Man Sang International Limited

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Man Sang International Limited, you should at once hand this circular to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

(Incorporated in Bermuda with limited liability)

(Stock Code: 938)

MAJOR TRANSACTION

DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF SMARTEST MAN HOLDINGS LIMITED

AND THE SALE LOAN

AND NOTICE OF SPECIAL GENERAL MEETING

A notice convening the special general meeting of Man Sang International Limited (the ‘‘Company’’) to be held at Meeting Room (Soho 1), 6/F., ibis Hong Kong Central & Sheung Wan Hotel, No. 28 Des Voeux Road West, Sheung Wan, Hong Kong on 22 December 2017 at 11:00 a.m. is set out on pages SGM-1 to SGM-2 of this circular. Whether or not you are able to attend, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the office of the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time of the meeting. Completion and return of the proxy form will not preclude you from attending and voting at the meeting or any adjournment thereof (as the case may be) should you so wish.

5 December 2017

CONTENTS

		Page
Definitions	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from	the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
Appendix I	— Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II	— Valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III — General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		III-1
Notice of SGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		SGM-1

– i –

DEFINITIONS

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

‘‘associate(s)’’ has the meaning ascribed to it in the Listing Rules
‘‘Board’’ the board of Directors
‘‘Business Day(s)’’ a day on which banks are open for business in Hong Kong (other than a Saturday, Sunday or a public holiday or a day on which a tropical cyclone warning No. 8 or above or a ‘‘black rainstorm warning signal’’ is hoisted or remains hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m.)
‘‘close associate(s)’’ has the meaning ascribed to it under the Listing Rules
‘‘Company’’ Man Sang International Limited, a company incorporated in Bermuda with limited liability, the Shares of which are listed on the Main Board of the Stock Exchange (stock code: 938)
‘‘Completion’’ completion of the Disposal pursuant to the terms and conditions under the Sale and Purchase Agreement
‘‘Consideration’’ the aggregate consideration payable in respect of the Sale Share and Sale Loan at an amount of RMB362.48 million (equivalent to approximately HK$427.73 million)
‘‘CPJ HK’’ China Pearls and Jewellery City Holdings Limited (中國諸暨珠寶城控股有限公司), a company incorporated in Hong Kong with limited liability, in which the Target Company is beneficially interested in 65.85% of its issued share capital
‘‘CPJ PRC’’ 諸暨華東國際珠寶城有限公司 (China Pearls and Jewellery International City Co. Ltd.*), a limited liability company established in the PRC and a direct wholly-owned subsidiary of CPJ HK
‘‘Director(s)’’ the director(s) of the Company
‘‘Disposal’’ the disposal of the Sale Share and the Sale Loan by the Vendor to the Purchaser pursuant to the terms and conditions of the Sale and Purchase Agreement
‘‘Group’’ the Company and its subsidiaries
‘‘HK$’’ Hong Kong dollar, the lawful currency of Hong Kong
for identification purpose only

– 1 –

DEFINITIONS

‘‘Hong Kong’’

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

‘‘Independent Third Party(ies)’’
any person(s) or company(ies) and their respective ultimate beneficial owner(s), to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, are third parties independent of and not connected with any directors, chief executive or substantial shareholders of the Company or its subsidiaries or any of their respective associates
‘‘Latest Practicable Date’’
1 December 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular
‘‘Listing Rules’’ the Rules Governing the Listing of Securities on the Stock Exchange
‘‘Long Stop Date’’ 28 February 2018 (or such other date as may be agreed by the Vendor and the Purchaser in writing)
‘‘PRC’’
The People’s Republic of China but excluding, for the purposes of this circular, Hong Kong, Macau Special Administrative Region and Taiwan
‘‘Purchaser’’ 諸暨市通和珠寶有限公司, a company established in the PRC with limited liability
‘‘RMB’’ Renminbi, the lawful currency of the PRC
‘‘Sale and Purchase Agreement’’
the sale and purchase agreement dated 1 November 2017 entered into between the Vendor and the Purchaser in relation to the Disposal
‘‘Sale Loan’’ all amounts owing from the Target Group to the Vendor immediately before Completion
‘‘Sale Share’’
1 Share of US$1 in the capital of the Target Company, representing the entire issued share capital of the Target Company
‘‘SFO’’ the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong)
‘‘SGM’’
the special general meeting of the Company to be convened for, among others, considering and if thought fit, approving the Sale and Purchase Agreement and the transactions contemplated thereunder

– 2 –

DEFINITIONS

‘‘Share(s)’’ share(s) of HK$0.10 each in the capital of the Company
‘‘Shareholder(s)’’ holder(s) of the Share(s)
‘‘Stock Exchange’’ The Stock Exchange of Hong Kong Limited
‘‘Target Company’’ Smartest Man Holdings Limited (俊文控股有限公司), a company incorporated in the British Virgin Islands with limited liability and an indirect wholly-owned subsidiary of the Company as at the Latest Practicable Date
‘‘Target Group’’ the Target Company and its subsidiaries
‘‘Vendor’’ Man Sang Enterprise Ltd. (民生企業有限公司), a company incorporated in the British Virgin Islands with limited liability and a direct wholly-owned subsidiary of the Company
‘‘%’’ per cent

Unless otherwise specified in this circular, the exchange rate for reference purpose in this circular are RMB1.00 to HK$1.18.

– 3 –

LETTER FROM THE BOARD

MAN SANG INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 938)

Executive Directors: Mr. Lei Hong Wai (Chairman) Ms. Cheng Ka Ki Mr. Cheung Kwok Wai, Elton Mr. Leung Alex Mr. Yuan Huixia

Independent Non-executive Directors: Mr. Lai Hok Lim Mr. Lei Seng Fat Mr. Wong Tak Chuen

Registered Office: Clarendon House 2 Church Street Hamilton HM11 Bermuda

Head Office and Principal Place of Business: Unit 1611, Shun Tak Centre West Tower, 168–200 Connaught Road Central Hong Kong

5 December 2017

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION

DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF SMARTEST MAN HOLDINGS LIMITED AND THE SALE LOAN

We refer to the Company’s announcements dated 1 November 2017 and 22 November 2017 in relation to, among other things, the Disposal.

1. INTRODUCTION

On 1 November 2017, the Board announced that, the Vendor, a direct wholly-owned subsidiary of the Company, entered into the Sale and Purchase Agreement with the Purchaser, pursuant to which the Purchaser has conditionally agreed to purchase and the Vendor has conditionally agreed to sell, the Sale Share (representing the entire issued share capital of the Target Company) together with the Sale Loan at an aggregate consideration of RMB362.48 million (equivalent to approximately HK$427.73 million).

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LETTER FROM THE BOARD

As at the Latest Practicable Date, the Company is beneficially interested in the entire issued share capital of the Target Company. Upon Completion, the Group will cease to have any interest in the Target Group.

The purpose of this circular is to provide you with, among other things, further information in relation to the Disposal and a notice of the SGM.

2. SALE AND PURCHASE AGREEMENT

The principal terms of the Sale and Purchase Agreement are summarised as follows:

Date: 1 November 2017 Parties: (a) Purchaser; and (b) Vendor

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, as at the Latest Practicable Date, the Purchaser and its ultimate beneficial owner(s) were Independent Third Parties.

Assets to be disposed of

As at the Latest Practicable Date, the Vendor was the legal and beneficial owner of the Sale Share and the Sale Loan. The Vendor has conditionally agreed to sell, and the Purchaser has conditionally agreed to purchase, the Sale Share, representing the entire issued share capital of the Target Company, and the Sale Loan.

Consideration

Pursuant to the terms of the Sale and Purchase Agreement, the Consideration for the sale and purchase of the Sales Share and the Sale Loan shall be the sum of RMB362.48 million (equivalent to approximately HK$427.73 million). The consideration for the Sale Loan is equivalent to its face value and the consideration for the Sale Share shall be the balance of the Consideration after deducting the amount for the Sale Loan. The sum of RMB362.48 million has been/shall be paid by the Purchaser to the Vendor or its nominee(s) in the following manner:

(a) a refundable deposit of RMB30 million (the ‘‘Deposit’’) which has been paid by the Purchaser after the signing of the Sale and Purchase Agreement; and
(b) as to the remaining balance (being the Consideration less the Deposit) shall be paid by the Purchaser at Completion.

The Consideration was agreed between the Vendor and the Purchaser after arm’s length negotiations with reference to the unaudited consolidated net asset value of the Target Group attributable to the Shareholders as at 31 March 2017, which has taken into consideration the fair market value of the properties held by CPJ PRC.

– 5 –

LETTER FROM THE BOARD

Conditions precedent

The sale and purchase of the Sale Share and the Sale Loan are conditional upon the satisfaction or waiver (if made in accordance with the provisions thereof) of the following:

(a) the Company having obtained the relevant approval from the Shareholders at a general meeting in accordance with the requirements of the Listing Rules for the sale and purchase of the Sale Share and the Sale Loan as contemplated by the Sale and Purchase Agreement; and
(b) there having been no material breach of the warranties as set out in the Sale and Purchase Agreement (and no fact, event or circumstance having occurred which would make the warranties as set out in the Sale and Purchase Agreement untrue, inaccurate or misleading in any material respect at Completion).

The Purchaser may at its sole discretion waive condition (b) above at any time by written notice to the Vendor. Condition (a) cannot be waived pursuant to the Sale and Purchase Agreement.

If:

(i) one or more of the above conditions remains unsatisfied as at the Long Stop Date and has not been waived on or before that date in accordance with the Sale and Purchase Agreement; or
(ii) one or more of the above conditions becomes impossible to satisfy before the Long Stop Date and, if it is a condition which can be waived by a party, has not been waived within three (3) Business Days of such condition becoming impossible to satisfy,

the Disposal, other than the terms as specified in the Sale and Purchase Agreement, shall automatically terminate with immediate effect and each of the Purchaser’s and the Vendor’s rights and obligations other than those specified above shall cease immediately on termination and thereafter none of the parties thereto shall have any obligations and liabilities towards each other thereunder save for any antecedent breaches of the terms thereof. Such termination shall not affect the rights and obligations of any party above existing before termination.

In the event that condition (a) as set out above cannot be satisfied on or before Long Stop Date, the Sale and Purchase Agreement shall lapse and the Vendor shall return the Deposit to the Purchaser without any interest. In the event that condition (a) as set out above has been satisfied but the Sale and Purchase Agreement is terminated or fails to complete which is due to default in any terms of the Sale and Purchase Agreement by the Purchaser, the Vendor is entitled to forfeit the Deposit. In the event that condition (a) as set out above has been satisfied but the Sale and Purchase Agreement is terminated or

– 6 –

LETTER FROM THE BOARD

fails to complete which is due to default in any terms of the Sale and Purchase Agreement by the Vendor, the Vendor shall repay the Deposit and an additional amount of RMB30 million to the Purchaser.

As at the Latest Practicable Date, none of the conditions as set out above had been satisfied.

Completion

Completion shall take place on the third (3rd) Business Day after condition (a) as set out above is satisfied in accordance with the Sale and Purchase Agreement, or at such other time or date and/or venue as may be agreed in writing between the Vendor and the Purchaser.

3. INFORMATION OF THE TARGET GROUP

The Target Company, an indirect wholly-owned subsidiary of the Company, is a company incorporated in the British Virgin Islands with limited liability whose principal business is investment holding.

As at the Latest Practicable Date, the Target Company was beneficially interested in 65.85% of the issued share capital of CPJ HK. CPJ HK is a company incorporated in Hong Kong with limited liability and its principal business is investment holding. CPJ HK is the holding company of CPJ PRC, which is principally engaged in the development and operation of a large-scale international pearl and jewellery trading platform and the leasing and sale of the related commercial properties located in Zhuji of Zhejiang, the PRC (the ‘‘CPJ City’’).

Set out below are the unaudited consolidated financial information of the Target Group for the two years ended 31 March 2016 and 2017 and for the six months ended 30 September 2017 prepared in accordance with Hong Kong Financial Reporting Standards:

	For the
	six months	For the	For the
	ended	year ended	year ended
	30 September	31 March	31 March
	2017	2017	2016
	HK$’000	HK$’000	HK$’000
	(Unaudited)	(Unaudited)	(Unaudited)
Revenue	23,752	60,482	175,705
Net (loss)/profit before taxation	(16,643)	(12,811)	82,870
Net (loss)/profit attributable to
the Shareholders	(5,313)	(1,074)	31,405

As at 30 September 2017, the unaudited consolidated net asset value of the Target Group attributable to the Shareholders (excluding the Sale Loan) was approximately HK$430.4 million.

– 7 –

LETTER FROM THE BOARD

Based on the valuation report prepared by Cushman & Wakefield Limited (please refer to Appendix II of this circular) in relation to CPJ City as at 30 September 2017, a fair value loss of approximately HK$31.7 million has been recorded to the unaudited consolidated management accounts of the Target Group for the six months ended 30 September 2017, reflecting that the valuation of CPJ City has decreased as at 30 September 2017 in comparison to that of 31 March 2017.

4. FINANCIAL EFFECTS OF THE DISPOSAL

After taking into account the Consideration to be received by the Vendor for the Disposal, it is estimated that an accounting gain of approximately HK$10.0 million (subject to audit) will be recorded by the Group based on the unaudited consolidated financial information of the Target Group as at 30 September 2017, representing the difference between the Consideration and the net assets value of the Target Group attributable to the Shareholders as at 30 September 2017 less the related transaction costs and tax, after consideration of reclassification of exchange reserve of the Target Group.

Based on the unaudited consolidated financial information of the Target Group as at 30 September 2017 and assuming there are no substantial changes in the assets and liabilities of the Target Group until Completion, the total assets of the Group would decrease by approximately HK$838.2 million, being the total assets of the Target Group plus transaction costs and tax arising from the Disposal minus the amount of the Consideration, and the total liabilities of the Group would be reduced by approximately HK$679.4 million, being the amount of total liabilities of the Target Group to be de-consolidated from the Group’s unaudited consolidated financial information. The difference between the estimated reductions of the Group’s total assets and total liabilities as a result of the Disposal is attributable to the non-controlling interest of the Target Group. The net asset of the Group will increase/decrease by the actual gain/loss arising from the Disposal immediately after Completion.

The business of the Group will remain the same after Completion. Upon Completion, the Vendor will cease to hold any interests in the Target Group. Accordingly, the Target Group will cease to be subsidiaries of the Company and hence its financial information will cease to be consolidated into that of the Group.

5. INFORMATION OF THE VENDOR AND THE PURCHASER

The Vendor, a direct wholly-owned subsidiary of the Company, is a company incorporated in the British Virgin Islands with limited liability whose principal business is investment holding. As at the Latest Practicable Date, the Vendor was the legal and beneficial owner of the Sale Share.

The Purchaser is a company established in the PRC with limited liability whose principal business is (i) the manufacturing, processing and distributing of pearls and jewellery products; and (ii) investment holding.

– 8 –

LETTER FROM THE BOARD

6. REASONS FOR AND BENEFITS OF THE DISPOSAL AND THE USE OF PROCEEDS

The Group is principally engaged in the development, sales and leasing of properties.

CPJ HK, a direct 65.85%-owned subsidiary of the Target Company, was incorporated in Hong Kong with limited liability on 18 January 2006. The Group through the Vendor, contributed approximately HK$129.1 million initially upon the establishment of the Target Group, and was beneficially interested in 49% of the issued share capital of CPJ HK at that time. Since then and up to the Latest Practicable Date, the Target Company has further acquired 16.85% of the issued share capital of CPJ HK through three acquisitions (the ‘‘Acquisitions’’) as detailed below:

Date	8 March 2007	29 November 2012	18 February 2014
Percentage of the	6%	7%	3.85%
issued share capital
of CPJ HK acquired
Consideration	HK$60.0 million	HK$28.4 million	HK$17.3 million
Type of transaction	Major acquisition	Discloseable and	Connected
		connected	transaction
		transaction
Vendor of the	Tiptop Sky	Grace Pearl (H.K.)	Tiptop Sky
transaction	Holdings Limited	Company Limited	Holdings Limited

Save as disclosed above, as at the Latest Practicable Date, the Group has not invested any further capital for the Target Group and hence the Group had invested approximately HK$234.8 million (the ‘‘Total Investment Cost’’) in total as the cost of acquiring the 65.85% shareholding in CPJ HK. Accordingly, the Consideration is approximately HK$192.9 million higher than the Total Investment Cost, representing a positive return of approximately 82.2% before expenses. The Board considers that the Consideration far exceeds the Total Investment Cost on the Target Group and thus the Disposal represents a good opportunity for the Group to realise the gain in its investment in the Target Group in cash.

According to a memorandum (the ‘‘Memorandum’’) signed by CPJ HK and the local government of Zhuji, PRC on 24 January 2006, upon 75% to 80% of the phase 1 of the CPJ City (‘‘Phase 1’’) has been developed, the parties involved in the Memorandum would need to commence the development of the phase 2 of the CPJ City (‘‘Phase 2’’). As stated in the interim results announcement of the Group for the six months ended 30 September 2017 published on 28 November 2017, Phase 1 has been substantially completed and the Company has been evaluating the total investment costs required for the development of Phase 2.

According to the most recent estimation made by management of CPJ PRC, the Group will need to commit approximately RMB140 million for the construction of the remaining part of Phase 1, and a further RMB1,500 million will be required for the construction of Phase 2

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LETTER FROM THE BOARD

over the next three years. Management of CPJ PRC anticipated that part of the estimated construction costs can be funded by internal resources and bank borrowings which is expected to be no more than 50% of the total construction cost based on discussion with various PRC banks, meaning the Company will need to raise additional fundings of at least RMB820 million from other sources in order to satisfy the funding requirement of the constructions.

The Directors consider that funding required for the constructions will create excessive financial burden to the Group, as the Group has already assumed considerable amount of liabilities upon the acquisition of the property project in Chongqing which was completed in July 2016 (details of which are set out in the Company’s circular dated 16 June 2016) (the ‘‘Chongqing Project’’). As at 30 September 2017, the Company recorded a loan of approximately HK$944 million and promissory notes payable of HK$778 million which are directly attributable to the acquisition of the Chongqing Project. Accordingly, the Directors are of the view that estimated costs required for the constructions of Phase 1 and Phase 2 will have significant impact on the financial position and hence the financial results of the Group in the foreseeable future. On the other hand, the proceeds from the Disposal can be used to partially repay the abovementioned liabilities, which will improve the Group’s financial position by reducing the debts and hence the associated interest expenses.

Furthermore, the Directors have noticed that property price in Chongqing has been rising recently while the property price in Zhuji has been shrinking, which can be evidenced by the fair value gain of HK$6.1 million recorded in respect of the Group’s investment properties in Chongqing during the year ended 31 March 2017, as compared with a fair value loss of HK$47.8 million (for the six months ended 30 September 2017: HK$31.7 million) recorded in respect of the Group’s investment properties in CPJ PRC during the year ended 31 March 2017. In view of the above, the Directors consider that the outlook of the property market in Chongqing is more promising than the property market in Zhuji, hence the Directors believe it would not be in the best interest of the Company and the Shareholders if the Group is to further invest in CPJ PRC.

The net proceeds from the Disposal of approximately HK$419.5 million, after taking into account the related transaction costs and tax of approximately HK$8.2 million, will be used by the Group for the general working capital, where the Group may apply them in partial repayment of the loan and/or promissory notes in relation to the Chongqing Project.

In view of the above, including the facts that (i) the Disposal represents a good opportunity for the Company to realise the gain in its investment in the Target Group in cash; (ii) the total construction costs of approximately RMB1,640 million in respect of Phase 1 and Phase 2 of the CPJ City will create significant financial burden to the Group which may impact the financial results of the Group; and (iii) the outlook of the property market in Zhuji is not as promising as the property market in Chongqing, the Directors consider that the Disposal is in the interests of the Company and the Shareholders as a whole, and the terms and conditions of the Sale and Purchase Agreement are on normal commercial terms and fair and reasonable.

– 10 –

LETTER FROM THE BOARD

7. LISTING RULES IMPLICATIONS

As all applicable percentage ratios (as defined under the Listing Rules) in respect of the Disposal exceeds 25% but all are less than 75%, the Disposal constitutes a major transaction for the Company and is therefore subject to the reporting, announcement and shareholders’ approval requirements under Chapter 14 of the Listing Rules.

8. THE SGM

The Company will convene the SGM for the Shareholders to consider and, if thought fit, approve the Sale and Purchase Agreement and the transactions contemplated thereunder. A notice convening the SGM to be held at Meeting Room (Soho 1), 6/F., ibis Hong Kong Central & Sheung Wan Hotel, No. 28 Des Voeux Road West, Sheung Wan, Hong Kong on 22 December 2017 at 11:00 a.m. is set out on pages SGM-1 to SGM-2 of this circular.

The votes of the Shareholders on the resolution for approving the Sale and Purchase Agreement and the transactions contemplated thereunder will be taken by way of poll at the SGM. Any Shareholder with a material interest in the Disposal and his close associates will abstain from voting on the relevant resolutions approving the Sale and Purchase Agreement and the transactions contemplated thereunder. To the best of the Directors’ knowledge, information and belief, and having made all reasonable enquiries, the Purchaser and its ultimate beneficial owners are Independent Third Parties. To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, no Shareholder has a material interest in the Disposal which is different from the other Shareholders. Therefore, no Shareholder is required to abstain from voting on the relevant resolutions to be proposed at the SGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

Whether or not you are able to attend, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return the same to the office of the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong as soon as possible but in any event not less than 48 hours before the time of the meeting. Completion and return of the proxy form will not preclude you from attending and voting at the meeting or any adjournment thereof (as the case may be) should you so wish.

As Completion is conditional upon fulfilment of the conditions precedent set out in the Sale and Purchase Agreement, the Disposal may or may not proceed. Shareholders and potential investors should exercise caution when dealing in securities of the Company.

9. RECOMMENDATION

The Directors consider that the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder are on normal commercial terms, 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 to be proposed at the SGM to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

– 11 –

LETTER FROM THE BOARD

10. ADDITIONAL INFORMATION

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

By Order of the Board Man Sang International Limited Leung Alex Executive Director and Company Secretary

– 12 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION

Financial information and management discussion and analysis of the Group for each of the three years ended 31 March 2015, 2016 and 2017 are respectively disclosed in (i) pages 41 to 152 and pages 12 to 15 of the annual report of the Company for the year ended 31 March 2015 respectively; (ii) pages 41 to 146 and pages 9 to 13 of the annual report of the Company for the year ended 31 March 2016 respectively; and (iii) pages 50 to 160 and pages 9 to 16 of the annual report of the Company for the year ended 31 March 2017 respectively, which were published on both the website of the Stock Exchange (http://www.hkex.com.hk) and the website of the Company (http://www.msil.com.hk). Please refer to the relevant hyperlinks as stated below:

2015 annual report:

http://www.hkexnews.hk/listedco/listconews/SEHK/2015/0603/LTN20150603681.pdf

http://www.msil.com.hk/download/2015-annual-report/

2016 annual report:

http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0613/LTN20160613304.pdf

http://www.msil.com.hk/download/2016-annual-report/

2017 annual report:

http://www.hkexnews.hk/listedco/listconews/SEHK/2017/1004/LTN20171004890.pdf

http://www.msil.com.hk/download/annual-report-2017/

2. INDEBTEDNESS STATEMENT

As at the close of business on 31 October 2017, being the latest practicable date for the purpose of this statement of indebtedness prior to printing of this circular, the Group had outstanding indebtedness of the following:

(i) Bank and other borrowings

The Group had outstanding secured and unguaranteed trustee loan (the ‘‘Trustee Loan’’) of RMB800,000,000 (equivalent to HK$944,000,000) due to a financial institution (the ‘‘Institution’’) which was secured by the Group’s investment properties under construction, property, plant and equipment, prepaid lease payments and properties under development of approximately RMB1,346,352,000 (equivalent to approximately HK$1,588,695,000), RMB429,852,000 (equivalent to approximately HK$507,225,000), RMB226,814,000 (equivalent to approximately HK$267,641,000) and RMB388,809,000 (equivalent to approximately HK$458,794,000) respectively. The Trustee Loan carried fixed interest rate of 8.1% per annum.

– I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The Group had outstanding unsecured and unguaranteed revolving loan of HK$20,000,000 due to a finance company, a subsidiary of a company listed on the Stock Exchange. Such listed company and the Company had common shareholders and executive directors. The amount carried a fixed interest rate of 8% per annum.

The Group had outstanding unsecured and unguaranteed loans of RMB61,910,000 (equivalent to approximately HK$73,054,000) due to certain independent third parties of the Group. The amount carried a fixed interest rate of 10% per annum.

The Group had outstanding unsecured loans with aggregate principal amount of RMB30,000,000 (equivalent to HK$35,400,000) due to an independent third party of the Group and guaranteed by a company beneficially owned by Mr. Tsoi Tung (‘‘Mr. Tsoi ’’), a director of an indirectly wholly-owned subsidiary of the Group. The amount carried a fixed interest rate of 12% per annum. Such unsecured loans were in default for immediate repayment with (i) daily interest rate of 0.05% charged starting from the date of the default; and (ii) the penalty charge of RMB2,000,000 (equivalent to HK$2,360,000).

(ii) Promissory notes

The Group had outstanding promissory notes with aggregate principal amount of HK$778,000,000. The principal amount and the interest accrued will be repaid at the maturity date on 28 July 2019. The promissory notes carried a fixed interest rate of 8% per annum.

(iii) Other indebtedness

The Group had outstanding indebtedness of approximately HK$86,938,000 due to its non-controlling shareholders of CPJ HK, which were unguaranteed, unsecured, noninterest bearing and repayable on demand.

The Group also had outstanding indebtedness of approximately RMB210,030,000 (equivalent to approximately HK$247,835,000) due to Mr. Tsoi and companies under his control. The amount was unguaranteed, unsecured, non-interest bearing and not repayable on or before 31 December 2018.

(iv) Contingent liabilities

The Group entered into a mortgage collaboration agreement with a PRC bank under which the Group agreed to indemnify the bank for any failure by purchasers of the Group’s properties in CPJ City to repay the borrowings or interest to the bank for the period before and up to the bank registering the certificates of real estate ownership as collateral for the borrowings.

As at 31 October 2017, the Group has maximum exposure on the guarantees of approximately RMB38,745,000, equivalent to approximately HK$45,719,000.

– I-2 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

(v) Disclaimer

Save as aforesaid or as otherwise disclosed herein, 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 other debt securities issued and outstanding, or authorised or otherwise created but unissued, and term loans (secured, unsecured, guaranteed or otherwise), bank overdrafts, loans or other similar indebtedness, liabilities under acceptance (other than normal trade bills), acceptable credits, hire purchase commitments, debentures, mortgages, charges, guarantees or other material contingent liabilities.

The Directors confirmed that there was no adverse change in the indebtedness and contingent liabilities of the Group since 31 October 2017 and up to the Latest Practicable Date.

For the purpose of the above statement of indebtedness, the foreign currency, Renminbi, has been translated into Hong Kong dollars at the approximate rate of 1:1.18 as at 31 October 2017.

3. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, save as disclosed in the annual report of the Group for the year ended 31 March 2017 and the interim results announcement for the six months ended 30 September 2017, the Directors were not aware of any material adverse change in the financial and trading position of the Group since 31 March 2017, being the date to which the latest published audited consolidated financial statements of the Group were made up.

4. WORKING CAPITAL

In determining the sufficiency of the working capital of the Group, a key factor is that the Trustee Loan will expire in June 2018 which is within twelve months from the date of this circular. After reviewing the working capital forecast prepared by the management of the Company, the Directors are aware that the Group may not have sufficient working capital to meet its present requirements for the next twelve months should the Group is unable to renew the Trustee Loan which is subject to the approval of the Institution as it expires.

The Directors understand it is a market practice that the financial institutions and commercial banks in the PRC would formally commence negotiation with existing borrowers regarding renewal of loan facilities only two to three months before the existing loan facilities expire. As at the Latest Practicable Date, the management of the Group has held preliminary discussions with the Institution in relation to the renewal of the Trustee Loan and there is no indication that the Institution is not willing to renew the Trustee Loan based on the pledged assets of the Group.

As at 31 October 2017, based on the carrying values of the pledged assets (including investment properties under construction, property, plant and equipment, prepaid lease payments and properties under development of approximately HK$1,589 million, HK$507 million, HK$268 million and HK$459 million, respectively) and the location and quality of the abovementioned pledged assets, the Directors are of the view that the Group will be able to

– I-3 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

renew the Trustee Loan of RMB800 million or obtain new loans from other banks for repaying the Trustee Loan in full upon its maturity in June 2018 for the operating requirements of the Group.

Accordingly, the Directors are of the opinion that, in the absence of unforeseeable circumstances, after taking into account the Group’s business prospects, internal resources, the present available facilities, the proceeds from the Disposal and based on the assumption of successful renewal of the Trustee Loan as set out above, the Group has sufficient working capital for its present requirements for at least next twelve months from the date of this circular.

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group focuses on the development, sales and leasing of properties in the PRC. During 2016, property sales volume and property price in small to medium cities in the PRC remained subdued and continued to be under downward adjustment pressure. The revenue generated from sales of properties of the CPJ City decreased as a result of the completion of two residential apartments and a commercial complex during the year ended 31 March 2016 (the ‘‘FY2016’’) where significant contracted sales were recognised in the FY2016 and no new property was completed in the CPJ City for the year ended 31 March 2017.

The Group has been proactively considering to expand its footprints in different regions within the PRC, especially in the provincial capital cities where the demand for residential/ commercial properties are enormous.

As announced on 12 April 2016, the Company signed a sale and purchase agreement to purchase a property located in the central business district of Chongqing, the PRC (the ‘‘Chongqing Property’’) at a consideration of HK$1,468 million and such acquisition has completed on 28 July 2016. The Chongqing Property is located in Jiefangbei (解放碑) business district of Yuzhong District and is close to Jiefangbei Walking Street, which is a pedestrian lane with numerous retail shops. Given the geographical location of Chongqing Property, the Directors consider that the Chongqing Property will benefit from the heavy pedestrian flow nearby and thus aim to develop the Chongqing Property to become a new landmark in Yuzhong District.

The Chongqing Property is in the progress of redevelopment (renovation without demolishing/altering the building structure). Upon completion of the redevelopment, the Chongqing Property will comprise residential apartments (for sale), service apartments (for lease) and retail units in a shopping mall (for lease).

As at the Latest Practicable Date, the redevelopment of the Chongqing Property was partially completed where the residential apartments has been ready for sale since March 2017. The Group has recorded revenue of HK$133.7 million and HK$22.8 million from the sale of the residential apartments for the year ended 31 March 2017 and six months ended 30 September 2017, respectively. Given the property price in Chongqing has increased since July 2016 when the Group acquired the Chongqing Property and it is anticipated the property price in Chongqing will continue to rise in the foreseeable future based on the current market trend,

– I-4 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

it is currently the Group’s business strategy to slowly and gradually offer the residential apartments for sale to the public in order to enjoy the anticipated growth in property price in Chongqing.

The remaining redevelopment is expected to be completed in 2 stages, where the service apartments (which will be managed by an international renowned hotel management group) will be made available for lease starting in the fourth quarter in 2018, while shopping mall, which represents the final phase of the redevelopment, will be ready for lease in the first quarter of 2019. The Directors estimate that revenue from the leasing of the service apartments and the shopping mall will be recorded during the year ending 31 March 2019 and will be able to generate stable rental income to the Group in the long-run.

Given (i) the prestigious location the property is erected within the central business district of Chongqing; (ii) the promising commercial and residential property market in Chongqing, the PRC; (iii) the increasing consumption power in Chongqing; and (iv) the implementation of ‘‘The Belt and Road Initiative’’ which brings development opportunities to Chongqing, the Directors expect that the Chongqing Property will create positive return to the Shareholders in the long run with the implementation of the sale and lease plan as mentioned above.

Upon Completion of the Disposal, the Group will focus on developing the properties in Chongqing as mentioned above and will also closely monitor other market opportunities to supplement its existing projects through mergers and acquisitions, so as to create greater returns for the Shareholders.

– I-5 –

VALUATION REPORT

APPENDIX II

The following is the text of a letter, summary of valuations and valuation certificates prepared for the purpose of incorporation in this Circular received from Cushman & Wakefield Limited, an independent property valuer, in connection with its opinion of market value in existing state of the Properties held by 諸暨華東國際珠寶城有限公司 (China Pearls and Jewellery International City Co. Ltd.*) (refer to as ‘‘CPJ PRC’’) in the PRC as at 30 September 2017.

==> picture [172 x 64] intentionally omitted <==

16th Floor Jardine House 1 Connaught Place Central Hong Kong

5 December 2017

The Directors Man Sang International Limited Unit 1611 Shun Tak Centre, West Tower 168–200 Connaught Road Central Hong Kong

Dear Sirs,

INSTRUCTION, PURPOSE & VALUATION DATE

In accordance with the instructions for us to carry out the valuation of the market value in existing state of the properties (the ‘‘Properties’’ and each referred to as the ‘‘Property’’) held by Man Sang International Limited (the ‘‘Company’’) and its indirectly 65.85% owned subsidiary, 諸暨華東國際珠寶城有限公司 (China Pearls and Jewellery International City Co. Ltd.*) (refer to as ‘‘CPJ PRC’’), (together the ‘‘Group’’) in the People’s Republic of China (the ‘‘PRC’’), we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we considered necessary for the purpose of providing you with our opinion of the market values in existing state of the Properties as at 30 September 2017 (the ‘‘valuation date’’).

DEFINITION OF MARKET VALUE

Our valuation of each of the Properties represent its Market Value. The definition of Market Value adopted in The HKIS Valuation Standards 2012 Edition follows the International Valuation Standards published by the International Valuation Standards Council (‘‘IVSC’’). Market Value is defined by the IVSC 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’’.

for identification purpose only

– II-1 –

VALUATION REPORT

APPENDIX II

VALUATION BASIS AND ASSUMPTIONS

Our valuations of the Properties exclude 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.

In the course of our valuations of the Properties held in the PRC, with reference to the PRC Legal opinion of the legal adviser, 浙江豐國律師事務所 (F & G LAW FIRM ZHEJIANG), we have prepared our valuation on the basis that transferable land use rights in respect of the Properties for their specific term at nominal annual land use fee has been granted and that any premium payable has already been fully paid. We have relied on the information and advice given by the Company and the PRC legal opinion of the Company’s legal adviser, dated 5 December 2017, regarding the titles to the Properties and the interests in the Properties. In valuing the Properties, we have prepared our valuations on the basis that the owners have enforceable title to the Properties and has free and uninterrupted rights to use, occupy or assign the Properties for the whole of the unexpired terms as granted.

In respect of the Properties situated in the PRC, the status of titles and grant of major certificates, approvals and licences, in accordance with the information provided by the Company, are set out in the notes in the valuation certificate.

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

METHOD OF VALUATION

In valuing the Property nos. 1 to 5 in Group I, which are held by the Group for investment/sale in the PRC; we have adopted Direct Comparison Approach by making reference to comparables sales evidence as available in the relevant market, and where appropriate, we have also valued the Properties by Investment Approach by capitalizing the rental derived from the existing tenancies with due provision of the reversionary potential of the Properties.

In valuing the Property nos. 6 to 7 of Group II, which are held by the Group for development in the PRC; we have adopted Direct Comparison Approach by making reference to comparables sales evidence as available in the relevant market.

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 on The Stock Exchange of Hong Kong Limited and The HKIS Valuation Standards 2012 Edition published by the Hong Kong Institutes of Surveyors.

– II-2 –

VALUATION REPORT

APPENDIX II

SOURCES OF INFORMATION

In the course of our valuation, we have relied to a considerable extent on the information given by the Company in respect of the Properties in the PRC and have accepted advice on such matters as planning approvals or statutory notices, easements, tenure, identification of the Properties, particulars of occupancy, tenancy details, completion date of buildings, site and floor areas and all other relevant matters.

Dimensions, measurements and areas included in the valuation certificates are based on the information provided to us and are therefore only approximations. We have had no reason to doubt the truth and accuracy of the information provided to us by the Company which is material to the valuation. We were also advised by the Company that no material facts have been omitted from the information provided.

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

TITLE INVESTIGATION

We have been provided by the Company with copies or extracts of documents in relation to the current title to the Properties. However, we have not been able to conduct searches to verify the ownership of the Properties or to ascertain any amendment which may not appear on the copies handed to us. We are also unable to ascertain the title of the Properties in the PRC and we have therefore relied on the advice given by the PRC Legal adviser and the Company. All documents have been used for reference only and all dimensions, measurements and areas are approximate.

SITE INSPECTION

Our valuers, Mr. Tom Zheng (CIREA) and Ms. Sharon Shen (CIREA), inspected the exterior and, whenever possible, the interior of the Properties in November 2017. However, no structural survey has been made, but in the course of our inspection, we did not note any serious defects. We are not, however, able to report that the Properties are free of rot, infestation or any other structural defects. No tests were carried out to any of the services. Moreover, we have not carried out investigation on site to determine the suitability of the soil conditions and the services etc. for any future development. Our valuation is prepared on the assumption that these aspects are satisfactory and that no extraordinary costs or delays will be incurred during the construction period.

Unless otherwise stated, we have not been able to carry out on-site measurements to verify the site and floor areas of the Properties and we have assumed that the area shown on the documents handed to us are correct.

– II-3 –

VALUATION REPORT

APPENDIX II

CURRENCY

Unless otherwise stated, all sums stated in our valuation are in Renminbi, the official currency of the PRC.

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

Yours faithfully, For and on behalf of

Cushman & Wakefield Limited

Philip C Y Tsang

Registered Professional Surveyor (General Practice) Registered China Real Estate Appraiser MSc, MHKIS Director

Note: Mr. Philip C Y Tsang is Registered Professional Surveyor who has over 24 years’ experience in the valuation of properties in the PRC.

– II-4 –

VALUATION REPORT

APPENDIX II

SUMMARY OF VALUATIONS

				Market Value
				in existing
		Market Value		state as at
		in existing		30 September
		state as at	The Group’s	2017
		30 September	attributable	attributable
Property		2017	interest	to the Group
		RMB	%	RMB
Group I — Properties held by the Group for		investment/sale	in the PRC
1.	Unsold units of Market Centre of	516,500,000	65.85	340,115,250
	Phase I,
	China Pearls and
	Jewellery International City (‘‘CP&J
	City’’)
	in Shanxiahu Town,
	Zhuji,
	Zhejiang Province,
	the PRC
2.	The unsold portion of apartment of	70,900,000	65.85	46,687,650
	Phase I,
	China Pearls and
	Jewellery International City
	(‘‘CP&J City’’) in Shanxiahu Town,
	Zhuji,
	Zhejiang Province,
	the PRC
3.	The unsold portion of factory buildings	59,200,000	65.85	38,983,200
	of Phase I,
	China Pearls and
	Jewellery International City
	(‘‘CP&J City’’) in Shanxiahu Town,
	Zhuji,
	Zhejiang Province,
	the PRC

– II-5 –

VALUATION REPORT

APPENDIX II

Property 4. The unsold portion of composite building of Phase I, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC 5. The unsold portion of Commercial Plaza of Phase 1, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC sub-total of Group I	Market Value in existing state as at 30 September 2017 The Group’s attributable interest RMB % 79,700,000 65.85 127,700,000 65.85 854,000,000	Market Value in existing state as at 30 September 2017 attributable to the Group RMB 52,482,450 84,090,450
		562,359,000

– II-6 –

VALUATION REPORT

APPENDIX II

SUMMARY OF VALUATIONS

Property Market Value in existing state as at 30 September 2017 The Group’s attributable interest RMB % Group II — Properties held by the Group for development in the PRC 6. The remaining vacant industrial land, with a site area of approximately 26,589.30 sq m, Phase I, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC 15,100,000 65.85 7. The remaining vacant commercial/ residential land, with a site area of approximately 18,097.23 sq m, Phase I, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC 37,200,000 65.85 sub-total of Group II: 52,300,000 Grand Total: 906,300,000	Market Value in existing state as at 30 September 2017 attributable to the Group RMB 9,943,350 24,496,200
	34,439,550
	596,798,550

Property
Market Value
in existing
state as at
30 September
2017
The Group’s
attributable
interest
RMB
%
Group II — Properties held by the Group for development in the PRC
6.
The remaining vacant industrial land,
with a site area of approximately
26,589.30 sq m,
Phase I,
China Pearls and
Jewellery International City (‘‘CP&J
City’’) in Shanxiahu Town,
Zhuji,
Zhejiang Province,
the PRC
15,100,000
65.85
7.
The remaining vacant commercial/
residential land,
with a site area of approximately
18,097.23 sq m,
Phase I,
China Pearls and
Jewellery International City
(‘‘CP&J City’’) in Shanxiahu Town,
Zhuji,
Zhejiang Province,
the PRC
37,200,000
65.85
sub-total of Group II:
52,300,000
Grand Total:
906,300,000

Market Value
in existing
state as at
30 September
2017
attributable
to the Group
RMB
9,943,350
24,496,200

34,439,550

596,798,550

– II-7 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group I — Properties held by the Group for investment/sale in the PRC

Property

Unsold units of Market Centre of Phase I, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC

Description and tenure

CP&J City has a total site area of approximately 249,519.80 sq m. A Market Centre has been erected and put into operation since 2008.

Market Centre, Phase I of CP&J City, is erected on portion of two pieces of lands with a total site area of 121,568.80 sq m.

As advised, the Property comprises 1,633 unsold retail units with a total gross floor area of approximately 72,587.62 sq m.

Particulars of occupancy

Portion of the Property with a total gross floor area of approximately 15,529.92 sq m is subject to various tenancies with the latest expiry date in July 2019 at a total monthly rent of approximately RMB1,900,000.

The remaining portion of the Property is currently vacant.

Market value in existing state as at 30 September 2017

RMB516,500,000

(65.85% interest attributable to the Group: RMB340,115,250)

The land use rights of the Property have been granted for a term due to expire on 21 August 2046 for commercial use.

– II-8 –

VALUATION REPORT

APPENDIX II

Notes:

(1) According to 2 Certificates for the Use of State-owned Land, the land use rights of the Property, comprising of a total site area of 121,568.80 sq m, have been granted to 諸暨華東國際珠寶城有限公司 (China Pearls and Jewellery International City Co. Ltd.*) (refer to as ‘‘CPJ PRC’’) with details as follows:

Certificate No. Use Expiry Date (2009)91100291 Commercial 21 August 2046 (2009)91100292 Commercial 21 August 2046 Total:	Site Area (sq m) 101,356.40 20,212.40
	121,568.80

As advised, the Property is part of the said site area.

(2) According to 73 Building Ownership Certificates, the building ownership of the Property, comprising a total gross floor area of 136,494.28 sq m, have been vested in CPJ PRC with details as follows:

Certificate No.	Use	Gross Floor Area
		(sq m)
F0000025108	Commercial	2,075.67
F0000025109	Commercial	1,961.29
F0000025110	Commercial	1,581.09
F0000025111	Commercial	1,962.74
F0000025112	Commercial	1,581.13
F0000025113	Commercial	1,962.73
F0000025114	Commercial	1,506.25
F0000025115	Commercial	1,887.86
F0000025116	Commercial	1,506.28
F0000025117	Commercial	1,887.86
F0000025118	Commercial	1,581.12
F0000025119	Commercial	2,423.10
F0000025120	Commercial	2,538.84
F0000025121	Commercial	1,849.74
F0000025777	Commercial	2,075.69
F0000025779	Commercial	1,961.29
F0000025780	Commercial	1,581.10
F0000025781	Commercial	1,962.72
F0000031324	Commercial	452.86
F0000031325	Commercial	1,128.26
F0000025782	Commercial	1,962.72
F0000031354	Commercial	1,126.99
F0000031355	Commercial	558.49
F0000031353	Commercial	85.83
F0000031356	Commercial	178.72
F0000031357	Commercial	1,790.13
F0000031359	Commercial	1,221.61
F0000031358	Commercial	284.64
F0000031360	Commercial	150.82
F0000031361	Commercial	1,643.39
F0000025122	Commercial	1,581.09
F0000025123	Commercial	1,962.72
F0000025786	Commercial	2,538.84
F0000031362	Commercial	1,293.55
F0000031363	Commercial	556.19
F0000025770	Commercial	2,075.67
F0000025771	Commercial	1,961.30

– II-9 –

APPENDIX II

VALUATION REPORT

Certificate No. Use F0000025772 Commercial F0000025773 Commercial F0000025774 Commercial F0000025775 Commercial F0000025802 Commercial F0000025778 Commercial F0000025803 Commercial F0000025776 Commercial F0000025804 Commercial F0000026086 Commercial F0000025805 Commercial F0000025806 Commercial F0000031313 Commercial F0000031314 Commercial F0000025801 Commercial F0000031322 Commercial F0000031323 Commercial F0000025759 Commercial F0000031320 Commercial F0000031321 Commercial F0000025761 Commercial F0000025762 Commercial F0000025763 Commercial F0000031318 Commercial F0000031319 Commercial F0000031317 Commercial F0000031380 Commercial F0000031315 Commercial F0000031316 Commercial F0000025767 Commercial F0000025768 Commercial F0000025769 Commercial F0000032369 Commercial F0000032372 Commercial F0000032371 Commercial F0000032370 Commercial Total:	Gross Floor Area (sq m) 1,581.13 1,962.74 1,581.11 1,962.71 1,506.25 1,887.86 1,506.25 1,887.86 1,581.12 1,797.99 2,538.83 1,849.74 780.68 1,294.99 1,961.29 1,122.99 458.10 1,962.72 1,249.26 331.85 1,962.73 1,771.29 1,887.87 1,439.96 66.31 1,822.15 65.74 1,050.08 531.04 1,962.73 2,538.83 1,849.73 9,465.83 8,578.12 5,677.95 8,578.13
	136,494.28

Certificate No.
Use
F0000025772
Commercial
F0000025773
Commercial
F0000025774
Commercial
F0000025775
Commercial
F0000025802
Commercial
F0000025778
Commercial
F0000025803
Commercial
F0000025776
Commercial
F0000025804
Commercial
F0000026086
Commercial
F0000025805
Commercial
F0000025806
Commercial
F0000031313
Commercial
F0000031314
Commercial
F0000025801
Commercial
F0000031322
Commercial
F0000031323
Commercial
F0000025759
Commercial
F0000031320
Commercial
F0000031321
Commercial
F0000025761
Commercial
F0000025762
Commercial
F0000025763
Commercial
F0000031318
Commercial
F0000031319
Commercial
F0000031317
Commercial
F0000031380
Commercial
F0000031315
Commercial
F0000031316
Commercial
F0000025767
Commercial
F0000025768
Commercial
F0000025769
Commercial
F0000032369
Commercial
F0000032372
Commercial
F0000032371
Commercial
F0000032370
Commercial
Total:

Gross Floor Area
(sq m)
1,581.13
1,962.74
1,581.11
1,962.71
1,506.25
1,887.86
1,506.25
1,887.86
1,581.12
1,797.99
2,538.83
1,849.74
780.68
1,294.99
1,961.29
1,122.99
458.10
1,962.72
1,249.26
331.85
1,962.73
1,771.29
1,887.87
1,439.96
66.31
1,822.15
65.74
1,050.08
531.04
1,962.73
2,538.83
1,849.73
9,465.83
8,578.12
5,677.95
8,578.13

136,494.28

As advised, the Property is part of the said gross floor area.

(3) According to Pre-sale Permit No. (07)009 dated 28 April 2007, CPJ PRC was permitted to pre-sale the Property with a total gross floor area of 166,436 sq m. As advised, the Property is part of the said gross floor area.
(4) According to Business Licence No. 330600400011825 dated 27 March 2015, CPJ PRC was established on 10 March 2006 with a registered capital of US$30,000,000 with a valid operation period from 10 March 2006 to 9 March 2056.

– II-10 –

VALUATION REPORT

APPENDIX II

(5) According to the PRC legal opinion:
(i) CPJ PRC, a 65.85% owned subsidiary of the Company has legally obtained valid business licence and legally established under the PRC law;
(ii) CPJ PRC has fully settled all the land premium or obtained Certificate for the Use of State-owned Land and Building Ownership Certificates;
(iii) CPJ PRC has right to use, transfer, lease and pledge the Property;
(iv) Pre-sale Permit is legally established; and
(v) The Property is not subject to any pledge.
(6) The status of the title and grant of major approvals and licenses in accordance with the information provided to us and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes Pre-sale Permit Yes Business Licence Yes

– II-11 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group I — Properties held by the Group for investment/sale in the PRC

Property

The unsold portion of apartment of Phase I, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC

Description and tenure

CP&J City has a total site area of approximately 249,519.80 sq m. Apartment #1 to #4 erected on portion of a piece of land with a site area of approximately 41,003.00 sq m.

Apartment #1 and Apartment #2 were completed in 2010 and 2012 respectively. Both Apartment #3 and #4 were completed in 2015.

Particulars of occupancy

The Property is currently vacant.

Market value in existing state as at 30 September 2017

RMB70,900,000

(65.85% interest attributable to the Group: RMB46,687,650)

As advised, the Property comprises 179 unsold apartment units with a total gross floor area of approximately 18,829.81 sq m.

The land use rights of the Property have been granted for a term due to expire on 30 October 2077 for commercial/ residential use.

– II-12 –

VALUATION REPORT

APPENDIX II

Notes:

(1) According to Certificate for the Use of State-owned Land No. (2007)91106127, the land use rights of the Property, comprising of a site area of 41,003.00 sq m, have been granted to CPJ PRC for a term due to expire on 30 October 2077 for commercial/residential use.

As advised, the Property is part of the said site area.

(2) According to 5 Building Ownership Certificates, a total gross floor area of approximately 78,360.83 sq m, have been vested in CPJ PRC with details as follows:

Certificate No. Use F0000110130 Sales Office F0000110129 Residential F0000143087 Residential and Sales Office F0000143088 Residential and Sales Office F0000061907 Residential, Basement and Sales Office Total:	Gross Floor Area (sq m) 3,671.75 17,269.47 16,595.95 17,097.31 23,726.35
	78,360.83

As advised, the Property is part of the said gross floor area.

(3) According to 4 Pre-sale Permits, CPJ PRC was permitted to pre-sale the Property with a total gross floor area of 109,941.00 sq m with details as follows:

Certificate No. Issue Date (11)041 22 August 2011 (09)005 8 January 2009 (14)001 25 April 2014 (14)002 25 April 2014 Total:	Gross Floor Area (sq m) 21,090.00 54,783.00 16,712.02 17,355.98
	109,941.00

(4) According to Business Licence No. 330600400011825 dated 27 March 2015, CPJ PRC was established on 10 March 2006 with a registered capital of US$30,000,000 with a valid operation period from 10 March 2006 to 9 March 2056.
(5) According to the PRC legal opinion:
(i) CPJ PRC, a 65.85% owned subsidiary of the Company has legally obtained valid business licence and legally established under the PRC law;
(ii) CPJ PRC has fully settled all the land premium or obtained Certificate for the Use of State-owned Land and Building Ownership Certificates;
(iii) CPJ PRC has right to use, transfer, lease and pledge the Property;
(iv) Pre-sale Permit is legally established; and
(v) The Property is not subject to any pledge.

– II-13 –

VALUATION REPORT

APPENDIX II

(6) The status of the title and grant of major approvals and licenses in accordance with the information provided to us and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes Pre-sale Permit Yes Business Licence Yes

– II-14 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group I — Properties held by the Group for investment/sale in the PRC

Property

The unsold portion of factory buildings of Phase I, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC

Description and tenure

CP&J City has a total site area of approximately 249,519.80 sq m. Factory buildings #1 to #4 comprises four 5-storey factory buildings of Phase I, CP&J City erected on a piece of land with a site area of approximately 14,214.20 sq m. Factory buildings #5 to #8 comprises four 6-storey factory buildings of Phase I, CP&J City erected on a piece of land with a site area of approximately 16,557.07 sq m. Factory buildings were completed in 2009.

Particulars of occupancy

The Property is vacant.

Market value in existing state as at 30 September 2017

RMB59,200,000

(65.85% interest attributable to the Group: RMB38,983,200)

As advised, the Property comprises 22 unsold factory units with a total gross floor area of 29,874.56 sq m.

The land use rights of the Property have been granted for a term due to expire on 30 December 2056 for industrial use.

– II-15 –

VALUATION REPORT

APPENDIX II

Notes:

(1) According to 2 Certificates for the Use of State-owned Land, the land use rights of the Property, comprising of a total site area of 26,130.07 sq m, have been granted to CPJ PRC with details as follows:

Certificate No. Use Expiry Date (2017)0011503 Industrial 30 December 2056 (2017)0017738 Industrial 30 December 2056 Total:	Site Area (sq m) 13,536.90 12,593.17
	26,130.07

As advised, the Property is part of the said site area.

(2) According to 2 Building Ownership Certificates, a total gross floor area of approximately 31,774.27 sq m, have been vested in CPJ PRC with details as follows:

Certificate No. Use (2017)0011503 Industrial (2017)0017738 Industrial Total:	Gross Floor Area (sq m) 21,591.14 10,183.13
	31,774.27

As advised, the Property is part of the said gross floor area.

(3) According to Business Licence No. 330600400011825 dated 27 March 2015, CPJ PRC was established on 10 March 2006 with a registered capital of US$30,000,000 with a valid operation period from 10 March 2006 to 9 March 2056.
(4) According to the PRC legal opinion:
(i) CPJ PRC, a 65.85% owned subsidiary of the Company has legally obtained valid business licence and legally established under the PRC law;
(ii) CPJ PRC has fully settled all the land premium or obtained Certificate for the Use of State-owned Land and Building Ownership Certificates;
(iii) CPJ PRC has right to use, transfer, lease and pledge the Property; and
(iv) The Property is not subject to any pledge.
(5) The status of the title and grant of major approvals and licenses in accordance with the information provided to us and the opinion of the PRC legal adviser:

Certificates for the Use of State-owned Land Yes Building Ownership Certificate Yes Business License Yes

– II-16 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group I — Properties held by the Group for investment/sale in the PRC

Property

The unsold portion of composite building of Phase I, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC

Description and tenure

CP&J City has a total site area of approximately 249,519.80 sq m. Composite building comprises a 12storey building of Phase I, CP&J City erected on portion of a piece of land with a site area of approximately 41,003.00 sq m. Composite building was completed in 2010.

As advised, the Property comprises 99 unsold commercial/residential units with a total gross floor area of approximately 21,235.37 sq m.

Particulars of occupancy

Portion of the Property with a total gross floor area of approximately 2,432.03 sq m is subject to various tenancies with the latest expiry date in August 2018 at a total monthly rent of approximately RMB21,000.

The remaining portion of the Property is currently vacant.

Market Value in existing state as at 30 September 2017

RMB79,700,000

(65.85% interest attributable to the Group: RMB52,482,450)

The land use rights of the Property have been granted for a term due to expire on 30 October 2077 for commercial/ residential use.

– II-17 –

VALUATION REPORT

APPENDIX II

Notes:

(1) According to Certificate for the Use of State-owned Land No. (2007)91106127, the land use rights of the Property, comprising of a site area of 41,003.00 sq m, have been granted to CPJ PRC for a term due to expire on 30 October 2077 for commercial/residential use.

As advised, the Property is part of the said site area.

(2) According to 10 Building Ownership Certificates, a total gross floor area of approximately 21,965.12 sq m, have been vested in CPJ PRC with details as follows:.

Certificate No. Use F0000070965 Composite Building F0000070966 Composite Building F0000070967 Composite Building F0000070968 Composite Building F0000070969 Composite Building F0000070970 Composite Building F0000070971 Composite Building F0000070972 Composite Building F0000070973 Composite Building F0000070974 Composite Building Total:	Gross Floor Area (sq m) 2,527.66 2,527.66 2,446.51 1,884.09 2,172.15 2,081.41 2,081.41 2,081.41 2,081.41 2,081.41
	21,965.12

As advised, the Property is part of the said gross floor area.

(3) According to Pre-sale Permit No. (09)005 dated 8 January 2009, CPJ PRC was permitted to pre-sale the Property with a total gross floor area of 54,783 sq m.

As advised, the Property is part of the said gross floor area.

(4) According to Business Licence No. 330600400011825 dated 27 March 2015, CPJ PRC was established on 10 March 2006 with a registered capital of US$30,000,000 with a valid operation period from 10 March 2006 to 9 March 2056.
(5) According to the PRC legal opinion:
(i) CPJ PRC, a 65.85% owned subsidiary of the Company has legally obtained valid business licence and legally established under the PRC law;
(ii) CPJ PRC has fully settled all the land premium or obtained Certificate for the Use of State-owned Land and Building Ownership Certificates;
(iii) CPJ PRC has right to use, transfer, lease and pledge the Property;
(iv) Pre-sale Permit is legally established; and
(v) The Property is not subject to any pledge.

– II-18 –

VALUATION REPORT

APPENDIX II

(6) The status of the title grant of major approvals and licenses in accordance with the information provided to us and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes Pre-sale Permit Yes Business Licence Yes

– II-19 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group I — Properties held by the Group for investment/sale in the PRC

Property

The unsold portion of Commercial Plaza, China Pearls and Jewellery International City (‘‘CP&J City’’) in Shanxiahu Town, Zhuji, Zhejiang Province, the PRC

Description and tenure

CP&J City has a total site area of approximately 249,519.80 sq m. Commercial Plaza comprises 3 4-storey/5storey commercial plaza of CP&J City erected on a piece of land with a site area of approximately 42,683.00 sq m. Commercial plaza was completed in 2015.

As advised, the Property comprises 172 unsold commercial units with a total gross floor area of 30,699.47 sq m.

Particulars of occupancy

Portion of the Property with a total gross floor area of approximately 7,114.90 sq m is subject to various tenancies with the latest expiry date in October 2025 at a total monthly rent of approximately RMB49,000.

The remaining portion of the Property is currently vacant.

Market Value in existing state as at 30 September 2017

RMB127,700,000

(65.85% interest attributable to the Group: RMB84,090,450)

The land use rights of the Property have been granted for a term due to expire on 20 June 2048 for commercial service use.

– II-20 –

VALUATION REPORT

APPENDIX II

Notes:

(1) According to Certificate for the Use of State-owned Land No. (2015)91100830, the land use rights of the Property, comprising of a site area of 42,683.00 sq m, have been granted to CPJ PRC for a term due to expire on 20 June 2048 for commercial service use.
(2) According to 3 Building Ownership Certificates, a total gross floor area of approximately 36,777.02 sq m, have been vested in CPJ PRC with details as follows:

Certificate No. Use F0000147666 Commercial F0000147667 Commercial F0000147668 Commercial Total:	Gross Floor Area (sq m) 20,167.48 8,304.77 8,304.77
	36,777.02

As advised, the Property is part of the said gross floor area

(3) According to Business Licence No. 330600400011825 dated 27 March 2015, CPJ PRC was established on 10 March 2006 with a registered capital of US$30,000,000 with a valid operation period from 10 March 2006 to 9 March 2056.
(4) According to to the PRC legal opinion:
(i) CPJ PRC, a 65.85% owned subsidiary of the Company has legally obtained valid business licence and legally established under the PRC law;
(ii) CPJ PRC has fully settled all the land premium or obtained Certificate for the Use of State-owned Land and Building Ownership Certificates;
(iii) CPJ PRC has right to use, transfer, lease and pledge the Property; and
(iv) The Property is not subject to any pledge.
(5) The status of the title and grant of major approvals and licenses in accordance with the information provided to us and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Building Ownership Certificate Yes Business Licence Yes

– II-21 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group II — Properties held by the Group for development in the PRC

Description and tenure

Property

The remaining vacant CP&J City has a total site industrial land, with a area of approximately site area of 249,519.80 sq m. The approximately Property comprises the 26,589.30 sq m, Phase I, remaining vacant industrial China Pearls and land of Phase I, CP&J City Jewellery International with a total site area of City (‘‘CP&J City’’) approximately 26,589.30 in Shanxiahu Town, sq m. Zhuji, Zhejiang Province, As advised, there is currently the PRC no concrete development plan for the Property.

Particulars of occupancy

The Property is currently vacant pending for development.

Market Value in existing state as at 30 September 2017

RMB15,100,000 (65.85% interest attributable to the Group: RMB9,943,350)

The land use rights of the Property have been granted for a term due to expire on 30 December 2056 for industrial use.

– II-22 –

VALUATION REPORT

APPENDIX II

Notes:

(1) According to Certificate for the Use of State-owned Land No. (2012)91101176, the land use rights of the Property, comprising of a total site area of 26,589.30 sq m, have been granted to CPJ PRC for a term due to expire on 30 December 2056 for industrial use.
(2) According to Land Use Rights Grant Contract No. (2007)150 and its Supplement Contract dated 20 June 2007:
(i) Grantee: CPJ PRC
(ii) Location: Cifeimiao Village, Xiyanglong Village, Shanxiahu Town
(iii) Site Area: 89,194 sq m
(iv) Land Premium: RMB23,596,019
(v) Plot Ratio: 1.13
(vi) Land Use Term: Due to expire on 9 March 2056
(vii) Use: Industrial
(3) According to Business Licence No. 330600400011825 dated 27 March 2015, CPJ PRC was established on 10 March 2006 with a registered capital of US$30,000,000 with a valid operation period from 10 March 2006 to 9 March 2056.
(4) According to the PRC legal opinion:
(i) CPJ PRC a 65.85% owned subsidiary of the Company has legally obtained valid business licence and legally established under the PRC law;
(ii) CPJ PRC has fully settled all the land premium and obtained Certificate for the Use of State-owned Land;
(iii) CPJ PRC has tight to use, transfer, lease and pledge the Property; and
(iv) The Property is not subject to any pledge.
(5) The status of the title and grant of major approvals and licenses in accordance with the information provided to us and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Land Use Rights Grant Contract and its Supplement Contract Yes Business Licence Yes

– II-23 –

VALUATION REPORT

APPENDIX II

VALUATION CERTIFICATE

Group II — Properties held by the Group for development in the PRC

Description and tenure

Property

The remaining vacant CP&J City has a total site commercial/residential area of approximately land, with a site area of 249,519.80 sq m. The approximately Property comprises the 18,097.23 sq m, Phase I, remaining vacant commercial/ China Pearls and residential land of Phase I, Jewellery International CP&J City with a total site City (‘‘CP&J City’’) area of approximately in Shanxiahu Town, 18,097.23 sq m. Zhuji, Zhejiang Province, As advised, there is currently the PRC no concrete development plan for the Property. The land use rights of the Property have been granted for a term due to expire on 30 October 2077 for commercial/ residential use.

Particulars of occupancy

The Property is currently vacant pending for development.

Market Value in existing state as at 30 September 2017

RMB37,200,000 (65.85% interest attributable to the Group: RMB24,496,200)

– II-24 –

VALUATION REPORT

APPENDIX II

Notes:

(1) According to Certificate for the Use of State-owned Land No. (2007)91106127, the land use rights of the Property, comprising of a site area of 41,003.00 sq m, have been granted to CPJ PRC for a land use term due to expire on 30 October 2077 for commercial/residential use. As advised, the Property is part of the said site area.
(2) According to Land Use Rights Grant Contract No. (2007)117 dated 27 September 2007:
(i) Grantee: CPJ PRC
(ii) Location: Yangzihshan, Xidoumen, Shanxiahu Town
(iii) Site Area: 42,067.9 sq m
(iv) Land Premium: RMB60,280,000
(v) Plot Ratio: ≤4.0
(vi) Land Use Term: 40 years for commercial use and 70 for residential use
(vii) Use: Commercial/residential

As advised, the Property is part of the said site area.

(3) According to Business Licence No. 330600400011825 dated 27 March 2015, CPJ PRC was established on 10 March 2006 with a registered capital of US$30,000,000 with a valid operation period from 10 March 2006 to 9 March 2056.
(4) According to the PRC legal opinion:
(i) CPJ PRC, a 65.85% owned subsidiary of the Company has legally obtained valid business licence and legally established under the PRC law;
(ii) CPJ PRC has fully settled all the land premium and obtained Certificate for the Use of State-owned Land;
(iii) CPJ PRC has right to use, transfer, lease and pledge the Property; and
(iv) The Property is not subject to any pledge.
(5) The status of the title and grant of major approvals and licenses in accordance with the information provided to us and the opinion of the PRC legal adviser:

Certificate for the Use of State-owned Land Yes Land Use Rights Grant Contract Yes Business Licence Yes

– II-25 –

GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ AND CHIEF EXECUTIVE’S INTERESTS IN SECURITIES

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

Long positions in the Shares

					Approximate
					percentage of
		Number of	Shares held as at	the Latest	the issued
			Practicable Date		share capital
Name of	Capacity/nature	Direct	Deemed	Total	of the
Director	of interest	interest	interest	interest	Company
Mr. Cheung Kwok	Interest in	—	256,038,041	256,038,041	13.43%
Wai, Elton	controlled		(Note)
	corporations
Mr. Lei Hong Wai	Interest in	—	256,038,041	256,038,041	13.43%
	controlled		(Note)
	corporations
Mr. Leung Alex	Beneficial owner	1,800,000	—	1,800,000	0.09%

Note: These Shares were directly owned by Twin Success International Limited (‘‘Twin Success’’), which is (i) 50% owned by Silver Pacific Development Limited (‘‘SP Development’’), which in turn is owned by Mr. Cheung Kwok Wai, Elton and Mr. Cheung Kwok Fan in equal shares, and (ii) 50% owned by Silver Pacific International Limited (‘‘SP International’’), which is wholly-owned by Mr. Lei Hong Wai.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executive of the Company had any interests or short positions in the shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) which, (a) were required to be notified to the Company and the Stock

– III-1 –

GENERAL INFORMATION

APPENDIX III

Exchange pursuant to provisions of Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which the Directors have taken or deemed to have under such provisions of the SFO); or (b) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (c) were required, pursuant to the Model Code to be notified to the Company and the Stock Exchange.

3. SUBSTANTIAL SHAREHOLDERS’ INTERESTS IN SECURITIES

As at the Latest Practicable Date, so far as is known to any Director, the following person (other than Directors) had interests or short positions in Shares or underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group or had any options in respect of such capital:

		Number of Shares held as at	Number of Shares held as at	Number of Shares held as at	Percentage of
		the Latest Practicable Date			the issued share
Name of	Capacity/nature		Deemed		capital of the
Shareholder	of interest	Direct interest	interest	Total interest	Company
Mr. Cheng Chung	Beneficial owner	11,773,453	368,781,655	380,555,108	19.96%
Hing	and interest in		(Note 1)
	a controlled
	corporation
Rich Men Limited	Beneficial owner	368,781,655	—	368,781,655	19.35%
		(Note 1)
Twin Success	Beneficial owner	256,038,041	—	256,038,041	13.43%
		(Note 2)
SP Development	Interest in a	—	256,038,041	256,038,041	13.43%
	controlled		(Note 2)
	corporation
SP International	Interest in a	—	256,038,041	256,038,041	13.43%
	controlled		(Note 2)
	corporation
Mr. Cheung Kwok	Interest in	—	256,038,041	256,038,041	13.43%
Wai, Elton	controlled		(Note 2)
	corporations
Mr. Lei Hong Wai	Interest in	—	256,038,041	256,038,041	13.43%
	controlled		(Note 2)
	corporations
Mr. Cheung Kwok	Interest in a	—	256,038,041	256,038,041	13.43%
Fan	controlled		(Note 2)
	corporation

– III-2 –

GENERAL INFORMATION

APPENDIX III

Notes:

These Shares were directly owned by Rich Men Limited. Mr. Cheng Chung Hing owns 100% of the issued share capital of Rich Men Limited.
These Shares were directly owned by Twin Success, which is (i) 50% owned by SP Development, which in turn is owned by Mr. Cheung Kwok Wai, Elton and Mr. Cheung Kwok Fan in equal shares, and (ii) 50% owned by SP International, which is wholly-owned by Mr. Lei Hong Wai.

Save as disclosed herein, as at the Latest Practicable Date, so far as was known to the Directors, there was no other person, other than the Directors and (in the case of the other members of the Group) other than the Company, who had an interest or short position in the Shares and underlying Shares which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or, who were, directly or indirectly, interested in 10% or more of the nominal value of any class of share capital carrying rights to vote in all circumstances at general meetings of any other member of the Group.

4. DISCLOSURE OF OTHER INTERESTS

(i) Interests in competing business

Mr. Lei Hong Wai (Chairman and executive director) and Mr. Cheung Kwok Wai (executive director) have interest in approximately 5.48% of the issued share capital of Eternity Investment Limited (stock code: 764), a company listed on the Main Board of the Stock Exchange engaging in the distribution of films, sub-licensing of film rights, sale of financial assets, property investment, money lending, design and sale of jewelry products, and sale of precious stones, through themselves and their beneficial interests in Twin Success. In addition, Mr. Lei Hong Wai is the chairman of the board of directors and an executive director of Eternity Investment Limited and Mr. Cheung Kwok Wai Elton is an executive director of Eternity Investment Limited. Therefore, Eternity Investment Limited competes with the Group’s property investment business.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or their respective close associates had an interest in any business constituting a competing business to the Group.

(ii) Interests in assets

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had been acquired, disposed of by or leased to, or which were proposed to be acquired, disposed of by or leased to, any member of the Group since 31 March 2017 (being the date to which the latest published audited accounts of the Company were made up).

(iii) Interests in contract or arrangement

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

– III-3 –

GENERAL INFORMATION

APPENDIX III

5. DIRECTORS’ SERVICE CONTRACTS

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

6. LITIGATION

As at the Latest Practicable Date, no member of the Group was engaged in any litigation or claims of material importance nor was any litigation or claims of material importance known to the Directors to be pending or threatened against any member of the Group.

7. MATERIAL CONTRACTS

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

(a) the sale and purchase agreement dated 3 February 2016 and entered into between the Vendor (a direct wholly-owned subsidiary of the Company) as the vendor, Hua Yang Global Limited as the purchaser and Mr. Cheng Chung Hing as the guarantor, pursuant to which the vendor agreed to sell and the purchaser agreed to purchase the entire issued share capital of Man Sang Jewellery Company Limited and the loan owed by Man Sang Jewellery Company Limited to the vendor at a total consideration of approximately HK$184.6 million;
(b) the sale and purchase agreement dated 8 April 2016 and entered into between the Company as the purchaser, Xinli Holdings Limited (‘‘Xinli’’) as the vendor and Ms. Wang Ming (‘‘Ms. Wang’’) as the guarantor, pursuant to which the vendor agreed to sell and the purchaser agreed to purchase the entire issued share capital of Gloryear Investments Limited and the loan owed by Gloryear Investments Limited to the vendor at a total consideration of HK$1,468 million;
(c) the deed of variation dated 19 May 2016 and entered into between the Company, Xinli and Ms. Wang in relation to the variation of the payment terms of the sale and purchase agreement dated 8 April 2016;
(d) the subscription agreement dated 7 July 2016 and entered into between the Company as the issuer, and Jin Sheng BoJi (Hong Kong) Limited and Mr. Xu Xinsheng as the subscribers, pursuant to which the Company agreed to allot and issue, and the subscribers agreed to subscribe for a total of 317,528,000 subscription Shares at the subscription price of HK$0.60 per subscription Share;

– III-4 –

GENERAL INFORMATION

APPENDIX III

(e) the subscription agreement dated 30 September 2016 and entered into between the Company as the issuer, and 上海鉑躍股權投資基金管理有限公司 as the subscriber, pursuant to which the Company agreed to allot and issue, and the subscriber agreed to subscribe for a total of 166,666,666 subscription Shares at the subscription price of HK$0.60 per subscription Share;
(f) the deed of variation dated 6 October 2016 and entered into between the Company, Xinli and Ms. Wang in relation to the variation of the terms regarding completion accounts of the sale and purchase agreement dated 8 April 2016;
(g) the sale and purchase agreement (the ‘‘Xin Feng Agreement’’) dated 2 November 2016 and entered into between the Company, Free Gain Ventures Limited as purchaser, Mr. Tsoi Tung (a connected person to the Company) as vendor and Xinli and Ms. Wang collectively as guarantors, pursuant to which the vendor agreed to sell and the purchaser agreed to purchase the entire issued share capital of Xin Feng Holding Limited and the loan owed by Xin Feng Holding Limited and its subsidiaries to the vendor at a total consideration of RMB500 million and grant of the option of the vendor to subscribe for 5% of the then issued share capital of the Company;
(h) the termination agreement dated 15 November 2016 and entered into between the Company and 上海鉑躍股權投資基金管理有限公司 pursuant to which the parties agreed to terminate the subscription agreement dated 30 September 2016 in relation to the subscription of a total of 166,666,666 subscription shares;
(i) the deed of variation dated 26 May 2017 and entered into between the Company, Free Gain Ventures Limited, Mr. Tsoi Tung, Xinli and Ms. Wang in relation to the variation of the payment terms of the Xin Feng Agreement;
(j) the deed of termination dated 14 August 2017 and entered into between the Company, Free Gain Ventures Limited, Mr. Tsoi Tung, Xinli and Ms. Wang in relation to the termination of the Xin Feng Agreement; and
(k) the Sale and Purchase Agreement.

8. EXPERTS AND CONSENTS

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

Name Qualification Cushman & Wakefield Limited Independent professional valuer 浙江豐國律師事務所 PRC legal adviser

– III-5 –

GENERAL INFORMATION

APPENDIX III

Each of the above experts has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its report and/or the reference to its name or opinion in the form and context in which they respectively appear.

As at the Latest Practicable Date, none of the experts above were beneficially interested in the share capital of any member of the Group, nor did they have any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, none of the above experts had any direct or indirect interest in any assets which had been acquired, disposed of by or leased to, or which were proposed to be acquired, disposed of by or leased to, any member of the Group since 31 March 2017 (being the date to which the latest published audited accounts of the Company were made up).

9. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be available for inspection during normal business hours at the Company’s principal place of business in Hong Kong at Unit 1611, Shun Tak Centre, West Tower, 168–200 Connaught Road Central, Hong Kong, from the date of this circular up to and including the date of the SGM:

(a) the memorandum of association and bye-laws of the Company;
(b) the material contracts as referred to in the paragraph headed ‘‘7. Material contracts’’ in this appendix;
(c) the annual reports of the Company for the two financial years ended 31 March 2016 and 31 March 2017, respectively;
(d) the interim report of the Company for the six months ended 30 September 2017;
(e) the valuation report issued by Cushman & Wakefield Limited, the text of which is set out in Appendix II to this circular;
(f) the PRC legal opinion issued by 浙江豐國律師事務所 in relation to the properties owned by CPJ PRC in connection with the Disposal;
(g) the written consent of each of the expects referred in the paragraph headed ‘‘8. Experts and consents’’ in this appendix; and
(h) this circular.

10. MISCELLANEOUS

(a) The company secretary of the Company is Mr. Leung Alex, who is a fellow member of both Hong Kong Institute of Certified Public Accountants and the CPA Australia.
(b) In the case of inconsistency, the English text of this circular shall prevail over the Chinese text.

– III-6 –

NOTICE OF SGM

MAN SANG INTERNATIONAL LIMITED

(Incorporated in Bermuda with limited liability)

(Stock Code: 938)

NOTICE IS HEREBY GIVEN that the special general meeting of Man Sang International Limited (the ‘‘Company’’) will be held at Meeting Room (Soho 1), 6/F., ibis Hong Kong Central & Sheung Wan Hotel, No. 28 Des Voeux Road West, Sheung Wan, Hong Kong on Friday, 22 December 2017 at 11:00 a.m. for the purpose of considering and, if appropriate, passing with or without modifications the following resolution as an ordinary resolution of the Company:

ORDINARY RESOLUTION

‘‘THAT:

(a) the Disposal by Man Sang Enterprise Ltd. of (i) the entire issued share capital of Smartest Man Holdings Limited; (ii) all amounts due and owing by Smartest Man Holdings Limited and its subsidiaries to the vendor (Man Sang Enterprise Ltd.) as at completion of the Disposal of Man Sang Enterprise Ltd. on terms more particularly set out in the Company’s circular dated 5 December 2017 (the ‘‘Circular’’) (a copy of the Circular marked ‘‘A’’ and initialled by the Chairman of the meeting for identification purpose has been tabled at the meeting) (the ‘‘Disposal’’) be and are hereby approved; and
(b) any one or more of the Directors be and is/are hereby authorised to do all such acts and things and execute all such documents, including under seal where applicable, as he/they may consider necessary, desirable or expedient in his/their opinion to implement and/or give effect to the Disposal.’’

By Order of the Board Man Sang International Limited Leung Alex

Executive Director and Company Secretary

Hong Kong, 5 December 2017

– SGM-1 –

NOTICE OF SGM

Notes:

(1) At the special general meeting of the Company (‘‘SGM’’), the Chairman of the SGM will put each of the above resolution to be voted by way of a poll pursuant to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.
(2) A member of the Company entitled to attend and vote at the SGM (or any adjournment thereof) is entitled to appoint another person as his/her/their proxy to attend and vote instead of him/her/them. A member who is the holder of two or more shares in the capital of the Company may appoint more than one proxy to attend and vote on the same occasion. A proxy need not be a member of the Company.
(3) To be valid, the form of proxy in the prescribed form together with the power of attorney or other authority (if any) under which it is signed or a notarially certified copy thereof, must be deposited with the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong, not less than 48 hours before time fixed for holding the SGM (or any adjournment thereof). Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the meeting convened and in such event the form of proxy shall be deemed to be revoked.
(4) The register of members of the Company will be closed from Wednesday, 20 December 2017 to Friday, 22 December 2017 (both days inclusive), for the purpose of determining shareholders’ entitlement to attend and vote at the SGM, during which period no transfer of shares will be registered. In order to qualify for attending and voting at the SGM, all transfer documents accompanied by the relevant share certificates must be lodged with the Company’s branch share registrar in Hong Kong, Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Tuesday, 19 December 2017.
(5) Where there are joint holders of any share in the Company, any one of such joint holders may vote at the SGM, either in person or by proxy, in respect of such share as if he/she/they were solely entitled thereto, but if more than one of such joint holders be present at the SGM, the vote of the senior who tenders a vote, whether in person or by proxy, shall be accepted to the exclusion of the vote(s) of other holder(s) and, for this purpose, seniority shall be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.
(6) A circular containing the particulars in connection with the disposal of the entire equity interest in Smartest Man Holdings Limited has been despatched to members of the Company.
(7) As at the date of this notice, the executive directors of the Company are Mr. Lei Hong Wai (Chairman), Ms. Cheng Ka Ki, Mr. Cheung Kwok Wai, Elton, Mr. Leung Alex and Mr. Yuan Huixia; and the independent nonexecutive directors of the Company are Mr. Lai Hok Lim, Mr. Lei Seng Fat and Mr. Wong Tak Chuen.

– SGM-2 –

AI assistant

Man Sang International Limited — Proxy Solicitation & Information Statement 2017

49578_rns_2017-12-04_650acc4b-cdb9-4641-b203-b5c9df583b92.pdf

MAN SANG INTERNATIONAL LIMITED

MAJOR TRANSACTION

DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF SMARTEST MAN HOLDINGS LIMITED

AND THE SALE LOAN

AND NOTICE OF SPECIAL GENERAL MEETING

DEFINITIONS

MAN SANG INTERNATIONAL LIMITED

MAJOR TRANSACTION

DISPOSAL OF THE ENTIRE ISSUED SHARE CAPITAL OF SMARTEST MAN HOLDINGS LIMITED AND THE SALE LOAN

1. INTRODUCTION

2. SALE AND PURCHASE AGREEMENT

Assets to be disposed of

Consideration

Conditions precedent

Completion

3. INFORMATION OF THE TARGET GROUP

4. FINANCIAL EFFECTS OF THE DISPOSAL

5. INFORMATION OF THE VENDOR AND THE PURCHASER

6. REASONS FOR AND BENEFITS OF THE DISPOSAL AND THE USE OF PROCEEDS

LETTER FROM THE BOARD

7. LISTING RULES IMPLICATIONS

8. THE SGM

9. RECOMMENDATION

10. ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION

2015 annual report:

2016 annual report:

2017 annual report:

2. INDEBTEDNESS STATEMENT

(i) Bank and other borrowings

(ii) Promissory notes

(iii) Other indebtedness

(iv) Contingent liabilities

(v) Disclaimer

3. MATERIAL ADVERSE CHANGE

4. WORKING CAPITAL

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

INSTRUCTION, PURPOSE & VALUATION DATE

DEFINITION OF MARKET VALUE

VALUATION BASIS AND ASSUMPTIONS

METHOD OF VALUATION

SOURCES OF INFORMATION

TITLE INVESTIGATION

SITE INSPECTION

CURRENCY

Cushman & Wakefield Limited

Philip C Y Tsang

SUMMARY OF VALUATIONS

SUMMARY OF VALUATIONS

VALUATION CERTIFICATE

Property

Description and tenure

VALUATION REPORT

VALUATION CERTIFICATE

Property

Description and tenure

Notes:

VALUATION CERTIFICATE

Property

Notes:

VALUATION CERTIFICATE

Property

Description and tenure

Particulars of occupancy

Notes:

VALUATION CERTIFICATE

Property

Description and tenure

Particulars of occupancy

Notes:

VALUATION CERTIFICATE

Description and tenure

Property

Notes:

VALUATION CERTIFICATE

Property

1. RESPONSIBILITY STATEMENT

Man Sang International Limited Proxy Solicitation & Information Statement 2017