Parkson Retail Group Limited — Proxy Solicitation & Information Statement 2016

Mar 23, 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect about 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 Parkson Retail Group Limited, you should at once hand this circular form to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser(s) or the transferee(s).

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

PARKSON RETAIL GROUP LIMITED 百盛商業集團有限公司

(Incorporated in Cayman Islands with limited liability)

(Stock code: 03368)

MAJOR TRANSACTION:

SUPPLEMENTAL AGREEMENT IN RELATION TO THE ACQUISITION OF THE QINGDAO SHOPPING MALL

A letter from the Board is set out on page 4 to page 13 of this circular.

* For identification purpose only

24 March 2016

CONTENTS

			Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			1
**LETTER FROM **	THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		4
APPENDIX I	–	Unaudited Pro forma Financial Information on
		the Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II	–	Valuation Report on the Qingdao Shopping Mall . . . . . .	II-1
APPENDIX III	–	General Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1

– i –

DEFINITIONS

In this circular, unless the context otherwise requires, the following terms have the following meaning:

• “2012 Announcement”

• means the announcement of the Company dated 20 December 2012 in relation to the Cooperative Agreement;

• “Above Ground Levels” means the four levels of the Qingdao Shopping Mall above ground;

• “Additional Land Premium”

• means the land premium and relevant taxes, duties and surcharges in the amount of RMB112,344,623.48 payable by the Purchaser to the Vendor for the acquisition of the title to the Commercial Portion in accordance with the Supplemental Agreement;

• “Announcement”

• means the announcement of the Company in relation to the Varied Transaction dated 25 February 2016;

• “Beijing Huadesheng”

• means Beijing Huadesheng Property Management Co., Ltd.* (北京華德盛物業管理有限公司), a company established in the PRC and an indirect wholly-owned subsidiary of the Company;

• “Board”

• means the board of Directors;

• “Commercial Portion”

• means the portion of basement floor one of the Qingdao Shopping Mall which is for commercial use;

• “Company”

• means Parkson Retail Group Limited, a company incorporated in the Cayman Islands;

• “Cooperative Agreement”

• means the cooperative agreement dated 20 December 2012 in relation to the Qingdao Shopping Mall and entered into between the Vendor and Beijing Huadesheng;

• “Directors” means the directors of the Company;

• “East Crest”

• means East Crest International Limited, a Shareholder holding 9,970,000 Shares representing approximately 0.37% of the entire issued share capital of the Company as at the date of the Supplemental Agreement;

– 1 –

DEFINITIONS

• “Group”

• means the Company and its subsidiaries;

• “Hong Kong”

• means the Hong Kong Special Administrative Region of the PRC;

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

• “LPD” or “Latest Practicable Date”

• means 18 March 2016, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained in this circular;

• “Management Rules”

• means the Management Rules on the Land Use Right of the Underground State-owned Land of the State-owned Land Resources and Housing Management Authority of Qingdao* (青島市國土資源和房屋管理局地下空間國有 建設用地使用權管理辦法);

• “Original Consideration”

• means the consideration paid under the SPA, being RMB1,422,320,000;

• “Original Transaction”

means the transactions contemplated by the SPA;

• “PRC”

• means the People’s Republic of China and, for the purposes of this circular only, excludes Hong Kong, Macau Special Administrative Region and Taiwan;

• “PRG” means PRG Corporation Limited, a controlling shareholder (as defined under the Listing Rules) holding 1,438,300,000 Shares representing approximately 53.50% of the entire issued share capital of the Company as at the date of the Supplemental Agreement;

• “Purchaser”

• means Qingdao Lion Plaza Retail Management Co., Ltd.* (青島金獅廣場商業管理有限公司), a company established in the PRC and a wholly-owned subsidiary of the Company;

• “Qingdao Shopping Mall” means the shopping complex located at No. 195, Hong Kong East Road, Laoshan District, Qingdao City, Shandong Province, PRC and acquired by the Purchaser pursuant to the SPA;

“RMB”

means Renminbi, the lawful currency of the PRC;

– 2 –

DEFINITIONS

“SFO”

• means the Securities and Futures Ordinance, Cap. 571 of the Laws of Hong Kong;

• “Shareholder(s)” means the shareholder(s) of the Company;

• “Shares”

• means shares of nominal value of HK$0.02 each in the capital of the Company;

• “SPA”

• means the sales and purchase agreement dated 29 December 2014 in relation to the Qingdao Shopping Mall and entered into between the Vendor and the Purchaser;

• “SPA Announcement”

• means the announcement of the Company dated 29 December 2014 in relation to the SPA;

• “Stock Exchange”

• means The Stock Exchange of Hong Kong Limited;

• “Supplemental Agreement”

• means the supplemental agreement dated 25 February 2016 in relation to, among other things, the Purchaser’s acquisition of the title to the Commercial Portion and entered into between the Vendor and the Purchaser;

• “Varied Transaction”

• means the Original Transaction as varied by the Supplemental Agreement;

• “Vendor”

• means Shanghai Industrial Qingdao Development Co., Ltd.* (上實發展(青島) 投資開發有限公司); and

• “%” means percentage.

• For ease of reference, the names of the PRC established companies or entities and the PRC laws and regulations have generally been included in this announcement in both Chinese and English languages and in the event of inconsistency, the Chinese language shall prevail.

– 3 –

LETTER FROM THE BOARD

PARKSON RETAIL GROUP LIMITED 百盛商業集團有限公司

(Incorporated in Cayman Islands with limited liability)

(Stock code: 03368)

Registered office:

Executive Directors: Registered office: Tan Sri Cheng Heng Jem c/o M&C Corporate Services Limited Mr. Chong Sui Hiong P.O. Box 309 Ms. Juliana Cheng San San Ugland House South Church Street Non-Executive Directors: George Town Datuk Lee Kok Leong Grand Cayman Dato’ Dr. Hou Kok Chung Cayman Islands

Independent Non-Executive Directors:

Principal place of business in Hong Kong:

Dato’ Fu Ah Kiow Room 609, 6th Floor Mr. Ko Tak Fai, Desmond Harcourt House Mr. Yau Ming Kim, Robert 39 Gloucester Road Wanchai, Hong Kong 24 March 2016

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION: SUPPLEMENTAL AGREEMENT IN RELATION TO THE ACQUISITION OF THE QINGDAO SHOPPING MALL

1. INTRODUCTION

Reference is made to the Announcement pursuant to which, among other things, it was announced that on 25 February 2016, the Purchaser, a wholly-owned subsidiary of the Company, entered into the Supplemental Agreement with the Vendor, whereby the Purchaser agreed to pay the Additional Land Premium in accordance with the terms and conditions of the Supplemental Agreement.

In the 2012 Announcement, it was disclosed, among other things, that the Vendor and Beijing Huadesheng had entered into the Cooperative Agreement in relation to acquisition of the land use right and the building ownership right to the Qingdao Shopping Mall which comprised five levels above the ground and three basement floors.

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LETTER FROM THE BOARD

In the SPA Announcement, it was disclosed, among other things, that:

• (a) the Company had established a new wholly-owned subsidiary, namely the Purchaser, to take over the role of purchaser of the Qingdao Shopping Mall from Beijing Huadesheng;

• (b) the Vendor and the Purchaser entered into the SPA in respect of the Original Transaction whereby the Purchaser would acquire the Qingdao Shopping Mall at the Original Consideration; and

• (c) the Original Transaction would constitute a discloseable transaction of the Company.

At the time of the entering into of the Cooperative Agreement and the SPA, the laws and regulations of the PRC applicable to the Qingdao Shopping Mall did not provide for mandatory registration of titles to properties which were situated underground. Accordingly and following the then prevailing market practice, the Vendor had not paid the land premium for the Commercial Portion and therefore the title to the Commercial Portion had not been registered.

In January 2015, the Qingdao government implemented the Management Rules which set out, among other things, the procedures and requirements for registration of titles to properties situated underground and the mandatory payment of land premium to the government for those underground properties which were used for commercial purposes.

In light of the implementation of the Management Rules, the Vendor and the Purchaser entered into the Supplemental Agreement to provide for, among other things, the Purchaser’s acquisition of the title to the Commercial Portion and payment of the Additional Land Premium.

The purpose of this circular is to provide you with further information on the Varied Transaction.

2. THE SUPPLEMENTAL AGREEMENT

The principal terms of the Supplemental Agreement are summarised below:

(a) Date

25 February 2016.

(b) Parties

The Purchaser and the Vendor.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, the Vendor and its ultimate beneficial owners are third parties independent of, and not connected with, the Company and its connected persons (as defined under the Listing Rules).

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LETTER FROM THE BOARD

(c) Assets to be acquired by the Group

The title to the Commercial Portion.

(d) Additional Land Premium

The amount of the Additional Land Premium is RMB112,344,623, comprising (i) an amount of RMB91,903,462 representing the land premium calculated in accordance with the Management Rules and (ii) an amount of RMB20,441,161 representing the taxes, stamp duties and surcharges arising from payment of land premium under the applicable PRC laws and regulations. Set out below is further information on the calculation of the Additional Land Premium:

Land Premium

As advised by the Purchaser’s PRC legal advisers, under the Management Rules: (i) the land premium payable per square metre for the basement level one of a building is calculated as one-third of the land premium payable per square metre for the levels above ground; and (ii) such land premium payable per square metre for the levels above ground is first evaluated by an independent property valuer and then approved and accepted for filing by the relevant PRC governmental authority.

The land premium payable per square metre for the Commercial Portion calculated in accordance with the Management Rules is approximately RMB3,192, being one-third of the land premium payable per square metre for the Above Ground Levels as filed with the relevant PRC governmental authority. According to the applicable PRC laws and regulations, the amount of the Additional Land Premium is required to be calculated on the basis of the Commercial Portion having an area of approximately 28,795 square meters. Accordingly, the amount of the land premium is approximately RMB91,903,462. However, the final registered area is subject to the calculation of the relevant PRC governmental authorities.

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LETTER FROM THE BOARD

Taxes

The total taxes, stamp duties and surcharges payable for the Commercial Portion in the aggregate amount of RMB20,441,161 comprises various taxes calculated in accordance with the applicable PRC laws and regulations, the calculation of which is set out in the table below:

Tax type Tax rate (%) Amount of tax (RMB)

1. Taxes and surcharges incurred upon title registration by the Vendor (“Tax Category 1”)[(Note][1)]

Deed tax	3	2,757,104
Stamp duty	0.05	45,952
2. _Taxes and surcharges incurred upon transfer of title from the _		Vendor to
the Purchaser (“Tax Category 2”)(Note 2)
Business tax	5	5,617,231
Land appreciation tax	5	5,617,231
Corporate income tax	5	5,617,231
Stamp duty	0.05	56,172
Educational and city development surcharge	0.65	730,240
Total taxes/surcharges(Note 3)		20,441,161

Notes:

1. The amount of taxes and surcharges payable under this category is calculated using the following formula:

(Prescribed tax rate under Tax Category 1) x land premium payable for Commercial Portion

1. The amount of taxes and surcharges payable under this category is calculated using the following formula:

(Land premium payable for Commercial Portion + Amount payable under Tax Category 1) Prescribed tax rate under x 1-(Sum of tax rates for taxes and surcharges payable Tax Category 2 under Tax Category 2 (%))

1. Total taxes/surcharges is derived by adding up the amounts payable under Tax Category 1 and Tax Category 2.

In accordance with the Supplemental Agreement, the Purchaser has already paid the Additional Land Premium, which was funded by the internal resources of the Group, to the Vendor within one working day after the signing of the Supplemental Agreement.

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LETTER FROM THE BOARD

(e) Material obligations of the Vendor

• (i) As confirmed by the Vendor, it has already paid the Additional Land Premium in accordance with legal documents entered into between the Vendor and the relevant PRC governmental authorities as contemplated by the Supplemental Agreement.

• (ii) The Vendor shall transfer the title to the Above Ground Levels and the Commercial Portion to the Purchaser before 31 May 2016.

(f) Coming into effect of the Supplemental Agreement

The Supplemental Agreement shall come into effect after the Vendor and the Purchaser have obtained, among other things, the relevant approvals under the applicable laws and regulations. As at the date of the Supplemental Agreement, both the Vendor and the Purchaser have obtained the approvals contemplated by the Supplemental Agreement and accordingly, the Supplemental Agreement has come into effect. As to the shareholders’ approval of the Purchaser, please refer to the paragraph headed “8. Implications under the Listing Rules” below for more details.

3. INFORMATION ON THE QINGDAO SHOPPING MALL

The Qingdao Shopping Mall is located in Laoshan District of Qingdao City and is part of a fully integrated commercial development project known as Beer City Project undertaken by the Vendor. According to the Cooperative Agreement and as disclosed in the 2012 Announcement and the SPA Announcement, the Qingdao Shopping Mall was estimated to have a site area of approximately 45,714 square metres. In 2013, the Vendor registered the title to the Qingdao Shopping Mall individually and the actual area registered was 50,213.7 square metres. Accordingly, the actual site area of the Qingdao Shopping Mall acquired by the Purchaser pursuant to the SPA was 50,213.7 square metres.

Based on the original plan, the Qingdao Shopping Mall had a total planned gross floor area of approximately 216,000 square metres, of which approximately 131,000 square metres is for retail use and the balance of 85,000 square metres is for ancillary use and for an estimated 2,000 car parking lots. In 2013, the Purchaser changed the building specifications such that the above ground levels of the Qingdao Shopping Mall were reduced from five to four, with a total gross floor area of approximately 228,600 square metres, of which approximately 123,200 square metres is for retail use and the balance of 105,400 square metres is for ancillary use and for an estimated 2,000 car parking lots. The Purchaser proposed the change in specifications after taking into account, among other things, the construction costs, the expected shopping leisure, the overall planning of the operation of the Qingdao Shopping Mall and the applicable building work standard and concluded that four levels were more cost effective and could produce more commercial benefits as compared to five levels.

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LETTER FROM THE BOARD

The building and construction of the Qingdao Shopping Mall was completed in December 2015 and, based on the information available to the Company as at the LPD, it is expected that the Qingdao Shopping Mall will be opened for business in April 2016. The Group intends to use (i) approximately 25% of the lettable area for the Group’s businesses, including a department store, a supermarket and its food and beverage businesses; and (ii) approximately 75% of the lettable area for leasing out to third parties. As at the LPD, binding agreements in relation to the occupation of the Qingdao Shopping Mall, representing approximately 95% of the lettable area, have already been entered into.

The book value of the Qingdao Shopping Mall was RMB1,422,320,000 as at 31 December 2015.

4. INFORMATION ON THE GROUP AND THE VENDOR

The principal activities of the Group are the operation and management of a network of department stores in the PRC. The Purchaser is a wholly-owned subsidiary of the Company whose scope of business includes, among other things, general merchandise, cosmetics and property management.

The Vendor is a company established in the PRC whose scope of business includes, among other things, property development and property management.

5. FINANCIAL AND TRADING PROSPECTS FOR THE FINANCIAL YEAR ENDING 31 DECEMBER 2016

As disclosed in the Company’s results announcement for the financial year ended 31 December 2015 dated 23 February 2016, 2015 was a particularly difficult year for most retailers in China, including the Company which recorded a decline of 6.9% in gross sales proceeds. Nevertheless, the Company, being a seasoned retailer and having had a business presence in China for over 20 years, is confident that it will be able to overcome the current economic challenges faced.

The Company had various new business ventures in 2015, which included, among others: (i) forming a joint venture with Korea’s E.Land Group in Shanghai and launching China’s first Korean city lifestyle mall, the Parkson Newcore Citymall, which aims to bring Korean lifestyle experiences to Chinese consumers through a range of brands, food and beverage (“ F&B ”) and leisure services with Korean elements; (ii) forming a strategic partnership with AUM Hospitality to develop F&B business in China; (iii) entering into four master franchise agreements with renowned F&B brand owners; and (iv) expanding its brands and merchandise range by bringing into China international brands as well as launching new private labels.

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LETTER FROM THE BOARD

As the Chinese market matures, the Group expects ever-increasing demand for good quality merchandise and lifestyle products from consumers. Whilst market headwinds are likely to remain strong in 2016, the Group believes that retail in China remains one of the most promising global business opportunities. China already has around 300 million middle-class consumers and that figure is expected to reach 500 million within a decade. The growing purchasing power of the Chinese middle class will fuel future growth for the retail segment and rapid urbanisation will create needs for quality retail businesses in lower tier cities.

In order to strengthen the Group’s existing strategies and to shelter against market headwinds whilst being prepared for the future market, the Group will continue to enhance its three key strategic pillars:

• retail format and network optimisation;

• product and service offerings enhancement; and

• cross-platform customer engagement.

The Group will continue to surprise the industry with retail formats that are new and innovative. New sub-brands with different market positioning under the Parkson brand name will be launched in selected stores to strengthen our brand image in each market segment.

Following detailed monitoring of individual store’s performance, the Group will convert a number of stores to the Elite, Parkson and Centro brands based on their respective target customers. Standalone specialty stores will be launched for departments that can crystallise the Group’s strength into financial prospects, for example, supermarket stores. In 2016, the Group will mark a significant milestone for the Group’s venture into shopping malls with the launch of the Qingdao Shopping Mall scheduled for April 2016. In addition, the Group will further cultivate product and service offerings in 2016. Having paved the way for the Group’s enriched lifestyle portfolio and F&B, the Group will focus on fine-tuning operational efficiency and increasing sales of new business ventures to drive better financial performance.

In parallel, the Group places utmost importance on customer engagement and will continue to build its proprietary customer engagement model to create cross-platform connections across the Parkson business. The Group is working with experts and partners to research on customer tastes and media preferences in different demographics. The Group will also leverage its wide customer base to develop cutting-edge solutions. Parkson will continue cooperation with mobile carriers and online payment providers to offer more mobile payment options. This will not only enhance customer convenience, but also lower payment costs for the Group.

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LETTER FROM THE BOARD

6. SIGNIFICANT FINANCIAL EFFECTS OF THE ACQUISITION OF THE COMMERCIAL PORTION ON THE GROUP

Assets and liabilities

Based on the pro forma financial information on the Group as set out in Appendix I to this circular (the “ Pro Forma Financial Information ”), the pro forma consolidated assets of the Group as at 31 December 2015 would remain the same at approximately RMB13,225,551,000 and the pro forma consolidated total liabilities of the Group as at 31 December 2015 would remain the same at approximately RMB8,186,237,000 after the acquisition of the Commercial Portion, assuming that the acquisition had taken place on 31 December 2015.

Earnings

For illustrative purpose only, assuming that the acquisition of the Commercial Portion was completed on 31 December 2015, the Directors expect that there will be no material financial impact on the unaudited pro forma profits attributable to the Shareholders for the six months period ended 30 June 2016 and the basic and diluted earnings per share for the six months period ending 30 June 2016 will remain unchanged, since the amortisation and related income from the Commercial Portion would only be recorded after the commencement of operation of the Qingdao Shopping Mall.

Gearing

As at 31 December 2015, the Group had total assets of approximately RMB13,225,551,000, total debt of approximately RMB4,017,375,000 and total equity of approximately RMB5,039,314,000. With reference to the Pro forma Financial Information, assuming that the acquisition of the Commercial Portion had taken place on 31 December 2015, there would be no change to the Group’s total assets, total debt and total equity immediately upon completion. As such, the Group’s gearing ratio (total debt/total assets) of 30.4% as at 31 December 2015 would remain the same before and after the acquisition of the Commercial Portion.

7. REASONS AND BENEFITS FOR ENTERING INTO THE VARIED TRANSACTION

As disclosed in the SPA Announcement, the SPA was entered into to formalise an option provided under the Cooperative Agreement whereby the Vendor would continue to build and deliver a completed Qingdao Shopping Mall to the Purchaser based on the building specifications provided by the Purchaser. At the time the Cooperative Agreement and the SPA were respectively entered into, the laws and regulations of the PRC applicable to the Qingdao Shopping Mall did not provide for mandatory registration of titles to properties which were situated underground. Accordingly, the Cooperative Agreement and the SPA were entered into on the understanding that registration of title would be effected only for the levels of the Qingdao Shopping Mall which were above ground and the Original Consideration was also

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LETTER FROM THE BOARD

determined based on this understanding. As a result of the implementation of the Management Rules in January 2015, payment of the Additional Land Premium became mandatory and, procedurally, such payment must be completed before the registration of title to the Above Ground Levels can be completed. Accordingly, if the Additional Land Premium is not paid, the registration of titles to both the Commercial Portion and the Above Ground Levels will not be accepted by the relevant PRC governmental authority. As such, the Vendor and the Purchaser entered into the Supplemental Agreement to provide for the payment of the Additional Land Premium by the Purchaser and the registration of title to the Commercial Portion, in addition to the titles to the Above Ground Levels, by the Vendor. As disclosed in the section headed “2. The Supplemental Agreement – (e) Material obligations of the Vendor” in this circular, the Additional Land Premium has already been paid by the Vendor to the relevant PRC governmental authorities.

Pursuant to the Cooperative Agreement, the Vendor had already delivered to the Purchaser (i) the non-Commercial Portion of the first basement floor of the Qingdao Shopping Mall, which will be used as car parks and ancillary purposes; and (ii) the second and third basement floors of the Qingdao Shopping Mall, which will be used as car parks and ancillary purposes. As advised by the Purchaser’s PRC legal advisers, since the Management Rules do not specifically provide for the procedures in relation to the registration of title for the basement levels of a building for non-commercial use, no title can be registered for the properties referred to in (i) and (ii) above (the “ Remaining Basement Floors ”). Nevertheless, the Purchaser has the right to use, occupy and is entitled to the revenue generated from the Remaining Basement Floors, but cannot dispose of or otherwise create any encumbrance over the Remaining Basement Floors. If and when title can be registered for the Remaining Basement Floors in the future, it is expected that the Purchaser shall be the party responsible for such registration and the related costs incurred, the amount of which is not presently known, shall be borne by the Purchaser.

Having taken into account the above reasons and benefits, the Directors (including all the independent non-executive Directors) consider that the terms of the Varied Transaction to be fair and reasonable and in the interests of the Company and the Shareholders as a whole.

8. IMPLICATIONS UNDER LISTING RULES

As the applicable percentage ratios in respect of the Varied Transaction, after taking into account both the Original Consideration and the Additional Land Premium (i.e. an aggregate of RMB1,534,664,623.48), exceed 25% but are less than 100%, the Varied Transaction constituted a major transaction for the Company under Chapter 14 of the Listing Rules and is subject to the notification, announcement and the shareholders’ approval requirements under the Listing Rules. However, as no Shareholder is required to abstain from voting if the Company were to convene a general meeting for approving the Varied Transaction and a closely allied group of Shareholders, who were interested in an aggregate of 1,448,270,000 Shares representing approximately 53.86% of the issued share capital of the Company as at the date of the Supplemental Agreement (being 2,688,523,750 Shares) having the right to attend and vote at any general meeting of the Company, has given its written approval of the Varied

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LETTER FROM THE BOARD

Transaction, the written approval of the aforementioned group of Shareholders has been accepted in lieu of holding a general meeting pursuant to Rule 14.44 of the Listing Rules. The aforesaid group of Shareholders comprised (i) East Crest (holding 9,970,000 Shares representing approximately 0.37% of the entire issued share capital of the Company as at the date of the Supplemental Agreement) and (ii) PRG (holding 1,438,300,000 Shares representing approximately 53.49% of the entire issued share capital of the Company as at the date of the Supplemental Agreement). As at the date of the Supplemental Agreement and as at the LPD, both East Crest and PRG were ultimately and wholly owned by Parkson Holdings Berhad, which was in turn held by Tan Sri Cheng Heng Jem, an executive Director, together with his spouse directly and through a series of controlled corporations, as to 60.96% and 61.52%, respectively.

9. VOTING RECOMMENDATION

Should a general meeting of the Company is required to be held for the Shareholders to consider and, if thought fit, approve the Varied Transaction, the Directors are of the opinion that, having considered the factors and reasons set out in the paragraph headed “7. Reasons and Benefits for entering into the Varied Transaction”, the Varied Transaction is in the interests of the Group and the Shareholders as a whole and that the terms of the Varied Transaction are fair and reasonable so far as the Group and the Shareholders are concerned. The Board would recommend the Shareholders to vote in favour of the resolution approving Varied Transaction should a general meeting of the Company is required to be held to approve the Varied Transaction.

10. ADDITIONAL INFORMATION

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

Yours faithfully,

For and on behalf of the board of directors of

Parkson Retail Group Limited Tan Sri Cheng Heng Jem Executive Director & Chairman

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UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

(A) UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

(i) Basis of preparation of the unaudited pro forma financial information of the Group

To provide additional financial information, the unaudited pro forma statement of assets and liabilities (the “Unaudited Pro Forma Financial Information”) of the Company and its subsidiaries (the “Group”) as at 31 December 2015 has been prepared based on:

• (a) pursuant to the Company’s announcement dated on 25 February 2016, the Group entered into a supplemental agreement with Shanghai Industrial Qingdao Development Co., Ltd (上實發展(青島)投資開發有限公司), to provide for, among other things, the Group’s acquisition of the title to the commercial portion of the first basement floor of the Qingdao Shopping Mall (the “Acquisition”), which is for commercial use, and payment of land premium and related taxes, duties and surcharges in the amount of RMB112,344,623.48.

• (b) the historical information about the Group’s financial position as at 31 December 2015 has been extracted by the Directors from the Group’s audited consolidated financial statement for the year ended 31 December 2015, on which an audit report has been issued; and

• (c) after taking into account the unaudited pro forma adjustments as described in the notes thereto to demonstrate how the Acquisition might have affected the historical financial information in respect of the Group as if the Acquisition had been completed on 31 December 2015.

The Unaudited Pro Forma Financial Information of the Group is for illustrative purpose only, and because of its hypothetical nature, it may not give a true picture of the financial position of the Group as of 31 December 2015 or at any future date.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

(ii) Unaudited Pro Forma Financial Information

Note NON-CURRENT ASSETS Property, plant and equipment 1 Investment properties Prepaid land lease payments Intangible assets Investment in a joint venture Investment in associates Other assets Deferred tax assets Total non-current assets CURRENT ASSETS Inventories Trade receivables Prepayments, deposits and other receivables Dividend receivables Investments in principal guaranteed deposits Time deposits Cash and cash equivalents 1 Total current assets CURRENT LIABILITIES Trade payables Customers’ deposits, other payables and accruals Interest-bearing bank loans Tax payable Total current liabilities NET CURRENT ASSETS TOTAL ASSETS LESS CURRENT LIABILITIES NON-CURRENT LIABILITIES Bonds Interest-bearing bank loans Long term payables Deferred tax liabilities Total non-current liabilities Net assets	At 31 December 2015 Unaudited Pro Forma Adjustment RMB’000 RMB’000 5,151,089 112,345 23,546 – 434,436 – 2,224,708 – 29,056 – 55,389 – 404,146 – 281,958 – 8,604,328 390,770 – 61,130 – 794,828 – 21,122 – 2,075,120 – 297,354 – 980,899 (112,345) 4,621,223 1,494,092 – 1,604,341 – 644,186 – 45,434 – 3,788,053 833,170 9,437,498 3,227,112 – 146,077 – 744,576 – 280,419 – 4,398,184 5,039,314	Total after Adjustment RMB’000 5,263,434 23,546 434,436 2,224,708 29,056 55,389 404,146 281,958
		8,716,673
		390,770 61,130 794,828 21,122 2,075,120 297,354 868,554
		4,508,878
		1,494,092 1,604,341 644,186 45,434
		3,788,053
		720,825
		9,437,498
		3,227,112 146,077 744,576 280,419
		4,398,184
		5,039,314

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UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

(iii) Note to the Unaudited Pro Forma Financial Information

• (1) Total costs of the Acquisition are as follows:

Consideration of land premium Related cost directly attributable to the Acquisition	RMB’000 91,904 20,441
	112,345

The Directors confirm that the basis used in the preparation of the Unaudited Pro Forma Financial Information is consistent with the accounting policies of the Group, and the accounting policies and the principal assumptions will be consistently adopted in the first set of the financial statements of the Company after the completion.

– I-3 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

The following is the text of a report received from our reporting accountants, Ernst & Young, Certified Public Accountants, Hong Kong, prepared for the purposes of incorporation in this circular, in respect of the additional unaudited pro forma financial information of the Group.

22/F CITIC Tower 1 Tim Mei Avenue Central, Hong Kong 24 March 2016

To the Directors of Parkson Retail Group Limited

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Parkson Retail Group Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) by the directors of the Company (the “Directors”) for illustrative purposes only. The unaudited pro forma financial information of the Group consists of the pro forma consolidated statement of assets and liabilities as at 31 December 2015 and related notes as set out on pages I-1 to I-3 of the circular dated 24 March 2016 (the “Circular”) issued by the Company (the “Unaudited Pro Forma Financial Information”). The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described in Appendix I to the Circular.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the proposed acquisition (hereinafter referred to as the “Acquisition”) by the Group to acquire the title to the commercial portion of the first basement floor of Qingdao Shopping Mall on the Group’s financial position as at 31 December 2015 as if the transaction had taken place on 31 December 2015. As part of this process, information about the Group’s financial position has been extracted by the Directors from the Group’s audited consolidated financial statements for the year ended 31 December 2015, on which an audit report has been issued.

Directors’ responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with reference to Accounting Guideline 7 (“AG7”) “Preparation of the Unaudited Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

Reporting Accountant’s responsibilities

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

– I-4 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountant comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether the Directors have compiled the Unaudited Pro Forma Financial Information, in accordance with paragraph 4.29 of the Listing Rules and with reference to AG7 “Preparation of Unaudited Pro Forma Financial Information for Inclusion in Investment Circulars” issued by HKICPA.

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

The purpose of Unaudited Pro Forma Financial Information included in this Circular is solely to illustrate the impact of the Acquisitions on unadjusted financial information of the Group as if the event or the transaction had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction at 31 December 2015 would have been as presented.

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

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

• the Unaudited Pro Forma Financial Information reflects the proper application of those adjustments to the unadjusted financial information.

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the Group, the event or transaction in respect of which the Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma Financial Information.

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

– I-5 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION ON THE GROUP

APPENDIX I

Opinion

In our opinion:

• (a) the Unaudited Pro Forma Financial Information has been properly compiled on the basis stated;

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

• (c) the adjustments are appropriate for the purpose of the Unaudited Pro Forma Financial Information as disclosed pursuant to paragraph 4.29(1) of the Listing Rules.

Yours faithfully, Ernst & Young Certified Public Accountants Hong Kong

– I-6 –

VALUATION REPORT ON THE QINGDAO SHOPPING MALL

APPENDIX II

The following is the text of a letter and a valuation certificate, prepared for the purpose of incorporation in this circular received from Vigers Appraisal and Consulting Limited, an independent valuer, in connection with its valuation as at 31 December 2015 of the Qingdao Shopping Mall.

Vigers Appraisal & Consulting Limited International Assets Appraisal Consultants

10th Floor, The Grande Building 398 Kwun Tong Road Kowloon Hong Kong

==> picture [84 x 81] intentionally omitted <==

24 March 2016

The Board of Directors Parkson Retail Group Limited 5th Floor, Metro Plaza, 555 Loushanguan Road, Shanghai 200051, China

Dear Sirs,

In accordance with the instructions of Parkson Retail Group Limited (the “Company”) for us to value the property interest in the People’s Republic of China (“the PRC”), we confirm that we have carried out an inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of the market value of such property interest as at 31 December 2015 (“valuation date”) for the purpose of incorporation in the circular.

Our valuation is our opinion of the market value of the property interest which we would define market value as intended to mean “the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

In valuing property, we have assessed the value of the property by adopting the direct comparison approach and made reference to the recent transactions for similar premises in the proximity. Adjustments have been made for the differences in transaction dates, building age, floor area etc. between the comparable properties and the subject property. We have also adopted the term and reversion approach by taking into account the current rent passing of the property interest and the reversionary potential of the tenancies.

– II-1 –

VALUATION REPORT ON THE QINGDAO SHOPPING MALL

APPENDIX II

We have not caused title searches to be made for the property interest at the relevant government bureau in the PRC. We have been provided with certain extracts of title documents relating to the property interest. However, we have not inspected the original documents to verify the ownership, encumbrances or the existence of any subsequent amendments which may not appear on the copies handed to us. In undertaking our valuation for the property interest, we have relied on the legal opinion (the “PRC legal opinion”) provided by Qingdao Lion Plaza Retail Management Co., Ltd’s PRC legal adviser, Shandong Qindao Law Firm.

We have relied to a considerable extent on information provided by the Company and have accepted advice given to us by the Company on such matters as planning approvals or statutory notices, easements, tenure, occupation, lettings, site and floor areas and in the identification of the property and other relevant matter. We have also been advised by the Company that no material facts had been concealed or omitted in the information provided to us. All documents have been used for reference only.

All dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us by the Company and are approximations only. No on-site measurement has been taken. We have inspected the exterior and, where possible, the interior of the properties. However, we have not carried out a structural survey nor have we inspected woodwork or other parts of the structures which are covered, unexposed or inaccessible and we are therefore unable to report that any such parts of the property are free from defect. No tests were carried out on any of the services.

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

Our valuation is prepared in accordance with the HKIS Valuation Standards (2012 Edition) published by The Hong Kong Institute of Surveyors (HKIS) and the requirements set out in Chapter 5 and Practice Note 12 to the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited.

Unless otherwise stated, all money amounts stated are in Renminbi (RMB). The exchange rate used in valuing the property interest in the PRC as at 31 December 2015 was HK$1=RMB0.838. There has been no significant fluctuation in the exchange rate for Renminbi against Hong Kong Dollars (HK$) between that date and the date of this letter.

– II-2 –

VALUATION REPORT ON THE QINGDAO SHOPPING MALL

APPENDIX II

We enclose herewith the valuation certificate.

Yours faithfully, For and on behalf of Vigers Appraisal & Consulting Limited Raymond Ho Kai Kwong Registered Professional Surveyor (GP) MRICS MHKIS MSc(e-com) China Real Estate Appraiser Managing Director

• Note : Mr. Raymond Ho Kai Kwong, Chartered Surveyor, MRICS MHKIS MSc(e-com), has over twenty nine years’ experiences in undertaking valuations of properties in Hong Kong and has over twenty one years’ experiences in valuations of properties in the PRC.

– II-3 –

VALUATION REPORT ON THE QINGDAO SHOPPING MALL

APPENDIX II

VALUATION CERTIFICATE

Property Description and Tenure

Particulars of occupancy

Market Value in existing state as at 31 December 2015

Qingdao The property comprises the whole Shopping Mall of Qingdao Shopping mall which located at has 4 retail levels and 3 basement No. 195 levels erected on a parcel of land Hong Kong with a site area of approximately East Road, 50,213 square metres. The property Laoshan District, was completed in December 2015. Qingdao City, Shandong Province, The total gross floor area of the the PRC property is approximately 228,622 sq.m. of which approximately 123,268 sq.m. for retail uses and approximately 105,354 sq.m. for ancillary uses and car parking uses.

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

RMB1,800,000,000

(equivalent to As per the tenancy schedule approximately provided, a portion of the HK$2,148,000,000) property was let and subject to various tenancy agreements (Please refer to for different terms with the Note 7 ) latest lease expiring in April 2031. The total monthly rent of the first year of the tenancy agreements is approximately RMB6,290,000 exclusive of turnover rent and property management fees.

As per the property information provided by the Company, the area breakdown of the gross floor area for sale of the retail portion of the property is stated as below:

Level B1 1 2 3 4 Total	Approximate Gross Floor Area for sale of the retail portion of the property (sq.m.) 28,110 18,864 26,687 27,948 21,659
	123,268

The property is held with the land use rights for a term expiring on 5 December 2050 for commercial, wholesale and retail uses.

Notes:

1. Pursuant to a Real Estate Ownership Certificate (Document No.: Qing Fang Di Quan Shi Zi No. 2013118644), the land use rights of the property were granted to Shanghai Industrial Qingdao Development Co. Ltd. “ 上 實發展(青島) 投資開發有限公司” with a site area of approximately 50,213 sq.m. for a term expiring on 5 December 2050 for commercial, wholesale and retail uses.

2. According to a Planning Permit for Construction Land (Document No.: De Zi No. 37 0200201005001) issued by Qingdao Planning Bureau” 青島市規劃局”on 22 January 2010, the construction site of a parcel of land with a site area of approximately 227,674.7 sq.m. is in compliance with the urban construction requirements.

– II-4 –

VALUATION REPORT ON THE QINGDAO SHOPPING MALL

APPENDIX II

1. According to a Planning Permit for Construction Works (Document No.: Jian Zi No. 37 0200201305033) issued by Qingdao Planning Bureau on 30 December 2013, the construction works of Qingdao Shopping Mall are in compliance with the urban construction requirements and are approved.

2. According to a Permit for Commencement of Construction Works (Document No.: Qing Lao Jian Shi Zi No. 14021) issued by the Construction bureau of Qingdao “ 青島市城鄉建設委員會”on 28 April 2014, the construction works of Qingdao Shopping Mall with a total gross floor area of approximately 228,622 sq.m. are in compliance with the requirements for works commencement and are approved.

3. According to a Sales and Purchase Agreement entered into between Shanghai Industrial Qingdao Development Co. Ltd. (“Shanghai Industrial Qingdao”) (Party A) and Qingdao Lion Plaza Retail Management Co., Ltd. (“Qingdao Lion Plaza”)” 青島金獅廣場商業管理有限公司”(Party B) dated 29 December 2014, the 4-level shopping mall with a total gross floor area of approximately 95,510 sq.m. of the property was granted from Party A to Party B at a consideration of RMB1,422,320,000.

4. According to a Supplementary Agreement entered into between Shanghai Industrial Qingdao (Party A) and Qingdao Lion Plaza (Party B) dated 25 February 2016, the 4-level shopping mall with the retail portion of the basement 1 of the property was granted from Party A to Party B at an additional consideration of RMB112,344,623.

5. The remaining areas of gross floor area of approximately 105,354 sq.m. are for ancillary uses and car parking uses and have not obtained the Building Ownership Certificate. Therefore, the remaining areas cannot be separately freely transferrable in the market. We have ascribed no commercial value to the remaining areas of the property.

6. In the course of our valuation, we have made the following assumptions:

7. (i) the property has obtained the relevant title documents and whether as a whole or on a strata-title basis, is freely transferable together with the residual term of its land use rights to any third party (both overseas and domestic) in the open market at no extra land use rights grant premium and other onerous charges payable to the government authorities;

8. (ii) the property is free from any mortgage, legal charges, order and other encumbrances which may cause adverse effects on the ownership of the property; and

9. (iii) regarding the development proposal, design, layout plans and correspondence provided by the Company stated in this report, including, inter alia, the uses, terms, site areas and the gross floor areas of property, etc., should there exist any variation and difference with that stated in the title documents issued by relevant government authorities, we reserve our rights to amend the whole or any part of the contents/valuation of this report.

10. The PRC legal opinion states, inter alia, the following:

11. (i) The construction of Qingdao Shopping Mall complies with the requirements of laws and regulations and government departments. The quality of construction of Qingdao Shopping Mall is lawful and acceptable;

12. (ii) Shanghai Industrial Qingdao has obtained building ownership rights of Qingdao Shopping Mall upon completion and Shanghai Industrial Qingdao also has a right to freely transfer the building ownership rights of Qingdao Shopping Mall under the related Real Estate Ownership Certificate;

13. (iii) According to a “Confirmation of Vacant Possession” entered into between Shanghai Industrial Qingdao and Qingdao Lion Plaza dated 25 December 2015, Qingdao Shopping Mall was delivered to Qingdao Lion Plaza. Although Qingdao Lion Plaza has not completed the transfer of real estate ownership registration of Qingdao Shopping Mall, Qingdao Lion Plaza may be regarded as the owner of Qingdao Shopping Mall after Qingdao Lion Plaza has taken vacant possession of Qingdao Shopping Mall and Qingdao Lion Plaza may exercise the related rights of Qingdao Shopping Mall;

– II-5 –

VALUATION REPORT ON THE QINGDAO SHOPPING MALL

APPENDIX II

• (iv) The procedure of obtaining the land use right of the retail portion of the basement 1 is still processing currently. Qingdao Lion Plaza would obtain the land use right from Shanghai Industrial Qingdao after Shanghai Industrial Qingdao has completed the registration of the land use right of the retail portion of the basement 1. However, it is still unable to apply for the rights transfer registration for the non-retail portion of 3 basement levels. As a result, Qingdao Lion Plaza cannot apply for the land use right and building rights registration of the non-retail portion of the 3 basement levels. Therefore, the non-retail portion of the basement levels cannot be separately freely transferrable in the market; and

• (v) Since Qingdao Lion Plaza has not yet completed the transfer registration of real estate rights, Qingdao Lion Plaza cannot exercise the transfer and the mortgage of Qingdao Shopping Mall. Therefore, Qingdao Lion Plaza can only exercise the real estate right of Qingdao Shopping Mall after completion of the registration of real estate right of Qingdao Shopping Mall.

• The status of title and grant of major approvals and permits in accordance with the PRC legal opinion and information provided by Qingdao Lion Plaza are as follows:

(i)	Real Estate Ownership Certificate	Yes
(ii)	Planning Permit for Construction Land	Yes
(iii)	Planning Permit for Construction Works	Yes
(iv)	Permit for Commencement of Construction Works	Yes

1. Qingdao Lion Plaza is a wholly-owned subsidiary of the Company.

2. The property was inspected by Ms. Carol Liu, China Real Estate Appraiser, on 28 January 2016.

– II-6 –

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 Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief the information contained in this circular is accurate and complete in all material respects and not misleading or deceptive, and there are no other matters the omission of which would make any statement herein or this document misleading.

2. INTERESTS OF DIRECTORS

(a) Interests in securities

As at the Latest Practicable Date, the interests and short positions of the Directors and the 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: (i) were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions in which they were deemed or taken to have under such provisions of the SFO); or (ii) were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii) were required, pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers under the Listing Rules, to be notified to the Company and the Stock Exchange were as follows:

i. Long positions of Tan Sri Cheng Heng Jem in the share capital of the Company:

				Approximate
	Name of	Name of	Number and	percentage of
Nature of interest	registered owner	beneficial owner	class of securities	shareholding
Corporate interest	PRG	PRG	1,438,300,000	53.49%
			ordinary shares
Corporate interest	East Crest	East Crest	9,970,000	0.37%
			ordinary shares

• Note: Tan Sri Cheng Heng Jem, together with his spouse Puan Sri Chan Chau Ha alias Chan Chow Har, through their interest and a series of companies in which they have a substantial interest, are entitled to exercise or control the exercise of more than one-third of the voting power at the general meetings of PHB. Since PHB is entitled to exercise or control the exercise of 100% of the voting power at the general meeting of PRG through East Crest, pursuant to the SFO, he is deemed to be interested in both the 1,438,300,000 Shares held by PRG and the 9,970,000 Shares held by East Crest.

– III-1 –

GENERAL INFORMATION

APPENDIX III

• ii. Long positions of Tan Sri Cheng Heng Jem in the share capital of the Company’s associated corporations (as defined in the SFO)

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
Parkson	Beneficial	Tan Sri Cheng Heng	Tan Sri Cheng Heng	654,709,795	61.52%
Holdings	interest and	Jem together with	Jem together with	ordinary
Berhad	corporate	his spouse Chan	his spouse Chan	shares
(“PHB”)	interest	Chau Ha @ Chan	Chau Ha @ Chan
		Chow Har directly,	Chow Har directly,
		and through a	and through a
		series of controlled	series of controlled
		corporations	corporations
East Crest	Corporate	PHB	PHB	1 ordinary	100%
	interest			share
Puncak Pelita	Corporate	PHB	PHB	2 ordinary	100%
Sdn Bhd	interest			shares
Parkson	Corporate	PHB	PHB	2 ordinary	100%
Properties	interest			shares
Holdings
Co., Ltd.
Parkson	Corporate	PHB	PHB	2 ordinary	100%
Vietnam	interest			shares
Investment
Holdings
Co., Ltd.
Prime Yield	Corporate	PHB	PHB	1 ordinary	100%
Holdings	interest			share
Limited
Corporate Code	Corporate	PHB	PHB	2 ordinary	100%
Sdn Bhd	interest			shares
PRG	Corporate	East Crest	East Crest	1 ordinary	100%
	interest			share
Smart Spectrum	Corporate	East Crest	East Crest	1 ordinary	100%
Limited	interest			share
Park Avenue	Corporate	East Crest	East Crest	250,002	100%
Fashion Sdn.	interest			ordinary
Bhd.				shares

– III-2 –

APPENDIX III

GENERAL INFORMATION

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
Serbadagang	Corporate	East Crest	East Crest	2 ordinary	100%
Holdings	interest			shares
Sdn. Bhd.
Parkson Retail	Beneficial	Tan Sri Cheng Heng	Tan Sri Cheng Heng	500,000	68.03%
Asia Limited	interest	Jem	Jem	ordinary	(in aggregate)
				shares
	Corporate	East Crest	East Crest	457,933,300
	interest			ordinary
				shares
Parkson	Corporate	Parkson Properties	Parkson Properties	2 ordinary	100%
Properties	interest	Holdings	Holdings	shares
NDT		Co., Ltd.	Co., Ltd.
(Emperor)
Co., Ltd.
Parkson	Corporate	Parkson Properties	Parkson Properties	1 ordinary	100%
Properties	interest	Holdings	Holdings	share
Hanoi		Co., Ltd.	Co., Ltd.
Co., Ltd.
Parkson HCMC	Corporate	Parkson Vietnam	Parkson Vietnam	2 ordinary	100%
Holdings	interest	Investment	Investment	shares
Co., Ltd.		Holdings	Holdings
		Co., Ltd.	Co., Ltd.
Parkson	Corporate	Parkson Vietnam	Parkson Vietnam	2 ordinary	100%
HaiPhong	interest	Investment	Investment	shares
Holdings		Holdings	Holdings
Co., Ltd.		Co., Ltd.	Co., Ltd.
Parkson TSN	Corporate	Parkson Vietnam	Parkson Vietnam	2 ordinary	100%
Holdings	interest	Investment	Investment	shares
Co., Ltd.		Holdings	Holdings
		Co., Ltd.	Co., Ltd.
Dyna Puncak	Corporate	Prime Yield Holdings	Prime Yield Holdings	2 ordinary	100%
Sdn Bhd	Interest	Limited	Limited	shares
Gema Binari	Corporate	Prime Yield Holdings	Prime Yield Holdings	2 ordinary	100%
Sdn. Bhd.	interest	Limited	Limited	shares
Prestasi Serimas	Corporate	Prime Yield Holdings	Prime Yield Holdings	2,000,000	100%
Sdn Bhd	interest	Limited	Limited	ordinary
				shares

– III-3 –

GENERAL INFORMATION

APPENDIX III

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
Parkson Credit	Corporate	Prime Yield Holdings	Prime Yield Holdings	2 ordinary	100%
Holdings Sdn	interest	Limited	Limited	shares
Bhd
AUM	Corporate	Prime Yield Holdings	Prime Yield Holdings	60,000	60%
Hospitality	interest	Limited	Limited	ordinary
Sdn Bhd				shares
Dalian Tianhe	Corporate	Serbadagang	Serbadagang	60,000,000	60%
Parkson	interest	Holdings	Holdings	registered
Shopping		Sdn. Bhd.	Sdn. Bhd	capital (RMB)
Centre
Co., Ltd.
Centro Retail	Corporate	Parkson Retail Asia	Parkson Retail Asia	2 ordinary	100%
Pte Ltd.	interest	Limited	Limited	shares
PT. Tozy	Corporate	Parkson Retail Asia	Parkson Retail Asia	45,000	100%
Sentosa	interest	Limited	Limited	ordinary	(in aggregate)
				shares
		Centro Retail	Centro Retail	5,000 ordinary
		Pte Ltd.	Pte Ltd.	shares
Parkson	Corporate	Parkson Retail Asia	Parkson Retail Asia	50,000,002	100%
Corporation	interest	Limited	Limited	ordinary
Sdn. Bhd.				shares
Parkson	Corporate	Parkson Retail Asia	Parkson Retail Asia	1 ordinary	100%
Myanmar	Interest	Limited	Limited	share
Co., Pte. Ltd.
Parkson HBT	Corporate	Parkson TSN	Parkson TSN	2,100,000	100%
Properties	interest	Holdings	Holdings	capital (USD)
Co., Ltd.		Co., Ltd.	Co., Ltd.
Idaman Erajuta	Corporate	Dyna Puncak	Dyna Puncak	2 ordinary	100%
Sdn. Bhd.	Interest	Sdn Bhd	Sdn Bhd	shares
Magna Rimbun	Corporate	Dyna Puncak	Dyna Puncak	2 ordinary	100%
Sdn Bhd	Interest	Sdn Bhd	Sdn Bhd	shares
True Excel	Corporate	Dyna Puncak	Dyna Puncak	1 ordinary	100%
Investments	Interest	Sdn Bhd	Sdn Bhd	share
Limited

– III-4 –

GENERAL INFORMATION

APPENDIX III

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
Parkson	Corporate	Gema Binari	Gema Binari	7,000,000	100%
Branding	Interest	Sdn. Bhd.	Sdn. Bhd.	ordinary
Sdn Bhd				shares
Giftmate	Corporate	Gema Binari	Gema Binari	120,000	60%
Sdn Bhd	Interest	Sdn. Bhd.	Sdn. Bhd.	ordinary
				shares
Parkson Credit	Corporate	Parkson Credit	Parkson Credit	30,000,000	100%
Sdn Bhd	Interest	Holdings	Holdings	ordinary
		Sdn Bhd	Sdn Bhd	shares
Entity A	Corporate	AUM Hospitality Sdn	AUM Hospitality Sdn	2,000,000	100%
Concepts	Interest	Bhd	Bhd	ordinary
Sdn Bhd				shares
Entity B	Corporate	AUM Hospitality Sdn	AUM Hospitality Sdn	400,000	100%
Management	Interest	Bhd	Bhd	ordinary
Sdn Bhd				shares
F&B Essentials	Corporate	AUM Hospitality Sdn	AUM Hospitality Sdn	100,000	100%
Sdn Bhd	Interest	Bhd	Bhd	ordinary
				shares
Fantastic Red	Corporate	AUM Hospitality Sdn	AUM Hospitality Sdn	75,000	75%
Sdn Bhd	Interest	Bhd	Bhd	ordinary
				shares
AUM Asiatic	Corporate	AUM Hospitality Sdn	AUM Hospitality Sdn	187,500	75%
Restaurants	Interest	Bhd	Bhd	ordinary
Sdn Bhd				shares
Entity C Sdn	Corporate	AUM Hospitality Sdn	AUM Hospitality Sdn	100,000	100%
Bhd	Interest	Bhd	Bhd	ordinary
				shares
Parkson SGN	Corporate	Parkson Corporation	Parkson Corporation	4,500,000	100%
Co., Ltd.	Interest	Sdn. Bhd.	Sdn. Bhd.	capital (USD)
Parkson	Corporate	Parkson Corporation	Parkson Corporation	1 ordinary	100%
Cambodia	interest	Sdn. Bhd.	Sdn. Bhd.	share
Holdings
Co., Ltd.
Kiara Innovasi	Corporate	Parkson Corporation	Parkson Corporation	3,000,000	60%
Sdn. Bhd.	Interest	Sdn. Bhd.	Sdn. Bhd.	ordinary
				shares

– III-5 –

APPENDIX III

GENERAL INFORMATION

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
Parkson Online	Corporate	Parkson Corporation	Parkson Corporation	2,600,000	100%
Sdn Bhd	interest	Sdn. Bhd.	Sdn. Bhd.	ordinary
				shares
Parkson	Corporate	Parkson Corporation	Parkson Corporation	30,000,920	100%
Haiphong	interest	Sdn. Bhd.	Sdn. Bhd.	capital (USD)
Co., Ltd.
Parkson Trading	Corporate	Parkson Corporation	Parkson Corporation	300,000	100%
(Vietnam)	interest	Sdn. Bhd.	Sdn. Bhd.	capital (USD)
Company
Limited
Solid Gatelink	Corporate	Parkson Corporation	Parkson Corporation	2 ordinary	100%
Sdn. Bhd.	interest	Sdn. Bhd.	Sdn. Bhd.	shares
Parkson	Corporate	Parkson Corporation	Parkson Corporation	10,340,000	100%
Vietnam	interest	Sdn. Bhd.	Sdn. Bhd.	capital (USD)
Co., Ltd.
Parkson	Corporate	Parkson Myanmar	Parkson Myanmar	2,100,000	70%
Myanmar	Interest	Co. Pte Ltd.	Co. Pte Ltd.	ordinary
Investment				shares
Company
Pte Ltd.
Festival City	Corporate	Idaman Erajuta Sdn.	Idaman Erajuta Sdn.	500,000	100%
Sdn. Bhd.	Interest	Bhd.	Bhd.	ordinary
				shares
Megan Mastika	Corporate	Magna Rimbun Sdn	Magna Rimbun Sdn	300,000	100%
Sdn Bhd.	Interest	Bhd	Bhd	ordinary
				shares
True Excel	Corporate	True Excel	True Excel	1,000 ordinary	100%
Investments	Interest	Investments	Investments	shares
(Cambodia)		Limited	Limited
Co., Ltd.
Parkson Fashion	Corporate	Parkson Branding	Parkson Branding	5,000,000	100%
Sdn Bhd	Interest	Sdn Bhd	Sdn Bhd	ordinary
				shares
Parkson	Corporate	Parkson Branding	Parkson Branding	300,000	100%
Branding (L)	Interest	Sdn Bhd	Sdn Bhd	ordinary
Limited				shares

– III-6 –

GENERAL INFORMATION

APPENDIX III

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
Business Spirit	Corporate	Entity A Concepts	Entity A Concepts	2 ordinary	100%
Sdn Bhd	Interest	Sdn Bhd	Sdn Bhd	shares
J Rockets 1	Corporate	Entity A Concepts	Entity A Concepts	350,000	100%
Sdn Bhd	Interest	Sdn Bhd	Sdn Bhd	ordinary
				shares
Massive	Corporate	Entity A Concepts	Entity A Concepts	300,000	100%
Privilege Sdn	Interest	Sdn Bhd	Sdn Bhd	ordinary
Bhd				shares
Urban Palette	Corporate	Entity A Concepts	Entity A Concepts	720,000	90%
Sdn Bhd	Interest	Sdn Bhd	Sdn Bhd	ordinary
				shares
The Opera	Corporate	Entity A Concepts	Entity A Concepts	2,250,000	90%
Gastroclub	Interest	Sdn Bhd	Sdn Bhd	ordinary
Sdn Bhd				shares
Genuine	Corporate	AUM Asiatic	AUM Asiatic	1,000,000	100%
Resources	Interest	Restaurants	Restaurants	ordinary
Sdn Bhd		Sdn Bhd	Sdn Bhd	shares
Alunan Omega	Corporate	AUM Asiatic	AUM Asiatic	300,000	100%
Sdn Bhd	Interest	Restaurants	Restaurants	ordinary
		Sdn Bhd	Sdn Bhd	shares
Ombrello	Corporate	Entity C Sdn Bhd	Entity C Sdn Bhd	100 ordinary	100%
Resources	Interest			shares
Sdn Bhd
Collective	Corporate	Entity C Sdn Bhd	Entity C Sdn Bhd	300,000	60%
Entity	Interest			ordinary
Sdn Bhd				shares
Vertigo Dot My	Corporate	Entity C Sdn Bhd	Entity C Sdn Bhd	60,000	60%
Sdn Bhd	Interest			ordinary
				shares
Parkson	Corporate	Parkson Cambodia	Parkson Cambodia	1,000 ordinary	100%
(Cambodia)	interest	Holdings	Holdings	shares
Co., Ltd.		Co. Ltd.	Co. Ltd.

– III-7 –

GENERAL INFORMATION

APPENDIX III

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
Parkson	Corporate	Parkson Vietnam Co.	Parkson Vietnam Co.	100,000	100%
Vietnam	Interest	Ltd.	Ltd.	capital (USD)
Management
Services
Co., Ltd.
Parkson	Corporate	Parkson Myanmar	Parkson Myanmar	30,000	100%
Myanmar	Interest	Investment	Investment	ordinary
Asia Pte. Ltd.		Company	Company	shares (USD)
		Pte. Ltd.	Pte. Ltd.	1 ordinary
				share (SGD)
Myanmar	Corporate	Parkson Myanmar	Parkson Myanmar	270,000	100%
Parkson	Interest	Investment	Investment	ordinary	(in aggregate)
Company		Company	Company	shares
Limited		Pte. Ltd.	Pte. Ltd.
		Parkson Myanmar	Parkson Myanmar	30,000
		Asia Pte. Ltd.	Asia Pte. Ltd.	ordinary
				shares
Ohla Restaurant	Corporate	Vertigo Dot My Sdn	Vertigo Dot My Sdn	100 ordinary	100%
Sdn Bhd	Interest	Bhd	Bhd	shares
Providence Club	Corporate	Vertigo Dot My Sdn	Vertigo Dot My Sdn	500,000	100%
KL Sdn Bhd	Interest	Bhd	Bhd	ordinary
				shares
Parkson	Corporate	Parkson Corporation	Parkson Corporation	700,000	70%
Edutainment	Interest	Sdn Bhd	Sdn Bhd	ordinary
World Sdn				shares
Bhd
Super Gem	Corporate	Parkson Corporation	Parkson Corporation	700,000	70%
Resources	Interest	Sdn Bhd	Sdn Bhd	ordinary
Sdn Bhd				shares
Parkson	Corporate	Parkson Corporation	Parkson Corporation	5,000,000	100%
Lifestyle	Interest	Sdn Bhd	Sdn Bhd	ordinary
Sdn Bhd				shares
Parkson Trends	Corporate	Parkson Corporation	Parkson Corporation	2 ordinary	100%
Sdn Bhd	Interest	Sdn Bhd	Sdn Bhd	shares
(formerly
known as
Orient
Greentech
Sdn Bhd)

– III-8 –

GENERAL INFORMATION

APPENDIX III

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
Dimensi	Corporate	Megan Mastika Sdn	Megan Mastika Sdn	300,000	100%
Andaman	Interest	Bhd	Bhd	ordinary
Sdn Bhd				shares
				53,719,999
				redeemable
				convertible
				cumulative
				preference
				shares
Parkson	Corporate	Parkson Corporation	Parkson Corporation	1,000,000	100%
Unlimited	Interest	Sdn Bhd	Sdn Bhd	ordinary
Beauty Sdn				shares
Bhd
Perfect Gatelink	Corporate	Parkson Corporation	Parkson Corporation	2 ordinary	100%
Sdn Bhd	Interest	Sdn Bhd	Sdn Bhd	shares

• iii. Short positions of Tan Sri Cheng Heng Jem in the share capital of the Company’s associated corporations (as defined in the SFO):

Name of				Number and	Approximate
associated	Nature of	Name of	Name of	class of	percentage of
corporation	interest	registered owner	beneficial owner	securities	shareholding
PHB	Corporate	Tan Sri Cheng Heng	Tan Sri Cheng Heng	40,000,142	3.75%
	interest	Jem together with	Jem together with	ordinary
		his spouse Chan	his spouse Chan	shares
		Chau Ha @ Chan	Chau Ha @ Chan
		Chow Har directly,	Chow Har directly,
		and through a	and through a
		series of controlled	series of controlled
		corporations	corporations

iv. Long positions of Chong Sui Hiong in the share capital of the Company

		Number and	Approximate
Nature of		class of	percentage of
interest	Subject matter	securities	shareholding
Beneficial interest	N/A	20,000	Less than 0.01%
		ordinary shares
Beneficial interest	Option to subscribe	375,000	Less than 0.02%
	for shares (note)	ordinary shares

• Note: Offer was made on 27 November 2012 pursuant to the share option scheme adopted on 9 November 2005.

– III-9 –

GENERAL INFORMATION

APPENDIX III

v. Long positions of Ko Tak Fai, Desmond in the share capital of the Company:

		Number and	Approximate
Nature of		class of	percentage of
interest	Subject matter	securities	shareholding
Beneficial interest	Option to subscribe	75,000	Less than 0.01%
	for shares (note)	ordinary share

• Note: Offer was made on 27 November 2012 pursuant to the share option scheme adopted on 9 November 2005.

vi. Long positions of Yau Ming Kim, Robert in the share capital of the Company:

		Number and	Approximate
Nature of		class of	percentage of
interest	Subject matter	securities	shareholding
Beneficial interest	Option to subscribe	75,000	Less than 0.01%
	for shares (note)	ordinary shares

• Note: Offer was made on 27 November 2012 pursuant to the share option scheme adopted on 9 November 2005.

vii. Long positions of Juliana Cheng San San in the share capital of the Company:

		Number and	Approximate
Nature of		class of	percentage of
interest	Subject matter	securities	shareholding
Beneficial interest	Option to subscribe	375,000	Less than 0.02%
	for shares (note)	ordinary shares

• Note: Offer was made on 27 November 2012 pursuant to the share option scheme adopted on 9 November 2005.

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

(b) Other interests

• (i) As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any asset which had been acquired, or disposed of by, or leased to any member of the Group, or was proposed to be acquired, or disposed of by, or leased to any member of the Group since 31 December 2015, the date to which the latest published audited financial statements of the Group were made up.

– III-10 –

GENERAL INFORMATION

APPENDIX III

• (ii) As at the Latest Practicable Date, no contracts of significance to which the Company, its holding company, subsidiaries or fellow subsidiaries was a party and in which a Director had a material interest, whether directly or indirectly, except for the following connected transactions in which Tan Sri Cheng Heng Jem, an executive Director, had a material interest through the Connected Persons as listed in the table below:

Type of contract	Connected Persons	Nature of the contracts
Deed of Non-	PHB	PHB grant to the Company a call
competition		option on PHB’s interest in
		their retail businesses in the
		PRC and an undertaking not to
		compete with the business of
		the Group in the PRC (details
		are set out in page 61 of the
		Company’s annual report for
		the financial year ended 31
		December 2014).
Trademark license	Smart Spectrum	Smart Spectrum Limited (a
agreement	Limited (novated by	wholly-owned subsidiary of
	Parkson Corporation	PHB) grant to Shanghai Lion
	Sdn. Bhd.)	Investment (an indirect wholly-
		owned subsidiary of the
		Company) an exclusive license
		to use certain trademarks,
		including the “Parkson” and
		“Xtra” trademarks (details are
		set out in page 61 of the
		Company’s annual report for
		the financial year ended 31
		December 2014).
Joint Venture	AUM Hospitality Sdn.	The Company has through a
Agreement	Bhd. (AUMH”),	wholly-owned subsidiary,
(“JV Agreement”)	which is 60% held	Grand Parkson, entered into a
	by a wholly-owned	JV Agreement with AUMH to
	subsidiary of PHB	establish a JV company for the
		purposes of developing its food
		and beverage business in China
		(details are set out in the
		announcement of the Company
		dated 26 January 2015).

– III-11 –

GENERAL INFORMATION

APPENDIX III

3. INTERESTS OF SUBSTANTIAL SHAREHOLDERS

As at the Latest Practicable Date, so far as was known to any Director or the chief executive of the Company, the following persons (other than any Director or the chief executive of the Company) had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of part XV of the SFO, 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:

			Percentage of
Name of		Number of	shareholding
shareholder	Nature of interest	shares	(direct or indirect)
PHB	Corporate interest	1,448,270,000	53.86%
		(Note 2)
Puan Sri Chan Chau	Interest of spouse	1,448,270,000	53.86%
Ha alias Chan		(Note 2)
Chow Har
PRG Corporation	Beneficial interest	1,438,300,000	53.49%
		(Note 3)
Wang Hung Roger	Beneficial interest,	266,826,000	9.92%
	and Trustee	(Note 4)
Wang Hsu Vivine H	Interest of spouse and	266,826,000	9.92%
	beneficiary of a Trust	(Note 5)
GEICO Holdings	Corporate interest	256,546,846	9.54%
Limited		(Note 6)
Golden Eagle	Beneficial interest	256,546,846	9.54%
International Retail		(Note 6)
Group Limited
Wang Dorothy S L	Beneficiary of a Trust	256,546,846	9.54%
Wang Janice S Y	Beneficiary of a Trust	256,546,846	9.54%
Prudential plc	Corporate interest	170,937,500	6.35%
		(Note 7)

Notes:

1. All of the above are long positions.

2. Puan Sri Chan Chau Ha alias Chan Chow Har is the spouse of Tan Sri Cheng Heng Jem, an executive Director, and is deemed to be interested in 1,448,270,000 Shares which Tan Sri Cheng Heng Jem is deemed to be interested in for the purposes of the SFO.

3. PRG Corporation is a wholly-owned subsidiary of East Crest which in turn is wholly-owned by PHB. By virtue of the SFO, PHB is deemed to be interested in the Shares held by PRG in the Company.

– III-12 –

GENERAL INFORMATION

APPENDIX III

1. The capacities of Wang Hung Roger in holding the 244,362,000 Shares (Long position) were as to 10,279,154 Shares (Long position) as beneficial owner and 234,082,846 Shares (Long position) as trustee.

2. Wang Hsu Vivine H is the spouse of Wang Hung Roger and is deemed to be interested in 266,826,000 Shares held by Wang Hung Roger.

3. Golden Eagle International Retail Group Limited is wholly-owned by GEICO Holdings Limited. By virtue of the SFO, GEICO Holdings Limited is deemed to be interested in the Shares held by Golden Eagle International Retail Group Limited in the Company.

4. The interest of Prudential plc was attributable on account through a number of its subsidiaries.

As at the Latest Practicable Date, so far as the Directors are aware, each of the following persons, not being a Director of chief executive of the Company, 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 a member of the Group other than the Company:

		Percentage of
Substantial Shareholder	Member of the Group	equity interest held
Xinjiang Youhao (Note 1)	Xinjiang Parkson	49%
Wuxi Sunan (Note 2)	Wuxi Parkson	40%
Chongqing Wanyou (Note 3)	Chongqing Parkson	30%
Guizhou Shenqi Enterprise	Guizhou Parkson	40%
(Note 4)
Shanghai Nine Sea Industry	Shanghai Lion Property	71%
	(Note 5)
Shanghai Nine Sea Industry	Shanghai Nine Sea Parkson	29%
	(Note 6)
Newcore Retail Hong Kong	Parkson Newcore Retail	51%
Limited	Shanghai Ltd
Mount Earnings Sdn. Bhd.	Yeehaw Best Practices	30%
(Note 7)	Sdn. Bhd.
Koh Wee Lit	Rite BOS Sdn Bhd	23.88%
Gee Cher Chiang	Rite BOS Sdn Bhd	16.67%
Bernice Cheong Nyuk Siew	Rite BOS Sdn Bhd	16.67%

Notes:

1. Xinjiang Friendship (Group) Co., Ltd. (“Xinjiang Youhao”) owns 49% of the equity interest of Xinjiang Youhao Parkson Development Co., Ltd. (“Xinjiang Parkson”).

– III-13 –

GENERAL INFORMATION

APPENDIX III

1. Wuxi Sunan Investment Guarantee Co., Ltd. (“Wuxi Sunan”) owns 40% of the equity interest of Wuxi Sanyang Parkson Plaza Co., Ltd. (“Wuxi Parkson”).

2. Chongqing Wanyou Economic Development Co., Ltd. (“Chongqing Wanyou”) owns 30% of the equity interest of Chongqing Wanyou Parkson Plaza Co., Ltd. (“Chongqing Parkson”).

3. (i) Guizhou Shenqi Enterprise owns 40% of the equity interest of Guizhou Shenqi Parkson Retail Development Co., Ltd. (“Guizhou Parkson”).

4. (ii) Zhang Pei, Zhang Zhi Jun and Zhang Ya own 30%, 40% and 30% of the equity interest in Guizhou Shenqi Enterprise, respectively, representing a 12%, 16% and 12% indirect equity interest in Guizhou Parkson.

5. Shanghai Nine Sea Lion Properties Management Co., Ltd. (“Shanghai Lion Property”) is a cooperative joint venture enterprise established under the laws of the PRC between Shanghai Nine Sea Industry Co., Ltd. (“Shanghai Nine Sea Industry”) and Exonbury Limited (“Exonbury”), a wholly-owned subsidiary of the Company. Shanghai Nine Sea Industry is entitled to 71% of the voting rights in the board of Shanghai Lion Property and 65% of its distributable profits. The Group is entitled to 29% of the voting rights in the board of Shanghai Lion Property and 35% of its distributable profits.

6. Shanghai Nine Sea Parkson Plaza Co., Ltd. (“Shanghai Nine Sea Parkson”) is a cooperative joint venture enterprise established under the laws of PRC between Shanghai Nine Sea Industry and Exonbury. Shanghai Nine Sea Industry is entitled to 29% of the voting rights in the board of Shanghai Nine Sea Parkson and a pre-determined distribution of income from Shanghai Nine Sea Parkson. The Group is entitled to 71% of the voting rights in the board of Shanghai Nine Sea Parkson and 100% of its distributable profit after deducting the aforesaid pre-determined distribution of income attributable to Shanghai Nine Sea Industry.

7. Gee Cher Chiang and Chia Chong Lun own 60% and 40% of the equity interest in Mount Earnings Sdn. Bhd. respectively, representing a 18% and 12% indirect equity interest in Yeehaw Best Pratices Sdn. Bhd.

Save as disclosed above, as at the Latest Practicable Date, so far as was known to any Director or the chief executive of the Company, no persons (other than any Director or the chief executive of the Company) had an interest or short position in the Shares and underlying Shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, 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.

Tan Sri Cheng Heng Jem, an executive Director, is the Chairman and Managing Director of PHB, which is a company which has an interest or short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO.

4. SERVICE CONTRACTS

As at the Latest Practicable Date:

• (a) Tan Sri Cheng Heng Jem (an executive Director) entered into a letter of appointment with the Company in October 2014, pursuant to which he was appointed and he has agreed to act as an executive Director for: (i) a term of three years commencing from 9 November 2014; and (ii) an annual Director’s fee as stipulated in the letter of appointment (or such amount as adjusted by the Board from time to time). The annual Director’s fee payable by the Company to Tan Sri Cheng Heng Jem is HK$240,000.

– III-14 –

GENERAL INFORMATION

APPENDIX III

• (b) Juliana Cheng San San (an executive Director) entered into a letter of appointment with the Company in August 2015, pursuant to which she was appointed and she has agreed to act as an executive Director for: (i) a term of three years commencing from 28 August 2015; and (ii) an annual Director’s fee as stipulated in the letter of appointment (or such amount as adjusted by the Board from time to time). The annual Director’s fee payable by the Company to Juliana Cheng San San is HK$240,000.

• (c) Datuk Lee Kok Leong (a non-executive Director) and Dato Dr. Hou Kok Chung (a non-executive Director) each entered into a letter of appointment with the Company in September 2014 and November 2014, respectively, pursuant to which they were appointed and have agreed to act as non-executive Directors for: (i) a term of three years commencing from 1 September 2014 and 13 November 2014, respectively; and (ii) an annual Director’s fee as stipulated in the letters of appointment (or such amount as adjusted by the Board from time to time). The annual Director’s fee payable by the Company to each of Datuk Lee Kok Leong and Dato’ Dr. Hou Kok Chung is HK$240,000.

Save as disclosed above, none of the Directors has any existing or a proposed service contracts with the Company or any member of the Group (excluding contracts expiring or which may be terminated by the Company or the relevant Group member within one year without payment of compensation other than statutory compensation).

5. FINANCIAL INFORMATION OF THE GROUP FOR THE LAST THREE FINANCIAL YEARS

Please refer to the annual reports of the Company for the years ended 31 December 2013 and 2014 published by the Company on 11 April 2014 and 21 April 2015 respectively, which contained information for the two financial years ended 31 December 2013 and 2014 with respect to the profits and losses, financial record and position of the Group and the audited consolidated statement of financial position of the Group together with the notes on the annual accounts for the two financial years ended 31 December 2013 and 2014. Please refer to the announcement of the Company dated 23 February 2016 for information for the financial year ended 31 December 2015 with respect to the profits and losses, financial record and position of the Group and the audited consolidated statement of financial position of the Group together with the notes on the annual accounts for the financial year ended 31 December 2015. The aforesaid annual reports and announcement of the Company are available on the Company’s website (www.parksongroup.com.cn) and the Stock Exchange’s website (www.hkexnews.com.hk).

6. WORKING CAPITAL OF THE GROUP

The Directors are of the opinion that, after taking into account the completion of the acquisition of the Commercial Portion as mentioned in this circular and the financial resources available to the Group (including but not limited to internally generated funds, cash and cash equivalents), the Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of this circular.

– III-15 –

GENERAL INFORMATION

APPENDIX III

7. INDEBTEDNESS

As at the close of business on 31 January 2016, being the latest practicable date for the purpose of the indebtedness statement prior to the printing of this circular, the Group had outstanding interest-bearing bank loans of approximately RMB795,018,000 and Bonds (as defined below) of outstanding principal amounts of approximately RMB3,237,582,000, details of which are set out as follows:

(a) Bank loans

As at 31 January 2016, the Group had secured interest-bearing bank loans of approximately RMB795,018,000 as follows:

Bank loans denominated in US$ Lender USD’000 11,250 Financial institution 11,250 Financial institution 11,250 Financial institution 11,250 Financial institution Bank loans denominated in HK$ HKD’000 34,938 Financial institution 34,577 Financial institution 75,000 Financial institution 140,310 Financial institution 310,000 Financial institution Total	As at 31 January 2016 RMB’000 73,706 73,706 73,706 73,706 294,824 29,380 29,076 63,068 117,989 260,681 500,194 795,018	Investment in principal guaranteed deposits pledged for bank loans RMB’000 76,000 76,000 77,000 77,000
		306,000
		30,000 30,000 67,000 123,000 260,000
		510,000
		816,000

– III-16 –

GENERAL INFORMATION

APPENDIX III

(b) Bonds

On 3 May 2013, the Company issued the 4.5% bonds due 2018 (the “Bonds”) with an aggregate principal amount of US$500 million. The net proceeds excluding direct transaction costs were US$494.3 million (equivalent to approximately RMB3,070,295,000). The Bonds, which are listed on the Stock Exchange, bear a fixed coupon at 4.5% per annum, payable semi-annually in arrears on 3 May and 3 November in each year and commenced on 3 November 2013. The maturity date is 3 May 2018.

As at 31 January 2016, the Group had repurchased bonds with an aggregate principal amount of US$3 million on the Stock Exchange. The outstanding principal amount of the Bonds as at 31 January 2016 was approximately US$494.2 million.

Save as disclosed above and apart from intra-group liabilities, the Group did not have any other outstanding loans, mortgages, charges, debentures, loan capital and bank overdrafts or other similar indebtedness, financial leases or hire purchase commitment, liabilities under acceptances (other than normal trade and other payables), or acceptance credits, or any guarantees or other material contingent liabilities at the close of business on 31 January 2016.

8. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors or the chief executive of the Company and their respective associates had any interest in any business which competes or is likely to compete, either directly or indirectly, with the business of the Group except for the indirect interests held by Tan Sri Cheng Heng Jem (through PHB) in Dalian Tianhe Parkson Shopping Centre Co., Ltd. (“ Dalian Tianhe Parkson ”) which owns one Parkson branded department store located in the Shahekou District, Dalian, Liaoning Province, the PRC (“ Dalian Tianhe Managed Store ”).

As at the Latest Practicable Date, Dalian Tianhe Managed Store carried on retail business which competed or is likely to compete, either directly or indirectly, with the business of the Group. Dalian Tianhe Managed Store is owned by Dalian Tianhe Parkson, a company in which PHB indirectly owned 60% of its equity interest as at the Latest Practicable Date.

Since Tan Sri Cheng Heng Jem together with his spouse, holds more than 60% equity interest and therefore has control over PHB, Tan Sri Cheng Heng Jem is deemed to have interest in the business of Dalian Tianhe Managed Store which competes or is likely to compete, either directly or indirectly, with the business of the Group. The Company possessed an option/right of refusal to acquire Dalian Tianhe Managed Store as and when it deems fit.

9. LITIGATION

Save as disclosed below, as at the Latest Practicable Date, so far as the Directors are aware, no member of the Group was engaged in any litigation or claim of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against any member of the Group.

– III-17 –

GENERAL INFORMATION

APPENDIX III

Litigation in relation to Tenancy between Parkson Retail Development Co., Ltd. and the landlord of the CNACM Premises

Reference is made to the announcement of the Company dated 5 June 2015. Parkson Retail Development Co., Ltd. (百盛商業發展有限公司) (an indirect wholly-owned subsidiary of the Company) (the “ Tenant ”) operates a flagship store, part of which is situated at the China National Arts and Crafts Museum (“ CNACM ”) and was leased from the landlord of the CNACM Premises (as defined below) under several tenancy agreements. One of the tenancy agreements was entered into in October 1993 (the “ Head Tenancy Agreement ”) in respect of an area of approximately 18,000 square meters (the “ CNACM Premises ”) for a term of 30 years under which a tenancy renewal agreement will be entered into every five years. The Tenant and the landlord of the CNACM Premises entered into a renewal agreement in accordance with the Head Tenancy Agreement in 1998 and 2003 respectively, each for a term of five years.

In 2005, the Tenant and the landlord of the CNACM Premises entered into a supplemental renewal agreement (the “ 2005 Renewal Agreement ”), pursuant to which, among other things, it was provided that:

• (i) the Tenant and the landlord of the CNACM Premises agreed that the term of the lease created under the agreement signed in 2003 would extend to 30 September 2014; and

• (ii) after the expiry of the 2005 Renewal Agreement, the landlord of the CNACM Premises and the Tenant would renew the tenancy in accordance with the Head Tenancy Agreement.

The landlord of the CNACM Premises had not entered into renewal agreement with the Tenant to continue the tenancy after the expiry of the 2005 Renewal Agreement as provided under the 2005 Renewal Agreement. Instead, the landlord of the CNACM Premises gave notice to the Tenant in August and September 2014 demanding the Tenant to vacate the CNACM Premises and refused to accept the cheque of the Tenant for the payment of rental.

In October 2014, the Tenant initiated legal proceedings at the People’s Court of the Western District of Beijing (the “ Court ”) requesting the Court to, inter alia , order the landlord of the CNACM Premises to perform the Head Tenancy Agreement and to pay all the costs in connection with the legal proceedings.

In May 2015, the landlord of the CNACM Premises filed a counterclaim (the “ Counterclaim ”) against the Tenant requesting the Court to order the Tenant to, inter alia , (i) vacate the CNACM Premises; (ii) pay a fee for occupying the CNACM Premises during the period from 1 October 2014 up to the date on which the Tenant has vacated the CNACM Premises, such fee being RMB47,488,000 calculated up to 30 April 2015; and (iii) pay all the costs in connection with the legal proceedings. The Court had arranged for a meeting between the Tenant and the Landlord scheduled to be held on 12 June 2015. On 3 June 2015, the Tenant was notified by the Court that the Court had cancelled the meeting and expected the parties to proceed to trial directly. The Tenant will pursue its claims and defend against the Counterclaim vigorously.

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GENERAL INFORMATION

APPENDIX III

10. EXPERTS AND CONSENTS

Name	Qualification
Ernst & Young	Certified Public Accountants
Vigers Appraisal and Consulting Limited	Independent property valuer
Shandong Qindao Law Firm	PRC legal adviser

The above experts have given and have not withdrawn their written consents to the issue of the circular with the inclusion of their letters or opinions or advice and the references to their names in the form and context in which they appear.

As at the Latest Practicable Date, the above experts were not beneficially interested in the share capital of any member of the Group nor do 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 nor do they have any interest, either direct or indirect, in any assets which have been, since 31 December 2015 (being the date to which the latest published audited financial statements of the Company were made up), acquired or disposed of by or leased to any member of the Group or are proposed to be acquired or disposed of by or leased to any member of the Group.

11. NO MATERIAL ADVERSE CHANGE

At as the Latest Practicable Date, none of the Directors was aware of any material adverse change in the financial or trading position of the Group since 31 December 2015 (being the date to which the latest published audited financial statements of the Group were made up).

12. MATERIAL CONTRACTS

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

• (a) the SPA;

• (b) the agreement dated 15 July 2015 entered into among (i) East Crest as vendor; (ii) Parkson Holdings Berhad as the vendor’s guarantor; (iii) Oroleon (Hong Kong) Limited (a wholly-owned subsidiary of the Company) as purchaser; and (iv) the Company as the purchaser’s guarantor whereby the purchaser agreed to acquire 457,933,300 ordinary shares in Parkson Retail Asia Limited from the vendor at the consideration of 228,508,716.70 Singapore dollars; and

• (c) the Supplemental Agreement.

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GENERAL INFORMATION

APPENDIX III

Save and except for East Crest and Parkson Holdings Berhad, who were the connected persons of the Company as at the date of the material contract set out in paragraph (b) above, each of the counter parties to the material contracts set out in this sub-section were parties independent of, and connected with, the connected persons of the Company as the date of the relevant material contract(s).

13. GENERAL

• (a) The registered office of the Company is situated at c/o M & C Corporate Services Limited, PO Box 309, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands;

• (b) The principal place of business of the Company in Hong Kong is at Room 609, 6th Floor, Harcourt House, 39 Gloucester Road, Wanchai, Hong Kong;

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

• (d) The secretary of the Company is SENG SZE Ka Mee, Natalia FCS (PE), FCIS, MBA (Executive), FHKIoD, FTIHK.

14. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at the office of the company secretary of the Company in Hong Kong at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong during normal business hours on any business day up to and including the date which is 14 days from the date of this circular:

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

• (b) the service contracts referred to in the section headed “Service Contracts” in this Appendix;

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

• (d) the letter from the Board, the text of which is set out on pages 4 to 13 of this circular;

• (e) the written consents from the experts referred to in the section headed “Experts and Consents” of this appendix;

• (f) the annual reports of the Company for each of the two years ended 31 December 2013 and 2014;

• (g) the annual results announcement of the Company for the year ended 31 December 2015 dated 23 February 2016;

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GENERAL INFORMATION

APPENDIX III

• (h) the accountants’ report on the Unaudited Pro Forma Financial Information on the Group, the text of which is set out in Appendix I to this circular;

• (i) the valuation report on the Qingdao Shopping Mall, the text of which is set out in Appendix II to this circular;

• (j) the PRC legal opinion of Shandong Qindao Law Firm referred to in the valuation report set out in Appendix II to this circular; and

• (k) this circular.

– III-21 –