RemeGen Co., Ltd. - Proxy Solicitation & Information Statement 2017

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

If you are in any doubt as to any aspect of this circular or as to the action to be taken, you should consult your licensed securities dealer, registered institution in securities, 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, you should hand this circular together with the accompanying proxy form at once to the purchaser or transferee or to the bank, licensed securities dealer or registered institution in securities or other agent through whom the sale or transfer was effected for transmission to the purchaser 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)

VERY SUBSTANTIAL DISPOSAL

IN RELATION TO THE DISPOSAL OF 51% OF THE ISSUED SHARE CAPITAL OF CAPITAL CONVERGE HOLDINGS LIMITED

Capitalised terms used in this cover page shall bear the same meanings as those defined in the section headed “Definitions” in this circular.

A notice convening the EGM to be held at Xiamen Suite I-II, 3/F, Prince Hotel, No. 23 Canton Road, Harbour City, Tsim Sha Tsui, Kowloon, Hong Kong on Thursday, 21 December 2017 at 11:00 a.m. is set out on pages EGM-1 to EGM-2 of this circular. A form of proxy for use at the EGM is enclosed with this circular. Whether or not you plan to attend the EGM, you are requested to complete and return the accompanying form of proxy in accordance with the instructions printed thereon to the Company’s branch share registrar, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for holding of the EGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the EGM or any adjournment thereof should you so wish.

6 December 2017

CONTENTS

			Page
Definitions . . . . . . .		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			4
Appendix I	–	Financial Information of the Group . . . . . . . . . . . . . . . . . .	I-1
Appendix II	–	Financial Information of the Target Group . . . . . . . . . . . .	II-1
Appendix III	–	Unaudited Pro Forma Financial Information
		of the Remaining Group. . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
Appendix IV	–	Valuation Report on the properties. . . . . . . . . . . . . . . . . . .	IV-1
Appendix V	–	General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
Notice of the EGM.		. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	EGM-1

– i –

DEFINITIONS

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

“associates”
has the meaning ascribed to it under the Listing Rules
“Board” the board of Directors
“Business Day”
a day (other than Saturday, Sunday or public holiday) on which commercial banks in Hong Kong open for business
“Chongqing Company”
Chongqing OCT Real Estate Limited (重慶華僑城置地有限公司), a company incorporated in the PRC with limited liability and a direct wholly-owned subsidiary of Honour Ray
“Chongqing OCT Land Project”
the large scale residential development project carried out by Chongqing Company
“Closing”
the closing of the Disposal, subject to the condition and in accordance with the terms set out in the Sale and Purchase Agreement
“Closing Date”
the 2nd Business Day after all conditions precedent for the Closing have been satisfied or waived by the Purchaser or any other date agreed in writing by the Purchaser and the Company in writing
“Company”
Overseas Chinese Town (Asia) Holdings Limited (華僑城 (亞洲)控股有限公司), an exempted company incorporated in the Cayman Islands with limited liability, the shares of which are listed on the Main Board of the Stock Exchange
“Consideration”
consideration for the Sale Shares and the Sale Loan payable by the Purchaser to the Company pursuant to the Sale and Purchase Agreement and the Supplemental Agreement
“Director(s)”
the director(s) of the Company
“Disposal”

the disposal of the Sale Shares and Sale Loan by the Company in accordance with the terms and conditions of the Sale and Purchase Agreement

– 1 –

DEFINITIONS

“EGM”
“Group”
“HK$”
“Hong Kong”
“Honour Ray”
“Independent Third Party(ies)”
“Latest Practicable Date”
“Listing Rules”
“New China Fund”
“New China Fund SP 1”
“PRC”
“Remaining Group”
“RMB”
the extraordinary general meeting of the Company to be convened to approve, among others, the Sale and Purchase Agreement, the Supplemental Agreement and the transactions contemplated thereunder

the Company and its subsidiaries

Hong Kong dollar(s), the lawful currency of Hong Kong
the Hong Kong Special Administrative Region of the PRC
Honour Ray Limited (豪力有限公司), a company incorporated in Hong Kong with limited liability and a direct wholly-owned subsidiary of the Target Company
means any person(s) or company(ies) and their respective ultimate beneficial owner(s) who are third parties independent of the Company and its connected persons (as defined in the Listing Rules)
1 December 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information in this circular
the Rules Governing the Listing of Securities on the Stock Exchange
New China OCT Fund SPC, a segregated portfolio company incorporated in the Cayman Islands with limited liability
New China OCT Fund SPC 1 Segregated Portfolio, an investment portfolio under New China Fund
the People’s Republic of China (for the purpose of this announcement, excluding Hong Kong, the Macao Special Administrative Region of the PRC and Taiwan)
the Group excluding the Target Group after the Closing

Renminbi, the lawful currency of the PRC

– 2 –

DEFINITIONS

“Sale and Purchase Agreement” the sale and purchase agreement dated 9 November 2017 and entered into between the Company, the Target Company and the Purchaser in relation to the Disposal
“Sale Loan” 51% of the loan which amount to approximately RMB1,280,000,000 owed by Honour Ray to the Company as at the Closing inclusive of all its relevant rights and interests
“Sale Shares” the 51 shares of the Target Company to be sold by the Company to the Purchaser pursuant to the terms and conditions under the Sale and Purchase Agreement, representing 51% of the total issued share capital of the Target Company
“SFO” Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong)
“Share(s)” Share(s) of HK$0.1 each in the share capital of the Company
“Shareholder(s)” shareholder(s) of the Company
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“subsidiary(ies)” has the meaning ascribed to it under the Listing Rules
“Supplemental Agreement” the supplemental agreement dated 15 November 2017 and entered into between the Company, the Target Company and the Purchaser in relation to the Sale and Purchase Agreement
“Target Company” Capital Converge Holdings Limited, a company incorporated in the British Virgin Islands with limited liability and a direct wholly-owned subsidiary before the Disposal
“Target Group” Target Company, Honour Ray and Chongqing Company

“USD” the United States dollar(s), the lawful currency of the United States of America “%” per cent

In this circular, if there is any inconsistency between the Chinese names of the entities or enterprises established in the PRC and their English translations, the Chinese names shall prevail. The English translation of names or any descriptions in Chinese which are marked with “*” is 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: Registered Office: Mr. He Haibin (Chairman) Clifton House Ms. Xie Mei (Chief Executive Officer) 75 Fort Street Mr. Lin Kaihua PO Box 1350 GT George Town Non-executive Director: Grand Cayman Mr. Zhang Jing Cayman Islands

Independent Non-executive Directors: Head office and principal place of Mr. Lu Gong business in Hong Kong: 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

6 December 2017

To the Shareholders

Dear Sir or Madam,

VERY SUBSTANTIAL DISPOSAL IN RELATION TO THE DISPOSAL OF 51% OF THE ISSUED SHARE CAPITAL OF CAPITAL CONVERGE HOLDINGS LIMITED

INTRODUCTION

References are made to the announcement of the Company dated 13 November 2017 and the supplemental announcement of the Company dated 15 November 2017 in relation to, among others, the entering into of the Sale and Purchase Agreement and the Supplemental Agreement respectively with the Purchaser and the Target Company regarding the disposal of 51% of the issued share capital of the Target Company and the assignment of the Sale Loan.

– 4 –

LETTER FROM THE BOARD

As one or more of the relevant applicable percentage ratios set forth under Rule 14.07 of the Listing Rules in respect of the Disposal are 75% or more, the Disposal constitutes a very substantial disposal for the Company and is subject to the reporting, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

The EGM will be convened and held for the Shareholders to consider and, if thought fit, approve the Sale and Purchase Agreement, the Supplemental Agreement and the transactions contemplated thereunder. The purpose of this circular is to provide the Shareholders with further details of the Sale and Purchase Agreement, the Supplemental Agreement and the transactions contemplated therein, together with such other information as required by the Listing Rules.

The notice of the EGM is enclosed herein as part of this circular.

THE DISPOSAL

On 9 November 2017 (after trading hours), the Company entered into the Sale and Purchase Agreement with the Purchaser and the Target Company, pursuant to which the Purchaser has conditionally agreed to acquire and the Vendor has conditionally agreed to sell the Sale Shares at the Consideration in the sum equals to the USD equivalent of RMB1,395,249,891.13 in accordance with the terms and conditions of the Sale and Purchase Agreement. On 15 November 2017 (after trading hours), the Company entered into the Supplemental Agreement with the Purchaser and the Target Company, pursuant to which, among others, the Purchaser shall acquire and the Company shall sell the Sale Shares and the Sale Loan at the Consideration. The Disposal constitutes a very substantial disposal (as such term defined under Chapter 14 of the Listing Rules) for the Company. Further information on the implications of the Disposal under the Listing Rules is set forth in the section headed “Implications under the Listing Rules” below.

SALE AND PURCHASE AGREEMENT

The Sale and Purchase Agreement contains all of the terms and conditions for the Disposal which are negotiated on an arm’s length basis between the Company and the Purchaser. A summary of the principal terms and conditions is set forth below:

Date

9 November 2017 (and amended and supplemented by the Supplemental Agreement dated 15 November 2017)

Parties (1) the Company (as vendor);

(2) New China Fund (on behalf of New China Fund SP 1) (as purchaser); and

(3) the Target Company.

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LETTER FROM THE BOARD

Consideration and the sale and purchase of Sale Shares and Sale Loan

The Consideration of the Disposal to be paid by the Purchaser to the Vendor is the USD equivalent of RMB1,395,249,891.13, which was determined after arm’s length negotiations between the Company and the Purchaser with reference to the preliminary valuation of the properties under the Chongqing OCT Land Project as at 30 September 2017 and factors including the net liabilities and deferred tax assets of the Target Group as at 31 August 2017. The preliminary valuation of the properties under the Chongqing OCT Land Project as at 30 September 2017 is approximately RMB2,830,000,000, which is conducted by Savills Valuation and Professional Services Limited, an independent professional valuer, using the direct comparison approach. Subject to the terms and conditions of the Sale and Purchase Agreement and the Supplemental Agreement, the Consideration shall be paid and the sale and purchase of the Sale Shares and the Sale Loan shall be carried out in the following manner:

At the Closing, 51 Sale Shares, representing 51% of the issued and outstanding shares of the Target Company and the Sale Loan will be sold to the Purchaser at the Consideration in the sum equals to the USD equivalent of RMB1,395,249,891.13. Such amount shall be paid in the United States dollars at the USD/RMB central parity rate released by the People’s Bank of China or its authorised institution on one Business Day prior to the payment date.

PRC tax filing and payment

The parties agree that the Company will make all required filings, reports or notices to the applicable governmental authorities in the PRC with respect to all capital gains taxes owed by the Company in the PRC arising from the sale of the Sale Shares to the Purchaser hereunder and any determination required in connection therewith.

Conditions precedent

Closing of the Disposal is conditional upon fulfillment of, among other things, the following conditions:

the Company having complied fully with its obligations under the Sale and Purchase Agreement that require performing prior to the Closing;

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LETTER FROM THE BOARD

the warranties given by the Company under the Sale and Purchase Agreement being true and accurate in all material respects;
the Company having obtained all necessary approvals as required under the Listing Rules, including the approval of the Shareholders on the transactions contemplated under the Sale and Purchase Agreement;
all consents, approvals, authorisations, orders, registrations, filings or qualifications of or with any third party or governmental authorities required shall have been duly obtained or made, as applicable, and shall be in full force and effect;
there shall not have occurred and be continuing any material breach or violation of the Sale and Purchase Agreement on the part of the Company or the Target Company;
at the Closing, each of the Target Group (except Chongqing Company) has obtained its internal approval over the amendments of its articles of associations as mutually agreed by the parties (if appropriate);
at the Closing, each of the board of directors of the Target Group (except Chongqing Company) shall consist of five members, in which three of them shall be appointed by the Purchaser; and
there has not been any material adverse change on the part of any of the Target Group.

Covenants

The Purchaser and the Company agree to use all their best efforts, including by voting at shareholders’ meetings, to procure that the articles of association of each of the Target Group be amended to reflect the following:

before the Closing, Chongqing Company has obtained its internal approval over the amendments of its articles of association as mutually agreed by the parties (if appropriate);

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LETTER FROM THE BOARD

the board of directors of Chongqing Company shall be composed of, and remain at five directors, of whom three directors shall be appointed by the Purchaser and two directors shall be appointed by the Company;
such directors may serve consecutive terms upon re-appointment by the party that initially appointed such directors; and
the term of office of directors shall be three years, with each party entitled to appoint and elect a director may remove such director by notice to such director, the other shareholders and the Target Group; any vacancy occurring on the board of directors by reason of the death, disqualification, inability to act, resignation or removal of any director may be filled only by the party who appointed such director so as to maintain the ratio of directors specified in item 2 above.

The Purchaser and the Company agree that the board of directors of each of the members of the Target Group shall have, among others, the following authorities:

to determine the increase of capital, reduction of capital, separation, merger, suspension, dissolution, liquidation, profit distribution, equity structure adjustment or form change of the relevant member of Target Group;
to amend the articles of association of the relevant member(s) of Target Group;
to determine the Target Group’s overall budget, the annual financial budget and the overall business plans (including designing plan, start and closing plan, cost budgeting plan and sales plan, as well as material adjustments over the management plans);

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LETTER FROM THE BOARD

to approve any transaction or series of transaction between the relevant member(s) of Target Group and the related parties, except for shareholders’ borrowings agreed in writing by the shareholder(s) of the relevant member of the Target Group; and
to approve the transfer of the relevant member(s) of the Target Group’s equity of the project company by the shareholder(s) thereof.

Closing

The Closing of the Disposal shall be consummated by exchange of the Closing documents and wire transfer of funds on or prior to the Closing Date.

Immediately after Closing, the Company will hold 49% of the issued share capital of the Target Company and the financial results of the Target Company will no longer be consolidated into the financial statements of the Group. Upon Closing, the Target Company will be accounted for under equity method as an associate of the Group in the Group’s consolidated financial statements. Moreover, each member of the Target Group will no longer be a subsidiary of the Company.

INFORMATION ON THE PURCHASER

The Purchaser, New China Fund (on behalf of New China Fund SP 1) is a segregated portfolio company which was incorporated in the Cayman Islands. New China Fund SP 1 is an investment portfolio under New China Fund, with all its shares held by independent third parties and with a view to generate positive returns through investment in real estate industry. China Urbanization Capital Limited (華邦資本有限公司) is the manager of New China Fund, which is principally engaged in private equity investments in sectors such as technology, education, strategic emerging industries and real estate. China Urbanization Capital Limited is wholly-owned by China Urbanization Investment Limited (華邦投資有限公司), which is in turn owned as to 35% by the Company and the remaining 65% by independent third parties. The controlling shareholder of the Company does not have any direct interest in each of New China Fund, China Urbanization Capital Limited (華邦資本有限公司) and China Urbanization Investment Limited (華邦投資有限公司). To the best knowledge, information and belief of the Directors, and having made all reasonable enquiries, the Purchaser and its ultimate beneficial owner are third parties independent of the Company and connected persons (as defined in the Listing Rules) of the Company as at the date of this circular.

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LETTER FROM THE BOARD

INFORMATION ON 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 DISPOSAL

The Directors consider that the Disposal gives a good opportunity for the Group to realise a considerable gain which will be beneficial to the financial structure of the Group. The Disposal will also enable the Group to free up capital for its operations and explore potential new investment opportunities that may arise in the future.

The transfer of the Sale Shares (which amount to 51% of the total issued share capital of the Target Company) and the Sale Loan is the result of mutual negotiations between the parties. As confirmed by the Directors, as at the date of this circular, the Group has no current intention, arrangement, understanding or negotiation to dispose of further interests in the Target Company. The Company may however consider disposing of the remaining interests in the Target Company if the terms are favourable and/or circumstances are appropriate.

Upon Closing, there will be no change in relation to the Group’s principal businesses.

In light of the reasons above, the Directors (including the independent non-executive Directors) are of the view that the terms of the Sale and Purchase Agreement and the Supplemental Agreement are on normal commercial terms, fair and reasonable and in the interests of the Company and its Shareholders as a whole.

INFORMATION ON THE TARGET GROUP

The Target Company is a company incorporated in the British Virgin Islands with limited liability and a direct wholly-owned subsidiary of the Company before the Disposal. It is principally engaged in investment holding.

Honour Ray is an investment holding company which is directly and wholly-owned by the Target Company. It directly owns the entire equity capital in Chongqing Company, which is principally engaged in the real estate development and management of the properties under the Chongqing OCT Land Project. The Chongqing OCT Land Project comprises two land parcels with total site area of approximately 179,605 square metres. It is developed under two phases and is expected to be developed into a residential zone with a total plot ratio gross floor area of approximately 448,878 square metres. Phase 1 of the Chongqing OCT Land Project is under construction and will be completed by September 2018. As at the date of this circular, the residential properties under Phase 1 have been pre-sold. The contracted sales area and amount of properties are approximately 167,134 square metres and approximately RMB1.86 billion respectively, which are expected to be settled by the end of 2018. Phase 2 of the Chongqing OCT Land Project has not yet commenced.

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LETTER FROM THE BOARD

Since Phase 1 of the Chongqing OCT Land Project is expected to record revenue and profits by the end of 2018, whilst the land parcels under Phase 2 are still vacant, the Disposal provides a good opportunity for the Group to realize its assets and achieve considerable returns in advance, which will be beneficial to the cash flow and financial structure of the Group. Meanwhile, as the Group after the Disposal can still maintain a 49% shareholding of the Target Company and be able to share its future profits.

The Target Group currently does not have any business other than the business engaged by Chongqing Company.

FINANCIAL INFORMATION OF THE TARGET GROUP AND FINANCIAL EFFECTS OF THE DISPOSAL ON THE COMPANY

As at 31 August 2017, the Target Group had unaudited consolidated total assets and net liabilities of approximately RMB2,428,035,000 and RMB68,672,000, respectively. Selected unaudited consolidated financial information of the Target Group is set out below:

	Year ended 31 December	Year ended 31 December
	2015	2016
	RMB’000	RMB’000
Revenue	–	–
Net profit before taxation	33,509	30,919
Net profit after taxation	31,814	31,136

The major component of the net profit of the Target Group amounted to approximately RMB31.8 million and approximately RMB31.1 million for the years ended 31 December 2015 and 2016 respectively being the net exchange gain arose from the borrowings in foreign currency from the Company for financing the Target Group.

Based on the unaudited net liabilities of the Target Group as at 31 August 2017, it is estimated that the Group will record a net gain of approximately RMB687 million from the Disposal. The assets and liabilities of the Group are estimated to be increased and decreased by approximately RMB117 million and RMB1,128 million respectively after the Disposal. The estimated increase in assets and decrease in liabilities of the Group after the Disposal is arrived at by exclusion of the assets and liabilities of the Target Group as at 31 August 2017, assuming the Disposal took place on 31 December 2016, and the estimate net proceeds, tax provision and re-allocation of the loan to the Target Group arisen from the Disposal. For details please refer to note 4 and note 5 of the pro forma adjustments set out on page III-8 of the Appendix III to the Circular. Any actual gain or loss from the Disposal will depend on the carrying value of the net liabilities of the Target Group upon Closing.

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LETTER FROM THE BOARD

Moreover, taking into account that the Consideration is determined based on the disposal of 51% of the issued share capital of the Target Company instead of the properties themselves, the excess of the Consideration over 51% of the net book value of the properties will amount to approximately RMB745,739,000.

USE OF PROCEEDS

The net proceeds from the Disposal after deducting related transaction costs and expenses are estimated to be approximately RMB1,394 million. It is expected that the net proceeds from the Disposal will be allocated in the following manner: (a) approximately 50% of the proceeds (equivalent to approximately RMB697 million) will be used for future investment and (b) the remaining 50% of the proceeds will be used as general working capital. Details of such allocation have not yet been confirmed and will be subject to future amendments (if any).

(i) As for the future investment, the Group has been actively exploring investment opportunities and it expects to acquire high quality resources and businesses with growth potentials, and currently the Company has not entered into any arrangement with any parties.
(ii) As for the general working capital, it is expected that (a) approximately RMB600 million will be used for repayment of principal and interests payable from banking borrowings; (b) approximately RMB76 million will be used for payment of dividends of preferential shares and senior guaranteed perpetual capital securities; and (c) the remaining amount of approximately RMB21 million will be used as other miscellaneous expenses arising in the ordinary course of business of the Group.

IMPLICATIONS UNDER THE LISTING RULES

To the best knowledge of the Directors, as the Purchaser is an independent third party of the Company and no Shareholder has a material interest in the Disposal, none of the Shareholders and their respective close associates is required to abstain from voting in respect of the ordinary resolution to approve the Sale and Purchase Agreement, the Supplemental Agreement and the transactions contemplated thereunder at the EGM.

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LETTER FROM THE BOARD

RECOMMENDATION

The Board considers that the terms of the Sale and Purchase Agreement and the Supplemental Agreement are fair and reasonable and the entering into of the Sale and Purchase Agreement and the Supplemental Agreement are in the interests of the Company and the Shareholders as a whole. Accordingly, the Directors would recommend the Shareholders to vote in favour of a resolution approving the Sale and Purchase Agreement and the Supplemental Agreement and the transactions contemplated thereunder at the EGM.

ADDITIONAL INFORMATION

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

By order of the Board Overseas Chinese Town (Asia) Holdings Limited He Haibin

Chairman

– 13 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

The financial information of the Group for the years ended 31 December 2014, 2015 and 2016 and for the six months ended 30 June 2017 are disclosed on pages 59 to 136 of the annual report 2014 of the Company for the year ended 31 December 2014, pages 59 to 138 of the annual report 2015 of the Company for the year ended 31 December 2015, pages 77 to 172 of the annual report 2016 of the Company for the year ended 31 December 2016 and pages 24 to 50 of the interim report 2017 of the Company for the six months ended 30 June 2017. References to the annual reports and interim report of the Company published on the website of the Stock Exchange are set out below:

The audited consolidated financial statements of the Group for the year ended 31 December 2014 have 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/listedco/listconews/SEHK/2015/0326/LTN201503261243.pdf). The audited consolidated financial statements of the Group for the year ended 31 December 2015 have been set out in pages 59 to 138 of the annual report 2015 of the Company which was posted on 7 April 2016 on the Stock Exchange’s website (http://www.hkexnews.hk/listedco/listconews/SEHK/2016/0407/LTN20160407369.pdf).

The audited consolidated financial statements of the Group for the year ended 31 December 2016 have been set out in pages 77 to 172 of the annual report 2016 of the Company which was posted on 26 April 2017 on the Stock Exchange’s website http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0426/LTN20170426481.pdf.

The unaudited consolidated financial statements of the Group for the six months ended 30 June 2017 have been set out in pages 24 to 50 of the interim report 2017 of the Company which was posted on 29 August 2017 on the Stock Exchange’s website http://www.hkexnews.hk/listedco/listconews/SEHK/2017/0829/LTN20170829388.pdf.

2. INDEBTEDNESS STATEMENT

At the close of business on 31 October 2017, 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 which amounted to RMB5,831 million comprising, loans from related parties of the Company of approximately RMB1,466 million, and bank and other loans of approximately RMB4,365 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 properties 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 the Company, certain subsidiaries and intermediate parents of the Company. Other than the Bank and Other Loans, loans from related parties of the Company are unsecured.

– I-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

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 31 October 2017, 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.

3. WORKING CAPITAL

The Directors, after due and careful enquiry, are of the opinion that, after taking into account the financial resources presently available to the Group including the internally generated funds, the currently available facilities and the effects of the Disposal, and in the absence of unforeseen circumstances, the Group has sufficient working capital for its normal business for at least the next 12 months from the date of this circular.

4. CONTINGENT LIABILITIES

The Group has no other material contingent liabilities. The Group is not involved in any current material legal proceedings, nor is the Group aware of such material legal proceedings. The Group would record any loss contingencies when, based on information then available, it is probable that a loss had been incurred and the amount of the loss can be reasonably estimated. The Group confirms that there has not been any material change in the level of its contingent liabilities since 31 December 2016 up to the Latest Practicable Date.

5. FINANCIAL AND TRADING PROSPECTS OF THE REMAINING GROUP

Financial and Trading Prospects of the Remaining Group

For the year ended 31 December 2016, the Remaining Group’s turnover was approximately RMB5.358 billion, representing a decrease of approximately 16.75% over the same period of 2015. Profit attributable to the Shareholders of the Remaining Group for the year ended 31 December 2016 was approximately 354 million, representing an increase of approximately 46.90% over 2015. Gross profit margin of the Remaining Group for the year ended 31 December 2016 was approximately 30.72%, representing a decrease of approximately 0.68% over 2015. Total assets and total equity of the Remaining Group for the year ended 31 December 2016 amounted to approximately RMB19.176 billion and approximately RMB6.736 billion, representing a decrease of approximately 0.87% and an increase of approximately 20.62% over 2015 respectively.

Upon Closing, there will be no change in relation to the Group’s principal business. Looking forward, for comprehensive development businesses, the Remaining Group will focus on making greater efforts in promoting its new products in the market and accelerating the turnaround of products to enhance fund recovery and operational efficiency through keeping close attention to the real estate policies stipulated by the central and local governments and optimizing its development strategies based on market conditions. Adhering to the leading

– I-2 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

development and operation concept, the Remaining Group will continue to give full play to our advantages, actively focusing and seeking diversified investment opportunities through cooperation, merger and acquisitions, equity participation and other approaches. The Group will also accelerate increasing reserves for comprehensive development projects, so as to enhance our development potential.

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 continue to introduce waterfront multistory residential properties with scarce landscape resources as well as high-rise residential towers and boutique business premises. The highly-anticipated Bulgari Hotel will soon be introduced. As the strategic planning of “One Shaft Three Belts” (一軸三帶) in new Jing’an District in Shanghai is freshly announced, the Suhewan Segment, being a core segment of the new Jing’an District, is expected to become the new core for developments in Shanghai. As an iconic comprehensive commercial complex project of the Suhewan Segment, the Shanghai Suhewan Project remains in the spotlight of the market. The Chengdu OCT Project will launch a high-end customized villa in the only eyot of downtown Chengdu and a new phase of high-rise residential properties, and will continue its sale of low-density residential properties and high-end office products.

For the Paper Packaging Business, in order to optimize business structure and achieve strategic transformation, the Remaining Group will withdraw from the manufacturing procedure of the paper packaging business in stages and emphasize taking various measures depending on the specific conditions of different companies under the name of “Huali” to expand the way of thinking for transformation development.

Looking forward, as the Central Government expedites industrial upgrade, innovates economic development models and deepens the reform of state-owned enterprises, the Remaining Group, led by two strategic themes of OCT Group-i.e. “culture + tourism + urbanisation” and “tourism + internet + finance, will accelerate its pace of innovative development, facilitate strategic transformation, promote industrial distribution, and further improve and consolidate the important role of OCT Group’s overseas investment platform. It will proactively acquire and foster high quality resources and businesses with strong cooperation with OCT industrial ecosphere and growth potentials by means of domestic and overseas direct investments, indirect investments (industrial funds), etc. and build new development drivers for the Company with innovative financial measures to continuously enhance its corporate value.

The Board has full confidence in the future development prospects. The Remaining Group, with the support of OCT Group, will also endeavor to create ideal return on investment for shareholders by fully leveraging OCT’s advantages in its brand, resources and experience following the work idea of “share, breakthrough and implementation”.

– I-3 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Following the Disposal, the Remaining Group will continue to carry out its existing businesses. Set out below are the management discussion and analysis of the Remaining Group for each of the three financial years ended 31 December 2014, 2015 and 2016 and the six months ended 30 June 2017.

Liquidity, Financial Resources and Capital Structure

For the year ended 31 December 2014

The total equity of the Remaining Group as at 31 December 2014 was approximately RMB6.390 billion. As at 31 December 2014, the Remaining Group had current assets of approximately RMB17.688 billion and current liabilities of RMB4.159 billion. The current ratio of the Remaining Group was approximately 4.25 as at 31 December 2014, which was maintained within a relatively reasonable range and ensured stronger solvency for the Remaining Group.

The total cash and bank balance of the Remaining Group as at 31 December 2014 was approximately RMB3.270 billion and was used as the working capital of the Remaining Group. As at 31 December 2014, the Remaining Group had outstanding bank and other loans of approximately RMB3.522 billion, without any fixed-rate loans. As at 31 December 2014, the interest rates of bank and other loans of the Remaining Group ranged from 1.5% to 6.64% per annum. Some of those bank loans were secured by floating charges of certain assets of the Remaining Group and corporate guarantees provided by certain subsidiaries of the Company. The Remaining Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 53.90% as at 31 December 2014.

As at 31 December 2014, approximately 34% of the total amount of outstanding bank loans of the Remaining Group amounting to approximately HK$1.693 billion was in Hong Kong Dollars; approximately 30% of which amounting to approximately US$172 million was in United States Dollars. As at 31 December 2014, approximately 69.8% of the total amount of cash and cash equivalents of the Remaining Group was in Renminbi, approximately 7.4% of which was in Hong Kong Dollars, and approximately 9.7% of which was in United States Dollars.

For the year ended 31 December 2015

The total equity of the Remaining Group as at 31 December 2015 was approximately RMB6.804 billion. As at 31 December 2015, the Remaining Group had current assets of approximately RMB16.722 billion and current liabilities of RMB6.014 billion. The current ratio of the Remaining Group was approximately 2.78 as at 31 December 2015, which was maintained within a relatively reasonable range and ensured stronger solvency for the Remaining Group.

– I-4 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

The total cash and bank balance of the Remaining Group as at 31 December 2015 was approximately RMB3.362 billion and was used as the working capital of the Remaining Group. As at 31 December 2015, the Remaining Group had outstanding bank and other loans of approximately RMB4.131 billion, without any fixed-rate loans. As at 31 December 2015, the interest rates of bank and other loans of the Remaining Group ranged from 2.14% to 6.64% per annum. Some of those bank loans were secured by floating charges of certain assets of the Remaining Group and corporate guarantees provided by certain subsidiaries of the Company. The Remaining Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 49.01% as at 31 December 2015.

As at 31 December 2015, approximately 36.9% of the total amount of outstanding bank loans of the Remaining Group amounting to approximately HK$1.821 billion was in Hong Kong Dollars; approximately 24.4% of which amounting to approximately US$155 million was in United States Dollars. As at 31 December 2015, approximately 78.2% of the total amount of cash and cash equivalents of the Remaining Group was in Renminbi, approximately 19.2% of which was in Hong Kong Dollars, and approximately 2.6% of which was in United States Dollars.

For the year ended 31 December 2016

The total equity of the Remaining Group as at 31 December 2016 was approximately RMB6.736 billion. As at 31 December 2016, the Remaining Group had current assets of approximately RMB13.012 billion and current liabilities of RMB6.014 billion. The current ratio of the Remaining Group was approximately 3.19 as at 31 December 2016, which was maintained within a relatively reasonable range and ensured stronger solvency for the Remaining Group.

The total cash and bank balance of the Remaining Group as at 31 December 2016 was approximately RMB1.945 billion and was used as the working capital of the Remaining Group. As at 31 December 2016, the Remaining Group had outstanding bank and other loans of approximately RMB4.277 billion, without any fixed-rate loans. As at 31 December 2016, the interest rates of bank and other loans of the Remaining Group ranged from 1.05% to 6.38% per annum. Some of those bank loans were secured by floating charges of certain assets of the Remaining Group and corporate guarantees provided by certain subsidiaries of the Company. The Remaining Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 42.76% as at 31 December 2016.

As at 31 December 2016, approximately 37.3% of the total amount of outstanding bank loans of the Remaining Group amounting to approximately RMB1.595 billion was in Renminbi; approximately 50.6% of which amounting to approximately HK$2.418 billion was in Hong Kong Dollars; approximately 12.1% of which amounting to approximately US$74.80 million was in United States Dollars. As at 31 December 2016, approximately 89.8% of the total amount of cash and cash equivalents of the Remaining Group was in Renminbi, approximately 7.8% of which was in Hong Kong Dollars, and approximately 2.4% of which was in United States Dollars.

– I-5 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For the six months ended 30 June 2017

The total equity of the Remaining Group as at 30 June 2017 was approximately RMB6.968 billion. As at 30 June 2017, the Remaining Group had current assets of approximately RMB11.580 billion and current liabilities of RMB5.457 billion. The current ratio of the Remaining Group was approximately 2.12 as at 30 June 2017, which was maintained within a relatively reasonable range and ensured stronger solvency for the Remaining Group.

The total cash and bank balance of the Remaining Group as at 30 June 2017 was approximately RMB2.274 billion and was used as the working capital of the Remaining Group. As at 30 June 2017, the Remaining Group had outstanding bank and other loans of approximately RMB5.073 billion, without any fixed-rate loans. As at 30 June 2017, the interest rates of bank and other loans of the Remaining Group ranged from 1.15% to 6.38% per annum. Some of those bank loans were secured by floating charges of certain assets of the Remaining Group and corporate guarantees provided by certain subsidiaries of the Company. The Remaining Group’s gearing ratio (being the total borrowings including bills payable and loans divided by total assets) was approximately 45% as at 30 June 2017.

As at 30 June 2017, approximately 26.5% of the total amount of outstanding bank loans of the Remaining Group amounting to approximately RMB1.345 billion was in Renminbi and approximately 73.5% of which amounting to approximately HK$3.728 billion was in Hong Kong Dollars. As at 30 June 2017, approximately 82% of the total amount of cash and cash equivalents of the Remaining Group was in Renminbi, approximately 16.4% of which was in Hong Kong Dollars, and approximately 1.6% of which was in United States Dollars.

Funding and Treasury Policies

The Remaining Group adopted prudent funding and treasury policies. Surplus funds are primarily maintained in the form of cash deposits with leading banks.

Acquisition and development of properties are financed partly by internal resources and partly by bank loans. Repayments of bank loans are scheduled to match asset lives and project completion dates. Bank loans are mainly denominated in Hong Kong dollars and Renminbi and bear interest at floating rates.

Foreign currency exposure is closely monitored by the management and hedged to the extent desirable. As at 31 December 2014, 2015, 2016 and 30 June 2017, the Remaining Group had no material exposure under foreign exchange contracts or any other hedging instruments.

Interest Expense

For the years ended 31 December 2014, 2015, 2016 and the six months ended 30 June 2017, the interest expenses of the Remaining Group were RMB190 million, RMB223 million, RMB255 million and RMB115 million, respectively. A large portion of the interest expenses were incurred as a result of bank borrowings and debenture interests obtained by the Remaining Group for the development of integrated businesses.

– I-6 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Employees and Remuneration Policy

As at 31 December 2014, 2015, 2016 and 30 June 2017, the Remaining Group employed 1702, 2689, 2842 and 2885 full-time employees, respectively. The Remaining Group determines basic remunerations primarily with reference to the industry’s remuneration benchmark, the employees’ experience and their performance, and equal opportunities are offered to all staff members. Remunerations of the employees are maintained at a competitive level and are reviewed annually with reference to the relevant labour market and economic situation. Directors’ remunerations are determined based on a variety of factors such as market conditions and responsibilities assumed by each Director. Apart from the basic remuneration and statutory benefits, the Remaining Group also provides discretionary bonuses with reference to the results of the Remaining Group and individual performance of the staff.

The Remaining Group has not encountered any significant problems with its employees or disruption to its operations due to labour disputes, nor has it experienced any difficulty in the recruitment and retention of experienced staff. The Remaining Group maintains a good relationship with its employees.

According to the ordinary resolution passed at the EGM held on 15 February 2011, the Board adopted a new share option scheme and simultaneously terminated the share option scheme which was adopted on 12 October 2005. For the year ended 31 December 2014, no share options of the Remaining Group were exercised. For the year ended 31 December 2015, a total of 2,576,000 share options of the Remaining Group were exercised. For the year ended 31 December 2016, no share options of the Remaining Group were exercised. For the six months ended 30 June 2017, no share options of the Remaining Group were exercised.

Contingent Liabilities

As at 31 December 2014, 2015, 2016 and 30 June 2017, the Remaining Group had no contingent liabilities.

Significant Investments, Material Acquisitions and Disposals

For the year ended 31 December 2014

Withdrawal from Tianjin Tianxiao Project through Arbitration

Pursuant to the arbitration award dated 18 December 2014, the Group transferred 100% equity interest in 天津天瀟投資發展有限公司 (Tianjin Tianxiao Investment Development Company Limited) (“Tianjin Tianxiao”) to 首譽光控資產管理有限公司 (Everbright Prestige Capital Management Company Limited) (“Everbright Prestige”), and Everbright Prestige returned approximately RMB734 million (the down payment paid by the Group in acquiring Tianjin Tianxiao) and paid a compensation of approximately RMB337 million to the Group, totaling approximately RMB1.071 billion, and recorded a non-current revenue. Upon completion of the said transfer, Tianjin Tianxiao ceased to be a subsidiary of the Company.

– I-7 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

For further details, please refer to the announcements of the Company dated 13 February 2014, 27 March 2014, 18 December 2014 and 29 December 2014.

Shaheyuan Land Consolidation Project

On 11 July 2014, the independent shareholders of the Company approved a mandate for authority in Chengdu OCT to participate in the Tender selection of a joint venture with the Chengdu Jinniu Government for a land consolidation project and to engage in the transactions contemplated under the Tender. Chengdu OCT received a notice of successful bid for the Tender on 22 July 2014. Accordingly, Chengdu OCT established the JV Company with Xinjin Nongfa Investments for the land consolidation project in relation to, among others, site formation (土地平整), removal (拆舊), restoration (複墾), centralized relocation of farmers (農民集中安置) and construction of infrastructure and urban facilities of a plot of land located at Shaheyuan Area, Huancheng Ecological Zone, Jinniu District, Chengdu, the PRC, with a planned area of approximately 3,190 mu. The JV Company is responsible for providing the fund(s) for the Shaheyuan Land Consolidation Project with a maximum amount of RMB4.17 billion for certain investment return.

For further details, please refer to the announcements of the Company dated 3 June 2014, 22 July 2014 and 16 October 2014, and the circular of the Company dated 24 June 2014.

Acquisition of Property

On 12 December 2014, an indirectly wholly-owned subsidiary of the Company entered into a sale and purchase agreement with Easywise Limited in relation to the sale and purchase of the property located at Unit Nos. 1, 2 & 3 on 26th Floor and seven car parks on Ground Floor and 1st Floor, One Harbour Square, No.181 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong with the purchase price of HK$289,185,600.

For further details, please refer to the announcement of the Company dated 12 December 2014.

For the year ended 31 December 2015

Acquisition of the CDCT Development Project

On 24 April 2015, Chengdu OCT won the public tender for the Subscription of 25,000,000 shares in 成都文化旅遊發展股份有限公司 (Chengdu Culture & Tourism Development Company Limited) (“CDCT Development”) for a consideration of approximately RMB265 million. The shares under the Subscription represent approximately 33.33% of CDCT Development’s equity interests as enlarged by the Subscription.

For further details, please refer to the announcement of the Company dated 24 April 2015.

– I-8 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Acquisition of the OCT Chang’an Metropolis Project

On 9 October 2015, the Group entered into an asset acquisition agreement with 長安控股(集團)有限責任公司 (Chang’an Holdings (Group) Company Limited) and its subsidiaries to acquire Building 2# and Building 3# (excluding storey 52001) and 270 designated car parking spaces located at Chang’an Metropolis Centre for a consideration of approximately RMB1.59 billion. The total gross floor area involved in such transactions was approximately 104,700 sq.m..

For further details, please refer to the announcements of the Company dated 9 October 2015, 27 October 2015, 18 November 2015, 19 November 2015 and 24 November 2015, and the circular of the Company dated 25 November 2015.

Acquisition of the CSI Company Project

On 18 December 2015, 成都華僑城創盈企業管理有限公司 (Chengdu OCT Chuang Ying Enterprise Management Company Limited) (“Chengdu Chuang Ying”), a wholly-owned subsidiary of Chengdu OCT, won the public tender in respect of the 15% equity interests in 成都體育產業有限責任公司 (Chengdu Sports Industry Company Limited) (“CSI Company”) held by Chengdu Culture & Tourism Development Company Limited) (the “Sale Equity Interests”) and the capital injection of approximately RMB651 million into CSI Company (the “Subscription Equity Interests”). Chengdu Chuang Ying has entered into an agreement on 25 December 2015 for the acquisition of the Sale Equity Interests and the Subscription Equity Interests at a consideration of approximately RMB798 million. Subsequent to the Transfer, Chengdu Chuang Ying owns 49% equity interests in the CSI Company.

For further details, please refer to the announcements of the Company dated 3 December 2015, 18 December 2015, 11 January 2016 and 13 January 2016, and the circular of the Company dated 22 January 2016.

For the year ended 31 December 2016

Acquisition of Chengdu Baoxin Quansheng

On 7 March 2016, Chengdu Chuang Ying entered into a cooperation agreement with 成都保鑫投資有限公司 (Chengdu Baoxin Investment Company Limited) (“Chengdu Baoxin Investment”) to acquire 50% equity interest in 成都市保鑫泉盛房地產開發有限公司 (Chengdu Baoxin Quansheng Real Estate Development Company Limited) (“Chengdu Baoxin Quansheng”) held by Chengdu Baoxin Investment at a consideration of RMB25 million. Chengdu Chuang Ying and Chengdu Baoxin Investment should provide shareholders’ loan to Chengdu Baoxin Quansheng in proportion to their respective equity interests in Chengdu Baoxin Quansheng and provide corporate guarantees required for the bank loan(s) to be obtained by Chengdu Baoxin Quansheng, the total amount of which shall not exceed RMB1.950 billion. Chengdu Baoxin Quansheng owned a land located in Jinniu District, Chengdu City with a total site area of approximately 58,300 sq.m. and total gross floor area not more than 174,900 sq.m..

For further details, please refer to the announcement of the Company dated 7 March 2016.

– I-9 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Investment in Capital Fortune Emerging Industry Funds

On 30 September 2016, 深圳華友投資有限公司 (Shenzhen Huayou Investment Co., Ltd.) (“Huayou Investment”), an indirect wholly-owned subsidiary of the Company, entered into a limited partnership agreement with Shenzhen Capital Fortune Investment Management Co., Ltd. (“Capital Fortune Investment”) and other several partners to establish Capital Fortune Emerging Industry Funds in the total capital of RMB1.00 billion, of which RMB143 million was contributed by Huayou Investment. The investment scope of Capital Fortune Emerging Industry Funds covers emerging industries, such as new-energy automobiles, pharmacy and health, mobile internet, energy conservation and environmental protection.

For further details, please refer to the announcements of the Company dated 30 September 2016, 11 October 2016 and 24 October 2016 and the circular of the Company dated 27 October 2016.

Investment in Capital Fortune Fund No.10

On 19 December 2016, Huayou Investment entered into a limited partnership agreement with Capital Fortune Investment and other several partners to establish Capital Fortune Investment No.10 Fund in the total capital of RMB206 million, of which RMB100 million was contributed by Huayou Investment. Capital Fortune Fund No.10 engages in investment in the equity interest in a PRC securities firm. For further details, please refer to the announcement of the Company dated 19 December 2016.

Investment in NCI Fund

On 28 December 2016, City Legend International Limited (“City Legend”), an indirect wholly-owned subsidiary of the Company has applied for investing in the total amount of US$50 million in the NCI Fund. The investment objective of NCI Fund is to invest in equity securities in a high technology company whose operation is based in the PRC and propose to make initial public offering of its securities. For further details, please refer to the announcement of the Company dated 28 December 2016.

For the six months ended 30 June 2017

Investment in Minsheng Education

On 6 March 2017, City Legend entered into the cornerstone investment agreement with Minsheng Education Group Company Limited (“Minsheng Education”), to subscribe for 332,000,000 Shares of Minsheng Education at the IPO Price. The primary focus of Minsheng Education is to provide high-quality private formal higher education in the PRC dedicated to nurturing professional talents. This investment is expected to broaden the sources of profits of the Group. The subscription was completed on 21 March 2017 at a total effective subscription price of approximately HK$463 million, representing 8.26% of the total issued share capital of Minsheng Education. For further details, please refer to the announcement of the Company dated 6 March 2017.

– I-10 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Investment in Shanghai Libao Huachen Fund

On 17 March 2017, Huayou Investment entered into the limited partnership agreement with Shanghai Rongzheng Libao Investment Management Co., Ltd., Shanghai Rongzheng Investment Advisory Co., Ltd., and other several partners to establish Shanghai Libao Huachen Investment Centre (LLP) (“Shanghai Libao Huachen Fund”) with an aggregate capital of RMB400 million, among which Huayou Investment invested a total amount of RMB30 million. Shanghai Libao Huachen Fund principally invests in culture industry, including but not limited to segments of video and media, sports and entertainment, leisure and tourism as well as online education segment, and segments of upgrading and reconstruction of such industries through internet and mobile internet. For further details, please refer to the announcement of the Company dated 17 March 2017.

Save as disclosed above, as at 31 December 2014, 2015, 2016 and 30 June 2017, there are no other matters applicable to the Remaining Group and required to be disclosed under the requirements of paragraph 32 of Appendix 16 to the Listing Rules.

– I-11 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

Set out below are the unaudited consolidated statements of financial position of the Target Group as at 31 December 2014, 2015 and 2016 and 31 August 2017 and the unaudited consolidated statements of profit or loss, unaudited consolidated statements of comprehensive income, unaudited consolidated statements of changes in equity and unaudited consolidated statements of cash flows of the Target Group for the period from 16 January 2014 (date of incorporation of the Target Company) to 31 December 2014, the years ended 31 December 2015 and 2016 and the eight months ended 31 August 2016 and 2017, and certain explanatory notes (the “Financial Information”). The Financial Information has been presented on the basis set out in note 2 of the notes to the Financial Information and are prepared in accordance with the accounting policies adopted by the Company as shown in its annual report for the year ended 31 December 2016, and rule 14.68(2)(a)(i) of the Listing Rules.

The Financial Information is prepared by the Directors solely for the purpose of inclusion in this circular in connection with the Disposal. The Company’s auditors, RSM Hong Kong (the “reporting accountants”), were engaged to review the Financial Information of the Target Group set out on pages II-2 to II-7 of this circular in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” and with reference to Practice Note 750 “Review of Financial Information under the Hong Kong Listing Rules for a Very Substantial Disposal” issued by the Hong Kong Institute of Certified Public Accountants.

A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable the reporting accountants to obtain assurance that the reporting accountants would become aware of all significant matters that might be identified in an audit. Accordingly, the reporting accountants do not express an audit opinion.

Based on their review on the Financial Information of the Target Group, nothing has come to their attention that causes them to believe that the Financial Information is not prepared, in all material respects, in accordance with the basis of preparation as set out in note 3 below.

– II-1 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

A. UNAUDITED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

Revenue Other revenue Other net gains/(losses) Distribution costs Administrative expenses Profit/(loss) from operations Finance costs (Loss)/profit before tax Income tax (expense)/credit (Loss)/profit for the period/year attributable to owners of the Target Company	Period from 16 January 2014 to 31 December 2014 RMB’000 – – 47 – (35) 12 (6,369) (6,357) – (6,357)	Year ended 31 December 2015 2016 RMB’000 RMB’000 – – 860 1,218 38,667 33,977 – (512) (1,458) (1,195) 38,069 33,488 (4,560) (2,569) 33,509 30,919 (1,695) 217 31,814 31,136	Eight months ended 31 August 2016 2017 RMB’000 RMB’000 – – 59 1,064 14,174 (33,052) (246) (8,579) (545) (4,055) 13,442 (44,622) (2,534) (19,665) 10,908 (64,287) 459 2,775 11,367 (61,512)

– II-2 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

B. UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Loss)/profit for the period/year Other comprehensive income for the period/year, net of tax: Item that may be reclassified to profit or loss: Exchange differences on translating foreign operations Total other comprehensive income for the period/year attributable to the owners of the Target Company	Period from 16 January 2014 to 31 December 2014 RMB’000 (6,357) (28) (6,385)	Year ended 31 December 2015 2016 RMB’000 RMB’000 31,814 31,136 (62,430) (78,973) (30,616) (47,837)	Eight months ended 31 August 2016 2017 RMB’000 RMB’000 11,367 (61,512) (31,312) 77,678 (19,945) 16,166

– II-3 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

C. UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Non-current assets Deferred tax assets Current assets Inventories Trade and other receivables Current tax assets Cash and cash equivalents Current liabilities Trade and other payables Receipts in advance Related party loans Current tax liabilities Net current assets/(liabilities) Total assets less current liabilities Non-current liabilities Related party loans Deferred tax liabilities NET LIABILITIES Capital and reserves Share capital Reserves CAPITAL DEFICIENCY	As 2014 RMB’000 – – – – 493,740 493,740 – – 319,672 – 319,672 174,068 174,068 180,453 – 180,453 (6,385) – (6,385) (6,385)	at 31 December 2015 2016 RMB’000 RMB’000 – – 1,016,264 1,107,508 2 6,887 201 418 11,838 132,781 1,028,305 1,247,594 156 1,474 – – 945,758 1,330,958 – – 945,914 1,332,432 82,391 (84,838) 82,391 (84,838) 119,392 – – – 119,392 – (37,001) (84,838) – – (37,001) (84,838) (37,001) (84,838)	As at 31 August 2017 RMB’000 39,069 1,299,022 597,261 – 492,683 2,388,966 52,097 1,129,606 1,305,798 3,956 2,491,457 (102,491) (63,422) – 5,250 5,250 (68,672) – (68,672) (68,672)

– II-4 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

D. UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

Total comprehensive income for the period, at 31 December 2014 and 1 January 2015 Total comprehensive income for the year Transfer between reserves Changes in equity for the year At 31 December 2015 and 1 January 2016 Total comprehensive income for the year At 31 December 2016 and 1 January 2017 Total comprehensive income for the period At 31 August 2017 At 31 December 2015 and 1 January 2016 Total comprehensive income for the period At 31 August 2016	Share capital RMB’000 – – – – – – – – – – – –	Statutory surplus reserve RMB’000 – – 508 508 508 – 508 – 508 508 – 508	Exchange reserve RMB’000 (28) (62,430) – (62,430) (62,458) (78,973) (141,431) 77,678 (63,753) (62,458) (31,312) (93,770)	(Accumulated losses)/ retained profits RMB’000 (6,357) 31,814 (508) 31,306 24,949 31,136 56,085 (61,512) (5,427) 24,949 11,367 36,316	Total RMB’000 (6,385) (30,616) – (30,616) (37,001) (47,837) (84,838) 16,166 (68,672) (37,001) (19,945) (56,946)

– II-5 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

E. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES (Loss)/profit before tax Adjustment for: Interest expenses Operating income/(loss) before working capital changes Increase in inventories Increase in trade and other receivables Increase in trade and other payables Increase in receipts in advance Cash generated from/(used in) operations Tax (paid)/refund: PRC tax (paid)/refund Interest paid Net cash (used in)/generated from operating activities CASH FLOWS FROM FINANCING ACTIVITIES Increase/(decrease) in related party loans NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS Effect of foreign exchange rate changes CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE PERIOD/YEAR CASH AND CASH EQUIVALENTS AT THE END OF PERIOD/YEAR	Period from 16 January 2014 to 31 December 2014 RMB’000 (6,357) 6,369 12 – – – – 12 – (6,369) (6,357) 500,125 493,768 (28) – 493,740	Year ended 31 December 2015 2016 RMB’000 RMB’000 33,509 30,919 4,560 2,569 38,069 33,488 (1,016,264) (91,244) (2) (6,885) 156 1,318 – – (978,041) (63,323) (1,896) – (4,560) (2,569) (984,497) (65,892) 565,025 265,808 (419,472) 199,916 (62,430) (78,973) 493,740 11,838 11,838 132,781	Eight months ended 31 August 2016 2017 RMB’000 RMB’000 10,908 (64,287) 2,534 19,665 13,442 (44,622) (4,991) (191,514) (217) (590,374) 398 50,623 – 1,129,606 8,632 353,719 7 (26,670) (2,534) (19,665) 6,105 307,384 238,353 (25,160) 244,458 282,224 (31,312) 77,678 11,838 132,781 224,984 492,683

– II-6 –

FINANCIAL INFORMATION OF THE TARGET GROUP

APPENDIX II

NOTES TO THE FINANCIAL INFORMATION OF THE TARGET GROUP

1. GENERAL INFORMATION

Capital Converge Holdings Limited (the “Target Company”) is a limited liability company incorporated in the British Virgin Islands. The Target Company and its subsidiaries (together, the “Target Group”) principally engaged in real estate development in the People’s Republic of China (the “PRC”).

On 9 November 2017, the Company has entered into the sales and purchase agreement with New China OCT Fund SPC (on behalf of New China OCT Fund SPC 1 Segregated Portfolio) (the “Purchaser”) and Capital Converge Holdings Limited (the “Target Company”) pursuant to which the Company has agreed to sell and the Purchaser has agreed to purchase 51 shares of the Target Company (the “Sale Shares”) (the “Disposal”), representing 51% of the total issued share capital of the Target Company. On 15 November 2017 (after trading hours), the Company entered into the supplemental agreement with the Purchaser and the Target Company, pursuant to which, among others, the Purchaser shall acquire and the Company shall sell the Sale Shares and the Sale Loan (which means 51% of the loan which amount to approximately RMB1,280,000,000 owed by Honour Ray Limited to the Company inclusive of all its relevant rights and interests).

Upon completion of the Disposal, the Target Group will cease to be subsidiaries of the Company and the Target Company will be held as to 49% by the Company and 51% by the Purchaser.

2. BASIS OF PRESENTATION OF THE FINANCIAL INFORMATION OF THE TARGET GROUP

The Financial Information of the Target Group for the period from 16 January 2014 (date of incorporation of the Target Company) to 31 December 2014, the years ended 31 December 2015 and 2016, and the eight months ended 31 August 2016 and 2017 has been prepared under the going concern concept because (i) the Company, an immediate parent of the Target Company prior the Disposal, has agreed to provide continual financial support and adequate funds for the Target Group to meet its liabilities as and when they fall due and not to request repayment of the amounts due to the Group by the Target Group until such time as the Target Group is in a position to repay such amounts without impairing its liability position; and (ii) in accordance with the supplementary sale and purchase agreement entered into between the Company and New China Fund SP 1 (the “Purchaser”) on 15 November 2017, both the Company and New China Fund SP 1 have also agreed to provide financial support in the form of shareholders’ loans to the Target Group in proportion to their shareholding upon completion of the Disposal.

3. BASIS OF PREPARATION OF THE FINANCIAL INFORMATION OF THE TARGET GROUP

The Financial Information of the Target Group has been prepared solely for the purpose of inclusion in the circular to be issued by the Company in connection with the Disposal in accordance with paragraph 14.68(2)(a)(i) of the Rules Governing the Listing of the Securities on The Stock Exchange of Hong Kong Limited and in accordance with the relevant accounting policies adopted by the Company as set out in its annual report for the year ended 31 December 2016, which conform with Hong Kong Financial Reporting Standards issued by the Hong Kong Institute of Certified Public Accountants.

The Financial Information of the Target Group has been prepared under the historical cost convention. The Financial Information of the Target Group is presented in Renminbi (RMB) and all values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.

The Financial Information of the Target Group does not contain sufficient information to constitute a complete set of financial statements as defined in Hong Kong Accounting Standard 1 (Revised) “Presentation of Financial Statements” or an interim financial report as defined in Hong Kong Accounting Standard 34 “Interim Financial Reporting” issued by the Hong Kong Institute of Certified Public Accountants.

– II-7 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

A. INTRODUCTION TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

The accompanying unaudited pro forma financial information of the Remaining Group has been prepared to illustrate the effect of the disposal of 51% of the issued share capital of Capital Converge Holdings Limited (the “Disposal”) might have affected the financial information of the Group.

The unaudited pro forma consolidated statement of profit and loss and statement of cash flows of the Remaining Group for the year ended 31 December 2016 are prepared based on the audited consolidated statement of profit or loss and statement of cash flows of the Group for the year ended 31 December 2016 as extracted from the annual report of the Company for the year ended 31 December 2016 as if the Disposal had been completed on 1 January 2016.

The unaudited pro forma consolidated statement of financial position of the Remaining Group as at 31 December 2016 is prepared based on the audited consolidated statement of financial position of the Group as at 31 December 2016 as extracted from the annual report of the Company for the year ended 31 December 2016 as if the Disposal had been completed on 31 December 2016.

The unaudited pro forma financial information of the Remaining Group 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 unaudited pro forma financial information of the Remaining Group, it may not give a true picture of the actual financial position, results of operation or cash flows of the Remaining Group that would have been attained had the Disposal actually occurred on the dates indicated herein. Furthermore, the unaudited pro forma financial information of the Remaining Group does not purport to predict the Remaining Group’s future financial position, results of operation or cash flows.

The unaudited pro forma financial information of the Remaining Group should be read in conjunction with the financial information of the Group as set out in Appendix I and other financial information included elsewhere in this circular.

– III-1 –

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

B. UNAUDITED PRO FORMA CONSOLIDATED PROFIT OR LOSS OF THE REMAINING GROUP

Revenue Cost of sales Gross profit Other revenue Other net gains/(losses) Distribution costs Administrative expenses Other operating expenses Gain on disposal of subsidiaries Profit from operations Finance costs Share of profits of associates Share of a loss of a joint venture Profit before tax Income tax expense/(credit) Profit for the year Attributable to: Owner of the Company Non-controlling interests	The Group Pro forma adjustments Notes RMB’000 RMB’000 (Note 1) 5,358,174 (3,712,045) 1,646,129 44,033 (1,218) 2 10,373 (33,977) 2 (285,833) 512 2 (248,930) 1,195 2 (103,855) – 1,463,922 3 1,061,917 (254,777) 2,569 2 480,926 (15,257) 8 (5,456) 1,282,610 (665,952) (217) 2 (80,738) 3 616,658 385,511 (31,136) 2 1,383,184 3 (15,257) 8 231,147 616,658	The Remaining Group RMB’000 5,358,174 (3,712,045) 1,646,129 42,815 (23,604) (285,321) (247,735) (103,855) 1,463,922 2,492,351 (252,208) 465,669 (5,456) 2,700,356 (746,907) 1,953,449 1,722,302 231,147 1,953,449

– III-2 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

C. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE REMAINING GROUP

Non-current assets Fixed assets – Investment property under development – Investment property – Property, plant and equipment – Interests in leasehold land held for own use Intangible assets Goodwill Investments in associates Investment in joint venture Other financial assets Deferred tax assets Current assets Inventories Trade and other receivables Other financial assets Cash and cash equivalents Current liabilities Trade and other payables Receipts in advance Bank and other loans Related party loans Due to the Remaining Group Current tax liabilities Net current assets Total assets less current liabilities	The Group (audited) Pro forma adjustments Notes RMB’000 RMB’000 (Note 1) 821,096 1,556,753 1,227,053 617,031 4,221,933 2,092 570 1,634,164 511,064 5 19,544 247,320 154,251 (39,069) 4 6,279,874 10,490,803 (1,299,022) 4 530,196 (597,261) 4 639,841 5 1,159,700 2,077,758 (492,683) 4 1,394,189 5 14,258,457 2,845,650 (52,097) 4 1,423,911 (1,129,606) 4 2,559,663 1,212,000 – (1,305,798) 4 1,305,798 5 421,618 (3,956) 4 63,007 5 8,462,842 5,795,615 12,075,489	The Remaining Group (unaudited) RMB’000 821,096 1,556,753 1,227,053 617,031
		4,221,933 2,092 570 2,145,228 19,544 247,320 115,182
		6,751,869
		9,191,781 572,776 1,159,700 2,979,264
		13,903,521
		2,793,553 294,305 2,559,663 1,212,000 – 480,669
		7,340,190
		6,563,331
		13,315,200

– III-3 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

Non-current liabilities Bank and other loans Related party loans Deferred tax liabilities NET ASSETS CAPITAL AND RESERVES Share capital Reserves Equity attributable to owners of the Company Non-controlling interests TOTAL EQUITY	The Group (audited) Pro forma adjustments Notes RMB’000 RMB’000 (Note 1) 1,716,975 3,380,348 211,464 (5,250) 4 5,308,787 6,766,702 67,337 2,959,611 68,672 4 1,176,289 5 3,026,948 3,739,754 6,766,702	The Remaining Group (unaudited) RMB’000 1,716,975 3,380,348 206,214
		5,303,537
		8,011,663

		67,337 4,204,572
		4,271,909 3,739,754
		8,011,663

– III-4 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

D. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT CASH FLOWS OF THE REMAINING GROUP

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustment for: Depreciation and amortisation Interest income Net loss on disposal of fixed assets Interest expenses Allowance for trade and other receivables Reversal of allowance for trade and other receivables Impairment losses on goodwill Share of profits of associates Share of loss a joint venture Gain on disposal of subsidiaries Operating profit before working capital changes Decrease in inventories Decrease in trade and other receivables Increase in receipts in advance Decrease in trade and other payables Cash generated from operations PRC tax paid Interest paid Net cash generated from operating activities	The Group Pro forma adjustments Notes RMB’000 RMB’000 (Note 1) 1,282,610 1,463,922 3 (30,919) 6 (15,257) 8 209,761 (39,204) 291 254,777 (2,569) 6 344 (1,955) 103,170 (480,926) 15,257 8 5,456 – (1,463,922) 3 1,334,324 2,831,284 91,244 6 593,465 6,885 6 818,651 (66,507) (1,318) 6 5,511,217 (1,027,603) (428,763) 2,569 6 4,054,851	The Remaining Group RMB’000 2,700,356 209,761 (39,204) 291 252,208 344 (1,955) 103,170 (465,669) 5,456 (1,463,922)
		1,300,836 2,922,528 600,350 818,651 (67,825)
		5,574,540 (1,027,603) (426,194)
		4,120,743

– III-5 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

CASH FLOWS FROM INVESTING ACTIVITIES Payment for purchases of fixed assets Proceeds from disposals of fixed assets Acquisition of a joint venture Dividend received from an associate Interest received Disposal of subsidiaries Loans to the Target Group Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Acquisition of other financial assets Proceeds from new borrowings Loans from Remaining Group Dividends paid to owners of the Company Dividends paid to non-controlling interests Repayment of borrowings Net cash used in financing activities NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS Effect of foreign exchange rate changes CASH AND CASH EQUIVALENTS AT 1 JANUARY CASH AND CASH EQUIVALENTS AT 31 DECEMBER	The Group Pro forma adjustments Notes RMB’000 RMB’000 (Note 1) (1,431,123) 679 (25,000) 25,000 39,204 – 1,394,189 3 – (265,808) 7 (1,391,240) (1,402,700) 3,116,862 – (265,808) 6 265,808 7 (93,547) (228,463) (5,035,629) (3,643,477) (979,866) (316,532) (11,838) 6 3,374,156 78,973 6 2,077,758	The Remaining Group RMB’000 (1,431,123) 679 (25,000) 25,000 39,204 1,394,189 (265,808)
		(262,859)
		(1,402,700) 3,116,862 – (93,547) (228,463) (5,035,629)
		(3,643,477)
		214,407 (328,370) 3,453,129
		3,339,166

– III-6 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

E. NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

Notes:

The financial information of the Group is extracted from the audited consolidated statement of financial position as at 31 December 2016 and the audited consolidated statement of profit or loss and audited consolidated statement of cash flows for the year ended 31 December 2016, as set out in the published annual report of the Company for the year ended 31 December 2016.
These adjustments represent the exclusion of the results of the Target Group for the year ended 31 December 2016, which were extracted from the unaudited consolidated statement of profit or loss of the Target Group for the year ended 31 December 2016 as set out in Appendix II to the Circular, assuming the Disposal had taken place on 1 January 2016.
These adjustments represent (i) the estimated gross proceeds from the Disposal of RMB1,395.25 million; (ii) the estimated transaction costs directly attributable to the Disposal of approximately RMB$1.06 million; and (iii) the estimated gain on the disposal of the Target Group as if the Disposal had taken place on 1 January 2016.

Note
Cash consideration
Fair value of 49% of share capital retained
(i)
Less: Assignment of Sale Loan to the Purchaser
(ii)
Less: Net liabilities of the Target Group as at 1 January 2016
(iii)
Add: Release of exchange reserve of the Target Group as at
1 January 2016
(iv)
Less: Estimated transaction costs directly attributable to the
Disposal
Estimated gain on the Disposal before tax as if the Disposal had
taken place on 1 January 2016
Less: Estimated tax provision
(v)
Estimated gain on the Disposal after tax as if the Disposal had
taken place on 1 January 2016

RMB’000
1,395,250
638,417
2,033,667
(543,227)
37,001
(62,458)
(1,061)
1,463,922
(80,738)
1,383,184

(i) The fair value of the 49% of share capital retained of the Target Company is calculated based on 49% interest on the net liabilities of the Target Group as at 31 December 2015 amounted to approximately of RMB37,001,000 as set out in Appendix II to the Circular, and assumed that the fair value change of the Target Group only arose from the excess of the fair value of the properties held by the Target Group amounted to RMB2,830,000,000 as at 30 September 2017, as valued by Savills Valuation and Professional Services Limited and set out in page IV-4 of the Appendix IV to the Circular, over the carrying value of the properties held by the Target Group amounted to RMB1,016,264,000 and recorded in “Inventories” as at 31 December 2015, as set out in page II-4 of the Appendix II to the Circular, net of deferred tax on the fair value change of Target Group charged at 25% and estimated the discount on the non-controlling interests of the Target Company of approximately RMB10,000,000 due to the shareholding in the Target Company of the Group and the purchaser was 49% and 51% respectively. Actual fair value of 49% share capital retained is subject to the valuation of these 49% share capital retained which included but not limited to the impact of discount on the non-controlling interests of the Target Company and etc.

– III-7 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

(ii) This represents the loans due to the Remaining Group as at 1 January 2016 to be assigned to the Purchaser in accordance with the supplemental agreement to the sale and purchase agreement entered by the Company and New China OCT Fund SPC (on behalf of New China OCT Fund SPC 1 Segregated Portfolio) (the “Purchaser”), as if the Disposal had taken place on 1 January 2016.
(iii) The amount of net liabilities of the Target Group were extracted from the unaudited consolidated statement of financial position of the Target Group as at 31 December 2015, as set out in Appendix II to the Circular.
(iv) The amount represents exchange reserve of the Target Group to be released to profit or loss as if the Disposal had taken place on 1 January 2016.
(v) The amount represents taxes directly attributable to the Disposal estimated by the directors of the Company.

Actual gain arising from the Disposal depends on actual amount of net assets of the Target Group and actual amount of exchange reserve of the Target Group to be released to profit or loss on the completion date. Therefore, the actual gain on the Disposal shall be different to the amount calculated in the above table.

These adjustments represent the exclusion of assets and liabilities of the Target Group as at 31 August 2017, assuming the Disposal had taken place on 31 December 2016. The assets and liabilities of the Target Group as at 31 August 2017 were extracted from the unaudited consolidated statement of financial position of the Target Group as set out in Appendix II to the Circular.
These adjustments represent (i) the estimated gross proceeds from the Disposal of RMB1,395.25 million; (ii) the estimated transaction costs directly attributable to the Disposal of approximately RMB1.06 million; and (iii) the estimated gain on the disposal of the Target Group as if the Disposal had taken place on 31 December 2016.

Note
Cash consideration
Fair value of 49% of share capital retained
(i)
Less: Assignment of Sale Loan to the Purchaser
(ii)
Less: Net liabilities of the Target Group as at 31 December 2016
(iii)
Add: Release of exchange reserve of the Target Group as at
31 December 2016
(iv)
Less: Estimated transaction costs directly attributable to the
Disposal
Estimated gain on the Disposal before tax as if the Disposal had
taken place on 31 December 2016
Less: Estimated tax provision
(v)
Estimated gain on the Disposal after tax as if the Disposal had
taken place on 31 December 2016

RMB’000
1,395,250
511,064
1,906,314
(665,957)
84,838
(141,431)
(1,061)
1,182,703
(63,007)
1,119,696

(i) The fair value of the 49% of share capital retained of the Target Company is calculated based on 49% interest on the net liabilities of the Target Group as at 31 December 2016 amounted to approximately of RMB84,838,000 as at 31 December 2016 as set out in Appendix II to the Circular, and assumed that the fair value change of the Target Group only arose from the excess of the fair value of the properties held by the Target Group amounted to RMB2,830,000,000 as at 30 September 2017, as valued by Savills Valuation and Professional Services Limited and set out in page IV-4 of the Appendix IV to the Circular, over the carrying value of the properties held by the Target Group amounted to RMB1,299,022,000 and recorded in “Inventories” as at 31

– III-8 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

August 2017, as set out in page II-4 of the Appendix II to the Circular, net of deferred tax on the fair value change of Target Group charged at 25% and estimated the discount on the non-controlling interests of the Target Company of approximately RMB10,000,000 due to the shareholding in the Target Company of the Group and the purchaser was 49% and 51% respectively. Actual fair value of 49% share capital retained is subject to the valuation of these 49% share capital retained which included but not limited to the impact of discount on the non-controlling interests of the Target Company and etc.

(ii) This represents the loans due to the Remaining Group as at 31 August 2017 to be assigned to the Purchaser in accordance with the supplemental agreement to the sale and purchase agreement entered by the Company and the Purchaser, as if the Disposal had taken place on 31 December 2016.
(iii) The amount of net liabilities of the Target Group were extracted from the unaudited consolidated statement of financial position of the Target Group as at 31 August 2017, as further set out in Appendix II to the Circular.
(iv) The amount represents exchange reserve of the Target Group to be released to profit or loss as if the Disposal had taken place on 31 December 2016.
(v) The amount represents taxes directly attributable to the Disposal estimated by the directors of the Company.

The movement in reserves as a result of pro forma adjustments (notes (4) and (5)) represents gain on the Disposal of RMB658 million, and release of exchange reserve of RMB31.9 million, assuming the Disposal had taken place on 31 December 2016. Actual gain arising from the Disposal depends on actual amount of net assets of the Target Group and actual amount of exchange reserve of the Target Group to be released to profit or loss on the completion date. Therefore, the actual gain on disposal shall be different to the amount calculated in the above table.

These adjustments represent the exclusion of the cash flows of the Target Group for the year ended 31 December 2016, which were extracted from the unaudited consolidated statement of cash flows of the Target Group for the year ended 31 December 2016 as set out in Appendix II to the Circular, assuming the Disposal had taken place on 1 January 2016.
This represents the reclassification adjustment for the loans advanced by the Remaining Group to the Target Group during the year ended 31 December 2016, assuming the Disposal had taken place on 1 January 2016.
This represents the share of the results of the Target Group for the year ended 31 December 2016, assuming the Disposal had taken place on 1 January 2016.

– III-9 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

F. ACCOUNTANTS’ 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 accountants, RSM Hong Kong, Certified Public Accountants, Hong Kong.

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

6 December 2017

The Board of Directors

Overseas Chinese Town (Asia) Holdings Limited

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 (the “Directors”) for illustrative purposes only. The pro forma financial information consists of the pro forma statement of financial position as at 31 December 2016, the pro forma statement of profit or loss for the year ended 31 December 2016, the pro forma statement of cash flows for the year ended 31 December 2016 as set out on pages III-2 to III-9 of the circular issued by the Company. The applicable criteria on the basis of which the Directors have compiled the pro forma financial information are described in Appendix III of the circular issued by the Company.

The pro forma financial information has been compiled by the Directors to illustrate the impact of the disposal of 51% of the issued share capital of Capital Converge Holdings Limited on the Group’s financial position as at 31 December 2016 as if the transaction had been taken place at 31 December 2016, and on the Group’s financial performance and cash flows for the year ended 31 December 2016 as if the transaction had been taken place at 1 January 2016. As part of this process, information about the Group’s financial position has been extracted by the Directors from the Group’s consolidated financial statements as included in the annual report for the year ended 31 December 2016, on which an audit report has been published.

– III-10 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

Directors’ Responsibility for the Pro Forma Financial Information

The Directors are responsible for compiling the pro forma financial information 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 7 “Preparation of Pro Forma Financial Information for Inclusion in Investment Circulars” (“AG 7”) issued by the Hong Kong Institute of Certified Public Accountants (the “HKICPA”).

Our Independence and Quality Control

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

The firm applies Hong Kong Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality control including documented policies and procedures regarding compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Reporting Accountants’ Responsibilities

Our responsibility is to express an opinion, as required by paragraph 29(7) of Chapter 4 of the Listing Rules, on the pro forma financial information and to report our opinion to you. We do not accept any responsibility for any reports previously given by us on any financial information used in the compilation of the pro forma financial information beyond that owed to those to whom those reports were addressed by us at the dates of their issue.

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420 “Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus” issued by the HKICPA. This standard requires that the reporting accountant plans and performs procedures to obtain reasonable assurance about whether the Directors have compiled the pro forma financial information in accordance with paragraph 29 of Chapter 4 of the Listing Rules and with reference to AG 7 issued by the HKICPA.

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

The purpose of the pro forma financial information included in an investment circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken

– III-11 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

APPENDIX III

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 1 January 2016 and 31 December 2016 would have been as presented.

A reasonable assurance engagement to report on whether the pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the Directors in the compilation of the pro forma financial information provides 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 pro forma financial information reflects the proper application of those adjustments to the unadjusted financial information.

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

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

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

Opinion

In our opinion:

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

Yours faithfully, RSM Hong Kong

Certified Public Accountants Hong Kong

– III-12 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

The following is the text of a letter, summary of values 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 values of the properties of the Group as at 30 September 2017.

The Directors Overseas Chinese Town (Asia) Holdings Limited Suites 3203-3204, Tower 6 The Gateway, Harbour City Canton Road Tsim Sha Tsui Kowloon Hong Kong

==> picture [73 x 72] intentionally omitted <==

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

6 December 2017

Dear Sirs,

INSTRUCTIONS

In accordance with your instructions to us to value the properties situated in the People’s Republic of China (the “PRC”) which are held by Overseas Chinese Town (Asia) Holdings Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”), 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 market values of the properties as at 30 September 2017 (the “valuation date”) for inclusion in a circular.

BASIS OF VALUATION

Our valuation is our opinion of the market value of the property concerned 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 in an arm’s length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

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.

– IV-1 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

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

PROPERTY CATEGORIZATION AND VALUATION METHODOLOGY

In valuing the property in Group I, which is held by the Group under development in the PRC, we have valued the property on the basis that it will be developed and completed in accordance with the latest development proposal provided to us. We have assumed that all consents, approvals and licenses from relevant government authorities for the development proposal have been obtained without onerous conditions or delays. In arriving at our opinion of value, we have adopted the direct comparison approach by making reference to comparable market transactions as available in the market and have also taken into account the costs that will be expended to complete the development to reflect the quality of the completed development.

In valuing the property in Group II, which is held by the Group for future development in the PRC, we have adopted the direct comparison approach by making reference to comparable market transactions as available in the market.

TITLE INVESTIGATION

We have been provided with copies of the title documents relating to the properties. However, we have not searched the original documents to verify ownership or to ascertain the existence of any amendments which may not appear on the copies handed to us. In the course of our valuation, we have relied to a very considerable extent on information given by the Group and the legal opinion issued by the Group’s PRC legal adviser, V & T Law Firm (萬商天勤律師事務所), regarding the titles to the properties.

SOURCE OF INFORMATION

In the course of our valuation, we have relied to a considerable extent on information given by the Group and accepted advice given to us on such matters as planning approvals, statutory notices, easements, tenure, particulars of occupancy, development proposal, total and outstanding construction costs, estimated completion dates, site and floor areas, transaction records and all other relevant matters. Dimensions, measurements and areas included in the valuation certificate are based on information provided to us and are therefore only approximations. No on-site measurements have been taken. We have no reason to doubt the truth and accuracy of the information provided to us by the Group, which is material to our valuation. We have also sought confirmation from the Group that no material facts have been omitted from the information supplied. We consider that we have been provided with sufficient information to reach an informed view.

– IV-2 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

VALUATION ASSUMPTIONS

In valuing the properties in the PRC, unless otherwise stated, we have assumed that transferable land use rights of the properties for their respective specific terms at nominal annual land use fees have been granted and that any premium payable have already been fully paid. Unless otherwise stated, we have also assumed that the owners of the properties have good legal titles to the properties and have free and uninterrupted rights to occupy, use, lease, transfer or mortgage the properties for the whole of the respective unexpired terms as granted.

No allowance has been made in our valuation for any charges, mortgages or amounts owing on any property or for any expenses or taxation which may be incurred in effecting a sale. Unless otherwise stated, it is assumed that the properties are free from encumbrances, restrictions and outgoings of an onerous nature which could affect their values.

SITE INSPECTION

We have inspected the exterior and where possible, the interior of the properties. Site inspections of the properties were carried out on 30 October 2017 by our Mr. William Zhang (who is a China registered real estate and land appraiser with over 10 years’ experience in valuation of properties in the PRC) and Mr. Lucas Lu (who holds a Bachelor’s Degree in Land and Resources Management and has over 5 years’ experience in valuation of properties in the PRC). During the course of our inspections, we did not note any serious defects. Moreover, no structural survey has been made and we are therefore unable to report that the properties are 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.

CURRENCY

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

We enclose herewith our summary of values and valuation certificate.

Yours faithfully,

For and on behalf of

Savills Valuation and Professional Services Limited

Anthony C K Lau

MHKIS MRICS RPS(GP)

Director

Note: Mr. Anthony C.K. Lau is a professional surveyor who has over 24 years’ experience in valuation of properties in Hong Kong and the PRC.

– IV-3 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

SUMMARY OF VALUES

No. Property

Group I – Property held by the Group under development in the PRC

Phase I of OCT Lifestyle (雲溪別院), Lot No. B20-5/05, Standard Division B, Lijia Zutuan, Liangjiang New Area, Chongqing, PRC

Sub-total:

Market value in existing state as at 30 September 2017 RMB1,250,000,000 RMB1,250,000,000

Group II – Property held by the Group for future development in the PRC

Lot No. B20-4/05, Standard Division B, Lijia Zutuan, Liangjiang New Area, Chongqing, PRC

RMB1,580,000,000

Sub-total:

Sub-total: RMB1,580,000,000 Grand total: RMB2,830,000,000

– IV-4 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

VALUATION CERTIFICATE

Group I – Property held by the Group under development in the PRC

No. Property

Description and tenure

Market value in Particulars of existing state as at occupancy 30 September 2017

Phase I of OCT Lifestyle OCT Lifestyle (the “Development”) As at the valuation date, RMB1,250,000,000 (雲溪別院), is a large-scale residential the property was under Lot No. B20-5/05, development erected on two parcels construction. Standard Division B, of land with a total site area of Lijia Zutuan, approximately 179,604.60 sq m. The Liangjiang New Area, Development will be completed in Chongqing, two phases. PRC

The Development is located at Liangjiang New Area. Developments in the vicinity are dominated by various high-rise residential buildings and industrial buildings. It takes about a 40-minute drive from the Development to the city centre of Chongqing.

The property comprises Phase I of the Development with a site area of approximately 65,795.36 sq m. According to the information provided by the Group, the property will be completed by September 2018 and accommodate 4 blocks of high-rise residential buildings, 17 blocks of medium-rise residential buildings, ancillary commercial areas, basement car parking spaces and other ancillary facilities. Upon completion, the property will have a total gross floor area (“GFA”) of approximately 246,200.16 sq m, the breakdown of which is as follows:

Usage High-rise residential Medium-rise residential Basement car parking spaces Ancillary commercial areas Other Total	Approximate GFA (sq m) 86,785.10 80,791.66 74,075.73 2,722.44 1,825.23
	246,200.16

The land use rights of the property have been granted for two concurrent terms expiring on 30 May 2055 for commercial service use and 30 May 2065 for residential use respectively.

– IV-5 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

Notes:

Pursuant to the State-owned Land Use Rights Grant Contract – Yu De (2015) He Zi (Bei Xin) Di No. 63 entered into between Bureau of Land Resources and Housing Management of Chongqing Municipality and Chongqing OCT Real Estate Limited (重慶華僑城置地有限公司) (“Chongqing Company”) on 25 February 2015, Chongqing Company has agreed to purchase the land use rights of a parcel of land with a site area of approximately 179,625 sq m at a total consideration of RMB986,150,000. As stipulated, the construction works of proposed development on such land parcel shall be completed before 30 May 2019.

As advised by the Group, the property comprises portion of the land as stated in the State-owned Land Use Rights Grant Contract mentioned above.

Pursuant to the Real Estate Certificate – Yu (2016) Liang Jiang Xin Qu Bu Dong Chan Quan Di No. 000686489 dated 24 August 2016, the land use rights of a parcel of land with a site area of approximately 65,795.36 sq m have been granted to Chongqing Company for two concurrent terms expiring on 30 May 2055 for commercial service use and 30 May 2065 for residential use respectively.
Pursuant to the Construction Land Planning Permit – De Zi Di No. 500141201600061 dated 26 July 2016, Chongqing Company was permitted to use a parcel of land with a site area of approximately 179,604.74 sq m.

As advised by the Group, the property comprises portion of the land as stated in the Construction Land Planning Permit mentioned above.

Pursuant to the Construction Works Planning Permit – Jian Zi Di No. 500141201600169 dated 3 November 2016, the total approved construction scale of the property is approximately 246,200.16 sq m.
Pursuant to three Construction Works Commencement Permits – Nos. 500118201611240301, 500118201611240501 and 500118201611290201 dated between 24 November 2016 and 29 November 2016, the construction works of the property with a total construction scale of approximately 246,200.16 sq m were permitted for commencement.
Pursuant to four Chongqing City Pre-sale (Pre-rent) Permits for Commodity Housing – Yu Guo Tu Fang Guan (2017) Yu Zi Di Nos. 066, 105, 291 and 410, portion of the property with a total GFA of approximately 167,272.07 sq m was permitted for pre-sale.

As advised by the Group, the buildings as stated in the Chongqing City Pre-sale (Pre-rent) Permits for Commodity Housing mentioned above only comprise portion of the property.

As advised by the Group, portion of the property, including high-rise residential buildings and medium-rise residential buildings with a total GFA of approximately 167,134.11 sq m, has been pre-sold at a total consideration of approximately RMB1,860,000,000. We have taken into account the aforesaid amount in our valuation.
As advised by the Group, the total construction cost expended as at the valuation date was approximately RMB226,000,000 and the estimated outstanding construction cost for completion of the property will be approximately RMB502,000,000. We have taken into account the aforesaid amounts in our valuation.
The market value of the property as if completed as at the valuation date is in the sum of RMB2,073,000,000.
We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter alia, the following information:
(i) Chongqing Company has obtained the land use rights of the property;
(ii) Chongqing Company is entitled to occupy, use, transfer, lease, mortgage or by other means to dispose of the property;

– IV-6 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

(iii) the property is not subject to any mortgage or seizure; and
(iv) Chongqing Company has obtained the Construction Land Planning Permit, Construction Works Planning Permit, Construction Works Commencement Permits and Chongqing City Pre-sale Permits (apart from the commercial units on Levels 1 and 2 of Block 1 of the property).
In undertaking our valuation of the property, we have made reference to various recent sales transactions and asking prices of some similar developments which have characteristics comparable to the property. The prices of those transactions are in a range between RMB10,000 to RMB14,000 per sq m for residential units, RMB24,000 to RMB29,000 per sq m for commercial units and RMB100,000 to RMB130,000 per car parking space. The unit rates assumed by us are consistent with the said sales transactions and asking price references. Due adjustments to the unit rates of those sales transactions and asking price references have been made to reflect factors including but not limited to time, surrounding environment, location, accessibility, building age, size and building quality in arriving at the key assumptions.

In our valuation, we have assumed an average price of approximately RMB11,100 per sq m for the residential portion, RMB19,700 per sq m for commercial portion and RMB89,000 per car parking space.

– IV-7 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

Group II – Property held by the Group for future development in the PRC

No. Property

Description and tenure

Market value in Particulars of existing state as at occupancy 30 September 2017

Lot No. B20-4/05, Standard Division B, Lijia Zutuan, Liangjiang New Area, Chongqing, PRC

OCT Lifestyle (the “Development”) As at the valuation RMB1,580,000,000 is a large-scale residential date, the property was a development erected on two parcels vacant site pending for of land with a total site area of future development. approximately 179,604.60 sq m. The Development will be completed in two phases.

The property comprises Phase II of the Development with a site area of approximately 113,809.24 sq m. According to the information provided by the Group, the property will be developed into a residential development with a total plot ratio GFA of approximately 276,501.79 sq m.

As advised by the Group, the development proposal has not been approved.

The land use rights of the property have been granted for two concurrent terms expiring on 30 May 2055 for commercial service use and 30 May 2065 for residential use respectively.

Notes:

Pursuant to the State-owned Land Use Rights Grant Contract – Yu De (2015) He Zi (Bei Xin) Di No. 63 entered into between Bureau of Land Resources and Housing Management of Chongqing Municipality and Chongqing Company on 25 February 2015, Chongqing Company has agreed to purchase the land use rights of a parcel of land with a site area of approximately 179,625 sq m at a total consideration of RMB986,150,000. As stipulated, the construction works of proposed development on such land parcel shall be completed before 30 May 2019.

As advised by the Group, the property comprises portion of the land as stated in the State-owned Land Use Rights Grant Contract mentioned above.

Pursuant to the Real Estate Certificate – Yu (2016) Liang Jiang Xin Qu Bu Dong Chan Quan Di No. 000686451 dated 24 August 2016, the land use rights of a parcel of land with a site area of approximately 113,809.24 sq m have been granted to Chongqing Company for two concurrent terms expiring on 30 May 2055 for commercial service use and 30 May 2065 for residential use respectively.

– IV-8 –

VALUATION REPORT ON THE PROPERTIES

APPENDIX IV

We have been provided with a legal opinion on the title to the property issued by the Group’s PRC legal adviser, which contains, inter alia, the following information:
(i) Chongqing Company has obtained the land use rights of the property;
(ii) Chongqing Company is entitled to occupy, use, transfer, lease, mortgage or by other means to dispose of the property; and
(iii) the property is not subject to any mortgage or seizure.
In undertaking our valuation of the property, we have made reference to various land transactions which have characteristics comparable to the property. The accommodation values of land transactions are in the range between RMB6,200 to RMB7,300 per sq m. The accommodation value assumed by us is consistent with the said transactions. Due adjustments to the unit rates of those transactions have been made to reflect factors including but not limited to plot ratio, land use term, accessibility, surrounding environment, location, use, site area and time in arriving at the key assumptions.

In our valuation, we have assumed an accommodation value of approximately RMB5,700 per sq m.

– IV-9 –

GENERAL INFORMATION

APPENDIX V

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ INTERESTS

Directors’ and chief executive’s interests and short positions in the securities of the Company and its associated corporations

As at the Latest Practicable Date, no 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 SFO) were held by 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”).

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:

			Approximate%
			of issued share
Name of Substantial		Number of	capital of the
Shareholder	Capacity/Nature	Shares held	Company
Pacific Climax Limited	Beneficial owner	530,894,000	81.38%
(“Pacific Climax”)		(long position)
(note 1)
Overseas Chinese Town	Interest of a	530,894,000	81.38%
(HK) Company Limited	controlled	(long position)
(“OCT (HK)”)	corporation (note 2)

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GENERAL INFORMATION

APPENDIX V

			Approximate%
			of issued share
Name of Substantial		Number of	capital of the
Shareholder	Capacity/Nature	Shares held	Company
Shenzhen Overseas	Interest of a	530,894,000	81.38%
Chinese Town Company	controlled	(long position)
Limited (“OCT Ltd.”)	corporation (note 3)
Overseas Chinese Town	Interest of a	530,894,000	81.38%
Enterprises Company	controlled	(long position)
(“OCT Group”)	corporation (note 4)
UBS Group AG	Person having a	14,000	0.002%
	security interest in	(long position)
	shares (note 5)
	Interest of a	51,179,000	7.85%
	controlled	(long position)
	corporation (note 5)

Notes:

(1) The interests held by Pacific Climax consist of (long position) in 434,894,000 ordinary shares and 96,000,000 convertible preference shares. Ms. Xie Mei and Mr. Lin Kaihua, both being executive Directors, and Mr. Zhang Jing, being a non-executive 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. Mr. He Haibin and Ms. Xie Mei, both being executive Directors, and Mr. Zhang Jing, being a non-executive Director, are also directors of OCT (HK).
(3) OCT Ltd. is the beneficial owner of all the issued share capital of OCT (HK), which is in turn the beneficial owner of all the issued share capital of 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 53.47% of the issued shares of OCT Ltd., which is the beneficial owner of all the issued shares of OCT (HK) and in turn, the beneficial owner of all the issued share capital of 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) The interests of UBS Group AG consist of the interests (long position) in 41,618,000 shares, 6,180,000 shares, 3,372,000 shares, 8,000 shares and 1,000 shares (total: 51,179,000 shares) held by UBS Fund Management (Luxembourg) S.A., UBS Asset Management (Hong Kong) Ltd, UBS Asset Management (Singapore) Ltd, UBS Fund Management (Switzerland) AG and UBS AG, which are all wholly-owned by UBS Group AG. UBS Group AG is also interested in 14,000 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 51,193,000 shares (long 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.

– V-2 –

GENERAL INFORMATION

APPENDIX V

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 CONTRACTS

As at the Latest Practicable Date, 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 2016 (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.

6. MATERIAL ADVERSE CHANGE

The Directors confirmed that there was no material adverse change in the financial or trading position or prospects of the Group since 31 December 2016 (being the date to which the latest published audited consolidated financial statements of the Group had been made up) up to the Latest Practicable Date.

7. EXPERTS AND CONSENTS

The qualifications of the experts who have been named in this circular or have given opinions or advice which are contained herein are set out below:

Name	Qualification
RSM Hong Kong	Certified Public Accountants
Savills Valuation and	Property Valuer
Professional Services Limited
(“Savills”)

– V-3 –

GENERAL INFORMATION

APPENDIX V

As at the Latest Practicable Date, none of RSM Hong Kong and Savills has 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.

Each of RSM Hong Kong and Savills has given and has not withdrawn its written consent to the issue of this circular, with the inclusion of its letter or references to its name in the form and context in which they are included.

None of RSM Hong Kong and Savills has any direct or indirect interest in any assets which have been, since 31 December 2016 (being the date to which the latest published audited financial statements of the Group were made up), acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

8. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business of the Group) had been entered into by members of the Group within the two years immediately preceding the Latest Practicable Date and are or may be material:

the equity interest transfer and subscription agreement dated 25 December 2015 entered into between Chengdu OCT Chuang Ying Enterprise Management Company Limited (成都華僑城創盈企業管理有限公司) (“ OCT Chuang Ying ”), Chengdu Culture & Tourism Development Group Limited Liability Company (成都文化旅遊發展集團有限責任公司) (“ Chengdu C & T ”) and Chengdu Sports Industry Co., Ltd. (成都體育產業有限責任公司) (“ Chengdu Sports* ”) in relation to the acquisition of the 15% equity interests held in Chengdu Sports by Chengdu C & T and capital injection of RMB651,300,000 into Chengdu Sports by the Company at a total consideration of RMB797,842,500;
the cooperation agreement dated 7 March 2016 entered into between OCT Chuang Ying and Chengdu Baoxin Investment Company Limited (成都保鑫投資有限公司) (“ Baoxin Investment ”) in respect of, amongst others, the acquisition of 50% equity interest in Chengdu Baoxin Quansheng Real Estate Development Company Limited (成都市保鑫泉盛房地產開發有限公司) (“ Baoxin Quansheng ”) by OCT Chuang Ying from Baoxin Investment;
the equity transfer agreement dated 7 March 2016 entered into between OCT Chuang Ying and Baoxin Investment in respect of the acquisition of 50% equity interest in Baoxin Quansheng by OCT Chuang Ying from Baoxin Investment;

– V-4 –

GENERAL INFORMATION

APPENDIX V

the Shenzhen Capital Fortune Investment New Industries Investment Enterprise (LLP) (深圳遠致富海新興產業投資企業(有限合夥)) (“ Limited Partnership ”) agreement entered into among Shenzhen Huayou Investment Co., Ltd. (深圳市華友投資有限公司), Shenzhen Tongbao Haina Investment Enterprise (LLP)* (深圳通寶海納投資企業(有限合夥)) and the other partners on 30 September 2016 in relation to the establishment of the Limited Partnership;
the Sale and Purchase Agreement; and
the Supplemental Agreement.

9. LITIGATION

As at the Latest Practicable Date, neither the Company nor any member of the Group was engaged in any litigation or arbitration or claim of material importance and no litigation or claim of material importance is known to the Directors to be pending or threatened by or against the Company or 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 Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.
(d) The English text of this circular shall prevail over the Chinese text.

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 21 December 2017:

(a) the memorandum of continuance and bye-laws of the Company;
(b) the Sale and Purchase Agreement;
(c) the Supplemental Agreement;

– V-5 –

GENERAL INFORMATION

APPENDIX V

(d) the annual reports of the Company for the years ended 31 December 2014, 2015 and 2016;
(e) the interim report of the Company for the six months ended 30 June 2017;
(f) the report on the unaudited pro forma financial information of the Remaining Group issued by RSM Hong Kong as set out in Appendix III to this circular;
(g) the valuation report and the valuation certificate on the properties issued by Savills as set out in Appendix IV to this circular;
(h) the written consents as referred to under the section headed “Experts and Consents” in this Appendix;
(i) the material contracts referred to in the paragraph headed “Material Contracts” in this Appendix; and
(j) this circular.

– V-6 –

NOTICE OF THE EGM

==> picture [236 x 59] intentionally omitted <==

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)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (“ EGM ”) of Overseas Chinese Town (Asia) Holdings Limited (the “Company”) will be held at Xiamen Suite I-II, 3/F, Prince Hotel, No. 23 Canton Road, Harbour City, Tsim Sha Tsui, Kowloon, Hong Kong on Thursday, 21 December 2017 at 11:00 a.m. or any adjournment of such meeting for the purposes of considering and, if thought fit, passing the following resolutions, with or without modifications, as ordinary resolutions of the Company:

ORDINARY RESOLUTIONS

“ THAT
(a) The sale and purchase agreement dated 9 November 2017 (the “Sale and Purchase Agreement”) and the supplemental agreement dated 15 November 2017 (the “Supplemental Agreement”) entered into by the Company, New China OCT Fund SPC (on behalf of New China OCT Fund SPC 1 Segregated Portfolio) (the “Purchaser”) and Capital Converge Holdings Limited (the “Target Company”), pursuant to which the Purchaser has conditionally agreed to acquire and the Company has conditionally agreed to sell the Sale Shares (as defined in the Sale and Purchase Agreement) and the Sale Loan (as defined in the Supplemental Agreement) at the consideration in the sum equals the USD equivalent of RMB1,395,249,891.13, a copy of which has been produced to this meeting marked “A” and “B” and signed by the Chairman of the meeting for the purpose of identification, and the transactions contemplated thereunder be and are hereby approved, confirmed and ratified; and
(b) any one or more of the directors of the Company be and is/are hereby generally and unconditionally authorized to do all such acts and things, to sign and execute all such documents for and on behalf of the Company and to take such steps as he/they may in his/their absolute discretion consider necessary, appropriate, desirable or expedient to give effect to or in connection with the Sale and Purchase Agreement and the Supplemental Agreement and the transactions contemplated thereunder.”

By order of the Board Overseas Chinese Town (Asia) Holdings Limited He Haibin Chairman

Hong Kong, 6 December 2017

– EGM-1 –

NOTICE OF THE EGM

Notes:

Any member entitled to attend and vote at the EGM (and any adjournment of such meeting) shall be entitled to appoint another person as his proxy to attend and vote instead of him. A member who is the holder of two or more shares of the Company may appoint more than one proxy to represent him and vote on his behalf at the EGM (and any adjournment of such meeting). A proxy need not be a member of the Company. In addition, a proxy or proxies representing either a member who is an individual or a member which is a corporation shall be entitled to exercise the same powers on behalf of the member which he or they represent as such member could exercise.
The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its seal or under the hand of an officer, attorney or other person authorised to sign the same.
In order to be valid, the proxy form and the power of attorney or other authority (if any) under which it is signed, or a certified copy of such power of attorney or authority, must be deposited with the Company’s branch share registrar and transfer office in Hong Kong, Computershare Hong Kong Investor Services Limited at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, as soon as possible and in any event not less than forty-eight (48) hours before the time appointed for holding the EGM (or any adjournment of such meeting) (as the case may be) at which the person named in the instrument proposes to vote.
Completion and return of the proxy form does not preclude a member from attending and voting in person at the EGM (or any adjournment of such meeting) and, in such event, the proxy form shall be deemed to be revoked.
Where there are joint holders of any shares of the Company, any one of such joint holders may vote, either in person or by proxy, in respect of such shares as if he were solely entitled thereto; but if more than one of such joint holders are present at the EGM (and any adjournment of such meeting), the most senior will alone be entitled to vote, whether in person or by proxy. For this purpose, seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the joint holding.

As at the date of this announcement, the Board of Overseas Chinese Town (Asia) Holdings Limited ( 華僑城 ( 亞洲 ) 控股有限公司 ) comprises seven Directors, namely: Mr. He Haibin, Ms. Xie Mei and Mr. Lin Kaihua as executive Directors; Mr. Zhang Jing as non-executive Director; Mr. Lu Gong, Ms. Wong Wai Ling, and Professor Lam Sing Kwong Simon as independent non-executive Directors.

– EGM-2 –

AI assistant

RemeGen Co., Ltd. — Proxy Solicitation & Information Statement 2017

51206_rns_2017-12-05_1d69bc2b-025c-4f9f-9ed7-ccf0b31bba68.pdf

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)

VERY SUBSTANTIAL DISPOSAL

IN RELATION TO THE DISPOSAL OF 51% OF THE ISSUED SHARE CAPITAL OF CAPITAL CONVERGE HOLDINGS LIMITED

DEFINITIONS

DEFINITIONS

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

VERY SUBSTANTIAL DISPOSAL IN RELATION TO THE DISPOSAL OF 51% OF THE ISSUED SHARE CAPITAL OF CAPITAL CONVERGE HOLDINGS LIMITED

INTRODUCTION

THE DISPOSAL

SALE AND PURCHASE AGREEMENT

LETTER FROM THE BOARD

LETTER FROM THE BOARD

INFORMATION ON THE PURCHASER

INFORMATION ON THE GROUP

REASONS FOR AND BENEFITS OF THE DISPOSAL

INFORMATION ON THE TARGET GROUP

FINANCIAL INFORMATION OF THE TARGET GROUP AND FINANCIAL EFFECTS OF THE DISPOSAL ON THE COMPANY

USE OF PROCEEDS

IMPLICATIONS UNDER THE LISTING RULES

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS STATEMENT

3. WORKING CAPITAL

4. CONTINGENT LIABILITIES

5. FINANCIAL AND TRADING PROSPECTS OF THE REMAINING GROUP

Financial and Trading Prospects of the Remaining Group

APPENDIX I

6. MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Liquidity, Financial Resources and Capital Structure

For the year ended 31 December 2014

For the year ended 31 December 2015

APPENDIX I

For the year ended 31 December 2016

For the six months ended 30 June 2017

Funding and Treasury Policies

Interest Expense

Employees and Remuneration Policy

Contingent Liabilities

Significant Investments, Material Acquisitions and Disposals

For the year ended 31 December 2014

Withdrawal from Tianjin Tianxiao Project through Arbitration

Shaheyuan Land Consolidation Project

Acquisition of Property

For the year ended 31 December 2015

Acquisition of the CDCT Development Project

Acquisition of the OCT Chang’an Metropolis Project

Acquisition of the CSI Company Project

For the year ended 31 December 2016

Acquisition of Chengdu Baoxin Quansheng

Investment in Capital Fortune Emerging Industry Funds

Investment in Capital Fortune Fund No.10

Investment in NCI Fund

For the six months ended 30 June 2017

Investment in Minsheng Education

Investment in Shanghai Libao Huachen Fund

A. UNAUDITED CONSOLIDATED STATEMENTS OF PROFIT OR LOSS

B. UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

C. UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

D. UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

E. UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

NOTES TO THE FINANCIAL INFORMATION OF THE TARGET GROUP

1. GENERAL INFORMATION

2. BASIS OF PRESENTATION OF THE FINANCIAL INFORMATION OF THE TARGET GROUP

3. BASIS OF PREPARATION OF THE FINANCIAL INFORMATION OF THE TARGET GROUP

A. INTRODUCTION TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

B. UNAUDITED PRO FORMA CONSOLIDATED PROFIT OR LOSS OF THE REMAINING GROUP

C. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE REMAINING GROUP

D. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT CASH FLOWS OF THE REMAINING GROUP

E. NOTES TO THE UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP

F. ACCOUNTANTS’ REPORT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION

The Board of Directors

Dear Sirs,

Directors’ Responsibility for the Pro Forma Financial Information

Our Independence and Quality Control

Reporting Accountants’ Responsibilities

Opinion

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