RemeGen Co., Ltd. - Proxy Solicitation & Information Statement 2016

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Overseas Chinese Town (Asia) Holdings Limited (the “Company”), you should at once hand this circular with the accompanying form of proxy to the purchaser or transferee, or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

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Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

MAJOR TRANSACTION ACQUISITION AND SUBSCRIPTION OF EQUITY INTERESTS IN CSI COMPANY

22 January 2016

			Page
Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			1
Letter from the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			4
Appendix I	–	Financial information of the Group . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
Appendix II	–	Accountant’s report of CSI Company . . . . . . . . . . . . . . . . . . . . . . . . . .	II-1
Appendix III	–	Management discussion and analysis of CSI Company . . . . . . . . . . . . . .	III-1
Appendix IV	–	Unaudited pro forma financial information of the Group . . . . . . . . . . . .	IV-1
Appendix V	–	Valuation of Land Parcels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
Appendix VI	–	General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VI-1

DEFINITIONS

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

“Board”

the board of Directors

“Business Day(s)” a working day as announced by the relevant PRC government department(s)
“Chengdu Chuang Ying” 成�華僑城創盈企業管理有限公司 (Chengdu OCT Chuang Ying Enterprise Management Company Limited*), a company incorporated in the PRC
“Chengdu Culture and Tourism” 成�文化旅遊發展集團有限責任公司 (Chengdu Culture & Tourism Development Group Limited Liability Company*), a State-owned enterprise established under the laws of the PRC
“Chengdu OCT” 成�天府華僑城實業發展有限公司 (Chengdu Tianfu OCT Industry Development Company Limited*), a sino-foreign equity joint venture established under the laws of the PRC and a nonwholly owned subsidiary of the Company
“close associate(s)” has the meaning ascribed thereto under the Listing Rules
“Company”
Overseas Chinese Town (Asia) Holdings Limited, a company incorporated in the Cayman Islands with limited liability and the Shares of which are listed on the Stock Exchange
“connected person(s)” has the meaning ascribed thereto under the Listing Rules
“Consideration” RMB797,842,500 (equivalent to approximately HK$965,389,425), being the consideration for the Transfer
“controlling shareholder(s)” has the meaning ascribed to in the Listing Rules
“CSI Company” 成�體育產業有限責任公司 (Chengdu Sports Industry Co., Ltd.*), a company incorporated in the PRC
“Director(s)” director(s) of the Company

“Earnest Money” an earnest money in the amount of RMB100,000,000 paid by Chengdu Chuang Ying to SWUEE at the Tender

“Equity Interest Transfer and the equity interest transfer and subscription agreement entered into Subscription Agreement” between Chengdu Chuang Ying, Chengdu Culture and Tourism and CSI Company in respect of the Transfer
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DEFINITIONS

“Group”	the Company and its subsidiaries
“HK$”	Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong”	the Hong Kong Special Administrative Region of the PRC
“Independent Third Party(ies)”	parties independent of and not connected with the Company and its
	connected persons
“Land Parcels”	seven parcels of land located at No. 11 Renmin Middle Road First
	Section, No. 1 East Yuhe Side Street and Donghuamen Street,
	Qingyang District, Chengdu, the PRC with a total site area of
	approximately 96,000 sq.m
“Latest Practicable Date”	18 January 2016, being the latest practicable date prior to the
	printing of this circular for ascertain information contained in this
	circular
“Listing Rules”	the Rules Governing the Listing of Securities on the Stock
	Exchange
“Pacific Climax”	Pacific Climax Limited, a company incorporated in the British
	Virgin Islands with limited liability, who is a controlling
	shareholder of the Company
“PRC”	the People’s Republic of China (for the purpose of this circular,
	excluding Hong Kong, the Macau Special Administrative Region of
	the PRC and Taiwan)
“Properties”	Lot Nos. 1, 2, 3 and certain portion of Lot No. 4 of the Land
	Parcels and certain properties on the Land Parcels which comprises
	a stadium which can accommodate approximately 40,000 persons, a
	basketball hall, a swimming pool, an office building and car
	parking spaces etc.
“RMB”	Renminbi, the lawful currency of the PRC
“Savills”	Savills Valuation and Professional Services Limited, an
	independent property valuer
“Sale Equity Interests”	15% equity interests held in CSI Company by Chengdu Culture and
	Tourism
“Share(s)”	share(s) of HK$0.1 each in the share capital of the Company

DEFINITIONS

“Shareholder(s)”	shareholder(s) of the Company
“sq.m”	square metre(s)
“Stock Exchange”	The Stock Exchange of Hong Kong Limited
“Subscription Equity Interests”	capital injection of RMB651,300,000 into CSI Company, of which
	RMB30,000,000 will become the registered capital of CSI
	Company and the remainder will go to the capital reserve of CSI
	Company
“SWUEE”	西南聯合產權交易所(Southwest United Equity Exchange*)
“Target Interests”	the Sale Equity Interests and the Subscription Equity Interests
“Tender”	the public tender selection of sale and subscription of the Target
	Interests held by SWUEE
“Transfer”	the acquisition and subscription of the Target Interests by the
	Company through the Tender
“V&T”	V&T (Shenzhen) Law Firm (萬商天勤深圳律師事務所), the
	Company’s PRC legal adviser
“%”	per cent.

In this circular, the English names of the PRC entities or enterprises are translations of their Chinese names. In the event of any inconsistency, the Chinese names shall prevail.

For the purpose of this circular and solely for the purpose of illustration, the conversion of RMB into HK$ is based on the exchange rate of RMB1.00 = HK$1.21. Such rate is for the purpose of illustration only and does not constitute a representation that any amount in question in RMB or HK$ has been or could have been or may be converted at such or another rate or at all.

For identification purpose only
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LETTER FROM THE BOARD

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Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 03366)

Executive Directors: Ms. Wang Xiaowen (Chairman) Ms. Xie Mei (Chief Executive Officer) Mr. Lin Kaihua

Non-executive Director: Mr. Zhou Ping

Registered Office: Clifton House 75 Fort Street PO Box 1350 GT George Town Grand Cayman Cayman Islands

Head Office and Principal Place of Business:

Independent Non-executive Directors:

Mr. Lu Gong Business: Ms. Wong Wai Ling Suites 3203-3204, Tower 6 Professor Lam Sing Kwong Simon The Gateway, Harbour City Canton Road Tsim Sha Tsui Kowloon Hong Kong 22 January 2016

To the Shareholders,

Dear Sir or Madam,

MAJOR TRANSACTION ACQUISITION AND SUBSCRIPTION OF EQUITY INTERESTS IN CSI COMPANY

INTRODUCTION

References are made to the announcement of the Company dated 18 December 2015.

The purpose of this circular is to provide Shareholders with (i) further details of the Equity Interest Transfer and Subscription Agreement and the transactions contemplated thereunder; and (ii) such other information as required by the Listing Rules.

LETTER FROM THE BOARD

PRINCIPAL TERMS OF THE EQUITY INTEREST TRANSFER AND SUBSCRIPTION AGREEMENT

The principal terms of the Equity Interest Transfer and Subscription Agreement entered into between Chengdu Chuang Ying, Chengdu Culture and Tourism and CSI Company are as follows:

Date:

25 December 2015

Parties: (1) Chengdu Chuang Ying, a wholly-owned subsidiary of Chengdu OCT which is a non-wholly owned subsidiary of the Company; Chengdu OCT is a non-wholly owned subsidiary of the Company and is indirectly owned as to approximately 51% by the Company, as to approximately 24.8% by 深圳華僑城房地產有限公司 (Overseas Chinese Town Real Estate Company Limited) (“OCT Real Estate”) (a wholly-owned subsidiary of 深圳華僑城股份有限公司 (Shenzhen Overseas Chinese Town Company Limited) (“OCT Ltd.”)) and as to approximately 24.2% by OCT Ltd.. As at the Latest Practicable Date, Pacific Climax is a controlling shareholder of the Company, holding approximately 66.66% of the issued share capital of the Company. Pacific Climax is wholly-owned by Overseas Chinese Town (HK) Company Limited, which is, in turn, wholly-owned by OCT Ltd.;
(2) Chengdu Culture and Tourism; and
(3) CSI Company.

To the best information, knowledge and belief of the Directors, after having made all reasonable enquiries, Chengdu Culture and Tourism, CSI Company and their respective ultimate beneficial owners are Independent Third Parties.

Assets to be acquired:

The acquisition of the Sale Equity Interests and the subscription of the Subscription Equity Interests.

Consideration:

RMB797,842,500 (equivalent to approximately HK$965,389,425), which was the minimum bidding price set by SWUEE and was arrived at after bidding at the Tender.

Payment Terms

The Consideration shall be settled by the Group in the following manner:

the Earnest Money paid to SWUEE at the Tender shall be applied towards settling part of the Consideration and other related fees and/or expenses; and
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LETTER FROM THE BOARD

the remaining Consideration shall be paid by cash within three Business Days after Equity Interest Transfer and Subscription Agreement becoming effective.

If Chengdu Chuang Ying fails to settle the Consideration in accordance with the abovementioned payment terms, Chengdu Chuang Ying is liable to a penalty amounting to 0.05% of the Earnest Money that is due to pay for each day of delay. If the delay is over 15 days and Chengdu Chuang Ying still fails to make the payment, Chengdu Culture and Tourism and CSI Company have the right to terminate the Equity Interest Transfer and Subscription Agreement and the Earnest Money will not be refunded to Chengdu Chuang Ying.

If Chengdu Culture and Tourism and CSI Company fails to cooperate to assist Chengdu Chuang Ying to deal with the registration procedures in respect of the Transfer, Chengdu Culture and Tourism and CSI Company are liable to a penalty amounting to 0.05% of the Earnest Money for each day of delay. If the delay is over 15 days, Chengdu Chuang Ying has the right to terminate the Equity Interest Transfer and Subscription Agreement.

Other Major Terms

Completion of registration procedures in respect of the Transfer with the relevant administrative and commerce bureau shall take place within 60 Business Days after the Consideration is settled and the certificate for the Transfer has been issued by SWUEE.
The profit or loss of CSI Company from 30 June 2015 to the completion of registration procedures in respect of the Transfer shall be shared or borne by the shareholders of CSI Company proportionate to their respective equity interests in CSI Company upon completion of the Transfer.
Chengdu Culture and Tourism has entered into a loan agreement with 交通銀行股份有限公司四川分行 (Sichuan Branch of Bank of Communications Co., Ltd*) dated 16 March 2015 for a loan in the amount of RMB40,000,000, and CSI Company has provided guarantee for the aforesaid loan of the guarantee of RMB40,000,000 will expire on 16 March 2016. CSI Company shall remain responsible for such guarantee after completion of the Transfer.
Chengdu Culture and Tourism has provided a loan to CSI Company and the principal and interest accrued amounted to RMB121,435,500 as at 30 June 2015. CSI Company shall return the principal and interest accrued to Chengdu Culture and Tourism.

Upon completion of the Transfer, CSI Company will be owned as to 49% by Chengdu Chuang Ying and 51% by Chengdu Culture and Tourism. CSI Company will not become a subsidiary of the Company and the financial results of CSI Company will not be consolidated into the Group. Chengdu Chuang Ying will finance the payment for the Transfer by its internal resources.

* For identification purpose only

LETTER FROM THE BOARD

BASIS OF THE CONSIDERATION

The Consideration, which was the minimum bidding price set by SWUEE and was arrived at after bidding at the Tender. The Board considered that the Consideration was fair and reasonable after taking into account the location and potential value for future development of the Land Parcels and the preliminary valuation of the Land Parcels as assessed by an independent valuer.

SOURCE OF FUNDING

Chengdu Chuang Ying will fund the consideration pursuant to the Equity Interest Transfer and Subscription Agreement by internal resources.

INFORMATION ABOUT CHENGDU CULTURE AND TOURISM

Chengdu Culture and Tourism is wholly-owned by State-owned Assets Supervision and Administration Commission of Chengdu* (成�市國有資產監督管理委員會), and is principally engaged in the investment, financing and management of sports-related projects, operation and development of sports competition and performances, development and operation of property and land consolidation. It together with its subsidiaries, owns tourism resources including Kuanzhaixiangzi (寬窄巷子), Anren Museum Town (安仁博物館小鎮), XiLing Snow Mountain Ski Resort (西嶺雪山滑雪場), Wufeng Old Town (五鳳古鎮) and Panda International Tourism Resort (熊貓國際旅遊渡假區) etc..

INFORMATION ABOUT CSI COMPANY

CSI Company, the owner of the Properties, is principally engaged in the sports venues operation and management, operations and sales of sports products, management and development of sports competition and performance, investment and development of sports tourism.

Set out below are key audited financial figures of CSI Company extracted from its financial reports prepared under the PRC accounting standards for the year ended 31 December 2013 and 2014, respectively:

	As at 31 December	As at 31 December
	2013	2014
	(RMB)	(RMB)
Total assets	1,154,475,309	1,069,097,387
Net assets	942,001,052	946,406,011
	For the year ended 31 December
	2013	2014
	(RMB)	(RMB)
Revenue	27,029,375	21,950,014
Net (loss)/profit (before taxation and extraordinary items)	(5,287,878)	4,404,959
Net (loss)/profit (after taxation and extraordinary items)	(5,371,122)	4,404,959

* For identification purpose only

LETTER FROM THE BOARD

INFORMATION ABOUT THE PROPERTIES

The Properties are located in Luomashi business district which is one of the top three core business districts in Chengdu, the PRC. Some well-known five-star hotels, grade-A office building, shopping malls are also located in this district. Chengdu’s landmarks like Sichuan Science and Technology Museum and Tianfu Plaza are located in the vicinity. According to “the Development Plan of Service Industry of Qingyang District, Chengdu (2007 – 2020)”, Luomashi district shall make full use of the effect of central business district and metro station, upgrade the currently traditional commercial area to a high-end business and commercial area, integrating business, finance, real estate, shopping, leisure, entertainment, culture and residential functions together. In accordance with the planning of Chengdu central business district and positioning of “Two-Axis and Four-Zone”, Luomashi district will become the financial business district of Chengdu.

The map below shows the location of the Properties:–

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The Land Parcels are being used and/or shall be used for, amongst others, sports, cultural and composite purposes. The properties on the Land Parcels comprise a stadium which can accommodate approximately 40,000 persons, a basketball hall, a swimming pool, an office building and car parking spaces etc.. CSI Company generates revenue from, among others, operation of the said sports venues.

LETTER FROM THE BOARD

Please see below for a summary of the details of the Land Parcels:–

							Planned Use
	Land Parcels	Area (approximate) (sq.m.)	The Properties thereon	Ownership	Payment details of the land premium (if any)	Current use	Planned Use
1.	Lot No. 1	12,579.82	Portion of a sports stadium with a maximum seating capacity of about 40,000 as well as various sports facilities such as swimming pool and basketball hall	CSI Company	N/A	Cultural and sports uses	To maintain current use
2.	Lot No. 2	15,227.55		CSI Company	N/A	Cultural and sports uses	Approximately 8,000 sq.m. (actual area to be determined by surveying and mapping after commencement of work) to be developed into a complex, and the remainder to maintain current use
3.	Lot No. 3	56,593.62		CSI Company	N/A	Cultural and sports uses	To maintain current use
4.	Lot No. 4	1,599.97	A 7-storey office building with a total gross floor area of approximately 6,736.00 sq.m.	Owned by CSI Company (as to 779.80 sq.m.) and Chengdu Sports Bureau (as to 820.17 sq.m.), the ownership of Chengdu Sports Bureau in Lot No. 4 and the office building thereon will be transferred to CSI Company (Note)	Nil consideration	Canteen, office, residential and car park uses	To be developed into a complex
5.	Located to the north of Lot No. 2 (the “Wet Market Lot”)	2,866.68	Da Hong Wet Market	The local government and such ownership will be transferred to CSI Company (Note)	Land price for Wet Market Lot and CPA 2 calculated as RMB9,380,000 per mu (i.e. RMB 14,070 per sq.m.), which is subject to final surveyed land area and will be paid by CSI Company	Wet market	To be developed into a complex
6.	Located to the east of Lot No. 3 (the “CPA 2”)	4,000.02	Car parking area	The local government and such ownership will be transferred to CSI Company (Note)		Car parking area	To maintain current use
7.	Located to the east of Lot No. 2 (the “CPA 1”)	3,251.48	Car parking area	The local government and such ownership will be transferred to CSI Company (Note)	RMB45,748,136 (excluding land grant fee), which will be paid by CSI Company	Car parking area	To be developed into a complex

Note: It is preliminarily estimated that the transfer will be completed by 31 December 2016.

LETTER FROM THE BOARD

The Land Parcels are located at No. 11 Renmin Middle Road First Section, No. 1 East Yuhe Side Street and Donghuamen Street, Qingyang District, Chengdu, Sichuan Province, the PRC. Please see below a map showing the specific location of each of the Land Parcels:–

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INFORMATION ABOUT THE GROUP

The principal business activity of the Company is investment holding. The Group is principally engaged in the comprehensive development business and the manufacture and sale of cartons and paper products.

REASONS FOR AND BENEFITS OF THE TRANSFER

The Group intends to hold the interest in CSI Company as its long term investment as the Group is positive towards the development potential of CSI Company and expects to obtain investment proceeds from CSI Company and accordingly is of the view that the Transfer is in the interest of the shareholders of the Company.

The Group considers that the Transfer is a good investment opportunity for the Group to further its comprehensive development businesses in the PRC. CSI Company owns the Properties, which are located in Luomashi business district, a core business district where the land supply is scarce in Chengdu, the PRC. CSI Company owns and operates the largest stadium in Chengdu for holding activities such as large-scale performances and sports competitions, which continuously generates revenue for CSI Company. According to information provided by CSI Company, approximately 15,300 sq.m. site area of the Land Parcels developable for future commercial purpose will be developed into a commercial complex project “Vitality Centre”. The detailed construction plan and products will be further discussed and implemented jointly by

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LETTER FROM THE BOARD

Chengdu Chuang Ying and Chengdu Culture and Tourism upon the completion of the Transfer. The Group is positive towards the development potential of CSI Company. The acquisition and subscription of the Target Interests will enhance the Group’s brand influence in Chengdu.

The Directors (including the independent non-executive Directors) are of the opinion that the terms of the Transfer and the transactions contemplated thereunder (including the Consideration) are fair and reasonable and the Transfer is in the interest of the Company and the Shareholders as a whole.

LISTING RULES IMPLICATIONS

As one or more of the relevant applicable percentage ratios calculated pursuant to the Listing Rules in respect of the Transfer is/are more than 25% but less than 100%, the Transfer constitutes a major transaction of the Company for the purpose of the Listing Rules and is subject to the announcement requirements and the approval of the Shareholders under Chapter 14 of the Listing Rules.

As no Shareholder has material interest in the Equity Interest Transfer and Subscription Agreement and the transactions contemplated thereunder, none of the Shareholders is required to abstain from voting if the Company were to convene a general meeting for the approval of the Equity Interest Transfer and Subscription Agreement and the transactions contemplated thereunder. The Company has obtained a written approval from Pacific Climax, which held 434,894,000 Shares as at the date of this circular (representing approximately 66.66% of the issued share capital of the Company) for the approval of the Equity Interest Transfer and Subscription Agreement and the transactions contemplated thereunder. As such, no extraordinary general meeting will be convened by the Company to approve the Equity Interest Transfer and Subscription Agreement and the transactions contemplated thereunder.

FINANCIAL EFFECT OF THE TRANSFER

Upon completion of the Transfer, CSI Company will become an associate of the Company and its results will be equity accounted for the consolidated financial statements of the Company. Based on the unaudited pro forma financial information of the Group as set out in Appendix IV of this circular, as at 30 June 2015, (i) the unaudited pro forma total assets of the Group would be approximately RMB22.18 billion; (ii) the unaudited pro forma total liabilities of the Group would be approximately RMB15.68 billion; (iii) the unaudited pro forma adjusted net asset value of the Group would be approximately RMB6.50 billion; and (iv) the unaudited pro forma adjusted gearing ratio of the Group would be approximately 52.6%. There would be no financial effect of the Transfer on the earnings of the Group as at the completion date of the Transfer.

FINANCIAL AND TRADING PROSPECTS OF THE GROUP

For the year ended 31 December 2014, the Group’s turnover was approximately RMB3,797 million, representing a decrease of approximately 6.5% over 2013. Profit attributable to the Shareholders for the year ended 31 December 2014 was approximately RMB326 million, representing an increase of approximately 38.2% over 2013. Gross profit margin for the year ended 31 December 2014 was approximately 32.8%, representing a decrease of approximately 3.7% over 2013. Total assets and total equity for the year ended 31 December 2014 amounted to approximately RMB21,858 million and approximately RMB6,384 million, representing an increase of approximately 3.6% and approximately 4.5% over 2013 respectively.

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LETTER FROM THE BOARD

Looking forward, the Group will persist with established strategies and continue to rely on our leading development principle and clear market positioning, sufficiently leverage on the resource edges in brands, products, capital, talents and other respects, positively seek land resource and projects merger and acquisition opportunities in line with our strategic positioning in the premium regions of first and second-tier cities, expand premium projects reserve, maintain development progress of the projects, accelerate products turnover, deepen diversification of cooperation pattern of project company equities to enhance the future development potential of the Group.

Shanghai Suhewan, as a riverside city comprehensive project featuring a fusion of cultural heritage, art, fashion, commercial and residential properties as well as urban recreational facilities, will be transformed into a brand new landmark in Shanghai. With the project maturing gradually, it will effectively enhance the overall value of the neighboring district and gradually make Suhewan District a luxury homes district in the city center of Shanghai. Chengdu OCT will continue to sell high-rise residential properties, low-density residential properties, multi-storey residential properties and hign-end office buildings, and boost the development of business properties. The Chongqing OCT Real Estate Project enjoys a supreme location and rich landscape resources and is expected to develop middle-to-high-end high-rise and multistorey residential properties.

The Group will continue to strengthen and optimize the paper packaging business and will further explore the value of this business in the capital market in the future. The Group will actively promote the market development of paper packaging business, closely follow the changes of packaging need of customers to adjust our products structures, and further explore the market potential of major clients, expand multi-point cooperation in Southern China and Eastern China, fully break into the international clothing brand, e-business, logistics and other market segments, seek new breakthroughs in market expansion to further enlarge our sale scale. The Group will take the opportunity of Suzhou new project to explore a new direction of innovation and development in paper packaging business.

The Group has full confidence in the development prospect in the future, and believes that it will receive continuous support and concern from its parent company. The Group commits to being a prominent developer and operator of commercial complex, and strives to bring satisfactory return to its shareholders.

ADDITIONAL INFORMATION

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

By order of the Board Overseas Chinese Town (Asia) Holdings Limited Wang Xiaowen Chairman

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP

The Company is required to set out in this circular the financial information for the last three financial years with respect to the profits and losses, financial record and position, set out as a comparative table and the latest published audited statement of financial position together with the notes on the annual accounts for the last financial year for the Group.

The audited consolidated financial statements of the Group for the year ended 31 December 2012 has been set out in pages 50 to 140 of the annual report 2012 of the Company which was posted on 15 March 2013 on the Stock Exchange’s website (http://www.hkexnews.hk).

The audited consolidated financial statements of the Group for the year ended 31 December 2013 has been set out in pages 61 to 142 of the annual report 2013 of the Company which was posted on 19 March 2014 on the Stock Exchange’s website (http://www.hkexnews.hk).

The audited consolidated financial statements of the Group for the year ended 31 December 2014 has been set out in pages 59 to 136 of the annual report 2014 of the Company which was posted on 26 March 2015 on the Stock Exchange’s website (http://www.hkexnews.hk).

2. INDEBTEDNESS STATEMENT

At the close of business on 30 November 2015, being the latest practicable date for the purpose of ascertaining the indebtedness of the Group prior to the printing of this circular, the Group had total borrowings amounted to RMB11,996 million comprising, loans from related parties of the Company of approximately RMB7,803 million, and bank and other loans of approximately RMB4,193 million (the “Bank and Other Loans”). The Bank and Other Loans were secured by charge on two bank accounts of a subsidiary of the Company, pledge of certain investment property of a subsidiary of the Company, pledge of certain inventories classified as properties held for future development and under development for sale, floating charge on certain inventories classified as completed properties held for sale and guarantee provided by certain subsidiaries and intermediate parents of the Company. Other than the Bank and Other Loans, loans from related parties of the Company are unsecured.

As at the close of business on 30 November 2015, the contingent liability of the Company was the corporate guarantee for the Bank and Other Loans as described above to the extent of approximately RMB237 million.

Save as aforesaid and apart from intra-group liabilities and normal trade payables in the ordinary course of business, at the close of business on 30 November 2015, the Group did not have any other outstanding mortgages, charges, debentures or other loan capital, bank overdrafts or loans, other similar indebtedness, finance lease or hire purchase lease commitments, liabilities under acceptance or acceptance credit, guarantees or other material contingent liabilities.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

3. WORKING CAPITAL

The Directors are of the opinion that, taking into account the financial resources available to the Group including the internally generated funds and the present available bank facilities, and in the absence of unforeseen circumstances, the Group will have sufficient working capital for its requirements for at least the next 12 months from the date of this circular.

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ACCOUNTANT’S REPORT OF CSI COMPANY

APPENDIX II

The following is the text of a report, prepared for the sole purpose of inclusion in this circular, from the independent reporting accountants, RSM Hong Kong, Certified Public Accountants, Hong Kong.

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RSM Hong Kong 中瑞岳華（香�）會計師事務所 Certified Public Accountants

The Board of Directors Overseas Chinese Town (Asia) Holdings Limited

29th Floor Lee Garden Two 28 Yun Ping Road Causeway Bay Hong Kong

22 January 2016

Dear Sirs,

We set out below our report on the financial information (the “Financial Information”) of 成�體育產業有限責任公司 (Chengdu Sports Industry Co., Ltd*) (“CSI Company”) and its subsidiary (hereinafter collectively referred to as the “CSI Group”) for each of the three years ended 31 December 2014 and the ten months ended 31 October 2015 (the “Relevant Periods”) for inclusion in the circular dated 22 January 2016 issued by Overseas Chinese Town (Asia) Holdings Limited (the “Company”) in connection with the acquisition and subscription of equity interests in CSI Company (the “Circular”).

CSI Company was established on 13 December 2007 in the People’s Republic of China (the “PRC”) with limited liability and is principally engaged in the sports venues operation and management, operations and sales of sports products, management and development of sports competition and performances, investment and development of sports tourism. As at the date of this report, CSI Company has the following subsidiary:

		Registered	Attributable
	Place and date	and paid up	interest of
Name of subsidiary	of establishment	capital	CSI Company	Principal activities
成�聯勝票務�銷	The PRC	RMB500,000	100%	Management and
有限公司(“CLS”)	4 June 2008			development of
				sports competition
				and performance

All the companies of CSI Group have adopted 31 December as the financial year end date.

The statutory financial statements of CSI Company and CLS have been prepared in accordance with the relevant accounting principles and financial regulations applicable to companies established in the PRC and were audited in accordance with Independent Auditing Standards for Chinese Certified Public Accountants by the following certified public accountants registered in the PRC.

* The English translation name is for identification purpose only. The official name of the entity is in Chinese.

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ACCOUNTANT’S REPORT OF CSI COMPANY

APPENDIX II

Financial year	Name of auditor
For the year ended 31 December 2012	四川恆坤會計師事務所有限公司
	(Sichuan Hengkun Accounting Firm Co., LTD)
For the year ended 31 December 2013	四川經衛會計師事務所有限責任公司
For the year ended 31 December 2014	四川德維會計師事務所有限責任公司(Sichuan Dowell
	Certified Public Accountants Co., Ltd.)

For the purpose of this report, the directors of CSI Company have prepared the consolidated financial statements of CSI Group for the Relevant Periods in accordance with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”) (the “Underlying Financial Statements”).

We have performed our independent audit on the Underlying Financial Statements in accordance with Hong Kong Standards on Auditing issued by the HKICPA and have examined the Underlying Financial Statements in accordance with Auditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the HKICPA.

The Financial Information has been prepared from the Underlying Financial Statements in accordance with HKFRSs, after making such adjustments as we considered necessary for the purpose of preparing our report for inclusion in the Circular.

The directors of the respective companies of CSI Group are responsible for the preparation of the Underlying Financial Statements. The directors of the Company are responsible for the contents of the Circular in which this report is included. It is our responsibility to compile the Financial Information set out in this report from the Underlying Financial Statements, to form an independent opinion on the Financial Information and to report our opinion to you.

For the purpose of this report, the directors of CSI Company have prepared the comparative financial information of CSI Group for the ten months ended 31 October 2014 (the “Comparative Financial Information”) in accordance with HKFRSs. We have reviewed the Comparative Financial Information in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the HKICPA. A review consists principally of making enquiries of CSI Group management and applying analytical procedures to the Comparative Financial Information and, based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than an audit and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the Comparative Financial Information.

On the basis of our review which does not constitute an audit, we are not aware of any material modifications that should be made to the Comparative Financial Information.

In our opinion, for the purpose of this report, the Financial Information gives a true and fair view of the state of affairs of CSI Company and of CSI Group as at 31 December 2012, 2013 and 2014 and 31 October 2015 and of CSI Group’s results and cash flows for the Relevant Periods.

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FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Note Revenue 7 Cost of sales Gross profit Other income 8 Distribution costs Administrative expenses Other operating expenses Profit/(loss) before tax Income tax (expense)/credit 10 Profit/(loss) for the year/ period 11 Total comprehensive income for the year/ period attributable to owners of CSI Company	Year ended 31 December 2012 2013 RMB’000 RMB’000 44,856 25,629 (17,808) (7,474) 27,048 18,155 589 770 (1,902) (1,711) (17,681) (15,387) (608) (8,515) 7,446 (6,688) (1,846) 350 5,600 (6,338) 5,600 (6,338)	2014 RMB’000 21,950 (4,190) 17,760 1,692 (1,605) (12,831) (611) 4,405 – 4,405 4,405	Ten months ended 31 October 2014 2015 RMB’000 RMB’000 (unaudited) 18,611 18,502 (3,585) (2,222) 15,026 16,280 1,348 12,258 (985) (848) (10,008) (10,218) (503) (11,097) 4,878 6,375 – (1,423) 4,878 4,952 4,878 4,952

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B. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Note Non-current assets Fixed assets 12 – Property, plant and equipment – Interests in allocated land and leasehold land held for own use Other financial assets 13 Current assets Inventories 14 Trade and other receivables 15 Cash and cash equivalents 16 Current liabilities Trade and other payables 17 Receipts in advance Current tax liabilities Net current assets Total assets less current liabilities Non-current liabilities Other payables 17 NET ASSETS Capital and reserves Paid-up capital 18 Reserves TOTAL EQUITY	As at 31 December 2012 2013 2014 RMB’000 RMB’000 RMB’000 59,269 50,894 50,737 822,957 491,060 491,060 500 500 500 882,726 542,454 542,297 – 385,366 395,125 3,702 33,762 33,516 68,314 194,893 103,159 72,016 614,021 531,800 4,068 14,405 27,443 1,013 69 248 1,322 – – 6,403 14,474 27,691 65,613 599,547 504,109 948,339 1,142,001 1,046,406 – 200,000 100,000 – 200,000 100,000 948,339 942,001 946,406 45,000 45,000 45,000 903,339 897,001 901,406 948,339 942,001 946,406	As at 31 October 2015 RMB’000 53,212 491,060 500
		544,772
		401,492 36,151 109,988
		547,631
		136,667 3,009 1,369
		141,045
		406,586
		951,358
		–
		–
		951,358
		45,000 906,358
		951,358

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C. STATEMENTS OF FINANCIAL POSITION

Note Non-current assets Investment in a subsidiary 24 Fixed assets 12 – Property, plant and equipment – Interests in allocated land and leasehold land held for own use Other financial assets 13 Current assets Inventories 14 Trade and other receivables 15 Cash and cash equivalents 16 Current liabilities Trade and other payables 17 Receipts in advance Current tax liabilities Net current assets Total assets less current liabilities Non-current liabilities Other payables 17 NET ASSETS Capital and reserves Paid-up capital 18 Reserves 19(b) TOTAL EQUITY	As at 31 December 2012 2013 2014 RMB’000 RMB’000 RMB’000 731 731 731 59,269 50,894 50,737 822,957 491,060 491,060 500 500 500 883,457 543,185 543,028 – 385,366 395,125 3,702 33,762 33,516 65,369 191,967 100,159 69,071 611,095 528,800 4,068 14,405 27,443 1,013 69 248 1,290 – – 6,371 14,474 27,691 62,700 596,621 501,109 946,157 1,139,806 1,044,137 – 200,000 100,000 – 200,000 100,000 946,157 939,806 944,137 45,000 45,000 45,000 901,157 894,806 899,137 946,157 939,806 944,137	As at 31 October 2015 RMB’000 731 53,212 491,060 500
		545,503
		401,492 36,151 106,954
		544,597
		136,667 3,009 1,369
		141,045
		403,552
		949,055
		–
		–
		949,055
		45,000 904,055
		949,055

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D. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

At 1 January 2012 Total comprehensive income for the year Transfer At 31 December 2012 and 1 January 2013 Total comprehensive income for the year Transfer At 31 December 2013 and 1 January 2014 Total comprehensive income for the year Transfer At 31 December 2014 and 1 January 2015 Total comprehensive income for the period At 31 October 2015 At 1 January 2014 Total comprehensive income for the period (unaudited) At 31 October 2014 (unaudited)	Paid-up capital RMB’000 45,000 – – 45,000 – – 45,000 – – 45,000 – 45,000 45,000 – 45,000	Capital reserve RMB’000 (Note 19(c)(i)) 851,386 – – 851,386 – – 851,386 – – 851,386 – 851,386 851,386 – 851,386	Statutory surplus reserve RMB’000 (Note 19(c)(ii)) 4,651 – 448 5,099 – 1 5,100 – (220) 4,880 – 4,880 5,100 – 5,100	Retained profits RMB’000 41,702 5,600 (448) 46,854 (6,338) (1) 40,515 4,405 220 45,140 4,952 50,092 40,515 4,878 45,393	Total RMB’000 942,739 5,600 – 948,339 (6,338) – 942,001 4,405 – 946,406 4,952 951,358 942,001 4,878 946,879

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E. CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES Profit/(loss) before tax Adjustments for: Bank interest income Loss on disposal of fixed assets Depreciation Operating profit before working capital changes (Increase)/decrease in trade and other receivables Increase in inventories (Decrease)/increase in trade and other payables Increase/(decrease) in receipts in advance Cash generated from/(used in) operations Income tax paid Net cash generated from/(used in) operating activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of fixed assets Acquisition of other financial assets Proceeds from disposal of fixed assets Interest received Net cash used in investing activities	Year ended 31 December 2012 2013 2014 RMB’000 RMB’000 RMB’000 7,446 (6,688) 4,405 (305) (349) (1,534) 4 7,905 1 6,392 4,379 1,855 13,537 5,247 4,727 (1,019) (30,060) 246 – (55,421) (9,759) (683) 10,337 13,038 216 (944) 179 12,051 (70,841) 8,431 (4,944) (972) – 7,107 (71,813) 8,431 (102) (1,978) (1,699) (500) – – 2 21 – 305 349 1,534 (295) (1,608) (165)	Ten months ended 31 October 2014 2015 RMB’000 RMB’000 (unaudited) 4,878 6,375 (1,227) (1,045) 1 58 1,560 1,460 5,212 6,848 2,176 (2,635) (13,066) (6,367) 14,395 9,224 1,317 2,761 10,034 9,831 – (54) 10,034 9,777 (1,699) (4,049) – – – 56 1,227 1,045 (472) (2,948)

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APPENDIX II

				Ten months	ended
	Year	ended 31 December		31 October
	2012	2013	2014	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
CASH FLOWS FROM
FINANCING ACTIVITIES
Inception of loan from ultimate
parent	–	200,000	–	–	–
Repayment of loan from
ultimate parent	–	–	(100,000)	–	–
Net cash generated from/(used
in) financing activities	–	200,000	(100,000)	–	–
NET INCREASE/
(DECREASE) IN CASH
AND CASH
EQUIVALENTS	6,812	126,579	(91,734)	9,562	6,829
CASH AND CASH
EQUIVALENTS AT
BEGINNING OF YEAR/
PERIOD	61,502	68,314	194,893	194,893	103,159
CASH AND CASH
EQUIVALENTS AT END
OF YEAR/PERIOD	68,314	194,893	103,159	204,455	109,988

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APPENDIX II

F. NOTES TO THE FINANCIAL INFORMATION

1. GENERAL INFORMATION

CSI Company was incorporated on 13 December 2007 in the PRC with limited liability. The address of its registered office and principal place of business is No. 11 Section 1, Renmin Middle Road, Qingyang District, Chengdu, the PRC.

CSI Company is principally engaged in the sports venues operation and management, operations and sales of sports products, management and development of sports competition and performances, investment and development of sports tourism. The principal activities of its subsidiary are set out in note 24 to the Financial Information.

As at 31 December 2012, 2013, 2014 and 31 October 2015, in the opinion of the directors of CSI Company, 成�文化旅遊發展集團有限責任公司 (Chengdu Culture & Tourism Development Group Limited Liability Company) (“Chengdu Culture and Tourism”), a state-owned enterprise established under the laws of the PRC, is the ultimate parent of CSI Company.

2. BASIS OF PREPARATION

The Financial Information has been prepared in accordance with all applicable HKFRSs issued by the HKICPA. HKFRSs comprise Hong Kong Financial Reporting Standards (“HKFRS”); Hong Kong Accounting Standards (“HKAS”); and Interpretations. The Financial Information also comply with the applicable disclosure provisions of the Rules Governing the Listing of Securities on the Stock Exchange and with the disclosure requirements of the Hong Kong Companies Ordinance (Cap. 622).

3. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS AND REQUIREMENTS

(a) Application of new and revised HKFRSs

In the Relevant Periods, CSI Group has adopted all the new and revised HKFRSs issued by the HKICPA that are relevant to its operations and effective for its accounting year beginning on 1 January 2015. The adoption of these new and revised HKFRSs did not result in significant changes to CSI Group’s accounting policies, presentation of CSI Group’s Financial Information and amounts reported for the Relevant Periods.

(b) New and revised HKFRSs in issue but not yet effective that are relevant to CSI Group’s operation

CSI Group has not early applied new and revised HKFRSs that have been issued but are not yet effective for the financial year beginning 1 January 2015. The directors of CSI Company anticipate that the new and revised HKFRSs will be adopted in CSI Group’s Financial Information when they become effective. CSI Group is in the process of assessing, where applicable, the potential effect of all new and revised HKFRSs that will be effective in future periods but is not yet in a position to state whether these new and revised HKFRSs would have a material impact on its results of operations and financial position.

HKFRS 9 Financial Instruments[1] HKFRS 15 Revenue from Contracts with Customers[2] Amendments to HKFRSs Annual Improvements to HKFRSs 2012-2014 Cycle[3]

1 Effective for annual periods beginning on or after 1 January 2018, with earlier application permitted.

2 Effective for annual periods beginning on or after 1 January 2017, with earlier application permitted.

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Effective for annual periods beginning on or after 1 January 2016, with earlier application permitted.

4. SIGNIFICANT ACCOUNTING POLICIES

The Financial Information has been prepared under the historical cost convention.

The preparation of Financial Information in conformity with HKFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying CSI Group’s accounting policies. The areas where assumptions and estimates are significant to the Financial Information are disclosed in note 5 to the Financial Information.

The significant accounting policies applied in the preparation of the Financial Information are set out below.

(a) Consolidation

The Financial Information includes the financial statements of CSI Company and its subsidiary made up to 31 December and 31 October. Subsidiary is entity over which CSI Group has control. CSI Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. CSI Group has power over an entity when CSI Group has existing rights that give it the current ability to direct the relevant activities, i.e. activities that significantly affect the entity’s returns.

When assessing control, CSI Group considers its potential voting rights as well as potential voting rights held by other parties. A potential voting right is considered only if the holder has the practical ability to exercise that right.

Subsidiary is consolidated from the date on which control is transferred to CSI Group. It is deconsolidated from the date the control ceases.

Intragroup transactions, balances and unrealised profits are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of a subsidiary have been changed where necessary to ensure consistency with the policies adopted by CSI Group.

(b) Foreign currency translation

(i) Functional and presentation currency

Items included in the Financial Information of each of CSI Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The Financial Information is presented in Renminbi (“RMB”), which is CSI Company’s functional and presentation currency.

(ii) Transactions and balances in each entity’s financial statements

Transactions in foreign currencies are translated into the functional currency on initial recognition using the exchange rates prevailing on the transaction dates. Monetary assets and liabilities in foreign currencies are translated at the exchange rates at the end of each reporting period. Gains and losses resulting from this translation policy are recognised in profit or loss.

Non-monetary items that are measured at fair value in foreign currencies are translated using the exchange rates at the dates when the fair values are determined.

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When a gain or loss on a non-monetary item is recognised in other comprehensive income, any exchange component of that gain or loss is recognised in other comprehensive income. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss.

(c) Fixed assets

Fixed assets including buildings and leasehold land (classified as finance leases) held for use in the production or supply of goods or services, or for administrative purposes (other than properties under construction as described below), are stated in the consolidated statement of financial position at cost, less subsequent accumulated depreciation and subsequent impairment losses, if any.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to CSI Group and the cost of the item can be measured reliably. All other repairs and maintenance are recognised in profit or loss during the period in which they are incurred.

Depreciation of fixed assets is calculated at rates sufficient to write off their cost less their residual values over the estimated useful lives on a straight-line basis. The principal useful lives are as follows:

Allocated land	Indefinite lives, not depreciated
Leasehold land	The shorter of the lease terms and 50 years
Buildings	40 years
Furniture, fixtures and equipment	3 to 10 years
Motor vehicles	5 years

The residual values, useful lives and depreciation method are reviewed and adjusted, if appropriate, at the end of each reporting period.

Construction in progress represents buildings under construction and plant and equipment pending installation, and is stated at cost less impairment losses. Depreciation begins when the relevant assets are available for use.

The gain or loss on disposal of fixed assets is the difference between the net sales proceeds and the carrying amount of the relevant asset, and is recognised in profit or loss.

(d) Operating leases

Leases that do not substantially transfer to the lessees all the risks and rewards of ownership of assets are accounted for as operating leases. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

(e) Properties under development and held for sale

Properties for sale under development and held for sale are stated at the lower of cost and net realisable value. Costs include acquisition costs, prepaid land lease payments, construction costs, borrowing costs capitalised and other direct costs attributable to such properties. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.

On completion, the properties are reclassified to properties held for sale at the then carrying amount.

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(f) Recognition and derecognition of financial instruments

Financial assets and financial liabilities are recognised in the consolidated statement of financial position when CSI Group becomes a party to the contractual provisions of the instruments.

Financial assets are derecognised when the contractual rights to receive cash flows from the assets expire; CSI Group transfers substantially all the risks and rewards of ownership of the assets; or CSI Group neither transfers nor retains substantially all the risks and rewards of ownership of the assets but has not retained control on the assets. On derecognition of a financial asset, the difference between the asset’s carrying amount and the sum of the consideration received and the cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expired. The difference between the carrying amount of the financial liability derecognised and the consideration paid is recognised in profit or loss.

(g) Financial assets

Financial assets are recognised and derecognised on a trade date basis where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial assets within the timeframe established by the market concerned, and are initially measured at fair value, plus directly attributable transaction costs except in the case of financial assets at fair value through profit or loss.

CSI Group classifies its financial assets in the following categories: loans and receivables and availablefor-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(i) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. These assets are carried at amortised cost using the effective interest method (except for short-term receivables where interest is immaterial) minus any reduction for impairment or uncollectibility. Typically trade and other receivables, bank balances and cash are classified in this category.

(ii) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are not classified as loans and receivables, held-to-maturity investments or financial assets at fair value through profit or loss. Available-for-sale financial assets are subsequently measured at fair value. Gains or losses arising from changes in fair value of these investments are recognised in other comprehensive income and accumulated in the investment revaluation reserve, until the investments are disposed of or there is objective evidence that the investments are impaired, at which time the cumulative gains or losses previously recognised in other comprehensive income are reclassified from equity to profit or loss. Interest calculated using the effective interest method and dividends on available-for-sale equity investments are recognised in profit or loss.

Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity instruments, are measured at cost less impairment losses.

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(h) Trade and other receivables

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection of trade and other receivables is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.

Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less allowance for impairment.

(i) Cash and cash equivalents

For the purpose of the statement of cash flows, cash and cash equivalents represent cash at bank and on hand, demand deposits with banks and other financial institutions, and short-term highly liquid investments which are readily convertible into known amounts of cash and subject to an insignificant risk of change in value. Bank overdrafts which are repayable on demand and form an integral part of CSI Group’s cash management are also included as a component of cash and cash equivalents.

(j) Financial liabilities and equity instruments

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument under HKFRSs. An equity instrument is any contract that evidences a residual interest in the assets of CSI Group after deducting all of its liabilities. The accounting policies adopted for specific financial liabilities and equity instruments are set out below.

(k) Trade and other payables

Trade and other payables are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method unless the effect of discounting would be immaterial, in which case they are stated at cost.

(l) Equity instruments

Equity instruments issued by CSI Company are recorded at the proceeds received, net of direct issue

costs.

(m) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable and is recognised when it is probable that the economic benefits will flow to CSI Group and the amount of revenue can be measured reliably.

Event income represents service income for holding of concerts or sports events. Event income is recognised when the services are rendered.

Rental income is recognised on a straight-line basis over the lease term.

Interest income is recognised on a time-proportion basis using the effective interest method.

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(n) Employee benefits

(i) Employee leave entitlements

Employee entitlements to annual leave and long service leave are recognised when they accrue to employees. A provision is made for the estimated liability for annual leave and long service leave as a result of services rendered by employees up to the end of the reporting period.

Employee entitlements to sick leave and maternity leave are not recognised until the time of leave.

(ii) Pension obligations

CSI Group contributes to defined contribution retirement schemes which are available to all employees. Contributions to the schemes by CSI Group and employees are calculated as a percentage of employees’ basic salaries. The retirement benefit scheme cost charged to profit or loss represents contributions payable by CSI Group to the funds.

(iii) Termination benefits

Termination benefits are recognised at the earlier of the dates when CSI Group can no longer withdraw the offer of those benefits and when CSI Group recognises restructuring costs and involves the payment of termination benefits.

(o) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

To the extent that funds are borrowed generally and used for the purpose of obtaining a qualifying asset, the amount of borrowing costs eligible for capitalisation is determined by applying a capitalisation rate to the expenditures on that asset. The capitalisation rate is the weighted average of the borrowing costs applicable to the borrowings of CSI Group that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

(p) Government grants

A government grant is recognised when there is reasonable assurance that CSI Group will comply with the conditions attaching to it and that the grant will be received.

Government grant relating to income are deferred and recognised in profit or loss over the period to match them with the costs they are intended to compensate.

(q) Taxation

Income tax represents the sum of the current tax and deferred tax.

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The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit recognised in profit or loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. CSI Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the Financial Information and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences, unused tax losses or unused tax credits can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investment in a subsidiary, except where CSI Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised, based on tax rates that have been enacted or substantively enacted by the end of the reporting period. Deferred tax is recognised in profit or loss, except when it relates to items recognised in other comprehensive income or directly in equity, in which case the deferred tax is also recognised in other comprehensive income or directly in equity.

The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which CSI Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and CSI Group intends to settle its current tax assets and liabilities on a net basis.

(r) Impairment of non-financial assets

The carrying amounts of non-financial assets are reviewed at each reporting date for indications of impairment and where an asset is impaired, it is written down as an expense through the consolidated statement of profit or loss to its estimated recoverable amount. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. If this is the case, recoverable amount is determined for the cash-generating unit to which the asset belongs. Recoverable amount is the higher of value in use and the fair value less costs of disposal of the individual asset or the cash-generating unit.

Value in use is the present value of the estimated future cash flows of the asset/cash-generating unit. Present values are computed using pre-tax discount rates that reflect the time value of money and the risks specific to the asset/cash-generating unit whose impairment is being measured.

Impairment losses for cash-generating units are allocated first against the goodwill of the unit and then pro rata amongst the other assets of the cash-generating unit. Subsequent increase in the recoverable amount caused by changes in estimates are credited to profit or loss to the extent that they reverse the impairment.

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(s) Impairment of financial assets

At the end of each reporting period, CSI Group assesses whether its financial assets (other than those at fair value through profit or loss) are impaired, based on objective evidence that, as a result of one or more events that occurred after the initial recognition, the estimated future cash flows of the (group of) financial asset(s) have been affected.

In addition, for trade receivables that are assessed not to be impaired individually, CSI Group assesses them collectively for impairment, based on CSI Group’s past experience of collecting payments, an increase in the delayed payments in the portfolio, observable changes in economic conditions that correlate with default on receivables, etc.

Only for trade receivables, the carrying amount is reduced through the use of an allowance account and subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

For all other financial assets, the carrying amount is directly reduced by the impairment loss.

For financial assets measured at amortised cost, if the amount of the impairment loss decreases in a subsequent period and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed (either directly or by adjusting the allowance account for trade receivables) through profit or loss. However, the reversal must not result in a carrying amount that exceeds what the amortised cost of the financial asset would have been had the impairment not been recognised at the date the impairment is reversed.

(t) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when CSI Group has a present legal or constructive obligation arising as a result of a past event, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made. Where the time value of money is material, provisions are stated at the present value of the expenditures expected to settle the obligation.

Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated reliably, the obligation is disclosed as a contingent liability, unless the probability of outflow is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events are also disclosed as contingent liabilities unless the probability of outflow is remote.

(u) Events after the reporting period

Events after the reporting period that provide additional information about CSI Group’s position at the end of the reporting period are adjusting events and are reflected in the Financial Information. Events after the reporting period that are not adjusting events are disclosed in the notes to the Financial Information when material.

5. CRITICAL JUDGEMENTS AND KEY ESTIMATES

Critical judgements in applying accounting policies

In the process of applying the accounting policies, management has made the following judgements, that have the most significant effect on the amounts recognised in the Financial Information (apart from those involving estimations, which are dealt with below):

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(a) Distinction between investment properties and owner-occupied properties

Some properties comprise a portion that is held to earn rentals and another portion that is held for use in the supply of goods or services. If these portions can be sold separately (or leased out separately under a finance lease), CSI Group accounts for the portions separately. If the portions cannot be sold separately, the property is accounted for as investment property only if an insignificant portion is held for use in the supply of goods or services. Judgement is applied in determining whether ancillary services are so significant that a property does not qualify as an investment property. CSI Group considers each property separately in making its judgement.

(b) Legal title of a parcel of land

As stated in notes 14 to the Financial Information, the title of a parcel of land held for future development was not transferred to CSI Group as at 31 October 2015. Despite the fact that CSI Group has not obtained the relevant legal title, the directors of CSI Company determined to recognise those prepaid lease payments as properties held for future development under inventories, on the grounds that they expect the transfer of legal titles in future should have no major difficulties and CSI Group is in substance controlling those buildings and that parcel of land.

Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

(a) Fixed assets and depreciation

CSI Group determines the estimated useful lives, residual values and related depreciation charges for CSI Group’s fixed assets. This estimate is based on the historical experience of the actual useful lives and residual values of fixed assets of similar nature and functions. CSI Group will revise the depreciation charge where useful lives and residual values are different to those previously estimated, or it will write-off or write-down technically obsolete or non-strategic assets that have been abandoned.

The carrying amount of fixed assets as at 31 December 2012, 31 December 2013, 31 December 2014, and 31 October 2015 were approximately RMB882,226,000, RMB541,954,000, RMB541,797,000, and RMB544,272,000 respectively.

6. FINANCIAL RISK MANAGEMENT

CSI Group’s activities expose it to a variety of financial risks: foreign currency risk, credit risk, liquidity risk and interest rate risk. CSI Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on CSI Group’s financial performance.

(a) Foreign currency risk

CSI Group has minimal exposure to foreign currency risk as most of its business transactions, assets and liabilities are principally denominated in the functional currencies of CSI Group entities, RMB. CSI Group currently does not have a foreign currency hedging policy in respect of foreign currency transactions, assets and liabilities. CSI Group monitors its foreign currency exposure closely and will consider hedging significant foreign currency exposure should the need arise.

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(b) Credit risk

CSI Group has no significant concentrations of credit risk.

The credit risk on cash and bank balances is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

CSI Group is also exposed to credit risk in respect of financial guarantees issued (note 22). The directors of CSI Company believe that the credit risk is not significant as the financial position of the ultimate parent is good.

(c) Liquidity risk

CSI Group’s policy is to regularly monitor current and expected liquidity requirements to ensure that it maintains sufficient reserves of cash to meet its liquidity requirements in the short and longer term.

The maturity analysis based on contractual undiscounted cash flows of CSI Group’s financial liabilities is as follows:

At 31 December 2012 Trade and other payables Receipts in advance At 31 December 2013 Trade and other payables Receipts in advance At 31 December 2014 Trade and other payables Receipts in advance At 31 October 2015 Trade and other payables Receipts in advance	On demand or less than 1 year RMB’000 4,068 1,013 27,805 69 34,143 248 139,567 3,009	Between 1 and 2 years RMB’000 – – 13,400 – 101,675 – – –	Between 2 and 5 years RMB’000 – – 203,350 – – – – –	Total RMB’000 4,068 1,013
				244,555 69
				135,818 248
				139,567 3,009

At the end of each of the Relevant Periods, CSI Group is also exposed to liquidity risk in respect of financial guarantees issued (note 22). The amounts are payable on demand and the maximum liabilities are disclosed in note 22.

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(d)

Interest rate risk

CSI Group exposed to fair value interest rate risks in relation to the following fixed-rate financial instruments:

Fixed-rate financial assets: Cash and cash equivalents Fixed-rate financial liabilities: Loan from ultimate parent	As at 31 December 2012 2013 2014 RMB’000 RMB’000 RMB’000 – 169,525 87,850 – 200,000 100,000	As at 31 October 2015 RMB’000 88,000
		100,000

CSI Group exposed to cash flow interest rate risk in relation to the following variable-rate financial instruments which bear interests at variable rates varied with the then prevailing market condition:

				As at
		As at 31 December		31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
Variable-rate financial assets:
Cash and cash equivalents	68,314	25,368	15,309	21,988

The sensitivity analysis below has been determined assuming that the change in interest rates had occurred at the end of the reporting period and all other variables were held constant. Such change has been applied to financial instruments that would have affected the profit or loss. A change of +100 basis points (“bps”) and -100 bps was applied at the end of the reporting period. The applied change of bps represented management’s assessment of the reasonably possible change in interest rates based on the current market conditions.

				Increase/(decrease) in	post-tax
				profit or loss
				+100 bps	-100 bps
				RMB’000	RMB’000
As	at	31	December 2012	512	(512)
As	at	31	December 2013	253	(253)
As	at	31	December 2014	153	(153)
As	at	31	October 2015	137	(137)

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(e) Categories of financial instruments at 31 December 2012, 2013, 2014 and 31 October 2015

					As at
		As	at 31 December		31 October
	2012		2013	2014	2015
	RMB’000		RMB’000	RMB’000	RMB’000
Financial assets:
Loans and receivables (including
cash and cash equivalents)	72,016		200,515	108,535	117,999
Available-for-sale financial assets	500		500	500	500
Financial liabilities:
Financial liabilities measured at
amortised cost	4,068		214,405	127,443	136,667

(f) Fair value

The carrying amounts of CSI Group’s financial assets and financial liabilities as reflected in the consolidated statement of financial position approximate their respective fair values.

7. REVENUE

CSI Group’s revenue is as follows:

				Ten months	ended
	Year	ended 31 December		31 October
	2012	2013	2014	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Event income	29,558	14,733	15,873	14,417	13,292
Rental income	6,750	6,820	2,719	1,952	2,484
Sports venue hiring charge
income	5,892	2,875	368	275	334
Others	2,656	1,201	2,990	1,967	2,392
	44,856	25,629	21,950	18,611	18,502

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8. OTHER INCOME

				Ten months	ended
	Year	ended 31 December		31 October
	2012	2013	2014	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Recovery of doubtful debts	276	–	28	–	–
Bank interest income	305	349	1,534	1,227	1,045
Government subsidies	–	–	–	–	10,534
Others	8	421	130	121	679
	589	770	1,692	1,348	12,258

Government subsidies represented the government subsidies for the 9th National Para Games and the 6th Special Olympics of China. The government subsidies incomes are recognised in profit or loss over the period to match with the costs incurred.

9. SEGMENT INFORMATION

Operating segments are identified on the basis of internal reports about components of CSI Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.

CSI Group has carried on a single business in a single geographical location, which is sports venues operation and management in the PRC, and all the assets are principally located in the PRC. Accordingly, there is only one single reportable segment of CSI Group which is regularly reviewed by the chief operating decision maker.

Revenue from major customers

Revenue from customers of the corresponding years/periods contributing over 10% of the total revenue of CSI Group is as follows:

					Ten months	ended
		Year	ended 31 December		31 October
		2012	2013	2014	2014	2015
		RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
					(unaudited)
Customer	a	10,400	7,300	6,794	6,794	2,554
Customer	b	4,344	3,583	2,758	2,758	–

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10. INCOME TAX EXPENSE/(CREDIT)

				Ten months	ended
	Year	ended 31 December		31 October
	2012	2013	2014	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Current tax
– PRC Enterprise Income Tax:
Provision for the year/period	1,846	–	–	–	1,423
Overprovision in prior years	–	(350)	–	–	–
	1,846	(350)	–	–	1,423

No provision for Hong Kong Profits Tax is required since CSI Group has no assessable profit for the Relevant Periods.

Under the Law of PRC on Enterprise Income Tax (the “EIT Law”) and Implementation Regulation of the EIT Law, CSI Company and its PRC subsidiary are subject to tax rate at 25% on profit before tax and 10% on revenue respectively during the Relevant Periods.

The reconciliation between the income tax expense and the product of profit/(loss) before tax multiplied by the PRC Enterprise Income Tax rate is as follows:

Profit/(loss) before tax Tax at the domestic income tax rate of 25% Tax effect of expenses that are not deductible Tax effect of income that is not taxable Tax effect of tax losses not recognised Tax effect of utilisation of tax losses not previously recognised Tax effect of different tax rates in the PRC jurisdiction Over-provision in prior years Income tax expense	Year ended 31 December 2012 2013 2014 RMB’000 RMB’000 RMB’000 7,446 (6,688) 4,405 1,862 (1,672) 1,101 271 65 10 (69) – (19) – 1,607 – – – (1,092) (218) – – – (350) – 1,846 (350) –	Ten months ended 31 October 2014 2015 RMB’000 RMB’000 (unaudited) 4,878 6,375 1,220 1,593 2 6 – – – – (1,208) (168 (14) (8 – – – 1,423	Ten months ended 31 October 2014 2015 RMB’000 RMB’000 (unaudited) 4,878 6,375 1,220 1,593 2 6 – – – – (1,208) (168 (14) (8 – – – 1,423
			1,593 6 – – (168 (8 –
			1,423

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11. PROFIT/(LOSS) FOR THE YEAR/PERIOD

CSI Group’s profit/(loss) for the year/period is stated after charging/(crediting) the following:

						Ten months ended	Ten months ended
		Year	ended 31 December			31 October
		2012	2013		2014	2014	2015
		RMB’000	RMB’000	RMB’000		RMB’000	RMB’000
						(unaudited)
(a)	Finance costs:
	Interest expenses on loan from
	ultimate parent	–	10,348		12,994	7,890	4,410
	Total borrowing costs wholly
	repayable within five years	–	10,348		12,994	7,890	4,410
	Amount capitalised	–	(10,348)	(12,994)		(7,890)	(4,410)
		–	–		–	–	–
(b)	Other items:
	Auditors’ remuneration	–	10		–	–	–
	Depreciation	6,392	4,379		1,855	1,560	1,460
	Loss on disposal of fixed assets	4	7,905		1	1	58
	Corresponding costs incurred for
	government subsidies received	–	–		–	–	10,534
	Staff costs:
	Directors’ emoluments	–	–		–	–	–
	Other staff costs
	– Salaries and other
	benefits	2,943	3,018		3,292	1,809	1,764
	– Retirement benefits
	schemes contributions	642	720		878	736	793
		3,585	3,738		4,170	2,545	2,557

The employees of CSI Group are members of a central pension scheme operated by the local municipal government. CSI Group is required to contribute certain percentage of the employees’ basic salaries and wages to the central pension scheme to fund the retirement benefits. The local municipal government undertakes to assume the retirement benefits obligations of all existing and future retired employees of CSI Group. The only obligation of CSI Group with respect to the central pension scheme is to meet the required contributions under the scheme.

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12. FIXED ASSETS

(a) CSI Group and CSI Company

Cost At 1 January 2012 Additions Disposals At 31 December 2012 and 1 January 2013 Additions Transfer to inventories Disposals At 31 December 2013 and 1 January 2014 Additions Disposals At 31 December 2014 and 1 January 2015 Additions Disposals At 31 October 2015 Accumulated depreciation At 1 January 2012 Charge for the year Disposals At 31 December 2012 and 1 January 2013 Charge for the year Transfer to inventories Disposals At 31 December 2013 and 1 January 2014 Charge for the year Disposals At 31 December 2014 and 1 January 2015 Charge for the period Disposals At 31 October 2015	Buildings RMB’000 62,180 – – 62,180 – – (8,516) 53,664 – – 53,664 – – 53,664 4,371 1,560 – 5,931 1,507 – (694) 6,744 1,352 – 8,096 1,127 – 9,223	Furniture, fixture and equipment RMB’000 4,929 102 (22) 5,009 69 – (172) 4,906 10 (14) 4,902 694 (332) 5,264 1,806 667 (18) 2,455 661 – (69) 3,047 400 (13) 3,434 314 (218) 3,530	Construction in progress RMB’000 – – – – 1,909 – – 1,909 1,689 – 3,598 3,355 – 6,953 – – – – – – – – – – – – – –	Motor vehicles RMB’000 1,375 – (9) 1,366 – – (6) 1,360 – – 1,360 – – 1,360 646 261 (7) 900 259 – (5) 1,154 103 – 1,257 19 – 1,276	Sub-total RMB’000 68,484 102 (31) 68,555 1,978 – (8,694) 61,839 1,699 (14) 63,524 4,049 (332) 67,241 6,823 2,488 (25) 9,286 2,427 – (768) 10,945 1,855 (13) 12,787 1,460 (218) 14,029	Allocated land RMB’000 491,060 – – 491,060 – – – 491,060 – – 491,060 – – 491,060 – – – – – – – – – – – – – –	Leasehold land RMB’000 338,729 – – 338,729 – (338,729) – – – – – – – – 2,928 3,904 – 6,832 1,952 (8,784) – – – – – – – –	Sub-total RMB’000 829,789 – – 829,789 – (338,729) – 491,060 – – 491,060 – – 491,060 2,928 3,904 – 6,832 1,952 (8,784) – – – – – – – –	Total RMB’000 898,273 102 (31
									898,344 1,978 (338,729 (8,694
									552,899 1,699 (14
									554,584 4,049 (332
									558,301
									9,751 6,392 (25
									16,118 4,379 (8,784 (768
									10,945 1,855 (13
									12,787 1,460 (218
									14,029

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ACCOUNTANT’S REPORT OF CSI COMPANY

		Furniture,
		fixture and	Construction	Motor		Allocated	Leasehold
	Buildings	equipment	in progress	vehicles	Sub-total	land	land	Sub-total	Total
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
Carrying amount
At 31 December 2012	56,249	2,554	–	466	59,269	491,060	331,897	822,957	882,226
At 31 December 2013	46,920	1,859	1,909	206	50,894	491,060	–	491,060	541,954
At 31 December 2014	45,568	1,468	3,598	103	50,737	491,060	–	491,060	541,797
At 31 October 2015	44,441	1,734	6,953	84	53,212	491,060	–	491,060	544,272

(b) The analysis of carrying amount of properties is as follows:

In PRC – medium-term leases Representing: Buildings carried at cost Interests in leasehold land held for own use	As at 31 December 2012 2013 2014 RMB’000 RMB’000 RMB’000 388,146 46,920 45,568 56,249 46,920 45,568 331,897 – – 388,146 46,920 45,568	As at 31 October 2015 RMB’000 44,441
		44,441 –
		44,441

(c) Allocated land with carrying amount of approximately RMB491,060,000, RMB491,060,000, RMB491,060,000 and RMB491,060,000 located in the PRC as at 31 December 2012, 2013, 2014 and 31 October 2015 respectively is non-transferable.

13. OTHER FINANCIAL ASSETS

CSI Group and CSI Company

				As at
		As at 31 December		31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
Unlisted equity securities, at cost
– in the PRC	500	500	500	500

Unlisted equity securities was stated at cost as they do not have a quoted market price in active market and whose fair value cannot be reliably measured as at the end of each reporting period.

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14. INVENTORIES

CSI Group and CSI Company

				As at
		As at 31 December		31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
Properties held for future development
and under development for sale	–	385,366	395,125	401,492

(a) The amounts of properties for future development and under development are expected to be recovered after more than one year.
(b) The analysis of carrying value of leasehold land included in properties held for future development and under development for sale are set out as follows:

CSI Group and CSI Company

					As at
			As at 31 December		31 October
		2012	2013	2014	2015
		RMB’000	RMB’000	RMB’000	RMB’000
In	the PRC
	– medium-term leases	–	375,693	375,693	375,693

(c) At 31 December 2013, 31 December 2014 and 31 October 2015, the inventories included a parcel of land held for future development of approximately RMB45,748,000, RMB45,748,000 and RMB45,748,000 respectively for which CSI Group is in the process of obtaining the relevant land use right certificate.
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15. TRADE AND OTHER RECEIVABLES

CSI Group and CSI Company

				As at
		As at 31 December		31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
Trade receivables	1,400	2,000	10	377
Prepayments, deposits and other
receivables:
Amount due from ultimate parent	2,015	2,005	5,005	5,004
Amounts due from third parties	287	1,617	361	2,630
	2,302	3,622	5,366	7,634
Prepayment for land cost	–	28,140	28,140	28,140
	3,702	33,762	33,516	36,151

As at 31 December 2012, 2013, 2014 and 31 October 2015, the fair value of trade receivables approximated their carrying amounts.

CSI Group and CSI Company allow an average credit period of 0 to 90 days for its customers.

The following is an aged analysis of trade receivables net of allowance of doubtful debts presented based on dates on which revenue was recognised:

0 to 90 days	As at 31 December 2012 2013 2014 RMB’000 RMB’000 RMB’000 1,400 2,000 10	As at 31 October 2015 RMB’000 377

The carrying amounts of CSI Group’s and CSI Company’s trade receivables are all denominated in RMB.

As at 31 December 2012, 2013, 2014 and 31 October 2015, none of the trade receivables were impaired and there were no allowance for impairment required.

The amount due from ultimate parent is unsecured, non-interest bearing and has no fixed terms of repayment.

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16. CASH AND CASH EQUIVALENTS

CSI Group

				As at
		As at 31 December		31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
Bank balances and cash (Note a)	68,314	25,368	15,309	21,988
Bank deposits (Note b)
– with maturity of 3 months	–	169,525	87,850	88,000
	68,314	194,893	103,159	109,988

CSI Company

				As at
		As at 31 December		31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
Bank balances and cash (Note a)	65,369	25,242	15,259	21,954
Bank deposits (Note b)
– with maturity of 3 months	–	166,725	84,900	85,000
	65,369	191,967	100,159	106,954

Note a: As at 31 December 2012, 2013, 2014, and 31 October 2015, all bank balances and cash of CSI Group and CSI Company were denominated in RMB. Conversion of RMB into foreign currencies is subject to the PRC’s Foreign Exchange Control Regulations and Administration of Settlement, Sale and Payment of Foreign Exchange Regulations.

Note b: The deposits are denominated in RMB and at fixed interest rate ranging from 1.85% to 3.05% per annum and therefore are subject to fair value interest rate risk.

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17. TRADE AND OTHER PAYABLES

CSI Group and CSI Company

				As at
	As at 31 December			31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
Trade payables	643	684	638	655
Other payables and accruals:
Loan from ultimate parent	–	200,000	100,000	100,000
Interest payable to ultimate parent	–	10,348	23,342	27,752
Amounts due to third parties	3,425	3,373	3,463	8,260
	3,425	213,721	126,805	136,012
	4,068	214,405	127,443	136,667
Less: Amount due for settlement within
12 months (shown under current
liabilities)	(4,068)	(14,405)	(27,443)	(136,667)
Amounts due for settlement after 12
months	–	200,000	100,000	–

The aging analysis of trade payables based on the date of receipt of goods or services, is as follows:

				As at
		As at 31 December		31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
0 to 90 days	–	45	–	17
91 days to 180 days	5	1	–	–
181 days to 365 days	–	–	–	–
Over 1 year	638	638	638	638
Total	643	684	638	655

The carrying amounts of CSI Group’s and CSI Company’s trade payables are all denominated in RMB.

Loan from ultimate parent are unsecured, interest bearing at 6.7%, 6.7% and 5.8% per annum as at 31 December 2013, 31 December 2014 and 31 October 2015 respectively and repayable on 27 March 2016.

18. PAID-UP CAPITAL

Registered and paid-up capital At 1 January 2012, 31 December 2012, 1 January 2013, 31 December 2013, 1 January 2014, 31 December 2014, 1 January 2015 and 31 October 2015	RMB’000 45,000

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APPENDIX II

CSI Group’s objectives when managing capital are to safeguard CSI Group’s ability to continue as a going concern and to maximise the return to the equity holders through the optimisation of the debt and equity balance.

CSI Group currently does not have any specific policies and processes for managing capital.

CSI Group is not subject to any externally imposed capital requirements.

19. RESERVES

(a) CSI Group

The amounts of CSI Group’s reserves and movements therein are presented in the consolidated statements of profit or loss and other comprehensive income and consolidated statements of changes in equity.

(b) CSI Company

		Statutory
	Capital	surplus	Retained
	reserve	reserve	profits	Total
	RMB’000	RMB’000	RMB’000	RMB’000
	(Note (c)(i))	(Note (c)(ii))
At 1 January 2012	851,386	4,880	40,463	896,729
Total comprehensive income for
the year	–	–	4,428	4,428
At 31 December 2012 and
1 January 2013	851,386	4,880	44,891	901,157
Total comprehensive income for
the year	–	–	(6,351)	(6,351)
At 31 December 2013 and
1 January 2014	851,386	4,880	38,540	894,806
Total comprehensive income for
the year	–	–	4,331	4,331
At 31 December 2014 and
1 January 2015	851,386	4,880	42,871	899,137
Total comprehensive income for
the period	–	–	4,918	4,918
At 31 October 2015	851,386	4,880	47,789	904,055

(c) Nature and purpose of reserves

(i) Capital reserve

Capital reserve of CSI Company represents the excess of the contribution from an equity holder over the registered capital of the CSI Company amounting to RMB45,000,000.

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APPENDIX II

(ii) Statutory surplus reserve

In accordance with relevant laws and regulations in the PRC, CSI Company and CLS are required to transfer 10% of their profit after tax reported in their statutory financial statements prepared under relevant accounting principles and financial regulations applicable to enterprises established in the PRC to the statutory surplus reserve. Appropriation to statutory surplus reserve shall be approved by the shareholders and may cease if the balance of statutory surplus reserve has reached 50% of the respective company’s registered capital.

CSI Company and CLS may, upon the approval by a resolution, convert their surplus reserve into capital in proportion to their then existing equity holdings. However, when converting the CSI Company’s and CLS’s statutory surplus reserve into capital, the balance of such reserve remaining unconverted must not be less than 25% of the registered capital.

20. CAPITAL COMMITMENTS

CSI Group

Capital commitments contracted for at the end of the reporting period but not yet incurred are as follows:

				As at
		As at 31 December		31 October
	2012	2013	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000
Leasehold land	–	68,474	68,474	68,474
Fixed assets	–	8,433	9,686	13,532
	–	76,907	78,160	82,006

21. LEASE COMMITMENTS

CSI Group

The total future minimum lease payments under non-cancellable operating leases are receivable as follows:

					As at
		As	at 31 December		31 October
	2012		2013	2014	2015
	RMB’000		RMB’000	RMB’000	RMB’000
Within one year	1,078		1,018	987	1,078
In the second to fifth years inclusive	3,227		2,209	1,222	352
	4,305		3,227	2,209	1,430

Operating lease rental income represent rentals receivable by CSI Group for certain of its offices. Leases are negotiated for an average term of three years and rentals are fixed over the lease terms and do not include contingent rentals.

II-31 -

ACCOUNTANT’S REPORT OF CSI COMPANY

APPENDIX II

22. FINANCIAL GUARANTEES ISSUED

As at 31 December 2012, 31 December 2013, 31 December 2014 and 31 October 2015, CSI Group has issued guarantees to banks in respect of banking facilities granted to the ultimate parent.

At the end of each of the Relevant Periods, the directors of CSI Company do not consider it probable that a claim will be made against CSI Group under any of the above guarantees. The maximum liability of CSI Group at the end of each of the Relevant Periods under the above guarantees are the outstanding amounts of the bank loans to the ultimate parent at 31 December 2012, 31 December 2013, 31 December 2014 and 31 October 2015 of approximately RMB965,000,000, RMB569,000,000, RMB60,000,000 and RMB100,000,000 respectively.

The fair value of the guarantees at date of inception is not material and is not recognised.

23. RELATED PARTY TRANSACTIONS

(a) Recurring transactions

					Ten months	ended
		Year	ended 31 December		31 October
		2012	2013	2014	2014	2015
		RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
					(unaudited)
Interest	expenses on loan
from	ultimate parent	–	10,348	12,994	7,890	4,410

(b) Balances with related parties

Note Amount due from ultimate parent (i) Loan from ultimate parent (ii) Interest payable to ultimate parent	As 2012 RMB’000 2,015 – –	at 31 December 2013 2014 RMB’000 RMB’000 2,005 5,005 200,000 100,000 10,348 23,342	As at 31 October 2015 RMB’000 5,004 100,000 27,752

Note:

(i) The amounts are unsecured, interest-free and have no fixed term of repayment.

(ii) Loan from ultimate parent are unsecured, interest bearing at 6.7%, 6.7% and 5.8% per annum as at 31 December 2013, 31 December 2014 and 31 October 2015 respectively and repayable on 27 March 2016.

II-32 -

APPENDIX II

ACCOUNTANT’S REPORT OF CSI COMPANY

(b) The remuneration of directors of CSI Group and other members of key management during the Relevant Periods is as follows:

				Ten months	ended
	Year	ended 31 December		31 October
	2012	2013	2014	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Salaries and other benefits	69	65	80	46	42
Retirement benefits scheme
contributions	16	13	17	20	14
	85	78	97	66	56

24. INVESTMENT IN A SUBSIDIARY

Particulars of the subsidiary are as follows:

	Place of	Registered and	Percentage of ownership interest	Percentage of ownership interest	Percentage of ownership interest	directly
Name	establishment	paid-up capital		held by CSI	Company		Principal activity
						As at
			As at 31 December			31 October
			2012	2013	2014	2015
CLS	The PRC	As at 31 December	100%	100%	100%	100%	Management and
		2012, 2013, 2014 and					development of
		31 October 2015					sports competition
		– RMB500,000					and performance

CLS is a limited company established in the PRC.

25. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by CSI Company or any of its subsidiary in respect of any period subsequent to 31 October 2015.

Yours faithfully,

RSM Hong Kong

Certified Public Accountants Hong Kong

II-33 -

MANAGEMENT DISCUSSION AND ANALYSIS OF CSI COMPANY

APPENDIX III

FINANCIAL HIGHLIGHTS

CSI Company and its subsidiary recorded profits or (losses) of approximately RMB5,600,000, RMB(6,338,000), RMB4,405,000 and RMB4,952,000, respectively for the year ended 31 December 2012, 2013, 2014 and during the ten months ended 31 October 2015. As at 31 October 2015, the audited net asset of CSI Company and its subsidiary was approximately RMB951,358,000.

The Directors confirm that the accounting policies applied in the accountant’s report of CSI Company are consistent with those adopted by the Group in all material respects. Set out below are selected financial information derived from the accountant’s report of CSI Company for the year ended 31 December 2012, 2013, 2014 and during the ten months ended 31 October 2015, the full text of which is set out in Appendix II to this circular:

		Year ended		Ten months	ended
		31 December		31 October
	2012	2013	2014	2014	2015
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(unaudited)
Revenue	44,856	25,629	21,950	18,611	18,502
Gross profit	27,048	18,155	17,760	15,026	16,280
Profit/(loss) before
tax	7,446	(6,688)	4,405	4,878	6,375
Profit/(loss) for
the year/period	5,600	(6,338)	4,405	4,878	4,952

III-1 -

APPENDIX III

MANAGEMENT DISCUSSION AND ANALYSIS OF CSI COMPANY

Non-current assets Fixed assets – Property, plant and equipment – Interests in allocated land and leasehold land held for own use Other financial assets Current assets Inventories Trade and other receivables Cash and cash equivalents Current liabilities Trade and other payables Receipts in advance Current tax liabilities Net current assets Total assets less current liabilities Non-current liabilities Other payables NET ASSETS Capital and reserves Paid-up capital Reserves TOTAL EQUITY Current ratio (based on current assets over current liabilities) Gearing ratio (based on total liabilities over total assets)	2012 RMB’000 59,269 822,957 500 882,726 – 3,702 68,314 72,016 4,068 1,013 1,322 6,403 65,613 948,339 – – 948,339 45,000 903,339 948,339 11.25 0.01	As at 31 December 2013 RMB’000 50,894 491,060 500 542,454 385,366 33,762 194,893 614,021 14,405 69 – 14,474 599,547 1,142,001 200,000 200,000 942,001 45,000 897,001 942,001 42.42 0.19	2014 RMB’000 50,737 491,060 500 542,297 395,125 33,516 103,159 531,800 27,443 248 – 27,691 504,109 1,046,406 100,000 100,000 946,406 45,000 901,406 946,406 19.20 0.12	As at 31 October 2015 RMB’000 53,212 491,060 500
				544,772
				401,492 36,151 109,988
				547,631
				136,667 3,009 1,369
				141,045
				406,586
				951,358
				–
				–
				951,358
				45,000 906,358
				951,358
				3.88 0.13

III-2 -

MANAGEMENT DISCUSSION AND ANALYSIS OF CSI COMPANY

APPENDIX III

CSI Company and its subsidiary experienced a drop in revenue by approximately 43% for the year ended 31 December 2013 when compared with the corresponding period in 2012, and by approximately 14% for the year ended 31 December 2014 when compared with the corresponding period in 2013. The revenue for the ten months ended 31 October 2015 remained at similar level when compared with the corresponding period in 2014.

Gross profit of CSI Company and its subsidiary decreased by approximately 33% for the year ended 31 December 2013 compared with the corresponding period in 2012, and by approximately 2% for the year ended 31 December 2014 compared with the corresponding period in 2013. There was an increase in gross profit by approximately 8% for the ten months ended 31 October 2015 compared with the corresponding period in 2014.

The decrease in both revenue and gross profit for the year ended 31 December 2013 when compared with the corresponding period in 2012 and for the year ended 31 December 2014 when compared with the corresponding period in 2013 was mainly due to the demolition of the basketball court by CSI Company in 2013 and fewer sports competitions in 2013 and 2014. The increase in gross profit for the ten months ended 31 October 2015 compared with the corresponding period in 2014 was mainly because of the difference in revenue structure.

A net loss was incurred for the year ended 31 December 2013, which was mainly due to the decrease in revenue and the demolition of the basketball court in 2013, which was recorded as loss on disposal of fixed assets and resulted in an increase in other operating expenses of CSI Company and its subsidiary for the year 2013. For the year ended 31 December 2014, CSI Company and its subsidiary had a net profit. This was mainly because, in the absence of a loss of fixed assets caused by the demolition of the basketball park, other operating expenses significantly decreased when compared with the year 2013. A slight increase in net profit of approximately 1.5% was recorded for the ten months ended 31 October 2015 when compared with the corresponding period in 2014.

SEGMENT INFORMATION

The turnover of CSI Company and its subsidiary was not classified by business segments.

SIGNIFICANT INVESTMENT, MATERIAL ACQUISITION AND DISPOSAL

CSI Company and its subsidiary did not have any material disposal for the year ended 31 December 2012, 2013, 2014 and during the period ended 31 October 2015.

The significant investment and material acquisition of CSI Company and its subsidiary for the year ended 31 December 2012, 2013, 2014 and during the period ended 31 October 2015 are as follows:

CSI Company entered into the Agreement for Payment of Land Premium and Transfer of Land《土地價款支付及土地移交協議》with Chengdu Office for Integrated Construction for Civil Buildings (成�市民用建築統一建設辦公室) on 11 September 2013. It was agreed that two parcels of land with a total site area of approximately 10.3 mu (approximately 6,867 sq.m.) will be integrated by CSI Company at the cost of RMB9,380,000 per mu and the total cost would be approximately RMB96,600,000.

III-3 -

MANAGEMENT DISCUSSION AND ANALYSIS OF CSI COMPANY

APPENDIX III

CSI Company entered into the Agreement for Payment of Land Premium and Transfer of Land《地價款支付及土地移交協議》with Chengdu Land Reserve Centre (成�市土地儲備中心) on 6 September 2013. It was agreed that one parcel of land with a site area of approximately 4.8772 mu (approximately 3,251 sq.m.) will be integrated by CSI Company at the cost of RMB9,380,000 per mu and the total cost would be approximately RMB45,750,000.

PROSPECTS AND FUTURE PLANS

CSI Company owns a parcel of land located in the core block in the central city of Chengdu and a large-scale modernized stadium which can accommodate approximately 40,000 persons. According to the tender documents issued by SWUEE in relation to the Tender as well as the information provided by CSI Company, the Land Parcels, of which approximately 15,300 sq.m. site area are developable for commercial purpose in the future and will be developed into a commercial complex project “the Vitality Centre”. The detailed construction plan and products will be further discussed and implemented jointly by Chengdu Chuang Ying and Chengdu Culture and Tourism upon the completion of the Transfer. The stadium is operated by CSI Company for holding activities such as large performances and sports competitions and generates revenue. For details of the Land Parcels and the properties thereon please see the section headed “Information about the Properties” in the “Letter from the Board”.

LIQUIDITY, FINANCIAL RESOURCES, GEARING RATIO AND CAPITAL STRUCTURE

CSI Company and its subsidiary generally finances its operations with internal resources, interestbearing related party loans.

As at 31 December 2012, CSI Company and its subsidiary had no bank loan and interest bearing loan from related party.

As at 31 December 2013, CSI Company and its subsidiary had no bank loan but had interest-bearing loans of RMB200 million obtained from the ultimate parent with the effective annual interest rate of 6.7%. As at 31 December 2013, the total loans of approximately RMBNil were repayable within one year.

As at 31 December 2014, CSI Company and its subsidiary had no bank loan but had interest-bearing loans of RMB100 million obtained from the ultimate parent with the effective annual interest rate of 6.7%. As at 31 December 2014, the total loans of approximately RMBNil were repayable within one year.

As at 31 October 2015, CSI Company and its subsidiary had no bank loan but had interest-bearing loans of RMB100 million obtained from the ultimate parent with the effective annual interest rate of 5.8%. As at 31 October 2015, the total loans of approximately RMB100 million were repayable within one year.

Please refer to the table as set out on page III-2 of this circular for the information of the nature of major assets and liabilities, gearing ratio (based on total liabilities over total assets) and liquidity of CSI Company and its subsidiary for the year ended 31 December 2012, 2013, 2014 and during the ten months ended 31 October 2015.

III-4 -

MANAGEMENT DISCUSSION AND ANALYSIS OF CSI COMPANY

APPENDIX III

CHARGE ON ASSETS

CSI Company and its subsidiary did not pledge any assets as at 31 December 2012, 2013, 2014 and as at 31 October 2015.

TREASURY POLICIES AND FOREIGN CURRENCY EXPOSURE

For the year ended 31 December 2012, 2013, 2014 and during the ten months ended 31 October 2015, there were no formal treasury policies for CSI Company and its subsidiary.

The transactions and monetary assets of CSI Company and its subsidiary are principally denominated in RMB. CSI Company and its subsidiary have not experienced any material difficulties or effects on their operations or liquidity as a result of fluctuations in currency exchange rates for the year ended 31 December 2012, 2013, 2014 and during the ten months ended 31 October 2015. CSI Company and its subsidiary did not employ any material financial instrument for hedging purposes.

EMPLOYEES AND REMUNERATION POLICY

As at 31 December 2012, 2013, 2014 and 31 October 2015, CSI Company and its subsidiary had a total of approximately 28, 25, 27 and 27 full-time staff members respectively. The basic remuneration of the employees is determined with reference to the industry’s remuneration benchmark, the individual experience and performance of employees. It is the policy of CSI Company and its subsidiary to maintain salaries of employees at a competitive level and to review salaries regularly, with close reference to the relevant conditions of the labour market and economic situation. Directors’ remuneration of CSI Company is determined based on a variety of factors such as market conditions and respective responsibilities assumed by Directors. Apart from the basic remuneration and statutory benefits required by laws, CSI Company and its subsidiary also provides discretionary bonuses based upon its business results and the individual performance of the staff.

For the year ended 31 December 2012, 2013, 2014 and during the ten months ended 31 October 2015 and as of the Latest Practicable Date, CSI Company and its subsidiary had not experienced any significant problems with its employees or disruption to its operations due to labour disputes nor had it experienced any difficulty in the recruitment and retention of experienced staff.

CONTINGENT LIABILITIES

As at 31 December 2012, 31 December 2013, 31 December 2014 and 31 October 2015, CSI Company and its subsidiary has issued guarantee to banks in respect of banking facilities granted to the ultimate parent.

At the end of each of the Relevant Periods, the directors of CSI Company and its subsidiary do not consider it probable that a claim will be made against CSI Company and its subsidiary under any of the above guarantees. The maximum liability of CSI Company and its subsidiary at the end of each of the

III-5 -

MANAGEMENT DISCUSSION AND ANALYSIS OF CSI COMPANY

APPENDIX III

Relevant Periods under the above guarantees are the outstanding amounts of the bank loans to the ultimate parent at 31 December 2012, 31 December 2013, 31 December 2014 and 31 October 2015 of approximately RMB965,000,000, RMB569,000,000, RMB60,000,000 and RMB100,000,000 respectively.

The fair value of the guarantees at date of inception is not material and is not recognised.

To the best of the Directors’ knowledge, information and belief, having made all reasonable enquiries, as of the Latest Practicable Date, CSI Company and its subsidiary were not involved in any litigation or arbitration of material importance and no litigation or arbitration of material importance was known to the Directors to be pending or threatened against CSI Company and its subsidiary.

III-6 -

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX IV

A. UNAUDITED PRO FORMA STATEMENT OF ASSETS AND LIABILITIES OF THE GROUP

The accompanying unaudited pro forma statement of assets and liabilities of the Group (the “Statement”) has been prepared to illustrate the effect of the acquisition and subscription of equity interests in 成�體育產業有限責任公司 (Chengdu Sports Industry Co., Ltd.) (“CSI Company”) (the “Transfer”), assuming the transaction had been completed as at 30 June 2015, might have affected the financial position of the Group.

The Statement is prepared based on the unaudited consolidated statement of financial position of the Group as at 30 June 2015 as extracted from the interim report of the Group for the six months ended 30 June 2015 after making certain pro forma adjustments resulting from the Transfer.

The Statement is prepared based on a number of assumptions, estimates, uncertainties and currently available information, and is provided for illustrative purposes only. Accordingly, as a result of the nature of the Statement, it may not give a true picture of the actual financial position of the Group that would have been attained had the Transfer actually occurred on 30 June 2015. Furthermore, the Statement does not purport to predict the Group’s future financial position.

The Statement should be read in conjunction with the financial information of the Group as set out in the interim report of the Group for the six months ended 30 June 2015, the financial information of CSI Company as set out in Appendix II of the Circular and other financial information included elsewhere in the Circular.

IV-1 -

APPENDIX IV

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Non-current assets Fixed assets – Investment property – Other property, plant and equipment – Interests in leasehold land held for own use Intangible assets Goodwill Investments in associates Other financial assets Deferred tax assets Current assets Inventories Trade and other receivables Cash and cash equivalents Current liabilities Trade and other payables Receipts in advance Bank loans Related party loans Current tax liabilities Net current assets Total assets less current liabilities Non-current liabilities Bank and other loans Related party loans Deferred tax liabilities Net assets	The Group as at 30 June 2015 (Unaudited) Pro forma adjustment RMB’000 RMB’000 Notes 768,494 1,246,174 647,582 2,662,250 846 223,476 496,156 797,843 (2) 4,320 133,610 3,520,658 14,699,049 1,117,424 2,841,251 (797,843) (1) 18,657,724 2,144,573 1,144,964 830,118 1,302,722 476,970 5,899,347 12,758,377 16,279,035 2,945,873 6,582,225 254,149 9,782,247 6,496,788	Adjusted balance RMB’000 768,494 1,246,174 647,582
		2,662,250 846 223,476 1,293,999 4,320 133,610
		4,318,501
		14,699,049 1,117,424 2,043,408
		17,859,881
		2,144,573 1,144,964 830,118 1,302,722 476,970
		5,899,347
		11,960,534
		16,279,035
		2,945,873 6,582,225 254,149
		9,782,247
		6,496,788

IV-2 -

APPENDIX IV

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

Notes:

To record the consideration of RMB797,842,500 to be paid by the Group for the Transfer pursuant to the equity interest transfer and subscription agreement entered into between the Group, 成�文化旅遊發展集團有限責任公司 (Chengdu Culture & Tourism Development Group Limited Liability Company) and CSI Company (the ”Equity Interest Transfer and Subscription Agreement”).
To record the Group’s share of 49% net fair value of the identifiable assets and liabilities of CSI Company and the goodwill of approximately RMB1,143,000, being the excess of the cost of acquisition of RMB797,842,500 over the Group’s share of the net fair value of the identifiable assets and liabilities of approximately RMB796,700,000, resulted upon completion of the Transfer. The net fair value of the identifiable assets and liabilities of CSI Company is determined as its net assets of approximately RMB951,358,000 as at 31 October 2015 with fair value adjustments on the land parcels of CSI Company (being the excess of the fair value over the carrying amount of the land parcels as at 31 October 2015) and the corresponding deferred tax liabilities at the domestic income tax rate of 25% of approximately RMB31,015,000 and approximately RMB7,754,000 respectively and the capital injection of RMB651,300,000 pursuant to Equity Interest Transfer and Subscription Agreement.
IV-3 -

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX IV

B. ACCOUNTANT’S REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report, prepared for the sole purpose of inclusion in this circular, from the independent reporting accountant, RSM Hong Kong, Certified Public Accountants, Hong Kong.

==> picture [128 x 55] intentionally omitted <==

RSM Hong Kong 中瑞岳華（香�）會計師事務所 Certified Public Accountants

The Board of Directors Overseas Chinese Town (Asia) Holdings Limited

29th Floor Lee Garden Two 28 Yun Ping Road Causeway Bay Hong Kong 22 January 2016

Dear Sirs,

We have completed our assurance engagement to report on the compilation of pro forma financial information of Overseas Chinese Town (Asia) Holdings Limited (the “Company”) and its subsidiaries (hereinafter collectively referred to as the “Group”) by the directors of the Company for illustrative purposes only. The pro forma financial information consists of the pro forma statement of assets and liabilities as at 30 June 2015 (the “Statement”) as set out on pages IV-1 to IV-3 of the circular issued by the Company. The applicable criteria on the basis of which the directors have compiled the Statement are described on page IV-1.

The Statement has been compiled by the directors to illustrate the impact of the acquisition and subscription of equity interests in 成�體育產業有限責任公司 (Chengdu Sport Industry Co., Ltd.) on the Group’s financial position as at 30 June 2015 as if the transaction had been taken place at 30 June 2015. As part of this process, information about the Group’s financial position has been extracted by the directors from the Group’s condensed financial statements as included in the interim report for the six months ended 30 June 2015, on which no audit or review report has been published.

Directors’ Responsibility for the Pro Forma Financial Information

The directors are responsible for compiling the Statement in accordance with paragraph 29 of Chapter 4 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 (“AG”) 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

IV-4 -

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX IV

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by paragraph 29(7) of Chapter 4 of the Listing Rules, on the Statement 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 Statement beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountant comply with ethical requirements and plan and perform procedures to obtain reasonable assurance about whether the directors have compiled the Statement in accordance with paragraph 29 of Chapter 4 of the Listing Rules and with reference to AG 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” issued by the HKICPA.

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

The purpose of the Statement included in an investment circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the event or transaction at 30 June 2015 would have been as presented.

A reasonable assurance engagement to report on whether the Statement 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 Statement provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

The related pro forma adjustments give appropriate effect to those criteria; and
The Statement reflects the proper application of those adjustments to the unadjusted financial information.

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

The engagement also involves evaluating the overall presentation of the Statement.

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

IV-5 -

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX IV

Opinion

In our opinion:

(a) the Statement has been properly compiled on the basis stated;
(b) such basis is consistent with the accounting policies of the Group; and
(c) the adjustments are appropriate for the purposes of the Statement as disclosed pursuant to paragraph 29(1) of Chapter 4 of the Listing Rules.

Yours faithfully,

RSM Hong Kong Certified Public Accountants Hong Kong

IV-6 -

VALUATION OF LAND PARCELS

APPENDIX V

The following is the text of a letter and valuation certificate prepared for the purpose of incorporation in this circular received from Savills Valuation and Professional Services Limited, an independent property valuer, in connection with their opinion of value of the Land Parcels to be acquired by the Company as at 31 October 2015.

==> picture [72 x 71] intentionally omitted <==

The Directors

Overseas Chinese Town (Asia) Holdings Limited Suite 3203-4, Tower 6 The Gateway, Harbour City Canton Road Tsimshatsui Kowloon Hong Kong

Savills Valuation and Professional Services Limited 23/F Two Exchange Square Central, Hong Kong T: (852) 2801 6100 F: (852) 2530 0756 EA Licence: C-023750 savills.com

22 January 2016

Dear Sirs,

RE: SEVEN LAND PARCELS LOCATED AT NO. 11 RENMIN MIDDLE ROAD FIRST SECTION, NO. 1 EAST YUHE SIDE STREET AND DONGHUAMEN STREET, QINGYANG DISTRICT, CHENGDU, SICHUAN PROVINCE, THE PEOPLE’S REPUBLIC OF CHINA (THE “PROPERTY” OR “LAND PARCELS”)

INSTRUCTION

In accordance with the instructions from Overseas Chinese Town (Asia) Holdings Limited (the “Company”) for us to value the Property situated in The People’s Republic of China (“PRC”), which is held or to be acquired by Chengdu Sports Industry Co., Ltd. (成�體育產業有限責任公司) (“CSI Company”), we confirm that we have carried out inspections, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of value of the Property as at 31 October 2015 (“valuation date”) for circular purpose.

BASIS OF VALUATION

Our valuation of the Property is our opinion of its market value which we would define 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 on an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

V-1 -

VALUATION OF LAND PARCELS

APPENDIX V

Market value is understood as the value of an asset or liability estimated without regard to costs of sale or purchase (or transaction) and without offset for any associated taxes or potential taxes.

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

VALUATION METHODOLOGY

The Property is to be held by the Company for future development upon completion of acquisition. In valuing portion of the Property with granted land use rights, we have valued such portion of the Property by making reference to comparable market transactions as available in the relevant markets assuming sale with the benefit of vacant possession. In valuing portion of the Property with allocated land use rights, we have assigned no commercial value since such portion of the Property is not freely transferrable in the market. In valuing the remaining portion of the Property to be acquired by CSI Company, we have also assigned no commercial value as CSI Company has not yet obtained any valid title documents.

TITLE INVESTIGATIONS

We have been provided with copies of extracts of the title documents relating to the Property. However, we have not searched the original documents to ascertain the existence of any amendments, which may not appear on the copies handed to us. We have relied to a very considerable extent on information given by the Company and its PRC legal adviser, V & T Law Firm (萬商天勤律師事務所), regarding the title to the Property.

VALUATION CONSIDERATIONS AND ASSUMPTIONS

In valuing the Property in the PRC, unless otherwise stated, we have assumed that transferable land use rights in respect of the Property for its specific terms at nominal land use fees have been granted and that any land premium payable has been fully settled. We have also assumed that the owner of the Property has an enforceable title to the Property and has free and uninterrupted rights to use, occupy or assign the Property for the whole of the unexpired terms as granted.

We have relied to a very considerable extent on information given by CSI Company and have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, ownership, particulars of occupancy, site and floor areas and all other relevant matters. Dimensions, measurements and areas included in the valuation certificate are based on information contained in the documents provided to us and are therefore only approximations. No on-site measurements have been made. We have had no reason to doubt the truth and accuracy of the information provided to us by CSI Company, which is material to our valuation. We have also been advised by the Company that no material facts have been omitted from the information provided. We consider that we have been provided with sufficient information to reach an informed view.

V-2 -

VALUATION OF LAND PARCELS

APPENDIX V

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

SITE INSPECTION

We have inspected the Property. Site inspection of the Property was carried out in September 2015 by our Mr. William Zhang, who is a China Registered Real Estate Appraiser and a China Registered Land Valuer. During the course of our inspection, we did not note any serious defects. However, no structural survey has been made and we are therefore unable to report whether the Property is free from rot, infestation or any other defects. No tests were carried out on any of the services. We have also not carried out investigations on site to determine the suitability of the ground conditions and the services for any future development. Our valuation is prepared on the assumption that these aspects are satisfactory and no extraordinary expenses or delay will be incurred during the development period.

REMARKS

Unless otherwise stated, all money amounts stated are in Renminbi (“RMB”).

We enclose herewith our valuation certificate.

Yours faithfully, For and on behalf of Savills Valuation and Professional Services Limited Anthony C K Lau MRICS MHKIS RPS(GP) Director

Note: Mr. Anthony C K Lau is a qualified surveyor and has over 22 years’ post-qualification experience in the valuation of properties in the PRC and Hong Kong.

V-3 -

VALUATION OF LAND PARCELS

APPENDIX V

VALUATION CERTIFICATE

Property to be held by the Company for future development

Property Description and tenure

Seven land parcels The Property comprises seven contiguous located at No. 11 parcels of land with a total site area of Renmin Middle approximately 96,119.14 sq.m., designated Road First Section, for an urban upgrading and revitalization No. 1 East Yuhe project. Side Street and Donghuamen Street, The Property is located near the centre of Qingyang District, Chengdu City and at about 5-minute Chengdu, walking distance to the nearby Luomashi Sichuan Province, Station of Chengdu Metro No. 1. The city PRC centre, Tianfu Square, is only 10 minutes’ walking from the Property. Developments in the vicinity are dominated by residential, commercial and office buildings and various public facilities such as libraries and theatres. It is at about 15 minutes’ drive to Chengdu Railway Station; at about 25 minutes’ drive to Chengdu East Railway Station for high-speed rail and Chengdu Shuangliu International Airport.

Market value in Particulars of existing state as at occupancy 31 October 2015 As at the valuation RMB737,000,000 date, the Property (See Notes 10 was owner-occupied. and 11)

Details of the site areas and the respective owners of the Land Parcels are as follows:

Land Parcel Lot No. 1 Lot No. 2 Lot No. 3 Lot No. 4 (part) Lot No. 4 (part) Wet Market Lot CPA 1 CPA 2 Total:	Site Area Owner (sq.m.) 12,579.82 CSI Company 15,227.55 CSI Company 56,593.62 CSI Company 779.80 CSI Company 820.17 Chengdu Sports Bureau 2,866.68 Local government 3,251.48 Local government 4,000.02 Local government 96,119.14

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VALUATION OF LAND PARCELS

APPENDIX V

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 October 2015

Lot Nos. 1, 2 and 3 accommodate portion of a sports stadium completed in 1991 with a maximum seating capacity of about 40,000 as well as various sports facilities such as swimming pool and basketball hall (“Sports Stadium”).

Lot No. 4 accommodates a 7-storey office building (“Office Building”) with a total gross floor area of approximately 6,736.00 sq.m., which was completed in about 1992.

Details of the buildings and current land use of the Land Parcels are as follows:

Buildings/ Land Parcel Current Land Use Lot No. 1 Sports Stadium Lot No. 2 Sports Stadium Lot No. 3 Sports Stadium Lot No. 4 Office Building Wet Market Lot Da Hong Wet Market CPA 1 Car parking area CPA 2 Car parking area

Under current effective planning conditions, Lot Nos. 1 and 2 have been planned for public facilities use at a permissible plot ratio not exceeding 8.0 and Lot No. 3 has been planned for public park use.

V-5 -

VALUATION OF LAND PARCELS

APPENDIX V

Property

Description and tenure

Market value in Particulars of existing state as at occupancy 31 October 2015

As advised by CSI Company, Wet Market Lot and CPA 1 will be amalgamated with Lot Nos. 2 and 4 for commercial development and CPA 2 is reserved for public park and green land uses. Detailed development plan of the Property has not been finalised.

The land use rights of Lot No. 2 have been granted for a term expiring on 18 April 2061 for cultural and sports use. Lot Nos. 1 and 3 have been allocated for cultural and sports uses. Lot No. 4 has been allocated for composite use. The land use rights of Wet Market Lot, CPA 1 and CPA 2 are yet to be granted.

Notes:

Pursuant to the State-owned Land Use Rights Grant Contract – 5101 Qing (2011) Chu Rang He Tong No. 04 dated 19 April 2011, the land use rights of Lot No. 2 of the Property with a site area of approximately 15,227.55 sq.m. have been granted to Chengdu Sports Industry Co., Ltd. (成�體育產業有限責任公司) (“CSI Company”) for a term of 50 years for cultural and sports uses at a land grant fee of RMB53,852,991.95.
Pursuant to three State-owned Land Use Rights Certificates, the land use rights of three parcels of land with a total site area of approximately 84,400.99 sq.m. have been granted / allocated to CSI Company for cultural and sports uses. Details of the said certificates are as follows:

Lot No. Certificate No. Date of Issue 1 Cheng Guo Yong (2011) No. 53 25 January 2011 3 Cheng Guo Yong (2011) No. 54 25 January 2011 2 Cheng Guo Yong (2011) No. 298 9 May 2011 Total:	Site Area Nature of Land Use Rights and Land Use Term Expiry Date (sq.m.) 12,579.82 Allocated land 56,593.62 Allocated land 15,227.55 Granted land: 18 April 2061 84,400.99

V-6 -

VALUATION OF LAND PARCELS

APPENDIX V

Pursuant to two State-owned Land Use Rights Certificates, the land use rights of a parcel of land (i.e. Lot No. 4) with a site area of approximately 1,599.97 sq.m. have been allocated to CSI Company and Chengdu Sports Bureau (成�市體育局) (“Sports Bureau”) for composite use. Detail of the said certificates are as follows:

Certificate No. Date of Issue Cheng Guo Yong (2003) No. 1016 2 July 2003 Cheng Guo Yong (2009) No. 1098 9 May 2011 Total:	Site Area Name of the Land User (sq.m.) 820.17 Sports Bureau 779.80 CSI Company 1,599.97

Pursuant to two Building Ownership Certificates, the building ownership of the Office Building with a total gross floor area of approximately 6,736.00 sq.m. is vested in CSI Company and Sports Bureau for canteen, office, residential and car park uses. Detail of the said certificates are as follows:

Certificate No. Date of Issue Rong Fang Quan Zheng Cheng Fang Jian Zheng Zi No. 0948918 14 October 2003 Cheng Fang Quan Zheng Jian Zheng Zi No. 2528683 16 November 2010 Total:	Approximate Gross Floor Area Name of the Owner (sq.m.) 3,453.00 Sports Bureau 3,283.00 CSI Company 6,736.00

Pursuant to the Agreement for Payment of Land Premium and Transfer of Land 《地價款支付及土地移交協議》( ) – Cheng Tu Chu (Qing) (2013C) No. 27 entered into between CSI Company and Chengdu Land Reserve Centre (成�市土地儲備中心) dated 6 September 2013, it has been agreed that the land cost for a parcel of land (i.e. CPA 1) with a site area of approximately 4.8772 mu (3,251.48 sq.m.) is RMB45,748,136 (excluding land grant fee).
Pursuant to the Agreement for Payment of Land Premium and Transfer of Land 《土地價款支付及土地移交協議》( ) entered into between CSI Company and Chengdu Office for Integrated Construction for Civil Use Buildings (成�市民用建築統一建設辦公室) dated 11 September 2013, it has been agreed that the land price for two parcels of land (i.e. Wet Market Lot and CPA 2) with a total site area of approximately 10 mu (6,866.70 sq.m.) is calculated as RMB9,380,000 per mu (i.e. RMB14,070 per sq.m.) and is subject to final surveyed land area.
Pursuant to the Reply Letter – Cheng Cai Jiao Han [2015] No. 54 issued by Chengdu Bureau of Finance dated 19 November 2015, it has been approved that the land and asset held by Sports Bureau will be allocated and transferred to CSI Company free of charge.
Pursuant to the Notification Letter of Planning Conditions 《規劃條件通知書》( ) issued by Chengdu Planning Administrative Bureau, the permissible plot ratio of two parcels of land (i.e. Lot Nos. 1 and 2) with a development site area of approximately 27,807.37 sq.m. located at No. 11 Renmin Middle Road First Section, Qingyang District of Chengdu does not exceed 8.0 for public facilities use.
V-7 -

VALUATION OF LAND PARCELS

APPENDIX V

We have been provided with a legal opinion on the title to the Property issued by the Company’s PRC legal advisor, which contains, inter alia, the following information:
i. CSI Company legally owns the land use rights of Lot No. 2, which is free from any mortgages and other third party rights. During the remaining land use term of the said land parcel, CSI Company is entitled to occupy, use and develop such land parcel and is also entitled to transfer, let, mortgage or by other legal means dispose of the said land use rights without any additional land use fees or land premium payable;
ii. the other three allocated land parcels (i.e. Lot Nos. 1 and 3 and portion of Lot No. 4) and the building thereon (i.e. portion of the Office Building) as registered under the name of CSI Company have all been legally obtained and are also free from any mortgages and other third party rights. In light of the positive support from local government concerning the amalgamation of the land parcels of the sports centre, should CSI Company continuously legally occupy and use the allocated land parcels as registered under its name in accordance with the Interim Regulations of the People’s Republic of China Concerning the Assignment and Transfer of the State-owned Land Use Rights in the Urban Areas 《中華人民共和國城鎮國有土地使用權出讓和轉讓暫行條( 例》) and the Provisional Rules on Administration of Allocated Land Use Rights 《劃撥土地使用權管理暫行辦( 法》), there exists no legal impediment for CSI Company to occupy and use the said allocated land parcels;
iii. pursuant to various government approval documents, it is legally feasible to change current land use of the Property to commercial land with granted land use rights in accordance with prevailing land grant procedures;
iv. pursuant to various government approval documents, the amalgamation of the land parcels involved in the sports centre upgrading and revitalization project (i.e. Wet Market Lot, CPA 1 and portion of Lot No. 4 as held by Sports Bureau) has been approved by local government and relevant authorities and so has the plan of the involved land parcels. Hence, there exists no legal impediment for CSI Company to apply for the approval of site amalgamation of the land parcels involved in the sports centre upgrading and revitalization project and to obtain the relevant land use rights certificates;
v. in light of the written approval and support from local government, there exists no legal impediment to allocate and transfer the land parcel and other assets as held by Sports Bureau to CSI Company; and
vi. in accordance with the district zoning plan obtained from local planning bureau, the land parcels of Da Hong wet market, car parking area 1 and former sports bureau office (i.e. Wet Market Lot, CPA 1 and portion of Lot No. 4 as held by Sports Bureau) are zoned as commercial land. Should CSI Company pay land grant fees in accordance with The Law of Land Administration of the People’s Republic of China 《中華人民共和國土地管( 理法》) and The Urban Real Estate Administration Law of the People’s Republic of China 《中華人民共和國城( 市房地產管理法》), there exists no major impediment to use such land parcels as commercial land.
In undertaking our valuation, we have assigned no commercial value to Sports Stadium erected upon the Land Parcels and the planned road area in between the Land Parcels as it is pending for demolition under current effective planning conditions.
In undertaking our valuation, we have only assigned market value to the granted land Lot No. 2 of the Property since (i) Lot Nos. 1, 3 and 4 are allocated land and hence not freely transferable in the market and (ii) CSI Company has not obtained valid titles to Wet Market Lot, CPA 1 and CPA 2 as at the valuation date.
V-8 -

GENERAL INFORMATION

APPENDIX VI

1. RESPONSIBILITY STATEMENT

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

2. DISCLOSURE OF INTERESTS

(i) Directors’ and chief executives’ interests and short positions in securities of the Company and its associated corporations

As at the Latest Practicable Date, interests and short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“SFO”)) of the Directors and chief executives of the Company which have been notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests and short positions which were taken or deemed to have under such provisions of the SFO) or have been entered in the register maintained by the Company pursuant to section 352 of the SFO, or otherwise have been notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies (the “Model Code”) are as follows:

Long Positions in Underlying Shares of the Company

				Approximate
				% of issued
	Number of			share capital
	underlying		Nature of	of the
Name of Director	shares held	Capacity	interest	Company
Zhou Ping (“Mr. Zhou”)	160,000	Beneficial owner	Personal	0.025%
(Note)

Note:

Ms. Li Ning, the spouse of Mr. Zhou, held share options to subscribe for 160,000 Shares, Mr. Zhou is deemed, or taken to be, interested in the share options to subscribe for 160,000 Shares held by Ms. Li Ning.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor chief executives of the Company had any interests or short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) as recorded in the register required to be kept by the Company under section 352 of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.

VI-1 -

GENERAL INFORMATION

APPENDIX VI

(ii) Persons who have interests or short positions which are discloseable under Divisions 2 and 3 of Part XV of the SFO

As at the Latest Practicable Date, as far as is known to the Directors, the following persons (not being a Director or chief executive of the Company) had interests or short positions in the Shares or underlying Shares of the Company which fall to be disclosed to the Company under the provisions of Divisions 2 and 3 of Part XV of the SFO as recorded in the register required to be kept by the Company pursuant to section 336 of the SFO:

Long Position in the Shares

			Approximate % of
Name of Substantial			issued share capital
Shareholders	Capacity/Nature	No. of Shares held	of the Company
Pacific Climax (Note 1)	Beneficial owner	434,894,000	66.66%
		(long position)
Overseas Chinese Town	Interest of a controlled	434,894,000	66.66%
(HK) Company	corporation (Note 2)	(long position)
Limited (“OCT (HK)”)	Beneficial owner	96,000,000	14.72%
		(long position)
Shenzhen Overseas	Interest of a controlled	530,894,000	81.38%
Chinese Town	corporation (Note 3)	(long position)
Company Limited
(“OCT Ltd.”)
Overseas Chinese Town	Interest of a controlled	530,894,000	81.38%
Enterprises Company	corporation	(long position)
(“OCT Group”)
(Note 4)
New China Life	Beneficial owner (Note 5)	40,000,000	6.13%
Insurance Company		(long position)
Ltd. (“NC Life
Insurance”)
China Re Asset	Beneficial owner (Note 5)	40,000,000	6.13%
Management Co., Ltd		(long position)
(“CRAMC”)

VI-2 -

APPENDIX VI

GENERAL INFORMATION

			Approximate % of
Name of Substantial			issued share capital
Shareholders	Capacity/Nature	No. of Shares held	of the Company
Others
UBS Group AG	Person having a security	3,200,000	0.49%
	interest in shares (Note 6)	(long position)
	Interest of a controlled	49,274,000	7.55%
	corporation (Note 6)	(long position)
		278,000	0.04%
		(short position)
UBS AG	Person having a security	3,200,000	0.49%
	interest in shares (Note 6)	(long position)
	Interest of a controlled	48,996,000	7.51%
	corporation (Note 6)	(long position)
	Beneficial owner (Note 6)	278,000	0.04%
		(long position)
		278,000	0.04%
		(short position)

Notes:

(1) Ms. Xie Mei and Mr. Lin Kaihua, both being executive Directors, and Mr. Zhou Ping, being a nonexecutive Director, are also directors of Pacific Climax.
(2) OCT (HK) is the beneficial owner of all the issued share capital in Pacific Climax. Therefore, OCT (HK) is deemed, or taken to be interested in all the Shares beneficially held by Pacific Climax for the purpose of the SFO. Ms. Wang Xiaowen and Ms. Xie Mei, both being executive Directors, and Mr. Zhou Ping, being a non- executive Director, are also directors of OCT (HK).
(3) OCT Ltd. is the beneficial owner of all the issued share capital in OCT (HK), which is in turn the beneficial owner of all the issued share capital in Pacific Climax. Therefore, OCT Ltd. is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT (HK) and Pacific Climax for the purpose of the SFO. OCT Ltd. is a company incorporated in the PRC, the shares of which are listed on the Shenzhen Stock Exchange. OCT Ltd. is a subsidiary of OCT Group.
(4) OCT Group is the beneficial owner of 56.90% of the issued shares in OCT Ltd., which is the beneficial owner of all the issued shares in OCT (HK) and in turn, the beneficial owner of all the issued share capital in Pacific Climax. Therefore, OCT Group is deemed, or taken to be interested in all the Shares which are beneficially owned by OCT Ltd., OCT (HK) and Pacific Climax for the purpose of the SFO.
(5) On 24 July 2013, the Company allotted and issued 40,000,000 and 40,000,000 new non-voting convertible preference shares of HK$0.10 each in the capital of the Company (the “Convertible Preference Shares”) to NC Life Insurance and CRAMC respectively according to the preference shares subscription agreements entered into by the Company with each of NC Life Insurance and CRAMC on 6 June 2013. In addition, on 6 June 2013, OCT (HK) entered into a put option agreement with each of NC Life Insurance and CRAMC, pursuant to which, OCT (HK) grants to each of NC Life Insurance and CRAMC to require OCT (HK) to purchase from NC Life Insurance and CRAMC or Integrated Asset Management (Asia) Limited (as the case may be) (and any subsequent transferee of the
VI-3 -

GENERAL INFORMATION

APPENDIX VI

Convertible Preference Shares) all (but not some only) of the outstanding Convertible Preference Shares legally and beneficially owned by NC Life Insurance or CRAMC (as the case may be) (and any subsequent transferee of the Convertible Preference Shares) from time to time during the 180 days commencing from the third anniversary of the date on which the Convertible Preference Shares would be allotted and issued by the Company to NC Life Insurance, CRAMC or Integrated Asset Management (Asia) Limited (as the case may be).

(6) The interests of UBS AG consist of the interests (long position) in 39,088,000 Shares, 5,756,000 Shares and 4,152,000 Shares and 278,000 Shares (total: 49,274,000 Shares) held by UBS Fund Services (Luxembourg) SA, UBS Global Asset Management (Hong Kong) Ltd, UBS Global Asset Management (Singapore) Ltd and UBS AG. UBS Fund services (Luxembourg) SA, UBS Global Asset Management (Hong Kong) Ltd and UBS Global Asset Management (Singapore) Ltd are wholly-owned by UBS AG while UBS AG is directly owned as to 98.02% by UBS Group AG, and the interests (short position) in 278,000 Shares held by UBS AG. UBS Group AG is also interested in 3,200,000 Shares (long position) in the capacity as a person having a security interest in the shares. Therefore UBS Group AG is deemed, or taken to be interested in the total of 52,474,000 Shares (long position) and 278,000 Shares (short position) for the purpose of the SFO.

Save as disclosed above, no other interests required to be recorded in the register kept under section 336 of the SFO have been notified to the Company as at the Latest Practicable Date.

3. COMPETING INTERESTS

As at the Latest Practicable Date, so far as the Directors are aware, none of the Directors or their respective close associates has any interest in any business which competes or is likely to compete with the businesses of the Group.

4. SERVICE CONTRACT

As at the Latest Practicable Date, each of the Directors has entered into a service contract with the Company. Contents of such contracts are the same in all material respects. Save for the service contracts of Mr. Lu Gong which will expire on the date of the annual general meeting of the Company to be held in 2016, all other service contracts with the Directors will expire on the date of the annual general meeting of the Company to be held in 2017 or 2018. Save as the aforesaid, none of the Directors has a service contract with any member of the Group which was not determinable by the Group within one year without payment of compensation (other than statutory compensation).

5. INTEREST IN THE GROUP’S ASSETS OR CONTRACTS OR ARRANGEMENTS SIGNIFICANT TO THE GROUP

As at the Latest Practicable Date, none of the Directors had any interest, direct or indirect, in any assets which have been, since 31 December 2014 (being the date to which the latest published audited accounts 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.

As at the Latest Practicable Date, none of the Directors was materially interested in any contract or arrangement entered into by any member of the Group subsisting at the date of this circular and which is significant in relation to the businesses of the Group.

VI-4 -

GENERAL INFORMATION

APPENDIX VI

6. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, the Group was not engaged in any litigation or claims of material importance, and so far as the Directors are aware, no litigation or claims of material importance is pending or threatened against the Group.

7. MATERIAL CONTRACTS

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

(a) the formal agreement entered into between Chengdu OCT and 成�市鑫金工發投資有限公司 (Chengdu Shi Xinjin Gongfa Investment Company Limited*) dated 17 June 2014 in relation to the land resumption project in Chengdu Jinniu District, the PRC;
(b) the asset acquisition agreement dated 9 October 2015 entered into between 長安控股(集團)有限責任公司 (Chang’an Holdings (Group) Company Limited) and 華昌國際有限公司 (City Legend International Limited) in relation to acquisitions of the properties located at Chang’an Metropolis Centre, Xi’an, the PRC by 華昌國際有限公司 (City Legend International Limited) from 長安控股(集團)有限責任公司 (Chang’an Holdings (Group) Company Limited);
(c) the asset acquisition agreement dated 9 October 2015 entered into between 華昌國際有限公司 (City Legend International Limited), 陝西長安建設投資開發有限責任公司 (Shaanxi Chang’an Construction & Investment Development Co., Limited), 長安控股(集團)有限責任公司 (Chang’an Holdings (Group) Company Limited) and 西安豐盛資產管理有限公司 (Xi’an Fengsheng Assets Management Limited) in relation to the acquisitions of the properties located at Chang’an Metropolis Centre, Xi’an, the PRC by 華昌國際有限公司 (City Legend International Limited) from 陝西長安建設投資開發有限責任公司 (Shaanxi Chang’an Construction & Investment Development Co., Limited) with 長安控股(集團)有限責任公司 (Chang’an Holdings (Group) Company Limited) and 西安豐盛資產管理有限公司 (Xi’an Fengsheng Assets Management Limited) as guarantors; and
(d) the Equity Interest Transfer and Subscription Agreement.

8. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2014 (being the date to which the latest published audited accounts of the Company were made up).

* For identification purpose only

VI-5 -

GENERAL INFORMATION

APPENDIX VI

9. EXPERTS AND CONSENTS

(a) The following is the qualification of the experts which have given their opinions which are contained in this circular:

Name

Qualification

Certified Public Accountants

RSM Hong Kong Certified Public Savills Independent V&T PRC legal advisers

Independent Property Valuer

(b) As at the Latest Practicable Date, none of RSM Hong Kong, Savills or V&T had any shareholding in any member of the Group or any right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.
(c) Each of RSM Hong Kong, Savills and V&T has given and has not withdrawn its written consent to the issue of this circular with the inclusion of its letter, opinion, report and references to its name in the form and context in which they are included.
(d) The letter, opinion and report given by each of RSM Hong Kong, Savills and V&T is given as of the date of this circular for incorporation in this circular.

As at the Latest Practicable Date, each of RSM Hong Kong, Savills and V&T is not beneficially interested in the share capital of any member of the Group nor had any interest, direct or indirect, in any assets which have been, since 31 December 2014 (being the date to which the latest published audited accounts 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.

10. GENERAL

(a) The company secretary and the qualified accountant of the Company is Mr. Fong Fuk Wai, who is a fellow member of the Hong Kong Institute of Certified Public Accountants.
(b) The Company’s registered office is at Clifton House, 75 Fort Street, PO Box 1350 GT, George Town, Grand Cayman, Cayman Islands. The head office and principal place of business is at Suites 3203-3204, Tower 6, The Gateway, Harbour City, Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong.
(c) The Hong Kong branch share registrar and transfer office of the Company is Computershare Hong Kong Investor Services Ltd. at Shops 1712-1716, 17/F, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.
(d) The English text of this circular shall prevail over the Chinese text.
VI-6 -

GENERAL INFORMATION

APPENDIX VI

11. DOCUMENTS AVAILABLE FOR INSPECTION

A copy of the following documents are available for inspection during normal business hours except on Saturday, Sunday and public holidays at the office of the Company in Hong Kong at Suites 3203-3204, Tower 6, The Gateway, Harbour City, Canton Road, Tsim Sha Tsui, Kowloon, Hong Kong from the date of this circular up to and including 4 February 2016:

(a) the memorandum and articles of association of the Company;
(b) the letter from the Board, the text of which is set out on pages 4 to 12 of this circular;
(c) the annual reports of the Company for the three years ended 31 December 2014;
(d) the accountants’ report of CSI Company, the text of which is set out in Appendix II of this circular;
(e) the report on the unaudited pro forma financial information of the Group, the text of which is set out in Appendix IV of this circular;
(f) the valuation report, the text of which is set out in Appendix V of this circular;
(g) the material contracts referred to in the paragraph headed “Material Contracts” in this appendix;
(h) the written consents referred to in the paragraph headed “Experts and Consents” in this appendix;
(i) the circular issued by the Company dated 27 March 2015;
(j) the circular issued by the Company dated 25 November 2015; and
(k) this circular.
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AI assistant

RemeGen Co., Ltd. — Proxy Solicitation & Information Statement 2016

51206_rns_2016-01-21_7e83888d-2f78-43e8-a432-0e584e4e89d9.pdf

Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司

MAJOR TRANSACTION ACQUISITION AND SUBSCRIPTION OF EQUITY INTERESTS IN CSI COMPANY

CONTENTS

DEFINITIONS

Overseas Chinese Town (Asia) Holdings Limited 華僑城（亞洲）控股有限公司

(Stock Code: 03366)

MAJOR TRANSACTION ACQUISITION AND SUBSCRIPTION OF EQUITY INTERESTS IN CSI COMPANY

INTRODUCTION

PRINCIPAL TERMS OF THE EQUITY INTEREST TRANSFER AND SUBSCRIPTION AGREEMENT

Assets to be acquired:

Payment Terms

LETTER FROM THE BOARD

Other Major Terms

BASIS OF THE CONSIDERATION

SOURCE OF FUNDING

INFORMATION ABOUT CHENGDU CULTURE AND TOURISM

INFORMATION ABOUT CSI COMPANY

LETTER FROM THE BOARD

INFORMATION ABOUT THE PROPERTIES

LETTER FROM THE BOARD

LETTER FROM THE BOARD

INFORMATION ABOUT THE GROUP

REASONS FOR AND BENEFITS OF THE TRANSFER

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

FINANCIAL EFFECT OF THE TRANSFER

FINANCIAL AND TRADING PROSPECTS OF THE GROUP

LETTER FROM THE BOARD

ADDITIONAL INFORMATION

1. AUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE GROUP

2. INDEBTEDNESS STATEMENT

3. WORKING CAPITAL

Dear Sirs,

FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

APPENDIX II

B. CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

APPENDIX II

C. STATEMENTS OF FINANCIAL POSITION

D. CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

E. CONSOLIDATED STATEMENTS OF CASH FLOWS

APPENDIX II

F. NOTES TO THE FINANCIAL INFORMATION

1. GENERAL INFORMATION

2. BASIS OF PREPARATION

3. ADOPTION OF NEW AND REVISED HONG KONG FINANCIAL REPORTING STANDARDS AND REQUIREMENTS

(a) Application of new and revised HKFRSs

(b) New and revised HKFRSs in issue but not yet effective that are relevant to CSI Group’s operation

4. SIGNIFICANT ACCOUNTING POLICIES

(a) Consolidation

(b) Foreign currency translation

(i) Functional and presentation currency

(ii) Transactions and balances in each entity’s financial statements

(c) Fixed assets

(d) Operating leases

(e) Properties under development and held for sale

(f) Recognition and derecognition of financial instruments

(g) Financial assets

(i) Loans and receivables

(ii) Available-for-sale financial assets

(h) Trade and other receivables

(i) Cash and cash equivalents

(j) Financial liabilities and equity instruments

(k) Trade and other payables

(l) Equity instruments

(m) Revenue recognition

(n) Employee benefits

(i) Employee leave entitlements

(ii) Pension obligations

(iii) Termination benefits

(o) Borrowing costs

(p) Government grants

(q) Taxation

(r) Impairment of non-financial assets

(s) Impairment of financial assets

(t) Provisions and contingent liabilities

(u) Events after the reporting period

RemeGen Co., Ltd. Proxy Solicitation & Information Statement 2016