Long Investment Corp — Proxy Solicitation & Information Statement 2017

Dec 5, 2017

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in SOCAM Development Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or transferee(s).

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

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瑞安建業有限公司[*] SOCAM Development Limited

(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

VERY SUBSTANTIAL DISPOSAL

CONDITIONAL DISPOSAL OF 28.20% SHARE INTEREST AND THE RELATED LOANS IN RICHCOAST GROUP LIMITED

A letter from the Board is set out on pages 6 to 14 of this circular.

A notice convening the special general meeting of the Company to be held at Tian & Di Room, 7th Floor, The Landmark Mandarin Oriental, 15 Queen’s Road Central, The Landmark, Central, Hong Kong on Friday, 22 December 2017 at 11:00 a.m. is set out on pages SGM-1 and SGM-2 of this circular. A form of proxy for the meeting is enclosed. Whether or not you are able to attend the meeting, you are requested to complete the enclosed form of proxy in accordance with the instructions printed thereon and return the same to the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the meeting or any adjournment or postponement thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the meeting and any adjournment or postponement thereof (as the case may be), should you so wish.

Hong Kong, 6 December 2017

• For identification purpose only

CONTENTS

			Page
DEFINITIONS	. . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**LETTER FROM **	THE BOARD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		6
APPENDIX I	–	FINANCIAL INFORMATION OF THE GROUP
		AND THE DISPOSAL GROUP . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II	–	UNAUDITED PRO FORMA FINANCIAL INFORMATION
		OF THE REMAINING GROUP . . . . . . . . . . . . . . . . . . . . . . . .	II-1
APPENDIX III	–	PROPERTY VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . .	III-1
APPENDIX IV	–	GENERAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
NOTICE OF SPECIAL GENERAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			SGM-1

DEFINITIONS

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

• “Assignable Onshore Debts”

the loans and debts as well as the receivables due by the Richcoast PRC Subsidiaries to members of the Group in the PRC in an aggregate amount of approximately RMB505.52 million (equivalent to approximately HK$596.01 million) at the date of the Sale and Purchase Agreement, which shall be assigned to the Purchaser or its designated assignee pursuant to the Sale and Purchase Agreement;

• “associates”, “close associates”, “connected person(s)” and “subsidiaries”

each shall have the meaning ascribed to it under the Listing Rules;

• “Board”

• the board of Directors;

• “Business Day”

a day (other than a Saturday or Sunday) on which banks are open in Hong Kong and the PRC to the general public for business;

• “Company”

SOCAM Development Limited, a company incorporated in Bermuda with limited liability, whose shares are listed on the main board of the Stock Exchange (stock code: 983);

• “Completion”

completion of the Disposal under the Sale and Purchase Agreement;

• “Completion Date”

• the date of Completion;

• “Dalian Tiandi Project”

• the Dalian Tiandi property development project jointly developed and operated by the Group, the SOL Group and the Yida Group, being a large-scale integrated development in Dalian, the PRC, with an estimated developable gross floor area of approximately three million square metres comprising software offices, residential, commercial and retail properties, hotels and educational facilities;

• “Deferred Payment”

• has the meaning ascribed to it under the section headed “THE SALE AND PURCHASE AGREEMENT — Total Transaction Amount and payment terms” in the letter from the Board contained in this circular;

• “Directors”

the directors of the Company;

– 1 –

DEFINITIONS

• “Disposal”

• the disposal by Main Zone of the Sale Shares, the Offshore Loans and the Assignable Onshore Debts to the Purchaser pursuant to the Sale and Purchase Agreement;

• “€”

• EURO, the lawful currency of the Eurozone;

• “Group”

• collectively, the Company and its subsidiaries;

• “HK$” Hong Kong Dollars, the lawful currency of Hong Kong;

• “Hong Kong”

• the Hong Kong Special Administrative Region of the People’s Republic of China;

• “Innovate Zone”

• Innovate Zone Group Limited, a wholly-owned subsidiary of SOL incorporated in the British Virgin Islands with limited liability;

• “Latest Practicable Date” 1 December 2017, being the latest practicable date for ascertaining certain information referred to in this circular prior to its printing;

• “Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange;

• “Long Stop Date” 29 December 2017 (or such other date as may be agreed between the parties to the Sale and Purchase Agreement);

• “Macau”

• the Macau Special Administrative Region of the People’s Republic of China;

• “Main Zone”

• Main Zone Group Limited, a wholly-owned subsidiary of the Company incorporated in the British Virgin Islands with limited liability;

• “Mitsui”

• Mitsui Fudosan Residential Co. Ltd., a company incorporated in Japan with limited liability, and a project partner of certain investment in the Dalian Tiandi Project, which is an independent third party;

• “Mr. Frankie Wong”

• Mr. Wong Yuet Leung, Frankie;

• “Mr. Vincent Lo”

• Mr. Lo Hong Sui, Vincent;

– 2 –

DEFINITIONS

• “Non-Assignable Onshore Debts”

• “Offshore Loans”

• “Outstanding Disposal Offshore Consideration”

• “PRC”

• “Purchaser” or “Many Gain”

• “Remaining Group”

• “Resolution”

• “Richcoast”

• “Richcoast Group” or “Disposal Group”

the loans and debts due by the Richcoast PRC Subsidiaries to the Group in an aggregate amount of approximately RMB98.36 million (equivalent to approximately HK$115.97 million) at the date of the Sale and Purchase Agreement, to be repaid to the Group incidental to the Disposal;

• the shareholder’s loans due by the Richcoast Non-PRC Subsidiaries to Main Zone in an aggregate amount of approximately RMB743.00 million (equivalent to approximately HK$876.00 million) at the date of the Sale and Purchase Agreement, which shall be assigned to the Purchaser or its designated assignee pursuant to the Sale and Purchase Agreement;

• has the meaning ascribed to it under the section headed “THE SALE AND PURCHASE AGREEMENT — Total Transaction Amount and payment terms” in the letter from the Board contained in this circular;

• the People’s Republic of China (for the purpose of this circular, excluding Hong Kong, Taiwan and Macau);

• Many Gain International Limited, a wholly-owned subsidiary of Yida incorporated in the British Virgin Islands with limited liability;

• the Group immediately after Completion;

• the ordinary resolution to be proposed at the SGM as set out in the notice of the SGM on pages SGM-1 and SGM-2 of this circular;

• Richcoast Group Limited, a company incorporated in the British Virgin Islands with limited liability, which is held as to 28.20% by the Group through Main Zone, 61.54% by the SOL Group through Innovate Zone and 10.26% by the Yida Group through the Purchaser at the date of this circular;

• collectively, Richcoast and its subsidiaries;

– 3 –

DEFINITIONS

• “Richcoast Non-PRC Subsidiaries” subsidiaries of Richcoast excluding the Richcoast PRC Subsidiaries;

• “Richcoast PRC Subsidiaries” subsidiaries of Richcoast established in the PRC; “RMB” Renminbi, the lawful currency of the PRC; “Sale and Purchase Agreement” the sale and purchase agreement dated 14 November 2017 entered into among Main Zone, the Company, the Purchaser and Yida in relation to the Transaction, as supplemented from time to time;

• “Sale Shares” 220 ordinary shares of US$1.00 each of Richcoast, representing 28.20% of the issued share capital of Richcoast;

• “SFO” the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong);

• “SGM” the special general meeting of the Company to be held for considering and, if thought fit, approving the Sale and Purchase Agreement and the Transaction contemplated thereunder;

• “Shareholders” holders of the ordinary shares in the issued share capital of the Company;

• “SOCL” Shui On Company Limited, which is owned by the Bosrich Unit Trust, the units of which are the property of a discretionary trust, of which Mr. Vincent Lo is a discretionary beneficiary;

• “SOFCL” Shui On Finance Company Limited, a wholly-owned subsidiary of SOCL;

• “SOL” Shui On Land Limited, a company incorporated in the Cayman Islands with limited liability, whose shares are listed on the main board of the Stock Exchange (stock code: 272);

• “SOL Disposal” has the meaning ascribed to it under the section headed “INFORMATION ON THE RICHCOAST GROUP” in the letter from the Board contained in this circular;

– 4 –

DEFINITIONS

“SOL Group” collectively, SOL and its subsidiaries; “Stock Exchange” The Stock Exchange of Hong Kong Limited;

• “Total Transaction Amount” the total consideration for the Disposal and the debt repayment amount, being RMB1,300 million in aggregate (equivalent to approximately HK$1,532.70 million);

• “Transaction” the Disposal and the repayment of the Non-Assignable Onshore Debts pursuant to the Sale and Purchase Agreement;

• “US$” United States Dollars, the lawful currency of the United States of America;

• “Yida” Yida China Holdings Limited, a company incorporated in the Cayman Islands with limited liability, whose shares are listed on the main board of the Stock Exchange (stock code: 3639);

• “Yida Group” collectively, Yida and its subsidiaries; and “%” per cent.

For the purpose of this circular, the exchange rate at RMB1 = HK$1.179 has been used for illustrative purpose only and do not constitute a representation that any amount has been, could have been or may be exchanged at such rate.

– 5 –

LETTER FROM THE BOARD

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瑞安建業有限公司[*]

SOCAM Development Limited

(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

Executive Directors:

Mr. Lo Hong Sui, Vincent Mr. Wong Yuet Leung, Frankie

Independent Non-executive Directors: Ms. Li Hoi Lun, Helen Mr. Chan Kay Cheung Mr. William Timothy Addison

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

Head Office and Principal Place of Business in Hong Kong: 34th Floor Shui On Centre 6-8 Harbour Road Hong Kong

6 December 2017

To the Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL

CONDITIONAL DISPOSAL OF 28.20% SHARE INTEREST AND THE RELATED LOANS IN RICHCOAST GROUP LIMITED

INTRODUCTION

On 14 November 2017, the Board announced that Main Zone and the Company entered into the Sale and Purchase Agreement with the Purchaser and Yida in respect of the Transaction.

The purpose of this circular is to provide you with (i) further particulars of the Sale and Purchase Agreement and the Transaction; (ii) other information required under the Listing Rules; and (iii) a notice of the SGM.

• For identification purpose only

– 6 –

LETTER FROM THE BOARD

THE SALE AND PURCHASE AGREEMENT

Date

14 November 2017

Parties

1. Main Zone, a wholly-owned subsidiary of the Company holding 28.20% share interest in Richcoast at the date of this circular, as the seller;

2. Many Gain, a wholly-owned subsidiary of Yida holding 10.26% share interest in Richcoast at the date of this circular, as the Purchaser;

3. the Company, as the guarantor of the obligations of Main Zone under the Sale and Purchase Agreement; and

4. Yida, as the guarantor of the obligations of the Purchaser under the Sale and Purchase Agreement.

To the best of the knowledge, information and belief of the Directors after having made all reasonable enquiries, the Purchaser, Yida and their respective beneficial owners are independent of the Company and its connected persons.

Subject matters

Pursuant to the Sale and Purchase Agreement, (i) Main Zone has conditionally agreed to sell and procure the sale of, and the Purchaser has conditionally agreed to acquire the Sale Shares (representing 28.20% of the issued share capital of Richcoast), the Offshore Loans and the Assignable Onshore Debts; and (ii) the Purchaser has conditionally agreed to procure the repayment of the Non-Assignable Onshore Debts.

Total Transaction Amount and payment terms

The Total Transaction Amount, comprising consideration for the Disposal and the debt repayment amount, is RMB1,300 million in aggregate (equivalent to approximately HK$1,532.70 million), which includes:

• (i) Consideration for the Disposal: a sum of approximately RMB1,201.64 million (equivalent to approximately HK$1,416.73 million) being the consideration payable to Main Zone for the Disposal, comprising:

• (a) an amount of RMB1,460 (equivalent to approximately HK$1,721) for the Sale Shares;

• (b) an amount of approximately RMB743.00 million (equivalent to approximately HK$876.00 million) for the Offshore Loans; and

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LETTER FROM THE BOARD

• (c) an amount of approximately RMB458.64 million (equivalent to approximately HK$540.73 million) for the Assignable Onshore Debts; and

• (ii) Debt repayment amount: an amount of approximately RMB98.36 million (equivalent to approximately HK$115.97 million) for the repayment of the Non-Assignable Onshore Debts by the Richcoast PRC Subsidiaries to the Group via their self operating funds.

The Total Transaction Amount shall be paid and settled, or procured to be paid and settled, by the Purchaser in cash in the following manner:

• (i) an earnest money of RMB10 million (equivalent to approximately HK$11.79 million) that had been paid prior to the date of the Sale and Purchase Agreement was converted into part of the deposit upon signing of the Sale and Purchase Agreement;

• (ii) an amount of approximately RMB131.37 million (equivalent to approximately HK$154.89 million), being the remaining deposit, was paid within three Business Days after signing of the Sale and Purchase Agreement;

• (iii) (a) an amount of approximately RMB150.11 million (equivalent to approximately HK$176.98 million); and (b) an amount of up to approximately RMB32.06 million (equivalent to approximately HK$37.80 million), subject to the cash balance available on the books of the Richcoast PRC Subsidiaries, shall be paid/settled on the Completion Date;

• (iv) an amount of approximately RMB87.44 million (equivalent to approximately HK$103.09 million) shall be paid/settled on or before 29 December 2017; and

• (v) the remaining balance of the Total Transaction Amount, being the Total Transaction Amount of RMB1,300 million (equivalent to approximately HK$1,532.70 million) less the accumulative amount paid/settled on or before the later of the Completion Date or 29 December 2017, shall be paid/settled within twelve months after the Completion Date, of which an accumulative amount of at least approximately RMB737.44 million (equivalent to approximately HK$869.44 million) shall be paid/settled within six months after the Completion Date.

The Purchaser shall pay interest calculated on a daily basis at the rate of 5% per annum on the balance of the Total Transaction Amount outstanding at the Completion Date (the “Deferred Payment”) until the date of actual payment (both dates inclusive). The interest rate was determined after arm’s length negotiations having taken into account interest rates applicable to similar arrangement. As security, the Purchaser shall on Completion issue to Main Zone a promissory note for an amount equivalent to the outstanding balance of the consideration for the Sale Shares and the Offshore Loans (the “Outstanding Disposal Offshore Consideration”) and carrying the aforesaid interest. Upon the settlement of any of the Outstanding Disposal Offshore Consideration (including the accrued interest thereon), a corresponding amount of the Purchaser’s obligations under the promissory note shall be reduced proportionately. The promissory note will be returned to the Purchaser upon full payment of the Outstanding Disposal Offshore Consideration and the accrued interest thereon. Moreover, the Sale and Purchase Agreement provides for certain further financial control measures to secure the payment of the Deferred Payment, including that funds arising from new loan facilities of and assets disposal by the Richcoast Group in

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LETTER FROM THE BOARD

certain circumstances shall be placed in a joint custody account and Main Zone shall have the right to appoint a designated financial supervisor to the Richcoast Group until and unless the Deferred Payment (including the accrued interest thereon) is settled in full.

The Total Transaction Amount was determined after arm’s length negotiations between Main Zone and the Purchaser with reference to the carrying value of the Group’s interest in the Richcoast Group (which holds 78% interest in the Dalian Tiandi Project) as well as the Group’s cumulative cash investment cost in the Richcoast Group, and after taking into account the following factors:

• (i) the Disposal represents the last phase of the Company’s asset monetisation strategy in the PRC; and

• (ii) the fact that the Dalian Tiandi Project is a joint-venture project, in which the Group, having a 22% effective interest, is subject to various restrictions as set out in the joint venture agreement.

Conditions

Completion is conditional upon, among other things, the satisfaction or, as applicable, waiver of the following conditions on or before the Long Stop Date:

• (i) there being (a) no government resumption or surrender of; (b) no change in ownership of; and (c) no encumbrance created on the Richcoast Group’s properties on or before the Completion Date, which would have a material adverse effect to the Richcoast Group’s properties;

• (ii) the Shareholders’ approval having been obtained by the Company in respect of the Sale and Purchase Agreement and the Transaction contemplated thereunder pursuant to the Listing Rules;

• (iii) the shareholders’ approval having been obtained by Yida in respect of the Sale and Purchase Agreement and the Transaction contemplated thereunder pursuant to the Listing Rules;

• (iv) financial institutions’ consents having been obtained in relation to the release on the Completion Date of the corporate guarantees provided by the Group in favour of certain financial institutions for the benefit of the Richcoast Group;

• (v) financial institutions’ consents having been obtained in relation to the change of control of Richcoast;

• (vi) consent of Mitsui having been obtained in relation to the release of the corporate guarantee executed by the Company in its favour for the benefit of the Richcoast Group; or its exit from the relevant investment in the Dalian Tiandi Project prior to Completion; and

• (vii) a supplemental agreement having been entered into between one of the Richcoast PRC Subsidiaries and an independent third party in relation to the development of a school on the project site of the Dalian Tiandi Project.

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LETTER FROM THE BOARD

Completion

Completion shall take place on the second Business Day after the date on which all of the conditions are satisfied or waived (except for the conditions under paragraphs (ii) and (iii) above which cannot be waived) in accordance with the Sale and Purchase Agreement, or on such other date as agreed between Main Zone and the Purchaser in writing.

At the date of this circular, Richcoast is a joint venture company of the Group and is accounted for as an associate of the Company in the financial statements of the Group. Following Completion, the Company will no longer hold any share interest in Richcoast.

Guarantee

The Company has agreed to guarantee to the Purchaser the performance by Main Zone of all its obligations under the Sale and Purchase Agreement until Main Zone’s obligations thereunder have been satisfied in full.

Yida has agreed to guarantee to Main Zone the performance by the Purchaser of all its obligations under the Sale and Purchase Agreement until the Purchaser’s obligations thereunder have been satisfied in full.

INFORMATION ON THE RICHCOAST GROUP

The Richcoast Group was formed in 2007 for the development and operation of the Dalian Tiandi Project, which is a property development and investment project jointly developed and operated by the Group, the SOL Group and the Yida Group, being a large-scale integrated development in Dalian, the PRC, with an estimated developable gross floor area of approximately three million square metres comprising software offices, residential, commercial and retail properties, hotels and educational facilities.

At the date of this circular, Richcoast is held as to 28.20% by the Group through Main Zone, 61.54% by the SOL Group through Innovate Zone and 10.26% by the Yida Group through the Purchaser. Richcoast, through its subsidiaries, holds 78% interest in the Dalian Tiandi Project, and the remaining 22% interest in the Dalian Tiandi Project is held by the Yida Group.

Set out below is a summary of the audited financial information of the Richcoast Group for the two years ended 31 December 2015 and 2016:

	2016	2016	2015	2015
		Equivalent to		Equivalent to
	RMB	approximately	RMB	approximately
	million	HK$ million	million	HK$ million
Net loss (before taxation and
extraordinary items)	(681.48)	(803.46)	(691.48)	(815.25)
Net loss (after taxation and
extraordinary items)	(569.74)	(671.72)	(598.82)	(706.01)

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LETTER FROM THE BOARD

The unaudited consolidated total equity, including non-controlling interests, of the Richcoast Group as at 30 June 2017 was approximately RMB1,230.01 million (equivalent to approximately HK$1,450.18 million).

The Board was informed by the SOL Group that Innovate Zone has on 14 November 2017 entered into a sale and purchase agreement to dispose of its entire 61.54% share interest and the related loans in Richcoast to the Purchaser (the “SOL Disposal”), details of which have been set out in an announcement of SOL dated 14 November 2017.

FINANCIAL IMPACT ON THE GROUP AND USE OF PROCEEDS

The Group expects to recognise a loss before transaction cost of approximately HK$132.60 million on the Transaction, being the difference between (i) the Total Transaction Amount; and (ii) the unaudited carrying value of the Group’s investment in Richcoast of approximately HK$1,697.70 million, taking into account the unaudited accumulated other comprehensive income attributable to Richcoast of approximately HK$32.40 million, as at 30 June 2017. Such estimated disposal loss will be partly offset by the interest accrued on the Deferred Payment of approximately HK$40 million, which is to be recognised as income of the Group after Completion until full settlement of the Deferred Payment.

Shareholders should note that the financial impact set out above is for illustrative purpose only, which will have to be ascertained with reference to the carrying value of the Group’s investment in Richcoast at the Completion Date.

Currently, Richcoast is accounted for as an associate of the Company in the Group’s consolidated financial statements. Upon Completion, the Group will no longer hold any share interest in the Richcoast Group, and 28.20% share of the results of the Richcoast Group will be reduced in the Group’s consolidated financial statements. Please refer to Appendix II to this circular for the financial information of the Remaining Group.

According to the unaudited pro forma financial information of the Remaining Group as set out in Appendix II to this circular, assuming that the Disposal was completed on 30 June 2017, the Group’s total assets would decrease by approximately HK$170 million while its total liabilities would decrease by approximately HK$1 million.

The proceeds of RMB1,300 million (equivalent to approximately HK$1,532.70 million) from the Transaction, after deducting the transaction costs and expenses, will be used by the Group to further reduce its borrowings and for general working capital purpose. The exact allocation of the net proceeds will depend on the proportion of borrowings that may be renewed, extended or refinanced under the prevailing credit market condition.

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LETTER FROM THE BOARD

REASONS FOR AND BENEFITS OF THE ENTERING INTO OF THE SALE AND PURCHASE AGREEMENT

As disclosed in the prior years’ annual reports of the Company, the Group has been pursuing its asset monetisation strategy in the PRC. The Transaction represents the last phase of the Company’s overall monetisation strategy, which will make a positive contribution to the cash flow and financial position of the Group. The Transaction will not only free the Group from the negative impact of recurring operating losses of the Dalian Tiandi Project and ease the Group from the funding burden to the project, but also allow the Group to release significant resources tied-up in this non-performing investment.

The net proceeds to be generated from the Transaction would significantly improve the Group’s financial position and strengthen its working capital, which would put the Group in a more flexible financial condition allowing it to seek out new investment opportunities to rebuild its asset management and property businesses, as well as to strengthen its construction business.

IMPLICATIONS OF THE LISTING RULES

At the Latest Practicable Date, Mr. Vincent Lo, who is the Chairman of the Company and an executive Director, and his associates were together beneficially interested in approximately 48.44% of the issued shares of the Company. Mr. Vincent Lo is also the chairman and an executive director of SOL, and he and his associates were together beneficially interested in approximately 57.23% of the issued shares of SOL at the Latest Practicable Date. Mr. Vincent Lo did not have any interests in the Yida Group nor was he otherwise related or connected to the Yida Group and its connected person(s) at the Latest Practicable Date.

Mr. Frankie Wong, who is an executive Director, the chief executive officer and chief financial officer of the Company, is also a non-executive director of SOL. At the Latest Practicable Date, he was beneficially interested in approximately 0.81% of the issued shares of the Company and did not have any interests in the shares of SOL and Yida.

None of the Directors has any material interest in the Transaction. Nevertheless, to adhere to the highest level of good corporate governance, in view of the SOL Disposal, each of Mr. Vincent Lo and Mr. Frankie Wong voluntarily abstained from voting on the Board resolution for approving the Transaction.

As one of the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Transaction exceeds 75%, the Transaction (including the settlement arrangements in connection with the Deferred Payment after Completion) constitutes a very substantial disposal of the Company and is subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules. The Company will comply with all disclosure obligations under the Listing Rules in respect of the Deferred Payment as and if appropriate.

According to the Listing Rules, a Shareholder shall abstain from voting on the Resolution at the SGM if such Shareholder or any of his/her/its close associates has a material interest in the Transaction. At the Latest Practicable Date, to the best knowledge, information and belief of the Directors having made all reasonable enquiries, none of the Shareholders and their close associates had a material interest in the Transaction and thus none of them is required to abstain from voting on the Resolution at the SGM. However, Mr. Frankie Wong, who led the negotiation with the Yida Group in relation to the Sale and Purchase Agreement, intends to voluntarily abstain from voting on the Resolution at the SGM.

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LETTER FROM THE BOARD

IRREVOCABLE VOTING UNDERTAKINGS

On 14 November 2017, SOCL together with SOFCL provided to the Company an irrevocable voting undertaking, pursuant to which SOCL and SOFCL shall, subject to applicable provisions of the Listing Rules, vote in favour of the Resolution at the SGM. At the Latest Practicable Date, SOCL beneficially owned 234,381,000 ordinary shares of the Company, representing approximately 48.38% of the issued shares of the Company, of which 232,148,000 ordinary shares were held by SOCL itself and 2,233,000 ordinary shares were held by SOFCL.

In addition, on 14 November 2017 subsequent to the issuance of the announcement of the Company in respect of the Transaction, Mr. Sun Yinhuan (a former executive director of Yida who is not a close associate of Yida) provided to the Company an irrevocable voting undertaking, pursuant to which he shall, subject to applicable provisions of the Listing Rules, vote in favour of the Resolution at the SGM. At the Latest Practicable Date, he beneficially owned 19,185,950 ordinary shares of the Company, representing approximately 3.96% of the issued shares of the Company.

Completion is subject to, among other things, the necessary Shareholders’ approval having been obtained. As such, the Transaction may or may not materialise. Securities holders and potential investors should therefore exercise caution when dealing in the securities of the Company.

GENERAL INFORMATION

The Group principally engages in property development and investment, and asset management in the PRC, and construction in Hong Kong and Macau.

Main Zone is a wholly-owned subsidiary of the Company and its principal activity is investment holding.

The Purchaser is a wholly-owned subsidiary of Yida and its principal activity is investment holding.

The Yida Group principally engages in the development of business parks in the PRC.

SPECIAL GENERAL MEETING

A notice convening the SGM to be held at Tian & Di Room, 7th Floor, The Landmark Mandarin Oriental, 15 Queen’s Road Central, The Landmark, Central, Hong Kong on Friday, 22 December 2017 at 11:00 a.m. is set out on pages SGM-1 and SGM-2 of this circular. At the SGM, the Resolution will be proposed to approve, among others, the Sale and Purchase Agreement and the Transaction contemplated thereunder.

A form of proxy for the SGM is enclosed. Whether or not you are able to attend the SGM, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong as soon as possible and in any event not later than 48 hours before the time appointed for holding the SGM or any adjournment or postponement thereof (as the case may be). Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM and any adjournment or postponement thereof (as the case may be), should you so wish.

– 13 –

LETTER FROM THE BOARD

In accordance with Rule 13.39(4) of the Listing Rules, the Resolution will be decided by poll at the SGM. Accordingly, the chairman of the SGM will demand, pursuant to Bye-law 66 of the Bye-laws of the Company, a poll for the Resolution at the SGM. An announcement of the voting results will be made after the SGM in accordance with the Listing Rules.

RECOMMENDATION

The Directors (including the independent non-executive Directors) are of the view that the Sale and Purchase Agreement and the Transaction contemplated thereunder are on normal commercial terms, which are fair and reasonable and in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend the Shareholders to vote in favour of the Resolution at the SGM.

ADDITIONAL INFORMATION

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

Yours faithfully, By order of the Board

SOCAM Development Limited Wong Yuet Leung, Frankie Executive Director, Chief Executive Officer and Chief Financial Officer

– 14 –

FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

(i) Financial information of the Group

The audited consolidated financial statements of the Group for the three years ended 31 December 2014, 2015 and 2016 and the unaudited condensed consolidated financial statements of the Group for the six months ended 30 June 2017 are disclosed in the following documents which have been published on the website of the Stock Exchange (www.hkex.com.hk) and the website of the Company (www.socam.com), and which can be accessed by the direct hyperlinks below:

• (1) annual report of the Company for the year ended 31 December 2014 published on 24 April 2015 (pages 90 to 183):

• http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0424/LTN20150424919.pdf

• (2) annual report of the Company for the year ended 31 December 2015 published on 19 April 2016 (pages 86 to 175):

• http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0419/LTN20160419584.pdf

• (3) annual report of the Company for the year ended 31 December 2016 published on 20 April 2017 (pages 91 to 174):

• http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0420/LTN20170420238.pdf

• (4) interim report of the Company for the six months ended 30 June 2017 published on 18 September 2017 (pages 22 to 41):

• http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0918/LTN20170918277.pdf

(ii) Financial information of the Disposal Group

The Disposal Group is owned as to 28.2% by the Group and is accounted for as interests in associates using equity method in preparing the Group’s consolidated financial statements. Under the equity method, interests in associates are carried in the consolidated statement of financial position at cost as adjusted for post-acquisition changes in the Group’s share of profit or loss and other comprehensive income of the associates, less any identified impairment loss.

Set out below are the consolidated statements of financial position of the Disposal Group as at 31 December 2014, 31 December 2015 and 31 December 2016 and 30 June 2017, and the consolidated statements of profit or loss and other comprehensive income, the consolidated statements of changes in equity and the consolidated statements of cash flows of the Disposal Group for each of the three years ended 31 December 2016 and the six months ended 30 June 2017 (the “Relevant Periods”), and explanatory notes (the “Consolidated Financial Information”).

The Consolidated Financial Information has been prepared in accordance with Rule 14.68(2)(a)(i) of the Listing Rules, and solely for the purposes of inclusion in this circular to be issued by the Company in connection with the Transaction pursuant to the Sale and Purchase Agreement.

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

The reporting accountants of the Disposal Group, Deloitte Touche Tohmatsu was engaged to review the Consolidated Financial Information set out on pages I-3 to I-8 of this circular in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” and with reference to Practice Note 750 “Review of Financial Information under the Hong Kong Listing Rules for a Very Substantial Disposal” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”). A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable the auditor to obtain assurance that the auditor would become aware of all significant matters that might be identified in an audit. Accordingly, the auditor does not express an audit opinion.

Based on their review, nothing has come to their attention that causes them to believe that the Consolidated Financial Information for the Relevant Periods is not prepared, in all material respects, in accordance with the basis of preparation set out below.

The amounts included in the Consolidated Financial Information have been recognised and measured in accordance with the relevant accounting policies of Richcoast adopted in the preparation of the financial statements of Richcoast and its subsidiaries for the relevant years/periods, which conform with Hong Kong Financial Reporting Standards issued by the HKICPA. The Consolidated Financial Information does not contain sufficient information to constitute a complete set of financial statements as defined in Hong Kong Accounting Standard (“HKAS”) 1 “Presentation of Financial Statements” or an interim financial report as described in HKAS 34 “Interim Financial Reporting” issued by the HKICPA.

The Consolidated Financial Information is presented in Renminbi, the currency of primary economic environment in which the Disposal Group operates (i.e. the functional currency of the Disposal Group).

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Consolidated Statements of Profit or Loss and Other Comprehensive Income

For the years ended 31 December 2014, 2015 and 2016 and six months ended 30 June 2016 and 2017

Revenue Cost of sales Gross profit Other income, and other gain and loss Fair value changes on investment properties Fair value changes on derivative financial liabilities Write-down of properties under development for sale and properties held for sale Other operating expenses Finance costs Loss before taxation Taxation Loss and total comprehensive expense for the year/period Attributable to: Owners of Richcoast Non-controlling interests	Year ended 31 December 2014 2015 2016 RMB million RMB million RMB million 918 338 697 (856) (329) (633) 62 9 64 6 (132) (172) (231) (153) (315) 6 23 – (101) (260) (138) (140) (126) (87) (26) (53) (33) (424) (692) (681) 64 93 112 (360) (599) (569) (281) (485) (468) (79) (114) (101) (360) (599) (569)	Six months ended 30 June 2016 2017 RMB million RMB million 407 497 (363) (448) 44 49 (53) 72 (208) (123) – – (80) (7) (51) (47) (21) (11) (369) (67) 85 15 (284) (52) (229) (30) (55) (22) (284) (52)

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Consolidated Statements of Financial Position

At 31 December 2014, 2015 and 2016 and 30 June 2017

Non-current Assets Property, plant and equipment Investment properties Other receivables Pledged bank deposit Current Assets Properties under development for sale Properties held for sale Trade and other receivables, deposits and prepayments Tax recoverable Amounts due from related companies Restricted bank balances Bank balances and cash Current Liabilities Creditors, accrued charges and other payables Sales deposits received Amounts due to holding companies of shareholders Amounts due to shareholders Amounts due to related companies Secured bank borrowings and loans from other financial institutions Net Current Liabilities Total Assets less Current Liabilities	At 31 December 2014 2015 RMB million RMB million 5 3 7,322 7,433 626 626 – – 7,953 8,062 3,145 3,455 558 403 54 117 21 34 470 570 281 84 204 202 4,733 4,865 788 796 134 375 379 554 141 622 2,564 3,047 1,479 1,190 5,485 6,584 (752) (1,719) 7,201 6,343	2016 RMB million 2 7,392 626 42 8,062 3,143 431 169 34 592 26 552 4,947 637 546 257 772 2,801 623 5,636 (689) 7,373	At 30 June 2017 RMB million 2 7,421 626 42 8,091 3,083 261 168 50 627 25 776 4,990 676 608 385 769 2,815 1,031 6,284 (1,294) 6,797

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Capital and Reserves Share capital Reserves Equity attributable to owners of Richcoast Non-controlling interests Non-current Liabilities Secured bank borrowings and loans from other financial institutions Amount due to a holding company of a shareholder Loans from shareholders Amounts due to related companies Derivative financial liabilities Deferred tax liabilities	At 31 December 2014 2015 RMB million RMB million – – 1,521 1,268 1,521 1,268 672 558 2,193 1,826 1,713 1,432 92 93 2,242 2,131 440 461 23 – 498 400 5,008 4,517 7,201 6,343	2016 RMB million – 825 825 457 1,282 2,145 92 2,373 1,174 – 307 6,091 7,373	At 30 June 2017 RMB million – 795
			795 435
			1,230
			1,747 92 2,365 1,077 – 286
			5,567
			6,797

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Consolidated Statements of Changes in Equity

For the years ended 31 December 2014, 2015 and 2016 and six months ended 30 June 2016 and 2017

At 1 January 2014 Loss and total comprehensive expense for the year At 31 December 2014 Loss and total comprehensive expense for the year Fair value adjustments on loans from shareholders At 31 December 2015 Loss and total comprehensive expense for the year Fair value adjustments on loans from shareholders At 31 December 2016 Loss and total comprehensive expense for the period At 30 June 2017 At 1 January 2016 Loss and total comprehensive expense for the period Fair value adjustments on loans from shareholders At 30 June 2016	Attributable to own	Attributable to own	ers of the Company Accumulated profits/ (losses) Sub-total RMB million RMB million 1,049 1,802 (281) (281) 768 1,521 (485) (485) – 232 283 1,268 (468) (468) – 25 (185) 825 (30) (30) (215) 795 283 1,268 (229) (229) – 25 54 1,064	Non- controlling interests RMB million 751 (79) 672 (114) – 558 (101) – 457 (22) 435 558 (55) – 503	Total RMB million 2,553 (360)
	Share capital RMB million – – – – – – – – – – – – – – –	Other reserve RMB million 753 – 753 – 232 985 – 25 1,010 – 1,010 985 – 25 1,010	Accumulated profits/ (losses) RMB million 1,049 (281) 768 (485) – 283 (468) – (185) (30) (215) 283 (229) – 54
					2,193
					(599) 232
					1,826
					(569) 25
					1,282
					(52)
					1,230
					1,826 (284) 25
					1,567

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Consolidated Statements of Cash Flows

For the years ended 31 December 2014, 2015 and 2016 and six months ended 30 June 2016 and 2017

Operating Activities Loss before taxation Adjustments for: Depreciation Exchange loss (gain) Fair value changes on derivative financial liabilities Fair value changes on investment properties Finance costs Loss on disposal of investment properties Write-down of properties under development for sale and properties held for sale Operating cash flows before movements in working capital Decrease (increase) in properties development for sale (Increase) decrease in properties held for sale (Increase) decrease in trade and other receivables, deposits and prepayments (Decrease) increase in creditors, accrued charges and other payables (Decrease) increase in sales deposits received Cash from operations Tax (paid) refunded Net cash from operating activities	Year ended 31 December 2014 2015 2016 RMB million RMB million RMB million (424) (692) (681) 3 2 1 8 159 181 (6) (23) – 231 153 315 26 53 33 – – – 101 260 138 (61) (88) (13) 853 (220) 462 (201) 155 (28) (3) (62) (53) (19) 100 (113) (346) 241 171 223 126 426 (24) (19) 19 199 107 445	Six months ended 30 June 2016 2017 RMB million RMB million (369) (67) 1 – 53 (92) – – 208 123 21 11 – 13 80 7 (6) (5) 571 186 (275) 170 (58) 2 51 39 14 62 297 454 14 (23) 311 431

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Investing Activities Additions to investment properties Proceed from disposal of investment properties Repayments from related companies Advances to related companies Placement of restriction bank balances Withdrawal of restricted bank balances Placement of pledged bank deposit Net cash (used in) from investing activities Financing Activities Interest paid Bank borrowings and loans from other financial institutions raised Repayments of bank borrowings and loans from other financial institutions Advances from holding companies of shareholders Repayments to holding companies of shareholders Loans from shareholders raised Advances from shareholders Repayments to shareholders Payments for redemption of redeemable preference shares of a subsidiary Repayments to holder of redeemable preference shares Advances from related companies Repayments to related companies Net cash from (used in) financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at the beginning of the year/period Cash and cash equivalents at the end of the year/period, represented bank balances and cash	Year ended 31 December 2014 2015 2016 RMB million RMB million RMB million (160) (63) (52) – – – 58 − 4 − (100) (4) (273) − − − 197 57 – – (42) (375) 34 (37) (475) (516) (460) 1,177 879 1,404 (1,419) (1,448) (1,259) − 175 − (305) − (297) 38 34 36 132 323 97 − − − – (74) (46) − (19) − 926 680 932 – (177) (465) 74 (143) (58) (102) (2) 350 306 204 202 204 202 552	Six months ended 30 June 2016 2017 RMB million RMB million (43) (78) – 30 4 − (4) (35) − − 33 2 – – (10) (81) (261) (218) 883 191 (896) (181) − 128 (50) − 12 40 13 − − (3) (46) – − − 218 240 – (323) (127) (126) 174 224 202 552 376 776

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

2. STATEMENT OF INDEBTEDNESS

Borrowings

At 31 October 2017, being the latest practicable date for the purpose of this statement of indebtedness, the Group had total borrowings amounting to approximately HK$3,771 million, details of which are as follows:

Senior notes Bank borrowings Advance from joint ventures and related companies Secured Unsecured	HK$ million 2,151 1,421 199
	3,771
	647 3,124
	3,771

Mortgages and charges

At 31 October 2017, the Group’s secured borrowings were secured by certain of the Group’s bank deposits, investment properties, properties under development for sale, properties held for sale, benefits accrued to the relevant investment properties and equity interests in certain subsidiaries.

Contingent liabilities

At 31 October 2017, the Group had the following material contingent liabilities:

• (a) Standby documentary credit arranged with a bank to secure a bank loan of RMB83 million (equivalent to approximately HK$98 million) granted to a subsidiary of an associate;

• (b) Effective share of guarantees issued in favour of banks and other financial institution amounting to HK$394 million to secure bank and other loans granted to certain joint ventures and associates;

• (c) Effective share of a guarantee issued in favour of a joint venture (the “Joint Venture”, which was formed between an associate and an independent third party (the “Joint Venture Partner”)) and the Joint Venture Partner for an amount not exceeding RMB18 million (equivalent to approximately HK$21 million) in respect of certain payment obligations to the Joint Venture and the Joint Venture Partner; and

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

• (d) Guarantee issued in favour of a third party for a loan granted to a former wholly-owned subsidiary (the “Former Subsidiary”) with an outstanding amount of RMB542 million (equivalent to approximately HK$639 million) and the related interest amounting to RMB402 million (equivalent to approximately HK$474 million). Both of the parent company of the acquirer and the acquirer of the Former Subsidiary have agreed to procure the repayment of the loan and this obligation is guaranteed by the parent company of such acquirer.

Other liabilities

Save as disclosed above and apart from intra-group liabilities and normal trade payables, at the close of business on 31 October 2017, the Group did not have any outstanding loan capital issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances, debentures, mortgages, charges, finance lease commitments, guarantees or other material contingent liabilities.

The Directors confirmed that there had been no material change in terms of the Group’s contingent liabilities and indebtedness during the period from 31 October 2017 to the Latest Practicable Date.

3. WORKING CAPITAL

The Directors, after taking into account the financial resources available including the existing banking facilities of the Group, internally generated funds and the effect of the Disposal, are of the opinion that the Group has sufficient working capital for its present requirements and for at least 12 months following the date of this circular in the absence of any unforeseeable circumstances.

4. MATERIAL ADVERSE CHANGE

The Directors are not aware of any material adverse change in the financial or trading position of the Group since 31 December 2016, being the date to which the latest published audited consolidated financial statements of the Group were made up.

5. FINANCIAL AND TRADING PROSPECTS

Over the past several years, the Group has made considerable progress in the execution of its monetisation strategy. In May and June of 2017, the Company successfully issued the three-year US$ denominated notes and raised longer-term funds in an aggregate amount of US$280 million. Consequently, the Group has substantially reduced its total bank borrowings from HK$8.2 billion at the end of 2013 to HK$0.9 billion as at 30 June 2017 and has strengthened its working capital, which allows the Group to revamp and upgrade its remaining property assets and enhance their values. The Disposal represents the last phase of the Group’s monetisation strategy, which will make a further positive contribution to the cash flow and financial position of the Group.

The Group owns six property projects commanding good locations in major cities in the PRC and featuring primarily a niche retail portfolio in Shenyang, Chengdu, Tianjin and Chongqing. The Group is making satisfactory progress on the asset enhancement programmes of these shopping malls, with the goal of raising occupancy rates, rental yields and values.

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FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

The construction business has been a core business of the Company since it was formed in 1997, and its subsidiaries are major contractors engaged in the housing projects and building works in the public sector of Hong Kong. The Government of the Hong Kong Special Administrative Region is determined to resolve the shortage of affordable housing units as its top priority. The Group’s construction division, with its core strengths, sees ample business opportunities in the public construction sector in Hong Kong, and is expanding its order book. It is also well set to capture opportunities in community health and leisure facilities, as well as related construction activities such as fit-out, renovation and maintenance contracts.

The Group, now in a more flexible financial condition, looks to seek out new investment opportunities to rebuild its asset management and property businesses, as well as to strengthen its construction business.

6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Set out below is the management discussion and analysis on the Remaining Group for the three years ended 31 December 2016 and six months ended 30 June 2017 (the “Reporting Periods”). The financial data in respect of the Remaining Group, for the purpose of this circular, is derived from the consolidated financial statements of the Company for the Reporting Periods.

Financial review

Financial results

The Remaining Group reported turnover of HK$6,091 million, HK$5,916 million, HK$5,345 million and HK$3,167 million for the Reporting Periods respectively, representing a year-on-year decrease of 2.9% and 9.7% for 2015 and 2016 respectively, but a year-on-year increase of 28.6% for the six months ended 30 June 2017. The construction segment remained the largest source of turnover.

For the three years ended 31 December 2014, 2015 and 2016 and the six months ended 30 June 2017, the Remaining Group recorded a net loss attributable to shareholders of HK$1,255 million, HK$990 million, HK$1,245 million and HK$187 million respectively. Such losses were largely attributable to the loss from the property segment and this will be discussed in the section below. For the years ended 31 December 2014 and 2015, the Group also shared recurring operating losses of a then 45%-owned cement joint venture, Lafarge Shui On Cement Limited (“LSOC”), amounted to HK$317 million and HK$272 million respectively. In August 2015, the Group disposed of its entire interest in LSOC and recognised a net gain of HK$416 million in the same year.

Property segment

Turnover from the property segment amounted to HK$483 million, HK$306 million, HK$634 million and HK$23 million for the Reporting Periods respectively, accounting for approximately 8%, 5%, 12% and 1% of the total turnover of the Remaining Group for the respective periods. The relatively high turnover in 2016 was mainly due to the en-bloc disposal of the Zunyi project for a consideration of approximately HK$462 million. For details of the disposal of the Zunyi project, please refer to the announcement of the Company dated 4 January 2016. The decreasing turnover from property segment over the Reporting Periods was mainly because the inventories of the Group’s wholly-owned property projects have been substantially sold over the past few years.

– I-11 –

FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

For the three years ended 31 December 2014, 2015 and 2016 and the six months ended 30 June 2017, the property segment of the Remaining Group recorded a loss of HK$591 million, HK$802 million, HK$1,038 million and HK$74 million respectively. The losses for 2014, 2015 and 2016 were largely due to share of impairment losses provided on the property inventories of the Group’s jointly developed property projects as well as impairment loss provision on a Group’s wholly-owned project, as a result of the depressed selling prices amid oversupply of housing in the cities concerned. In addition, revaluation losses on the investment properties of the Group’s property projects and the jointly developed projects were also recognised in respective years. The aggregated impairment losses and fair value changes on these properties, net of deferred tax provision, totalled HK$120 million, HK$350 million and HK$594 million for the three years ended 31 December 2014, 2015 and 2016 respectively. In addition, during the year of 2015 and 2016, the Renminbi registered a depreciation of over 6% against HK$, and this brought about foreign exchange losses to the Group’s property projects, including jointly developed ones, totaling HK$116 million and HK$62 million respectively.

Construction segment

Turnover from the construction segment amounted to HK$5,599 million, HK$5,606 million, HK$4,711 million and HK$3,144 million for the Reporting Periods respectively, which accounted for approximately 92%, 95%, 88% and 99% of the total turnover of the Remaining Group for the respective periods. Construction segment’s turnover was relatively stable for 2014 and 2015, but recorded a year-on-year decrease of 16% in 2016. This was mainly due to completion of certain construction contracts during 2016, but major new contracts awarded during that year only contributed limited turnover during their initial stages of construction works. However, turnover from such new contracts awarded in 2016 contributed a significant portion of turnover for the six months ended 30 June 2017, which led to a substantial increase in construction’s turnover in that period.

The construction segment of the Remaining Group reported operating profit of HK$112 million, HK$108 million, HK$75 million and HK$50 million for the years ended 31 December 2014, 2015 and 2016 and for the six months ended 30 June 2017 respectively, representing average net profit margin of 2.0%, 1.9%, 1.6% and 1.6% of the turnover of construction segment for the respective periods. The decrease of average net profit margin to 1.6% in 2016 was mainly because of the movements in steel and labour costs, which were not sufficiently covered by the fluctuation in income received from the client on certain government construction projects. In addition, the decrease in average net profit margin in 2016 was also attributable to the additional cost provision for the lead-in-water incident and considerable cost overrun, largely resulting from under-performance of certain subcontractors, in one of the construction projects during the year ended 31 December 2016.

As at 31 December 2014, 2015 and 2016 and 30 June 2017, the Remaining Group had outstanding construction contracts to be completed worth approximately HK$11.4 billion, HK$9.5 billion, HK$9.7 billion and HK$10.9 billion, respectively.

– I-12 –

FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Liquidity and financial resources

As at 31 December 2014, 2015 and 2016 and 30 June 2017, the Remaining Group had net bank and other borrowings as follows:

Bank borrowings repayable: Within one year Over one year US$ senior notes due 2020 Total bank and other borrowings Bank balances, deposits and cash Net bank and other borrowings	2014 HK$ million 6,268 372 6,640 – 6,640 (2,435) 4,205	31 December 2015 HK$ million 2,914 421 3,335 – 3,335 (2,172) 1,163	2016 HK$ million 1,685 669 2,354 – 2,354 (1,069) 1,285	30 June 2017 HK$ million 353 566 919 2,146 3,065 (1,481) 1,584

As at 31 December 2014, (a) the Remaining Group’s current assets and current liabilities amounted to HK$9,205 million and HK$9,718 million respectively; (b) RMB, HK$ and US$ denominated borrowings accounted for 7.0%, 86.6% and 6.4% of the total bank and other borrowings, respectively; (c) the Remaining Group had fixed rate borrowings totaling HK$352 million; and (d) the net gearing ratio of the Remaining Group, calculated as net bank and other borrowings over shareholders’ equity was 53.7%.

As at 31 December 2015, (a) the Remaining Group’s current assets and current liabilities amounted to HK$6,774 million and HK$5,961 million respectively; (b) RMB, HK$ and US$ denominated borrowings accounted for 14.8%, 78.2% and 7.0% of the total bank and other borrowings, respectively; (c) the Remaining Group had fixed rate borrowings totaling HK$391 million; and (d) the net gearing ratio of the Remaining Group, calculated as net bank and other borrowings over shareholders’ equity was 21.0%.

As at 31 December 2016, (a) the Remaining Group’s current assets and current liabilities amounted to HK$4,573 million and HK$4,443 million respectively; (b) RMB and HK$ denominated borrowings accounted for 25.0% and 75.0% of the total bank and other borrowings, respectively; (c) the Remaining Group had fixed rate borrowings totaling HK$143 million; and (d) the net gearing ratio of the Remaining Group, calculated as net bank and other borrowings over shareholders’ equity was 33.5%.

– I-13 –

FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

As at 30 June 2017, (a) the Remaining Group’s current assets and current liabilities amounted to HK$4,818 million and HK$3,248 million respectively; (b) RMB, HK$ and US$ denominated borrowings accounted for 6.6%, 23.4% and 70.0% of the total bank and other borrowings, respectively; (c) the Remaining Group had fixed rate borrowings totaling HK$2,293 million; and (d) the net gearing ratio of the Remaining Group, calculated as net bank and other borrowings over shareholders’ equity was 42.0%.

Future plan for material investments or capital assets

As at the Latest Practicable Date, except for the proactive steps to undertake enhancement works on its four shopping malls in Tianjin, Shenyang, Chongqing and Chengdu, the PRC, by using its internal resources and the banking facilities available, the Remaining Group had no plan for other material investments or capital assets.

Number and remuneration of employees

As at the end of each Reporting Periods, the number of employees of the Remaining Group was approximately 1,240, 1,340, 1,220 and 1,330 in Hong Kong and Macau, and 600, 550, 480 and 460 in subsidiaries and joint ventures in the PRC, respectively.

For each of the Reporting Periods, the Remaining Group reported total staff costs (including directors’ emoluments) of HK$641 million, HK$697 million, HK$679 million and HK$335 million respectively.

Employees are rewarded on a performance-related basis. Apart from basic salary and performance-related bonus, the Remaining Group also provides other benefits to its employees including provident fund schemes, medical insurance, training and share option schemes.

Pledge of assets

As at the end of each Reporting Periods, certain assets with the following carrying amounts were pledged by the Remaining Group as security for certain banking facilities and other loans granted to the Remaining Group.

Investment properties Amounts due from joint ventures	2014 HK$ million 3,011 13 3,024	31 December 2015 HK$ million 1,556 – 1,556	2016 HK$ million 1,433 – 1,433	30 June 2017 HK$ million 1,470 –
				1,470

In addition, equity interests in certain subsidiaries and joint ventures have also been charged to banks as security for certain banking facilities granted to the Remaining Group at the end of the Reporting Periods.

– I-14 –

FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Capital commitments

As at 31 December 2014, 2015 and 2016 and 30 June 2017, the Remaining Group’s had no significant capital commitments.

Foreign exchange exposure

The Remaining Group’s financing and treasury activities are centrally managed and controlled at the corporate level. The Remaining Group’s bank borrowings are mainly denominated in HK$ and have been arranged on a floating-rate basis. Investments in the PRC are partly funded by capital already converted into RMB and partly financed by borrowings in HK$. RMB financing is at project level only where the sources of repayment are also RMB denominated. Given that income from operations in the PRC is denominated in RMB, the Remaining Group expects that the fluctuations of RMB in the short-term will affect the Remaining Group’s business performance and financial status. During the six months ended 30 June 2017, the Remaining Group took out foreign currency contracts in a total notional amount of approximately US$369 million to reduce potential foreign exchange risk that may arise from possible further depreciation of RMB in the short-term. It is the Remaining Group’s policy not to enter into derivative transactions for speculative purposes.

Contingent liabilities

As at the end of each of the Reporting Periods, the Remaining Group had the following contingent liabilities, which have not been provided for in the consolidated financial statements:

• (a) Effective share of guarantees issued in favour of banks amounting to HK$863 million, HK$569 million, HK$825 million and HK$703 million respectively to secure bank loans granted to certain joint ventures; and

• (b) Guarantee issued in favour of a third party for a loan granted to the former subsidiary with an outstanding principal amount of RMB542 million (equivalent to approximately HK$639 million) and the related interest of nil, RMB280 million (equivalent to approximately HK$330 million), RMB347 million (equivalent to approximately HK$409 million) and RMB380 million (equivalent to approximately HK$448 million) respectively at the end of each of the Reporting Periods. Both of the parent company of the acquirer and the acquirer of this former subsidiary have agreed to procure the repayment of the loan and agreed unconditionally to undertake and indemnify the Remaining Group for all losses as a result of the guarantee.

– I-15 –

FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

Material acquisitions and disposals

2014

• (a) Acquisition of 10% interest in Shanghai 21st Century Tower Project – In December 2014, the Remaining Group entered into a sale and purchase agreement for the acquisition of an additional 10% share interest in Twenty-One Century Holdings Limited (“Twenty-One Century”, formerly known as Lead Wealthy Investments Limited, then a joint venture company owned as to 70% by the Remaining Group, which via a PRC project company (the “Shanghai Project Company”) holds the Shanghai 21st Century Tower Project, a completed property development comprising the Four Seasons Hotel Pudong and unsold branded units plus car parking spaces in Shanghai Four Seasons Place situated at the 21st Century Tower located in Shanghai, the PRC) for a consideration of approximately RMB150 million. The acquisition was completed in June 2015.

• (b) Disposal of the construction business in the PRC – In August 2014, the Remaining Group entered into sale and purchase agreements for the disposal of its entire share interests in Shui On Granpex Limited (“SO Granpex”), Famous Scene Holdings Limited (“Famous Scene”) and Pat Davie (China) Limited (“Pat Davie (China)”) for a total consideration of HK$355 million (as adjusted). SO Granpex together with Famous Scene hold a total of 85% equity interests in 瑞安建築有限公司 (Shui On Construction Co., Ltd.*), an operating company established in the PRC which principally engages in building construction and maintenance in the PRC, while Pat Davie (China) holds various operating companies established in the PRC, which principally engage in provision of construction management consultancy services, fitting-out works, and trading of fitting-out materials in the PRC. The disposals were completed in October 2014.

• (c) Buyback and disposal of interest in Chengdu Centropolitan Project – In April 2014, the Remaining Group bought back 49% share interest in Gracious Spring Limited (“Gracious Spring”, which via a PRC project company (the “Chengdu Project Company”) holds the Chengdu Centropolitan Project, a mixed-use development located in Chengdu, the PRC) from its then joint venture partner at par value of the shares of US$49 pursuant to the terms of the shareholders agreement (as amended and supplemented from time to time). Thereafter, in June 2014, the Remaining Group entered into a sale and purchase agreement for the disposal of 19% share interest and assignment of the corresponding shareholder’s loan in Gracious Spring to another investor for a consideration of approximately HK$378 million. The disposal was completed in June 2014.

• (d) Disposal of Tianjin Project Phase II – In April 2014, the Remaining Group and its joint venture partner entered into a sale and purchase agreement for the disposal of their entire share interests in Silver Reach Limited, then being a joint venture owned as to 64.7% by the Remaining Group, which holds the options entitling it to acquire the entire interest in the Tianjin Project Phase II, a residential development located in Tianjin, the PRC, for a total consideration of approximately RMB264 million, with RMB171 million payable to the Remaining Group. The disposal was completed in April 2014.

• For identification purpose only

– I-16 –

FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

2015

• (a) Disposal of Shanghai 21st Century Tower Project – In April 2015, Twenty One Century (a joint venture company owned as to 80% by the Remaining Group) entered into a sale and purchase agreement for the disposal of its entire share interest in Lead Wealthy Investments (Singapore) Pte. Ltd. (which via the Shanghai Project Company holds 100% interest in the Shanghai 21st Century Tower Project) for a total consideration of approximately HK$640 million attributable to the Remaining Group. The disposal was completed in July 2015.

• (b) Disposal of 45% interest in LSOC – In March 2015, the Remaining Group entered into a sale and purchase agreement for the disposal of its 45% share interest in LSOC (which, via its subsidiaries, principally engages in cement operations in the PRC) for a total consideration of approximately HK$2,553 million. The disposal was completed in August 2015.

• (c) Disposal of Beijing Centrium Residence Project – In January 2015, a 65%-owned joint venture company of the Remaining Group entered into a sale and purchase agreement for the disposal of its entire share interest in Prime Asset Investment Limited (which via a PRC project company holds the Beijing Centrium Residence Project, a completed property development located in Beijing, the PRC) for a total consideration of approximately HK$429 million attributable to the Remaining Group. The disposal was completed in April 2015.

2016

• (a) Disposal of 35% interest in the cement business in Nanjing – In August 2016, the Remaining Group entered into a framework agreement for the disposal of its 35% equity interest in Nanjing Jiangnan Cement Co., Ltd. (“Nanjing Jiangnan Cement”, which principally engages in manufacturing and trading of cement in Nanjing, the PRC) for a total consideration of approximately RMB148 million. As at the Latest Practicable Date, the disposal had not yet been completed.

• (b) Disposal of 20% remaining interest in Shenyang Project Phase II – In January 2016, the Remaining Group disposed of its entire 20% share interest in Loyal Max Investments Limited (which via a PRC project company holds the Shenyang Project Phase II, a property development located in Shenyang, Liaoning, the PRC) to its then joint venture partner for a total consideration of approximately RMB305 million pursuant to the terms of the shareholders deed entered into with that joint venture partner in January 2014. The disposal was completed in January 2016.

• (c) Disposal of Guizhou Zunyi Project – In January 2016, the Remaining Group entered into a sale and purchase agreement for the disposal of its entire share interest in New Prime Investments Limited (“New Prime”, which via a PRC project company holds two land parcels located in Zunyi, Guizhou, the PRC) for a total consideration of approximately RMB388 million. The disposal was completed in January 2016.

– I-17 –

FINANCIAL INFORMATION OF THE GROUP AND THE DISPOSAL GROUP

APPENDIX I

2017

• (a) Acquisition of 19% interest in Chengdu Centropolitan Project – In July 2017, the Remaining Group bought back 19% share interest in Gracious Spring (which via the Chengdu Project Company holds the Chengdu Centropolitan Project) from its then joint venture partner at par value of the shares of US$19 pursuant to the terms of the shareholders’ agreement entered into with that joint venture partner in June 2014. The acquisition was completed in July 2017.

• (b) Disposal of 15% interest in construction business – In August 2017, the Remaining Group entered into a sale and purchase agreement for the disposal of its 15% share interest in Shui On Contractors Limited (“Shui On Contractors”, which via its subsidiaries, principally engages in the construction business in Hong Kong and Macau) for a total consideration of HK$75 million to seven of its employees under an employee equity participation arrangement of the Remaining Group. The disposal was completed in September 2017.

• (c) Acquisition of interest in Tianjin Veneto Project – In September 2017, the Remaining Group entered into a sale and purchase agreement for the acquisition of the remaining 50% share interest in Cosy Rich Limited (a 50%-owned joint venture company of the Remaining Group, which holds the options entitling it to acquire 90% interest in the Tianjin Veneto Project, a property development located in Tianjin, the PRC) for a total consideration of approximately €4.62 million. The acquisition was completed in November 2017.

• (d) Acquisition of interest in Nanjing Scenic Villa Project – In September 2017, the Remaining Group entered into a sale and purchase agreement for the acquisition of the remaining 50% share interest in Win Lead Holdings Limited (a 50%-owned joint venture company of the Remaining Group, which holds 100% interest in the Nanjing Scenic Villa Project, a property development located in Nanjing, the PRC) for a total consideration of approximately €32.04 million. The acquisition was completed in November 2017.

– I-18 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

A. UNAUDITED PRO FORMA FINANCIAL OF THE REMAINING GROUP

Set out below is the summary of an illustrative and unaudited pro forma consolidated statement of financial position, unaudited pro forma consolidated statement of profit or loss, unaudited pro forma consolidated statement of profit or loss and other comprehensive income and unaudited pro forma condensed consolidated statement of cash flows (collectively the “Unaudited Pro Forma Financial Information”) of the Group as if the disposal of 28.2% share interest and related loans in Richcoast Group Limited (“Richcoast”) (the “Disposal”) had been completed on 30 June 2017 for the unaudited pro forma consolidated statement of financial position, and on 1 January 2017 for the unaudited pro forma consolidated statement of profit or loss, unaudited pro forma consolidated statement of profit or loss and other comprehensive income and the unaudited pro forma condensed consolidated statement of cash flows.

This Unaudited Pro Forma Financial Information of the Group after completion of the Disposal (the “Remaining Group”) has been prepared by the Directors in accordance with Paragraph 4.29 of the Listing Rules for illustrative purposes only, based on their judgments, estimations and assumptions, and because of its hypothetical nature, it may not give a true picture of the financial position of the Remaining Group at 30 June 2017 or at any future date or the results and cash flows of the Remaining Group for the period ended 30 June 2017 or for any future period.

The Unaudited Pro Forma Financial Information of the Remaining Group should be read in conjunction with the unaudited condensed consolidated financial statements of the Group for the six months ended 30 June 2017 as disclosed in the 2017 interim report of the Company, and other financial information included elsewhere in this Circular.

The unaudited pro forma consolidated statement of financial position of the Remaining Group is prepared based on the unaudited condensed consolidated statement of financial position of the Group as at 30 June 2017, which has been extracted from the published interim report of the Company for the six months ended 30 June 2017, after making certain pro forma adjustments that are directly attributable to the Disposal and factually supportable, as further described in the accompanying notes.

The unaudited pro forma consolidated statement of profit or loss, unaudited pro forma consolidated statement of profit or loss and other comprehensive income and unaudited pro forma condensed consolidated statement of cash flows of the Remaining Group are prepared based on the unaudited condensed consolidated statement of profit or loss, unaudited condensed consolidated statement of profit or loss and comprehensive income and unaudited condensed consolidated statement of cash flows of the Group for the six months ended 30 June 2017, which have been extracted from the published interim report of the Company for the six months ended 30 June 2017, after making certain pro forma adjustments that are directly attributable to the Disposal and factually supportable, as further described in the accompanying notes.

– II-1 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

Unaudited pro forma consolidated statement of financial position of the Remaining Group

At 30 June 2017

Non-current Assets Investment properties Property, plant and equipment Interests in joint ventures Available-for-sale investments Club memberships Amounts due from joint ventures Amounts due from associates Restricted bank deposits Current Assets Properties held for sale Properties under development for sale Debtors, deposits and prepayments Amounts due from customers for contract work Amounts due from joint ventures Amounts due from associates Taxation recoverable Restricted bank deposits Bank balances, deposits and cash	The Group at 30 June 2017 HK$ million (note 1) 1,787 21 114 56 1 1,744 1,297 137 5,157 214 67 1,939 184 762 304 4 151 1,193 4,818	Pro forma adjustments HK$ million HK$ million (note 2) (note 3) – – – – – – – – – – – – (1,297) – – – (1,297) – – – – – – 1,189 – – – – (304) – – – (98) – – 340 (402) 1,529	Remaining Group at 30 June 2017 HK$ million 1,787 21 114 56 1 1,744 – 137
			3,860
			214 67 3,128 184 762 – 4 53 1,533
			5,945

– II-2 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

Current Liabilities Creditors and accrued charges Sales deposits received Derivative financial instruments Amounts due to customers for contract work Amounts due to joint ventures Amounts due to associates Amounts due to related companies Amounts due to non-controlling shareholders of subsidiaries Taxation payable Bank borrowings, due within one year Net Current Assets Total Assets Less Current Liabilities Capital and Reserves Share capital Reserves Equity attributable to owners of the Company Non-controlling interests Non-current Liabilities Bank borrowings Senior notes Defined benefit liabilities Deferred tax liabilities	The Group at 30 June 2017 HK$ million (note 1) 1,945 1 36 376 107 1 369 12 48 353 3,248 1,570 6,727 484 3,285 3,769 32 3,801 566 2,146 102 112 2,926 6,727	Pro forma adjustments HK$ million HK$ million (note 2) (note 3) – – – – – – – – – – (1) – – – – – – – – – (1) – (401) 1,529 (1,698) 1,529 – – – (169) – (169) – – – (169) – – – – – – – – – – – (169)	Remaining Group at 30 June 2017 HK$ million 1,945 1 36 376 107 – 369 12 48 353
			3,247
			2,698
			6,558
			484 3,116
			3,600 32
			3,632
			566 2,146 102 112
			2,926
			6,558

– II-3 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

Unaudited pro forma consolidated statement of profit or loss of the Remaining Group For the six months ended 30 June 2017

Turnover The Company and its subsidiaries Share of joint ventures/associates Group turnover Other income and gains Changes in inventories of finished goods, work in progress, contract work in progress and cost of properties sold Raw materials and consumables used Staff costs Depreciation Subcontracting, external labour costs and other expenses Fair value changes on investment properties Dividend income from available-for-sale investments Finance costs Loss on disposal of interest in an associate Share of results of joint ventures Share of results of associates Loss before taxation Taxation Loss for the period Attributable to: Owners of the Company Non-controlling interests	The Group for the six months ended 30 June 2017 HK$ million (note 1) 3,167 421 3,588 3,167 192 (346) (222) (335) (4) (2,316) (18) 1 (108) – (179) (7) (175) (8) (183) (197) 14 (183)	Pro forma adjustments HK$ million HK$ million (note 4) (note 5) – – (123) – (123) – – – (11) 30 – – – – – – – – – – – – – – 14 – – (101) – – 7 – 10 (71) – – 10 (71) 10 (71) – – 10 (71)	Remaining Group for the six months ended 30 June 2017 HK$ million 3,167 298 3,465 3,167 211 (346) (222) (335) (4) (2,316) (18) 1 (94) (101) (179) – (236) (8) (244) (258) 14 (244)

– II-4 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

Unaudited pro forma consolidated statement of profit or loss and other comprehensive income of the Remaining Group

For the six months ended 30 June 2017

Loss for the period Other comprehensive income (expense) Items that may be subsequently reclassified to profit or loss: Fair value changes of available-for-sale investments Exchange differences arising on translation of financial statements of foreign operations Share of exchange differences of joint ventures Reclassification adjustments for amounts transferred to profit or loss: – upon deregistration of a subsidiary – upon disposal of interest in an associate Other comprehensive income for the period Total comprehensive expense for the period Total comprehensive (expense) income attributable to: Owners of the Company Non-controlling interests	The Group for the six months ended 30 June 2017 HK$ million (note 1) (183) 6 193 (61) (7) – 131 (52) (66) 14 (52)	Pro forma adjustments HK$ million HK$ million (note 4) (note 5) 10 (71) – – – – – – – – – (33) – (33) 10 (104) 10 (104) – – 10 (104)	Remaining Group for the six months ended 30 June 2017 HK$ million (244) 6 193 (61) (7) (33) 98 (146) (160) 14 (146)

– II-5 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

Unaudited pro forma condensed consolidated statement of cash flows of the Remaining Group For the six months ended 30 June 2017

Net cash from operating activities Operating cash flows before movements in working capital Decrease in amounts due from customers for contract work Decrease in sales deposits received in respect of properties for sale Decrease in creditors and accrued charges Movements in other working capital Tax paid Net cash (used in) from investing activities Advances to joint ventures Net proceeds from disposal of an associate Restricted bank deposits refunded Restricted bank deposits placed Other investing cash flows Net cash from financing activities New bank and other loans raised Repayment of bank loans Issue of senior notes Expenditure incurred on issue of senior notes Interest paid Other financing cash flows Net increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Effect of foreign exchange rate changes Cash and cash equivalents at the end of the period Analysis of the balances of cash and cash equivalents Bank balances, deposits and cash	The Group for the six months ended 30 June 2017 HK$ million (note 1) 37 189 (13) (26) 30 (2) 215 (423) – 337 (141) 11 (216) 255 (1,702) 2,186 (41) (71) (26) 601 600 587 6 1,193 1,193	Pro forma adjustments HK$ million (note 6) – – – – – – – – 340 – – – 340 – – – – – – – 340 – – 340 340	Remaining Group for the six months ended 30 June 2017 HK$ million 37 189 (13) (26) 30 (2) 215 (423) 340 337 (141) 11 124 255 (1,702) 2,186 (41) (71) (26) 601 940 587 6 1,533 1,533

– II-6 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

Notes to the Unaudited Pro Forma Financial Information

• (1) Figures are extracted from the unaudited condensed consolidated financial statements of the Group as set out in the published interim report of the Company for the six months ended 30 June 2017.

• (2) The adjustment reflects the derecognition of the Group’s investment in Richcoast, which has been classified as an associate in the condensed consolidated financial statements, as if the Disposal had been completed on 30 June 2017. The carrying value of the Group’s investment in the Richcoast Group as at 30 June 2017 represents (a) the carrying value of advances made to Richcoast Group totaling HK$1,601 million (after netting off the amount of share of post-acquisition losses of HK$82 million that were in excess of cost of investment); (b) a deposit of HK$98 million placed with an offshore bank to secure an onshore bank loan granted to the Richcoast Group, which will be released for settlement of the onshore bank loan; and (c) amounts due to Richcoast Group of HK$1 million.

• (3) The adjustment represents the Total Transaction Amount received and to be received by the Group as well as the loss on disposal of Richcoast, assuming the Disposal had been completed on 30 June 2017. The Total Transaction Amount of approximately RMB1,300 million (equivalent to approximately HK$1,533 million) will be settled in three phases: (a) an amount of approximately RMB292 million (equivalent to approximately HK$344 million) is to be paid on or before Completion; (b) an amount of approximately RMB87 million (equivalent to approximately HK$103 million) is to be paid on or before 29 December 2017; and (c) remaining balance of approximately RMB921 million (equivalent to approximately HK$1,086 million) is to be paid within 12 months from the date of Completion. Thus, the net proceeds of approximately HK$340 million is estimated to be received by the Group in cash at the date of Completion, after payment of the estimated directly attributable transaction costs of approximately HK$4 million.

The pro forma loss on disposal of Richcoast is calculated as below:

Total Transaction Amount – Cash received on/before Completion – Cash to be received after Completion Carrying value of investment in Richcoast as at 30 June 2017 Estimated directly attributable transaction costs Release of cumulative translation reserve upon disposal Pro forma loss on disposal of an associate	HK$ million 344 1,189 1,533 (1,698) (4) 32 (137)

The adjustment on reserves of HK$169 million represents the pro forma loss on disposal of an associate of HK$137 million and release of cumulative translation reserve of HK$32 million.

The final gain or loss on the disposal may be different from the amount described above and would be subject to the carrying value of the Group’s investment in Richcoast on the date of Completion and foreign exchange rate.

– II-7 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

• (4) The adjustment reflects the derecognition of (a) the share of results of Richcoast Group of HK$7 million, which has been accounted for as the Group’s associates using the equity method, (b) other income from Richcoast Group of HK$11 million and (c) interest expenses in relation to the contributions to Richcoast Group of HK$14 million for the six months ended 30 June 2017 as if the Disposal had been completed on 1 January 2017. The adjustment has no net impact on the unaudited pro forma condensed consolidated statement of cash flows for the six months ended 30 June 2017.

• (5) The adjustment represents the loss on disposal of Richcoast, assuming the Disposal had been completed on 1 January 2017.

The pro form loss on disposal of Richcoast is calculated as below:

Total Transaction Amount (note (i)) Carrying value of investment in Richcoast as at 1 January 2017 (note (ii)) Estimated directly attributable transaction costs Release of cumulative translation reserve upon disposal Pro forma loss on disposal of an associate	HK$ million 1,533 (1,663) (4) 33 (101)

• (i) Out of the Total Transaction Amount, a total of approximately RMB1,008 million (equivalent to approximately HK$1,189 million), which carries interest at 5% per annum, is to be paid within 12 months after the Completion Date. Thus, estimated interest income on this outstanding payment amounting to HK$30 million would be recognised as income of the Remaining Group for the six months ended 30 June 2017 and to be settled together with the outstanding Total Transaction Amount.

• (ii) The amount was included in the consolidated statement of financial position of the Group as set out in the published annual report of the Company for the year ended 31 December 2016.

• (6) The adjustment reflects the net cash inflow amounting to approximately HK$340 million assuming the Disposal had been completed on 1 January 2017, which represents the partial settlement of the Total Transaction Amount of approximately RMB292 million (equivalent to approximately HK$344 million), after payment of the estimated directly attributable transaction costs of approximately HK$4 million.

• (7) For the purpose of this Unaudited Pro Forma Financial Information, the exchange rate of RMB1 = HK$1.179 has been used for illustrative purpose only and do not constitute a representation that any amount has been, could have been or may be exchanged at such rate.

• (8) All pro forma adjustments are not expected to have a continuing effect on the Group.

• (9) No adjustments have been made to reflect any trading results or other transactions of the Group subsequent to 30 June 2017.

– II-8 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

B. INDEPENDENT REPORTING ACCOUNTANTS’ ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report received from the reporting accountants, Deloitte Touche Tohmatsu, Certified Public Accountants, Hong Kong, for the purpose of inclusion in this circular.

To the Directors of SOCAM Development Limited

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of SOCAM Development Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) by the directors of the Company (the “Directors”) for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma statement of financial position as at 30 June 2017, the unaudited pro forma statement of profit or loss for the six months ended 30 June 2017, the unaudited pro forma statement of profit or loss and other comprehensive income for the six months ended 30 June 2017, the unaudited pro forma statement of cash flows for the six months ended 30 June 2017 and related notes as set out on pages II-1 to II-8 of the circular issued by the Company dated 6 December 2017 (the “Circular”). The applicable criteria on the basis of which the Directors have compiled the unaudited pro forma financial information are described on pages II-1 to II-8 of the Circular.

The unaudited pro forma financial information has been compiled by the Directors to illustrate the impact of the proposed conditional disposal of 28.2% share interest and the related loans in Richcoast Group Limited on the Group’s financial position as at 30 June 2017 and the Group’s financial performance and cash flows for the six months ended 30 June 2017 as if the transaction had taken place at 30 June 2017 and 1 January 2017 respectively. As part of this process, information about the Group’s financial position, financial performance and cash flows has been extracted by the Directors from the Group’s financial statements for the six months ended 30 June 2017, on which a review report has been published.

Directors’ Responsibilities for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the unaudited pro forma financial information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

– II-9 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the “Code of Ethics for Professional Accountants” issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

Our firm applies Hong Kong Standard on Quality Control 1 “Quality Control for Firms that Perform Audits and Reviews of Financial Statements, and Other Assurance and Related Services Engagements” issued by the HKICPA and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 4.29(7) of the Listing Rules, on the unaudited pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the unaudited pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountant plans and performs procedures to obtain reasonable assurance about whether the Directors have compiled the unaudited pro forma financial information in accordance with paragraph 4.29 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

For purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the unaudited pro forma financial information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the unaudited pro forma financial information.

The purpose of unaudited pro forma financial information included in an investment circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction at 30 June 2017 or 1 January 2017 would have been as presented.

– II-10 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX II

A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

• the related pro forma adjustments give appropriate effect to those criteria; and

• the unaudited pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the Group, the event or transaction in respect of which the unaudited pro forma financial information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the unaudited pro forma financial information.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Opinion

In our opinion:

• (a) the unaudited pro forma financial information has been properly compiled on the basis stated;

• (b) such basis is consistent with the accounting policies of the Group; and

• (c) the adjustments are appropriate for the purposes of the unaudited pro forma financial information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Deloitte Touche Tohmatsu

Certified Public Accountants

Hong Kong

6 December 2017

– II-11 –

PROPERTY VALUATION REPORT

APPENDIX III

The following is the text of a letter, summary of valuations and valuation certificates prepared for the purpose of incorporation in this circular issued by Cushman & Wakefield Limited, an independent property valuer, in connection with the valuations as at 30 September 2017 of the property interests held by the Disposal Group.

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6 December 2017

The Directors SOCAM Development Limited 34th Floor, Shui On Centre 6-8 Harbour Road Wan Chai Hong Kong

Dear Sirs,

Instructions, Purpose & Date of Valuation

In accordance with your instructions for us to value certain properties in the People’s Republic of China (the “PRC”) (as more particularly described in the attached valuation certificates), which SOCAM Development Limited (referred to as the “Company”) or its subsidiaries (collectively the “Group”) have interests and intend to dispose of the equity interests of such properties’ holding company, Richcoast Group Limited, we confirm that we have inspected the properties, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the values of such properties as at 30 September 2017 for disposal reference.

Basis of Valuation

Our valuation of each of the property interests represents its market value which in accordance with The HKIS Valuation Standards 2012 Edition published by The Hong Kong Institute of Surveyors is defined as “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

Valuation Basis and Assumptions

Our valuation of each property excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangement, special considerations or concessions granted by anyone associated with the sale, or any element of special value.

– III-1 –

PROPERTY VALUATION REPORT

APPENDIX III

In the course of our valuation of the properties held by the respective project companies in the PRC, unless otherwise stated, we have assumed that transferable land use rights in respect of each of the properties for its specific term at nominal annual land use fee have been granted and that any premium payable has already been fully paid. We have relied on the information and advice given by Richcoast Group Limited and its legal adviser, Liaoning Henghai Law Firm (遼寧恒海律師事務所), regarding the title to the properties and the interests of the respective project companies in the properties in the PRC. In valuing the properties, unless otherwise stated, we have assumed that the owners have enforceable title to the properties and have free and uninterrupted rights to use, occupy or assign the properties for the whole of the unexpired terms as granted.

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

In valuing the properties, we have complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities published by The Stock Exchange of Hong Kong Limited and The HKIS Valuation Standards 2012 Edition published by the Hong Kong Institute of Surveyors.

Method of Valuation

In valuing the property interests in Groups I and II which are completed properties held by for investment and for sale in the PRC respectively, we have mainly adopted the Investment Method by considering the capitalized rental incomes derived from the existing tenancies with due provision for any reversionary potential of the property interests or wherever appropriate the Direct Comparison Method by making reference to comparable sales evidence as available in the relevant market subject to suitable adjustments between the subject properties and the comparable properties.

In respect of the property interests in Group III which are held by under development in the PRC, our valuations are carried out on the basis that each of the properties will be developed and completed in accordance with the respective project companies’ latest development proposals provided to us, if any. We have assumed that all consents, approvals and licences from relevant government authorities for the development proposal have been obtained without onerous conditions or delays. We have also assumed that the design and construction of the developments are in compliance with the local planning and other relevant regulations and have been or will be approved by the relevant authorities. In valuing the properties, we have used the Investment Method by capitalizing the rental income derived from the committed tenancies, if any, with due provision for reversionary potential of the properties, or wherever appropriate, by the Direct Comparison Method by making reference to comparable sales evidence as available in the relevant market so as to assess the development value as if completed. The development value as if completed represents our opinion of the aggregate values of the development assuming it would have been completed at the date of valuation. In arriving at the final value of the properties, we have also taken into account the development costs expended and the costs that will be expended to complete the development.

– III-2 –

PROPERTY VALUATION REPORT

APPENDIX III

Regarding the property interests in Group IV which are vacant lots held for future development in the PRC, we have mainly adopted the Direct Comparison Method by making reference to comparable land sales evidence as available in the relevant market subject to suitable adjustments between the subject properties and the comparable properties.

Source of Information

We have relied to a very considerable extent on the information given by the respective project companies and have accepted advice given to us on such matters as planning approvals, statutory notices, easements, tenure, identification of land and buildings, particulars of occupancy, site and floor areas, site and floor plans, number of parking spaces, construction costs, development time schedule, committed sales details and all other relevant matters.

Dimensions and measurements are based on the copies of documents or other information provided to us by the respective project companies and are therefore only approximations. No on-site measurement has been carried out. We have no reason to doubt the truth and accuracy of the information provided to us by the respective project companies which is material to the valuations. We were also advised by the respective project companies that no material facts have been omitted from the information provided.

We would point out that the copies of documents of the properties in the PRC provided to us are mainly compiled in Chinese characters and the transliteration into English represents our understanding of the contents. We would therefore advise you to make reference to the original Chinese editions of the documents and consult your legal advisers regarding the legality and interpretation of these documents.

Title Investigation

We have not been able to cause title searches of the property interests in the PRC but we have been provided with extracts of documents in relation to the titles to the property interests. However, we have not inspected the original documents to verify ownership or to ascertain any amendments which may not appear on the copies handed to us. All documents have been used for reference only and all dimensions, measurements and areas are approximate.

In the course of our valuation of the property interests, we have assumed that transferable land use rights in respect of the property interests for their respective specific terms at nominal annual land use fees have been granted and that any premium payable has already been fully paid. We have relied on the advice given by Richcoast Group Limited or its legal adviser regarding the title to each of the property interests and the interests of the respective project companies in the properties. The status of titles and grants of major approvals and licences in respect of the property interests are set out in the notes in the respective valuation certificates.

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PROPERTY VALUATION REPORT

APPENDIX III

Site Inspection

Lucy Yu (Senior Manager and Registered China Real Estate Appraiser) and Grace Guo (Assistant Valuer) from our Dalian office inspected the exterior and, wherever possible, the interior of the properties on 25 October 2017. However, no structural survey has been made, but in the course of our inspections, we did not note any serious defects. We are, however, not able to report whether the properties are free of rot, infestation or any other structural defects. No test was carried out on any of the services. Moreover, we have not carried out any soil investigations to determine the suitability of the soil conditions and the services etc. for any future development. Our valuations are prepared on the assumption that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during the construction period. Unless otherwise stated, we have not been able to carry out detailed on-site measurements to verify the site and floor areas of the properties and we have assumed that the areas shown on the documents handed to us are correct.

Currency

Unless otherwise stated, all monetary sums stated in our valuation certificates are in Renminbi (“RMB”) which is the official currency in the PRC.

Independence

We confirm that we are an independent qualified valuer, as referred to Rule 5.08 of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited.

We enclose herewith a summary of valuations and our valuation certificates for your attention.

Yours faithfully, For and on behalf of

Cushman & Wakefield Limited Andrew K.F. Chan

MSc, MRICS, MHKIS, MCIREA, RPS(GP)

Regional Director Valuation & Advisory Services, Greater China

Note: Mr Andrew K.F. Chan is a Registered Professional Surveyor (General Practice) who has over 30 years’ experience in the valuation of properties in the PRC.

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PROPERTY VALUATION REPORT

APPENDIX III

SUMMARY OF VALUATIONS

Property

Market value in existing state as at 30 September 2017 (RMB)

Group I — Property interests held for investment in the PRC

1. Portions of Plots D22/D14-1/E29-1/D10-1 of Huangnichuan Project, Dalian Tiandi held for investment, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC 2. Plots C10/B02 of Huangnichuan Project, Dalian Tiandi, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC Sub-total of Group I: Group II — Property interests held for sale in the PRC 3. Unsold units of Plots E06/C14/E02A of Huangnichuan Project, Dalian Tiandi, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC 4. Unsold units of Plots A8 (B09), A10 (B13), A11 (C01) and B4 (C03) of Hekou Bay Project, Dalian Tiandi, High-Tech Zone, Dalian, Liaoning Province, the PRC Sub-total of Group II:	1,116,000,000 920,000,000
	2,036,000,000 148,000,000 177,000,000
	325,000,000

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PROPERTY VALUATION REPORT

APPENDIX III

Property

Market value in existing state as at 30 September 2017 (RMB)

Group III — Property interests held under development in the PRC 5. Plots D14-2/D10-2/D28-1/C22/E02B of Huangnichuan Project, Dalian Tiandi under construction, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC 6. Portions of Hekou Bay Project, Dalian Tiandi under construction, High-Tech Zone, Dalian, Liaoning Province, the PRC Sub-total of Group III: Group IV — Property interests held for future development in the PRC 7. The land for scientific research, residential and retail development of Huangnichuan Project, Dalian Tiandi, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC 8. Plot C06 of Huangnichuan Project, Dalian Tiandi, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC 9. Plots F02/F03 of Huangnichuan Project, Dalian Tiandi, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC 10. Vacant lands of Hekou Bay Project, Dalian Tiandi, High-Tech Zone, Dalian, Liaoning Province, the PRC Sub-total of Group IV: Grand Total:	809,000,000 1,273,000,000
	2,082,000,000 2,108,000,000 155,000,000 No commercial value (see Note 1) 3,876,000,000
	6,139,000,000
	10,582,000,000

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PROPERTY VALUATION REPORT

APPENDIX III

Note:

• (1) The State-owned Land Use Rights Certificates of Plots F02 and F03 in Huangnichuan Project, Dalian Tiandi have not been issued. Therefore, we have ascribed no commercial value to the property on market value basis.

On the assumption that the State-owned Land Use Rights Certificates had been granted to the property, and land premium and relevant costs and expenses had been fully settled, the market value of the property in its existing state as at 30 September 2017 would be RMB153,000,000.

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PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Group I — Property interests held for investment in the PRC

Description and tenure

Property

1. Portions of Plots The property comprises office and D22/D14-1/E29-1/D10-1 retail buildings. of Huangnichuan Project, Dalian Tiandi The portions in Plot D22 comprise 2 held for investment, buildings of 5 storeys completed in North of Lvshun about 2011 for office use. South Road, High-Tech Zone, The portions in Plot D14-1 Dalian, comprise 2 buildings of 6 storeys Liaoning Province, completed in about 2011 for office the PRC use. The portions in Plots E29-1 and D10-1 comprise unsold retail spaces completed in 2013.

The property comprises office and retail buildings. The portions in Plot D22 comprise 2 buildings of 5 storeys completed in about 2011 for office use.

Particulars of occupancy

As at the date of valuation, the property was subject to various tenancies (see Note (1) below).

Market value in existing state as at 30 September 2017

RMB1,116,000,000

The property is situated in the software park of Huangnichuan Project, Dalian Tiandi, abutting Lvshun South Road on the south.

The property is approximately 22 km to the city centre. The property is connected to the downtown of Lvshun to the west. The natural environment of the property is good. The property is served by public bus routes.

The property has a total plot ratio gross floor area of 142,604.08 sq m.

Plot D22 D14-1 D10-1 E29-1 Total	Gross Floor Area (sq m) 41,521.19 51,541.00 41,007.56 8,534.33
	142,604.08

The land use rights of the property have been granted for terms due to expire on 2 March 2056 for scientific research use and due to expire on 29 June 2050 for commercial use.

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PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) The tenancy status of the property as at the date of valuation is summarized as follows:

Plot	**Occupancy **	Rate	Monthly Rent	Tenancy Term	Latest Expiry Date
			(RMB)
D22		80%	804,944	1–5 years	November 2020
D14-1		87%	1,072,543	8 years	30 November 2021
D10-1		55%	246,635	1–3 years	29 February 2024

• (2) Pursuant to 4 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High-tech Industrial Zone Branch), the land use rights of the property have a total site area of 106,529.5 sq m with details as follows:

Certificate No. Issue Date GXYQGY (2010) 05089 25 November 2010 GXYQGY (2010) 05052 19 July 2010 GXYQGY (2010) D05088 25 November 2010 GXYQGY (2010) D05050 19 July 2010 Total

Site Area Land Use Expiry Date Owner (sq m) 22,505.1 Scientific Research 2 March 2056 Dalian Jiadao Science & Technology Development Co., Ltd 12,597.4 Commercial 29 June 2050 Dalian Software Park Zhongxing Kaifa Co., Ltd 45,096.6 Scientific research 2 March 2056 Dalian Jiadao Science & Technology Development Co., Ltd 26,330.4 Commercial 29 June 2050 Dalian Software Park Zhongxing Kaifa Co., Ltd 106,529.5

• (3) Pursuant to 3 Building Ownership Certificates issued by 大連高新技術產業園區房產局 (the Dalian High-tech Industrial Park Real Estate Bureau), the building ownership of the property with a total gross floor area of 50,055.52 sq m has been vested in 大連嘉道科技發展有限公司 and 大連軟件園中興開發有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd and Dalian Software Park Zhongxing Kaifa Co., Ltd) with details as follows:

Certificate No. Location Issue Date DFQZGDZD2010002265 Nos. 28, 30, 32 and 34 Hongchuandong Road 21 May 2010 DFQZGDZD2010002264 Nos. 20, 22, 24 and 26 Hongchuandong Road 21 May 2010 DFQZGDZD2013004209 No. 61 Weichuanxi Street 24 June 2013 Total	Gross Floor Area No. of Storeys Building Use (sq m) 20,760.61 5 Non-Residential 20,760.58 5 Non-Residential 8,534.33 5 Retail 50,055.52

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PROPERTY VALUATION REPORT

APPENDIX III

• (4) According to 2 Planning Permits for Construction Use of Land issued by 大連高新技術產業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau), the construction site with an area of 124,947.3 sq m is in compliance with the requirements of urban planning.

Permit No. Issue Date DZD210211200820528 6 October 2008 DZD210211201058895 23 April 2010 Total	Site Area (sq m) 67,600.0 57,347.3
	124,947.3

• (5) According to 2 Planning Permits for Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau), the property is permitted to be developed with a total gross floor area of 256,490 sq m.

Permit No. Issue Date JZD210211200820531 29 December 2008 JZD210211201020016 27 July 2010 Total	Gross Floor Area (sq m) 162,370 94,120
	256,490

• (6) According to 2 Permits for Commencement of Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau), the construction works of the development are permitted to commence with a total gross floor area of 208,656 sq m with details as follows:

Permit No. Issue Date 210211201003250701 25 March 2010 210230201010152201 15 October 2010 Total	Gross Floor Area (sq m) 114,536 94,120
	208,656

• (7) The Real Estate Surveying Reports have recorded the following gross floor areas:

	Gross
Plot	Floor Area
	(sq m)
D14-1	56,777.45
D10-1	95,551.23

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PROPERTY VALUATION REPORT

APPENDIX III

• (8) According to Business Licence No. 91210200661123059Y, 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) was established with a registered capital of RMB300,000,000 as a limited company on 20 June 2007.

According to Business Licence No. 91210231674071518B, 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was established with a registered capital of RMB1,900,000,000 as a limited company on 16 May 2008.

• (9) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件 園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) respectively have obtained the land use rights of the property and are the legal land users of the property. 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) are entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) State-owned Land Use Rights Certificates, Planning Permits for Construction Use of Land, Planning Permits for Construction Works and Permits for Commencement of Construction Works of the property have been obtained. Subject to the issue of Construction Works Completion Examination Certificate, 大連 嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中 興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) have the rights to apply for Building Ownership Certificates;

• (c) The property is subject to a mortgage; and

• (d) As confirmed by 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd), except for the mortgage mentioned above, the land use rights and projects under construction mentioned above are not subject to any foreclosure or compulsory acquisition.

• (10) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project companies are as follows:

State-owned Land Use Rights Certificate	Yes
Building Ownership Certificate	Yes (part)
Business Licence	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permit for Construction Works	Yes
Permit for Commencement of Construction Works	Yes
Real Estate Surveying Report	Yes (part)

– III-11 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Property

1. Plots C10/B02 of Huangnichuan Project, Dalian Tiandi, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC

Description and tenure

The property comprises schools and apartments.

The portions in Plot B02 comprise 12 buildings of 1–8 storeys completed in about 2011 for school use.

Market value in existing state as at 30 September 2017

Particulars of occupancy

As at the date of valuation, RMB920,000,000 the property was subject to various tenancies (see Note (1) below).

The portions in Plot C10 comprise 3 apartment buildings completed in 2012.

The property is situated in the software park of Huangnichuan Project, Dalian Tiandi, abutting Lvshun South Road on the south.

The property is approximately 22 km to the city centre. The property is connected to the downtown of Lvshun to the west. The natural environment of the property is good. The property is served by public bus routes.

The property has a total gross floor area of 151,490.74 sq m.

Plot B02 C10 Total	Gross Floor Area (sq m) 113,202.38 38,288.36
	151,490.74

The land use rights of the property have been granted for terms due to expire on 29 June 2060 for scientific education use and due to expire on 29 June 2080 for residential use.

– III-12 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

(1) The tenancy status of the property as at the date of valuation is summarized as follows:

Plot	Occupancy Rate	Monthly Rent	Tenancy Term	Latest Expiry Date
		(RMB)
B02	100%	3,615,401	13 years	31 March 2023
C10	100%	273,810	4 years	16 October 2020

• (2) Pursuant to 2 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High-tech Industrial Zone Branch), the land use rights of the property have a total site area of 88,301.7 sq m with details as follows:

Certificate No. Issue Date GXYQGY (2010) 05045 5 July 2010 GXYQGY (2010) 05049 19 July 2010 Total	Site Area Land Use Expiry Date Owner (sq m) 73,112.0 Scientific education 29 June 2060 Dalian Jiadao Science & Technology Development Co., Ltd 15,189.7 Residential 29 June 2080 Dalian Software Park Zhongxing Kaifa Co., Ltd 88,301.7

– III-13 –

PROPERTY VALUATION REPORT

APPENDIX III

• (3) Pursuant to 15 Building Ownership Certificates issued by 大連高新技術產業園區房產局 (the Dalian High-tech Industrial Park Real Estate Bureau), the building ownership of the property with a total gross floor area of 151,490.74 sq m has been vested in 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) with details as follows:

Certificate No. Location Issue Date DFQZGDZD2011006660 No. 70A Hongchuandong Road 30 December 2011 DFQZGDZD2011006659 No. 70B Hongchuandong Road 30 December 2011 DFQZGDZD2011006658 No. 70C Hongchuandong Road 30 December 2011 DFQZGDZD2011006657 No. 70D Hongchuandong Road 30 December 2011 DFQZGDZD2011006656 No. 70E Hongchuandong Road 30 December 2011 DFQZGDZD2011006654 No. 70F Hongchuandong Road 30 December 2011 DFQZGDZD2011006653 No. 70G Hongchuandong Road 30 December 2011 DFQZGDZD2011006651 No. 70H Hongchuandong Road 30 December 2011 DFQZGDZD2011006652 No. 70J Hongchuandong Road 30 December 2011 DFQZGDZD2011006650 No. 70K Hongchuandong Road 30 December 2011 DFQZGDZD2011006655 No. 70M Hongchuandong Road 30 December 2011 DFQZGDZD2011006649 No. 70N Hongchuandong Road 30 December 2011 DFQZGDZD2014005460 No. 51, Jinchuannan Road, High-Tech Zone 8 July 2014 DFQZGDZD2014005461 No. 81, Jinchuannan Road, High-Tech Zone 8 July 2014 DFQZGDZD2014005462 No. 73, Jinchuannan Road, High-Tech Zone 8 July 2014 Total

Gross Floor Area No. of Storeys Building Use (sq m) 7,464.90 6 Non-Residential 8,575.11 6 Non-Residential 9,350.07 6 Non-Residential 7,339.60 5 Non-Residential 7,731.52 4 Non-Residential 8,865.51 5 Non-Residential 16,850.75 8 Non-Residential 15,697.73 7 Non-Residential 8,342.27 7 Non-Residential 6,171.65 6 Non-Residential 16,134.52 8 Non-Residential 678.75 1 Non-Residential 15,544.24 15 Engineer Apartment 15,470.77 15 Engineer Apartment 7,273.35 13 Engineer Apartment 151,490.74

• (4) According to Business Licence No. 91210200661123059Y, 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) was established with a registered capital of RMB300,000,000 as a limited company on 20 June 2007.

According to Business Licence No. 91210231674071518B, 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was established with a registered capital of RMB1,900,000,000 as a limited company on 16 May 2008.

– III-14 –

PROPERTY VALUATION REPORT

APPENDIX III

• (5) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件 園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) respectively have obtained the land use rights of the property and are the legal land users of the property. 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) are entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) State-owned Land Use Rights Certificates, Planning Permits for Construction Use of Land, Planning Permits for Construction Works and Permits for Commencement of Construction Works of the property have been obtained. Subject to the issue of Construction Works Completion Examination Certificate, 大連 嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中 興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) have the rights to apply for Building Ownership Certificates;

• (c) According to the Grant Contract of Land Use Rights, the property must be leased to certain types of tenants, and is subject to sale and transfer restrictions on strata unit basis. But the property can be transferred as a whole;

• (d) The property is subject to a mortgage; and

• (e) As confirmed by 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd), except for the mortgage mentioned above, the land use rights and projects under construction mentioned above are not subject to any foreclosure or compulsory acquisition.

• (6) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project companies are as follows:

State-owned Land Use Rights Certificate Yes Building Ownership Certificate Yes Business Licence Yes

– III-15 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Group II — Property interests held for sale in the PRC

Property Description and tenure

1. Unsold units of Plots The property comprises unsold E06/C14/E02A of townhouses and residential units Huangnichuan Project, completed in 2016. Dalian Tiandi, North of Lvshun South Road, The portions in E06 comprise a High-Tech Zone, total townhouse gross floor area of Dalian, 1,701.37 sq m and 134 car parking Liaoning Province, spaces. the PRC The portions in C14 comprise 236 car parking spaces.

Particulars of occupancy

As at the date of valuation, the property was vacant.

Market value in existing state as at 30 September 2017

RMB148,000,000

The portions in E02A comprise a total gross floor area of 1,553.65 sq m for residential and retail use and 485 car parking spaces.

The property is situated in the west of the software park of Huangnichuan Project, Dalian Tiandi, abutting business center and experimental school of High-Tech Zone.

The property is approximately 22 km to the city centre. The property is connected to the downtown of Lvshun to the west. The natural environment of the property is good. The property is served by public bus routes.

The land use rights of the property have been granted for a term due to expire on 29 June 2080 for residential use.

– III-16 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) Pursuant to 3 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High-tech Industrial Zone Branch), the land use rights of the property have a total site area of 197,998.60 sq m with details as follows:

Certificate No. Issue Date GXYQGY (2010) D05046 8 July 2010 GXYQGY (2010) D05059 9 August 2010 GXYQGY (2010) D05060 9 August 2010 Total	Site Area Land Use Expiry Date Owner (sq m) 120,522.60 Residential 29 June 2080 Dalian Software Park Zhongxing Kaifa Co., Ltd 19,450.00 Residential 29 June 2080 Dalian Software Park Zhongxing Kaifa Co., Ltd 58,026.00 Residential 29 June 2080 Dalian Software Park Zhongxing Kaifa Co., Ltd 197,998.60

• (2) According to Planning Permit for Construction Use of Land No. DZD210211201058896 issued by 大連高新技術產 業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau) on 23 April 2010, the construction site with an area of 207,576.5 sq m is in compliance with the requirements of urban planning.

• (3) According to 3 Planning Permits for Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau), the property is permitted to be developed with a total gross floor area of 333,836.81 sq m.

Permit No. Issue Date JZD 210211201020011 23 July 2010 JZD 2102112011200020 5 May 2011 JZD 210211201320008 23 March 2013 Total	Gross Floor Area (sq m) 159,187.00 59,328.50 115,321.31
	333,836.81

• (4) According to 4 Permits for Commencement of Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau), the construction works of the development are permitted to commence with a total gross floor area of 333,836.81 sq m with details as follows:

Permit No. Issue Date 210230201008261401 26 August 2010 210230201008261301 26 August 2010 210200201107040101 4 July 2011 210230201304011401 1 April 2013 Total	Gross Floor Area (sq m) 68,186.00 91,001.00 59,328.50 115,321.31
	333,836.81

– III-17 –

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APPENDIX III

• (5) According to 5 Pre-sale Permits issued by 大連高新技術產業園區房產局 (the Dalian High-tech Industrial Park Real Estate Bureau) and 大連市國土資源和房屋局高新園區分局 (Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was permitted to pre-sell portions of the property with a total gross floor area of 226,219.84 sq m.

Permit No. DGFYXZD20100015 DGFYXZD20100020 DGFYXZD20110030 DGFYXZD20140002 DGFYXZD20160005 Total	Gross Floor Area Issue Date (sq m) 45,966.00 30 September 2010 58,036.48 10 December 2010 32,528.84 21 November 2011 57,970.40 12 May 2014 31,718.12 18 May 2016 226,219.84

• (6) According to 2 Construction Works Completion Examination Certificates issued by 大連高新技術產業園區建設工 程竣工驗收備案部門 (the Dalian High-tech Industrial Park Construction Works Completion Examination Department), portions of the development with a total gross floor area of 273,646.55 sq m have been completed.

Certificate No. 2012010 2017022 Total	Gross Floor Area Issue Date (sq m) 158,325.24 6 September 2012 115,321.31 27 May 2017 273,646.55

• (7) As advised by the project company, portions of the property with a total gross floor area of 859.57 sq m were committed to be sold at a total consideration of RMB8,500,000. We have included such portions in our valuation and taken into account such amount.

• (8) According to Business Licence No. 91210231674071518B, 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was established with a registered capital of RMB1,900,000,000 as a limited company on 16 May 2008.

• (9) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) has obtained the land use rights of the property and is the legal land user of the property. 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) is entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) State-owned Land Use Rights Certificates, Planning Permits for Construction Use of Land, Planning Permits for Construction Works and Permits for Commencement of Construction Works of the property have been obtained. Subject to the issue of Construction Works Completion Examination Certificate, 大連 軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) has the rights to apply for Building Ownership Certificates; and

• (c) As confirmed by 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd), the land use rights and projects under construction mentioned above are not subject to any foreclosure or compulsory acquisition.

– III-18 –

PROPERTY VALUATION REPORT

APPENDIX III

(10)	The status of title and grant of major approvals and licences in accordance with the information provided to us by	The status of title and grant of major approvals and licences in accordance with the information provided to us by
	the project company are as follows:
	State-owned Land Use Rights Certificate	Yes
	Planning Permit for Construction Use of Land	Yes
	Planning Permit for Construction Works	Yes
	Permit for Commencement of Construction Works	Yes
	Pre-sale Permit	Yes
	Business Licence	Yes
	Construction Works Completion Examination Certificate	Yes

– III-19 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Description and tenure

Property

1. Unsold units of Plots The property comprises various A8 (B09), A10 (B13), unsold units within Plots A8 A11 (C01) and B4 A10 (B13), A11 (C01) and B4 (C03) of Hekou Bay (C03) completed in between Project, Dalian Tiandi, and 2016. High-Tech Zone, Dalian, The property is situated on the Liaoning Province, Lvshun South Road Software the PRC Industry Belt. The property is located in the south of Lvshun South Road, and the east of Lingjing Hotel.

The property comprises various unsold units within Plots A8 (B09), A10 (B13), A11 (C01) and B4 (C03) completed in between 2014 and 2016.

Particulars of occupancy

As at the date of valuation, the property was vacant.

Market value in existing state as at 30 September 2017

RMB177,000,000

The property is approximately 17 km to Dalian Railway Station, 16 km to Dalian Zhoushuizi International Airport. The property is served by public bus routes and Dalian Metro Lines 1 and 12.

The unsold units in Hekou Bay Project have a total gross floor area of 52,524.77 sq m.

Portion Residential Retail Apartment Car Park Total	Gross Floor Area (sq m) 75.86 3,900.19 4,352.98 44,195.74 (520 car park lots)
	52,524.77

The land use rights of the property have been granted for terms due to expire on 31 July 2079 for residential use and due to expire on 31 July 2049 for commercial use.

– III-20 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) Pursuant to 4 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), the land use rights of the property, comprising a total site area of 47,300 sq m, have been vested in 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd).

Certificate No. Location Usage 2009 (05047) A8 (B09) Residential 2009 (05049) A10 (B13) Residential 2009 (05050) A11 (C01) Residential 2009 (05053) B4 (C03) Residential Total	Site area (sq m) 10,300 13,200 8,100 15,700
	47,300

• (2) According to Planning Permit for Construction Use of Land No. 210211200920556 issued by 大連高新技術產業園 區規劃建設局 (the Dalian High Tech Industrial Park Planning and Construction Bureau) on 18 March 2009, the construction site with an area of 114,200 sq m is in compliance with the requirements of urban planning.

• (3) According to 4 Planning Permits for Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High Tech Industrial Park Planning and Construction Bureau), the construction works of portions of the development, with a total gross floor area of 192,396 sq m, are in compliance with the construction works requirements and have been approved with details follows:

Permit No. Issue Date Location 2102112011200019 5 May 2011 A8 (B09) 2102112011200018 5 May 2011 A10 (B13) 2102112011200033 4 August 2011 A11 (C01) 210211201420002 16 January 2014 B4 (C03) Total	Gross Floor Area (sq m) 49,728 65,912 21,618 55,138
	192,396

• (4) According to 4 Permits for Commencement of Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High Tech Industrial Park Planning and Construction Bureau), the construction works of portions of the development are permitted to commence with a total gross floor area of 192,396 sq m with details as follows:

Permit No. Issue Date Location 210200201107060101 6 July 2011 A8 (B09) 210200201107060201 6 July 2011 A10 (B13) 210200201203140401 14 March 2012 A11 (C01) 210230201405291001 29 May 2014 B4 (C03) Total	Gross Floor Area (sq m) 49,728 65,912 21,618 55,138
	192,396

– III-21 –

PROPERTY VALUATION REPORT

APPENDIX III

• (5) According to 5 Pre-sale Permits issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), the permitted pre-sale area of portions of the development is 131,115.82 sq m with details as follows:

Permit No. Plot No. Usage 20130007 A8 (B09) Residential 20130008 A10 (B13) Residential 20130016 A11 (C01) Residential 20150008 B4 (C03) Residential 20150009 B4 (C03) Commercial Total	Gross Floor Area (sq m) 32,165.62 44,227.30 14,924.00 26,350.00 13,448.90
	131,115.82

• (6) As advised by the project company, portions of the property with a total gross floor area of 649.75 sq m and 7 car park lots were committed to be sold at a total consideration of RMB6,000,000. We have included such portions in our valuation and taken into account such amount.

• (7) According to the copy of Business Licence No. 91210231683000199E, 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) was established with a registered capital of RMB660,000,000 as a limited company on 26 November 2008.

• (8) Pursuant to Construction Works Completion Examination Certificate No. 2015011 issued by 大連高新技術產業園 區建設工程竣工驗收部門 (the Dalian High-Tech Industrial Park Construction Works Completion Examination Department) on 5 August 2015, portions of the development with a total gross floor area of 137,232.59 sq m have been completed.

• (9) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) has obtained the land use rights and is the legal land user of the property. 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) is entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) State-owned Land Use Rights Certificates, Planning Permits for Construction Use of Land, Planning Permits for Construction Works and Permits for Commencement of Construction Works of the property have been obtained. Subject to the issue of Construction Works Completion Examination Certificate, 大連 軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) has the rights to apply for Building Ownership Certificates;

• (c) A portion of the property is subject to a mortgage; and

• (d) As confirmed by 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd), except for the mortgage mentioned above, the land use rights and projects under construction mentioned above are not subject to any foreclosure and compulsory acquisition.

• (10) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project company are as follows:

State-owned Land Use Rights Certificate	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permit for Construction Works	Yes
Permit for Commencement of Construction Works	Yes
Pre-sale Permit	Yes
Business Licence	Yes
Construction Works Completion Examination Certificate	Yes (part)

– III-22 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Group III — Property interests held under development in the PRC

Property

1. Plots D14-2/D10-2/ D28-1/C22/E02B of Huangnichuan Project, Dalian Tiandi under construction, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC

Description and tenure

The property comprises five sites with a total site area of 74,267.33 sq m.

Portions of Plot D14-2 are planned to be developed into an office building.

Portions of Plot D10-2 are planned to be developed into a hotel.

Particulars of occupancy

As at the date of valuation, the property was under construction and scheduled to be completed in 2019.

Market value in existing state as at 30 September 2017

RMB809,000,000

Portions of Plot D28-1 are planned to be developed into retail facilities.

Portions of Plots C22 and E02B are planned to be developed into a residential development.

The property is situated in the software park of Huangnichuan Project, Dalian Tiandi. The property is approximately 22 km to the city centre. The property is connected to the downtown of Lvshun to the west. The natural environment of the property is good. The property is served by public bus routes.

The total planned gross floor area of the property is 141,493.3 sq m.

Portion Office (D14-2) Hotel (D10-2) Retail (D28-1) Residential (C22) Residential (E02B) Total	Planned Gross Floor Area (sq m) 36,359.00 35,955.44 416.00 21,940.00 46,822.86
	141,493.30

The land use rights of Plots D14-2, D10-2 and D28-1 have been granted for terms due to expire on 2 March 2056 for scientific research use and 29 June 2050 for commercial and hotel uses respectively.

The land use rights of Plots C22 and E02B have been granted for terms due to expire on 11 June 2078 and 29 June 2080 for residential use respectively.

– III-23 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) Pursuant to 5 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High-tech Industrial Zone Branch), the land use rights of the property together with other lots have a total site area of 210,216.30 sq m with details as follows:

Certificate No. Issue Date GXYQGY (2010) D05088 25 November 2010 GXYQGY (2010) D05050 19 July 2010 GXYQGY (2010) D05075 16 September 2010 GXYQGY (2009) D05013 29 December 2008 GXYQGY (2010) D05060 9 August 2010 Total

Site Area Land Use Expiry Date Owner (sq m) 45,096.60 Scientific research 2 March 2056 Dalian Jiadao Science & Technology Development Co., Ltd 26,330.40 Commercial 29 June 2050 Dalian Software Park Zhongxing Kaifa Co., Ltd 11,192.30 Commercial 29 June 2050 Dalian Software Park Zhongxing Kaifa Co., Ltd 69,571.00 Residential 11 June 2078 Dalian Software Park Zhongxing Kaifa Co., Ltd 58,026.00 Residential 29 June 2080 Dalian Software Park Zhongxing Kaifa Co., Ltd 210,216.30

• (2) According to 4 Planning Permits for Construction Use of Land issued by 大連高新技術產業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau), the construction site with an area of 834,035.80 sq m is in compliance with the requirements of urban planning.

Permit No. Issue Date DZD 210211200820528 6 October 2008 DZD 210211201058895 23 April 2010 DZD 210211200820532 21 October 2008 DZD 210211201058896 23 April 2010 Total	Site Area (sq m) 67,600.00 57,347.30 501,512.00 207,576.50
	834,035.80

• (3) According to 5 Planning Permits for Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau), portions of the development are permitted to be developed with a total gross floor area of 349,052.83 sq m.

– III-24 –

PROPERTY VALUATION REPORT

APPENDIX III

Permit No. Issue Date JZD 210211200820531 29 December 2008 JZD 210211201020016 27 July 2010 JZD 210211201420020 19 November 2014 JZD 2102112011200026 27 June 2011 JZD 210211201320009 23 March 2013 Total	Gross Floor Area (sq m) 162,370.00 94,120.00 416.00 30,749.60 61,397.23
	349,052.83

• (4) According to 5 Permits for Commencement of Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau), the construction works of portions of the development are permitted to commence with a total gross floor area of 301,218.83 sq m with details as follows:

Permit No. Issue Date 210211201003250701 25 March 2010 210230201010152201 10 October 2010 210230201504030601 3 April 2015 210230201112060501 6 December 2011 210230201304011501 1 April 2013 Total	Gross Floor Area (sq m) 114,536.00 94,120.00 416.00 30,749.60 61,397.23
	301,218.83

• (5) According to 2 Pre-sale Permits Nos. DGFYXZD20170016 and DGFYXZD20170018 issued by 大連市國土資源和 房屋局高新園區分局 (Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch) on 19 September 2017 and 12 October 2017 respectively, 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was permitted to pre-sell portions of the property with a total gross floor area of 46,822.86 sq m.

• (6) According to the information provided by the project companies, the expended construction cost as at 30 September 2017 was approximately RMB429,000,000. The estimated total construction cost was approximately RMB779,000,000. In the course of our valuation, such costs have been taken into account.

• (7) As advised by the project companies, portions of the property with a total gross floor area of 448.49 sq m were committed to be sold at a total consideration of RMB3,960,000. We have included such portions in our valuation and taken into account such amount.

• (8) The development value of the property as if completed as at 30 September 2017 was RMB1,384,000,000.

• (9) According to Business Licence No. 91210200661123059Y, 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) was established with a registered capital of RMB300,000,000 as a limited company on 20 June 2007.

According to Business Licence No. 91210231674071518B, 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was established with a registered capital of RMB1,900,000,000 as a limited company on 16 May 2008.

– III-25 –

PROPERTY VALUATION REPORT

APPENDIX III

• (10) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件 園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) respectively have obtained the land use rights of the property and are the legal land users of the property. 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) are entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) The project under construction by 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) mentioned above have been legally approved by the relevant government departments without being repealed, modified and abolished. 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) are entitled to develop the project in compliance with the certificates;

• (c) State-owned Land Use Rights Certificates, Planning Permits for Construction Use of Land, Planning Permits for Construction Works and Permits for Commencement of Construction Works of the property have been obtained. Subject to the issue of Construction Works Completion Examination Certificate, 大連 嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中 興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) have the rights to apply for Building Ownership Certificates;

• (d) A portion of the property is subject to a mortgage; and

• (e) As confirmed by 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd), except for the mortgage mentioned above, the land use rights and projects under construction mentioned above are not subject to any foreclosure or compulsory acquisition.

• (11) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project companies are as follows:

State-owned Land Use Rights Certificate	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permit for Construction Works	Yes
Permit for Commencement of Construction Works	Yes
Pre-sale Permit	Yes (part)
Business Licence	Yes

– III-26 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Property

1. Portions of Hekou Bay Project, Dalian Tiandi, under construction, High-Tech Zone, Dalian, Liaoning Province, the PRC

Description and tenure

The property comprises five sites with a total site area of approximately 61,200 sq m.

Portions of Plot B3 (B08) are planned to be developed into residential buildings and retail buildings. Portions of Plot C1 (B02) and C3/C4 (C04/C06) are planned to be developed into office buildings.

Particulars of occupancy

As at the date of valuation, the property was under construction and scheduled for completion in phases in between 2018 and 2019.

Market value in existing state as at 30 September 2017

RMB1,273,000,000

Portions of Plot A9 (B10) are planned to be developed into residential buildings.

The property is situated on the Lvshun South Road Software Industry Belt. The property is located in the south of Lvshun South Road, and the east of Lingjing Hotel.

The property is approximately 17 km to Dalian Railway Station, 16 km to Dalian Zhoushuizi International Airport. The property is served by public bus routes and Dalian Metro Lines 1 and 12.

The property is planned to be developed into a residential, commercial and office composite development with a total plot ratio area of 172,593.33 sq m.

Portion Residential Retail Office Others Total	Planned Gross Floor Area (sq m) 92,611.33 12,494.00 41,184.60 26,303.40
	172,593.33

The land use rights of the property have been granted for terms due to expire on 31 July 2079 for residential use, due to expire on 31 July 2049 for commercial use and due to expire on 31 July 2059 for office use.

– III-27 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) Pursuant to 2 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), the land use rights of portions of the property, comprising a total site area of 33,200 sq m, have been vested in 大連軟件園榮達開發有限 公司 (Dalian Software Park Rongda Kaifa Co., Ltd).

Certificate No. Plot Usage 2009 (05048) A9 (B10) Residential 2009 (05052) B3 (B08) Residential Total	Site area (sq m) 23,300 9,900
	33,200

Pursuant to 3 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), the land use rights of portions of the property, comprising a total site area of 28,000 sq m, have been vested in 大連軟件園榮源開發有限 公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) with details as follows:

Certificate No. Plot Usage 2009 (05064) C1 (B02) Office 2009 (05066) C3 (C04) Office 2009 (05067) C4 (C06) Office Total	Site area (sq m) 13,300 7,500 7,200
	28,000

• (2) According to 2 Planning Permits for Construction Use of Land issued by 大連高新技術產業園區規劃建設局 (the Dalian High Tech Industrial Park Planning and Construction Bureau) on 18 March 2009, the construction site of a parcel of land with a site area of 186,300 sq m is in compliance with the urban planning requirements with details as follows:

Permit No. Portion 210211200920556 Dalian Software Park Rongda Kaifa Co., Ltd 210211200920557 Dalian Software Park Rongyuan Kaifa Co., Ltd Total	Site Area (sq m) 114,200 72,100
	186,300

– III-28 –

PROPERTY VALUATION REPORT

APPENDIX III

• (3) According to 5 Planning Permits for Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High Tech Industrial Park Planning and Construction Bureau), the construction works of portions of the development, with a total gross floor area of 239,292 sq m, are in compliance with the construction works requirements and have been approved with details as follows:

Permit No. Issue Date Plot 2102112011200030 21 July 2011 C1 (B02) 2102112011200031 21 July 2011 C3/C4 (C04/C06) 210211201320034 13 December 2013 B3 (B08) 210211201520002 30 April 2015 A9 (B10) 210211201520003 30 April 2015 A9 (B10) Total	Gross Floor Area (sq m) 65,503.00 12,500.00 35,829.00 75,556.32 49,903.68
	239,292.00

• (4) According to 5 Permits for Commencement of Construction Works issued by 大連高新技術產業園區規劃建設局 (the Dalian High Tech Industrial Park Planning and Construction Bureau), the construction works of portions of the development are permitted to commence with a total gross floor area of 239,292 sq m with details as follows:

Permit No. Issue Date Plot 210230201209270701 27 September 2012 C1 (B02) 210230201312231901 23 December 2013 B3 (B08) 210230201507200601 20 July 2015 A9 (B10) 210285201703210101 21 March 2017 A9 (B10) 210285201703010101 1 March 2017 C3/C4 (C04/C06) Total	Gross Floor Area (sq m) 65,503.00 35,829.00 75,556.32 49,903.68 12,500.00
	239,292.00

• (5) According to 2 Pre-sale Permits issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), the permitted pre-sale area of portion of the property is 92,611.33 sq m, with details as follows:

Permit No. Plot Usage 20160009 A9 (B10) Residential 20170011 A9 (B10) Residential Total	Gross Floor Area (sq m) 43,085.39 49,525.94
	92,611.33

• (6) As advised by the project companies, the expended construction cost and the estimated total construction cost as at 30 September 2017 were approximately RMB441,000,000 and RMB833,000,000 respectively. In the course of our valuation, such costs have been taken into account.

• (7) As advised by the project companies, portions of the property with a total gross floor area of 65,581.19 sq m were committed to be sold at a total consideration of RMB78,000,000. We have included such portions in our valuation and taken into account such amount.

• (8) The development value of the property as if completed as at 30 September 2017 was approximately RMB1,977,000,000.

– III-29 –

PROPERTY VALUATION REPORT

APPENDIX III

• (9) According to the copy of Business Licence No. 91210231683000199E, 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) was established with a registered capital of RMB660,000,000 as a limited company on 26 November 2008.

According to the copy of Business Licence No. 91210231683000172N, 大連軟件園榮源開發有限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) was established with a registered capital of RMB350,000,000 as a limited company on 26 November 2008.

• (10) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) and 大連軟件園榮源開發有 限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) respectively have obtained the land use rights and are the legal land users of the property. 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) and 大連軟件園榮源開發有限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) are entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) The project under construction by 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) and 大連軟件園榮源開發有限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) mentioned above have been legally approved by the relevant government departments without being repealed, modified and abolished. 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) and 大連軟件園榮源開發有限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) are entitled to develop the project in compliance with the certificates;

• (c) State-owned Land Use Rights Certificates, Planning Permits for Construction Use of Land, Planning Permits for Construction Works and Permits for Commencement of Construction Works of the property have been obtained. Subject to the issue of Construction Works Completion Examination Certificate, 大連 軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) and 大連軟件園榮源開發有限公 司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) have the rights to apply for Building Ownership Certificates;

• (d) The property is subject to a mortgage; and

• (e) As confirmed by 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) and 大連軟 件園榮源開發有限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd), except for the mortgage mentioned above, the land use rights and projects under construction mentioned above are not subject to any foreclosure and compulsory acquisition.

• (11) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project companies are as follows:

State-owned Land Use Rights Certificate	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permit for Construction Works	Yes
Permit for Commencement of Construction Works	Yes
Pre-sale Permit	Yes (part)
Business Licence	Yes

– III-30 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Group IV — Property interests held for future development in the PRC

Property Description and tenure

Particulars of occupancy

Market value in existing state as at 30 September 2017

1. The land for scientific The property comprises a site with a research, residential and total area of approximately retail development of 775,997.6 sq m and is proposed to Huangnichuan Project, be developed into a complex project Dalian Tiandi, North of including residential, retail, office Lvshun South Road, and car parking facilities with a High-Tech Zone, total planned plot ratio gross floor Dalian, area of 864,961.18 sq m. Liaoning Province, the PRC The property is situated in the southeast, west and north of the software park of Huangnichuan Project, Dalian Tiandi, abutting Lvshun South Road on the south. Developments in the software park of the Huangnichuan Project, Dalian Tiandi, comprise mainly residential buildings, commercial buildings, office buildings and schools, etc.

As at the date of valuation, RMB2,108,000,000 the property was a vacant (See Note (1) land. below)

The property is approximately 22 km to the city centre. The property is connected to the downtown of Lvshun to the west. The natural environment of the property is good. The property is served by public bus routes.

The land use rights of the property have been granted for terms due to expire on 2 March 2056 and 11 June 2058 for scientific research use, due to expire on 29 June 2080 or 11 June 2078 for residential use and due to expire on 29 June 2050 for commercial use.

– III-31 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) State-owned Land Use Rights Certificate No. GXYQGY(2010) D0509 of Plot E23 has been issued by 大連市國土 資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High-tech Industrial Zone Branch). As advised by the project companies, such plot was originally and individually planned as a stand-alone ancillary facility. For the purpose of our valuation, the site area of such plot is not included in the area above.

• (2) Pursuant to 26 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High-tech Industrial Zone Branch), the land use rights of the property with a total site area of approximately 784,874.6 sq m with details as follows:

Certificate No.	Issue Date	Site Area	Land Use	Expiry Date	Owner
		(sq m)
GXYQGY (2010)	2 December	31,681.9	Scientific	2 March 2056	Dalian Jiadao Science &
D05095	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	2 December	12,253.2	Scientific	2 March 2056	Dalian Jiadao Science &
D05096	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	2 December	11,265.8	Scientific	2 March 2056	Dalian Jiadao Science &
D05097	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	2 December	10,432.9	Scientific	2 March 2056	Dalian Jiadao Science &
D05098	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	2 December	20,214.3	Scientific	2 March 2056	Dalian Jiadao Science &
D05099	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	21 December	18,443.8	Scientific	2 March 2056	Dalian Jiadao Science &
D05101	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	21 December	4,068.4	Scientific	2 March 2056	Dalian Jiadao Science &
D05104	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	21 December	17,521.4	Scientific	2 March 2056	Dalian Jiadao Science &
D05102	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	21 December	12,037.9	Scientific	2 March 2056	Dalian Jiadao Science &
D05103	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	21 December	23,920.3	Scientific	2 March 2056	Dalian Jiadao Science &
D05106	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	21 December	23,851.2	Scientific	2 March 2056	Dalian Jiadao Science &
D05105	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	21 December	22,146.9	Scientific	2 March 2056	Dalian Jiadao Science &
D05107	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	21 December	18,536.8	Scientific	2 March 2056	Dalian Jiadao Science &
D05108	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2010)	2 December	11,714.5	Scientific	2 March 2056	Dalian Jiadao Science &
D05090	2010		Research		Technology
					Development Co., Ltd
GXYQGY (2009)	29 December	8,550.6	Scientific	11 June 2058	Dalian Software Park
D05009	2008		Research		Shuion Kaifa Co., Ltd

– III-32 –

PROPERTY VALUATION REPORT

APPENDIX III

Certificate No. Issue Date Site Area Land Use Expiry Date Owner (sq m) GXYQGY (2009) 29 December 3,526.5 Scientific 11 June 2058 Dalian Software Park D05001 2008 Research Shuion Kaifa Co., Ltd GXYQGY (2009) 2 December 21,354 Scientific 11 June 2058 Dalian Software Park D05011 2008 Research Shuion Kaifa Co., Ltd GXYQGY (2012) 12 October 17,733.7 Scientific 11 June 2058 Dalian Software Park D05070 2012 Education Shuion Kaifa Co., Ltd GXYQGY (2012) 12 October 11,653.1 Scientific 11 June 2058 Dalian Software Park D05069 2012 Education Shuion Kaifa Co., Ltd GXYQGY (2009) 29 December 11,431.6 Scientific 11 June 2058 Dalian Software Park D05004 2008 Research Shuion Kaifa Co., Ltd GXYQGY (2009) 29 December 159,831 Residential/ 11 June 2078 Dalian Software Park D05012 2008 Commercial Zhongxing Kaifa Co., Ltd GXYQGY (2009) 29 December 272,110 Residential/ 11 June 2078 Dalian Software Park D05014 2008 Commercial Zhongxing Kaifa Co., Ltd GXYQGY (2010) 10 September 9,577.9 Residential 29 June 2080 Dalian Software Park D05071 2010 Zhongxing Kaifa Co., Ltd GXYQGY (2010) 16 September 7,227.2 Retail 29 June 2050 Dalian Software Park D05074 2010 Zhongxing Kaifa Co., Ltd GXYQGY (2010) 16 September 11,192.3 Retail 29 June 2050 Dalian Software Park D05075 2010 Zhongxing Kaifa Co., Ltd GXYQGY (2010) 19 July 2010 12,597.4 Retail 29 June 2050 Dalian Software Park D05052 Zhongxing Kaifa Co., Ltd Total 784,874.6

• (3) According to Business Licence No. 91210200661123059Y, 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) was established with a registered capital of RMB300,000,000 as a limited company on 20 June 2007.

According to Business Licence No. 91210231674071518B, 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was established with a registered capital of RMB1,900,000,000 as a limited company on 16 May 2008.

According to Business Licence No. 91210231661125425H, 大連軟件園瑞安開發有限公司 (Dalian Software Park Shuion Kaifa Co., Ltd) was established with a registered capital of RMB600,000,000 as a limited company on 25 June 2007.

– III-33 –

PROPERTY VALUATION REPORT

APPENDIX III

• (4) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd), 大連軟件園中 興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) and 大連軟件園瑞安開發有限公司 (Dalian Software Park Shuion Kaifa Co., Ltd) respectively have obtained the land use rights of the property and are the legal land users of the property. 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd), 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) and 大連軟件園瑞安開發有限公司 (Dalian Software Park Shuion Kaifa Co., Ltd) are entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) A portion of the property is subject to a mortgage; and

• (c) As confirmed by 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd), 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) and 大連軟件園瑞 安開發有限公司 (Dalian Software Park Shuion Kaifa Co., Ltd), except for the mortgage mentioned above, the land use rights are not subject to any foreclosure or compulsory acquisition.

• (5) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project companies are as follows:

State-owned Land Use Rights Certificate Yes Grant Contract of Land Use Rights Yes (part) Business Licence Yes

– III-34 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Property

1. Plot C06 of Huangnichuan Project, Dalian Tiandi, North of Lvshun South Road, High-Tech Zone, Dalian, Liaoning Province, the PRC

Description and tenure

• The property comprises a site with a total site area of 24,352.5 sq m.

• Plot C06 is planned to be developed into an apartment development with a total plot ratio gross floor area of approximately 68,187 sq m.

Particulars of occupancy

As at the date of valuation, the property was a vacant land.

Market value in existing state as at 30 September 2017

RMB155,000,000

The property is situated in the north of the software park of Huangnichuan Project, Dalian Tiandi, abutting Lvshun South Road on the south.

Developments in the software park of the Huangnichuan Project, Dalian Tiandi comprise mainly residential buildings, commercial buildings, office buildings and schools, etc.

The property is approximately 22 km to the city centre. The property is connected to the downtown of Lvshun to the west. The natural environment of the property is good. The property is served by public bus routes.

The land use rights of the property have been granted for a term due to expire on 29 June 2080 for residential use.

– III-35 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) Pursuant to State-owned Land Use Rights Certificate No. GXYQGY (2010) D05055 issued by 大連市國土資源和 房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High-tech Industrial Zone Branch) on 10 August 2010, the land use rights of the property has a total site area of 24,352.5 sq m.

• (2) According to Planning Permit for Construction Use of Land No. DZD210211201058894 issued by 大連高新技術產 業園區規劃建設局 (the Dalian High-tech Industrial Park Planning and Construction Bureau) on 23 April 2010, the construction site with an area of approximately 39,542.2 sq m is in compliance with the requirements of urban planning.

• (3) According to Business Licence No. 91210231674071518B, 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was established with a registered capital of RMB1,900,000,000 as a limited company on 16 May 2008.

• (4) We have been provided with a legal opinion on the title to the property issued by issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) has obtained the land use rights of the property and is the legal land user of the property. 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) is entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) According to the Grant Contract of Land Use Rights, the property upon completion must be leased to certain types of tenants, and is subject to sale and transfer restrictions on strata unit basis. But the property can be transferred as a whole;

• (c) The property is subject to a mortgage; and

• (d) As confirmed by 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd), except for the mortgage mentioned above, the land use rights are not subject to any foreclosure or compulsory acquisition.

• (5) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project company are as follows:

State-owned Land Use Rights Certificate	Yes
Planning Permit for Construction Use of Land	Yes
Business Licence	Yes

– III-36 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 30 September 2017

1. Plots F02/F03 of The property comprises two sites Huangnichuan Project, with a total site area of Dalian Tiandi, North of approximately 50,886.2 sq m. Lvshun South Road, High-Tech Zone, The property is situated in the Dalian, south of the software park of Liaoning Province, Huangnichuan Project, Dalian the PRC Tiandi, abutting Lvshun South Road on the south.

As at the date of valuation, No commercial the property was a vacant value land. (see Note (1) below)

Developments in the software park of the Huangnichuan Project, Dalian Tiandi comprise mainly residential buildings, commercial buildings, office buildings and schools, etc.

The property is approximately 22 km to the city centre. The property is connected to the downtown of Lvshun to the west. The natural environment of the property is good. The property is served by public bus routes.

– III-37 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) The State-owned Land Use Rights Certificates of Plots F02 and F03 in Huangnichuan Project, Dalian Tiandi have not been issued. Therefore, we have ascribed no commercial value to the property on market value basis.

On the assumption that the State-owned Land Use Rights Certificates had been granted to the property, and land premium, relevant costs and expenses had been fully settled, the market value of the property in its existing state as at 30 September 2017 would be RMB153,000,000.

• (2) Pursuant to Grant Contract of Land Use Rights No. 2010–27 dated 27 May 2010, the land use rights of portions of the property with a site area of approximately 22,400.6 sq m have been contracted to be granted to 大連軟件園中 興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) at a consideration of RMB43,600,000. As advised by the project companies, the land premium has been fully settled as at the date of valuation.

• (3) According to Business Licence No. 91210200661123059Y, 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) was established with a registered capital of RMB300,000,000 as a limited company on 20 June 2007.

According to Business Licence No. 91210231674071518B, 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) was established with a registered capital of RMB1,900,000,000 as a limited company on 16 May 2008.

According to Business Licence No. 912102006611226032, 大連德蘭軟件發展有限公司 (Dalian Delan Software Development Co., Ltd) was established with a registered capital of RMB300,000,000 as a limited company on 19 June 2007.

• (4) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連德蘭軟件發展有限公司 (Dalian Delan Software Development Co., Ltd), 大連嘉道科技發展有限公司 (Dalian Jiadao Science & Technology Development Co., Ltd) and 大連軟件園中興開發有限公司 (Dalian Software Park Zhongxing Kaifa Co., Ltd) have not obtained the State-owned Land Use Rights Certificates of the property.

• (5) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project companies are as follows:

State-owned Land Use Rights Certificate No Grant Contract of Land Use Rights Yes (part) Business Licence Yes

– III-38 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Property

1. Vacant lands of Hekou Bay Project, Dalian Tiandi, High-Tech Zone, Dalian, Liaoning Province, the PRC

Description and tenure

The property comprises fifteen land plots with a total site area of approximately 177,500 sq m.

The property is situated on the Lvshun South Road Software Industry Belt. The property is located in the south of Lvshun South Road, and the east of Lingjing Hotel.

Market value in existing state as at 30 September 2017

Particulars of occupancy

As at the date of valuation, RMB3,876,000,000 the property was vacant lands pending for construction.

Developments in the vicinity comprise mainly residential and office buildings, such as Star & Sea Land, Haichuang Banshan No. 1, POFI Landao and Ascendants of Dalian Software Park.

The property is approximately 17 km to Dalian Railway Station, 16 km to Dalian Zhoushuizi International Airport. The property is served by public bus routes and Dalian Metro Lines 1 and 12.

The property is planned to be developed into a residential, commercial and office composite development with a total plot ratio area of 815,240.30 sq m.

Portion Residential Retail Office Others Total	Planned Gross Floor Area (sq m) 267,644.43 359,136.27 150,874.80 37,584.80
	815,240.30

The land use rights of the property have been granted for terms due to expire on 31 July 2079 for residential use, due to expire on 31 July 2049 for commercial use and due to expire on 31 July 2059 for office use.

– III-39 –

PROPERTY VALUATION REPORT

APPENDIX III

Notes:

• (1) Pursuant to 2 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), the land use rights of portions of the property, comprising a total site area of 33,700 sq m, have been vested in 大連軟件園榮達開發有限 公司 (Dalian Software Park Rongda Kaifa Co., Ltd).

Certificate No. Plot Usage 2009 (05046) A1 (A01) Residential 2009 (05051) B2 (B07) Residential Total	Site area (sq m) 11,100 22,600
	33,700

Pursuant to 10 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), the land use rights of portions of the property, comprising a total site area of 99,700 sq m, have been vested in 大連軟件園榮泰開發有限 公司 (Dalian Software Park Rongtai Kaifa Co., Ltd) with details as follows:

Certificate No. Plot Usage 2009 (05054) A2 (A02) Residential 2009 (05055) A3 (A03) Residential 2009 (05056) A4 (A07) Residential 2009 (05057) A5 (A09) Residential 2009 (05058) A6 (A11) Residential 2009 (05059) A7 (A12) Residential 2009 (05060) B1 (B05) Residential 2009 (05061) E1 (A06) Commercial 2009 (05062) E2 (A08) Commercial 2009 (05063) E3 (A10) Commercial Total	Site area (sq m) 8,400 10,600 6,800 7,400 4,500 11,000 30,800 9,700 4,600 5,900
	99,700

Pursuant to 3 State-owned Land Use Rights Certificates issued by 大連市國土資源和房屋局高新園區分局 (the Dalian State-owned Land Resources and Housing Bureau High Tech Industrial Zone Branch), the land use rights of portions of the property, comprising a total site area of 44,100 sq m, have been vested in 大連軟件園榮源開發有限 公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) with details as follows:

Certificate No. Plot Usage 2009 (05065) C2 (B06) Office 2009 (05068) D1 (B03) Office 2009 (05069) D2 (B04) Office Total	Site area (sq m) 18,500 12,500 13,100
	44,100

– III-40 –

PROPERTY VALUATION REPORT

APPENDIX III

• (2) According to 3 Planning Permits for Construction Use of Land issued by 大連高新技術產業園區規劃建設局 (the Dalian High Tech Industrial Park Planning and Construction Bureau) on 18 March 2009, the construction site of three parcels of land with a total site area of 286,000 sq m is in compliance with the urban planning requirements with details as follows:

Permit No. Portion 210211200920556 Dalian Software Park Rongda Kaifa Co., Ltd 210211200920557 Dalian Software Park Rongyuan Kaifa Co., Ltd 210211200920558 Dalian Software Park Rongtai Kaifa Co., Ltd Total	Site Area (sq m) 114,200 72,100 99,700
	286,000

• (3) According Planning Permit for Construction Works No. 2102112011200036 issued by 大連高新技術產業園區規 劃建設局 (the Dalian High Tech Industrial Park Planning and Construction Bureau) on 21 August 2011, the construction works of Plot D1 (B03) with a total gross floor area of 60,028 sq m are in compliance with the construction works requirements and have been approved.

• (4) According to the copy of Business Licence No. 91210231683000199E, 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd) was established with a registered capital of RMB660,000,000 as a limited company on 26 November 2008.

According to the copy of Business Licence No. 912102316830002012, 大連軟件園榮泰開發有限公司 (Dalian Software Park Rongtai Kaifa Co., Ltd) was established with a registered capital of RMB100,000,000 as a limited company on 26 November 2008.

According to the copy of Business Licence No. 91210231683000172N, 大連軟件園榮源開發有限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) was established with a registered capital of RMB350,000,000 as a limited company on 26 November 2008.

• (5) We have been provided with a legal opinion on the title to the property issued by Richcoast Group Limited’s PRC legal adviser which contains, inter-alia, the following information:

• (a) 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd), 大連軟件園榮源開發有限 公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) and 大連軟件園榮泰開發有限公司 (Dalian Software Park Rongtai Kaifa Co., Ltd) respectively have obtained the land use rights and are the legal land users of the property. 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd), 大連 軟件園榮源開發有限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) and 大連軟件園榮泰開發有限 公司 (Dalian Software Park Rongtai Kaifa Co., Ltd) are entitled to mortgage or otherwise transfer the land use rights of the property according to the Grant Contract of Land Use Rights;

• (b) A portion of the property is subject to a mortgage; and

• (c) As confirmed by 大連軟件園榮達開發有限公司 (Dalian Software Park Rongda Kaifa Co., Ltd), 大連軟件 園榮源開發有限公司 (Dalian Software Park Rongyuan Kaifa Co., Ltd) and 大連軟件園榮泰開發有限公司 (Dalian Software Park Rongtai Kaifa Co., Ltd), except for the mortgage mentioned above, the land use rights are not subject to any foreclosure and compulsory acquisition.

• (6) The status of title and grant of major approvals and licences in accordance with the information provided to us by the project companies are as follows:

State-owned Land Use Rights Certificate	Yes
Planning Permit for Construction Use of Land	Yes
Planning Permit for Construction Works	Yes (part)
Business Licence	Yes

– III-41 –

GENERAL INFORMATION

APPENDIX IV

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS OF DIRECTORS AND CHIEF EXECUTIVE

At the Latest Practicable Date, the interests and short positions of the Directors and chief executive of the Company in the shares of the Company which were required to be notified to the Company and the Stock Exchange pursuant to the provisions of Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which they were taken or deemed to have been taken under such provisions of the SFO) or the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix 10 of the Listing Rules (the “Model Code”) or which were required to be entered in the register required to be kept under section 352 of the SFO were as follows:

Long positions in shares of the Company

Name of Director Mr. Vincent Lo Mr. Frankie Wong	Number of shares Approximate percentage of issued shares (Note 1) Personal interests Family interests Other interests Total – 312,000 (Note 2) 234,381,000 (Note 3) 234,693,000 48.44% 3,928,000 – – 3,928,000 0.81%

Notes:

1. Based on 484,410,164 shares of the Company in issue at the Latest Practicable Date.

2. These shares were beneficially owned by Ms. Loletta Chu (“Mrs. Lo”), the spouse of Mr. Vincent Lo. Under the SFO, Mr. Vincent Lo was deemed to be interested in such shares and both Mr. Vincent Lo and Mrs. Lo were also deemed to be interested in 234,381,000 shares mentioned in Note 3 below.

3. These shares were beneficially owned by SOCL. Of these 234,381,000 shares beneficially owned by SOCL, 232,148,000 shares were held by SOCL itself and 2,233,000 shares were held by SOFCL, an indirect wholly-owned subsidiary of SOCL. SOCL was owned by the Bosrich Unit Trust, the trustee of which was Bosrich Holdings (PTC) Inc. (“Bosrich”). The units of the Bosrich Unit Trust were the property of a discretionary trust, of which Mr. Vincent Lo was one of the discretionary beneficiaries and HSBC International Trustee Limited (“HSBC Trustee”) was the trustee. Accordingly, Mr. Vincent Lo, Mrs. Lo, HSBC Trustee and Bosrich were deemed to be interested in such shares under the SFO.

– IV-1 –

GENERAL INFORMATION

APPENDIX IV

Save as disclosed above, at the Latest Practicable Date, none of the Directors or chief executive of the Company had any interests or short positions in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which were required to be notified to the Company and the Stock Exchange pursuant to the provisions of Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have been taken under such provisions of the SFO) or the Model Code or which were required to be entered in the register required to be kept under section 352 of the SFO.

At the Latest Practicable Date, there was no contract or arrangement subsisting in which any of the Directors was materially interested and which was significant in relation to the business of the Group.

Certain tenancy agreements subsist between certain members of the Group as lessees and certain subsidiaries of SOCL (being a company controlled by Mr. Vincent Lo) as lessors in respect of the leasing of certain office premises owned by the group companies of SOCL in Hong Kong and the PRC, the aggregate amount of the rental and management fees of which was approximately HK$1.6 million for the ten-month period ended 31 October 2017. Save as disclosed above, since 31 December 2016 (being the date to which the latest published audited consolidated financial statements of the Group were made up), none of the Directors had any direct or indirect interest in any assets which had been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

At the Latest Practicable Date, save as disclosed below, none of the Directors was a director or an employee of a company which had an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO:

	Names of companies which had
	such discloseable interest or	Position within
Name of Director	short position	such companies
Mr. Vincent Lo	SOCL	director
Mr. Frankie Wong	SOCL and SOFCL	director

3. SERVICE CONTRACTS

At the Latest Practicable Date, none of the Directors had entered or proposed to enter into, with any member of the Group, a service contract which is not expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation).

– IV-2 –

GENERAL INFORMATION

APPENDIX IV

4. COMPETING BUSINESS INTERESTS OF DIRECTORS

At the Latest Practicable Date, the following Directors were considered to have interests in the business, which competed or was likely to compete, either directly or indirectly, with the business of the Group pursuant to Rule 8.10 of the Listing Rules as set out below:

• (a) Mr. Vincent Lo is a director and the controlling shareholder of SOCL which, through its subsidiaries, including (among others) SOL, principally engages in property development and investment projects in the PRC.

• (b) Mr. Vincent Lo is a director of Great Eagle Holdings Limited which, through its subsidiaries, engages in (among others) property development and investment, and trading of building materials in the PRC.

• (c) Mr. Frankie Wong is a director of SOCL which, through its subsidiaries, including (among others) SOL, principally engages in property development and investment projects in the PRC.

As the Board is independent from the boards of directors of the aforesaid companies and the above Directors are unable to control the Board, the Group is capable of carrying on its business independently of, and at arm’s length from, the businesses of such companies.

Save as disclosed above, at the Latest Practicable Date, none of the Directors or their respective close associates had any interest in the business, which competed or was likely to compete, either directly or indirectly, with the business of the Group (as would be required to be disclosed under Rule 8.10 of the Listing Rules as if each of them were a controlling shareholder).

5. LITIGATION

At the Latest Practicable Date, there was no litigation or claim of material importance known to the Directors to be pending or threatened against any member of the Group.

6. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) were entered into by the members of the Group within the two years immediately preceding the issuance of this circular, which were or might be material:

• (a) a contribution agreement dated 31 December 2015 entered into among Main Zone, Innovate Zone, Many Gain (collectively the “JV Shareholders”) and Richcoast whereby the JV Shareholders agreed, among other things, to provide additional funding to the Richcoast Group by way of shareholders’ loans in an aggregate amount of not exceeding RMB781 million for the Dalian Tiandi Project, which shall be contributed by Main Zone as to approximately RMB171.8 million, Innovate Zone as to approximately RMB374.9 million and Many Gain as to approximately RMB234.3 million in proportion to the effective interests of 22%, 48% and 30% held by the Company, SOL and Yida in the Richcoast Group respectively;

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GENERAL INFORMATION

APPENDIX IV

• (b) a sale and purchase agreement dated 4 January 2016 entered into between Link Reach Holdings Limited (“Link Reach”, an indirect wholly-owned subsidiary of the Company) as vendor and Angel View International Limited (“Angel View”) as purchaser whereby Angel View agreed to (i) acquire from Link Reach its entire share interest in New Prime Investments Limited (“New Prime”, which, via a project company established in the PRC, namely 遵義天時利房地產開發有限公司 (Zunyi Tinsley Real Estate Development Co., Ltd.*) (“Zunyi Tinsley”), holds two land parcels located in Zunyi, Guizhou, the PRC for property development) together with the outstanding shareholder’s loan owed by New Prime to Link Reach; and (ii) provide a loan to Zunyi Tinsley for its settlement of the advances owed by it to an onshore affiliate of Link Reach, for a total transaction amount of approximately RMB388 million;

• (c) a framework agreement dated 29 August 2016 entered into between Great Market Limited (“Great Market”, an indirect wholly-owned subsidiary of the Company) as vendor and 江蘇 南碧房地產開發有限公司 (Jiangsu Nan Bi Property Development Co., Ltd.*) (“Jiangsu Nan Bi”) as purchaser whereby Jiangsu Nan Bi agreed to (i) acquire 35% equity interest in Nanjing Jiangnan Cement Co., Ltd. (“Nanjing Jiangnan Cement”, which principally engages in manufacturing and trading of cement in Nanjing, the PRC) from Great Market; and (ii) provide loans to Nanjing Jiangnan Cement for its partial settlement of the advances owed by it to Great Market and its affiliates, for a total transaction amount of approximately RMB147.6 million (subject to adjustment);

• (d) supplemental guarantee restructuring deeds dated 17 October 2016 and 17 October 2017 entered into between the Company and China Cinda Asset Management Co., Ltd., Beijing Branch (“CCAM”) whereby CCAM agreed not to demand the fulfillment of the Company’s guarantee obligations under the corporate guarantee dated 2 April 2007 entered into by the Company in favour of the original lending bank for a loan granted to Beijing ZhongTian HongYe Real Estate Consulting Co., Ltd. (a former wholly-owned subsidiary of China Central Properties Limited, which was previously an associate of the Company and, since June 2009, has become an indirect wholly-owned subsidiary of the Company) in an outstanding principal amount of approximately RMB542 million, which was subsequently acquired by CCAM, for a period up to 18 October 2018 in consideration of the Company paying compensation fees in a total amount of RMB24 million to CCAM;

• (e) a sale and purchase agreement dated 4 August 2017 entered into between the Company as seller and seven employees of the Group (the “Employees”, including, among others, Mr. Choi Yuk Keung, Lawrence, Mr. Chan Ngai Shing, David, Mr. Ng Yat Hon, Gilbert and Mr. Lee Kwok Fai) as purchasers whereby the Employees, pursuant to an employee equity participation arrangement, agreed to acquire from the Company an aggregate of 15% share interest in Shui On Contractors Limited (which, via its subsidiaries, principally engages in the construction business in Hong Kong and Macau) for a total consideration of HK$75 million;

• For identification purpose only

– IV-4 –

GENERAL INFORMATION

APPENDIX IV

• (f) a sale and purchase agreement dated 7 September 2017 (as supplemented by a supplemental agreement dated 7 September 2017) entered into among Wealth Frame Limited (“Wealth Frame”, a wholly-owned subsidiary of the Company) as purchaser, the Company, Fine Ace Investments Limited (“Fine Ace”, a wholly-owned subsidiary of SOTAN China Real Estate I, LP (“SOTAN Fund”)) as seller and the limited partners of SOTAN Fund whereby Wealth Frame agreed to acquire from Fine Ace (i) 50% share interest in Cosy Rich Limited (“Cosy Rich”, which holds the options entitling it to acquire 90% interest in a property project known as Tianjin Veneto located in Tianjin, the PRC); and (ii) the shareholder’s loans owed by Cosy Rich to Fine Ace, for a total consideration of approximately €4.62 million;

• (g) a sale and purchase agreement dated 7 September 2017 (as supplemented by a supplemental agreement dated 7 September 2017) entered into among Wealth Frame as purchaser, the Company, Rosy Opportunity Limited (“Rosy Opportunity”, a wholly-owned subsidiary of SOTAN Fund) as seller and the limited partners of SOTAN Fund whereby Wealth Frame agreed to acquire from Rosy Opportunity (i) 50% share interest in Win Lead Holdings Limited (“Win Lead”, which, via a project company established in the PRC, holds a property project known as Nanjing Scenic Villa located in Nanjing, the PRC); and (ii) the shareholder’s loan owed by Win Lead to Rosy Opportunity, for a total consideration of approximately €32.04 million; and

• (h) the Sale and Purchase Agreement.

7. EXPERTS’ QUALIFICATIONS AND CONSENTS

The following are the qualifications of the experts who have given their opinions or advice, which are contained in this circular:

Name	Qualification
Deloitte Touche Tohmatsu	Certified Public Accountants
Cushman & Wakefield Limited	Independent professional property valuer
Liaoning Henghai Law Firm	PRC legal adviser

Deloitte Touche Tohmatsu, Cushman & Wakefield Limited and Liaoning Henghai Law Firm have given and have not withdrawn their respective written consents to the issuance of this circular with the inclusion of their letters, reports and/or summary of their opinions (as the case may be) and references to their names in the form and context in which they respectively appear herein.

– IV-5 –

GENERAL INFORMATION

APPENDIX IV

Deloitte Touche Tohmatsu, Cushman & Wakefield Limited and Liaoning Henghai Law Firm have confirmed that, at the Latest Practicable Date:

• (a) they did not have any shareholding, directly or indirectly, in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group;

• (b) they did not have any direct or indirect interest in any assets which had since 31 December 2016 (being the date to which the latest published audited consolidated financial statements of the Group were made up) been acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group;

• (c) the reports of Deloitte Touche Tohmatsu are given as of the date of this circular for incorporation herein;

• (d) the property valuation report of Cushman & Wakefield Limited is given as of the date of this circular for incorporation herein; and

• (e) the opinion of Liaoning Henghai Law Firm is given as of the date of this circular and has been provided to Cushman & Wakefield Limited for the purpose of preparing the property valuation report.

8. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection during business hours at the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong from the date of this circular up to and including 22 December 2017:

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

• (b) the annual reports of the Company for the years ended 31 December 2015 and 2016;

• (c) the interim report of the Company for the six months ended 30 June 2017;

• (d) the material contracts referred to in the section headed “Material Contracts” in this appendix;

• (e) the review report from Deloitte Touche Tohmatsu on the financial information of the Disposal Group for the three years ended 31 December 2016 and the six months ended 30 June 2016 and 2017 and explanatory notes;

– IV-6 –

GENERAL INFORMATION

APPENDIX IV

• (f) the report from Deloitte Touche Tohmatsu on the unaudited pro forma financial information of the Remaining Group, the text of which is set out in Appendix II to this circular;

• (g) the property valuation report from Cushman & Wakefield Limited, the text of which is set out in Appendix III to this circular;

• (h) the written consents referred to in the section headed “Experts’ Qualifications and Consents” in this appendix;

• (i) the circular dated 24 October 2017 issued by the Company in respect of the conditional acquisition of interests in property projects in Tianjin and Nanjing, the PRC; and

• (j) this circular.

9. MISCELLANEOUS

• (a) The company secretary of the Company is Ms. Chan Yeuk Ho, Karen, an Associate of The Institute of Chartered Secretaries and Administrators and The Hong Kong Institute of Chartered Secretaries.

• (b) The principal share registrar and transfer office of the Company is Conyers Corporate Services (Bermuda) Limited, Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda.

• (c) The branch share registrar and transfer office of the Company in Hong Kong is Tricor Standard Limited, Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

• (d) The registered office of the Company is at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The head office and principal place of business of the Company in Hong Kong is at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong.

• (e) The English text of this circular shall prevail over the Chinese text, in case of any inconsistency.

– IV-7 –

NOTICE OF SPECIAL GENERAL MEETING

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瑞安建業有限公司[*]

SOCAM Development Limited

(Incorporated in Bermuda with limited liability)

(Stock Code: 983)

NOTICE IS HEREBY GIVEN that a special general meeting of SOCAM Development Limited (the “Company”) will be held at Tian & Di Room, 7th Floor, The Landmark Mandarin Oriental, 15 Queen’s Road Central, The Landmark, Central, Hong Kong on Friday, 22 December 2017 at 11:00 a.m. for the purpose of considering and, if thought fit, passing (with or without amendments) the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

“ THAT :

• (a) the entering into of the Sale and Purchase Agreement (as defined in the circular of the Company dated 6 December 2017 (the “Circular”, a copy of which agreement is tabled at the meeting and marked “A” and signed by the chairman of the meeting for identification purpose) and the Transaction (as defined in the Circular) contemplated thereunder be hereby approved, ratified and confirmed; and

• (b) the directors of the Company be hereby authorised for and on behalf of the Company to execute any such documents, instruments and agreements and to do any such acts or things as may be deemed by such directors in their absolute discretion to be incidental to, ancillary to or in connection with the Sale and Purchase Agreement and the Transaction contemplated thereunder.”

By Order of the Board SOCAM Development Limited Chan Yeuk Ho, Karen Company Secretary

Hong Kong, 6 December 2017

• For identification purpose only

– SGM-1 –

NOTICE OF SPECIAL GENERAL MEETING

Notes:

• (1) Any shareholder entitled to attend and vote at the above meeting or any adjournment or postponement thereof (as the case may be) is entitled to appoint one or more proxies to attend and, on a poll, vote in his/her stead. A proxy need not be a shareholder of the Company.

• (2) 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 thereof, must be lodged with the head office of the Company at 34th Floor, Shui On Centre, 6-8 Harbour Road, Hong Kong not later than 48 hours before the time appointed for holding the meeting or any adjournment or postponement thereof (as the case may be). Completion and return of the proxy form will not preclude a shareholder from attending and voting in person at the meeting or any adjournment or postponement thereof (as the case may be) should he/she so wish.

• (3) In accordance with Rule 13.39(4) of the Listing Rules, the above resolution will be put to vote at the meeting by way of poll. An explanation of the detailed procedures of voting by poll will be provided to the shareholders at the meeting.

• (4) For the purpose of determining the shareholders’ entitlement to attend and vote at the meeting or any adjournment or postponement thereof (as the case may be), the register of members of the Company will be closed from Tuesday, 19 December 2017 to Friday, 22 December 2017 (both dates inclusive), during which period no transfer of shares will be registered. In order to be eligible to attend and vote at the meeting or any adjournment or postponement thereof, all completed transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Standard Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, for registration not later than 4:30 p.m. on Monday, 18 December 2017.

• (5) If a Typhoon Signal No.8 or above is hoisted or a Black Rainstorm Warning Signal is in force at or at any time after 9:00 a.m. on the day of the meeting, the meeting will be postponed to a later date. In this event, the Company will, as soon as practicable, post an announcement on its website and on the website of the Stock Exchange to notify shareholders of the date, time and place of the postponed meeting.

The meeting will be held as scheduled when an Amber or a Red Rainstorm Warning Signal is in force. Shareholders should decide on their own whether they would attend the meeting under unfavourable weather conditions bearing in mind their own situations.

– SGM-2 –