and the information provided by the management of the Company, the management of the Target Group and/or their representative(s) (collectively the ‘‘Management’’). In the course of our valuation work, we have conducted the following processes to evaluate the reasonableness of the adopted basis and assumptions provided:

• . Discussed with the Management in relation to the background, development, operations, financial performance and other relevant information of the Target Group;

• . Reviewed relevant financial information, operational information, financial projection and other relevant data concerning the Target Group;

• . Reviewed the signed contracts between the Target Group and the government, legal opinions of the build-operate-transfer project (the ‘‘Project’’) operated by the Target Group, feasibility studies of the Project’s construction, business plan and other relevant documents of the Project, which were provided by the Management;

• . Performed market research in relation to the economic outlook in general, the specific economic environment and market elements affecting the business, industry and market and obtained relevant statistical figures from public sources;

• . Examined the relevant basis and assumptions of both the financial and operational information of the Target Group, which were provided by the Management;

• . Prepared a valuation model to derive the fair value of the Target Group; and

– 18 –

APPENDIX II

VALUATION REPORT

• . Presented all relevant information on the scope of works, source of information, an overview of the Target Group, an overview of the industry, major assumptions, valuation methodology, sensitivity analysis, limiting conditions, remarks and opinion of value in this report.

We reviewed and examined the relevant legal documents, information and financial projection of the Target Group provided to us by the Management without further verification. We assumed that the information and financial projection have been prepared on a reasonable basis that have been arrived at after due and careful consideration by the Management, and we have no reason to believe that any material fact has been withheld from us. Moreover, we do not warrant that our investigations have revealed all of the matters which an audit or more extensive examination might disclose.

4. SOURCE OF INFORMATION

For the purpose of our valuation, we have been provided with the information in respect of the Target Group prepared by the Management. The valuation required the consideration of all relevant factors including, but not limited to, the following:

• . Background of the Target Group’s business operations and relevant corporate information;

• . Historical financial information of the Target Group;

• . Financial projection of the Target Group prepared by the Management;

• . Registrations and legal documents related to the Target Group;

• . Market information in relation to the Target Group’s industry; and

• . Economic outlook in the People’s Republic of China (the ‘‘PRC’’).

We have also conducted research from public sources and carried out site inspection to assess the reasonableness and fairness of the information provided. We have assumed the accuracy of the information provided and relied to a considerable extent on such information in arriving at our opinion.

– 19 –

APPENDIX II

VALUATION REPORT

5. OVERVIEW OF THE TARGET GROUP

The Target

Billion Ray Investments Limited (i.e. the Target) is an investment holding company incorporated in British Virgin Islands with limited liability.

The Target, which indirectly wholly owns Shantou City Li Chao Tourism Development Limited (汕頭市麗潮旅遊開發有限公司) (i.e. the Project Company), is a company which develops and operates tourist attractions.

The Project Company

The Project Company is an investment holding company incorporated in the PRC in 2012 with limited liability which is an indirect wholly owned subsidiary of the Target. The Project Company is principally engaged in the operation of the Project — Shantou City Chaoren Port Cultural Park (汕頭市潮人碼頭文化公園特許經營項目). According to an exclusive right agreement and a supplemental agreement signed between the Project Company and the Shantou government authority in 2013 and 2016 respected. The Project Company has been granted an exclusive right (the ‘‘Exclusive Right’’) to build and operate the Project over 42.25 years.

Description of the Project

In 2013, the Project Company entered into the build-operate-transfer agreement, in Shantou City Chaoren Port Cultural Park, with the government of Shantou City of Guangdong province, in connection with the Shantou Marina Waterfront Project. The Project Company and the local government entered into a supplemental agreement to confirm the exclusive operating right for 42.25 years. The Project is supported by local government to revitalize the Old Town District of Shantou, as an integrated project, including commercial, culture, leisure and tourism features. With a total area of over 90,000 square meters, the Project is located at the center of Shantou City, the Guangdong Province, in the PRC, in front of the Chao Hai Guan Bell House (潮海關 鐘樓), east to Hai Jun Port (海軍碼頭) and west to Yuan Xi Di Car and Ferry Port (原 西堤汽車輪渡碼頭). The Project will include a yacht terminal, a shopping mall, a business facility, a cultural facility, a public entertainment and a parking area with a total floor area of approximately 38,000 square meters.

– 20 –

APPENDIX II

VALUATION REPORT

6. INDUSTRY OVERVIEW

6.1 Overview of the Retail Industry in the PRC

According to National Bureau of Statistics China, the total retail sales rose 10.4% year on year (‘‘YoY’’) in 2016. The monthly retail sales remained healthy during 2017 and maintained at a level of 10% growth in most of the months. In 2017, the Consumer Confidence Index in the PRC was 112 points, compared with 106 points in 2016 as prepared by The Nielsen Company. The quarterly index reached all-time high to 114 points in the fourth quarter of 2017. This reveals that the consumers are indeed very optimistic in the future economic condition and have higher spending intention.

Figure 1: Retail Sales in the PRC

==> picture [361 x 217] intentionally omitted <==

Source: National Bureau of Statistics of China

According to data published by the National Bureau of Statistics of China, Guangdong province was the PRC’s largest consumer market in 2016. With the consumer optimism in the PRC, the consumer spending in Guangdong province has a huge potential of growth. In terms of the consumption pattern, the consumption growth in the first and second tier cities in the PRC was relatively stable whereas the growth in the third and fourth tier cities diverged according to the Haitong International Securities Group Limited in 2017. The central and western provinces exhibited a volatile growth in consumption. The trend of consumption of eastern provinces was closer to the counterpart in the first and second tier cities.

– 21 –

APPENDIX II

VALUATION REPORT

According to a report from CBRE, the Chinese retail market displayed rapid growth in 2017, driven by improving economic conditions and consumption upgrading. Several luxury groups reported stronger sales in the PRC. CBRE pointed out that domestic brands and franchises have invested heavily in store expansion recently; they are the main driver of the leasing demand for shopping centre space in the first tier and second tier cities. In addition, according to the research report published by Knight Frank regarding the property market in the third quarter of 2017, the rents remained stable for prime retail space. According to Table 1 below, the rental fees per month in Guangzhou reached USD255 while vacancy rate remained below 5% in the third quarter of 2017.

Table 1: Rents and vacancy rates in third quarter of 2017

	Rental
	(USD psm
City	per month)	Vacancy Rate
Beijing	$185.3	3.0%
Shanghai	$252.0	11.6%
Guangzhou	$255.1	4.3%

Source: Knight Frank

Figures 2: Prime retail rentals from 2010–2017

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Source: Knight Frank

– 22 –

VALUATION REPORT

APPENDIX II

According to a report from CBRE regarding outlook of the PRC, more leasing demand may possibly come from domestic clothing brands, and active entertainment and healthcare retailers. In addition, the growth of income and the uprising trend of online shopping are expected to stimulate the consumption in the future. More online retailers are seeking to establish an offline presence in order to bridge the online and offline customer experience.

According to Figure 3 below, the surrounding areas of the Target Group such as Guangzhou is expected to have a low risk of oversupply for retail.

Figure 3: Prime Retail New Supply

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Source: CBRE Research

Both the yields of Guangzhou and Shenzhen registered approximately 4% in 2017 while the forecast yields in 2018 are expected to be remains stable.

– 23 –

APPENDIX II

VALUATION REPORT

6.2 Overview of Yacht Marina Clubs in the PRC

In the PRC, the number of yacht owners is less than other nations such as United States and United Kingdom. This indicates that the market has a potential growth in the future as the number of rich people continues to grow in the PRC. According to ‘‘2017海之藍中國遊艇市場報告’’, there are approximately 5,000 registered yachts in the PRC. In 2016–2017, approximately 1,000 berths were put into use.

There are a few famous marina clubs in Guangdong Province, for example, Shenzhen Marina Club (大梅沙灣遊艇會), Vanke Longcheer Yacht Club (浪騎遊艇會), Seven Star Yacht Club and Shenzhen Bay Marina Club. Shenzhen Marina Club is a marina club operated in 2006 and located in Shenzhen Dameisha with a total of 175 berths; Vanke Longcheer Yacht Club operated in 1998 and located in Shenzhen Dapeng Peninsula with a total of 275 berths; Seven Star Yacht Club operated in 2008 and located in Shenzhen east coast with a total of 230 berths; Shenzhen Bay Marina Club operated in 2000 and located in Shenzhen Bay with a total of 268 berths.

7. MAJOR ASSUMPTIONS

In conducting our valuation work, the following assumptions have been adopted to sufficiently support our conclusion of value, including, but not limited to:

General Market Assumptions

• . There will be no major changes in the political, legal, fiscal, technological, economic and market conditions in the localities in which the Target Group operates or intends to operate, which would adversely affect the revenues attributable to and profitability of the Target Group;

• . There will be no major changes in the current taxation laws in the localities in which the Target Group operates or intends to operate and that the rates of tax payable shall remain unchanged and that all applicable laws and regulations will be complied with;

• . There will be no material changes in the relevant market return, market risk and exchange rates that would impact the Target Group’s business operation;

• . There will be no material changes in the Exclusive Right granted by the Shantou government that would impact the Target Group’s business operation;

• . There will be no material changes in the number of tourists travelling to Shantou that would impact the Target Group’s business operation;

• . There will be no material changes regarding the outlook of the shopping malls located near the Project operate by the Target Group;

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APPENDIX II

VALUATION REPORT

• . The membership fees, admission fees of the marina club (the ‘‘Marina Club’’) and the museum operate by the Target Group will not differ materially from those of present or expected;

• . The facilities surrounding the Project location will not differ materially from those of expected;

• . The rental fees of the shopping malls operated by the Target Group will not differ materially from those of present or expected;

• . The supply and demand, both domestically and internationally, of the shopping mall, the Marina Club and Chaoshan Cultural Museum operated by the Target Group will not differ materially from those of present or expected;

• . The market prices and the relevant costs, both domestically and internationally, of the Marina Club operated by the Target Group will not differ materially from those of expected; and

• . The market data, industrial information and statistical figures obtained from publicly available sources and Bloomberg Terminal are true and accurate.

Company-specific Assumptions

• . The Target Group has obtained all necessary permits, business certificates, licenses and legal approvals to operate the business and all relevant permits, business certificates, licenses and legal approvals to operate the business in the localities in which the Target Group operates or intends to operate would be officially obtained upon expiry;

• . The Target Group has obtained the Exclusive Right to build the Project over 2.5 years and will operate for 42.25 years and the core operation of the Target Group will not differ materially from those of present or expected;

• . According to the Management, there was a construction delay; therefore, the beginning year of operation will be postponed accordingly. As advised by the Management, all the signed contracts, including rental contracts and outsourced management services contract remain valid as all the related parties come to agreements with the Management upon the deferral of the start of operation without other major change on the terms of contracts. As provided by the Management, the operation will start in 2020;

• . The information provided and the representations made by the Management with regard to the Target Group’s financial and business affairs are accurate and reliable;

• . The financial projection in respect of the Target Group have been prepared on a reasonable basis that have been arrived at after due and careful consideration by the Management;

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APPENDIX II

VALUATION REPORT

• . The Target Group currently has, or will have, adequate human capital and capacity required for the Marina Club, Chaoshan Cultural Museum and shopping boulevard of the Target Group, and the required human capital and capacity will be acquired in a timely manner that will not affect the operation of the Target Group;

• . The Target Group has acquired, or will acquire, adequate financial capital for the investments in projected capital expenditure and working capital from time to time;

• . The construction cost of the Project operated by the Target Group will not differ materially from those of present or expected;

• . The terms of the upcoming rental contracts will not differ materially from those of present or expected;

• . The senior management of the Target Group will implement only those prospective financial and operational strategies that will maximize the efficiency of the operation of the Target Group;

• . The senior management of the Target Group has sufficient knowledge and experience in respect of the operation of the Target Group, and the turnover of any director, management or key person will not affect the operation of the Target Group;

• . The senior management of the Target Group has adopted reasonable and appropriate contingency measures against any human disruption such as fraud, corruption and strike, and the occurrence of any human disruption will not affect the operation of the Target Group;

• . The senior management of the Target Group has adopted reasonable and appropriate contingency measures against any natural disaster such as fire, flood and hurricane, and the occurrence of any natural disaster will not affect the operation of the Target Group;

• . There are no undisclosed actual or contingent assets or liabilities, no unusual obligations or substantial commitments, other than in the ordinary course of business and as reflected in the financials, nor any litigation pending or threatened, which would have a material impact on the value of the Target Group as of the Date of Valuation;

• . The agreements in relation to the Exclusive Right between the Target Group and the Shantou government have been signed in 2013 and 2016 respectively and the corresponding construction and payment terms will not differ materially from those of present or expected;

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APPENDIX II

VALUATION REPORT

• . The Project under existing plans or contracts will be completed as schedule and it will not arise any legal or financial issue that will affect the operation of the Target Group; and

• . The property management will be outsourced, and the terms for the Project under contracts will not differ materially from those of present or expected.

In the event actual events do not accord with one or more of the above assumptions, the resulting value of the Target Group may vary substantially from the figure as set out in this report.

8. VALUATION METHODOLOGY

In conducting the valuation, we have considered three generally accepted approaches, including income approach, market approach and cost approach.

8.1. General Valuation Approaches

8.1.1 Income Approach

The income approach measures the value of an asset by the present value of its future economic benefits. These benefits can include earnings, cost savings, tax deductions and proceeds from its disposition.

8.1.2 Market Approach

The market approach measures the value of an asset through an analysis of recent sales or offerings of comparable property. Sales and offering prices are adjusted for differences in location, time of sale, utility, and the terms and conditions of sale between the asset being appraised and the comparable properties.

8.1.3 Cost Approach

The cost approach measures the value of an asset by the cost to reproduce or replace it with another of like utility. To the extent that the asset being valued provides less utility than a new asset, the reproduction or replacement cost new would be adjusted to reflect appropriate physical deterioration, functional and economic obsolescence.

8.2. Adopted Approach for the Valuation of the Target Group

Among the abovementioned valuation approaches, the selection of the valuation approach in valuing the Target Group is based on, among other criteria, the quantity and quality of the information provided, accessibility to available data, availability of relevant market information, uniqueness of the Target Group’s business operations and nature of the industry the Target Group is participating, professional judgment and technical expertise.

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VALUATION REPORT

APPENDIX II

The income approach was considered to be the most appropriate valuation approach in this valuation, as it takes the future growth potential and firm-specific issues of the Target Group into consideration. Under the income approach, the Discounted Cash Flow (‘‘DCF’’) method is adopted.

8.2.1 The Discounted Cash Flow (‘‘DCF’’) Method

The DCF method begins with an estimation of the annual cash flows, which a market participant acquirer would expect the asset to generate over a discrete projection period. The expected debt-free cash flow for each year was determined as follows:

FCF = EBIT (1 – T) + Dep — InvCapex — InvNWC

Where:

FCF = free cash flow EBIT = earnings before income and tax T = tax rate Dep = non-cash items InvCapex = investment in capital expenditure InvNWC = investment in net working capital

The estimated cash flows for each of the years in the discrete projection period are then converted to their present value equivalent using a rate of return appropriate for the risk of achieving the asset’s projected cash flows. The present values of the estimated cash flows are then added to the present value equivalent of the residual value of the asset (if any) at the end of the discrete projection period to arrive at an estimate of the value of the specific asset. The present value of the expected free cash flow was calculated as follows:

PVFCF = FCF1/(1 + r)[1] + FCF2/(1 + r)[2] + ... + FCFn/(1 + r)[n]

Where:

PVFCF = present value of free cash flows FCF = free cash flow r = discount rate n = number of year of projections

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APPENDIX II

VALUATION REPORT

The key basis of revenue, operating expenses, capital expenditure, and net working capital adopted in the coming 7 years are shown in the following:

8.2.2 Revenue

All of the Target Group’s revenue in the forecast period are expected to derive from the rental income of shopping boulevard, membership fees from the marina club (the ‘‘Marina Club’’) and the admission fees from Chaoshan Cultural Museum. In the valuation, the Project plans to be completed in 2019. The revenue in 2020 is expected to derive solely from the rental income of shopping boulevard, annual membership fees from Marina Club and the admission fees from Chaoshan Cultural Museum.

According to the information provided by the Management, there are 5 rental contract(s) signed in 2016, with a contract sum of around RMB380 per month per square metre for the total gross area approximately 5,200 square metre, representing more than 22% of the leasable area of the shopping boulevard. The occupancy rate of the shopping boulevard is expected to be ranged from 70% to 90% with the rental rates of RMB430 per square metre on the 1st Floor, RMB30 per square metre for the management fees, and RMB310 per square metre on the 2nd Floor, RMB30 per square metre for the management fees, in the first year of operation. According to the Management, they noticed that the contracts are signed in 2016 and they agreed that the prices are still valid and applicable in the valuation.

According to the signed rental contracts, as provided by the Management, the annual rental fee was agreed to increase 8% each year for 60 months. With reference to the policy of Shantou Government in revitalizing the Old Town District of Shantou, the surrounding area of the Project is expected to enjoy a grow period in the coming years. In addition, some of the new shopping, office buildings, e.g. Huarun Wanxiang Cheng (華潤萬象城), Suning Guangchang (蘇寧 廣場), etc., are going to complete in nearby area, the rental growth rate is expected to increase under the synergy effect. Therefore, as advised by the Management, the rental rate of the shopping boulevard is assumed to grow at 5% for the overall leasable area during the first 4 years after the completion of the construction.

The Marina Club will comprise of 63 yacht berths. The admission fee of the membership with berth, as advised by management, is going to set at RMB1,200,000 and the admission fee of the membership without berth will be set at RMB200,000. The annual membership fees will be RMB200,000 and RMB30,000 for membership with berth and without berth respectively. This is comparative to the admission fee of the membership of Seven Star Yacht Club and ‘‘大梅沙灣遊艇會’’ with the range of approximately RMB1 million to RMB2 million. The membership is going to pre-sell a year before the completion of the Marina Club building. The number of members of the Marina Club without fixed berths will be 250.

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VALUATION REPORT

APPENDIX II

Chaoshan Cultural Museum is expected to have 550,000 annual visitors in the first year of operation which accounted for less than 5% of Chaoshan annual overnight visitors of approximately 14.5 million in 2015 and it is expected to growth with 1% annually; while the ticket fee is going to set at RMB20 per visitor with reference to Guangdong Chaoju Theatre (廣東潮劇院), The Ancestral Temple in FoShan and Science Centre in Guangdong within the range of RMB20 to RMB60. The table below presents the total revenue generated in the forecast period:

			Year	Ended 31 December	Ended 31 December
(RMB’000)	2018	2019	2020	2021	2022	2023	2024
Revenue	0	125,600	116,929	133,051	144,073	150,735	155,385
Shopping Boulevard	0	0	85,829	100,905	110,845	116,387	119,879
Marina Club	0	125,600	20,100	20,703	21,324	21,964	22,623
Chaoshan Cultural
Museum	0	0	11,000	11,443	11,904	12,384	12,883

8.2.3 Operating Expenses

The operating expenses refer to selling, general and administrative expenses. In the valuation, the operating expenses in the forecast period are determined with reference to the percentage of revenue.

For the direct expenses of the property management fees, the company signed a contract with Lask Vigers Asset Management Limited, a company incorporated in 2010 primarily engages in surveying, real estate and property management, and the outsource property management fee is RMB18 per square metre with a total area of approximately 38,010 square meter. The annual property management fee is accounted in the operating expense, as shown in the table below from 2020 onward once the operation starts, and assuming it grows at inflation rate. While the direct expense for the Marina Club and Chaoshan Cultural Museum are determined to 30% of the revenue in the year of operation, which accounts for the salaries of general staffs, food and beverage and other related cost. The table below presents the operating expenses in the forecast period:

			Year Ended 31 December	Year Ended 31 December	Year Ended 31 December
(RMB’000)	2018	2019	2020	2021	2022	2023	2024
Operating Expenses	888	1,219	35,548	36,882	38,090	39,195	40,268

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APPENDIX II

VALUATION REPORT

8.2.4 Capital Expenditure

According to the Management, it is expected that the amount of capital expenditure will be material for the construction of the Project in the forecast period. The Target Group already invested approximately RMB59 million as of the Date of Valuation in the Project and the upcoming capital will be invested around RMB400 million according to the Shantou City Chaoren Port Cultural Park general schedule (汕頭市潮人碼頭文化園總進度計劃), which is provided by the Management’s construction consultant. The table below presents the capital expenditure in the forecast period:

			Year Ended 31 December	Year Ended 31 December
(RMB’000)	2018	2019	2020	2021	2022	2023	2024
Capital Expenditure	142,470	293,415	2,000	2,060	2,122	2,185	2,251

8.2.5 Net Working Capital

The net working capital is considered to be de minimis. As advised by the management, the number of accounts receivable turnover days and accounts payable turnover days will be 30 and 30 respectively. The table below presents the net working capital in the forecast period:

			Year Ended	31 December	31 December
(RMB’000)	2018	2019	2020	2021	2022	2023	2024
Net Working Capital	(73)	(100)	7,634	8,866	9,690	10,164	10,476
Accounts Receivable	0	0	9,611	10,936	11,842	12,389	12,771
Accounts Payable	(73)	(100)	(1,977)	(2,070)	(2,152)	(2,225)	(2,296)

8.2.6 Tax Rate

According to the Management, other than the enterprise tax, the Project needs to pay other types of taxes to tax authorities in the PRC, including valueadded tax (‘‘VAT’’), city maintenance and construction tax, education surtax, local educational surtax and property tax. According to the information provided by the Management, the VAT is based on 5% of revenue, while the educational surtax and local educational surtax is based on 3% and 2% of VAT respectively. For city maintenance and construction tax, the percentage is based on the city where the Project is located. The city maintenance and construction tax is based on 7% of VAT. The property tax is based on 12% of the rental income.

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APPENDIX II

VALUATION REPORT

8.2.7 Discount Rate

The Project develops a complexes area with commercial and cultural properties, i.e. shopping malls, marina club with parking berths, and other peripheral facilities. By managing the complexes, leasing the properties and providing peripheral services, e.g. berths parking services in the complexes, the Project generates cash flow. The Project is, in nature, a real estate development project with operating the investment properties.

The rate at which the free cash flow is discounted to present value represents the required rate of return for the above investment property. To derive the discount rate, we obtained the required rate of return by referencing to the following sources:

• (a) The average capitalization rate of retail properties in Guangzhou with reference to the ‘‘2018 Asia Pacific Real Estate Market Outlook|Greater China’’ published by CBRE was approximately 4% plus perpetual growth rate of 3%, i.e. approximately 7%. The 3% represents growth rate of an investment in long-run, which is generally considered to be in line with long-term inflation rate.

• (b) The estimated weighted average cost of capital based on selected real estate investment companies in the PRC and Hong Kong using the capital asset pricing model (‘‘CAPM’’) of approximately 9.5%.

Capitalization Rate

The capitalization rate is the rate of return on an investment property based on the income that the property is expected to generate. It is used to estimate the potential return on the property investment.

Weighted Average Cost of Capital

The weighted average cost of capital (‘‘WACC’’) for the Target Group. WACC represents the weighted average return attributable to all of the operating assets of the Target Group. WACC was computed using the formula below:

WACC = Re (E/V) + Rd (D/V) (1 — Tc)

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VALUATION REPORT

Where:

WACC	=	weighted average cost of capital
Re	=	cost of equity
Rd	=	cost of debt
E	=	value of the firm’s equity
D	=	value of the firm’s debt
V	=	sum of the values of the firm’s equity and debt
Tc	=	corporate tax rate

As a component of WACC, the cost of equity was determined using the CAPM. CAPM calculates a required return based on a risk measurement. It describes the relationship between the risk of a particular asset, its market price and the expected return to the investor, that investors required additional return to compensate additional risk associated.

In the valuation, CAPM was modified to reflect the size premium associated with the Target Group. The cost of equity under the modified CAPM was computed using the formula below:

Re = Rf + β * MRP + RPS

Where:

Re	=	cost of equity
Rf	=	risk-free rate
β	=	beta coefficient
MRP	=	market risk premium
RPS	=	size premium

In the valuation, the yield rate of the Government Bond Generic Yield 10-year of the PRC of 3.75% as at the Date of Valuation, as extracted from Bloomberg, was adopted as the risk-free rate.

Since the Target Group is not a publicly listed company, it is not possible to determine its beta coefficient directly. Instead, the beta coefficient for the Target Group was determined by the median of the betas of comparable companies (the ‘‘Comparable Companies’’), with adjustment for differences in corporate tax rates and leverage compositions. As a result, the beta coefficient of the Target Group was calculated as 0.71.

In the valuation, the market risk premium of the PRC as of the Date of Valuation was calculated as the sum of the market risk premium of the United States and the country risk premium of the PRC. The market risk premium of the United States of 5.08% and the country risk premium of the PRC of 0.81%, which were determined with reference to ‘‘Country Default Spreads and Risk Premiums’’, published by Professor Aswath Damodaran,

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VALUATION REPORT

APPENDIX II

who is a well-known author of several widely used academic textbooks on valuation and related subjects, in January 2018, were adopted. As a result, the market risk premium of the PRC was calculated as 5.89%.

Considering the above-mentioned parameters, our analysis suggested a cost of equity before any other risk premium of approximately 7.92%. By adding a size premium of 3.67%, which was determined with reference to ‘‘2017 Valuation Handbook — U.S. Guide to Cost of Capital’’, published by Duff & Phelps Corporation, and a company specific risk premium of 3%, we arrived at a cost of equity of 14.59%.

The cost of debt before tax is referenced to the coupon rate, at 6% p.a., of the loan facility, which is going to finance the Project. With the PRC statutory tax rate at 25%, the after-tax cost of debt was 4.5%.

The weight of debt and weight of equity were determined by making reference to the median of the weight of debt and weight of equity of the Comparable Companies respectively. The weight of equity was adopted as 50%.

Accounting for the above, the WACC estimated was approximately 9.5% as of the Date of Valuation.

Comparable Companies

The Target Group engages in the Project development, and the Project is a complexes area with commercial and cultural properties with shopping malls, marina club with parking berths, and other peripheral facilities. By managing the complexes, leasing the properties and providing peripheral services, the Project generates cash flow. This is in nature a real estate development project with operating the investment properties.

Due to the fact that there is no company is exactly the same as the Target Group, a set of the Comparable Companies must be selected in valuing the Target. To determine the set of the Comparable Companies, we mainly focused on the following perspectives during the selection process from the public resources (e.g. Bloomberg), including:

• (i) The companies are principally engaged in real estate developers and investors listed in the PRC and Hong Kong, with their business primarily engage in leasing non-residential properties mainly in PRC; and

• (ii) Sufficiency of information (such as listing and operating histories, and availability of the financial information to the public).

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APPENDIX II

VALUATION REPORT

With reference to the business nature and financial information of publicly listed companies that are considered to be comprehensive comparable to the Target Group. Details of the selected companies are as follows:

	Bloomberg
Company Name	Ticker	Business Description
Yuexiu Real	405 HK	Yuexiu Real Estate Investment Trust invests in a
Estate		diverse portfolio of income producing properties
Investment		which are used primarily for office, retail, and other
Trust		commercial purposes in China.
SOHO China	410 HK	Soho China Ltd. is a property developer. It develops
Limited		properties in central Beijing and Shanghai. Soho
		China collaborates with internationally recognized
		architects, translating their designs into real estate
		which possesses strong appeal to property investors
		and the local businesses and customer bases they
		serve.
Shui On Land	272 HK	Shui On Land Limited engages principally in the
Limited		development, sale, leasing, management and
		ownership of residential, office, retail, entertainment
		and cultural properties in the PRC.
Hui Xian Real	87001 HK	Hui Xian Real Estate Investment Trust is a real estate
Estate		investment trust. The trust’s sole real estate
Investment		investment interest at the time of its listing is its
Trust		investment interest in the Oriental Plaza in Beijing.
China Jinmao	817 HK	China Jinmao Holdings Group Limited invests in and
Holdings		develops real estate projects in the Peoples Republic
Group Limited		of China.
Maoye	600828 CH	Maoye Commercial Co., Ltd. operates in the retail
Commercial		department store, real estate development and
Company		property management sectors.
Limited
Golden Eagle	3308 HK	Golden Eagle Retail Group Limited operates
Retail Group		department stores in China. Its stores target mid-
Limited		range and high-end market segments in China, and
		contain various functions and amenities such as
		dining, entertainment, beauty and personal care,
		cinemas, and preschool education in addition to their
		core function as an international department store.
Springland	1700 HK	Springland International Holdings Ltd. operates retail
International		stores. It operates a chain of department stores and a
Holdings		chain of supermarkets. Springland operates in the
Limited		Greater Yangtze River Delta in China.

Source: Bloomberg

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APPENDIX II

VALUATION REPORT

We have considered that Shui On Land Limited, being a real estate developer, owns and lease its retail properties in PRC. Based on the abovementioned selection criteria, we consider the above set of the Comparable Companies adopted in the valuation is comparable to the Target Group.

Capitalization rate is a popular metric in measuring the return of property while the WACC considers the risk of the business entity as a whole. Our valuation subject (i.e. the Target Group) is not a property though it comprises similar risk of real estate. As our valuation considers the overall operation required return of the Target Group, including financial risk and company-specific risk of the business portfolio, WACC is considered to be a more appropriate measure of required rate of return.

Accounting for the above items, the discount rate of 9.5% was adopted as of the Date of Valuation.

8.2.8 Discount for Lack of Marketability

The concept of marketability deals with the liquidity of an ownership interest, that is, how quickly and easily it can be converted into cash if the owner chooses to sell. Compared to similar interest in public companies, ownership interest in privately held company is not readily marketable. Therefore, the value of a share in a privately held company is usually less than that in a publicly held company. The lack of marketability is a downward adjustment to the value of an investment to reflect its reduced level of marketability.

In the valuation, with reference to the 2016 edition of the ‘‘FMV Restricted Stock Study Companion Guide’’, published by Business Valuation Resources and it is an all-inclusive online database that provides empirical support to determine discounts for lack of marketability. A discount for lack of marketability of 16.11% was adopted.

8.2.9 Discount for Lack of Control

The discount for lack of control is an amount or percentage deducted from the pro rata share of value of 100% of an equity interest in a business to reflect the absence of some or all of the powers of control.

In the valuation, a discount for lack of control of 16.7% was adopted as of the Date of Valuation.

9. SENSITIVITY ANALYSIS

By its very nature, valuation work cannot be regarded as an exact science and the conclusions arrived at in many cases will of necessity be subjective and dependent on the exercise of individual judgment. Hence, there is no single indisputable range and generally we cannot provide absolute assurance on a valuation.

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VALUATION REPORT

APPENDIX II

Thus, the following sensitivity analyses have been applied to determine the impact of change in discount rate and the unit rental rate on the fair value of the Target Group.

Sensitivity Analysis on Discount Rate for the Valuation as of 31 March 2018

Change in	Applied		Change in
Discount Rate	Discount Rate	Fair Value	Fair Value
(%)	(%)	(HKD’000)	(%)
+0.50%	10.00%	87,000	-10%
+0.25%	9.75%	92,000	-5%
Base case	9.50%	97,000	—
-0.25%	9.25%	102,000	5%
-0.50%	9.00%	107,000	10%

Sensitivity Analysis on unit rental rate for the Valuation as of 31 March 2018

	Adopted Unit	Adopted Unit
Change in Unit	Rental Rate	Rental Rate		Change in Fair
Rental Rate	(First Floor)	(Second Floor)	Fair Value	Value
(%)	(RMB/sq. m.)	(RMB/sq. m.)	(HKD’000)	(%)
+5.0%	451.50	325.50	103,000	+6%
+2.5%	440.75	317.75	100,000	+3%
Base case	430.00	310.00	97,000	—
-2.5%	419.25	302.25	93,000	-4%
-5.0%	408.50	294.50	90,000	-7%

Note: Unit rental rate excluding property management fee, RMB30 per square meter.

10. LIMITING CONDITIONS

The valuation reflects facts and conditions existing at the Date of Valuation. Subsequent events have not been considered and we are not required to update our report for such events and conditions.

To the best of our knowledge, all data set forth in this report are reasonable and accurately determined. The data, opinions, or estimates identified as being furnished by others that have been used in formulating this analysis are gathered from reliable sources; yet, no guarantee is made nor liability assumed for their accuracy.

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VALUATION REPORT

APPENDIX II

We have relied on information provided by the Management to a considerable extent in arriving at our opinion of value. We have not verified the accuracy of the information provided and have assumed that the aforesaid information is accurate. We have not conducted any further investigations concerning whether all data have been provided to us for our assessment and we have no reason to believe that any material data have been withheld from us.

We would particularly point out that our valuation was based on the information such as the projections made by the Target Group, company background, business nature the Target Group provided to us.

Our conclusion of the value was derived from generally accepted valuation procedures and practices that rely substantially on the use of various assumptions and the consideration of many uncertainties, not all of which can be easily quantified or ascertained.

By its very nature, valuation work cannot be regarded as an exact science and the conclusions arrived at in many cases will of necessity be subjective and dependent on the exercise of individual judgment. Hence, there is no single indisputable range and generally we cannot provide absolute assurance on a valuation.

This report is for the exclusive use of the party to whom it is addressed and for the specific purpose stated in section 1 — Purpose of Valuation, neither the whole nor any part of this report nor any reference thereto may be included in any document, circular or statement without our written approval of the form and context in which it will appear. We will not accept any responsibility or liability to any third party to whom in respect of, or arising out of, the contents of this report may be shown.

11. REMARKS

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

We hereby confirm that we have neither present nor prospective interests in the Company, the Target Group and its subsidiaries and associated companies, or the value reported herein.

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APPENDIX II

VALUATION REPORT

12. OPINION OF VALUE

Based on the investigation and analysis stated above, our scope of work, the valuation method employed, information reviewed and the assumptions adopted, the fair value of 20% equity interest of the Target Group as of 31 March 2018 (i.e. the Date of Valuation), in our opinion, was reasonably stated as HKD97,000,000 (HONG KONG DOLLARS NINETY SEVEN MILLION ONLY).

Yours faithfully,

For and on behalf of

Access Partner Consultancy & Appraisals Limited

Elvis C. F. Ng

CFA, FRM Director

• Note: Mr. Elvis C. F. Ng is a holder of Chartered Financial Analyst and a certified Financial Risk Manager. He has over ten years’experience in business valuation, transaction advisory and corporate consultancy in the Asia Pacific Region including Hong Kong, the PRC and Australia, as well as in European, American, Middle-east and African countries.

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APPENDIX III

GENERAL INFORMATION OF THE GROUP

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(a) Interests of Directors and chief executive of the Company

As at the Latest Practicable Date, none of the Directors or chief executive of the Company and/or any of their respective associates had any interest or short position in the Shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) (a) 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 interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (b) which were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein; or (c) which were required, pursuant to Rule 5.46 to 5.67 of the GEM Listing Rules, to be notified to the Company and the Stock Exchange.

(b) Interests of substantial Shareholders and other person

Save as disclosed below, as at the Latest Practicable Date, no person, other than a Director or chief executive of the Company, had, or were deemed or taken to have interests or short positions in the Shares or underlying Shares which would fall to be disclosed to the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of Part XV of the SFO and required to be entered into the register maintained by the Company pursuant to Section 336 of the SFO, who were, directly or indirectly, interested in 5% or more of the number of any class of share carrying rights to vote in all circumstances at general meetings of any other member of the Group or had any option in respect of such capital:

Long positions in the Shares:

			Approximate
			percentage of total
			number of issued
		Total number of	Shares of the
Name of Shareholders	Capacity	Shares held	Company
			(note 1)
Full Times Investments Ltd	Beneficial owner	36,815,000	25.9%
(‘‘Full Times’’)
HMV Digital China Group Limited	Interest in	37,995,000	26.7%
(‘‘HMV Digital’’)	controlled	(note 2)
	corporation
	Beneficial owner	1,440,000	1.0%

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APPENDIX III

GENERAL INFORMATION OF THE GROUP

Notes:

1. The approximately percentage of shareholding is calculated based on 142,256,878 Shares in issue as at the Latest Practicable Date.

2. 37,995,000 Shares refer to the aggregate of (a) 36,815,000 Shares held by Full Times and (b) 1,180,000 Shares held by New Smart International Creation Ltd (‘‘New Smart’’). Both Full Times and New Smart are direct wholly-owned subsidiaries of HMV Digital (stock code: 8078), whose shares are listed on the GEM.

As at the Latest Practicable Date, none of the Directors is a director or employee of the substantial Shareholders as stated above in this paragraph.

3. DIRECTORS’ INTERESTS IN ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date:

• (i) none of the Directors has or had any direct or indirect interest in any assets which have been acquired or disposed of by or leased to any member of the Group, or are proposed to be acquired or disposed of by or leased to any member of the Group since 31 March 2018 (being the date to which the latest published audited accounts of the Group were made up); and

• (ii) none of the Directors was materially interested, directly or indirectly, in any contract or arrangement entered into by any member of the Group which is subsisting as at the Latest Practicable Date and is significant in relation to the business of the Group.

4. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation, claim or arbitration of material importance and there was no litigation, claim or arbitration of material importance known to the Directors to be pending or threatened against any member of the Group.

5. SERVICE CONTRACTS

As at Latest Practicable Date, Mr. Lau Kelly being the executive Director of the Company; and Dr. Wan Ho Yuen, Terence, Mr. Hau Chi Kit, Mr. Ma Stephen Tsz On and Mr. Ho Siu King, Stanley, being the independent non-executive Directors, have entered into service contracts with the Company for an initial term of three years commencing from their dates of appointment, and their employments are subject to the rotation requirements under the articles of association of the Company.

Saved as disclosed above, as at the Latest Practicable Date, none of the Directors had any existing or was proposing to enter into any service contracts with the Company or any member of the Group (excluding contracts expiring or determinable by the Group within one year without payment of compensation (other than statutory compensation)).

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APPENDIX III

GENERAL INFORMATION OF THE GROUP

6. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors, controlling shareholder of the Company nor their respective close associates (as defined in the GEM Listing Rules) had any interest in a business, which competes or may compete, either directly or indirectly, with the business of the Group or any other conflict of interest which any such person has or may have with the Group which would be required to be disclosed pursuant to the GEM Listing Rules.

7. AUDIT COMMITTEE

As at the Latest Practicable Date, the audit committee of the Board comprised four independent non-executive Directors, namely, Dr. Wan Ho Yuen, Terence, Mr. Hau Chi Kit, Mr. Ma Stephen Tsz On and Mr. Ho Siu King, Stanley. The audit committee of the Board is chaired by Dr. Wan Ho Yuen, Terence. The background, directorship and past directorship (if any) of each of the members of the audit committee of the Board are set out below:

Dr. Wan Ho Yuen, Terence (‘‘Dr. Wan’’), aged 51, was appointed as an independent non-executive Director on 31 December 2015. He is currently the director of an accounting firm based in Hong Kong and an independent non-executive director of Union Asia Enterprise Holdings Limited (formerly known as Pan Asia Mining Limited), a company listed on the GEM of the Stock Exchange (stock code: 8173) since November 2015 and an independent non-executive director of Goal Rise Logistics (China) Holdings Limited, a company listed on the GEM of the Stock Exchange (stock code: 8457) since September 2017. Dr. Wan was an independent non-executive director of China Railsmedia Corporation Limited, a company listed on the Main Board of the Stock Exchange (stock code: 745) from 17 January 2014 to 8 April 2015. Dr. Wan obtained a bachelor of law degree from Tsing Hua University, the PRC in January 2004; and a doctorate degree of philosophy in business administration from Bulacan State University, Philippines in May 2006. Dr. Wan is a certified public accountant (Practicing) of Hong Kong Institute of Certified Public Accountants. Dr. Wan has over 10 years of experiences in taxation advisory, business management and accounting with several professional accounting firms and companies.

Mr. Hau Chi Kit (‘‘Mr. Hau’’), aged 46, was appointed as an independent nonexecutive Director on 4 March 2016. He is currently an independent non-executive director of China Zenith Chemical Group Limited (stock code: 362), eForce Holdings Limited (stock code: 943), all being companies whose shares are listed on the Main Board of the Stock Exchange. He is also an independent non-executive director of Code Agriculture (Holdings) Limited (stock code: 8153) whose shares are listed on the GEM of the Stock Exchange. He was a barrister-at-law in private practice in Hong Kong from 2001 to 2008. Prior to becoming a barrister, Mr. Hau worked at the Securities and Futures Commission. During the past three years, he was an independent non-executive director of CNC Holdings Limited (stock code: 8356) from May 2011 to May 2015 and Celebrate

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APPENDIX III

GENERAL INFORMATION OF THE GROUP

International Holdings Limited (stock code: 8212) from May to November 2015, all being companies whose shares are listed on the GEM of the Stock Exchange. Mr. Hau is a solicitor.

Mr. Ma Stephen Tsz On (‘‘Mr. Ma’’), aged 39, was appointed as an independent nonexecutive Director on 20 July 2018. He is a barrister-at-law at Wellington Chambers. He was admitted to practice law as a barrister in the High Court of Hong Kong in 2006. Mr. Ma holds a Postgraduate Certificate in Laws from The University of Hong Kong, a Graduate Diploma in Law from The Nottingham Trent University and a Bachelor’s degree in Business Administration from Simon Fraser University. Mr. Ma is currently an independent non-executive director of Chinese Food and Beverage Group Limited (stock code: 8272), a company listed on the GEM.

Mr. Ho Siu King, Stanley (‘‘Mr. Ho’’), aged 30, was appointed as an independent nonexecutive Director on 20 July 2018. He is a practicing barrister in Hong Kong. His areas of practice include civil and criminal law. He holds a Master of Laws degree from the London School of Economics and Political Science, and Bachelor of Laws and Bachelor of Engineering (Civil Engineering and Laws) degrees from the University of Hong Kong. Mr. Ho is currently an independent non-executive director of Chinese Food and Beverage Group Limited (stock code: 8272) and Easy Repay Finance & Investment Limited (stock code: 8079), all being companies whose shares listed on the GEM.

8. MATERIAL CONTRACTS

The following contracts (not being contracts enter into in the ordinary course of business of the Group) have been entered into by the Group within two years immediately preceding the date of this circular and up to the Latest Practicable Date which are or may be material:

• (a) the sale and purchase agreement dated 17 October 2016 entered into between Jovial (as purchaser) and Sminent (as vendor) in relation to the acquisition of 50% of issued share capital of Billion Ray (as target) at the consideration of HK$280,000,000. On 30 December 2016, Jovial and Sminent entered into the termination deed for terminating such acquisition;

• (b) the sale and purchase agreement dated 30 December 2016 (as supplement on 31 March 2017) entered into between Jovial (as purchaser) and Sminent (as vendor) in relation of the acquisition of 20% of issued share capital of Billion Ray (as target) at the consideration of HK$100,000,000;

• (c) the sale and purchase agreement dated 29 May 2017 entered into among Noble One Investments Limited, a direct wholly-owned subsidiary of the Company (as purchaser), the Company (as issuer of consideration shares) and Full Times Investments Limited (as vendor) in relation of the acquisition of 85% of the issued share capital of Full Wealthy International Limited (as target) at the consideration of HK$46,070,000;

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GENERAL INFORMATION OF THE GROUP

APPENDIX III

• (d) the sale and purchase agreement dated 11 December 2017 entered into between Top Insight Holdings Limited, a wholly-owned subsidiary of the Company (‘‘Top Insight’’) (as vendor) and Future Master Investments Limited (‘‘Future Master’’) (as purchaser) in relation of the disposal of the entire issued share capital of Cicero Capital Limited (as target) at the consideration of HK$145 million. On 26 January 2018, Top Insight and Future Master entered into the termination agreement for terminating such disposal;

• (e) the swap agreement dated 9 May 2018 entered into between Cordoba Homes Finance Limited (the ‘‘Creditor’’) and the Company in relation to swap the entire issued share capital of Top Insight owned by the Company with the Creditor for (i) the loan, accrued interests and any other money owed and payable by the Company to the Creditor under the loan agreement dated 5 August 2016 (as supplemented by a supplemental agreement dated 8 June 2017) in respect of a loan facility of HK$150 million and related security documents (collectively, the ‘‘Financing Documents’’) and all the rights, title, benefits, interests and claims whatsoever of the Creditor of and in the Financing Documents; and (ii) the provision of the new one year standby credit line for HK$25 million to be granted by the Creditor to the Company;

• (f) the SPA; and

• (g) the sale and purchase agreement dated 27 July 2018 entered into between the Company (as vendor) and Jian Kun International Investment Limited (as purchaser) in relation of the disposal of 100% of the issued share capital of Tongfang Electronic Company Limited (as target) at the consideration of HK$100,000.

9. EXPERTS AND CONSENTS

The following is the qualification of the expert who has given opinion or advice contained in this circular:

Name Qualification

Access Partner Consultancy & Appraisals Limited Independent valuer (‘‘Access Partner’’)

As at the Latest Practicable Date, Access Partner has given and has not withdrawn its written consent to the issue of this circular with the inclusion herein of its letter and report and references to its name in the form and context in which it appears.

As at the Latest Practicable Date, Access Partner did not had any interest, either direct or indirect, in any assets which have been, since 31 March 2018, being the date to which the latest published audited consolidated financial statements of the Group were made up, acquired or disposed of by or leased to or were proposed to be acquired or disposed of by or

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APPENDIX III

GENERAL INFORMATION OF THE GROUP

leased to any member of the Group nor had any shareholding in any member of the Group nor any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

10. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection at the principal place of business of the Company in Hong Kong at Unit B, 29/F, CKK Commercial Centre, 289–295 Hennessy Road, Wanchai, Hong Kong during normal business hours on any Business Day from the date of this circular up to and including the date of the EGM:

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

• (b) the annual reports of the Company for the years ended 31 March 2017 and 2018 respectively;

• (c) the valuation report prepared by Access Partner, the text of which is set out in Appendix II to this circular;

• (d) the consent letter referred to in the paragraph under the heading ‘‘Experts and Consents’’ in this Appendix to this circular;

• (e) the material contracts disclosed in the paragraph under the heading ‘‘Material Contracts’’ in this Appendix to this circular; and

• (f) this circular.

11. GENERAL

• (a) The compliance officer of the Company is Mr. Lau Kelly. He has worked with the Hong Kong Police Force for twelve years receiving commendations from Secretary of Civil Service and Secretary of Home Affairs for highly rated performances during his tenure. He has worked with Easy Finance Limited as Principal Consultant from 1 May 2011 to 31 October 2015 responsible for all regulatory and legal compliances.

• (b) The company secretary of the Company is Mr. Chung Man Wai, Stephen. He is a member of Hong Kong Institute of Certified Public Accountants.

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

• (d) The head office and principal place of business of the Company in Hong Kong is at Unit B, 29/F, CKK Commercial Centre, 289–295 Hennessy Road, Wanchai, Hong Kong.

– 45 –

APPENDIX III

GENERAL INFORMATION OF THE GROUP

• (e) The branch share registrar of the Company in Hong Kong is Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong.

• (f) The principal share registrar of the Company is SMP Partners (Cayman) Limited at Royal Bank House — 3rd Floor, 24 Shedden Road, P.O. Box 1586, George Town, Grand Cayman KY1-1110, Cayman Islands.

• (g) The English text of this circular shall prevail over their respective Chinese text for the purpose of interpretation.

– 46 –

NOTICE OF EGM

==> picture [52 x 52] intentionally omitted <==

Trillion Grand Corporate Company Limited 萬 泰 企 業 股 份 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 8103)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the ‘‘EGM’’) of Trillion Grand Corporate Company Limited (the ‘‘Company’’) will be held at Jasmine Road, 3/F, Best Western Plus Hotel Hong Kong, 308 Des Voeux Road West, Hong Kong on Tuesday, 11 September 2018 at 9: 30 a.m. for the purpose of considering and, if thought fit, passing the following resolutions as ordinary resolution of the Company:

ORDINARY RESOLUTION

1. ‘‘THAT

2. (a) the SPA (as defined in the circular dated 17 August 2018 despatched to the shareholders of the Company (the ‘‘Circular’’)), a copy of which has been produced to the meeting marked ‘‘A’’ and signed by the chairman of the meeting for the purpose of identification, and all the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and

3. (b) any one of the directors (‘‘Directors’’) of the Company be and are hereby authorized to do all such acts and things and execute such further documents and take all steps which, in their opinion may be necessary, desirable, or expedient to implement and give effect to the terms of, and all transactions contemplated under, the SPA for and on behalf of the Company and to approve any change and amendment thereto as they may consider necessary, desirable or expedient.’’

By order of the Board

Trillion Grand Corporate Company Limited Lau Kelly

Executive Director

Hong Kong, 17 August 2018

– EGM-1 –

NOTICE OF EGM

Registered Office: Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman KY1-1111 Cayman Islands

Head office and principal place of business in Hong Kong: Unit B, 29/F CKK Commercial Centre 289–295 Hennessy Road Wanchai Hong Kong

Notes:

1. For the purpose of determining the identity of the shareholders of the Company entitled to attend and vote at the EGM, the register of members of the Company will be closed from Friday, 7 September 2018 to Tuesday, 11 September 2018, both days inclusive, during which period no transfer of shares will be effected. All transfers accompanied by the relevant certificates must be lodged with the Company’s branch share registrar in Hong Kong, Union Registrars Limited, at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, Hong Kong for registration not later than 4: 30 p.m. on Thursday, 6 September 2018.

2. A shareholder of the Company entitled to attend and vote at the EGM or any adjourned meeting is entitled to appoint a person or persons as his proxy or proxies to attend and, on a poll, vote instead of him. A proxy need not be a shareholder of the Company.

3. To be valid, a form of proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of such power of attorney or authority, must be deposited at the Company’s branch share registrar in Hong Kong, Union Registrars Limited at Suites 3301–04, 33/F, Two Chinachem Exchange Square, 338 King’s Road, North Point, Hong Kong, not less than 48 hours before the time appointed for holding the EGM or any adjourned meeting, and in default thereof the form of proxy shall not be treated as valid. No instrument appointing a proxy shall be valid after the expiry of 12 months from the date of its execution.

4. Delivery of an instrument appointing a proxy shall not preclude a shareholder of the Company from attending and voting in person at the meeting, and in such event the instrument appointing a proxy shall be deemed to be revoked.

– EGM-2 –

NOTICE OF EGM

As at the date of this notice, the board of directors of the Company comprises the following Directors:

Executive Directors:

Mr. Lau Kelly (Chief Executive Officer)

Ms. Ho Chi Na

• Mr. Yuen Koon Tung

Independent Non-executive Directors:

• Dr. Wan Ho Yuen, Terence

• Mr. Hau Chi Kit

• Mr. Ma Stephen Tsz On

• Mr. Ho Siu King, Stanley

This notice, for which the Directors collectively and individually accept full responsibility, includes particulars given in compliance with the Rules Governing the Listing of Securities on the GEM of The Stock Exchange of Hong Kong Limited (‘‘GEM’’) 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 notice 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 notice misleading.

This notice will remain on the page of ‘‘Latest Company Announcement’’ on the GEM website for at least 7 days from the date of its postings and on the website of the Company at http://www.trilliongrand.com.

– EGM-3 –