Richly Field China Development Limited — Proxy Solicitation & Information Statement 2017

Nov 23, 2017

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

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

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

SUPERACTIVE GROUP COMPANY LIMITED 先機企業集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 0176)

MAJOR TRANSACTION IN RELATION TO ACQUISITION OF THE ENTIRE EQUITY INTEREST IN SHENZHEN CITY QIANHAI WANKE FINANCIAL SERVICES COMPANY LIMITED

24 November 2017

CONTENTS

				Page
Definitions	. .	. . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
**Letter from the **		Board	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	5
Appendix I		–	Financial information of the Group . . . . . . . . . . . . . . . . . .	I-1
Appendix II		–	Financial information of the Target Company . . . . . . . . . .	II-1
Appendix III		–	Financial information of the Project Company . . . . . . . . .	III-1
Appendix IV		–	Management Discussion and Analysis on
			the Target Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	IV-1
Appendix V		–	Unaudited pro forma financial information of
			the Enlarged Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
Appendix VI		–	Valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VI-1
Appendix VII		–	General information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	VII-1

– i –

DEFINITIONS

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

• “Acquisition”

• the acquisition of the Sale Equity pursuant to the Sale and Purchase Agreement

• “Announcements”

• the announcements of the Company dated 9 August 2017 and 29 August 2017 relating to, among other things, the Acquisition

• “Assumed Creditors’ Rights”

• all creditors’ rights of the Project Company prior to the Handover Date

• “Assumed Liabilities”

• all debts and liabilities incurred or to be incurred by the Project Company (other than the Huarong Loan) prior to the Handover Date (which includes the construction costs of approximately RMB126,000,000 payable by the Project Company under the Project)

• “Board”

• the board of the Directors

• “Company”

• Superactive Group Company Limited, a company incorporated in Bermuda with limited liability, whose shares are listed on the Main Board of the Stock Exchange (stock code: 0176)

• “Completion”

• completion of the Sale and Purchase Agreement in accordance with the terms and conditions of the Sale and Purchase Agreement

• “connected person(s)”

• has the meaning ascribed to it under the Listing Rules

• “Director(s)”

• the director(s) of the Company

• “Enlarged Group”

• the Group as enlarged by the consolidation of the Target Group

• “Group”

• the Company and its subsidiaries

• “Handover Date”

• the date on which the Project Vendors completed the transfer of 70% of the equity interest in the Project Company to the Target Company, i.e. 11 September 2017

• “Hong Kong”

• the Hong Kong Special Administrative Region of the PRC

– 1 –

DEFINITIONS

• “Huarong Loan”

• the loan in the principal amount of RMB200,000,000 granted by China Merchant Bank Lijiang as trustee on behalf of 華融（中國）投資管理有限公司 (Huarong (China) Investment Management Company Limited*) to the Project Company

• “Independent Third Party(ies)” third party(ies) independent of and not connected with the Company and its connected persons

• “Latest Practicable Date”

• 22 November 2017, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein

• “Listing Rules”

• the Rules Governing the Listing of Securities on the Stock Exchange

• “Long Stop Date”

• 31 October 2017 or such later date as may be agreed by the Vendors and the Purchaser in writing

• “Management Agreement”

• the management agreement entered into between the Project Company and 上海恒百經營管理有限公司麗江 分公司 (Shanghai Hengbai Operation Management Company Limited*) in respect of the management and operation of the commercial walkway of the Project

• “Offer Shares”

• 677,523,795 new Shares allotted and issued pursuant to the Open Offer

• “Open Offer”

• the open offer on the basis of one (1) Offer Share for every two (2) existing Shares held on the record date at the subscription price of HK$0.5 per Offer Share, details of which is set out in the Prospectus

• “PRC”

• the People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan

• “Project”

• underground walkway and people’s air defense structure project located at the underground of Minzhu Road and Fuhui Road, Lijiang city, Yunan province, the PRC which is wholly-owned by the Project Company

• “Project Company”

麗江華歐房地產置業有限公司 (Lijiang Hua Ou Real Estate Company Limited*), a company established in the PRC with limited liability

– 2 –

DEFINITIONS

• “Project Company Acquisition Agreement”

• the share acquisition agreement dated 5 June 2017 and entered into between the Project Vendors as vendors and the Target Company as purchaser in respect of the acquisition of the entire equity interest in the Project Company

• “Project Vendor A” Mr. Fang Zhaoan

• “Project Vendor B”

• Mr. Xu Lebin

• “Prospectus” the prospectus of the Company dated 6 October 2017 in respect of the Open Offer

• “Purchaser”

• Joint Faith Enterprises Limited, a company incorporated in Hong Kong with limited liability and an indirect wholly-owned subsidiary of the Company

• “Sale and Purchase Agreement”

• the sale and purchase agreement dated 9 August 2017 and entered into between the Vendors and the Purchaser in respect of the Acquisition

• “Sale Equity”

• the entire equity interest in the Target Company which is owned as to 90% by Vendor A and 10% by Vendor B as at the Latest Practicable Date

• “Share(s)”

• ordinary share(s) of HK$0.1 each in the share capital of the Company

• “Shareholder(s)”

• holder(s) of the issued Share(s)

• “Stock Exchange”

• The Stock Exchange of Hong Kong Limited

• “Super Fame”

• Super Fame Holdings Limited, a company incorporated in the British Virgin Islands with limited liability, which is owned as to 55% by Ms. Yeung So Lai, the chairman and executive Director of the Company, and as to 45% by Mr. Lee Chi Shing Caesar, an executive Director

• “Target Company”

• 深圳市前海萬客金融服務有限公司 (Shenzhen City Qianhai Wanke Financial Services Company Limited*), a company established in the PRC with limited liability

• “Target Group”

• the Target Company and the Project Company

– 3 –

DEFINITIONS

“Unsold Premises” the 590 units of the saleable shop premises to be sold by the Project Company under the Project with a total gross floor area of approximately 15,997 sq. m. “Vendor A” Ms. You Xuemei “Vendor B” Ms. Lin Yuqin “Vendors” Vendor A and Vendor B “Written Shareholder’s the written shareholder’s approval dated 29 August Approval” 2017 of the Acquisition, the Sale and Purchase Agreement and the transactions contemplated thereunder given by Super Fame “HK$” Hong Kong dollar, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “sq. m.” square metre “%” per cent.

• The English translation of Chinese names or words in this circular, where indicated, are included for information purpose only, and should not be regarded as the official English translation of such Chinese names and words.

– 4 –

LETTER FROM THE BOARD

SUPERACTIVE GROUP COMPANY LIMITED 先機企業集團有限公司

(Incorporated in Bermuda with limited liability)

(Stock Code: 0176)

Executive Directors: Ms. Yeung So Lai Mr. Lee Chi Shing Caesar

Independent non-executive Directors:

Mr. Chiu Sze Wai Wilfred Mr. Chow Wai Leung William Ms. Hu Gin Ing

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

Head office and principal place of business in Hong Kong: Room 1206, China Merchants Tower Shun Tak Centre 168–200 Connaught Road Central Sheung Wan Hong Kong

24 November 2017

To the Shareholders

Dear Sir or Madam,

MAJOR TRANSACTION IN RELATION TO ACQUISITION OF THE ENTIRE EQUITY INTEREST IN SHENZHEN CITY QIANHAI WANKE FINANCIAL SERVICES COMPANY LIMITED

INTRODUCTION

Reference is made to the Announcements in relation to, among others, the Acquisition.

The purpose of this circular is to provide you with, among other things, (i) information regarding the Acquisition; and (ii) the audited financial information of the Target Company and the Project Company.

– 5 –

LETTER FROM THE BOARD

SALE AND PURCHASE AGREEMENT

Date: 9 August 2017 (after trading hours)

Parties: (1) Joint Faith Enterprises Limited, an indirect wholly-owned subsidiary of the Company, as purchaser; (2) Ms. You Xuemian, as Vendor A; (3) Ms. Lin Yuqin, as Vendor B; and (4) the Target Company.

As at the date of the Sale and Purchase Agreement, the Target Company was beneficially owned as to 90% and 10% by Vendor A and Vendor B respectively. The Vendors acquired the Target Company from Independent Third Parties on 5 June 2017 at a total consideration of RMB1. Vendor A is a PRC citizen and, as at the Latest Practicable Date, was active in investments in the PRC, while Vendor B is a PRC citizen and was a director of the Target Company prior to Completion. The Vendors were introduced to the Company through an asset management company in the PRC. To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Vendors is an Independent Third Party.

Subject matter

Pursuant to the Sale and Purchase Agreement, the Vendors conditionally agreed to sell and the Purchaser conditionally agreed to purchase the Sale Equity, representing the entire equity interest in the Target Company.

Consideration

The aggregate consideration payable by the Purchaser shall be RMB20,000,000, which shall be payable to the Vendors on the date falling two years from the date of signing of the Sale and Purchase Agreement.

The consideration was arrived at after arm’s length negotiations between the Purchaser and the Vendors after taking into account (i) the arrangement in respect of the Assumed Creditors’ Rights and the Assumed Liabilities of the Project Company; (ii) the capital commitment of the Target Company under the Project Company Acquisition Agreement; (iii) the value of the Project and (iv) the construction of the Project having been completed and the Project Company being able to recover its investment and obtain a reasonable return within a short period of time.

Conditions precedent

Completion is conditional upon and subject to the following conditions:

• (1) the Purchaser being satisfied with the results of the due diligence of the Target Group (in particular the review on the assets, liabilities, operations and affairs of the Target Company and the Project Company as considered appropriate by the Purchaser);

– 6 –

LETTER FROM THE BOARD

• (2) the Purchaser and the Vendors having obtained all necessary consents and approvals required to be obtained in respect of the Sale and Purchase Agreement and the transactions contemplated thereunder;

• (3) there shall not have occurred any material adverse effect or any event, change, effect or development that would, individually or in the aggregate, have had or reasonably be expected to have a material adverse effect on the Target Company, the Project and the Project Company, taken as a whole; and

• (4) if necessary, the passing of the resolution(s) by the Shareholders in a special general meeting of the Company approving the Sale and Purchase Agreement and the transactions contemplated thereunder.

With respect to condition (2) above, to the best of the Directors’ knowledge, information and believe having made reasonable enquiries, no consents or approvals would be required from the regulatory authorities in the PRC. The Purchaser may in its absolute discretion at any time waive the conditions set out in (1) and (3) above. None of the conditions set out in (2) and (4) above are capable of being waived.

If the conditions set out above have not been satisfied or waived on or before the Long Stop Date, the Sale and Purchase Agreement shall cease and determine and thereafter neither party shall have any obligations and liabilities towards each other hereunder save for any antecedent breaches of the terms thereof.

As at the Latest Practicable Date, all of the conditions above have been satisfied.

Completion

Pursuant to the Sale and Purchase Agreement, Completion shall take place within 20 working days after the fulfillment or waiver of the conditions precedent set out in the Sale and Purchase Agreement, or such other date as may be agreed between the Vendors and the Purchaser.

Upon Completion which took place on 29 August 2017, the Target Company became an indirect wholly-owned subsidiary of the Company. On 11 September 2017, the Project Company became an indirect non wholly-owned subsidiary of the Company. Upon completion of the necessary registration procedures for the transfer of the remaining 30% equity interest in the Project Company to the Target Company, the Project Company will become an indirect wholly-owned subsidiary of the Company.

INFORMATION ON THE TARGET GROUP AND THE PROJECT

The Target Company

The Target Company was established in the PRC on 20 April 2015 and is owned as to 90% by Vendor A and as to 10% by Vendor B. As at the date of the Sale and Purchase Agreement and the Latest Practicable Date, the registered capital of the Target Company amounted to RMB100,000,000 which has not been paid up as at the Latest Practicable Date. The Target Company was engaged in P2P lending business in the PRC during the period from February 2016 to December 2016 and except for entering into the Project Company

– 7 –

LETTER FROM THE BOARD

Acquisition Agreement, has become dormant since December 2016. The Target Company has ceased the P2P lending business in the PRC since December 2016 due to unsatisfactory performance of the P2P lending business.

The Project Company

The Project Company was established on 18 September 2012 in the PRC with limited liability. It is principally engaged in the development of the Project. As at the date of the Sale and Purchase Agreement, the Project Company was owned as to 95% by Project Vendor A and 5% by Project Vendor B respectively. As at the Latest Practicable Date, the Project Company was owned as to 70% by the Target Company and 30% by Project Vendor A.

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of Project Vendor A and Project Vendor B is an Independent Third Party.

The Project Company Acquisition Agreement

On 5 June 2017, the Target Company entered into the Project Company Acquisition Agreement with the Project Vendors for the acquisition of the entire equity interest in the Project Company.

Principal terms of the Project Company Acquisition Agreement are set out below:

Date: 5 June 2017 Parties: (1) Mr. Fang Zhaoan, as Project Vendor A; (2) Mr. Xu Lebin, as Project Vendor B; and (3) the Target Company, as purchaser.

As at the date of the Project Company Acquisition Agreement, the Project Company was owned as to 95% and 5% by Project Vendor A and Project Vendor B respectively. Both Project Vendor A and Project Vendor B were the founders of the Project Company. They are PRC citizens and engaged in property development business. At the Latest Practicable Date, the Project Company was owned as to 70% and 30% by the Target Company and Project Vendor A respectively. Save as disclosed above, to the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, each of the Project Vendors is an Independent Third Party.

Subject matter

Pursuant to the Project Company Acquisition Agreement, the Project Vendors shall sell and the Target Company shall acquire the entire equity interest in the Project Company subject to the terms and conditions contained therein.

– 8 –

LETTER FROM THE BOARD

The Project

The Project Company is the developer and owner of the Project. The construction has been completed and the final acceptance of the Project was pending at the Latest Practicable Date and expected to be completed in around 2018. The Project is located near the north exit of the Old Town of Lijiang and at the underground of Minzhu Road and Fuhui Road in Lijiang City, Yunnan Province, the PRC. The actual gross floor area of the Project is approximately 36,583 sq. m. comprising a people’s air defense work structure of approximately 13,730 sq. m., 741 units of the saleable shop premises with a total gross floor area of approximately 19,923 sq. m., a non-saleable property utility room of approximately 15 sq. m. and a commercial function room of approximately 2,915 sq. m. As at the date of the Sale and Purchase Agreement and as at the Latest Practicable Date, 151 units of the saleable shop premises (the “ Sold Premises ”) with a total floor area of approximately 3,926 sq. m. have been agreed to be sold under the relevant pre-sale contracts and 590 units of the saleable shop premises (the “ Unsold Premises ”) with a total gross floor area of approximately 15,997 sq. m. remained unsold. The Project has been charged as security for the Huarong Loan. As at the Latest Practicable Date, the Project was pending the issue of the Property Ownership Certificates for the Sold Premises and Unsold Premises. The Property Ownership Certificates are expected to be obtained in early 2018 and there is no impediment during the process of obtaining approval.

According to the approval by the People’s Air Defence Office of Yunnan Province, the gross floor area of the Project shall be 34,660 sq. m. with a people’s air defense work structure of 18,430 sq. m. The actual gross floor area of the Project exceeds the approved gross floor area by approximately 1,923 sq. m. and the actual size of the people’s air defense work structure is smaller than the approved size by approximately 4,700 sq. m. Additional fee and/or compensation (the “ Additional Costs ”) may be payable by the Project Company for the excess actual gross floor area and the shortfall of the actual gross floor area of the people’s air defense work structure, where the Additional Costs shall be assessed by the People’s Air Defense Authorities of the PRC. Under the Project Company Acquisition Agreement, the Project Vendors have warranted the saleable area of the Project. In addition, in order to fulfill the Final Acceptance Condition and the No Breach Condition to the payment by the Target Company to the Project Company of the Balance of RMB80,000,000, the Project Vendors will have to bear the Additional Costs. Otherwise the Target Company will withhold the payment of the Balance and use the Balance to settle the Additional Costs. Although the Additional costs cannot be ascertained as at the Latest Practicable Date, based on the Company’s estimation, it is estimated that the Additional Costs payable by the Project Company would be approximately RMB66,000 and the Company expects the Balance will be sufficient to cover all the Additional Costs.

The Huarong Loan

Principal terms of the Huarong Loan are set out below:

Lender: Huarong (China) Investment Management Co., Ltd. Trustee bank: China Merchants Bank Lijiang Branch Principal amount: RMB200,000,000 Term: From 3 February 2016 to 2 February 2018 Interest rate: 12% p.a. payable on quarterly basis. Security: The Project has been charged as security in favour of Huarong (China) Investment Management Co., Ltd.

– 9 –

LETTER FROM THE BOARD

Assets and liabilities of the Project Company

Pursuant to the Project Company Acquisition Agreement, the Target Company shall undertake the Huarong Loan incurred prior to the Handover Date and the creditors’ rights and liabilities of the Project Company arising from the operating act of the Target Company as from the Handover Date.

The Project Vendors shall undertake all the Assumed Creditors’ Rights and the Assumed Liabilities existing prior to the Handover Date. Assumed Creditors’ Rights represent the rights to collect trade receivables from the Sold Premises. The Assumed Liabilities represent trade and other payables, amount due to a related company and amount due to a director of the Project Company incurred prior to the Handover Date. Within two years from the date of the Project Company Acquisition Agreement, the Project Vendors shall be responsible for the completion of the clearance of all the accounts receivable and the accounts payable existing before the Handover Date.

As at Latest Practicable Date, the Assumed Creditors’ Rights and the Assumed Liabilities amounted to approximately HK$155.4 million and approximately HK$267.5 million respectively.

Consideration

The total consideration for the acquisition of the Project Company as stated in the Project Company Acquisition Agreement is RMB500,000,000, which shall be settled in the following manner:

• (1) a refundable deposit (the “ Deposit ”) of RMB7,000,000 has been paid by the Target Company to the Project Vendors within two working days after signing of the Project Company Acquisition Agreement, which shall be used to repay the interest due under the Huarong Loan;

• (2) the second installment of RMB280,000,000 (the “ 2nd Installment ”) shall be settled within five working days after the fulfillment of the following conditions:

• (a) Project Vendor A and Project Vendor B having completed the transfer of 65% and 5% equity interest in the Project Company to the Target Company respectively, the necessary registration procedures and the hand-over of the Project Company;

• (b) the Project Vendors having assisted the Target Company and the Project Company in completing the signing of a contract for an entrusted loan in the principal amount of RMB280,000,000 provided by the Target Company to the Project Company;

• (c) the completion of registration of a charge over the land of the Project and the Unsold Premises for securing the debt of RMB280,000,000 in favour of the Target Company as the second ranking chargee (the Target

– 10 –

LETTER FROM THE BOARD

Company shall become the first ranking chargee after the repayment of the Huarong Loan in full);

• (d) the Project Vendors having completed the registration of the pledge over the 30% equity interest in the Project Company held by Project Vendor A in favour of the Target Company as security for the Project Vendors’ guarantee for hidden historical liabilities which were not reflected in the Project Company’s accounting records; and

• (e) the Management Agreement having been terminated. The Management Agreement was entered into between the Project Company and Shanghai Henbai Operation Management Company Limited (“ Shanghai Henbai ”) on 10 March 2015, pursuant to which Shanghai Henbai agreed to provide services in relation to the management and operation of the commercial walkway under the Project. Following the termination of the Management Agreement, a management company designated by the Target Company would be responsible for the management and operation of the commercial walkway under the Project, which allows the Target Company to exert more direct control over the delivery of the Sold Premises and Unsold Premises in the future.

where the 2nd Installment shall be applied in the following priority: (i) the repayment of the Huarong Loan; (ii) repayment of the Deposit; (iii) settlement of the transaction service fee of RMB600,000 in respect of the Project Company Acquisition Agreement; and (iv) payment of the construction costs (the “ Construction Costs ”) payable by the Project Company under the Project which are estimated to be approximately RMB126,000,000. In the event that the 2nd Installment was unable to settle the whole or part of the Construction Costs, those amounts will constitute the Assumed Liabilities which will be settled using the 3rd Installment (as defined below);

• (3) the third installment of RMB140,000,000 (the “ 3rd Installment ”) shall be settled by payment to the Project Vendors the net amount of the balance payment of the Sold Premises actually realised by the Project Company (the “ Balance Payment ”) after utilising the Balance Payment to settle the Assumed Liabilities. No further amount is payable by the Target Company to the Project Vendors if the net amount of the Balance Payment is less than RMB140,000,000. The Project Vendors shall be responsible for resolving the disputes with the creditors and debtors during the recovery process and undertake all the benefits and results from the handling of the disputes. If any of the buyers of the Sold Premises requests for the termination of the contract and the return of the Sold Premises, the Project Vendors shall pay such refund amount to the buyer and the Sold Premises so returned shall belong to the Project Vendors. As at Latest Practicable Date, it is estimated that the Assumed Liabilities will exceed the Balance Payment by approximately HK$48,191,000. Thus, no further amount is expected to be paid by the Target Company to the Project Vendors under the 3rd Installment.

– 11 –

LETTER FROM THE BOARD

• (4) the balance of consideration (the “ Balance ”) of RMB80,000,000 shall be payable by the Target Company to the Project Vendors within five working days after the fulfillment of the following conditions:

• (a) the expiry of two years from the date of the Project Company Acquisition Agreement;

• (b) the Project Vendors having completed the clearance of all the Assumed Liabilities. In the event that the Assumed Liabilities exceed the Balance Payment by RMB80,000,000, such shortfall shall be borne by the Project Vendors. As at Latest Practicable Date, it is estimated that the Assumed Liabilities will exceed the Balance Payment by approximately HK$48,191,000. Hence, the Company considers that the Balance will be sufficient to settle the remaining balance of the Assumed Liabilities;

• (c) the Project having passed the final acceptance and the ownership of the Project having been registered under the name of the Project Company, all the Unsold Premises having satisfied the conditions for issue of the ownership certificates, and the Sold Premises having been delivered to the respective owners as per the relevant sale contracts and the application for the ownership certificates of the Sold Premises having been processed (the “ Final Acceptance Condition ”);

• (d) the Project Vendors having completed the transfer of the remaining 30% equity interest in the Project Company to the Target Company and the necessary registration procedures; and

• (e) there having been no breach of the Project Company Acquisition Agreement by the Project Vendors (the “ No Breach Condition ”).

The principal terms of the entrusted loan to be provided by the Target Company to the Project Company are as follows:

Lender: Target Company Trustee bank: China CITIC Bank Shenzhen Branch Principal amount: RMB280,000,000 Term: 2 years Interest rate: 12% per annum Security: 30% equity interest of Project Company held by Project Vendor A

– 12 –

LETTER FROM THE BOARD

As at the Latest Practicable Date, the Target Company had paid the Deposit. The 2nd Installment is expected to be paid in November 2017 after the fulfillment of all conditions to the 2nd Installment.

The total capital commitment for the Acquisition will be RMB373,000,000, which comprises the following:

• (i) the consideration for the Acquisition of RMB20,000,000; and

• (ii) the capital commitment of RMB353,000,000 for the acquisition of the Project Company by the Target Company (comprising the 2nd Installment of RMB280,000,000 (less RMB7,000,000 as the repayment of the Deposit)) and the Balance of RMB80,000,000.

As at the Latest Practicable Date, the transfer of 70% of the equity interest in the Project Company had taken place.

The total capital commitment for the Acquisition will be funded (i) as to approximately HK$336.3 million by the proceeds from the Open Offer; and (ii) as to approximately HK$93,000,000 from the proceeds from the sale of the Unsold Premises.

FINANCIAL INFORMATION OF THE TARGET GROUP

The unaudited consolidated net liabilities of the Target Company and the Project Company as at 30 June 2017 were approximately RMB30,000 and RMB19,261,000 respectively.

The audited net (loss)/profit before and after taxation of the Target Company for each of the period ended 31 December 2015, the year ended 31 December 2016 and the six months ended 30 June 2017 are set out below:

			Period from
			20 April
			2015 (date of
			incorporation)		Six months
			to	Year ended	ended
			31 December	31 December	30 June
			2015	2016	2017
			RMB’000	RMB’000	RMB’000
			(audited)	(audited)	(audited)
Net	(loss)/profit	before taxation	(16)	10	(24)
Net	(loss)/profit	after taxation	(16)	10	(24)

– 13 –

LETTER FROM THE BOARD

The audited net loss before and after taxation of the Project Company for each of the year ended 31 December 2015, the year ended 31 December 2016 and for the six months ended 30 June 2017 are set out below:

			For the	For the	For the
			year ended	year ended	six months
			31 December	31 December	ended
			2015	2016	30 June 2017
			RMB’000	RMB’000	RMB’000
			(audited)	(audited)	(audited)
Net	loss	before taxation	(5,033)	(2,566)	(13,048)
Net	loss	after taxation	(4,497)	(2,101)	(9,787)

FINANCIAL EFFECT OF THE ACQUISITION

Upon Completion which took place on 29 August 2017, the Target Company will become a wholly-owned subsidiary of the Company. The Project Company became an indirect non wholly-owned subsidiary of the Company on the Handover Date. Hence, the results of the Target Group will be consolidated into the Enlarged Group’s results. The Directors consider that the Acquisition will bring positive contribution to the earnings of the Enlarged Group but the quantification of such contribution will depend on the future performance of the Target Group.

Based on the unaudited pro forma financial information of the Enlarged Group set out in Appendix V to this circular and the bases and assumptions taken into account in preparing such unaudited pro forma financial information, the total assets of the Group would increase from approximately HK$604 million to approximately HK$1,148 million which including the net proceeds approximately of HK$336 million from the Open Offer; and its total liabilities would increase from approximately HK$111 million to approximately HK$235 million, as a result of the Acquisition. The details of the financial effect of the Acquisition on the financial position and results of the Group together with the bases and assumptions taken into account in preparing the unaudited pro forma financial information are set out, for illustration purpose only, in Appendix V to this circular.

REASONS FOR AND BENEFITS OF THE ACQUISITION

The Group is engaged in the business of, inter alia, manufacturing of consumer electronics products, money lending business in Hong Kong, nursery education in the PRC and investment in an associate which is engaged in afterlife services in Taiwan.

The Directors undertake strategic reviews of its assets from time to time with a view to maximising returns to the Shareholders. The construction of the Project has been completed with pre-sales. It is expected that the Project Company can recover its investment and obtain a reasonable return within a short period of time. The Directors consider that the Acquisition provides an attractive opportunity for the Company to enhance its future development and strengthen its revenue bases.

In consideration of the above, the Directors are of the view that the terms of the Sale and Purchase Agreement are fair and reasonable and the Acquisition is in the interests of the Company and the Shareholders as a whole.

– 14 –

LETTER FROM THE BOARD

LISTING RULES IMPLICATIONS

As one or more of the applicable percentage ratios in respect of the Acquisition exceed 25% but are less than 100%, the Acquisition constitutes a major transaction of the Company under Chapter 14 of the Listing Rules and is therefore subject to the announcement, reporting and Shareholders’ approval requirements under Chapter 14 of the Listing Rules.

WRITTEN SHAREHOLDER’S APPROVAL

To the best of the Directors’ knowledge, information and belief having made all reasonable enquiries, none of the Shareholders have a material interest in the Sale and Purchase Agreement and the transactions contemplated thereunder and therefore no Shareholder is required to abstain from voting if a general meeting were to be convened for the approval of the Sale and Purchase Agreement and the transactions contemplated thereunder.

Pursuant to Rule 14.44 of the Listing Rules, Shareholders’ approval of the Sale and Purchase Agreement and the transactions contemplated thereunder may be given by way of written Shareholders’ approval in lieu of holding a general meeting if (1) no Shareholder is required to abstain from voting if the Company were to convene a general meeting for the approval of the Sale and Purchase Agreement and the transactions contemplated thereunder; and (2) the written shareholders’ approval has been obtained from a Shareholder or a closely allied group of Shareholders who together hold more than 50% of the issued share capital of the Company giving the right to attend and vote at that general meeting to approve the Sale and Purchase Agreement and the transactions contemplated thereunder.

On 29 August 2017, the Company received the Written Shareholder’s Approval from Super Fame, being a Shareholder holding an aggregate of 768,487,998 Shares, representing approximately 56.71% of the issued share capital of the Company. Accordingly, the Written Shareholder’s Approval has been accepted in lieu of holding a general meeting pursuant to Rule 14.44 of the Listing Rules.

RECOMMENDATION

The Directors consider that the terms of the Sale and Purchase Agreement and the transactions contemplated thereunder are on normal commercial terms, fair and reasonable, and are in the interests of the Company and the Shareholders as a whole.

FURTHER INFORMATION

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

Yours faithfully, By order of the Board Superactive Group Company Limited Yeung So Lai Chairman

– 15 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

1. FINANCIAL INFORMATION

Financial information of the Group for the three years ended 31 December 2014, 2015 and 2016 and for the six months ended 30 June 2017 can be found in the annual reports of the Company for the years ended 31 December 2014, 2015 and 2016 and the interim report of the Company for the six months ended 30 June 2017 respectively.

The above-mentioned financial information has been published on both website of the Stock Exchange at www.hkex.com.hk and the Company’s website at www.superactive.com.hk.

2. INDEBTEDNESS

As at the close of business on 30 September 2017, being the latest practicable date for the purpose of this indebtedness statement prior to the printing of this circular, the Enlarged Group had total borrowings of approximately HK$969,000 guaranteed by the corporate guarantee by the Company.

Save as aforesaid and apart from intra-group liabilities, at the close of business on 30 September 2017, being the latest practicable date for the purpose of the indebtedness statement prior to the printing of this circular, the Group did not have any other outstanding borrowings, or any mortgages, charges, debentures, loan capital, bank overdrafts or loans, liabilities under acceptance (other than normal trade bills) or other similar indebtedness, hire purchase or finance lease obligations or any guarantees or other material contingent liabilities.

3. WORKING CAPITAL

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

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse changes in the financial or trading position of the Group since 31 December 2016 (being the date to which the latest published audited consolidated financial statements of the Group were made up).

– I-1 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

5. BUSINESS OR INTEREST IN THE SHARE CAPITAL OF A COMPANY ACQUIRED BY THE GROUP AFTER 31 DECEMBER 2016, BEING THE DATE TO WHICH THE LATEST PUBLISHED AUDITED CONSOLIDATED ACCOUNTS OF THE GROUP WERE MADE UP

On 18 May 2017 (after trading hours), Capital Wheel Holdings Limited, Mr. Yiu Chow Shun, Barry, Mr. Li Yik Wai, Kinnie and Loyalgain Corporation Limited as vendors (the “ Vendors ”), Mr. Tang Yui, Ian, Mr. Chan Wai Lun, Anthony and Mr. Mark Anthony James Vaile as guarantors (the “ Guarantors ”) and Toran International Limited (“ Toran ”), a wholly-owned subsidiary of the Company, as the purchaser entered into a sale and purchase agreement (the “ Agreement ”), pursuant to which the Vendors have agreed to sell and Toran has agreed to purchase the 100 shares of US$1.00 each in the share capital of Speed Fame Enterprises Limited (“ Speed Fame ”), representing the entire issued share capital of the Speed Fame, at a total consideration of HK$59,474,576.26, of which (i) HK$23,788,896.00 shall be satisfied by the Toran by procuring the Company to allot and issue 36,768,000 new Shares (the “ Consideration Shares ”) at the issue price of HK$0.647 per Consideration Share to the Vendors or their respective nominee(s) or designated person(s) within seven business days from the date of completion of the Agreement; and (ii) HK$35,685,680.26 shall be satisfied in cash within one month from the date of completion of the Agreement. Please refer to the announcement of the Company dated 18 May 2017 for the details of the Agreement.

On 29 May 2017, Hinda Enterprises Limited (“ Hinda ”), a direct wholly-owned subsidiary of the Company, as purchaser entered into a sale and purchase agreement (the “ Agreement 2 ”) with Chan Ping Che (“ Mr. Chan ”) as vendor in relation to the acquisition of 2 ordinary shares (“ Wealth Long Sale Shares ”) of Wealth Long Limited, representing the entire issued share capital of Wealth Long, and the entire amount of the shareholder’s loan of HK$184,559,138 owing by Wealth Long to Mr. Chan (the “ Wealth Long Sale Loan ”), at the consideration of HK$185,000,000. On completion of Agreement 2 which took place on 29 May 2017, the parties executed a put option deed (as amended and supplemented by the supplemental deed dated 7 August 2017) (the “ Put Option Deed ”), pursuant to which Hinda was granted a right to require Mr. Chan to purchase from Hinda all of the Wealth Long Sale Shares and the Wealth Long Sale Loan sold and transferred to Hinda under the Agreement 2 at a total consideration of HK$185,000,000 (the “ Put Option ”). On 8 August 2017, Hinda served a notice to Mr. Chan to exercise the Put Option to request Mr. Chan to purchase from Hinda the Wealth Long Sale Shares and Wealth Long Sale Loan. Wealth Long was incorporated on 13 May 2016 and has not carried on any business other than holding all that piece or parcel of ground registered in the Land Registry as KWAI CHUNG TOWN LOT NO. 351 together with the messuages erections and buildings erected thereon known as VALID INDUSTRIAL CENTRE (華利工業中心) since its incorporation. Please refer to the circular of the Company dated 28 August 2017 for details of the Agreement 2 and the Put Option Deed.

– I-2 –

APPENDIX I

FINANCIAL INFORMATION OF THE GROUP

Save for the aforementioned, since 31 December 2016 (being the date to which the latest published audited consolidated financial statements of the Group were made up) no member of the Group has acquired, agreed to acquire or is proposing to acquire a business or an interest in the share capital of a company whose profits or assets make or will make a material contribution to the figures in the auditors’ report or the next published accounts of the Company.

6. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group is principally engaged in the business of manufacturing of consumer electronics products, money lending business and provision of regulated financial service activities in Hong Kong, provision of nursery education service and property development in PRC; and investment in an associate which is engaged in afterlife services in Taiwan.

Although the Group has started its transforming journey to explore its business into different industries to maximising the returns to its shareholders, the new business, such as money lending business, financial activities services and nursery education are still in the development and expansion stage. The Group would spend more resources for its development. Before the new business matures, the manufacturing of consumer electronics products is still the fundamental source of the Group’s revenue streams, and the Company has no intention to downsize or dispose of the consumer electronics manufacturing business. The Group will endeavor to maintain its business stability to ensure that the Groups income in robust. The Group has no plan to dispose of the consumer electronics manufacturing business even when the new business has entered the matured stage.

For money lending business, the Group targeted in the short-term high rate personal loan segment and believed that short-term high interest lending can effectively maintain the stability of the Group’s liquidity and at the same time provide a satisfactory return.

Hong Kong, as an international financial center, has frequent financial transactions and activities, and there is a real demand in the market for financial advisory services. The Group’s financial services business mainly targeted the demand of financial services to provide regulated financial advisory services. In order to strengthen the regulated financial service segment, the Group will also provide asset management services in the future. The Group is confident of the development of its financial services business.

With the change of fertility policy in mainland China, that subject to the conditions allowing couples to give birth to second child, the Group believes that the demand for nursery education will increase. The Group has now provided nursery education in Chengdu, the PRC, and plans to allocate resources to strengthen its nursery education service segment and provide services in major cities of China such as Beijing and Shanghai.

Apart from its investment in the associate, the Group did not participate the daily operation of afterlife services in Taiwan. After the acquisition of Wealth Long Limited terminated on 8 August 2017, the Group no plans to resume the business of afterlife service in Hong Kong.

– I-3 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

The following is the text of a report set out on pages II-1 to II-19, received from the Target Company’s reporting accountants, BDO Limited, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this Circular.

==> picture [79 x 65] intentionally omitted <==

==> picture [100 x 56] intentionally omitted <==

ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF SUPERACTIVE GROUP COMPANY LIMITED

Introduction

We report on the historical financial information of 深圳市前海萬客金融服務有限公 司 (Shenzhen City Qianhai Wanke Financial Services Company Limited) (the “ Target Company ”) set out on pages II-4 to II-19, which comprises the statements of financial position as at 31 December 2015 and 2016 and 30 June 2017 and the statements of profit or loss and other comprehensive income, the statements of changes in equity, and the statements of cash flows for the period from 20 April 2015 (date of establishment) to 31 December 2015, the year ended 31 December 2016 and the six months ended 30 June 2017 (the “ Relevant Periods ”) and a summary of significant accounting policies and other explanatory information (together the “ Historical Financial Information ”). The Historical Financial Information set out on pages II-4 to II-19 forms an integral part of this report, which has been prepared for inclusion in the investment circular of Superactive Group Company Limited (the “ Company ”) dated 24 November 2017 (the “ Circular* ”) in connection with the proposed acquisition of the entire equity interest in the Target Company.

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information, and for such internal control as the directors determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

Reporting accountants’ responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 “Accountants’ Reports on

* For identification purpose only

– II-1 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

Historical Financial Information in Investment Circulars” issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants’ judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical 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, the Historical Financial Information gives, for the purposes of the accountants’ report, a true and fair view of the Target Company’s financial position as at 31 December 2015 and 2016 and 30 June 2017 and of its financial performance and cash flows for the Relevant Periods in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information.

Review of Stub Period Comparative Historical Financial Information

We have reviewed the stub period comparative historical financial information of the Target Company which comprises the statement of profit or loss and other comprehensive income, the statement of changes in equity, and the statement of cash flows for the six months ended 30 June 2016 and other explanatory information (the “ Stub Period Comparative Historical Financial Information ”). The directors of the Company are responsible for the preparation and presentation of the Stub Period Comparative Historical Financial Information in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information. Our responsibility is to express a conclusion on the Stub Period Comparative Historical Financial Information based on our review. We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope

– II-2 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the Stub Period Comparative Historical Financial Information, for the purposes of the accountants’ report, is not prepared, in all material respects, in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information.

Report on matter under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Adjustments

In preparing the Historical Financial Information and Stub Period Comparative Historical Financial Information, no adjustments to the Underlying Financial Statements as defined on page II-4 have been made.

BDO Limited

Certified Public Accountants

Li Pak Ki

Practising Certificate Number: P01330

Hong Kong, 24 November 2017

– II-3 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

HISTORICAL FINANCIAL INFORMATION OF THE TARGET COMPANY

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountants’ report.

The financial statements of the Target Company for the Relevant Periods, on which the Historical Financial Information is based, were prepared in accordance with Hong Kong Financial Reporting Standards (“ HKFRSs ”) issued by the HKICPA (the “ Underlying Financial Statements ”). The Underlying Financial Statements were audited by us in accordance with Hong Kong Standards on Auditing issued by the HKICPA.

The Historical Financial Information is presented in Renminbi (“ RMB ”) and all values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Period from 20 April 2015 (date of establishment) to 31 December 2015 Note RMB’000 Revenue 6 – Other income – – Administrative expenses (16) Finance costs – (Loss)/profit before income tax 7 (16) Income tax expense 9 – (Loss)/profit and total comprehensive income for the period/year (16)	Year ended 31 December 2016 RMB’000 178 8 186 (57) (119) 10 – 10	Six months ended 30 June 2016 RMB’000 (Unaudited) 85 8 93 (4) (53) 36 (5) 31	Six months ended 30 June 2017 RMB’000 2 –
			2 (26) –
			(24) –
			(24)

– II-4 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

STATEMENTS OF FINANCIAL POSITION

Note CURRENT ASSETS Deposit and other receivables 10 Cash and bank balances Total current assets CURRENT LIABILITIES Other payables Total current liabilities Net liabilities EQUITY Paid-up capital 12 Accumulated losses Total deficits	As at 31 December 2015 31 December 2016 RMB’000 RMB’000 360 9,729 9 10 369 9,739 385 9,745 385 9,745 (16) (6) – – (16) (6) (16) (6)	As at 30 June 2017 RMB’000 7,000 – 7,000 7,030 7,030 (30) – (30) (30)

– II-5 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

STATEMENTS OF CHANGES IN EQUITY

Balance as at 20 April 2015 (date of establishment) Loss and total comprehensive income for the period Balance as at 31 December 2015 Balance as at 1 January 2016 Profit and total comprehensive income for the year Balance as at 31 December 2016 Balance as at 1 January 2017 Loss and total comprehensive income for the period Balance as at 30 June 2017 Balance as at 1 January 2016 Profit and total comprehensive income for the period (unaudited) Balance as at 30 June 2016 (unaudited)	Paid-up capital RMB’000 (Note 12) – – – – – – – – – – – –	Accumulated losses RMB’000 – (16) (16) (16) 10 (6) (6) (24) (30) (16) 31 15	Total RMB’000 – (16) (16) (16) 10 (6) (6) (24) (30) (16) 31 15

– II-6 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

STATEMENTS OF CASH FLOWS

OPERATING ACTIVITIES (Loss)/profit before income tax Interest income Operating cash flows before movements in working capital (Increase)/decrease in deposit and other receivables Increase/(decrease) in other payables NET CASH FROM/(USED IN) OPERATING ACTIVITIES INVESTING ACTIVITIES Deposit paid for acquisition of subsidiary Interest received NET CASH FROM/(USED IN) INVESTING ACTIVITIES FINANCING ACTIVITIES Increase in other payables NET CASH FROM FINANCING ACTIVITIES	Period from 20 April 2015 (date of establishment) to 31 December 2015 RMB’000 (16) – (16) (360) 385 9 – – – – –	Year ended 31 December 2016 RMB’000 10 (178) (168) (9,369) 9,360 (177) – 178 178 – –	Six months ended 30 June 2016 RMB’000 (Unaudited) 36 (85) (49) (9,441) 9,469 (21) – 85 85 – –	Six months ended 30 June 2017 RMB’000 (24) (2)
				(26) 2,729 (2,715)
				(12)
				(7,000) 2
				(6,998)
				7,000
				7,000

– II-7 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

NET MOVEMENT IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD/YEAR CASH AND CASH EQUIVALENTS AT END OF PERIOD/YEAR	Period from 20 April 2015 (date of establishment) to 31 December 2015 RMB’000 9 – 9	Year ended 31 December 2016 RMB’000 1 9 10	Six months ended 30 June 2016 RMB’000 (Unaudited) 64 9 73	Six months ended 30 June 2017 RMB’000 (10) 10
				–

Reconciliation of liabilities arising from financing activities

Other payables Total liabilities from financing activities	At 1 January 2017 RMB’000 – –	Cash flows RMB’000 7,000 7,000	At 30 June 2017 RMB’000 7,000
			7,000

– II-8 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

NOTES TO HISTORICAL FINANCIAL INFORMATION

1. INFORMATION ABOUT THE TARGET COMPANY

The Target Company was established in the People’s Republic of China (the “ PRC ”) as a limited liability company on 20 April 2015. The address of its registered office and principal place of business is Unit 201, Block A, 1 Qianwan 1st Road, Shenzhen, Guangdong, China.

The Target Company was engaged in P2P lending business in the PRC during the period from February 2016 to December 2016 and was dormant after December 2016.

2. BASIS OF PREPARATION AND PRESENTATION OF HISTORICAL FINANCIAL INFORMATION

The Historical Financial Information has been prepared in accordance with the accounting policies set out in Note 4 to the Historical Financial Information which conform with all applicable HKFRSs issued by HKICPA. In addition, the Historical Financial Information includes applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The Historical Financial Information has been prepared under the historical cost basis.

It should be noted that accounting estimates and assumptions are used in the preparation of the Historical Financial Information. Although these estimates are based on management’s best knowledge and judgement of current events and actions, actual results may ultimately differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in Note 5.

3. ADOPTION OF NEW OR REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)

The following standards and amendments to existing standards have been published, but are not yet effective for the financial year beginning on 1 January 2017 and have not been early adopted by the Target Company:

HKFRS 9	Financial Instruments 1
HKFRS 15	Revenue from Contracts with Customers 1
HKFRS 16	Leases 2
HKFRS 17	Insurance Contracts 4
Amendments to HKFRSs	Annual Improvements to HKFRSs 2014-2016 Cycle 1
Amendments to HKFRS 2	Classification and Measurement of Share-based Payment
	Transactions 1
Amendments to HKFRS 4	Applying HKFRS 9 Financial Instruments with HKFRS 4
	Insurance Contracts 1
Amendments to HKFRS 10 and	Sale or Contribution of Assets between an Investor and its
HKAS 28	Associate or Joint Venture 3
Amendments to HKFRS 15	Clarifications to HKFRS 15 Revenue from Contracts with
	Customers 1
Amendments to HKAS 40	Transfers of Investment Property 2
HK(IFRIC) – Int 22	Foreign Currency Transactions and Advance Consideration 1
HK(IFRIC) – Int 23	Uncertainty over Income Tax Treatments 2

• 1 Effective for annual periods beginning on or after 1 January 2018

• 2 Effective for annual periods beginning on or after 1 January 2019

• 3 No mandatory effective date yet determined but is available for early adoption 4 Effective for annual periods beginning on or after 1 January 2021

– II-9 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

Further information about the above HKFRSs which are expected to be applicable to the Target Company is as follows:

HKFRS 9 – Financial Instruments

HKFRS 9 introduces new requirements for the classification and measurement of financial assets. Debt instruments that are held within a business model whose objective is to hold assets in order to collect contractual cash flows (the business model test) and that have contractual terms that give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding (the contractual cash flow characteristics test) are generally measured at amortised cost. Debt instruments that meet the contractual cash flow characteristics test are measured at fair value through other comprehensive income (“ FVTOCI ”) if the objective of the entity’s business model is both to hold and collect the contractual cash flows and to sell the financial assets. Entities may make an irrevocable election at initial recognition to measure equity instruments that are not held for trading at FVTOCI. All other debt and equity instruments are measured at fair value through profit or loss (“ FVTPL ”).

HKFRS 9 includes a new expected credit losses impairment model for all financial assets not measured at FVTPL replacing the incurred loss model in HKAS 39 and new general hedge accounting requirements to allow entities to better reflect their risk management activities in financial statements.

HKFRS 9 carries forward the recognition, classification and measurement requirements for financial liabilities from HKAS 39, except for financial liabilities designated at FVTPL, where the amount of change in fair value attributable to change in credit risk of the liability is recognised in other comprehensive income unless that would create or enlarge an accounting mismatch. In addition, HKFRS 9 retains the requirements in HKAS 39 for derecognition of financial assets and financial liabilities.

The adoption of HKFRS 9 might have an impact on the Target Company’s financial performance and financial position, including the measurement of financial assets and disclosures. In particular, the adoption of an expected credit losses impairment model might result in earlier recognition of credit losses of the Target Company’s receivables.

HKFRS 15 – Revenue from Contracts with Customers

The new standard establishes a single revenue recognition framework. The core principle of the framework is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. HKFRS 15 supersedes existing revenue recognition guidance including HKAS 18 Revenue, HKAS 11 Construction Contracts and related interpretations.

HKFRS 15 requires the application of a 5-step approach to revenue recognition:

Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to each performance obligation Step 5: Recognise revenue when each performance obligation is satisfied

HKFRS 15 includes specific guidance on particular revenue related topics that may change the current approach taken under HKFRSs. The standard also significantly enhances the qualitative and quantitative disclosures related to revenue.

Amendments to HKFRS 15 – Clarifications to HKFRS 15 Revenue from Contracts with Customers

The amendments to HKFRS 15 included clarifications on identification of performance obligations; application of principal versus agent; licenses of intellectual property; and transition requirements.

– II-10 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

HKFRS 16 – Leases

HKFRS 16, which upon the effective date will supersede HKAS 17 Leases and related interpretations, introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Specifically, under HKFRS 16, a lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Accordingly, a lessee should recognise depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows. Also, the right-of-use asset and the lease liability are initially measured on a present value basis. The measurement includes non-cancellable lease payments and also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or to exercise an option to terminate the lease. This accounting treatment is significantly different from the lessee accounting for leases that are classified as operating leases under the predecessor standard, HKAS 17.

In respect of the lessor accounting, HKFRS 16 substantially carries forward the lessor accounting requirements in HKAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.

The Target Company expects that the adoption of HKFRS 16 will not have a significant effect on the Target Company’s financial position and performance.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Financial Instruments

(i) Financial assets

The Target Company classifies its financial assets at initial recognition, depending on the purpose for which the asset was acquired.

Loans and receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They incorporate other types of contractual monetary asset. Subsequent to initial recognition, they are carried at amortised cost using the effective interest method, less any identified impairment losses.

(ii) Impairment loss on financial assets

The Target Company assesses, at the end of reporting period, whether there is any objective evidence that financial asset is impaired. Financial asset is impaired if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated.

Loans and receivables

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. The carrying amount of financial asset is reduced through the use of an allowance account. When any part of financial asset is determined as uncollectible, it is written off against the allowance account for the relevant financial asset.

– II-11 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

(iii) Financial liabilities

Financial liabilities at amortised cost are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost, using the effective interest method. The related interest expense is recognised in profit or loss.

Gains or losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process.

(iv) Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income or interest expense over the Relevant Periods. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial asset or liability, or where appropriate, a shorter period.

(v) Equity instruments

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

(vi) Derecognition

The Target Company derecognises a financial asset when the contractual rights to the future cash flows in relation to the financial asset expire or when the financial asset has been transferred and the transfer meets the criteria for derecognition in accordance with HKAS 39.

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires.

(b) Cash and cash equivalents

For the purpose of the statements of cash flows, cash and cash equivalents comprise cash on hand and bank deposits, and short term highly liquid investments which are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Target Company’s cash management.

For the purpose of the statements of financial position, cash and cash equivalents comprise cash on hand and at bank, including term deposits, which are not restricted as to use.

(c) Revenue

Interest income is accrued on a time basis on the principal outstanding at the applicable interest rate.

– II-12 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

(d) Income tax expenses

Income taxes for the Relevant Periods comprise current tax and deferred tax.

Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purposes and is calculated using tax rates that have been enacted or substantively enacted at the end of the Relevant Periods.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for tax purposes. Except for recognised assets and liabilities that affect neither accounting nor taxable profits, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is measured at the tax rates appropriate to the expected manner in which the carrying amount of the asset or liability is realised or settled and that have been enacted or substantively enacted at the end of the Relevant Periods.

Income taxes are recognised in profit or loss except when they relate to items recognised in other comprehensive income in which case the taxes are also recognised in other comprehensive income or when they relate to items recognised directly in equity in which case the taxes are also recognised directly in equity.

(e) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when the Target Company has a legal or constructive obligation arising as a result of a past event, which it is probable will result in an outflow of economic benefits that can be reliably estimated.

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

(f) Related parties

• (a) A person or a close member of that person’s family is related to the Target Company if that person:

• (i) has control or joint control over the Target Company;

• (ii) has significant influence over the Target Company; or

• (iii) is a member of key management personnel of the Target Company or the Target Company’s parent.

• (b) An entity is related to the Target Company if any of the following conditions apply:

• (i) The entity and the Target Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

• (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

• (iii) Both entities are joint ventures of the same third party.

• (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

– II-13 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

• (v) The entity is a post-employment benefit plan for the benefit of the employees of the Target Company or an entity related to the Target Company.

• (vi) The entity is controlled or jointly controlled by a person identified in (a).

• (vii) A person identified in (a)(i) has significant influence over the entity or is a member of key management personnel of the entity (or of a parent of the entity).

• (viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the Target Company or to the Target Company’s parent.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity and include:

• (i) that person’s children and spouse or domestic partner;

• (ii) children of that person’s spouse or domestic partner; and

• (iii) dependents of that person or that person’s spouse or domestic partner.

5. ACCOUNTING ESTIMATES AND JUDGEMENTS

In the application of the Target Company’s accounting policies, the director is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Impairment of loans and receivables

The Target Company assessed at the end of the reporting period whether there is any objective evidence that loans and receivables are impaired. To determine whether there is objective evidence of impairment, the Target Company considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future free cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics.

– II-14 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

6. REVENUE

Period from 20 April 2015 (date of establishment) to Year ended 31 December 31 December Six months ended 30 June 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) Revenue: Interest income ~ 178 85 2

7. (LOSS)/PROFIT BEFORE INCOME TAX

	Period from
	20 April 2015
	(date of
	establishment)
	to	Year ended
	31 December	31 December	Six months ended 30 June
	2015	2016	2016	2017
	RMB’000	RMB’000	RMB’000	RMB’000
			(Unaudited)
(Loss)/profit before
income tax is arrived
at after charging:
Staff costs	–	48	3	–
Auditor’s remuneration	–	–	–	~
Preliminary expenses	16	–	–	–

8. DIRECTOR’S AND EMPLOYEES’ EMOLUMENTS

Director’s emoluments are as follows:

Fees Ms. You Xuemei Other emoluments Ms. You Xuemei	Period from 20 April 2015 (date of establishment) to 31 December 2015 RMB’000 – – –	Year ended 31 December 2016 RMB’000 – – –	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) – – – – – –	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) – – – – – –
				–

– II-15 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

No remuneration was paid by the Target Company to the director as an inducement to join or upon joining the Target Company or as compensation for loss of office during the Relevant Periods.

The management considers that the executive director is the key management personnel of the Target Company.

Employees’ emoluments

The number of employees of the Target Company ranged from 1 to 3 throughout the Relevant Periods. The highest paid individuals of the Target Company during the Relevant Periods do not include any director. The emoluments of the highest paid employees of the Target Company are as follows:

Salaries and other benefits Expenses of retirement benefit plans	Period from 20 April 2015 (date of establishment) to 31 December 2015 RMB’000 – – –	Year ended 31 December 2016 RMB’000 48 – 48	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) 3 – – – 3 –	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) 3 – – – 3 –
				–

Emoluments of these employees are within the following bands:

			Period from
			20 April 2015
			(date of
			establishment)
			to	Year ended
			31 December	31 December	Six months ended 30 June
			2015	2016	2016	2017
					(Unaudited)
Nil	to	RMB1,000,000	–	3	1	–

– II-16 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

9. INCOME TAX EXPENSE

No provision for PRC enterprise income tax (“ EIT ”) has been made as the Target Company had no assessable profits arising in the PRC throughout the Relevant Periods.

A reconciliation of the tax expense applicable to (loss)/profit before income tax at statutory EIT rate in the PRC is as follows:

Tax reconciliation: (Loss)/profit before income tax Tax at the statutory EIT rate of 25% Utilisation of tax loss previously not recognised Tax effect of tax loss not recognised Income tax expenses	Period from 20 April 2015 (date of establishment) to 31 December 2015 RMB’000 (16) (4) – 4 –	Year ended 31 December 2016 RMB’000 10 3 (3) – –	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) 36 (24) 9 (6) (4) – – 6 5 –	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) 36 (24) 9 (6) (4) – – 6 5 –
				(6) – 6
				–

No deferred tax asset has been recognised in respect of unused tax losses due to the unpredictability of future profit streams. The unused tax losses will expire in 5 years.

10. DEPOSIT AND OTHER RECEIVABLES

The refundable deposit of RMB7,000,000 as at 30 June 2017 represents the deposit paid pursuant to the terms of the Project Company Acquisition Agreement dated 5 June 2017 in relation to the acquisition of the entire equity interest in 麗江華歐房地產置業有限公司 (Lijiang Hua Ou Real Estate Company Limited) (the “ Project Company ”).

11. DIVIDEND

The Target Company did not pay/declare any dividend during the Relevant Periods.

12. PAID-UP CAPITAL

The registered capital is RMB100,000,000 and no capital has been paid throughout the Relevant Periods.

13. RELATED PARTY TRANSACTIONS

Members of key management personnel of the Target Company during the Relevant Periods comprised only the director of the Target Company whose emoluments are set out in Note 8 to the Historical Financial Information.

The Target Company did not have any other transactions with related parties during the Relevant Periods.

– II-17 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

14. FINANCIAL RISK MANAGEMENT

The main risk arising from the Target Company’s financial instruments in the normal course of the Target Company’s business is liquidity risk.

As at each reporting period end, the contractual undiscounted cash outflows of the non-derivative financial liabilities of the Target Company were equal to their carrying amounts, which were non-interest bearing and due for payment within one year or on demand.

		Within one
		year
		RMB’000
As	at
31	December 2015	(385)
31	December 2016	(9,745)
30	June 2017	(7,030)

15. CAPITAL RISK MANAGEMENT

As at 31 December 2015 and 2016 and 30 June 2017, the Target Company was in capital deficiency of RMB16,000, RMB6,000 and RMB30,000 respectively. The capital structure of the Target Company consists of equity attributable to owners of the Target Company, comprising paid-up capital and accumulated losses.

16. SUMMARY OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES BY CATEGORY

The carrying amounts presented in the statement of financial position relate to the following categories of financial assets and financial liabilities:

	As at		As at
	31 December	31 December	30 June
	2015	2016	2017
	RMB’000	RMB’000	RMB’000
Financial assets
Loans and receivables:
– Deposit and other receivables	360	9,729	7,000
Financial liabilities
Financial liabilities measured at amortised cost
– Other payables	(385)	(9,745)	(7,030)

Due to their short term nature, the carrying values of deposit and other receivables and other payables approximate their fair values.

17. CAPITAL COMMITMENT

As at 30 June 2017, the total capital commitment for the acquisition of the Project Company was RMB353,000,000, which comprised the 2nd instalment of RMB280,000,000 (less RMB7,000,000 as the repayment of the deposit) and the balance of RMB80,000,000.

– II-18 –

APPENDIX II

FINANCIAL INFORMATION OF THE TARGET COMPANY

18. EVENT AFTER THE REPORTING DATE

On 9 August 2017, equity owners of the Target Company entered into the Sale and Purchase Agreement with an indirect wholly-owned subsidiary of Superactive Group Company Limited to dispose the entire equity interests in the Target Company. The Target Company became an indirect wholly-owned subsidiary of Superactive Group Company Limited upon completion of the transaction on 29 August 2017.

19. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Target Company in respect of any period subsequent to 30 June 2017 and up to the date of this report.

– II-19 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

The following is the text of a report set out on pages III-1 to III-30, received from the Project Company’s reporting accountants, BDO Limited, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this Circular.

==> picture [79 x 64] intentionally omitted <==

==> picture [100 x 57] intentionally omitted <==

ACCOUNTANTS’ REPORT ON HISTORICAL FINANCIAL INFORMATION TO THE DIRECTORS OF SUPERACTIVE GROUP COMPANY LIMITED

Introduction

We report on the historical financial information of 麗江華歐房地產置業有限公司 (Lijiang Hua Ou Real Estate Company Limited) (the “ Project Company ”) set out on pages III-4 to III-29, which comprises the statements of financial position as at 31 December 2014, 2015 and 2016 and 30 June 2017 and the statements of profit or loss and other comprehensive income, the statements of changes in equity, and the statements of cash flows for each of the years ended 31 December 2014, 2015 and 2016 and the six months ended 30 June 2017 (the “ Relevant Periods ”) and a summary of significant accounting policies and other explanatory information (together the “ Historical Financial Information ”). The Historical Financial Information set out on pages III-4 to III-29 forms an integral part of this report, which has been prepared for inclusion in the investment circular of Superactive Group Company Limited (the “ Company ”) dated 24 November 2017 (the “ Circular* ”) in connection with the proposed acquisition of the entire equity interest in the Project Company through The Project Company Acquisition Agreement with the Project Vendor A and Project Vendor B as defined in the Circular.

Directors’ responsibility for the Historical Financial Information

The directors of the Company are responsible for the preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information, and for such internal control as the directors determine is necessary to enable the preparation of Historical Financial Information that is free from material misstatement, whether due to fraud or error.

The financial statements of the Project Company for the Relevant Periods (the “ Underlying Financial Statements ”), on which the Historical Financial Information is based, were prepared by the directors of the Company based on the previously issued financial statements and management accounts of the Project Company for the Relevant Periods. The directors of the Project Company are responsible for the preparation of the Project Company’s financial statements that gives a true and fair view in accordance with

* For identification purpose only

– III-1 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

Accounting Standards for Business Enterprises issued by the Ministry of Finance of the People’s Republic of China, as appropriate, and for such internal control as the directors determine is necessary to enable the preparation of Project Company’s financial statements that are free from material misstatement, whether due to fraud or error.

Reporting accountants’ responsibility

Our responsibility is to express an opinion on the Historical Financial Information and to report our opinion to you. We conducted our work in accordance with Hong Kong Standard on Investment Circular Reporting Engagements 200 “ Accountants’ Reports on Historical Financial Information in Investment Circulars ” issued by the Hong Kong Institute of Certified Public Accountants (the “ HKICPA ”). This standard requires that we comply with ethical standards and plan and perform our work to obtain reasonable assurance about whether the Historical Financial Information is free from material misstatement.

Our work involved performing procedures to obtain evidence about the amounts and disclosures in the Historical Financial Information. The procedures selected depend on the reporting accountants’ judgement, including the assessment of risks of material misstatement of the Historical Financial Information, whether due to fraud or error. In making those risk assessments, the reporting accountants consider internal control relevant to the entity’s preparation of Historical Financial Information that gives a true and fair view in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information in order to design procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Our work also included evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the Historical 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, the Historical Financial Information gives, for the purposes of the accountants’ report, a true and fair view of the Project Company’s financial position as at 31 December 2014, 2015 and 2016 and 30 June 2017 and of its financial performance and cash flows for the Relevant Periods in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information.

– III-2 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

Review of Stub Period Comparative Historical Financial Information

We have reviewed the stub period comparative historical financial information of the Project Company which comprises the statement of profit or loss and other comprehensive income, the statement of changes in equity, and the statement of cash flows for the six months ended 30 June 2016 and other explanatory information (the “ Stub Period Comparative Historical Financial Information ”). The directors of the Company are responsible for the preparation and presentation of the Stub Period Comparative Historical Financial Information in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information. Our responsibility is to express a conclusion on the Stub Period Comparative Historical Financial Information based on our review. We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued by the HKICPA. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Based on our review, nothing has come to our attention that causes us to believe that the Stub Period Comparative Historical Financial Information, for the purposes of the accountants’ report, is not prepared, in all material respects, in accordance with the basis of preparation and presentation set out in Note 2 to the Historical Financial Information.

Report on matter under the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited

Adjustments

In preparing the Historical Financial Information and Stub Period Comparative Historical Financial Information, no adjustments to the Underlying Financial Statements have been made.

BDO Limited

Certified Public Accountants

Li Pak Ki

Practising Certificate Number: P01330

Hong Kong, 24 November 2017

– III-3 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

HISTORICAL FINANCIAL INFORMATION OF THE PROJECT COMPANY

Preparation of Historical Financial Information

Set out below is the Historical Financial Information which forms an integral part of this accountants’ report.

The Underlying Financial Statements of the Project Company for the Relevant Periods, on which the Historical Financial Information is based, were prepared in accordance with Hong Kong Financial Reporting Standards (“ HKFRSs ”) issued by the HKICPA. The Underlying Financial Statements were audited by us in accordance with Hong Kong Standards on Auditing issued by the HKICPA.

The Historical Financial Information is presented in Renminbi (“ RMB ”) and all values are rounded to the nearest thousand (RMB’000) except when otherwise indicated.

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

Note Other income 6 Selling and distribution expenses Administrative expenses Finance costs 8 Loss before income tax 7 Income tax credit 9 Loss and total comprehensive income for the year/period	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 232 110 18 13 – (1,531) (1,463) (653) (327) – (3,500) (3,680) (1,931) (1,115) (915) – – – – (12,133) (4,799) (5,033) (2,566) (1,429) (13,048) 769 536 465 357 3,261 (4,030) (4,497) (2,101) (1,072) (9,787)	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 232 110 18 13 – (1,531) (1,463) (653) (327) – (3,500) (3,680) (1,931) (1,115) (915) – – – – (12,133) (4,799) (5,033) (2,566) (1,429) (13,048) 769 536 465 357 3,261 (4,030) (4,497) (2,101) (1,072) (9,787)
		(13,048) 3,261
		(9,787)

– III-4 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

STATEMENTS OF FINANCIAL POSITION

Note NON-CURRENT ASSETS Property, plant and equipment 12 Deferred tax assets 20 Land appreciation tax recoverable Deposits and other receivables 14 Total non-current assets CURRENT ASSETS Properties under development held for sale 13 Deposits and other receivables 14 Amount due from a related company 15 Cash and bank balances 17 Total current assets CURRENT LIABILITIES Trade payables 18 Other payables and accruals Pre-sales deposits Amount due to a related company 15 Amount due to a director 16 Other borrowings 19 Total current liabilities Net current (liabilities)/assets NON-CURRENT LIABILITIES Other borrowings 19 Total non-current liabilities Net liabilities EQUITY Paid-up capital 21 Accumulated losses Total deficits	31 December 2014 RMB’000 594 1,435 – – 2,029 274,240 1,126 – 8,637 284,003 110,005 14,224 21,780 – 142,899 – 288,908 (4,905) – – (2,876) 5,000 (7,876) (2,876)	As at 31 December 2015 RMB’000 359 1,971 2,317 5,236 9,883 381,204 3,634 – 1,189 386,027 110,784 2,430 114,109 2,300 78,660 95,000 403,283 (17,256) – – (7,373) 5,000 (12,373) (7,373)	31 December 2016 RMB’000 147 2,436 2,317 5,236 10,136 510,806 5,837 1,300 734 518,677 106,936 1,506 120,247 907 108,691 – 338,287 180,390 200,000 200,000 (9,474) 5,000 (14,474) (9,474)	As at 30 June 2017 RMB’000 79 5,697 2,317 5,236
				13,329
				512,297 5,778 3,000 795
				521,870
				106,930 8,714 122,214 1,911 114,691 200,000
				554,460
				(32,590)
				–
				–
				(19,261)
				5,000 (24,261)
				(19,261)

– III-5 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

STATEMENTS OF CHANGES IN EQUITY

Balance as at 1 January 2014 Loss and total comprehensive income for the year Balance as at 31 December 2014 Balance as at 1 January 2015 Loss and total comprehensive income for the year Balance as at 31 December 2015 Balance as at 1 January 2016 Loss and total comprehensive income for the year Balance as at 31 December 2016 Balance as at 1 January 2017 Loss and total comprehensive income for the period Balance as at 30 June 2017 Balance as at 1 January 2016 Loss and total comprehensive income for the period (unaudited) Balance as at 30 June 2016 (unaudited)	Paid-up capital RMB’000 (Note 21) 5,000 – 5,000 5,000 – 5,000 5,000 – 5,000 5,000 – 5,000 5,000 – 5,000	Accumulated losses RMB’000 (3,846) (4,030) (7,876) (7,876) (4,497) (12,373) (12,373) (2,101) (14,474) (14,474) (9,787) (24,261) (12,373) (1,072) (13,445)	Total RMB’000 1,154 (4,030) (2,876) (2,876) (4,497) (7,373) (7,373) (2,101) (9,474) (9,474) (9,787) (19,261) (7,373) (1,072) (8,445)

– III-6 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

STATEMENTS OF CASH FLOWS

Operating activities Loss before income tax Adjustments for: Depreciation Written off of property, plant and equipment Interest income Finance costs Operating cash flows before movements in working capital Increase in properties under development held for sale Decrease/(increase) in deposits and other receivables Increase/(decrease) in trade payables (Decrease)/increase in other payables and accruals Increase in pre-sales deposits Cash (used in)/generated from operations Land appreciation tax paid Net cash (used in)/generated from operating activities Investing activities Acquisition of property, plant and equipment Advance to a related company Interest received Net cash used in investing activities	Year ended 31 December 2014 2015 2016 RMB’000 RMB’000 RMB’000 (4,799) (5,033) (2,566) 233 234 212 – 28 – (44) (23) (18) – – – (4,610) (4,794) (2,372) (229,238) (91,436) (106,289) 20,693 (7,744) (2,203) 109,172 779 (3,848) (19,845) (11,794) (924) 21,780 92,329 6,138 (102,048) (22,660) (109,498) – (2,317) – (102,048) (24,977) (109,498) (60) (27) – – – (1,300) 44 23 18 (16) (4) (1,282)	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) (1,429) (13,048) 108 68 – – (13) – – 12,133 (1,334) (847) (105,031) (1,491) (2,205) 59 (3,847) (6) 2,237 7,208 – 1,967 (110,180) 6,890 – – (110,180) 6,890 – – (1,300) (1,700) 13 – (1,287) (1,700)	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) (1,429) (13,048) 108 68 – – (13) – – 12,133 (1,334) (847) (105,031) (1,491) (2,205) 59 (3,847) (6) 2,237 7,208 – 1,967 (110,180) 6,890 – – (110,180) 6,890 – – (1,300) (1,700) 13 – (1,287) (1,700)
			(847) (1,491) 59 (6) 7,208 1,967
			6,890 –
			6,890
			– (1,700) –
			(1,700)

– III-7 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

Financing activities Proceeds from other borrowings Repayment of other borrowings Advance from/(repayment to) a director Advance from/(repayment to) a related company Interest paid Net cash generated from/(used in) financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year/period Cash and cash equivalents at end of year/period	Year ended 31 December 2014 2015 2016 RMB’000 RMB’000 RMB’000 – 95,000 200,000 – – (95,000) 89,700 (75,304) 30,031 – 2,300 (1,393) (9,780) (4,463) (23,313) 79,920 17,533 110,325 (22,144) (7,448) (455) 30,781 8,637 1,189 8,637 1,189 734	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) 200,000 – (95,000) – 23,537 6,000 (1,968) 1,004 (10,077) (12,133) 116,492 (5,129) 5,025 61 1,189 734 6,214 795	Six months ended 30 June 2016 2017 RMB’000 RMB’000 (Unaudited) 200,000 – (95,000) – 23,537 6,000 (1,968) 1,004 (10,077) (12,133) 116,492 (5,129) 5,025 61 1,189 734 6,214 795
			(5,129)
			61 734
			795

Reconciliation of liabilities arising from financing activities

Amount due to a director Total liabilities from financing activities	At 1 January 2014 RMB’000 53,199 53,199	Cash flows RMB’000 89,700 89,700	At 31 December 2014 RMB’000 142,899
			142,899

– III-8 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

Amount due to a director* Amount due to a related company Loan from related party Loans from third parties Total liabilities from financing activities	At 1 January 2015 RMB’000 142,899 – – – 142,899	Cash flows RMB’000 (75,304) 2,300 50,000 45,000 21,996	Non-cash changes RMB’000 11,065 – – – 11,065	At 31 December 2015 RMB’000 78,660 2,300 50,000 45,000
				175,960

• An interest of RMB11,065,000 was accrued during the year.

Amount due to a director Amount due to a related company Loan from related party Loans from third parties Loans from financial institution Total liabilities from financing activities Amount due to a director Amount due to a related company Loans from financial institution Total liabilities from financing activities	At 1 January 2016 RMB’000 78,660 2,300 50,000 45,000 – 175,960 At 1 January 2017 RMB’000 108,691 907 200,000 309,598	Cash flows RMB’000 30,031 (1,393) (50,000) (45,000) 200,000 133,638 Cash flows RMB’000 6,000 1,004 – 7,004	At 31 December 2016 RMB’000 108,691 907 – – 200,000
			309,598
			At 30 June 2017 RMB’000 114,691 1,911 200,000
			316,602

– III-9 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

NOTES TO HISTORICAL FINANCIAL INFORMATION

1. INFORMATION ABOUT THE PROJECT COMPANY

The Project Company was established in the People’s Republic of China (the “ PRC ”) as a limited liability company on 18 September 2012. The address of its registered office and principal place of business is No.102, Bailongtan village, Xianghe road, Gucheng, Lijiang, China.

The principal activities of the Project Company are property development and property management.

2. BASIS OF PREPARATION AND PRESENTATION

The Historical Financial Information has been prepared in accordance with the accounting policies set out in Note 4 to the Historical Financial Information which conform with all applicable HKFRSs issued by HKICPA. In addition, the Historical Financial Information includes applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The Historical Financial Information has been prepared under the historical cost basis.

It should be noted that accounting estimates and assumptions are used in the preparation of the Historical Financial Information. Although these estimates are based on management’s best knowledge and judgement of current events and actions, actual results may ultimately differ from those estimates. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the Historical Financial Information are disclosed in Note 5.

3. ADOPTION OF NEW OR REVISED HONG KONG FINANCIAL REPORTING STANDARDS (“HKFRSs”)

The following standards and amendments to existing standards have been published, but are not yet effective for the financial year beginning on 1 January 2017 and have not been early adopted by the Project Company:

HKFRS 9	Financial Instruments 1
HKFRS 15	Revenue from Contracts with Customers 1
HKFRS 16	Leases 2
HKFRS 17	Insurance Contracts 4
Amendments to HKFRSs	Annual Improvements to HKFRSs 2014–2016 Cycle 1
Amendments to HKFRS 2	Classification and Measurement of Share-based Payment
	Transactions 1
Amendments to HKFRS 4	Applying HKFRS 9 Financial Instruments with HKFRS 4
	Insurance Contracts 1
Amendments to HKFRS 10 and	Sale or Contribution of Assets between an Investor and its
HKAS 28	Associate or Joint Venture 3
Amendments to HKFRS 15	Clarifications to HKFRS 15 Revenue from Contracts with
	Customers 1
Amendments to HKAS 40	Transfers of Investment Property 2
HK(IFRIC) – Int 22	Foreign Currency Transactions and Advance Consideration 1
HK(IFRIC) – Int 23	Uncertainty over Income Tax Treatments 2

1 Effective for annual periods beginning on or after 1 January 2018

• 2 Effective for annual periods beginning on or after 1 January 2019

• 3 No mandatory effective date yet determined but is available for early adoption 4 Effective for annual periods beginning on or after 1 January 2021

Further information about the above HKFRSs which are expected to be applicable to the Project Company is as follows:

– III-10 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

HKFRS 9 – Financial Instruments

HKFRS 9 introduces new requirements for the classification and measurement of financial assets. Debt instruments that are held within a business model whose objective is to hold assets in order to collect contractual cash flows (the business model test) and that have contractual terms that give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding (the contractual cash flow characteristics test) are generally measured at amortised cost. Debt instruments that meet the contractual cash flow characteristics test are measured at fair value through other comprehensive income (“ FVTOCI ”) if the objective of the entity’s business model is both to hold and collect the contractual cash flows and to sell the financial assets. Entities may make an irrevocable election at initial recognition to measure equity instruments that are not held for trading at FVTOCI. All other debt and equity instruments are measured at fair value through profit or loss (“ FVTPL ”).

HKFRS 9 includes a new expected credit losses impairment model for all financial assets not measured at FVTPL replacing the incurred loss model in HKAS 39 and new general hedge accounting requirements to allow entities to better reflect their risk management activities in financial statements.

HKFRS 9 carries forward the recognition, classification and measurement requirements for financial liabilities from HKAS 39, except for financial liabilities designated at FVTPL, where the amount of change in fair value attributable to change in credit risk of the liability is recognised in other comprehensive income unless that would create or enlarge an accounting mismatch. In addition, HKFRS 9 retains the requirements in HKAS 39 for derecognition of financial assets and financial liabilities.

The adoption of HKFRS 9 might have an impact on the Project Company’s financial performance and financial position, including the measurement of financial assets and disclosures. In particular, the adoption of an expected credit losses impairment model might result in earlier recognition of credit losses of the Project Company’s receivables.

HKFRS 15 – Revenue from Contracts with Customers

The new standard establishes a single revenue recognition framework. The core principle of the framework is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. HKFRS 15 supersedes existing revenue recognition guidance including HKAS 18 Revenue, HKAS 11 Construction Contracts and related interpretations.

HKFRS 15 requires the application of a 5-step approach to revenue recognition:

Step 1: Identify the contract(s) with a customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to each performance obligation Step 5: Recognise revenue when each performance obligation is satisfied

HKFRS 15 includes specific guidance on particular revenue related topics that may change the current approach taken under HKFRSs. The standard also significantly enhances the qualitative and quantitative disclosures related to revenue.

– III-11 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

The Project Company is currently assessing the impacts of adopting HKFRS 15 on the financial statements of the Project Company in 2018. Based on the preliminary assessment, the Project Company has identified the following areas which are likely to be affected:

(a) Timing of revenue recognition

The Project Company’s revenue recognition policies are disclosed in Note 4(h) to the Historical Financial Information. Currently, revenue from the sale of properties is generally recognised when the risks and rewards of ownership have passed to the customers.

Under HKFRS 15, revenue is recognised when the customer obtains control of the promised good or service in the contract. HKFRS 15 identifies 3 situations in which control of the promised good or service is regarded as being transferred over time:

• (i) When the customer simultaneously receives and consumes the benefits provided by the entity’s performance, as the entity performs;

• (ii) When the entity’s performance creates or enhances an asset (for example work in progress) that the customer controls as the asset is created or enhanced;

• (iii) When the entity’s performance does not create an asset with an alternative use to the entity and the entity has an enforceable right to payment for performance completed to date.

If the contract terms and the entity’s activities do not fall into any of these 3 situations, then under HKFRS 15 the entity recognises revenue for the sale of that good or service at a single point in time, being when control has passed. Transfer of risks and rewards of ownership is only one of the indicators that will be considered in determining when the transfer of control occurs.

As a result of this change from the risk-and-reward approach to the contract-by-contract transfer-of-control approach, it is possible that once the Project Company adopts HKFRS 15 some of the Project Company’s income from property development activities that are currently recognised at a point in time may meet the HKFRS 15 criteria for revenue recognition over time. This will depend on the terms of the sales contract and the enforceability of any specific performance clauses in that contract in the People’s Republic of China. It is also possible that for the remainder of the Project Company’s contracts, the point in time when revenue is recognised may be earlier or later than that under the current accounting policy. However, further analysis is required to determine whether this change in accounting policy may have a material impact on the amounts reported in any given financial reporting period.

(b) Significant financing component

HKFRS 15 requires an entity to adjust the transaction price for the time value of money when a contract contains a significant financing component, regardless of whether the payments from customers are received significantly in advance or in arrears. Currently, the Project Company would only apply such a policy when payments are significantly deferred, which is currently not common in the Project Company’s arrangement with its customers.

The Project Company has marketed and sold portion of its properties while the properties are still under construction.

Currently, the revenue from property sales is recognised when the property is complete, measured at the amount received from the customer, irrespective of whether the customer pays early or on completion. However, under HKFRS 15 such arrangement is likely to be regarded as including a financing component.

– III-12 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

The Project Company is in the process of assessing whether this component in the above arrangements would be significant to the contract and therefore whether, once HKFRS 15 is adopted, the transaction price would need to be adjusted for the purposes of recognising revenue. Any adjustment to the transaction price under HKFRS 15, if considered necessary, would result in interest expense being recognised while the construction work is still in progress to reflect the effect of the financing benefit obtained from the customers, with a corresponding increase to revenue on sale of properties recognised when control of the completed property is transferred to the customer.

Amendments to HKFRS 15 – Clarifications to HKFRS 15 Revenue from Contracts with Customers

The amendments to HKFRS 15 included clarifications on identification of performance obligations; application of principal versus agent; licenses of intellectual property; and transition requirements.

HKFRS 16 – Leases

HKFRS 16, which upon the effective date will supersede HKAS 17 Leases and related interpretations, introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Specifically, under HKFRS 16, a lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligation to make lease payments. Accordingly, a lessee should recognise depreciation of the right-of-use asset and interest on the lease liability, and also classifies cash repayments of the lease liability into a principal portion and an interest portion and presents them in the statement of cash flows. Also, the right-of-use asset and the lease liability are initially measured on a present value basis. The measurement includes non-cancellable lease payments and also includes payments to be made in optional periods if the lessee is reasonably certain to exercise an option to extend the lease, or to exercise an option to terminate the lease. This accounting treatment is significantly different from the lessee accounting for leases that are classified as operating leases under the predecessor standard, HKAS 17.

In respect of the lessor accounting, HKFRS 16 substantially carries forward the lessor accounting requirements in HKAS 17. Accordingly, a lessor continues to classify its leases as operating leases or finance leases, and to account for those two types of leases differently.

The Project Company expects that the adoption of HKFRS 16 will not have a significant effect on the Project Company’s financial position and performance.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Property, Plant and Equipment

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

The cost of property, plant and equipment includes its purchase price and the costs directly attributable to the acquisition of the items.

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

– III-13 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

Property, plant and equipment are depreciated so as to write off their cost or valuation net of expected residual value over their estimated useful lives on a straight-line basis. The useful lives, residual value and depreciation method are reviewed, and adjusted if appropriate, at the end of each reporting period. The useful lives are as follows:

Furniture and fixtures	20–33%
Office equipment	33%
Motor vehicles	25%

An asset is written down immediately to its recoverable amount if its carrying amount is higher than the asset’s estimated recoverable amount.

The gain or loss on disposal of an item of property, plant and equipment is the difference between the net sale proceeds and its carrying amount, and is recognised in profit or loss on disposal.

(b) Financial Instruments

(i) Financial assets

The Project Company classifies its financial assets at initial recognition, depending on the purpose for which the asset was acquired.

Loans and receivables

These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They incorporate other types of contractual monetary asset. Subsequent to initial recognition, they are carried at amortised cost using the effective interest method, less any identified impairment losses.

(ii) Impairment loss on financial assets

The Project Company assesses, at the end of reporting period, whether there is any objective evidence that financial asset is impaired. Financial asset is impaired if there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset that can be reliably estimated.

Loans and receivables

An impairment loss is recognised in profit or loss when there is objective evidence that the asset is impaired, and is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate. The carrying amount of financial asset is reduced through the use of an allowance account. When any part of financial asset is determined as uncollectible, it is written off against the allowance account for the relevant financial asset.

(iii) Financial liabilities

Financial liabilities at amortised cost are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost, using the effective interest method. The related interest expense is recognised in profit or loss.

– III-14 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

Gains or losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process.

(iv) Effective interest method

The effective interest method is a method of calculating the amortised cost of a financial asset or financial liability and of allocating interest income or interest expense over the Relevant Periods. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial asset or liability, or where appropriate, a shorter period.

(v)

Equity instruments

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

(vi) Derecognition

The Project Company derecognises a financial asset when the contractual rights to the future cash flows in relation to the financial asset expire or when the financial asset has been transferred and the transfer meets the criteria for derecognition in accordance with HKAS 39.

Financial liabilities are derecognised when the obligation specified in the relevant contract is discharged, cancelled or expires.

(c) Properties under development held for sale

Properties under development developed for future sale in the ordinary course of business are included in current assets at the lower of cost and net realisable value. It comprises the consideration for development expenditure (which includes cost of land use rights, construction costs and capitalised interest) directly contributable to the development of the properties.

(d) Cash and cash equivalents

For the purpose of the statements of cash flows, cash and cash equivalents comprise cash on hand and bank deposits, and short term highly liquid investments which are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value, and have a short maturity of generally within three months when acquired, less bank overdrafts which are repayable on demand and form an integral part of the Project Company’s cash management.

For the purpose of the statements of financial position, cash and cash equivalents comprise cash on hand and at bank, including term deposits, which are not restricted as to use.

(e) Income taxes

Income taxes for the Relevant Periods comprise current tax and deferred tax.

Current tax is based on the profit or loss from ordinary activities adjusted for items that are non-assessable or disallowable for income tax purposes and is calculated using tax rates that have been enacted or substantively enacted at the end of the Relevant Periods.

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for tax purposes. Except for recognised assets and liabilities that affect neither accounting nor taxable profits, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Deferred tax is measured at the tax rates

– III-15 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

appropriate to the expected manner in which the carrying amount of the asset or liability is realised or settled and that have been enacted or substantively enacted at the end of the Relevant Periods.

Income taxes are recognised in profit or loss except when they relate to items recognised in other comprehensive income in which case the taxes are also recognised in other comprehensive income or when they relate to items recognised directly in equity in which case the taxes are also recognised directly in equity.

(f)

Capitalisation of borrowing costs

Borrowing costs attributable directly to the acquisition, construction or production of qualifying assets which require a substantial period of time to be ready for their intended use or sale, are capitalised as part of the cost of those assets. Income earned on temporary investments of specific borrowings pending their expenditure on those assets is deducted from borrowing costs capitalised.

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

(g)

Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when the Project Company has a legal or constructive obligation arising as a result of a past event, which it is probable will result in an outflow of economic benefits that can be reliably estimated.

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

(h)

Revenue recognition

Revenue is measured at fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and sales related taxes.

Revenue from sale of properties in the ordinary course of business is recognised upon delivery of the properties to the buyers, at which time all of the following criteria are satisfied:

• the significant risks and rewards of ownership of the properties are transferred to buyers;

• neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the properties are retained;

• the amount of revenue can be measured reliably;

• it is probable that the economic benefits associated with the transaction will flow to the Project Company; and

• the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Deposits and instalments received from purchasers prior to meeting the above criteria for revenue recognition are included in the statement of financial position under current liabilities.

Interest income from a financial asset is recognised as it accrues using the effective interest method.

– III-16 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

(i) Related parties

• (a) A person or a close member of that person’s family is related to the Project Company if that person:

• (i) has control or joint control over the Project Company;

• (ii) has significant influence over the Project Company; or

• (iii) is a member of key management personnel of the Project Company or the Project Company’s parent.

• (b) An entity is related to the Project Company if any of the following conditions apply:

• (i) The entity and the Project Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

• (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

• (iii) Both entities are joint ventures of the same third party.

• (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

• (v) The entity is a post-employment benefit plan for the benefit of the employees of the Project Company or an entity related to the Project Company.

• (vi) The entity is controlled or jointly controlled by a person identified in (a).

• (vii) A person identified in (a)(i) has significant influence over the entity or is a member of key management personnel of the entity (or of a parent of the entity).

• (viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the Project Company or to the Project Company’s parent.

Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the entity and include:

• (i) that person’s children and spouse or domestic partner;

• (ii) children of that person’s spouse or domestic partner; and

• (iii) dependents of that person or that person’s spouse or domestic partner.

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgments used in preparing financial statements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

– III-17 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

The Project Company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

Impairment of properties under development held for sale

Included in the statements of financial position as at 31 December 2014, 2015 and 2016 and 30 June 2017 are properties under development held for sale with carrying amounts of RMB274,240,000, RMB381,204,000, RMB510,806,000 and RMB512,297,000 respectively. Management assessed the recoverability of the amounts based on an estimation of the net realisable values of the underlying properties which involves, inter-alia, considerable analysis of current market price of properties of a comparable standard and location, construction costs to be incurred to complete the development based on existing asset structure and a forecast of future sales based on zero growth rate of property price. If the actual net realisable values of the underlying properties are more or less than expected as a result of change in market condition and/or significant variation in the budgeted development costs, material reversal of or provision for impairment losses may result.

Recognition of deferred tax assets

The recognition of deferred tax assets requires formal assessment by the Project Company of the future profitability of related operations. In making this judgement, the Project Company evaluates, amongst other factors, the forecast financial performance and operational and financing cash flows.

6. OTHER INCOME

Penalty income * Administrative charge Bank interest income	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 101 – – – – 87 87 – – – 44 23 18 13 – 232 110 18 13 –	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 101 – – – – 87 87 – – – 44 23 18 13 – 232 110 18 13 –
		–

• Penalty income represents penalty received from contractor of the property development project due to quality of work.

7. LOSS BEFORE INCOME TAX

				Six months ended	Six months ended
	**Year **	ended 31 December		**30 **	June
	2014	2015	2016	2016	2017
	RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
				(Unaudited)
Loss before income tax is arrived at
after charging:
Depreciation of property, plant and
equipment	233	234	212	108	68
Written off of property, plant and
equipment	–	28	–	–	–
Staff costs	1,156	1,727	1,406	770	560
Operating lease rentals in respect
of office	–	69	73	34	12
Auditor’s remuneration	–	–	–	–	–

– III-18 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

8. FINANCE COSTS

Interest on amount due to a director Interest on loan from third party Interest on loan from related party Interest on loan from financial institution Less: Amount capitalised to properties under development held for sale	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 9,780 11,065 246 123 123 – 1,797 1,002 1,002 – – 2,666 1,409 1,409 – – – 20,656 7,543 12,010 9,780 15,528 23,313 10,077 12,133 (9,780) (15,528) (23,313) (10,077) – – – – – 12,133	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 9,780 11,065 246 123 123 – 1,797 1,002 1,002 – – 2,666 1,409 1,409 – – – 20,656 7,543 12,010 9,780 15,528 23,313 10,077 12,133 (9,780) (15,528) (23,313) (10,077) – – – – – 12,133
		12,133 –
		12,133

9. INCOME TAX CREDIT

No provision for PRC enterprise income tax (“ EIT ”) has been made as the Project Company had no assessable profits arising in PRC for the Relevant Periods.

A reconciliation of the income tax credit applicable to loss before income tax at statutory EIT rate in the PRC is as follows:

Loss before income tax Tax at the statutory EIT rate of 25% Tax effect of expenses not deductible for tax purpose Income tax credit	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) (4,799) (5,033) (2,566) (1,429) (13,048) (1,200) (1,258) (642) (357) (3,261) 431 722 177 – – (769) (536) (465) (357) (3,261)	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) (4,799) (5,033) (2,566) (1,429) (13,048) (1,200) (1,258) (642) (357) (3,261) 431 722 177 – – (769) (536) (465) (357) (3,261)
		(3,261) –
		(3,261)

– III-19 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

10. DIRECTOR’S AND EMPLOYEES’ EMOLUMENTS

Director’s emoluments are as follows:

Fees Mr. Fang Zhaoan Other emoluments Mr. Fang Zhaoan	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) – – – – – 83 84 84 42 37 83 84 84 42 37	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) – – – – – 83 84 84 42 37 83 84 84 42 37
		37

No remuneration was paid by the Project Company to the director as an inducement to join or upon joining the Project Company or as compensation for loss of office during the Relevant Periods.

The management considers that the executive director is the key management personnel of the Project Company.

Employees’ emoluments

The five highest paid individuals of the Project Company during the Relevant Periods do not include any director. The emoluments of the five highest paid employees of the Project Company are as follows:

Salaries and other benefits Expenses of retirement benefit plans	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 367 316 324 162 154 – – – – – 367 316 324 162 154	Year ended 31 December Six months ended 30 June 2014 2015 2016 2016 2017 RMB’000 RMB’000 RMB’000 RMB’000 RMB’000 (Unaudited) 367 316 324 162 154 – – – – – 367 316 324 162 154
		154

Emoluments of these employees are within the following bands:

							Six months ended	Six months ended
			**Year **	**ended **	31 December		30 June
			2014		2015	2016	2016	2017
							(Unaudited)
Nil	to	RMB1,000,000	5		5	5	5	5

– III-20 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

11. DIVIDEND

No dividend was paid/payable by the Project Company for the Relevant Periods.

12. PROPERTY, PLANT AND EQUIPMENT

Cost At 1 January 2014 Additions At 31 December 2014 and 1 January 2015 Additions Write-off At 31 December 2015, 31 December 2016 and 30 June 2017 Accumulated depreciation At 1 January 2014 Charge for the year At 31 December 2014 and 1 January 2015 Charge for the year Write-off At 31 December 2015 and 1 January 2016 Charge for the year At 31 December 2016 and 1 January 2017 Charge for the period At 30 June 2017 Net book value At 31 December 2014 At 31 December 2015 At 31 December 2016 At 30 June 2017	Furniture and fixtures RMB’000 2 16 18 – – 18 – 4 4 4 – 8 3 11 2 13 14 10 7 5	Office equipment RMB’000 114 44 158 27 (33) 152 25 44 69 45 (5) 109 24 133 4 137 89 43 19 15	Motor vehicles RMB’000 779 – 779 – – 779 103 185 288 185 – 473 185 658 62 720 491 306 121 59	Total RMB’000 895 60
				955 27 (33)
				949
				128 233
				361 234 (5)
				590 212
				802 68
				870
				594
				359
				147
				79

– III-21 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

13. PROPERTIES UNDER DEVELOPMENT HELD FOR SALE

Land use rights costs Other development costs Capitalised finance costs	31 December 2014 RMB’000 7,252 257,208 9,780 274,240	As at 31 December 2015 RMB’000 7,285 348,611 25,308 381,204	31 December 2016 RMB’000 7,285 454,900 48,621 510,806	As at 30 June 2017 RMB’000 7,285 456,391 48,621
				512,297

The properties under development are all located in the PRC. Properties under development held for sale which are expected to be recovered more than twelve months after the end of the reporting period are classified as current assets as it is expected to be realised in the normal operating cycle of the Project Company.

As at 31 December 2016 and 30 June 2017, the land use rights, construction in progress of the property development project in Lijiang, Yunnan Province and the equity of the equity owners, Mr. Fang Zhaoan and Mr. Xu Lebin were pledged to secure the other borrowings as set out in Note 19 to the Historical Financial Information.

14. DEPOSITS AND OTHER RECEIVABLES

Other receivables Other tax recoverable Deposits Less: Non-current portion Other tax recoverable	31 December 2014 RMB’000 65 – 1,061 1,126 – 1,126	As at 31 December 2015 RMB’000 1,569 5,236 2,065 8,870 (5,236) 3,634	31 December 2016 RMB’000 1,565 5,236 4,272 11,073 (5,236) 5,837	As at 30 June 2017 RMB’000 1,565 5,236 4,213
				11,014 (5,236)
				5,778

15. AMOUNT DUE FROM / (TO) A RELATED COMPANY

The balances with the related company are unsecured, interest-free and repayable on demand. Further details of the related company are set out in Note 23 to the Historical Financial Information.

16. AMOUNT DUE TO A DIRECTOR

The balance with a director, Mr. Fang Zhaoan, is unsecured, interest bearing at 6.15% per annum and repayable on demand.

17. CASH AND BANK BALANCES

Cash at banks earns interest at floating rates based on daily bank deposits rate. The bank balances are deposited with either state-owned banks or creditworthy banks in PRC with no recent history of default.

– III-22 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

18. TRADE PAYABLES

					As at
		**31 **	December	**31 **	December	31 December	As at
			2014		2015	2016	30 June 2017
			RMB’000		RMB’000	RMB’000	RMB’000
Trade	payables		110,005		110,784	106,936	106,930

The ageing analysis of trade payables, based on invoice date, as of the end of each of the Relevant Periods is as follows:

0–30 days 31–90 days 91–180 days Over 180 days OTHER BORROWINGS Loan from third party repayable Within one year Loan from related party repayable Within one year Loan from financial institution repayable Within one year In the second year	31 December 2014 RMB’000 3,632 103,361 3,012 – 110,005 31 December 2014 RMB’000 – – – – – –	As at 31 December 2015 RMB’000 1,940 – 164 108,680 110,784 As at 31 December 2015 RMB’000 45,000 50,000 – – – 95,000	31 December 2016 RMB’000 – – – 106,936 106,936 31 December 2016 RMB’000 – – – 200,000 200,000 200,000	As at 30 June 2017 RMB’000 – – – 106,930
				106,930
				As at 30 June 2017 RMB’000 –
				–
				200,000 –
				200,000
				200,000

19. OTHER BORROWINGS

Notes:

• (a) Loan from third party as at 31 December 2015 amounted to RMB45,000,000 was unsecured, carried interest at 6.72% per annum and repayable within one year.

• (b) Loan from related party as at 31 December 2015 amounted to RMB50,000,000 was unsecured, carried interest at 8.5% per annum and repayable within one year.

– III-23 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

• (c) Loan from financial institution as at 31 December 2016 and 30 June 2017 amounted to RMB200,000,000 was secured by the land use rights, construction in progress of the property development project in Lijiang, Yunnan Province and equity of the equity owners, Mr. Fang Zhaoan and Mr. Xu Lebin. The loan carried interest at 12% per annum and will be fully repayable in February 2018.

20. DEFERRED TAX ASSETS

The component of deferred tax assets recognised in the statements of financial position and the movements during the Relevant Periods are as follows:

At 1 January 2014 Credited to profit or loss for the year At 31 December 2014 and 1 January 2015 Credited to profit or loss for the year At 31 December 2015 and 1 January 2016 Credited to profit or loss for the year At 31 December 2016 and 1 January 2017 Credited to profit or loss for the period At 30 June 2017	Tax loss RMB’000 666 769
	1,435 536
	1,971 465
	2,436 3,261
	5,697

21. PAID-UP CAPITAL

					As at
		**31 **	December	**31 **	December	31 December	As at
			2014		2015	2016	30 June 2017
			RMB’000		RMB’000	RMB’000	RMB’000
Paid-up	capital		5,000		5,000	5,000	5,000

– III-24 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

22. COMMITMENTS

Capital commitments

As at the end of each of the Relevant Periods, the Project Company had capital commitments in respect of property development as follows:

								As at
					**31 **	December	**31 **	December	31 December	As at
						2014		2015	2016	30 June 2017
						RMB’000		RMB’000	RMB’000	RMB’000
Contracted	but	not	provided	for		264,557		199,358	93,069	24,534

Operating lease commitments

The Project Company leases certain office under operating lease commitments, with remaining lease terms ranging from four months to one year.

As at 31 December 2014, 2015 and 2016 and 30 June 2017, the Project Company had total future minimum lease payments under non-cancellable operating leases falling due as follows:

						As at
			**31 **	December	**31 **	December	31 December	As at
				2014		2015	2016	30 June 2017
				RMB’000		RMB’000	RMB’000	RMB’000
Within	one	year		56		13	12	–

23. RELATED PARTY TRANSACTIONS

In addition to the transactions detailed elsewhere in the Historical Financial Information, the Project Company had the following transactions with related parties during the Relevant Periods:

	**Year **	ended 31 December		Six months ended 30 June	Six months ended 30 June	Six months ended 30 June	Six months ended 30 June
	2014	2015	2016		2016		2017
	RMB’000	RMB’000	RMB’000		RMB’000	RMB’000
				(Unaudited)
Interest on amount due to
Mr. Fang Zhaoan	9,780	11,065	246		123		123
Interest on loan from related party
being company controlled by
Mr. Fang Zhaoan who owned 95%
of the Project Company	–	2,666	1,409		–		–

– III-25 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

The Project Company had the following balances with related party during the Relevant Periods:

		As at		As at
	31 December	31 December	31 December	30 June
	2014	2015	2016	2017
	RMB’000	RMB’000	RMB’000	RMB’000
Amount due from a related
party:
A company controlled by key
management personnel of
the Project Company *	–	–	1,300	3,000

The maximum balances outstanding during the year ended 31 December 2016 and the six months ended 31 June 2017 amounted to RMB1,300,000 and RMB3,000,000 respectively.

Amount due to a related party:

A company controlled by key
management personnel of
the Project Company *	–	2,300	907	1,911

• Mr. Jin Qingfeng, who owned 95% of 上海恒百商業經營有限公司麗江分公司 (“ Shanghai Hengbai Management Service Company Lijiang Branch”) (“Shanghai Hengbai** ”), was the Chief Executive Officer of the Project Company during the Relevant Periods. Shanghai Hengbai is a company which will provide the management service for the operation of the commercial walkway of the property project upon completion for the Project Company.

• ** For identification purpose only

Compensation of key management personnel

The remuneration of director and other member of key management personnel during the Relevant Periods was as follows:

					Six months ended	Six months ended
		**Year **	ended 31 December		**30 **	June
		2014	2015	2016	2016	2017
		RMB’000	RMB’000	RMB’000	RMB’000	RMB’000
					(unaudited)
Short-term	benefits	154	148	156	78	37

Further details of director’s emoluments are included in Note 10 the Historical Financial Information.

24. FINANCIAL INSTRUMENTS BY CATEGORY

The carrying amounts of each of the categories of financial instruments as at the end of each of the Relevant Periods are as follows:

Financial assets Loans and receivables Deposits and other receivables Amount due from a related company Cash and bank balances	31 December 2014 RMB’000 1,126 – 8,637 9,763	As at 31 December 2015 RMB’000 11,187 – 1,189 12,376	31 December 2016 RMB’000 13,390 1,300 734 15,424	As at 30 June 2017 RMB’000 13,331 3,000 795
				17,126

– III-26 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

Financial liabilities Financial liabilities measured at amortised cost Trade payables Other payables and accruals Amount due to a related company Amount due to a director Other borrowings	31 December 2014 RMB’000 110,005 14,224 – 142,899 – 267,128	As at 31 December 2015 RMB’000 110,784 2,430 2,300 78,660 95,000 289,174	31 December 2016 RMB’000 106,936 1,506 907 108,691 200,000 418,040	As at 30 June 2017 RMB’000 106,930 8,714 1,911 114,691 200,000
				432,246

Financial instruments not measured at fair value include deposits and other receivables, cash and cash equivalents, amount due from/(to) a related company, trade payables, other payables and accruals, amount due to a director and other borrowings.

Due to their short term nature or the effect of discounting is not material, the carrying values of these financial instruments approximate their fair values.

25. FINANCIAL RISK MANAGEMENT

The Project Company’s principal financial instruments comprise cash and cash equivalents, interestbearing other borrowings. The main purpose of these financial instruments is to raise finance for the operation.

Management meets periodically to analyse and formulate measures to manage the Project Company’s exposure to financial risk, including principally credit risk, interest rate risk and liquidity risk. The Project Company has no significant exposure to equity price risk and foreign currency risk. Generally, the Project Company employs a conservative strategy regarding its risk management.

Credit risk

Credit risk refers to the risk that the counterparty to a financial instrument would fail to discharge its obligation under the terms of the financial instrument and cause a financial loss to the Project Company. The carrying amounts of amounts due from related parties, other receivables and cash and cash equivalents included in the statements of financial position represent the Project Company’s maximum exposure to credit risk in relation to its financial assets.

In order to minimise the credit risk, management of the Project Company has delegated a team responsible for determination of credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. The Project Company reviews the recoverable amount of each individual debt as at the end of each Relevant Periods to ensure that adequate impairment losses are made for irrecoverable amounts. In this regard, the directors of the Project Company consider that the Project Company’s credit risk is significantly reduced.

The credit risk on cash and cash equivalents is limited because the counterparties are either state-owned banks or creditworthy banks in the PRC with no recent history of default.

Interest rate risk

Other than deposits held in banks, the Project Company does not have significant interest-bearing assets. All interest-bearing financial liabilities carried interest at fixed rate. Therefore, the directors consider that the Project Company’s exposure to interest rate risk is insignificant.

Liquidity risk

The Project Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of interest-bearing other borrowing.

– III-27 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

The maturity profile of the Project Company’s financial liabilities as at the end of each of the Relevant Periods, based on the contractual undiscounted cash flows, was as follows:

31 December 2014 Trade payables Other payables and accruals Amount due to a director 31 December 2015 Trade payables Other payables and accruals Amount due to a related company Amount due to a director Other borrowings 31 December 2016 Trade payables Other payables and accruals Amount due to a related company Amount due to a director Other borrowings	Carrying amount Total contractual undiscounted cash flows RMB’000 RMB’000 110,005 110,005 14,224 14,224 142,899 142,899 267,128 267,128 Carrying amount Total contractual undiscounted cash flows RMB’000 RMB’000 110,784 110,784 2,430 2,430 2,300 2,300 78,660 78,660 95,000 99,464 289,174 293,638 Carrying amount Total contractual undiscounted cash flows On demand or within 1 year RMB’000 RMB’000 RMB’000 106,936 106,936 106,936 1,506 1,506 1,506 907 907 907 108,691 108,691 108,691 200,000 223,911 21,699 418,040 441,951 239,739	On demand or within 1 year RMB’000 110,005 14,224 142,899	On demand or within 1 year RMB’000 110,005 14,224 142,899
		267,128
		On demand or within 1 year RMB’000 110,784 2,430 2,300 78,660 99,464
			293,638
			Within 1 year to 2 years RMB’000 – – – – 202,212
			202,212

– III-28 –

APPENDIX III

FINANCIAL INFORMATION OF THE PROJECT COMPANY

30 June 2017 Trade payables Other payables and accruals Amount due to a related company Amount due to a director Other borrowings	Carrying amount Total contractual undiscounted cash flows RMB’000 RMB’000 106,930 106,930 8,714 8,714 1,911 1,911 114,691 114,691 200,000 211,901 432,246 444,147	On demand or within 1 year RMB’000 106,930 8,714 1,911 114,691 211,901 444,147

26. CAPITAL MANAGEMENT

The primary objectives of the Project Company’s capital management are to safeguard its ability to continue as a going concern in order to provide return for equity owners and to maintain an optimal structure to reduce cost of capital.

The Project Company manages its capital structure and makes adjustments to it in the light of changes in economic conditions. To maintain or adjust the capital structure, the Project Company may obtain new borrowings or reduce its borrowings. No changes were made in the objectives, policies and processes during the Relevant Periods.

The Project Company monitors capital using a debt ratio, which is total liabilities divided by total assets. The Project Company’s policy is to maintain a stable debt ratio. The debt ratios as at the end of each of the Relevant Periods were as follows:

Total liabilities Total assets Debt ratio	31 December 2014 RMB’000 288,908 286,032 1.01	As at 31 December 2015 RMB’000 403,283 395,910 1.02	31 December 2016 RMB’000 538,287 528,813 1.02	As at 30 June 2017 RMB’000 554,460
				535,199
				1.04

27. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Project Company in respect of any period subsequent to 30 June 2017 and up to the date of this report.

– III-29 –

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET GROUP

(I) MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET COMPANY

Set out below is the management discussion and analysis on the Target Company for the period since the establishment of the Target Company (i.e. 20 April 2015) to 31 December 2015, the year ended 31 December 2016 and the six months ended 30 June 2017.

Business Review

The Target Company was established under the laws of the PRC on 20 April 2015 with limited liability and was engaged in P2P lending business in the PRC. The revenue and the results of the Target Company are nil and loss of RMB16,000 for the period since establishment to 31 December 2015 respectively, RMB178,000 and profit of RMB10,000 for the year ended 31 December 2016 respectively; and RMB2,000 and loss of RMB24,000 for the six months ended 30 June 2017 respectively.

Financial Overview

As at 31 December 2015 and 2016, and at 30 June 2017, the total assets of the Target Company were approximately RMB369,000, RMB9,739,000 and RMB7,000,000 respectively.

As at 31 December 2015 and 2016, and at 30 June 2017, the total liabilities of the Target Company were approximately RMB385,000, RMB9,745,000 and RMB7,030,000 respectively.

As at 31 December 2015 and 2016, and at 30 June 2017, the net liabilities of the Target Company were approximately RMB16,000, RMB6,000 and RMB30,000 respectively.

Liquidity and Financial Resources

The Target Company generally finances its daily operations from the business partners of the shareholders. As at 31 December 2015 and 2016, and at 30 June 2017, there were no unutilised banking facilities.

Capital Structure

The registered capital is RMB100 million. As at 31 December 2015 and 2016, and at 30 June 2017, no capital has been paid up.

Employees

As at 31 December 2015 and 2016 and at 30 June 2017, the Target Company has not hired any employees.

– IV-1 –

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET GROUP

Significant Investments, Material Acquisition and Disposal and Future Plans for Material Investments or Capital Assets

As at 31 December 2015 and 2016 and at 30 June 2017, the Target Company has no significant investments, material acquisition and disposal and future plans for material investments or capital assets, save for entering into Project Company Acquisition Agreement.

Charge of Assets

During the period ended 31 December 2015, the year ended 31 December 2016 and for the six months ended 30 June 2017, the Target Company had no charge of assets.

Debt Ratio

The debt ratio of the Target Company, which is calculated as total liabilities divided by total assets of the Target Company is approximately 104.34% as at 31 December 2015, 100.06% as at 31 December 2016 and 100.43% as at 30 June 2017.

Foreign Exchange and Interest Rate Exposure

The Target Company’s transactions are mainly denominated in RMB, being the functional currency of the Target Company. Cash and bank balances of the Target Company are also denominated in RMB. During the period ended 31 December 2015, the year ended 31 December 2016 and the six months ended 30 June 2017, the Target Company did not experience significant exposure to the exchange rate and interest rate fluctuations.

Contingent Liabilities

As at 31 December 2015 and 2016 and at 30 June 2017, the Target Company did not have any material contingent liabilities.

Capital Commitment

The Target Company has no capital commitment on 31 December 2015 and 2016. As at 30 June 2017, the Target Company has capital expenditure in respect of acquisition of the Project Company of approximately RMB353 million.

– IV-2 –

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET GROUP

(II) MANAGEMENT DISCUSSION AND ANALYSIS ON THE PROJECT COMPANY

Set out below is the management discussion and analysis on the Project Company for each of the three years ended 31 December 2014, 2015 and 2016 and the six months ended 30 June 2017.

Business Review

The Project Company was established under the laws of the PRC on 18 September 2012 with limited liability and was engaged in the development of the Project. There was no trading during the three years ended 31 December 2014, 2015 and 2016 and the six months ended 30 June 2017, and recorded a loss of RMB4,030,000, RMB4,497,000, RMB2,101,000 and RMB9,787,000 during the years ended 31 December 2014, 2015 and 2016 and the six months ended 30 June 2017 respectively.

Financial Overview

As at 31 December 2014, 2015 and 2016, and at 30 June 2017, the total assets of the Project Company were approximately RMB286,032,000, RMB395,910,000, RMB528,813,000 and RMB535,199,000 respectively.

As at 31 December 2014, 2015 and 2016, and at 30 June 2017, the total liabilities of the Project Company were approximately RMB288,908,000, RMB403,283,000, RMB538,287,000 and RMB554,460,000 respectively.

As at 31 December 2014, 2015 and 2016, and at 30 June 2017, the net liabilities of the Project Company were approximately RMB2,876,000, RMB7,373,000, RMB9,474,000 and RMB19,261,000 respectively.

Liquidity and Financial Resources

The Project Company generally finances its daily operations from the shareholders’ fund and the director of the Project Company, related companies and other borrowings. As at 31 December 2014, 2015 and 2016, and at 30 June 2017, there were no unutilised banking facilities.

Capital Structure

As at 31 December 2014, 2015 and 2016, and at 30 June 2017, the registered and issued capital is RMB5 million.

Employees

As at 31 December 2014, 2015 and 2016 and at 30 June 2017, the Project Company has 45, 55, 42 and 12 employees respectively.

– IV-3 –

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET GROUP

Significant Investments, Material Acquisition and Disposal and Future Plans for Material Investments or Capital Assets

Except for the investment in the Project, there was no other significant investments, material acquisition and disposal and future plans for material investments or capital assets for the three years ended 31 December 2014, 2015 and 2016 and the six months ended 30 June 2017.

Charge of Assets

During the three years ended 31 December 2014, 2015 and 2016 and for the six months period ended 30 June 2017, the properties under development of the Project Company has been charged for the facility granted to the Project Company.

Debt Ratio

The debt ratio of the Project Company, which is calculated as total liabilities divided by total assets of the Project Company is approximately 101.01% as at 31 December 2014, 101.86% as at 31 December 2015, 101.79% as at 31 December 2016 and 103.60% as at 30 June 2017.

Foreign Exchange Exposure

The Project Company’s transaction is mainly denominated in RMB, being the functional currencies of the Project Company. Cash and bank balances of the Project Company are also denominated in RMB. During the three years ended 31 December 2014, 2015, and 2016 and the six months period ended 30 June 2017, the Project Company did not experience significant exposure to the exchange rate and interest rate fluctuations.

Contingent Liabilities

According to the approval by the People’s Air Defence Office of Yunnan Province, the gross floor area of the Project Company’s property development project shall be 34,660 sq. m. with a people’s air defense work structure of 18,430 sq. m.. The actual gross floor area of the property development project exceeds the approved gross floor area by approximately 1,923 sq. m. and the actual size of the people’s air defense work structure is smaller than the approved size by approximately 4,700 sq. m. Additional fee and/or compensation may be payable by the Project Company for the excess actual gross floor area and the shortfall of the actual gross floor area of the people’s air defense work structure.

Save as disclosed above, as at 31 December 2014, 2015 and 2016 and at 30 June 2017, the Project Company did not have any material contingent liabilities.

– IV-4 –

APPENDIX IV

MANAGEMENT DISCUSSION AND ANALYSIS ON THE TARGET GROUP

Capital Commitment

The Project Company has capital expenditure in respect of the property development. As at 31 December 2014, 2015, 2016 and the six months period ended 30 June 2017 were approximately to RMB264,557,000, RMB199,358,000, RMB93,069,000 and RMB24,534,000 respectively.

– IV-5 –

APPENDIX V

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

A. UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE ENLARGED GROUP

Introduction

The following is an illustrative and unaudited pro forma consolidated statement of financial position as at 30 June 2017 (the “ Unaudited Pro Forma Financial Information ”) of the Superactive Group Company Limited (the “ Company ”) and its subsidiaries (together the “ Group ”), as enlarged by the proposed acquisition of i) the entire equity interest in 深圳市前海萬客金融服務有限 公司 (Shenzhen City Qianhai Wanke Financial Services Company Limited) (the “ Target Company ”); and ii) the entire equity interest in 麗江華歐房地產置業有限公司 (Lijiang Hua Ou Real Estate Company Limited) (the “ Project Company ”) through The Project Company Acquisition Agreement with Project Vendor A and Project Vendor B as defined in this Circular (collectively the “ Acquisition ”). The Group as enlarged by the Acquisition are hereinafter collectively referred to as the “Enlarged Group”. The Unaudited Pro Forma Financial Information has been prepared by the directors of the Company (the “ Directors ”) in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for the purpose of illustrating the effect of the Acquisition to the Group.

The Unaudited Pro Forma Financial Information of the Enlarged Group presented below is prepared to illustrate the financial position of the Enlarged Group as if the Acquisition had been completed on 30 June 2017.

The Unaudited Pro Forma Financial Information has been prepared by the Directors for illustrative purpose only and is based on a number of assumptions, estimates, uncertainties and currently available information. Accordingly, the Unaudited Pro Forma Financial Information does not purport to describe the actual financial position of the Enlarged Group that would have been attained had the Acquisition been completed on 30 June 2017 nor purport to predict the Enlarged Group’s future financial position of operations.

The Unaudited Pro Forma Financial Information has been prepared based upon the unaudited consolidated statement of financial position of the Group as at 30 June 2017 as set out in the Group’s interim report, the statements of financial position of the Target Company and the Project Company (together referred to as the “ Target Group ”) as at 30 June 2017 as set out in the Accountants’ Report of the Target Company and the Project Company set out in Appendix II and Appendix III respectively to this Circular, after giving effect to the unaudited pro forma adjustments as described in the accompanying notes.

The Unaudited Pro Forma Financial Information should be read in conjunction with the historical financial information of the Enlarged Group as set out in the published interim report of the Group for the six months ended 30 June 2017, the Accountants’ Reports on the Target Group as set out in Appendices II and III to this Circular, and other financial information included elsewhere in the Circular.

• For identification purpose only

– V-1 –

APPENDIX V

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Unaudited	pro forma	consolidated	statement	of financial	position	of the	Enlarged	Group	after the	Acquisition	HK$’000			201,198	–	174,812	6,561	2,668	6,032	63,348	454,619		19,190		496,398	6,652	62,386		3,455	105,588	693,669
								Unaudited	pro forma	adjustment	HK$’000	Note 12		–	–	–	–	–	–	–	–		–		–	–	–		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 11		–	(437,615)	–	–	–	–	–	(437,615)		–		–	–	–		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 10		–	–	–	–	–	–	–	–		–		–	–	–		–	336,300	336,300
								Unaudited	pro forma	adjustment	HK$’000	Note 9		–	(161,227)	–	–	–	–	–	(161,227)		–		–	–	–		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 8		–	–	–	–	–	–	–	–		–		–	–	(155,392)		–	–	(155,392)
								Unaudited	pro forma	adjustment	HK$’000	Note 7		–	–	–	–	–	–	–	–		–		–	–	–		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 6		–	–	–	–	–	–	–	–		–	(93,573)		–	155,392		–	–	61,819
								Unaudited	pro forma	adjustment	HK$’000	Note 5		–	575,810	–	–	–	–	–	575,810		–		–	(8,061)	–		–	(314,393)	(322,454)
								Unaudited	pro forma	adjustment	HK$’000	Note 4		–	23,032	–	–	–	–	–	23,032		–		–	–	–		–	–	–
										Sub-total	HK$’000			201,198	–	174,812	6,561	2,668	6,032	63,348	454,619		19,190		589,971	14,713	62,386		3,455	83,681	773,396
							Project	Company	30 June	2017	HK$’000	Note 3		91	–	–	6,561	2,668	6,032	–	15,352		–		589,971	6,652	–		3,455	916	600,994
							Target	Company	30 June	2017	HK$’000	Note 2		–	–	–	–	–	–	–	–		–		–	8,061	–		–	–	8,061
								The Group	30 June	2017	HK$’000	Note 1		201,107	–	174,812	–	–	–	63,348	439,267		19,190		–	–	62,386		–	82,765	164,341
													Non-current assets	Property, plant and equipment	Investment in a subsidiary	Interest in an associate	Deferred tax assets	Land appreciation tax recoverable	Deposits and other receivables	Goodwill		Current assets	Inventories	Properties under development held for sale		Prepayment and deposit	Trade and other receivables	Amount due from a related	company	Cash and cash equivalents

– V-2 –

APPENDIX V

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Unaudited	pro forma	consolidated	statement	of financial	position	of the	Enlarged	Unaudited Group	pro forma after the	adjustment Acquisition	HK$’000 HK$’000	Note 12		1,365 64,816	– 2,060	– –	– 40,000	– –	– –		– 1,727	– –	– 10,884	1,365 119,487	(1,365) 574,182	(1,365) 1,028,801		– 115,161	– 830	– 115,991
								Unaudited	pro forma	adjustment	HK$’000	Note 11		–	–	–	–	–	–		–	–	–	–	–	(437,615)		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 10		–	–	–	–	–	–		–	–	–	–	336,300	336,300		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 9		(161,227)	–	–	–	–	(48,191)		–	–	–	(209,418)	209,418	48,191		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 8		(69,302)	–	–	–	(2,201)	(83,889)		–	–	–	(155,392)	–	–		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 7		(92,130)	–	–	–	–	–		–	(230,324)	–	(322,454)	322,454	322,454		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 6		28,254	–	(140,744)	–	–	–		–	–	–	(112,490)	174,309	174,309		–	–	–
								Unaudited	pro forma	adjustment	HK$’000	Note 5		161,227	–	–	–	–	–		–	–	–	161,227	(483,681)	92,129		92,129	–	92,129
								Unaudited	pro forma	adjustment	HK$’000	Note 4		–	–	–	–	–	–		–	–	–	–	–	23,032		23,032	–	23,032
										Sub-total	HK$’000			196,629	2,060	140,744	40,000	2,201	132,080		1,727	230,324	10,884	756,649	16,747	471,366		–	830	830
							Project	Company	30 June	2017	HK$’000	Note 3		133,178	–	140,744	–	2,201	132,080		–	230,324	–	638,527	(37,533)	(22,181)		–	–	–
							Target	Company	30 June	2017	HK$’000	Note 2		8,096	–	–	–	–	–		–	–	–	8,096	(35)	(35)		–	–	–
								The Group	30 June	2017	HK$’000	Note 1		55,355	2,060	–	40,000	–	–		1,727	–	10,884	110,026	54,315	493,582		–	830	830
													Current liabilities	Trade and other payables	Deferred revenue	Pre-sale deposits	Amount due to a shareholder	Amount due to a related company	Amount due to a director	Amounts due to non-controlling	interests	Bank and other borrowings	Tax payables		Net current assets/(liabilities)	Total assets less current liabilities	Non-current liabilities	Other payables	Deferred tax liabilities

– V-3 –

APPENDIX V

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Unaudited	pro forma	consolidated	statement	of financial	position	of the	Target Project Enlarged	The Group Company Company Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Group	30 June 30 June 30 June pro forma pro forma pro forma pro forma pro forma pro forma pro forma pro forma pro forma after the	2017 2017 2017 Sub-total adjustment adjustment adjustment adjustment adjustment adjustment adjustment adjustment adjustment Acquisition	HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000	Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Note 11 Note 12	Net assets/(liabilities) 492,752 (35) (22,181) 470,536 – – 174,309 322,454 – 48,191 336,300 (437,615) (1,365) 912,810		Capital and Reserves	Share capital 135,505 – 5,758 141,263 – – – – – – 67,260 (5,758) – 202,765	Reserves 362,631 (35) (27,939) 334,657 – – 174,309 322,454 – 48,191 269,040 (431,857) (1,365) 715,429	Total equity attributable to	owners of the Company 498,136 (35) (22,181) 475,920 – – 174,309 322,454 – 48,191 336,300 (437,615) (1,365) 918,194	Non-controlling interests (5,384) – – (5,384) – – – – – – – – – (5,384)	Total equity 492,752 (35) (22,181) 470,536 – – 174,309 322,454 – 48,191 336,300 (437,615) (1,365) 912,810		Notes	(1) The amounts are extracted from the unaudited consolidated statement of financial position of the Group as at 30 June 2017 as set out in the Group’s interim report.	(2) The amounts are derived from the Accountants’ Report on the Target Company as set out in Appendix II to this Circular, and are translated to Hong Kong dollars	at the exchange rate as stated in Note 13 to the unaudited pro forma consolidated statement of financial position of the Enlarged Group as at 30 June 2017.	(3) The amounts are derived from the Accountants’ Report on the Project Company as set out in Appendix III to this Circular, and are translated to Hong Kong dollars	at the exchange rate as stated in Note 13 to the unaudited pro forma consolidated statement of financial position of the Enlarged Group as at 30 June 2017.	(4) Pursuant to the Sale and Purchase Agreement, the aggregate consideration payable by the Group to the Vendors shall be RMB20,000,000 (equivalent to	approximately HK$23,032,000) on the date falling two years from the date of signing of the Sale and Purchase Agreement.

– V-4 –

APPENDIX V

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

• (5) Pursuant to the Project Company Acquisition Agreement, the total consideration is RMB500,000,000 (equivalent to approximately HK$575,810,000), which shall be settled by (a) a refundable deposit of RMB7,000,000 (equivalent to approximately HK$8,061,000) (will be refunded in the settlement of the second instalment); (b) the second instalment of RMB280,000,000 (equivalent to approximately HK$322,454,000); (c) the third instalment of RMB140,000,000 (equivalent to approximately HK$161,227,000) (settled by payment to the Project Vendors the net amount of the accounts receivable which includes the balance payment of the Sold Premises after utilising the funds from such accounts receivable to settle the Assumed Liabilities. No further amount is payable by the Target Company to the Project Vendors if the net amount of the accounts receivable is less than RMB140,000,000 (equivalent to approximately HK$161,227,000); and (d) the balance of consideration of RMB80,000,000 (equivalent to approximately HK$92,129,000).

• (6) Assuming the Project was completed and all the buyers of the Sold Premises took possession of the Sold Premises on 30 June 2017, the adjustment represents 1) the estimated costs to complete the Project of approximately HK$28,254,000; 2) recognition of revenue from the sales of the Sold Premises of approximately HK$296,136,000; cost of the Sold Premises of approximately HK$121,827,000 is transferred from properties under development held for sale to cost of sales (based on the total cost of properties under development held for sale in the proportion of gross floor area of the Sold Premises to the total saleable area of the Project); Trade receivables of approximately HK$155,392,000 are recognised and pre-sale deposits of approximately HK$140,744,000 were derecognised and transferred to revenue.

• (7) Pursuant to Project Company Acquisition Agreement, the second instalment should be applied to 1) settle the Huarong Loan; 2) repay the deposit of HK$8,061,000 referred to in note (5) above; 3) settlement of transaction fee and 4) payment of the construction cost payable. The adjustment represents the settlement of 1) the Huarong Loan included in other borrowings of approximately HK$230,324,000 and 2) construction cost payable included in trade and other payables of approximately HK$92,130,000 by Project Vendor A and Project Vendor B after receipt of 2nd instalment from the Target Company.

• (8) The adjustment represents the offset of trade receivables from the Sold premises and Assumed Liabilities in accordance with the third instalment of the Project Company Acquisition Agreement as detailed in note (5) above.

• (9) Assumed Liabilities

Trade and other payables Amount due to a related company Amount due to a director	As at 30 June 2017 HK$’000 133,178 2,201 132,080 267,459	Additional cost to complete the Project as set out in unaudited pro forma adjustment under note (6) HK$’000 28,254 – – 28,254	Settlement of Assumed Liabilities as set out in unaudited pro forma adjustments under notes (7) (8) HK$’000 HK$’000 (92,130) (69,302) – (2,201) – (83,889) (92,130) (155,392)	Unsettled Assumed Liabilities HK$’000 – – 48,191
				48,191

As the unsettled Assumed Liabilities exceeded the receivables by approximately HK$48,191,000, the total consideration is adjusted downward by RMB140,000,000 (equivalent to approximately HK$161,227,000) as such amount will not be paid. Pursuant to the Project Company Acquisition Agreement, any unsettled Assumed Liabilities will be borne by Project Vendor A and Project Vendor B and the exceeded amount of HK$48,191,000 is adjusted in accordance with the Project Company Acquisition Agreement.

– V-5 –

APPENDIX V UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

• (10) This adjustment represents the financing of the Acquisition by the Company’s open offer which was completed on 26 October 2017.

• (11) Upon completion of the Acquisition, the identifiable assets and liabilities of the Target Company and the Project Company will be accounted for in the consolidated financial statements of the Enlarged Group at their fair values as required by the acquisition method in accordance with HKFRS 3 (Revised) “Business Combinations”. For the purpose of the unaudited pro forma financial information of the Enlarged Group and for illustrative purpose only, the Group has carried out a provisional purchase price allocation exercise in accordance with HKFRS 3 (Revised). No fair value adjustment has been applied to the Target Company’s identifiable assets and liabilities, as the carrying values of the Target Company’s assets and liabilities approximate their fair values. The Acquisition resulted in gain on bargain purchase of approximately HK$85.1 million as the completion of the Project required significant capital expenditure but the Project Vendors are short of the required financial resources. Details of the identifiable assets and liabilities of the Project Company accounted for in the unaudited pro forma consolidated statement of financial position of the Enlarged Group and the calculation of gain on bargain purchase are as follows:

The Target Company and the Project Company Property, plant and equipment Deferred tax assets Land appreciation tax recoverable Deposit and other receivables Properties under development held for sale (Note) Prepayment and deposit Trade and other receivables Amount due from a related company Cash and cash equivalents Trade and other payables Pre-sales deposits Amount due to a related company Amount due to a director Bank and other borrowings	Carrying values HK$’000 91 6,561 2,668 6,032 589,971 6,652 – 3,455 916 (133,213) (140,744) (2,201) (132,080) (230,324) (22,216)	Estimated cost to complete the Project as set out in unaudited pro forma adjustment note (6) HK$’000 – – – – 28,254 – – – – (28,254) – – – – –	Recognition of sales of Sold Premises as set out in unaudited pro forma adjustment note (6) HK$’000 – – – – (121,827) – 155,392 – – – 140,744 – – – 174,309	Settlement of Huarong Loan and Assumed Liabilities as set out in unaudited pro forma adjustment note (7) HK$’000 – – – – – – – – – 92,130 – – – 230,324 322,454	Settlement of Assumed Liabilities as set out in unaudited pro forma adjustment note (8) HK$’000 – – – – – – (155,392) – – 69,302 – 2,201 83,889 – –	Adjustment of unsettled Assumed Liabilities as set out in unaudited pro forma adjustment note (9) HK$’000 – – – – – – – – – – – – 48,191 – 48,191	Fair values HK$’000 91 6,561 2,668 6,032 496,398 6,652 – 3,455 916 (35) – – – –
							522,738

– V-6 –

APPENDIX V UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

• Note: The fair value of the Project was estimated at RMB690,000,000 (equivalent to HK$794,618,000) based on the valuation report prepared by an independent valuer, Knight Frank Petty Limited, as set out in Appendix VI of this Circular. As the Sold Premises have been sold at a consideration of RMB258,444,000 (equivalent to HK$297,629,000), the fair value of the Unsold Premises was estimated at the remaining value which was RMB431,556,000 (equivalent to HK$496,989,000). As the difference of HK$591,000 between the estimated fair value of HK$496,989,000 and carrying value of the Unsold Premises of HK$496,398,000 was considered immaterial by the directors of the Company, no fair value adjustment was made to the carrying value of the properties under development held for sale.

Total Consideration for: The Target Company The Project Company Less: Adjustment in consideration (note 9) Less: Fair value of identifiable net assets of the Target Company and the Project Company Gain on bargain purchase	HK$’000 23,032 575,810 (161,227)
	437,615 (522,738)
	85,123

Since the amount of the relative fair value of assets acquired and liabilities assumed at the Long Stop Date may be substantially different from their relative fair values used in the unaudited pro forma statement of financial position of the Enlarged Group, the respective values of the assets and liabilities to be recorded in the consolidated financial statements of the Group for subsequent period may be different from the amounts shown in this appendix.

• (12) The adjustment represents the estimated amounts regarding the legal and professional fees and other expenses incurred for the Acquisition of approximately HK$1,365,000.

• (13) For the purpose of the unaudited pro forma consolidated statement of financial position, all transactions and balances stated in Renminbi have been translated to Hong Kong dollars at the exchange rate of RMB1:HK$1.15162.

• (14) Apart from the above, no adjustment has been made to the Unaudited Pro Forma Financial Information to reflect any trading results or other transactions of the Group, the Target Company and the Project Company entered into subsequent to 30 June 2017.

– V-7 –

APPENDIX V

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

==> picture [79 x 64] intentionally omitted <==

==> picture [100 x 57] intentionally omitted <==

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

TO THE DIRECTORS OF SUPERACTIVE GROUP COMPANY LIMITED

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Superactive Group Company Limited (the “ Company ”) and its subsidiaries (hereinafter collectively referred to as the “ Group ”) by the directors of the Company for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma consolidated statement of financial position of the Group as at 30 June 2017 and related notes as set out on pages V-1 to V-7 of Appendix V of the Company’s circular dated 24 November 2017 (the “ Circular ”) in connection with the proposed acquisition of i) the entire equity interest in 深圳市前海萬 客金融服務有限公司 (Shenzhen City Qianhai Wanke Financial Services Company Limited) (the “ Target Company ”); and ii) the proposed acquisition of the entire equity interest in 麗江華歐房地產置業有限公司 (Lijiang Hua Ou Real Estate Company Limited) (the “ Project Company ”) through The Project Company Acquisition Agreement with Project Vendor A and Project Vendor B as defined in the Circular (collectively the “ Proposed Acquisition ”). The applicable criteria on the basis of which the directors of the Company have compiled the unaudited pro forma financial information are described on pages V-1 to V-7 of Appendix V of the Circular.

The unaudited pro forma financial information has been compiled by the directors of the Company to illustrate the impact of the Proposed Acquisition on the Company’s consolidated financial position as at 30 June 2017 as if the Proposed Acquisition had taken place at 30 June 2017. As part of this process, information about the financial position of the Target Company and the Project Company has been derived by the directors of the Company from the Target Company’s and the Project Company’s historical financial information for the six months ended 30 June 2017, on which accountants’ reports set out in Appendix II and Appendix III respectively of the Circular have been published.

Directors’ Responsibilities for the Unaudited Pro Forma Financial Information

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

• For identification purpose only

– V-8 –

APPENDIX V

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

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 HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

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

Reporting Accountants’ Responsibilities

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

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

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

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

A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly compiled, in all material respect, on the basis of the applicable criteria involves performing procedures to assess whether the applicable

– V-9 –

APPENDIX V

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

criteria used by the directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

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

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

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

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

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

Opinion

In our opinion:

• a. the unaudited pro forma financial information has been properly compiled by the directors of the Company on the basis stated;

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

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

BDO Limited

Certified Public Accountants

Hong Kong 24 November 2017

– V-10 –

APPENDIX VI

VALUATION REPORT

The following is the text of a valuation report prepared for inclusion in this document, received from Knight Frank Petty Limited, an independent property valuer, in connection with their valuation as of 31 August 2017 of the Property held by the Group.

==> picture [68 x 82] intentionally omitted <==

24 November 2017

Board of Directors Superactive Group Company Limited Room 1206, 12/F., China Merchants Tower, Shun Tak Centre, Sheng Wan, Hong Kong

Dear Sirs

VALUATION OF ANCIENT PORT WALKING STREET, UNDERGROUND AREA OF MINZHU ROAD AND FUHUI ROAD, GUCHENG DISTRICT, LIJIANG CITY, YUNNAN PROVINCE, THE PEOPLE’S REPUBLIC OF CHINA (THE “PROPERTY”)

In accordance with your instruction for us to value the market value of the Property held by Lijiang Hua Ou Real Estate Company Limited in the People’s Republic of China (the “ PRC ”), 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 the market value of the Property in existing state as at 31 August 2017.

Basis of Valuation

Our valuation is our opinion of the market value of the property 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 wherein the parties had each acted knowledgeably, prudently and without compulsion.”

– VI-1 –

APPENDIX VI

VALUATION REPORT

The market value is the best price reasonably obtainable in the market by the seller and the most advantageous price reasonably obtainable in the market by the buyer. This estimate specifically excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangements, special considerations or concessions granted by anyone associated with the sale, or any element of special value. The market value of a property is also estimated without regard to costs of sale and purchase, and without offset for any associated taxes.

VALUATION METHODOLOGIES

In arriving at our opinion of value, we have adopted the Direct Comparison Approach with reference to market comparable sales evidence available in the locality and have also taken into account the renovation costs that will be expended to complete the development to reflect the quality of the completed development.

TITLE DOCUMENTS AND ENCUMBRANCES

We have been provided with extracts of documents in relation to the titles to the Property. However, we have not inspected the original documents to ascertain any amendments which may not appear on the copies handed to us. We have relied on the information provided by the Group and its PRC legal advisor, Alpha & Leader Law Firm, regarding the title of the Property.

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

SOURCE OF INFORMATION

We have relied to a very considerable extent on the information given by the Group and the legal opinion of the Group’s PRC legal advisor. We have no reason to doubt the truth and the accuracy of the information provided by the Group which is material to the valuation. We have accepted advice given by the Group on such matters as planning approvals or statutory notices, easements, tenure, completion date of the buildings, particulars of occupancy, joint-venture agreements/contracts, and site and floor areas. Dimension, measurements and areas included in the attached valuation report are based on the information provided to us and are therefore only approximations. We have not been able to carry out detailed on-site measurements to verify the site and floor areas of the Property and we have assumed that the areas shown on the documents handed to us are correct. We were also advised by the Group that no material facts have been omitted from the information provided.

– VI-2 –

APPENDIX VI

VALUATION REPORT

We have inspected the exteriors and, where possible, the interiors of the Property and the inspection was carried out by Martin Ngan, Bachelor of Science with about 1 year’s experience in valuation of properties in the People’s Republic of China, in September 2017. However, no structural survey has been made, but in the course of our inspection, we did not note any serious defects, we are not, however, able to report that the Property is free from rot, infestation or any other structural defects. No tests were carried out on any of the services.

IDENTITY OF PROPERTY TO BE VALUED

We exercised reasonable care and skill (but will not have an absolute obligation to you) to ensure that the Property, identified by the Property address in your instructions, is the Property inspected by us and contained within our valuation report. If there is ambiguity as to the Property address, or the extent of the Property to be valued, this should be drawn to our attention in your instruction or immediately upon receipt of our report.

ENVIRONMENTAL ISSUES

We are not environmental specialists and therefore we have not carried out any scientific investigations of sites or buildings to establish the existence or otherwise of any environmental contamination, nor have we undertaken searches of public archives to seek evidence of past activities that might identify potential for contamination. In the absence of appropriate investigations and where there is no apparent reason to suspect potential for contamination, our valuation is prepared on the assumption that the Property is unaffected. Where contamination is suspected or confirmed, but adequate investigation has not been carried out and made available to us, then the valuation will be qualified.

COMPLIANCE WITH RELEVANT ORDINANCES AND REGULATIONS

We have assumed that the Property had been constructed, occupied and used in full compliance with, and without contravention of any ordinances, statutory requirement and notices except only where otherwise stated. We have further assumed that, for any use of the Property upon which this report is based, any and all required licences, permits, certificates, consents, approvals and authorisations have been obtained, except only where otherwise stated.

REMARKS

In preparing our valuation report, we have complied with the requirements contained within relevant provisions of Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities issued by The Stock Exchange of Hong Kong Limited and The HKIS Valuation Standards 2012 Edition published by the Hong Kong Institute of Surveyors.

– VI-3 –

APPENDIX VI

VALUATION REPORT

CURRENCY

All sums stated in our valuation are in Renminbi.

Our valuation report is attached.

Yours faithfully For and on behalf of Knight Frank Petty Limited Clement W M Leung MFin MCIREA MHKIS MRICS RPS (GP) Executive Director Head of China Valuation

Remarks: Clement W M Leung, MFin MCIREA, MHKIS, MRICS, RPS (GP), has been a qualified valuer and has about 23 years’ experience in the valuation of properties in Hong Kong, Macau and Asia Pacific Region and has 21 years’ experience in the valuation of properties in the People’s Republic of China.

– VI-4 –

APPENDIX VI

VALUATION REPORT

VALUATION REPORT

Property

Description and tenure

Particulars of occupancy

Market value in existing state as at 31 August 2017

Ancient Port Walking The Property is an underground Street, Underground area retail area comprising a total gross of Minzhu Road and Fuhui floor area of approximately Road, Gucheng District, 34,660.00 sq. m. and as advised by Lijiang City, Yunnan the Group, the renovation work is Province, The People’s scheduled to be completed in Republic of China December 2017. The Property is divided into 4 zones and contains 45 entrances connecting to Minzhu Road and Fuhui Road.

As advised by the Group, the RMB690,000,000 unsold portion of the (RENMINBI SIX Property is currently vacant HUNDRED NINETY and is pending for sale. MILLION ONLY) (please see As per our inspection, part of notes 7 & 8) the pre-sold portion of the Property is occupied as retail use.

The Property comprises 741 retail units with a floor area of approximately 19,937.90 sq. m.

The land use rights of the Property have been granted for a term for 40 years expiring on 11 September 2053 and 29 March 2055 for commercial use.

Notes:

1. Pursuant to Business License No. 530700100006979 dated 18 September 2012, Lijiang Hua Ou Real Estate Company Limited was incorporated with a registered capital of RMB5,000,000.

2. Pursuant to 2 State-owned Land Use Rights Certificates both issued by the Land Resources Bureau of Lijiang, Gucheng Branch, the title to the land use rights of the Property with a total site area of 24,570.79 sq. m. was vested in Lijiang Hua Ou Real Estate Company Limited. Details of the State-owned Land Use Rights Certificates are listed as follows:

			Site Area	Date of
Certificate No.	Land Use	Expiry Date	(sq. m.)	Issuance
Li Guo Yong (2015)	Commercial	11 September 2053	21,767.16	7 January 2015
Di 42
Li Guo Yong (2016)	Commercial	29 March 2055	2,803.63	7 June 2016
Di 1426

– VI-5 –

APPENDIX VI

VALUATION REPORT

1. Pursuant to three Construction Land Use Planning Permits all issued by Planning Bureau of Lijiang, Gucheng Branch, the Property was permitted to be developed and the details are listed below:

Certificate No.	Site area (sq. m.)	Use	Date of Issuance
Di Zi Di 2013-29	2,342.00	Commercial	18 September 2013
Di Zi Di 2013-28	9,552.35	Public facility	18 September 2013
Di Zi Di 2015-01	4.78 (mu)	Commercial	15 April 2015

1. Pursuant to three Construction Engineering Planning Permits all issued by Planning Bureau of Lijiang, Gucheng Branch, the Property was permitted to be developed and the details are listed below:

Certificate No.	**Gross **	Floor Area (sq m)	Date of Issuance
Jian Zi Di 2013-510		23,420.00	29 September 2013
Jian Zi Di 2013-509		9,553.00	29 September 2013
Jian Zi Di 2015-117		3,189.00	5 May 2015

1. Pursuant to the Construction Works Commencement Permit No. 533200201310090101 issued by Housing and Urban Rural Development Bureau of Lijiang dated 9 October 2013, the construction works of the Property with a gross floor area of 34,660.00 sq. m. was permitted to be commenced.

2. Pursuant to the Commodity Housing Pre-sale Permit No. Yu Xu Li Fang Zi (2015-3) issued by Housing and Urban Rural Development Bureau of Lijiang dated 6 June 2015, portion of the Property with a total floor area of 20,279.34 sq. m. was permitted to be pre-sold.

3. As advised by the Group, 151 retail units with a total floor area of approximately 3,926.13 sq. m. have been pre-sold at a total consideration of RMB258,444,066. According to the Group’s instruction, these pre-sold portions are included in this valuation. We have also taken into account the contracted consideration.

4. As advised by the Group, the projected outstanding renovation cost of the Property as at the valuation date was approximately RMB131,464,065. Accordingly, we have taken into account the aforesaid cost in our valuation.

5. The Property is subject to mortgage.

6. We have been provided with the Group’s PRC legal adviser’s opinion, which inter-alia, contains the followings:

7. (i) Lijiang Hua Ou Real Estate Company Limited (“ Lijiang Hua Ou ”) is a legal real estate development company;

8. (ii) Lijiang Hua Ou has legally obtained the State-owned Land Use Rights Certificates of two parcels of land which the Property is located and all land premium have been settled. Lijiang Hua Ou has obtained the land use rights of the civil defense portion of the Property which is stipulated as public facility use from the Commission of National Defense Civil Air Defense Office of Lijiang, Gucheng Branch. The Government of Lijiang collectively allocate such portion of the Property to Lijiang Hua Ou for construction. Lijiang Hua Ou has obtained the Land Use Right Certificates and can apply to the registration authority for first title proof of the Property. Lijiang Hua Ou can legally obtain Building Ownership Certificate of the Property, upon obtaining final construction acceptance and in accordance with legal procedure;

9. (iii) Lijiang Hua Ou has obtained sales permits and has the right to sell the commodity building; and

10. (iv) Lijiang Hua Ou has to obtain the mortgagee’s consent before transfer, let, re-mortgage, transfer as gift, transfer as trust, carry out material alternation or in other ways dispose of partial or whole of the Property.

– VI-6 –

APPENDIX VII

GENERAL INFORMATION

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ AND CHIEF EXECUTIVES’ INTERESTS IN SHARES AND UNDERLYING SHARES

As at the Latest Practicable Date, the interests and short positions of the Directors or chief executives of the Company and their associates in the Shares, underlying shares or debentures of the Company or any of its associated corporations (within the meaning of Part XV of the Securities and Futures Ordinance (“ SFO ”)) (i) which would have to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required to be entered in the register referred to therein pursuant to section 352 of the SFO; or (iii) which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies contained in the Listing Rules, were as follows:

			Approximate
			percentage interest
	Capacity/ Nature of	Number of Shares	in the Company’s
Name of Directors	interest	held	issued Shares
Ms. Yeung So Lai	Interest in controlled	1,152,731,997(L)	56.71%
(“Ms. Yeung”)(Note)	corporation
Mr. Lee Chi Shing Caesar	Interest in controlled	1,152,731,997(L)	56.71%
(“Mr. Lee”)(Note)	corporation

(L) denotes long position

Note: Super Fame, which is owned as to 55% by Ms. Yeung and 45% by Mr. Lee, is the holder of 1,152,731,997 Shares. As such, Ms. Yeung and Mr. Lee were deemed to be interested in 1,152,731,997 Shares held by Super Fame.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors nor the chief executive of the Company had or was deemed to have any interests or short positions in the shares, underlying shares or debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) (i) which were required to be notified to the Company and the Stock Exchange pursuant to Divisions 7 and 8 of Part XV of the SFO (including interests or short positions which they were taken or deemed to have under such provisions of the SFO); or (ii) which were required, pursuant to section 352 of the SFO, to be entered in the register referred to therein; or (iii)

– VII-1 –

APPENDIX VII

GENERAL INFORMATION

which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Companies.

3. DISCLOSURE OF INTERESTS BY SUBSTANTIAL SHAREHOLDERS AND OTHER PERSONS

As at the Latest Practicable Date, so far as any Directors are aware, the interests or short positions owned by the following parties (other than the Directors or chief executives of the Company) in the Shares or underlying shares of the Company which were required to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO or which were required to be recorded in the register of the Company required to be kept under section 336 of the SFO were as follows:

			Approximate
			percentage interest
	Capacity/ Nature of	Number of Shares	in the Company’s
Name	interest	held	issued Shares
Super Fame	Beneficial owner	1,152,731,997(L)	56.71%
Jade Treasure	Person having a	1,152,731,997(L)	56.71%
Global Limited	security interest in
(“Jade Treasure”)(Note)	shares
Right Select	Interest in controlled	1,152,731,997(L)	56.71%
International Limited	corporation
(“Right Select”)(Note)
China Huarong	Interest in controlled	1,152,731,997(L)	56.71%
International	corporation
Holdings Limited
(“China Huarong”)
(Note)
Huarong Real Estate	Interest in controlled	1,152,731,997(L)	56.71%
Co., Ltd.	corporation
(“Huarong Real Estate”)
(Note)
China Huarong Asset	Interest in controlled	1,152,731,997(L)	56.71%
Management Co., Ltd.	corporation
(“Huarong Asset
Management”)(Note)

(L) denotes long position

Note: Jade Treasure is wholly-owned by Right Select, which is in turn owned by China Huarong. China Huarong is owned as to 88.10% by Huarong Asset Management.

– VII-2 –

APPENDIX VII

GENERAL INFORMATION

Save as disclosed above and as at the Latest Practicable Date, the Directors are not aware of any interests or short positions owned by any persons (other than the Directors or chief executives of the Company) in the Shares or underlying shares of the Company which were required to be disclosed to the Company under Divisions 2 and 3 of Part XV of the SFO or which were required to be recorded in the register of the Company required to be kept under section 336 of the SFO.

4. DIRECTORS’ SERVICE CONTRACTS

As at the Latest Practicable Date, none of the Directors had any existing or proposed service contracts with any member of the Group (excluding contracts expiring or determinable by the employer within one year without payment of compensation (other than statutory compensation)).

5. COMPETING INTERESTS

As at the Latest Practicable Date, none of the Directors nor their respective close associates (as defined in the Listing Rules) was interested in any business apart from the business of the Enlarged Group, which competes or is likely to compete, either directly or indirectly, with the business of the Enlarged Group.

6. DIRECTORS’ INTEREST IN CONTRACTS OR ARRANGEMENTS

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

As at the Latest Practicable Date, none of the Directors had any direct or indirect interest in any assets which had 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.

7. EXPERTS AND CONSENTS

The following is the qualification of the experts who have given opinions or advice, which is contained in this circular:

Name	Qualifications
BDO Limited	Certified Public Accountants
Knight Frank Petty	Independent Professional Valuer
Limited

As at the Latest Practicable Date, each of the above experts had given and had not withdrawn their respective written consent to the issue of this circular with the inclusion herein of its letter or their names in the form and context in which they respectively appear.

– VII-3 –

APPENDIX VII

GENERAL INFORMATION

As at the Latest Practicable Date, the above experts did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group.

As at the Latest Practicable Date, the above experts did not have any interest, either directly or indirectly, in any assets which had been since 31 December 2016 (being the date to which the latest published audited financial statements of the Company were made up) acquired or disposed of by or leased to any member of the Group, or were proposed to be acquired or disposed of by or leased to any member of the Group.

8. LITIGATION

As at the Latest Practicable Date, so far as the Directors are aware, the Group has been in litigation in relation to a claim of approximately HK$1,940,000, initiated by a renovation Contractor for recovering renovation fee in default. The Group has made full provision for the claim and hence the Group did not have any contingent liabilities.

Save as disclosed above, as at the Latest Practicable Date, neither the Company nor any of its subsidiaries was engaged in any litigation or arbitration of material importance and no litigation, arbitration or claim of material importance was known to the Directors to be pending or threatened against any member of the Group.

9. MATERIAL CONTRACTS

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

• (1) the sale and purchase agreement (the “ Agreement ”) dated 18 May 2017 and entered into between Capital Wheel Holdings Limited (“ Vendor A ”), Mr. Yiu Chow Shun, Barry (“ Vendor B ”), Mr. Li Yik Wai, Kinnie (“ Vendor C ”) and Loyalgain Corporation Limited (“ Vendor D ”) as vendors (the “ Vendors ”), Mr. Mark Anthony James Vaile, Mr. Chan Wai Lun, Anthony and Mr. Tang Yui, Ian as the guarantors (the “ Guarantors ”), Toran International Limited (the “ Toran ”), a wholly-owned subsidiary of the Company, as the purchaser and the Company in relation to the acquisition of 100 shares of US$1.00 each in the share capital of Speed Fame Enterprises Limited from the Vendors as to 51 shares by Vendor A, 20 shares by Vendor B, 9 shares by Vendor C and 20 shares by Vendor D, at a total consideration of HK$59,474,576.26, of which (i) HK$23,788,896.00 shall be satisfied by the Toran by procuring the Company to allot and issue 36,768,000 new Shares (the “ Consideration Shares ”) at the issue price of HK$0.647 per Consideration Share to the Vendors or their respective nominee(s) or designated person(s) within seven business days from the date of completion of the Agreement; and (ii) HK$35,685,680.26 shall be satisfied in cash within one month from the date of completion of the Agreement;

• (2) the deed of non-competition dated 18 May 2017 entered into by the Vendors, the Guarantors and Mr. Poon Chi Yuen in favour of Speed Fame Enterprises Limited and its subsidiaries and Toran;

– VII-4 –

APPENDIX VII

GENERAL INFORMATION

• (3) the sale and purchase agreement (the “ Wealth Long Acquisition Agreement ”) dated 29 May 2017 entered into between Hinda Enterprises Limited (“ Hinda ”), a direct wholly-owned subsidiary of the Company, as purchaser and Chan Ping Che (“ Mr. Chan ”) as vendor in relation to the acquisition of 2 ordinary shares (“ Wealth Long Sale Shares ”) of Wealth Long Limited, representing the entire issued share capital of Wealth Long, and the entire amount of the shareholder’s loan of HK$184,559,138 owing by Wealth Long to Mr. Chan (the “ Wealth Long Sale Loan ”), at the consideration of HK$185,000,000;

• (4) the put option deed dated 29 May 2017 (as amended and supplemented by the supplemental deed dated 7 August 2017) entered into between Hinda and Mr. Chan in relation to the grant by Mr. Chan to Hinda of a right to require Mr. Chan to purchase from Hinda all of the Wealth Long Sale Shares and the Wealth Long Sale Loan sold and transferred to Hinda under the Wealth Long Acquisition Agreement at a total consideration of HK$185,000,000;

• (5) the Sale and Purchase Agreement;

• (6) the Project Company Acquisition Agreement;

• (7) the underwriting agreement dated 29 August 2017 and entered into among the Company and Well Link Securities Limited in relation to the underwriting arrangement in respect of the Open Offer, details of which is set out in the Prospectus;

• (8) the provisional agreement for sale and purchase dated 7 November 2017 entered into between Front Land Properties Limited (“ Front Land ”) as vendor and Force China Limited (“ Force China ”), a wholly-owned subsidiary of the Company, as purchase in relation to the sale and purchase of Unit Nos. 1510, 1511, 1512A and 1512B on 15/F of West Tower, Shun Tak Centre, Nos. 168-200 Connaught Road Central, Hong Kong (“ Property I ”), at a consideration of HK$193,600,000, details of which is set out in the announcements of the Company dated 7 November 2017 and 21 November 2017 (the “ Properties Acquisition Announcements ”);

• (9) the provisional agreement for sale and purchase dated 7 November 2017 entered into between Front Land as vendor and Best Success Investment Limited (“ Best Success ”), a wholly-owned subsidiary of the Company, as purchaser in relation to the sale and purchase of Unit Nos. 1501 and 1502 on 15/F of West Tower, Shun Tak Centre, Nos. 168-200 Connaught Road Central, Hong Kong (“ Property II ”), at a consideration of HK$126,752,000, details of which is set out in the Properties Acquisition Announcements;

• (10) the formal sale and purchase agreement dated 20 November 2012 entered into between Front Land and Force China in relation to the sale and purchase of Property I; and

• (11) the formal sale and purchase agreement dated 20 November 2012 entered into between Front Land and Best Success in relation to the sale and purchase of Property II.

– VII-5 –

APPENDIX VII

GENERAL INFORMATION

10. CORPORATE INFORMATION OF THE GROUP

Registered office Clarendon House 2 Church Street Hamilton HM11 Bermuda Head office and principal Room 1206, China Merchants Tower place of business in Shun Tak Centre Hong Kong 168-200 Connaught Road Central Sheung Wan, Hong Kong Bermuda principal share Conyers Corporate Services (Bermuda) Limited registrar and transfer Clarendon House office 2 Church Street Hamilton HM11 Bermuda Hong Kong branch share Tricor Secretaries Limited registrar and transfer Level 22, Hopewell Centre office 183 Queen’s Road East Hong Kong Company secretary Mr. Luk Chi Keung (associate member of Hong Kong Institute of Certified Public Accountants)

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents will be made available for inspection from 10:00 a.m. to 12:30 p.m. and from 2:30 p.m. to 5:00 p.m. on any weekday other than Saturday, Sunday and public holidays at the head office and principal place of business in Hong Kong of the Company at Room 1206, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Sheung Wan, Hong Kong for a period of 14 days from the date of this circular:

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

• (b) the annual reports of the Company for the years ended 31 December 2014, 2015 and 2016;

• (c) the accountants’ report of the Target Company, the text of which is set out in Appendix II to this circular;

• (d) the accountants’ report of the Project Company, the text of which is set out in Appendix III to this circular;

– VII-6 –

APPENDIX VII

GENERAL INFORMATION

• (e) the report on the unaudited pro forma financial information of the Enlarged Group issued by BDO Limited, the text of which is set out in Appendix V to this circular;

• (f) the valuation report prepared by Knight Frank Petty Limited set out in Appendix VI to this circular;

• (g) the written consent from the experts referred to under the paragraph headed “Expert and consent” in this appendix;

• (h) copy of each of the material contracts referred to in the paragraph headed “Material contracts” of this appendix;

• (i) the Written Shareholder’s Approval;

• (j) the circular of the Company dated 28 August 2017 in relation to (1) the acquisition of the entire issued share capital of and shareholder’s loan due from Wealth Long Limited (“ Wealth Long ”); and (2) the exercise of put option in respect of the disposal of the entire issued share capital of Wealth Long and the shareholder’s loan due from Wealth Long; and

• (k) this circular.

– VII-7 –