Rykadan Capital Limited

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Capitalised terms used on this cover page have the same meanings as those defined in the section headed “ Definitions ” in this Offer Document. If you are in doubt as to any aspect of this Offer Document or this Offer, you should consult a licensed securities dealer or registered institution in securities, a bank manager, solicitor, professional accountant or other professional adviser.

If you have sold or transferred all your Shares, you should at once hand this Offer Document, together with the accompanying form of proxy and Acceptance Form to the purchaser(s) or transferee(s) or to the bank, licensed securities dealer or registered institution in securities, or other agent through whom the sale or the transfer was effected for onward transmission to the purchaser(s) or transferee(s). This Offer Document should be read in conjunction with the accompanying Acceptance Form, the contents of which form part of the terms and conditions of the Offer.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this Offer Document and the accompanying forms, 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 Offer Document and the accompanying forms.

RYKADAN CAPITAL LIMITED 宏基資本有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2288)

(1) CONDITIONAL CASH OFFER BY DONGXING SECURITIES (HONG KONG) COMPANY LIMITED ON BEHALF OF RYKADAN CAPITAL LIMITED TO BUY-BACK UP TO 102,000,000 SHARES AT HK$0.68 PER SHARE;

(2) APPLICATION FOR WHITEWASH WAIVER; AND

(3) NOTICE OF EGM

Financial Adviser to the Company

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Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

A letter from the Board is set out on pages 6 to 17 of this Offer Document. A letter from Dongxing Securities containing, among other things, the details of the terms of the Offer is set out on pages 18 to 27 of this Offer Document. A letter from the Independent Board Committee to the Independent Shareholders containing its recommendation in respect of the Offer and the Whitewash Waiver is set out on pages 28 to 29 of this Offer Document. A letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders in respect of the Offer and the Whitewash Waiver is set out on pages 30 to 55 of this Offer Document.

Custodians,jurisdiction outsidenomineesHongand Kongtrusteesshouldwho would,read carefullyor otherwisethe paragraphsintend to, underforwardthethissectionOfferheadedDocument“ Overseas and/or the Shareholders” accompanyingin AppendixAcceptanceI toFormthistoOfferany Document.

A notice convening the EGM to be held at Room 1, 10/F, United Centre, 95 Queensway, Admiralty, Hong Kong at 1:00 p.m. on Monday, 23 November 2020 is set out on pages EGM-1 to EGM-3 of this Offer Document. A form of proxy for use at the EGM is enclosed herewith. Whether or not you intend to attend and vote at the EGM in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, as soon as practicable but, in any event, not less than 48 hours before the time appointed for holding the EGM or any adjournment or postponement thereof (as the case may be). Such form of proxy for use at the EGM is also published on the website of the Stock Exchange (www.hkexnews.hk) and the website of the Company (www.rykadan.com). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or at any adjournment or postponement thereof (as the case may be) in person should you so wish.

PRECAUTIONARY MEASURES FOR THE EGM To safeguard the health and safety of Shareholders and to prevent the spreading of the COVID-19 pandemic, the following precautionary measures will be implemented at the EGM: (i) Compulsory temperature screening/checks (ii) Wearing of surgical face mask (iii) No distribution of gifts and no provision of beverage and refreshments Attendees are in addition requested to observe and practise good personal hygiene at all times. To the extent permitted by law, the Company reserves the right to deny entry into the EGM venue or require any person to leave the EGM venue so as to ensure the health and safety of the attendees at the EGM. The Company wishes to strongly advise the Shareholders, particularly Shareholders who are unwell, subject to quarantine in relation to COVID-19 or unable to travel to attend the EGM, that they may appoint the chairman of the EGM as a proxy to vote on the resolutions to be proposed at the EGM, instead of attending the EGM in person.

30 October 2020

	Page
PRECAUTIONARY MEASURES FOR
THE EXTRAORDINARY GENERAL MEETING. . . . . . . . . . . . . . . . . . . . . . . . .	ii
EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	iv
DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
LETTER FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	6
LETTER FROM DONGXING SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	18
LETTER FROM THE INDEPENDENT BOARD COMMITTEE . . . . . . . . . . . . . .	28
LETTER FROM THE INDEPENDENT FINANCIAL ADVISER. . . . . . . . . . . . . . .	30
APPENDIX I – TERMS OF THE OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	I-1
APPENDIX II – FINANCIAL INFORMATION OF THE GROUP. . . . . . . . . . . . .	II-1
APPENDIX III– UNAUDITED PRO FORMA FINANCIAL INFORMATION
OF THE GROUP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	III-1
APPENDIX IV– PROPERTY VALUATION REPORT . . . . . . . . . . . . . . . . . . . . . .	IV-1
APPENDIX V – GENERAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .	V-1
NOTICE OF EXTRAORDINARY GENERAL MEETING . . . . . . . . . . . . . . . . . . . .EGM-1
Accompanying documents
Form of proxy for the EGM
Acceptance Form

– i –

PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY GENERAL MEETING

With the outbreak and spreading of the COVID-19 pandemic and the heightened requirements for the prevention and control of its spreading, to safeguard the health and safety of Shareholders who might be attending the EGM in person, the Company will implement the following precautionary measures at the EGM.

Voting by proxy in advance of the EGM:

The Company does not in any way wish to diminish the opportunity available to Shareholders to exercise their rights and to vote, but is conscious of the pressing need to protect Shareholders from possible exposure to the COVID-19 pandemic. For the health and safety of Shareholders, the Company wishes to strongly advise the Shareholders, particularly Shareholders who are unwell, subject to quarantine in relation to COVID-19 or unable to travel to attend to EGM, that they may appoint the chairman of the EGM as a proxy to vote on the resolutions to be proposed at the EGM, instead of attending the EGM in person. Physical attendance is not necessary for the purpose of exercising Shareholder rights. Completion and return of the proxy form will not preclude Shareholders from attending and voting in person at the EGM or any adjournment thereof should they subsequently so wish.

The deadline to submit completed proxy forms is Saturday, 21 November 2020 at 1:00 p.m. . Completed proxy forms must be returned to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.

To safeguard the health and safety of Shareholders who might be attending the EGM in person, the Company will also implement the following measures at the EGM:

(i) Compulsory temperature screening/checks will be carried out on every attendee at the main entrance of venue. Any person with a body temperature above the reference range quoted by the Department of Health, or is exhibiting flu-like symptoms may be denied entry into the venue and be requested to leave the venue.
(ii) Every attendee will be required to wear a surgical face mask throughout the EGM and sit at a distance from other attendees. Please note that no masks will be provided at the EGM venue and attendees should wear their own masks.
(iii) No distribution of gifts and no beverage and refreshments will be provided to attendees at the EGM.

Attendees are in addition requested to observe and practise good personal hygiene at all times. To the extent permitted by law, the Company reserves the right to deny entry into the EGM venue or require any person to leave the EGM venue so as to ensure the health and safety of the attendees at the EGM.

– ii –

PRECAUTIONARY MEASURES FOR THE EXTRAORDINARY GENERAL MEETING

Due to the constantly evolving COVID-19 pandemic situation in Hong Kong, the Company may be required to change the EGM arrangements at short notice. Shareholders should check the Company’s website for future announcements and updates on the EGM arrangements.

If Shareholders have any questions relating to the EGM, please contact Tricor Investor Services Limited, the Company’s Hong Kong branch share registrar, as follows:

Tricor Investor Services Limited Level 54, Hopewell Centre, 183 Queen’s Road East Hong Kong Telephone: +852 2980 1333 Facsimile: +852 2810 8185 Email: [email protected]

– iii –

EXPECTED TIMETABLE

The timetable set out below is indicative only and may be subject to change. Any changes to the timetable will be announced by the Company.

Despatch of the Offer Document, notice of the EGM,
form of proxy and Acceptance Form . . . . . . . . . . . . . . . . . . . . . Friday, 30 October 2020
Latest time for lodging transfer of Shares to qualify
for attendance at the EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4:30 p.m. on
	Tuesday, 17 November 2020
Closure of the register of members of the Company
(both dates inclusive) . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . .
	Wednesday, 18 November 2020 to
	Monday, 23 November 2020
Latest time for lodging form of proxy for the EGM . . .	. . . . . . . . . . . . . . . . . 1:00 p.m. on
	Saturday, 21 November 2020
EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	. . . . . . . . . . . . . . . . . 1:00 p.m. on
	Monday, 23 November 2020
Announcement of results of the EGM and
whether the Offer has become unconditional . . . . . . .	. . . . . . . no later than 7:00 p.m. on
	Monday, 23 November 2020
Latest time for lodging the Acceptance Form and
latest time for determining Shareholders’ entitlement
to participate in the Offer based on the records
of the register of members of the Company . . . . . . . . . . . . . . . . . . . . . . . . . 4:00 p.m. on
	Monday, 7 December 2020
Closing date of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 7 December 2020
Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Monday, 7 December 2020
Announcement of results of the Offer to be posted
on the Stock Exchange’s website . . . . . . . . . . . . . . . .	. . . . . . . no later than 7:00 p.m. on
	Monday, 7 December 2020
Latest date for despatch of cheques to the
Accepting Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . Wednesday, 16 December 2020
Latest date for despatch of share certificate for
those shares tendered but not bought-back
under the Offer (if applicable) . . . . . . . . . . . . . . . . . .	. . . . Thursday, 17 December 2020

– iv –

EXPECTED TIMETABLE

Notes:

Dealings in the Shares after Thursday, 3 December 2020 will not be settled under the rules of the Stock Exchange prior to the Record Date.
The Executive has agreed, subject to the approval of the Independent Shareholders for the Offer and the Whitewash Waiver at the EGM by way of poll, to waive any obligations of the Controlling Shareholders to make a mandatory general offer which might result from completion of the Offer. Assuming that the resolutions relating to the Offer and the Whitewash Waiver will be approved by the Independent Shareholders and the Offer has become unconditional on Monday, 23 November 2020, being the date of the EGM, the Offer will remain open for acceptance for a period of 14 days thereafter.
In order to accept the Offer, Shareholders are required to submit to the Registrar the duly completed Acceptance Form in accordance with the instructions as set out in this Offer Document and the Acceptance Form (which instructions form part of the terms and conditions of the Offer) at or before 4:00 p.m. on Monday, 7 December 2020.
Remittance for the total amounts due to Accepting Shareholders under the Offer (subject to deduction of seller’s ad valorem stamp duty payable on the Shares bought-back from such Accepting Shareholders) will be made by the Company within 7 business days (as defined in the Takeovers Code) after the close of the Offer.

All references to time and dates contained in this Offer Document refer to Hong Kong time and dates.

– v –

DEFINITIONS

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

“Acceptance Form(s)” form(s) to be sent to the Shareholders as part of the Offer Document for acceptance of the Offer

“Accepting Shareholder(s)” Shareholder(s) who accept(s) the Offer by submitting the duly completed Acceptance Form(s)
“acting in concert” has the meaning given to it in the Takeovers Code “Announcement” the announcement of the Company dated 28 September 2020 in relation to, among other things, the Offer and the application for the Whitewash Waiver
“associate(s)” has the meaning given to it in the Takeovers Code “Board” the board of Directors

“business day” a day on which the Stock Exchange is open for the transaction of business “CCASS” the Central Clearing and Settlement System established and operated by Hong Kong Securities Clearing Company Limited “Chan Concert Group” CHAN William and Tiger Crown Limited “Codes” the Takeovers Code and the Share Buy-backs Code “Company” Rykadan Capital Limited 宏基資本有限公司, an exempted company incorporated in the Cayman Islands with limited liability on 27 April 2009, the Shares of which are listed on the main board of the Stock Exchange (Stock Code: 2288) “Conditions” the conditions set out under the heading “ CONDITIONS OF THE OFFER ” in the Letter from the Board in this Offer Document, to which the Offer is subject “Controlling Shareholders” Tiger Crown Limited, Scenemay Holdings Limited, CHAN William, LI Chu Kwan and LI Wing Yin

– 1 –

DEFINITIONS

”Dongxing Securities” Dongxing Securities (Hong Kong) Company Limited, a licensed corporation under the SFO permitted to carry on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities (as defined under the SFO), being the agent making the Offer on behalf of the Company and the financial adviser to the Company in respect of the Offer
“Director(s)” the director(s) of the Company
“EGM” the extraordinary general meeting of the Company to be convened and held to consider and, if thought fit, approve the respective resolutions in respect of the Offer and the Whitewash Waiver
“Executive” the Executive Director of the Corporate Finance Division of the SFC or any delegate of the Executive Director
“Group” the Company and its subsidiaries
“HK$” Hong Kong dollar(s), the lawful currency of Hong Kong
“HKSCC” HKSCC Nominees Limited
“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China
“Independent Board Committee”

an independent committee of the Board, comprising all the independent non-executive Directors, namely TO King Yan, Adam, WONG Hoi Ki and HO Kwok Wah, George, who have no direct or indirect interest in the Offer or the Whitewash Waiver, which has been formed to advise the Independent Shareholders in respect of the Offer and the Whitewash Waiver

“Independent Financial Adviser” or “Innovax Capital”

Innovax Capital Limited, a licensed corporation under the SFO permitted to carry on Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities (as defined under the SFO), being the independent financial adviser appointed to advise the Independent Board Committee and the Independent Shareholders in relation to the Offer and the Whitewash Waiver

– 2 –

DEFINITIONS

“Independent Shareholders”
“Irrevocable Undertakings”
“Last Trading Day”
“Latest Acceptance Time”
“Latest Practicable Date”
“Listing Rules”
“Maximum Number of Shares”

“Offer”

Shareholders other than (i) Tiger Crown Limited, Scenemay Holdings Limited and CHAN William and parties acting in concert with any of them in the context of the Offer and the Whitewash Waiver, (ii) any Shareholder who has a material interest in the Offer or the Whitewash Waiver different from all other Shareholders, and (iii) any Shareholder who is involved in or interested in the Offer and/or Whitewash Waiver (other than as a Shareholder)

the irrevocable undertakings given by each member of the Chan Concert Group that he or it will not, and will procure the holders of Shares whose Shares he or it is deemed to be interested in by virtue of the SFO (other than Shares in which either member of the Chan Concert Group is deemed to be interested by virtue of the agreement with Scenemay Holdings Limited, LI Chu Kwan and LI Wing Yin under sections 317 and 318 of the SFO) not to, accept the Offer
15 September 2020, being the last trading day prior to the suspension of trading in the Shares prior to the issue of the Announcement
the latest time for receipt by the Registrar of the Acceptance Form submitted by the Shareholders, being 4:00 p.m. on Monday, 7 December 2020, or such later date as the Company may announce in accordance with the requirements of the Codes
27 October 2020, being the latest practicable date for the purpose of ascertaining certain information referred to in this Offer Document prior to its printing
the Rules Governing the Listing of Securities on the Stock Exchange
the maximum number of the Shares to be bought-back pursuant to the Offer, being 102,000,000 Shares in aggregate, representing approximately 21.36 % of the total issued Shares as at the Latest Practicable Date
a conditional cash offer by Dongxing Securities on behalf of the Company to buy-back the Maximum Number of Shares at the Offer Price from all Shareholders

– 3 –

DEFINITIONS

“Offer Document” this document (accompanying with the proxy form for voting at the EGM and the Acceptance Form)
“Offer Period” has the meaning ascribed to it under the Takeovers Code and commencing from the date of the Announcement, being 28 September 2020, and ending on the date on which the Offer closes, lapses or is withdrawn, as the case may be
“Offer Price” HK$0.68, being the buy-back price under the Offer
“Overseas Shareholders” Shareholders, whose addresses, as shown in the Register, are outside Hong Kong
“Record Date” the record date for the Offer which will be the 14th day after the date of the EGM, i.e. Monday, 7 December 2020
“Register” the register of members of the Company
“Registrar” Tricor Investor Services Limited, being the Company’s Hong Kong branch share registrar, whose address is situated at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong
“Relevant Period” the period from 28 March 2020 (being the date falling six months prior to 28 September 2020, the commencement date of the Offer Period) up to and including the Latest Practicable Date
“SFC”
the Securities and Futures Commission of Hong Kong
“SFO”
the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong Kong)
“Share Buy-backs Code” the Code on Share Buy-backs of Hong Kong
“Share(s)” the ordinary share(s) of the Company
“Shareholders” holder(s) of the Share(s)
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Takeovers Code” the Code on Takeovers and Mergers of Hong Kong

– 4 –

DEFINITIONS

“Title Documents” “Whitewash Waiver”

“%”

the relevant Share certificate(s), transfer receipt(s) and/ or other document(s) of title with respect to ownership(s) of the Share(s) (and/or any satisfactory indemnity or indemnities required in respect thereof)

a waiver to be granted by the Executive pursuant to Note 1 on dispensations from Rule 26 of the Takeovers Code in respect of the obligations of the Controlling Shareholders to make a mandatory general offer for all the Shares not held by members of the Controlling Shareholders and the parties acting in concert with any of them under Rule 26.1 of the Takeovers Code, which may otherwise arise as a result of the completion of the Offer

per cent.

– 5 –

LETTER FROM THE BOARD

RYKADAN CAPITAL LIMITED 宏基資本有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2288)

Executive Directors:

Mr. Chan William（陳偉倫） (Chairman and Chief Executive Officer)

Mr. Yip Chun Kwok（葉振國）

(Chief Operating Officer)

Registered Office:

Cricket Square Hutchins Drive P.O. Box 2681 Grand Cayman, KY1-111 Cayman Islands

Non-executive Director:

Mr. Ng Tak Kwan（吳德坤）

Independent Non-executive Directors:

Mr. Ho Kwok Wah, George（何國華） Mr. To King Yan, Adam（杜景仁） Mr. Wong Hoi Ki（黃開基）

Principal Place of Business in Hong Kong: Rooms 2701 & 2801 Rykadan Capital Tower 135 Hoi Bun Road Kwun Tong, Kowloon Hong Kong

30 October 2020

To the Shareholders

Dear Sir/Madam,

(1) CONDITIONAL CASH OFFER BY DONGXING SECURITIES (HONG KONG) COMPANY LIMITED ON BEHALF OF RYKADAN CAPITAL LIMITED TO BUY-BACK UP TO 102,000,000 SHARES AT HK$0.68 PER SHARE; (2) APPLICATION FOR WHITEWASH WAIVER; AND (3) NOTICE OF EGM

INTRODUCTION

On 28 September 2020, the Board announced that the Offer will be made by Dongxing Securities on behalf of the Company, subject to the fulfilment of the Conditions, to buy-back for cancellation up to the Maximum Number of Shares, being 102,000,000 Shares, representing approximately 21.36% of the total issued Shares as at the Latest Practicable Date, at the Offer Price of HK$0.68 per Share.

– 6 –

LETTER FROM THE BOARD

The purpose of this Offer Document is to provide you with, among other things, (i) information relating to the Offer and the Whitewash Waiver; (ii) a letter from the Independent Board Committee containing its recommendation to the Independent Shareholders in respect of the Offer and the Whitewash Waiver; (iii) a letter from the Independent Financial Adviser containing its advice to the Independent Board Committee and the Independent Shareholders as to whether the Offer and the Whitewash Waiver are fair and reasonable and as to acceptance and voting; and (iv) a notice of the EGM.

The Acceptance Form accompanying this Offer Document is for use only by the Shareholders who wish to accept the Offer.

THE OFFER

The number of Shares to be bought-back for cancellation by Dongxing Securities on behalf of the Company at the price of HK$0.68 per Share will not exceed the Maximum Number of Shares, being 102,000,000 Shares, representing approximately 21.36% of the total issued Shares as at the Latest Practicable Date.

The Offer is not conditional on any minimum number of Shares being tendered for acceptance or any minimum number of Shares to be bought-back under the Offer.

The Offer will be made in full compliance with the Codes.

THE OFFER PRICE

The Offer Price of HK$0.68 per Share valued the entire issued share capital of the Company as at the Latest Practicable Date at approximately HK$324.7 million.

The Offer Price represents:

(i) a premium of approximately 15.25% over the closing price of the Shares of HK$0.5900 as quoted on the Stock Exchange on the Latest Practicable Date;
(ii) a premium of approximately 51.11% over the closing price of the Shares of HK$0.4500 per Share as quoted on the Stock Exchange on the Last Trading Day;
(iii) a premium of approximately 50.78% over the average price of HK$0.4510 per Share, being the average closing price of the Shares as quoted on the Stock Exchange for the five consecutive trading days immediately prior to and including the Last Trading Day;
(iv) a premium of approximately 51.45% over the average price of HK$0.4490 per Share, being the average closing price of the Shares as quoted on the Stock Exchange for the ten consecutive trading days immediately prior to and including the Last Trading Day;

– 7 –

LETTER FROM THE BOARD

(v) a premium of approximately 55.55% over the average price of approximately HK$0.4372 per Share, being the average closing price of the Shares as quoted on the Stock Exchange for the thirty consecutive trading days immediately prior to and including the Last Trading Day; and
(vi) a discount of approximately 75.47% to the Group’s net asset value attributable to owners of the Company of approximately HK$2.77 per Share pursuant to the latest audited consolidated financial statements of the Company as at 31 March 2020.

The Offer Price was determined after taking into account, among other things, the historical prices of the Shares traded on the Stock Exchange, historical financial information of the Company and the prevailing market conditions and sentiments, with reference to share buy-back transactions in Hong Kong in recent years.

CONFIRMATION OF FINANCIAL RESOURCES

At the Offer Price, the Offer, if accepted in full, will result in the Company paying HK$69,360,000 in aggregate to the Accepting Shareholders in cash which will be funded by the internal resources of the Group. Dongxing Securities is satisfied that the Company has sufficient financial resources to enable it to satisfy acceptances of the Offer in full.

CONDITIONS OF THE OFFER

The Offer is conditional upon fulfillment of all of the following Conditions:

(a) the approval by more than 50% of the votes cast by the Independent Shareholders, voting in person or by proxy, by way of poll having been obtained at the EGM in respect of the Offer;
(b) the approval by at least 75% of the votes cast by the Independent Shareholders, voting in person or by proxy, by way of poll having been obtained at the EGM in respect of the Whitewash Waiver; and
(c) the Executive granting the Whitewash Waiver and the satisfaction of the conditions (if any) attached to the Whitewash Waiver and the Whitewash Waiver not having been revoked or withdrawn.

None of the Conditions can be waived, and none of them had been fulfilled as at the Latest Practicable Date.

The Offer is not conditional as to any minimum number of Shares tendered for acceptances.

– 8 –

LETTER FROM THE BOARD

IRREVOCABLE UNDERTAKINGS

As at the Latest Practicable Date, the Chan Concert Group, comprising CHAN William (the Chairman and Chief Executive Officer of the Company) and Tiger Crown Limited, together beneficially owned 130,804,000 Shares, representing approximately 27.40% of all issued Shares as at the Latest Practicable Date. Of those 130,804,000 Shares, (i) 33,700,000 Shares (representing approximately 7.06% of all issued Shares as at the Latest Practicable Date) were beneficially owned by CHAN William and (ii) 97,104,000 Shares (representing approximately 20.34% of all issued Shares as at the Latest Practicable Date) were beneficially owned by Tiger Crown Limited (which is 100% owned by Rykadan Holdings Limited, which in turn was 100% held under the Rykadan Trust of which HSBC International Trustee Limited was the trustee and CHAN William was the settlor and protector and one of the discretionary beneficiaries).

Each member of the Chan Concert Group has irrevocably undertaken to the Company that each of them will not, and will procure the holders of Shares whose Shares he or it is deemed to be interested in by virtue of the SFO (other than Shares in which either member of the Chan Concert Group is deemed to be interested by virtue of the agreement with Scenemay Holdings Limited, LI Chu Kwan and LI Wing Yin under sections 317 and 318 of the SFO) not to, accept the Offer. The Irrevocable Undertakings will be binding until the closing, lapse or withdrawal of the Offer.

WHITEWASH WAIVER

As at the Latest Practicable Date,

(i) the Chan Concert Group, comprising CHAN William and Tiger Crown Limited together, beneficially owned 130,804,000 Shares (representing approximately 27.40% of all issued Shares as at the Latest Practicable Date);
(ii) Scenemay Holdings Limited beneficially owned 87,604,000 Shares (representing approximately 18.35% of all the issued Shares as at the Latest Practicable Date);
(iii) the Controlling Shareholders were together interested in 218,408,000 Shares (representing approximately 45.74% of all issued Shares as at the Latest Practicable Date); and
(iv) the Controlling Shareholders and parties acting in concert with any of them were together interested in 281,432,000 Shares (representing approximately 58.95% of all issued Shares as at the Latest Practicable Date).

– 9 –

LETTER FROM THE BOARD

or it is deemed to be interested in by virtue of the SFO (other than Shares in which either member of the Chan Concert Group is deemed to be interested by virtue of the agreement with Scenemay Holdings Limited, LI Chu Kwan and LI Wing Yin under sections 317 and 318 of the SFO) not to, accept the Offer, the aggregate interests in the total issued Shares held by (i) the Chan Concert Group may increase from the current level of approximately 27.40% to a maximum level of approximately 34.84%; (ii) Scenemay Holdings Limited may increase from the current level of approximately 18.35% to a maximum level of approximately 23.33%; (iii) the Controlling Shareholders may increase from the current level of approximately 45.74% to a maximum level of approximately 58.17%; and (iv) the Controlling Shareholders and parties acting in concert with any of them may increase from the current level of approximately 58.95% to a maximum of approximately 74.96%, in each case upon completion of the Offer, thereby triggering an obligation by the Controlling Shareholders under Rule 26 of the Takeovers Code to make a mandatory general offer for all Shares not already beneficially owned by them and parties acting in concert with any of them unless the Whitewash Waiver is obtained. Consequently, an application for the Whitewash Waiver has been made to the Executive by the Controlling Shareholders.

The Executive has agreed, subject to the approval of the Independent Shareholders for the Offer and the Whitewash Waiver at the EGM by way of poll, to waive any obligations of the Controlling Shareholders to make a mandatory general offer which might result from completion of the Offer.

The maximum potential holding of voting rights of the Controlling Shareholders and parties acting in concert with them resulting from the Offer may exceed 50% of the voting rights of the Company, and the Controlling Shareholders and parties acting in concert with them may increase their holding without incurring any further obligation under Rule 26 of the Takeovers Code to make a general offer thereafter.

If the Whitewash Waiver is not granted by the Executive or if the resolution to approve the Whitewash Waiver is not passed by the Independent Shareholders, the Offer will not proceed and will immediately lapse.

CHANGES IN SHAREHOLDING STRUCTURES

As at the Latest Practicable Date, there were 477,447,000 Shares in issue and there were no outstanding options, warrants, derivatives or convertibles which may confer any rights on the holder(s) thereof to subscribe for, convert or exchange into Shares.

Set out below is a table showing the shareholding structure of the Company (A) as at the Latest Practicable Date and (B) immediately after the completion of the Offer on the assumptions that no additional Shares will be issued from the Latest Practicable Date up to and including the date of completion of the Offer and that (i) all Shareholders other than the Chan Concert Group accept the Offer in respect of all of their Shares; or (ii) neither the Chan Concert Group, Scenemay Holdings Limited nor NG Tak Kwan tender any Share for acceptance and the public Shareholders accept the Offer in full:–

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LETTER FROM THE BOARD

Name of Shareholders Tiger Crown Limited (Note 1 and 4) CHAN William (Notes 2 and 4) Aggregate number of Shares held by the Chan Concert Group Scenemay Holdings Limited (Notes 3, 4 and 5) Aggregate number of Shares held by the Controlling Shareholders NG Tak Kwan (Notes 6 and 7) Aggregate number of Shares held by the Controlling Shareholders and parties acting in concert with any of them Public Shareholders Total	(A) As at the Latest Practicable Date Number of Shares Approximate % 97,104,000 20.34 33,700,000 7.06 130,804,000 27.40 87,604,000 18.35 218,408,000 45.75 63,024,000 13.20 281,432,000 58.95 196,015,000 41.05 477,447,000 100.00	(B) Immediately after completion of the Offer (i) Where all Shareholders other than the Chan Concert Group accept the Offer in respect of all of their Shares (ii) Where neither the Chan Concert Group, Scenemay Holdings Limited nor NG Tak Kwan tender any Share for acceptance and the public Shareholders accept the Offer in full Number of Shares Approximate % Number of Shares Approximate % 97,104,000 25.86 97,104,000 25.86 33,700,000 8.98 33,700,000 8.98 130,804,000 34.84 130,804,000 34.84 61,826,448 16.47 87,604,000 23.33 192,630,448 51.31 218,408,000 58.17 44,479,134 11.85 63,024,000 16.79 237,109,582 63.16 281,432,000 74.96 138,337,418 36.84 94,015,000 25.04 375,447,000 100.00 375,447,000 100.00	(B) Immediately after completion of the Offer (i) Where all Shareholders other than the Chan Concert Group accept the Offer in respect of all of their Shares (ii) Where neither the Chan Concert Group, Scenemay Holdings Limited nor NG Tak Kwan tender any Share for acceptance and the public Shareholders accept the Offer in full Number of Shares Approximate % Number of Shares Approximate % 97,104,000 25.86 97,104,000 25.86 33,700,000 8.98 33,700,000 8.98 130,804,000 34.84 130,804,000 34.84 61,826,448 16.47 87,604,000 23.33 192,630,448 51.31 218,408,000 58.17 44,479,134 11.85 63,024,000 16.79 237,109,582 63.16 281,432,000 74.96 138,337,418 36.84 94,015,000 25.04 375,447,000 100.00 375,447,000 100.00
			100.00

Notes:

Tiger Crown Limited is 100% owned by Rykadan Holdings Limited which in turn is 100% held by HSBC International Trustee Limited as the trustee of Rykadan Trust. CHAN William is the settlor and protector and one of the discretionary beneficiaries of Rykadan Trust. Each of HSBC International Trustee Limited and Rykadan Holdings Limited is therefore deemed to be interested in the 97,104,000 Shares beneficially owned by Tiger Crown Limited.
Tiger Crown Limited, which beneficially owned 97,104,000 Shares, is 100% owned by Rykadan Holdings Limited which in turn is 100% held by HSBC International Trustee Limited as the trustee of Rykadan Trust. CHAN William is the settlor and protector and one of the discretionary beneficiaries of Rykadan Trust. CHAN William is also the sole director of Tiger Crown Limited and Rykadan Holdings Limited. Therefore, in addition to the 33,700,000 Shares beneficially owned by CHAN William, he is deemed to be interested in the 97,104,000 Shares beneficially owned by Tiger Crown Limited.

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LETTER FROM THE BOARD

As the entire issued share capital of Scenemay Holdings Limited is owned by LI Chu Kwan and LI Wing Yin in equal shares, each of LI Chu Kwan and LI Wing Yin is deemed to be interested in the Shares beneficially owned by Scenemay Holdings Limited, being 87,604,000 Shares as at the Latest Practicable Date.
Since Tiger Crown Limited, Scenemay Holdings Limited, CHAN William, LI Chu Kwan and LI Wing Yin are regarded as a group of shareholders acting in concert to exercise their voting rights in the Company and are parties to an agreement under section 317 of the SFO, pursuant to the provisions of the SFO, each of them is deemed to be interested in the Shares owned by the other parties to the agreement.
The number of Shares and shareholding percentage held by Scenemay Holdings Limited immediately after completion of the Offer will be (i) less/lower than those shown in the table if, for instance, Scenemay Holdings Limited accepts the Offer in respect of all the Shares beneficially owned by it but all valid acceptances received are fewer than the Maximum Number of Shares; or (ii) more/ higher than those shown in the table if, for instance, Scenemay Holdings Limited accepts the Offer in respect of only part of the Shares beneficially owned by it and all valid acceptances received are more than the Maximum Number of Shares, or it does not accept the Offer at all and valid acceptances are received from the other Shareholders. For illustration purposes only, (i) the number of Shares and shareholding percentage held by Scenemay Holdings Limited may at most drop to zero (assuming that it accepts the Offer in respect of all the Shares beneficially owned by it but no other valid acceptance is received) or (ii) its shareholding percentage may at most increase to 23.33% while maintaining its shareholding at 87,604,000 Shares (assuming that it does not accept the Offer and valid acceptances received in total equal to or exceed the Maximum Number of Shares).
The number of Shares and shareholding percentage held by NG Tak Kwan immediately after completion of the Offer will be (i) less/lower than those shown in the table if, for instance, NG Tak Kwan accepts the Offer in respect of all the Shares beneficially owned by him but all valid acceptances received are fewer than the Maximum Number of Shares; or (ii) more/higher than those shown in the table if, for instance, NG Tak Kwan accepts the Offer in respect of only part of the Shares beneficially owned by him and all valid acceptances received are more than the Maximum Number of Shares, or he does not accept the Offer at all and valid acceptances are received from the other Shareholders. For illustration purposes only, (i) the number of Shares and shareholding percentage held by NG Tak Kwan may at most drop to zero (assuming that he accepts the Offer in respect of all the Shares beneficially owned by it but no other valid acceptance is received) or (ii) his shareholding percentage may at most increase to 16.79% while maintaining his shareholding at 63,024,000 Shares (assuming that he does not accept the Offer and valid acceptances received in total equal to or exceed the Maximum Number of Shares).
NG Tak Kwan is a non-executive Director. As at the Latest Practicable Date, NG Tak Kwan was interested in 63,024,000 Shares.

As illustrated in column (B)(ii) of the table above, even if the shareholding of public Shareholders decreases to the extent as shown in column (B)(ii) above, over 25% of the issued Shares will still be held by public Shareholders and accordingly the Company will comply with the public float requirement under Rule 8.08 of the Listing Rules after completion of the Offer.

As at the Latest Practicable Date, save as disclosed above, none of the Company, the Controlling Shareholders or persons acting in concert with any of them held, owned, controlled or had direction over any Shares, outstanding options, derivatives, warrants or securities which are convertible or exchangeable into Shares, or had entered into any outstanding derivatives in respect of securities in the Company.

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LETTER FROM THE BOARD

As at the Latest Practicable Date, neither the Company nor parties acting in concert with it had received any irrevocable commitment to accept the Offer.

REASONS FOR THE OFFER

The price of the Shares has historically been traded at a significant discount to the Group’s net asset value attributable to owners of the Company per Share. Taking the closing price of the Shares of HK$0.4500 on the Last Trading Day as the reference date, the discounts to the Group’s net asset value attributable to owners of the Company per Share of HK$2.77 as at 31 March 2020 for the below periods are as follows:

(a) discount to the Group’s net asset value attributable to equity shareholders of the Company per Share as at 31 March 2020 based on the closing price of the Shares of HK$0.4500 on the Last Trading Day: approximately 83.77%;
(b) discount to the Group’s net asset value attributable to equity shareholders of the Company per Share as at 31 March 2020 based on the average closing price of the Shares of approximately HK$0.4313 as quoted on the Stock Exchange for the three months up to and including the Last Trading Day: approximately 84.44%;
(c) discount to the Group’s net asset value attributable to equity shareholders of the Company per Share as at 31 March 2020 based on the average closing price of the Shares of approximately HK$0.4566 as quoted on the Stock Exchange for the six months up to and including the Last Trading Day: approximately 83.53%; and
(d) discount to the Group’s net asset value attributable to equity shareholders of the Company per Share as at 31 March 2020 based on the average closing price of the Shares of approximately HK$0.5493 as quoted on the Stock Exchange for the twelve months up to and including the Last Trading Day: approximately 80.18%.

In view of the above, the Board (other than the members of the Independent Board Committee who express their opinion in the Letter from the Independent Board Committee of this Offer Document) considers that the Offer is in the best interest of the Shareholders with the following reasons:

(a) Premium valuation: The Offer provides an opportunity for the Shareholders to sell their Shares at a premium to the prevailing market prices of the Shares and receive cash proceeds in return. In particular, the closing price of the Shares has never exceeded the Offer Price after 27 September 2019 for almost 12 months. The Offer Price represented a premium of approximately 55.55% over the average closing price during the last 30 trading days immediately prior to and including the Last Trading Day; and
(b) Certain and immediate value: The Shares had been traded on the Stock Exchange at an average daily trading volume of approximately 71,397 Shares for the 6 months up to and including the Last Trading Day, representing less than

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LETTER FROM THE BOARD

0.02% of the total issued Shares as at the Last Trading Day. The Offer presents an immediate opportunity for the Shareholders to dispose of their Shares, not constrained by trading liquidity, and exit their investment for cash proceeds.

Therefore, the Directors (other than the independent non-executive Directors, whose views are set out in the Letter from the Independent Board Committee of this Offer Document after considering the view of the Independent Financial Adviser) believe that the Offer provides an immediate opportunity for the Shareholders to dispose their Shares (or a part thereof) at a premium to the prevailing market prices or to increase their proportionate equity interests in the Company by retaining their shareholdings and participating in the future prospects of the Group, and that the Offer, if completed, is accretive to the net asset value attributable to equity shareholders of the Company per Share and, with less Shares in issue, the market price per Share, thus benefiting all the Shareholders and enhancing the future financing capability of the Company through secondary issuances.

In determining the Maximum Number of Shares to be bought-back by the Company, the Board has taken into account the internal financial resources of the Group available to satisfy the Offer. Assuming that the Maximum Number of Shares will be bought-back by the Company and based on the audited consolidated net assets of the Group as at 31 March 2020, it is expected that the net assets of the Group will decrease, whilst the net asset value attributable to equity shareholders of the Company per Share will increase, upon completion of the Offer.

FINANCIAL EFFECTS OF THE OFFER

The unaudited pro forma financial information of the Group upon completion of the Offer, illustrating the financial impact of the Offer on the loss per Share, net assets per Share, liabilities and working capital (expressed as net current assets) of the Group, is set out in Appendix III to this Offer Document.

Loss per Share

Based on the unaudited pro forma financial information of the Group set out in Appendix III to this Offer Document and assuming that full acceptance of the Offer was completed on 1 April 2019 and the Maximum Number of Shares had been bought-back, the loss per Share attributable to the equity shareholders of the Company for the year ended 31 March 2020 would, as a result, have increased by approximately 27.2% from approximately HK16.2 cents per Share to approximately HK20.6 cents per Share.

Net assets per Share

Based on the unaudited pro forma financial information of the Group set out in Appendix III to this Offer Document and assuming that full acceptance of the Offer was completed on 31 March 2020 and the Maximum Number of Shares had been bought-back, the net assets per Share attributable to the equity shareholders of the Company as at 31 March 2020 would, as a result, have increased by approximately 20.2% from approximately HK$2.77 per Share to approximately HK$3.33 per Share.

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LETTER FROM THE BOARD

Liabilities

The Offer will be paid in cash and funded by the internal resources of the Group. The liabilities as at 31 March 2020 would remain unchanged at approximately HK$462,919,000 following completion of the Offer.

Working capital

The working capital (expressed as net current assets) as at 31 March 2020 would decrease by approximately 9.9% from approximately HK$752,185,000 to approximately HK$677,825,000.

The Directors confirm that the Group will have sufficient working capital to meet its normal operating requirements after completion of the Offer assuming full acceptance of the Offer.

Based on the above and having considered the manner of funding of the consideration for the Offer, the Company considers that completion of the Offer will have no material adverse effect on the Group’s loss per Share, net assets per Share, liabilities or working capital.

INFORMATION ON THE GROUP

The Company is incorporated in Cayman Islands with limited liabilities and the Shares are listed on the Main Board of the Stock Exchange. The Group operates and invests in real estate development, real estate investment, distribution of building materials and asset, investment and fund management.

FUTURE INTENTIONS ON THE GROUP

Completion of the Offer will not result in a change in the composition of the Board. The Controlling Shareholders intend to continue with the existing businesses of the Group and does not intend to introduce any major change to the businesses of the Group nor conduct any redeployment of the fixed assets of the Group. Accordingly, there will be no material change to the existing businesses and employment of the existing employees of the Group as a result of the Offer.

The Controlling Shareholders have also informed the Company that it is their intention that, following completion of the Offer, the Group’s businesses, management and the Board will remain unchanged. It is also their intention to maintain the Company’s listing on the Stock Exchange.

The Company has no current plan to declare or pay any dividend or distribution from the Latest Practicable Date until the closing, lapse or withdrawal of the Offer.

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LETTER FROM THE BOARD

The Company has no intention to rely on sections 705, 711 to 716 and 718 to 721 of the Companies Ordinance (Cap. 622) or any comparable provisions of the company law in Cayman Islands in relation to the right of compulsory acquisition of Shares held by minority Shareholders after the Offer. The Company intends to continue to meet the public float requirement of Rule 8.08 of the Listing Rules.

EXTRAORDINARY GENERAL MEETING

The Offer is conditional upon, among other things, the passing of an ordinary resolution and a special resolution by way of poll to approve the Offer and the Whitewash Waiver, respectively, by the Independent Shareholders, either voting in person or by proxy, at the EGM.

The Controlling Shareholders and NG Tak Kwan will abstain from voting on the resolutions in respect of the Offer and the Whitewash Waiver to be proposed at the EGM.

The EGM will be convened at 1:00 p.m. on Monday, 23 November 2020 for considering and, if thought fit, approving the resolutions in respect of the Offer and the Whitewash Waiver.

A notice convening the EGM is set out on pages EGM-1 to EGM-3 of this Offer Document and a form of proxy for use at the EGM is also enclosed. Whether or not you intend to attend the EGM in person, you are requested to complete the accompanying form of proxy in accordance with the instructions printed thereon and return it to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not later than 48 hours before the time appointed for holding the EGM or any adjournment or postponement thereof (as the case may be). Such form of proxy for use at the EGM is also published on the respective websites of the Stock Exchange (www.hkexnews.hk) and the Company (www.rykadan.com). Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or at any adjournment or postponement thereof (as the case may be) in person should you so wish.

The Independent Board Committee, comprising all the independent non-executive Directors who have no interest in the Offer and the Whitewash Waiver, has been formed to advise the Independent Shareholders in respect of the Offer and the Whitewash Waiver. The only non-executive Director, namely, NG Tak Kwan, is deemed to be party acting in concert with CHAN William and therefore is considered to have interests in the Offer and the Whitewash Waiver and cannot be a member of the Independent Board Committee. Innovax Capital has been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the Offer and the Whitewash Waiver are fair and reasonable so far as the Independent Shareholders are concerned, whether they are in the interests of the Company and the Shareholders as a whole, and as to acceptance and voting.

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LETTER FROM THE BOARD

Independent Shareholders should note that their decisions on how to vote on the resolutions to be proposed at the EGM to approve the Offer and the Whitewash Waiver shall not affect their decisions on whether to accept the Offer or not. Even if they vote in favour of or against the resolutions to be proposed at the EGM, they are free nonetheless to accept or not to accept the Offer.

RECOMMENDATION

Your attention is drawn to the letter from the Independent Board Committee as set out on pages 28 to 29 of this Offer Document and to the letter from the Independent Financial Adviser as set out on pages 30 to 55 of this Offer Document. The latter contains, among other things, the advice of the Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders in respect of the Offer and the Whitewash Waiver and the principal factors and reasons considered by it in arriving at such advice. Taking into account the letter from the Independent Board Committee and all other factors as stated under the section headed “ Reasons for the Offer ” above as a whole, the Board is of the opinion that the terms of the Offer and the Whitewash Waiver are fair and reasonable so far as the Independent Shareholders are concerned. The Board therefore recommends the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM approving the Offer and the Whitewash Waiver.

FURTHER INFORMATION

Your attention is also drawn to the terms of the Offer as set out in the letter from Dongxing Securities on pages 18 to 27 and in Appendix I to this Offer Document, the financial information of the Group as set out in Appendix II to this Offer Document, the unaudited pro forma financial information of the Group as set out in Appendix III to this Offer Document, the property valuation report as set out in Appendix IV to this Offer Document and the general information as set out in Appendix V to this Offer Document.

Shareholders and potential investors should note that the Offer is subject to all of the Conditions being fulfilled and, therefore, may or may not become unconditional. Shareholders and potential investors are advised to exercise caution when dealing in the Shares and should consult their professional advisers when in doubt.

Yours faithfully, For and on behalf of the Board

Rykadan Capital Limited 宏基資本有限公司 Chan William

Chairman and Chief Executive Officer

– 17 –

LETTER FROM DONGXING SECURITIES

==> picture [28 x 28] intentionally omitted <==

==> picture [4 x 4] intentionally omitted <==

30 October 2020

CONDITIONAL CASH OFFER BY DONGXING SECURITIES (HONG KONG) COMPANY LIMITED ON BEHALF OF RYKADAN CAPITAL LIMITED TO BUY-BACK UP TO 102,000,000 SHARES AT HK$0.68 PER SHARE AND APPLICATION FOR WHITEWASH WAIVER

INTRODUCTION

On 28 September 2020, the Board announced that the Offer would be made by Dongxing Securities on behalf of the Company, subject to the fulfilment of the Conditions, to buy-back for cancellation up to the Maximum Number of Shares, being 102,000,000 Shares, representing approximately 21.36% of the issued Shares as at the Latest Practicable Date, at the price of HK$0.68 per Share. The Offer will be made in full compliance with the Share Buy-backs Code. The Shareholders may accept the Offer by lodging the Acceptance Form for the sale of their Shares to the Company at the Offer Price.

The Shares to be bought-back by the Company will not exceed the Maximum Number of Shares. There is no minimum number of Shares proposed to be bought-back under the Offer. This letter sets out the details of the terms of the Offer. Further details of the terms and conditions of the Offer are set out in Appendix I to this Offer Document and the accompanying Acceptance Forms

THE OFFER

The Offer is being made by Dongxing Securities on behalf of the Company subject to fulfilment of the Conditions to buy-back the Shares on the following basis up to the Maximum Number, being 102,000,000 Shares:

For every Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.68 in cash

All Shareholders are entitled to accept the Offer by submitting Acceptance Forms for the sale of any number of their Shares to the Company.

The salient terms of the Offer are as follows:

(i) Dongxing Securities will make the Offer to the Shareholders on behalf of the Company, subject to fulfilment of the Conditions, to buy-back up to the Maximum Number of Shares at the Offer Price;
(ii) Shareholders may accept the Offer in respect of any number of their Shares at the Offer Price up to their entire shareholding (subject to the procedures for scaling down described under the section headed “ Common pool method for scaling down excess acceptances ” below);

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LETTER FROM DONGXING SECURITIES

(iii) The Offer is not conditional upon a minimum number of Shares being tendered for buy-back;
(iv) All Shares validly tendered will be bought-back to the extent that the aggregate number of Shares bought-back pursuant to the Offer will not thereby exceed the Maximum Number of Shares. If the number of Shares validly tendered exceeds the Maximum Number of Shares, the number of Shares to be bought-back from each Accepting Shareholder will be reduced proportionally so that the number of Shares bought-back by the Company in aggregate will not exceed the Maximum Number of Shares. Further details of the procedures for scaling down are described under the section headed “ Common pool method for scaling down excess acceptances ” below;
(v) Acceptance Forms which have been duly completed and received by or on behalf of the Company will become irrevocable and cannot be withdrawn after the Offer has become or been declared unconditional unless in accordance with Rule 19.2 of the Takeovers Code;
(vi) Shares will be bought-back in cash, free of brokerage commission, Stock Exchange transaction levies and trading charges, save that the amount of seller’s ad valorem stamp duty due on the Shares bought-back attributable to the Accepting Shareholders and calculated at a rate of HK$1.00 for every HK$1,000 or part thereof of the market value of the Shares to be bought-back under the Offer or the consideration payable by the Company in respect of relevant acceptances of the Offer, whichever is the higher, will be deducted by the Company from the amount payable to the Accepting Shareholders and will be paid by the Company on behalf of the Accepting Shareholders. The Company will arrange for payment of the seller’s ad valorem stamp duty on behalf of the Accepting Shareholders in respect of the Offer;
(vii) Shares bought-back will be treated as cancelled and will not be entitled to any dividend or distribution declared for any record date set on or after the date of their cancellation. Accordingly, the issued share capital of the Company will be diminished by the nominal value of the Shares being bought-back; and
(viii) Shares will be bought-back free from all liens, charges, encumbrances, equitable claims or adverse interests, rights of pre-emption or other third party rights of any nature. Accordingly, the submission of an Acceptance Form by an Accepting Shareholder will be deemed to constitute a warranty by that Accepting Shareholder to Dongxing Securities and the Company that the Shares are being sold free from all liens, charges, encumbrances, equitable claims or adverse interests, rights of pre-emption or other third party rights of any nature and together with all rights attaching or accruing thereto (including the right to any dividend or distribution that may be declared for any record date set on or after the date of cancellation as referred to in (vii) above).

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LETTER FROM DONGXING SECURITIES

In compliance with Rule 3 of the Share Buy-backs Code, the Offer will be subject to the approval by the Independent Shareholders in general meeting by a majority of votes by way of poll. The Offer will also be subject to the other terms and conditions referred to under the section headed “ Conditions of the Offer ” below.

As at the Latest Practicable Date, save for the 477,447,000 Shares in issue, the Company did not have outstanding options, warrants, derivatives or convertibles which may confer any rights to the holder(s) thereof to subscribe for, convert or exchange into Shares.

THE OFFER PRICE

The Offer Price of HK$0.68 per Share values the entire issued share capital of the Company as at the Latest Practicable Date at approximately HK$324.7 million.

The Offer Price represents:

(i) a premium of approximately 15.25% over the closing price of the Shares of HK$0.5900 per Share as quoted on the Stock Exchange on the Latest Practicable Date; and
(ii) a premium of approximately 51.11% over the closing price of the Shares of HK$0.4500 per Share as quoted on the Stock Exchange on the Last Trading Day;
(iii) a premium of approximately 50.78% over the average price of HK$0.4510 per Share, being the average closing price of the Shares as quoted on the Stock Exchange for the five consecutive trading days immediately prior to and including the Last Trading Day;
(iv) a premium of approximately 51.45% over the average price of HK$0.4490 per Share, being the average closing price of the Shares as quoted on the Stock Exchange for the ten consecutive trading days immediately prior to and including the Last Trading Day;
(v) a premium of approximately 55.55% over the average price of HK$0.4372 per Share, being the average closing price of the Shares as quoted on the Stock Exchange for the thirty consecutive trading days immediately prior to and including the Last Trading Day;
(vi) a discount of approximately 75.47% to the Group’s net asset value attributable to owners of the Company of approximately HK$2.77 per Share pursuant to the latest audited consolidated financial statements of the Company as at 31 March 2020.

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LETTER FROM DONGXING SECURITIES

At the Offer Price, the Offer, if accepted in full, will result in the Company paying HK$69,360,000 in aggregate to the Accepting Shareholders in cash which will be funded by internal resources of the Group. Dongxing Securities is satisfied that the Company has sufficient financial resources to enable it to satisfy acceptances of the Offer in full.

CONDITIONS OF THE OFFER

The Offer is conditional upon fulfillment of all of the following Conditions:

(a) the approval by more than 50% of the votes cast by the Independent Shareholders, voting in person or by proxy, by way of poll having been obtained at the EGM in respect of the Offer;
(b) the approval by at least 75% of the votes cast by the Independent Shareholders, voting in person or by proxy, by way of poll having been obtained at the EGM in respect of the Whitewash Waiver; and
(c) the Executive granting the Whitewash Waiver and the satisfaction of the conditions (if any) attached to the Whitewash Waiver and the Whitewash Waiver not having been revoked or withdrawn.

None of the above conditions can be waived.

The Offer is subject to all of the Conditions being fulfilled. If the resolution to approve the Offer is not passed by the Independent Shareholders, or if the resolution to approve the Whitewash Waiver is not passed by the Independent Shareholders or if the Whitewash Waiver is not granted by the Executive, the Offer will not proceed and will immediately lapse.

Tiger Crown Limited, Scenemay Holdings Limited and CHAN William and parties acting in concert with any of them and any Shareholder who has a material interest in the Offer or the Whitewash Waiver that is different from all other Shareholders or who is involved in or interested in the Offer and/or the Whitewash Waiver (other than as a Shareholder), will be required to abstain from voting on the respective resolutions in respect of the Offer and the Whitewash Waiver to be proposed at the EGM.

Pursuant to Rule 5.1 of the Share Buy-backs Code and Rule 15.3 of the Takeovers Code, if the Offer is declared unconditional, Shareholders who have not tendered their Shares will be able to tender their Shares for acceptance under the Offer for a period of 14 days thereafter.

Acceptance Forms which have been duly completed and received by or on behalf of the Company will become irrevocable and cannot be withdrawn after the Offer has become or been declared unconditional unless in accordance with Rule 19.2 of the Takeovers Code. All Shares bought-back under the Offer will be cancelled.

The Offer will not be conditional as to any minimum number of acceptances.

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LETTER FROM DONGXING SECURITIES

COMMON POOL METHOD FOR SCALING DOWN EXCESS ACCEPTANCES

Shareholders may accept the Offer in respect of some or all of their shareholding. If valid acceptances received are fewer than or equal to the Maximum Number of Shares, all Shares validly accepted will be bought-back. However, if valid acceptances received in total exceed the Maximum Number of Shares, the number of Shares to be bought-back by the Company from each Accepting Shareholder will be determined in accordance with the following formula, save that the Company may, in its absolute discretion, round such figure up or down to the nearest whole number with the intention of avoiding (as far as practicable) Shares being held by Accepting Shareholders in fractional entitlements of a Share:

==> picture [65 x 24] intentionally omitted <==

A = 102,000,000 Shares, being the Maximum Number of Shares
B = Total number of Shares tendered by valid acceptances received from all Accepting Shareholders under the Offer
C
= Total number of Shares tendered by valid acceptances received from each Accepting Shareholder under the Offer

As a result, it is possible that not all of such Shares tendered by an Accepting Shareholder will ultimately be bought-back. The total number of Shares which will be bought-back by the Company will not exceed the Maximum Number of Shares. The decision of the Company as to any scaling down of acceptances in accordance with the above formula and as to the treatment of fractions will be conclusive and binding on all Shareholders.

ODD LOTS

The Shares are currently traded in board lot of 1,000 Shares each. The Company has no intention to change the board lot size as a result of the Offer. Shareholders should note that acceptance of the Offer may result in their holding of odd lots of Shares. The Company has appointed Phillip Securities (Hong Kong) Limited as the designated broker to match sales and purchases of odd lot holdings of Shares for a reasonable period after completion of the Offer in order to enable such Accepting Shareholders to dispose of their odd lots or to top up their odd lots to whole board lots. Shareholders should note that the matching of odd lots is not guaranteed. Details of such arrangements are provided in “Appendix I – Terms of the Offer – 7. Odd Lots”.

IRREVOCABLE UNDERTAKINGS

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LETTER FROM DONGXING SECURITIES

Shares (representing approximately 7.06% of all issued Shares as at the Latest Practicable Date) were beneficially owned by CHAN William and (ii) 97,104,000 Shares (representing approximately 20.34% of all issued Shares as at the Latest Practicable Date) were beneficially owned by Tiger Crown Limited (which is 100% owned by Rykadan Holdings Limited, which in turn was 100% held under the Rykadan Trust of which HSBC International Trustee Limited was the trustee and CHAN William was the settlor and protector and one of the discretionary beneficiaries).

WHITEWASH WAIVER

As at the Latest Practicable Date,

(i) the Chan Concert Group, comprising CHAN William and Tiger Crown Limited together beneficially owned 130,804,000 Shares (representing approximately 27.40% of all issued Shares as at the Latest Practicable Date);
(ii) Scenemay Holdings Limited beneficially owned 87,604,000 Shares (representing approximately 18.35% of all the issued Shares as at the Latest Practicable Date);
(iii) the Controlling Shareholders were together interested in 218,408,000 Shares (representing approximately 45.74% of all issued Shares as at the Latest Practicable Date); and
(iv) the Controlling Shareholders and parties acting in concert with any of them were together interested in 281,432,000 Shares (representing approximately 58.95% of all issued Shares as at the Latest Practicable Date).

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LETTER FROM DONGXING SECURITIES

increase from the current level of approximately 18.35% to a maximum level of approximately 23.33%; (iii) the Controlling Shareholders may increase from the current level of approximately 45.74% to a maximum level of approximately 58.17%; and (iv) the Controlling Shareholders and parties acting in concert with any of them may increase from the current level of approximately 58.95% to a maximum of approximately 74.96%, in each case upon completion of the Offer, thereby triggering an obligation by the Controlling Shareholders under Rule 26 of the Takeovers Code to make a mandatory general offer for all Shares not already beneficially owned by them and parties acting in concert with any of them unless the Whitewash Waiver is obtained.

Accordingly, an application for the Whitewash Waiver has been made by the Controlling Shareholders to the Executive.

PROCEDURES FOR ACCEPTANCE

In order to accept the Offer, Shareholders should complete and return the accompanying Acceptance Form in accordance with the instructions set out in this Offer Document and the instructions printed on the Acceptance Form. The instructions in this Offer Document should be read together with the instructions on the Acceptance Form (which instructions form part of the terms and conditions of the Offer).

In order to be valid, the completed Acceptance Form should be forwarded, together with the Title Documents for not less than the number of Shares in respect of which the relevant Shareholder wishes to accept the Offer, by post or by hand to the Registrar, Tricor Investor Services Limited at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, in an envelope marked “ Rykadan Capital Limited – Buy-back Offer ” as soon as possible after receipt of the Acceptance Forms but in any event so as to reach the Registrar by no later than 4:00 p.m. (Hong Kong time) on Monday, 7 December 2020, or such later time and/or date as the Company may, subject to the Takeovers Code, decide and announce.

Unless the Offer is extended or revised in accordance with the Takeovers Code, no Acceptance Form received after the Latest Acceptance Time will be accepted.

If the Acceptance Form is executed by a person other than the registered holder, appropriate evidence of authority (e.g. a grant of probate or certified copy of a power of attorney) must be delivered to the Registrar with the completed Acceptance Form.

No acknowledgement of receipt of any Acceptance Form or Title Documents will be given.

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LETTER FROM DONGXING SECURITIES

Only one Acceptance Form will be accepted from each Shareholder by the Registrar. Acceptances duly received will become irrevocable and cannot be withdrawn after the Offer has been declared unconditional.

OVERSEAS SHAREHOLDERS

The making of the Offer to the Overseas Shareholders may be subject to the laws of the relevant jurisdictions. The laws of the relevant jurisdictions may prohibit the making of the Offer to the Overseas Shareholders or require compliance with certain filing, registration or other requirements in respect of the Offer.

The availability of the Offer to any Overseas Shareholders may be affected by the applicable laws, regulations and rules of their relevant jurisdictions of residence. The Overseas Shareholders should observe any applicable legal and regulatory requirements and, where necessary, consult their own professional advisers in the relevant jurisdictions. It is the responsibility of each Overseas Shareholder who wishes to accept the Offer to satisfy himself/herself/itself as to the full observance of the laws, regulations and rules of the relevant jurisdictions in connection with the acceptance of the Offer (including the obtaining of any governmental or other consent which may be required or the compliance with other necessary formalities and the payment of any transfer or other taxes due by such Overseas Shareholders in respect of such jurisdictions).

According to the Register, as at the Latest Practicable Date, the Company had Overseas Shareholders with registered addresses located in the Australia and Canada.

As at the Latest Practicable Date, the Company has obtained advice from law firms qualified to advise on the Australian law and Canadian law, and it had been advised that under the applicable legislations and regulations of these jurisdictions, there was no regulatory restriction of any regulatory body or stock exchange with respect to extending the Offer to these Overseas Shareholders in the relevant jurisdictions. Accordingly, the Offer will be extended to the Overseas Shareholders with registered addresses in the Australia and Canada.

It is the responsibility of each Overseas Shareholder who wishes to accept the Offer to satisfy himself or herself as to the full observance of the laws of the relevant jurisdictions in that connection, including the obtaining of any governmental or other consents which may be required or compliance with other necessary formalities or legal requirements. Any acceptance of the Offer by any Shareholder shall be deemed to constitute a representation and warranty from such Shareholder to the Company that all applicable local laws and requirements have been observed and complied with. For the avoidance of doubt, neither Hong Kong Securities Clearing Company Limited nor HKSCC Nominees Limited will give, or be subject to, any of the above representation and warranty. Shareholders should consult their professional advisers if in doubt.

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LETTER FROM DONGXING SECURITIES

NOMINEE REGISTRATION OF SHARES

To ensure equality of treatment of all Shareholders, those registered Shareholders who hold Shares as nominees for more than one beneficial owner should, as far as practicable, treat the holding of each beneficial owner separately. In order for beneficial owners of the Shares, whose investments are registered in nominee names (including those whose interests in Shares are held through CCASS) to accept the Offer, it is essential that they provide instructions to their nominee agents of their intentions with regards to the Offer as early as possible.

RESPONSIBILITY FOR DOCUMENTS

All communications, notices, Acceptance Form, the Title Documents and remittances to be delivered or sent by, to or from any Shareholder will be delivered or sent by, to and from them, or their designated agents, at their risk and none of the Company, Dongxing Securities, the Registrar or any of their respective directors or any other persons involved in the Offer accepts any liability for any loss or any other liabilities whatsoever which may rise as a result.

SETTLEMENT

Subject to the Offer becoming unconditional and provided that a duly completed Acceptance Form, accompanied by the relevant Title Documents are received by the Registrar by not later than the Latest Acceptance Time and are or are deemed to be in order, the Registrar will inform the relevant Accepting Shareholder by post of the buy-back of its/ his/her Shares. At the same time, the Registrar will send, by ordinary post at that Accepting Shareholder’s risk, a remittance for such total amount as is due to that Accepting Shareholder under the Offer, subject to deduction for the seller’s ad valorem stamp duty due on the buy-back of the Shares as disclosed in the section headed “the Offer” above, as soon as possible, but in any event within 7 business days (as defined under the Takeovers Code) following the close of the Offer.

If the Shares of an Accepting Shareholder have not been bought-back by the Company in full, the Title Documents in respect of the balance of such Shares or a replaced certificate therefor will be returned or sent to it/him/her by ordinary post at its/his/her own risk, as soon as possible, but in any event within 10 days following the close of the Offer.

If the Offer does not become unconditional, the Title Documents will be returned and/ or sent to each Accepting Shareholder (by ordinary post, at that Accepting Shareholder ’s own risk) within 10 days of the lapse of the Offer. Where any Accepting Shareholder has sent one or more transfer receipt(s) and in the meantime one or more Share certificate(s) has/have been collected on that Accepting Shareholder ’s behalf in respect thereof, that Accepting Shareholder will be sent (by ordinary post, at that Accepting Shareholder ’s own risk) such Share certificate(s) in lieu of the transfer receipt(s).

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LETTER FROM DONGXING SECURITIES

TAX IMPLICATIONS

Shareholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of their acceptance of the Offer. It is emphasized that none of the Company, its ultimate beneficial owners and parties acting in concert with them, Dongxing Securities, Innovax Capital, the Registrar or any of their respective directors or any persons involved in the Offer accepts responsibility for any taxation effects on, or liabilities of, any person or persons as a result of his/her/their acceptance(s) of the Offer.

EGM

A notice convening the EGM to be held at 1:00 p.m. on Monday, 23 November 2020 to consider and, if thought fit, approve the resolution in respect of the Offer and the Whitewash Waiver, is set out on pages EGM-1 to EGM-3 of this Offer Document and a form of proxy for use at the EGM is also enclosed.

GENERAL

Shareholders are strongly advised to consider carefully the information in the letter from the Board, the recommendation of the Independent Board Committee and the advice from Innovax Capital contained in this Offer Document, and to consult their professional advisers as they see fit.

Your attention is also drawn to the information set out in the appendices of this Offer Document which form part of this Offer Document.

Yours faithfully, For and on behalf of

Dongxing Securities (Hong Kong) Company Limited Chan Mo Yin Executive Director

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

The following is the text of a letter from the Independent Board Committee to the Independent Shareholders in respect of the Offer and the Whitewash Waiver for inclusion in this Offer Document.

RYKADAN CAPITAL LIMITED 宏基資本有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2288)

30 October 2020

To the Independent Shareholders

Dear Sir/Madam,

CONDITIONAL CASH OFFER BY DONGXING SECURITIES (HONG KONG) COMPANY LIMITED ON BEHALF OF RYKADAN CAPITAL LIMITED TO BUY-BACK UP TO 102,000,000 SHARES AT HK$0.68 PER SHARE AND APPLICATION FOR WHITEWASH WAIVER

We have been appointed by the Board to form the Independent Board Committee to advise you in respect of the Offer and the Whitewash Waiver, details of which are set out in the letter from the Board in the document issued by the Company dated 30 October 2020 (the “ Offer Document ”), in which this letter is included. Capitalised terms used in this letter have the same meanings as defined in the Offer Document unless the context requires otherwise.

Your attention is drawn to the letter from Dongxing Securities set out on pages 18 to 27 of the Offer Document and Appendix I to the Offer Document which contain the terms of the Offer, and the letter from the Independent Financial Adviser set out on pages 30 to 55 of the Offer Document which contains its advice and recommendation to us in respect of the Offer and the Whitewash Waiver as well as the principal factors and reasons for its advice and recommendation.

Having taken into account the factors and reasons considered by, and the opinion of, the Independent Financial Adviser as stated in the aforementioned letter of advice, we are of the opinion that the terms of the Offer and the Whitewash Waiver are fair and reasonable so far as the Independent Shareholders are concerned and that the Offer and the Whitewash Waiver, the granting of which is one of the conditions of the Offer, are in the interests of

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LETTER FROM THE INDEPENDENT BOARD COMMITTEE

the Company and the Shareholders as a whole. We therefore recommend the Independent Shareholders to vote in favour of the resolutions to approve the Offer and the Whitewash Waiver at the EGM.

We also concur with the advice of the Independent Financial Adviser to the Shareholders to accept the Offer as realisation of their investments as they think fit having regard to their own circumstances. However, the Shareholders are reminded to monitor the market price of the Shares during the Offer Period. If during the Offer Period, it transpires that the market price of the Shares exceeds the Offer Price and the sales proceeds (net of the transaction costs) exceed the net proceeds to be received under the Offer, the Shareholders who wish to realise their investments in the Company in whole or in part should, if they are able to do so, seek to sell their Shares in the market instead of accepting the Offer. On the other hand, for those Shareholders who, after considering the information contained in the Offer Document, would like to participate in the future prospects of the Group following completion of the Offer, they should consider retaining all or part of their Shares.

Yours faithfully, the Independent Board Committee TO King Yan, Adam WONG Hoi Ki HO Kwok Wah, George Independent Independent Independent Non-executive Director Non-executive Director Non-executive Director

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The following is the full text of the letter of advice from Innovax Capital Limited to the Independent Board Committee and the Independent Shareholders, for the purpose of incorporation into this Offer Document.

Room 2002, 20/F Chinachem Century Tower 178 Gloucester Road, Wanchai Hong Kong

30 October 2020

To the Independent Board Committee and the Independent Shareholders of Rykadan Capital Limited.

Dear Sir or Madam,

CONDITIONAL CASH OFFER BY DONGXING SECURITIES

(HONG KONG) COMPANY LIMITED ON BEHALF OF RYKADAN CAPITAL LIMITED TO BUY-BACK UP TO 102,000,000 SHARES AT HK$0.68 PER SHARE AND APPLICATION FOR WHITEWASH WAIVER

INTRODUCTION

We refer to our engagement as the independent financial adviser (“ IFA ”) to advise the Independent Board Committee and the Independent Shareholders in relation to the Offer and the Whitewash Waiver, details of which are set out in the letter from the Board (the “ Letter from the Board ”) and the letter from Dongxing Securities (Hong Kong) Company Limited (the “ Letter from Dongxing Securities ”) contained in this Offer Document (the “ Offer Document ”) dated 30 October 2020 issued by the Company, of which this letter forms part. Terms used in this letter shall have the same meanings as defined in the Offer Document unless the context otherwise requires.

As set out in the Letter from the Board, on 28 September 2020, the Board announced that a conditional cash offer will be made by Dongxing Securities on behalf of the Company in compliance with the Takeovers Code, subject to the fulfilment of the Conditions, to buy-back for cancellation up to the Maximum Number of Shares, being 102,000,000 Shares, representing approximately 21.36% of the total issued share capital of the Company as at the Latest Practicable Date. Shareholders may accept the Offer by submission of Acceptance Forms for the sale of their Shares to the Company at the Offer Price of HK$0.68 per Share.

As at the Latest Practicable Date, (i) the Chan Concert Group, comprising CHAN William and Tiger Crown Limited together beneficially owned 130,804,000 Shares, representing approximately 27.40% of the total issued Shares as at the Latest Practicable Date; (ii) Scenemay Holdings Limited beneficially owned 87,604,000 Shares, representing approximately 18.35% of the total issued Shares as at the Latest Practicable Date; (iii) the Controlling Shareholders are together interested in 218,408,000 Shares, representing approximately 45.74% of the total issued Shares as at the Latest Practicable Date; and (iv)

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

the Controlling Shareholders and parties acting in concert with any of them are together interested in 281,432,000 Shares, representing approximately 58.95% of the total issued Shares as at the Latest Practicable Date. Pursuant to Rule 32.1 of the Takeovers Code and Rule 6 of the Share Buy-backs Code, if as a result of share buy-backs, a shareholder’s proportionate interest in the voting rights of the Company increases, such increase will be treated as an acquisition for the purpose of the Takeovers Code.

Depending on the level of acceptances received from the Accepting Shareholders pursuant to the Offer and taking into account the fact that each member of the Chan Concert Group has irrevocably undertaken to the Company that each of them will not, and will procure the holders of Shares whose Shares he or it is deemed to be interested in by virtue of the SFO (other than Shares in which either member of the Chan Concert Group is deemed to be interested by virtue of the agreement with Scenemay Holdings Limited, LI Chu Kwan and LI Wing Yin under sections 317 and 318 of the SFO) not to, accept the Offer, the aggregate interests in the total issued Shares held by (i) the Chan Concert Group may increase from the current level of approximately 27.40% to a maximum level of approximately 34.84%; (ii) Scenemay Holdings Limited may increase from the current level of approximately 18.35% to a maximum level of approximately 23.33%; (iii) the Controlling Shareholders may increase from the current level of approximately 45.74% to a maximum level of approximately 58.17%; and (iv) the Controlling Shareholders and parties acting in concert with any of them may increase from the current level of approximately 58.95% to a maximum of approximately 74.96%, in each case upon completion of the Offer, thereby triggering an obligation by the Controlling Shareholders under Rule 26 of the Takeovers Code to make a mandatory general offer for all the Shares not already owned by them and parties acting in concert with them unless the Whitewash Waiver is obtained. Consequently, an application has been made to the Executive by the Controlling Shareholders for the Whitewash Waiver.

THE INDEPENDENT BOARD COMMITTEE

In accordance with Rules 2.1 and 2.8 of the Takeovers Code, the Independent Board Committee, comprising all the independent non-executive Directors, namely TO King Yan, Adam, WONG Hoi Ki, and HO Kwok Wah, George, has been formed to advise the Independent Shareholders in respect of the Offer and the Whitewash Waiver.

We, Innovax Capital Limited, have been appointed as the Independent Financial Adviser to advise the Independent Board Committee and the Independent Shareholders as to whether the terms of the Offer and the Whitewash Waiver are fair and reasonable and as to voting on the Offer and the Whitewash Waiver and as to acceptance of the Offer. Our appointment as the Independent Financial Adviser has been approved by the Independent Board Committee in accordance with Rule 2.1 of the Takeovers Code.

OUR INDEPENDENCE

In the two years immediately preceding the Latest Practicable Date, there was no business relationship between us and the Group. As at the Latest Practicable Date, we are not associated or connected with the Company, its controlling shareholders, any party acting, or presumed to be acting, in concert with any of them, or any company controlled by any of

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

them and, accordingly, are considered eligible to give independent advice on the Offer and the Whitewash Waiver. Apart from the normal professional fees payable to us by the Company in connection with this appointment as the Independent Financial Adviser, no arrangement exists whereby we will receive any fees or benefits from any of the Company, its controlling shareholders, any party acting, or presumed to be acting, in concert with any of them, or any company controlled by any of them.

BASIS OF OUR OPINION

In formulating our opinion and recommendation, we have reviewed, among other things, the annual report of the Company for the year ended 31 March 2020 (the “ Annual Report 2020 ”), the property valuation report and other information contained in the Offer Document. In addition, we have relied on the information, facts and representations provided, and the opinions expressed, by the Company and/or the Directors and/or the management of the Group (the “ Management ”). We have also relied on the information, facts and representations contained or referred to in the Offer Document and have assumed that the information, facts and representations contained or the opinions expressed to us are true, accurate and complete in all material aspects at the time they were made and will remain true, accurate and complete up to the Latest Practicable Date. The Company will notify the Shareholders of any material changes during the Offer Period as soon as possible in accordance with Rule 9.1 of the Takeovers Code. Independent Shareholders will be notified of any material changes of such information provided and our opinion, if any, as soon as possible throughout the Offer Period. We have also assumed that all statements of beliefs, opinions, expectations and intentions made by the Directors in the Offer Document were reasonably made after due enquiry and careful consideration, and will be met or carried out as the case may be. We have also sought and received confirmation from the Company that no material facts have been omitted from the information provided to us and the opinions expressed. We consider that the information we have received is sufficient for us to formulate our opinion and recommendation as set out in this letter and have no reason to believe that any material information has been omitted or withheld, or to doubt the truth or accuracy of the information provided to us. We have not, however, conducted any independent investigation into the business and affairs or prospects and outlook of the Group, nor carried out any independent verification of the information provided by the Company and/or the Directors and/or the Management.

As set out in the responsibility statement in Appendix V to the Offer Document, all Directors jointly and severally accept full responsibility for the accuracy of information contained in the Offer Document and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in the Offer Document have been arrived at after due and careful consideration and there are no other facts not contained in the Offer Document, the omission of which would make any statement in the Offer Document misleading. We have not considered the tax and regulatory implications on the Shareholders of their acceptances or non-acceptances of the Offer since these are dependent upon their own individual circumstances. In particular, the Shareholders who are resident outside Hong Kong or subject to overseas taxes or Hong Kong taxation on securities dealings should consider their own tax positions with regard to the Offer and, if in any doubt, should consult their own professional advisers.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

This letter is issued for the information of the Independent Board Committee solely in connection with their consideration of the Offer and the Whitewash Waiver. Except for its inclusion in the Offer Document, this letter may not be quoted or referred to, in whole or in part, nor shall this letter be used for any other purposes, without our prior written consent.

PRINCIPAL FACTORS AND REASONS TAKEN INTO ACCOUNT

In arriving at our opinion and recommendation in relation to the Offer and the Whitewash Waiver, we have considered the following principal factors and reasons:

1. Information on the Group

2. Financial performance of the Group

Set out below is a summary of the consolidated financial results of the Group for the year ended 31 March 2019 (the “ FY2019 ”) and the year ended 31 March 2020 (the “ FY2020 ”), as extracted from the Annual Report 2020:

	For the year	ended/as at
	31 March
	2019	2020
	HK’000	HK’000
Revenue	881,095	110,677
Profit/(loss) for the year	322,641	(84,940)
Profit/(loss) attributable to equity shareholders of the
Company	329,957	(77,319)
Net assets attributable to equity shareholders of
the Company	1,439,286	1,323,385
Net assets value per Share attributable to equity
shareholders of the Company Note 1	HK$3.01	HK$2.77

Note 1 : Based on number of Shares in issue of 477,447,000 as at 31 March 2019 and 2020.

FY2020 Results

In FY2020, the Group’s revenue amounted to approximately HK$110.7 million, representing a decrease of approximately HK$770.7 million or approximately 87.4% as compared to approximately HK$881.1 million recorded in FY2019. Decrease in revenue was due to the absence of one-off gains attributable to the exit and monetising of multiple property redevelopment projects as compared to FY2019, as well as shifting the majority of the revenue from distribution of construction and interior decorative

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

materials business to the joint ventures of the Group, and partially offset by the recognition of income from the sale of properties completed during the year, as well as income generated from the Group’s asset, investment and fund management business.

The Group’s gross profit and gross profit margin were approximately HK$417.4 million and 47.4% and approximately HK$43.2 million and 39.0% for the FY2019 and FY2020, respectively. Loss for FY2020 was approximately HK$84.9 million, while FY2019 was profit making of approximately HK$322.6 million. The loss was mostly attributable to the decrease in revenue as aforementioned, the absence of substantial profits shared from associates, net foreign exchange losses from United States Dollar, Renminbi and British Pound, fair value losses on investment properties in Hong Kong as well as the absorption of losses incurred by joint ventures.

As at 31 March 2020, the net asset attributable to equity shareholders of the Company of the Group was approximately HK$1,323.3 million, representing a decrease of approximately 8.1% as compared to approximately HK$1,439.3 million as at 31 March 2019. On the basis of 477,447,000 Shares in issue as at both dates, the net asset value per Share attributable to equity shareholders of the Company amounted to approximately HK$3.01 and HK$2.77 as at 31 March 2019 and 31 March 2020, respectively. The net asset attributable to equity shareholders of the Company and net asset value per Share attributable to equity shareholders of the Company of the Group remained relatively stable.

As at 31 March 2020, the Group’s bank balances and cash on hand amounted to approximately HK$242.1 million, representing a decrease of approximately HK$193.7 million or approximately 44.4% as compared to approximately HK$435.8 million as at 31 March 2019. Assuming full acceptance of the Offer, the total cash consideration payable by the Group will amount to approximately HK$74.4 million, representing approximately 30.7% of the total bank balances and cash on hand as at 31 March 2020.

3. Outlook of the Group

As noted from the Annual Report 2020 and based on discussion with the management of the Company, the Group intended to (i) expand its asset, investment and fund management business to further diversify its investment portfolio; and (ii) keep on seeking high-potential and larger-scale investment in Hong Kong, overseas markets and the PRC’s Greater Bay Area, combining the capital contributions from its asset, investment and fund management business together with its other existing resources. We also noted from the Letter from the Board that the Group will continue with the its existing business and does not intend to introduce any major change to the businesses nor conduct any redeployment of the fixed assets of the Group. Accordingly, there will be no material change to the existing businesses and employment of the existing employees of the Group as a result of the Offer.

We also noted from the Annual report 2020, the global COVID-19 pandemic has severely impacted the macroeconomic environment in Hong Kong, the U.S.A. and other markets in which the Group operates. However, the Group remains cautiously optimistic about the prospects for its current real estate development portfolio. In particular, the Group believes in the underlying strength of the commercial and industrial property markets in

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Hong Kong, which could be supported by ongoing trends including government policies to revitalise local industrial districts, as well as continued moving by multinational firms from traditional central business districts to emerging central business districts in Hong Kong where the Group focuses.

Outside of the short-to-medium term impact of COVID-19 pandemic, the Group has a cautious but positive outlook for its investment portfolio in the U.S.A.

As further advised by the Management, despite of impact of the COVID-19 and the continuing uncertainties arising from the markets in which the Group operates, the above proactive but cautious strategy will be maintained to support the Group’s future performance and create further value for its shareholders. The Group’s financial performance over the medium– to long-term may depend on the sustainability and recovery of the global and Hong Kong property markets.

4. Principal terms and conditions of the Offer

(i) The Offer

Dongxing Securities, on behalf of the Company, is making the Offer to buy-back up to 102,000,000 Shares, representing approximately 21.36% of the issued Shares as at the Latest Practicable Date, from the Shareholders on the following basis:

For each Share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . HK$0.68 in cash

All Shareholders are entitled to accept the Offer by submitting the Form of Acceptance for the sale of any number of their Shares to the Company on the basis of which is set out in Appendix I “Terms of the Offer” to the Offer Document.

(ii) Principal terms

The salient terms of the Offer are as follows:

(i) Dongxing Securities will make the Offer to the Shareholders on behalf of the Company, subject to fulfilment of the Conditions, to buy-back up to the Maximum Number of Shares at the Offer Price;
(ii) Shareholders may accept the Offer in respect of any number of their Shares at the Offer Price up to their entire shareholding (subject to the procedures for scaling down described under the section headed ”Common pool method for scaling down excess acceptances” in the Letter from Dongxing Securities);
(iii) The Offer is not conditional upon a minimum number of Shares being tendered for buy-back;

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iv) All Shares validly tendered will be bought-back to the extent that the aggregate number of Shares bought-back pursuant to the Offer will not thereby exceed the Maximum Number of Shares. If the number of Shares validly tendered exceeds the Maximum Number of Shares, the number of Shares to be bought-back from each Accepting Shareholder will be reduced proportionally so that the number of Shares bought-back by the Company in aggregate will not exceed the Maximum Number of Shares. Further details of the procedures for scaling down are described under the section headed “ Common pool method for scaling down excess acceptances ” in the Letter from Dongxing Securities;
(v) Acceptance Forms which have been duly completed and received by or on behalf of the Company will become irrevocable and cannot be withdrawn after the Offer has become or been declared unconditional unless in accordance with Rule 19.2 of the Takeovers Code;
(vi) Shares will be bought-back in cash, free of brokerage commission, Stock Exchange transaction levies and trading charges, save that the amount of seller’s ad valorem stamp duty due on the Shares bought-back attributable to the Accepting Shareholders and calculated at a rate of HK$1.00 for every HK$1,000 or part thereof of the market value of the Shares to be bought-back under the Offer or the consideration payable by the Company in respect of relevant acceptances of the Offer, whichever is the higher, will be deducted by the Company from the amount payable to the Accepting Shareholders and will be paid by the Company on behalf of the Accepting Shareholders. The Company will arrange for payment of the seller’s ad valorem stamp duty on behalf of the Accepting Shareholders in respect of the Offer;
(vii) Shares bought-back will be treated as cancelled and will not be entitled to any dividend or distribution declared for any record date set on or after the date of their cancellation. Accordingly, the issued share capital of the Company will be diminished by the nominal value of the Shares being bought-back; and
(viii) Shares will be bought-back free from all liens, charges, encumbrances, equitable claims or adverse interests, rights of pre-emption or other third party rights of any nature. Accordingly, the submission of an Acceptance Form by an Accepting Shareholder will be deemed to constitute a warranty by that Accepting Shareholder to Dongxing Securities and the Company that the Shares are being sold free from all liens, charges, encumbrances, equitable claims or adverse interests, rights of pre-emption or other third party rights of any nature and together with all rights attaching or accruing thereto (including the right to any dividend or distribution that may be declared for any record date set on or after the date of cancellation as referred to in (vii) above).

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Based on our discussion with the Directors, we understood that the Maximum Number of Shares was determined having taken into account the Company’s available financial resources, balancing the intention of enhancing the returns to Shareholders and the Company’s working capital needs. We concur with the Directors’ view that the Offer will not have an adverse impact on the ongoing operations and future plans of the Group.

We also noted from the above salient terms of the Offer that the Shareholders have the absolute discretion on whether to accept the Offer either in full or in part. The acceptance will be binding once all Conditions as described below are met. In addition, with the term set out in paragraph (vi) above, the Offer may represent a cheaper way for Accepting Shareholders to sell their Shares as compared to selling in the market given that there will be no brokerage commission or dealing charges payable under the Offer.

(iii) Conditions of the Offer

The Offer will be conditional upon fulfilment of all of the following Conditions:

(a) the approval by more than 50% of the votes cast by the Independent Shareholders, voting in person or by proxy, by way of a poll having been obtained at the EGM in respect of the Offer;
(b) the approval by at least 75% of the votes cast by the Independent Shareholders, voting in person or by proxy, by way of a poll having been obtained at the EGM in respect of the Whitewash Waiver; and
(c) the Executive granting the Whitewash Waiver and the satisfaction of the conditions (if any) attached to the Whitewash Waiver and the Whitewash Waiver not having been revoked or withdrawn.

None of the above Conditions can be waived, and none of them had been fulfilled as at the Latest Practicable Date.

The Offer is not conditional as to any minimum number of Shares tendered for acceptances.

Further details of the terms of the Offer are contained in the Letter from the Board, Letter from Dongxing Securities and Appendix I to the Offer Document. The Independent Shareholders are urged to read the relevant sections in the Offer Document in full.

As stated in the Letter from the Board, the Executive has agreed, subject to the approval of the Independent Shareholders for the Offer and the Whitewash Waiver at the EGM by way of poll, to waive any obligation of the Controlling Shareholders to make a mandatory general offer which might result from completion of the Offer. If the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Whitewash Waiver is not granted by the Executive or if the resolution to approve the Whitewash Waiver is not passed by the Independent Shareholders, the Offer will not proceed and will immediately lapse.

Tiger Crown Limited, Scenemay Holdings Limited and CHAN William and parties acting in concert with any of them and any Shareholders who have a material interest in the Offer or the Whitewash Waiver that is different from all other Shareholders or who is involved in or interested in the Offer and/or the Whitewash Waiver (other than as a Shareholder), will abstain from voting on the resolutions in respect of the Offer and the Whitewash Waiver to be proposed at the EGM. Each of CHAN William (being the applicant in the Whitewash Waiver) and NG Tak Kwan (being presumed to be acting in concert with CHAN William in the context of the Offer and the Whitewash Waiver under the Takeovers Code), will also abstain from voting on the resolutions in respect of the Offer and the Whitewash Waiver at the EGM.

If the Offer is declared unconditional, Shareholders will be able to tender their Shares for acceptance under the Offer for a period of 14 days thereafter.

5. Reasons for the Offer

As stated in the Letter from the Board, the Board considers that the Offer is in the interests of the Shareholders, after taking into account the price of the Shares has historically been traded at a significant discount to the Group’s net asset value per Share attributable to equity shareholders of the Company for the following reasons:

(i) the Offer provides an immediate opportunity for the Shareholders to sell their Shares at a premium to the prevailing market prices of the Shares and receive cash proceed in return; or
(ii) the Offer provides an immediate opportunity for the Shareholders to increase their proportionate interests in the Company by retaining their holdings of the Shares and participating in the future prospects of the Company; and
(iii) the Offer, if completed, have the effect of increasing the consolidated net asset value per Share attributable to equity shareholders of the Company and, with less Shares in issue, the market price per Share, thus benefiting all Shareholders.

Based on our detailed analysis set out in the paragraphs headed “6. Evaluation of the Offer”, “7. Financial effects of the Offer” and “8. Changes in shareholding structure after the Offer” below, we concur with the Directors that the Offer allows the Shareholders the flexibility, which is at their absolute discretion, of either to realise part or all of their shareholdings at the Offer Price, or to continue to retain their shareholdings in the Company and participate in the future developments of the Group. The Offer provides means for the Company to return capital to the Accepting Shareholders.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

6. Evaluation of the Offer

(i) Offer Price

The Offer Price, being HK$0.68 per Share, represents:

a premium of approximately 15.25% over the closing price of the Shares of HK$0.5900 as quoted on the Stock Exchange on the Latest Practicable Date;
a premium of approximately 51.11% over the closing price of the Shares of HK$0.4500 per Share as quoted on the Stock Exchange on the Last Trading Day;
a premium of approximately 50.78% over the average closing price of approximately HK$0.4510 per Share, being the average closing price of Shares as quoted on the Stock Exchange for the five consecutive trading days immediately prior to and including the Last Trading Day;
a premium of approximately 51.45% over the average closing price of approximately HK$0.4490 per Share, being the average closing price of the Shares as quoted on the Stock Exchange for the ten consecutive trading days immediately prior to and including the Last Trading Day;
a premium of approximately 55.55% over the average closing price of approximately HK$0.4372 per Share, being the average closing price of the Shares as quoted on the Stock Exchange for the thirty consecutive trading days immediately prior to and including the Last Trading Day; and
a discount of approximately 75.47% to the Group’s net asset value attributable to equity shareholders of the Company of approximately HK$2.77 per Share pursuant to the latest audited consolidated financial statements of the Company as at 31 March 2020.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

The chart below illustrates the closing price level of the Shares as quoted on the Stock Exchange for a period of 12 months immediately preceding the Last Trading Day from 16 September 2019 to the Latest Practicable Date (both dates inclusive) (the “ Review Period ”).

==> picture [418 x 259] intentionally omitted <==

----- Start of picture text -----

HK$ VOLUME
0.8 12,000,000
Highest: HK$0.72
16, 17 and 18 September 2019
0.7
10,000,000
Publication of the Announcement
0.6 28 September 2020
8,000,000
0.5
0.4 6,000,000
Lowest: HK$0.405
0.3 2 July 2020
4,000,000
0.2
2,000,000
0.1
0 0
2019/09/16 2019/10/30 2019/12/11 2020/01/29 2020/03/11 2020/04/24 2020/06/09 2020/07/23 2020/09/03
Volume Share Price Offer Pirce
----- End of picture text -----

Source: website of the Stock Exchange (www.hkex.com.hk)

The following table sets out (i) the monthly highest and lowest closing prices at which the Shares were traded on the Stock Exchange; (ii) the average daily trading volume of the Shares; (iii) the percentage of the average daily trading volume to the total issued Shares; and (iv) the percentage of the average daily trading volume relative to the public float of the Company during the Review Period.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

					Percentage
					of the
				Percentage	average
				of the	daily
			Average	average	trading
			daily	daily	volume to
			trading	trading	the public
			volume of	volume to	float of the
			the Shares	total issued	Company
	Highest	Lowest	for the	shares for	for the
	closing	closing	period/	the period/	period/
	price	price	month	month	month
	HK$	HK$	Shares	Note 1	Note 2
2019
September (from
16 September to
30 September)	0.72	0.63	191,000	0.040%	0.097%
October	0.67	0.59	54,429	0.011%	0.028%
November	0.68	0.63	79,476	0.017%	0.041%
December	0.67	0.63	156,000	0.033%	0.080%
2020
January	0.68	0.61	548,400	0.115%	0.280%
February	0.63	0.60	19,850	0.004%	0.010%
March	0.63	0.48	70,000	0.015%	0.036%
April	0.52	0.475	52,316	0.011%	0.027%
May	0.495	0.435	47,700	0.010%	0.024%
June	0.47	0.42	95,762	0.020%	0.049%
July	0.445	0.405	71,045	0.015%	0.036%
August	0.445	0.41	71,667	0.015%	0.037%
September	0.58	0.44	516,231	0.108%	0.263%
October (1 October
to the Latest
Practicable Date)	0.59	0.57	113,533	0.024%	0.058%

Source: website of the Stock Exchange (www.hkex.com.hk)

Notes:

Based on the total number of issued shares of 477,447,000 throughout the Review Period. Based on the information available on the website of the Stock Exchange, no new Shares has been issued during the Review Period.
Based on the total number of Shares constituting the public float of the Company throughout the Review Period, being 196,015,000 Shares. Based on the information available on the website of the Stock Exchange, there was no change of Shares held by public Shareholders during the Review Period.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Share price performance

As illustrated in the Share price chart above, we noted that after 27 September 2019, the closing prices of the Shares were below the Offer Price, save for 8 November 2019 and 20 to 22 January 2020, the Share prices were equal to the Offer Price. The highest and lowest closing prices of the Shares as quoted on the Stock Exchange during the Review Period were HK$0.72 on 16, 17 and 18 September 2019 and HK$0.405 on 2 July 2020, respectively. The Offer Price represents a discount of approximately 5.6% of the highest closing prices of the Shares and a premium of approximately 67.9% of the lowest closing prices of the Shares during the Review Period. After the publication of the Announcement on 28 September 2020 and up to the Latest Practicable Date (the “ Post-Announcement Period ”), the closing price of the Shares surged to HK$0.58 on 29 September 2020, representing an increase of approximately 28.9% as compared to the closing price of the Shares of HK$0.45 on 15 September 2020 and the closing price of the Shares was in the range of HK$0.57 to HK$0.59 from 30 September to the Latest Practicable Date. We noted that despite the recent release of the Announcement, the Share prices have not been spurred to reach the Offer Price.

Considering that the Shares have not been traded over the Offer Price of HK$0.68 per Share after 27 September 2019, we are of the view that the Offer provides the Shareholders an immediate opportunity to realise, in part or in whole, of their investments in the Company at a premium over the recent market prices of the Shares. We would like to remind the Shareholders that although the Offer Price is generally well above the closing prices of the Shares throughout the Review Period, there is no guarantee that the trading price of the Shares will persistently remain and be lower than the Offer Price during and after the Offer Period. The Shareholders, in particular those who may wish to realise their investments in the Shares, are thus reminded to closely monitor the market price of the Shares during the Offer Period. In the event that the market price of the Shares exceeds the Offer Price during the period while the Offer is open and the sales proceeds (net of transaction costs) exceed the amount receivable under the Offer, Shareholders should consider not accepting the Offer and consider seeking to sell their Shares in the open market if they are able to do so.

Liquidity in the Shares

As set out from the Share trading volume table above, during the Review Period (i.e. from 16 September 2019 to the Latest Practicable Date), the average daily trading volume of the Shares for the periods/months represents a range of approximately 0.004% to 0.115% of the total issued Shares and a range of approximately 0.010% to 0.280% of the public float of the Company, respectively. The average daily trading volume of the Shares for the periods/months remained below 100,000 shares since February 2020 and up to the period from 1 September 2020 to the Last Trading Day, and the average daily trading volume of the Shares for the period from 1 September 2020 to the Last Trading Day, was 80,818 shares only, which was also below 100,000 shares. Among the 266 trading days in the Review Period, there were (i) 61 trading days with zero Shares traded; (ii) 131 trading days with 1 Share to 100,000 Shares traded; (iii) 65 trading days with 100,001 Shares to 500,000 Shares traded; (iii) 7

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

trading days with 500,001 Shares to 2,000,000 Shares traded; (iv) 1 trading day with over 3,000,000 shares traded, being the day of publication of the Announcement; and (iv) 1 trading day with over 9,500,000 Shares traded on 14 January 2020, being the day that Scenemay Holdings Limited transferred 9,500,000 Shares to CHAN William. On 29 September 2020, being the first trading day after the publication of the Announcement, the trading volume of the Shares reached 3,829,000 Shares but then dropped to 1,993,000 Shares on 30 September 2020. Since then, the daily trading volume of the Shares was in the range of zero to 684,000 Shares from 5 to the Latest Practicable Date. We believe such increase in trading volume on 29 September 2020 and 30 September 2020 could be due to the immediate market reaction to the publication of the Announcement.

Based on the above, it is noted that the Shares has experienced thin historical average daily trading volume of the Shares for the period/month during the Review Period. Given the thin historical average daily trading volume of the Shares for the period/month, it is uncertain as to whether there would be sufficient liquidity in the Shares for the Shareholders to dispose of a significant number of Shares in the open market within a short period of time without causing an adverse impact on the market price level of Shares. The Offer therefore provides Shareholders who wish to realise their investments in the Company an opportunity and a viable alternate exit to sell their Shares at the Offer Price which will not be easily affected by the size of holdings.

(ii) Price to net asset value ratios

The Offer Price represents:

a discount of approximately 75.47% to the audited consolidated net asset value attributable to equity shareholders of the Company of approximately HK$2.77 per Share as at 31 March 2020 (the “ Offer Price to net asset value Discount ”);
a discount of approximately 78.82% and 79.01% to the adjusted net asset values attributable to equity shareholders of the Company (as adjusted by revaluation surplus based on the valuation of the property interests of the Group as at 31 August 2020, details of which are set out in the property valuation report contained in Appendix IV to the Offer Document (the “ Valuation Report ”)), of approximately HK$3.21 and HK$3.24 per Share as at 31 March 2020.

We noted that the Offer Price is at a discount to the net asset value per Share attributable to equity shareholders of the Company as set out above. As stated in the Letter from the Board, the Shares have consistently been traded at a substantial discount to the Group’s net asset value per Share attributable to equity shareholders of the Company. Taking different closing prices as reference, the relevant closing price represents:

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

a discount of approximately 83.77% to the net asset value per Share attributable to equity shareholders of the Company of HK$2.77 per Shares as at 31 March 2020 based on the closing price of the Shares of HK$0.4500 on the Last Trading Day;
a discount of approximately 84.44% to the net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 based on the average closing price of the Shares of approximately HK$0.4313 as quoted on the Stock Exchange for the three months up to and including the Last Trading Day;
a discount of approximately 83.53% to the net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 based on the average closing price of the Shares of approximately HK$0.4566 as quoted on the Stock Exchange for the six months up to and including the Last Trading Day; and
a discount of approximately 80.18% to the net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 based on the average closing price of the Shares of approximately HK$0.5493 as quoted on the Stock Exchange for the twelve months up to and including the Last Trading Day.

Given the Shares have been trading at a substantial discount to the net asset value per Share attributable to equity shareholders of the Company historically, the current Offer Price to net asset value attributable to equity shareholders of the Company discount of approximately 75.47% is equal to or smaller than (i) the historical discounts in the range of approximately 75.47% to 85.38% to the then net asset value per Share attributable to equity shareholders of the Company, based on the highest and lowest closing prices, respectively, during the whole Review Period; and (ii) the respective discounts of approximately 80.18%, 83.53% and 84.44% to the net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 as calculated based on the average closing prices of the Shares of HK$0.5493, HK$0.4566 and HK$0.4313 as quoted on the Stock Exchange for the twelve months, the six months and the three months up to and including the Last Trading Day, respectively, we consider that the Offer provides an opportunity for the Shareholders to monetise their shareholdings at a lower discount to the Group’s net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 in view of the recent market prices of the Shares.

Valuation of the property interests of the Group and adjusted net asset value attributable to equity shareholders of the Company

The valuation of the Group’s property interests (the “ Valuation ”) as at 31 August 2020 conducted by Colliers International (Hong Kong) Limited is set out in the Valuation Report. As noted from the Valuation Report, the property Group VI located in Buthan is built on a land bearing No. 806 and Plot No. 24A situated in Walakha village, Guma Gewog, Punakha, Buthan, and the land is held under a leasehold interest,

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

for an initial term of 15 years from 16 December 2013 to 15 December 2028 and subject to a further automatic renewal, as the Group has property interest in the building only and the property is permanently attached to an immovable property (i.e. the land) and cannot be sold independently of the immovable property, therefore no commercial value has been assigned to the property.

The table below sets forth the adjusted net asset value attributable to equity shareholders of the Company per Share under scenarios (i) should the property Group VI is given no commercial value as set out in the Valuation Report; and (ii) should the property Group VI be freely transferable and is given commercial value. For details of the property Group VI, please refer to the properties details as set out in the Valuation Report.

Adjusted net asset value attributable to equity shareholders of the Company

The calculations of the adjusted net asset value attributable to equity shareholders of the Company per Share are shown as below:

Audited consolidated net asset value attributable to equity shareholders of the Company as at 31 March 2020 Adjustment: Revaluation surplus arising from the Valuation as at 31 August 2020 (Note 1) Adjusted net asset value attributable to equity shareholders of the Company Adjusted net asset value attributable to equity shareholders of the Company per Share (Note 2) Notes:	Scenario (i) HK’000 1,323,385 210,037 1,533,422 HK$3.21	Scenario (ii) HK’000 1,323,385 223,687
		1,547,072

		HK$3.24

This represents the difference between the market value of the Group’s property interests as at 31 August 2020 and their corresponding book values as at 31 March 2020.
Based on the total number of Shares in issue of 477,447,000 Shares as at 31 March 2020.

Based on the above calculations, the Offer Price of HK$0.68 Share represents a discount of approximately 78.82% and 79.01% to the adjusted net asset value attributable to equity shareholders per Share of scenarios (i) and (ii), respectively. In view of no material difference between (a) the discount of adjusted net asset value attributable to equity shareholders per Share of scenario (i) and (ii), and (b) the discount of net asset value attributable to equity shareholders of the Company per Share of approximately 75.47% as at 31 March 2020, we consider that there are no material impact of the revaluation of the Group’s property interests.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(iii) Comparable companies analysis

In order to assess the fairness and reasonableness of the Offer Price, we consider that reference to price-to-earnings multiple (“ PE Ratio ”) and price-to-book multiple (“ PB Ratio ”), which are the most widely adopted benchmarks for evaluation of the value of a company, would be relevant.

As set out in the Annual Report 2020, the Group generated majority of revenue from property development/asset, investment and fund management, and property investment for the year ended 31 March 2020. Given the considerable amount of companies in the industry, we have reviewed and identified the following companies listed on the Main Board of the Stock Exchange which are engaged in similar nature of business as the Group, being development, investment and trading of residential and commercial properties, with the major operations located in Hong Kong , the market capitalisation below HK$500 million and the majority of revenue (being not less than 50%) derived from property development and investment (the “ Comparables ”) to assess the fairness and reasonableness of the Offer Price in comparison with the PE Ratio and PB Ratio. To the best of our knowledge and belief, the following list is exhaustive based on the aforementioned selection criteria.

The following table shows the PE Ratios and PB Ratios of the Company and the Comparables, respectively:

					Price/
Stock	Name of the		Market	Price/book	earnings
code	company	Principal business activity	Capitalisation	ratio	ratio
			HK$’000
			(Note 1)	(Note 2)	(Note 3)
1218	Easyknit	(i) property investments; (ii)	241,086	0.07	N/A
	International	property development; (iii)			(Note 5)
	Holdings	investment in securities; and (iv)
	Limited	loan financing
1560	Star Properties	(i) development of industrial	288,674	0.41	50.43
	Group	development sites, redevelopment
	(Cayman	or enhancement of existing
	Islands)	industrial buildings; and (ii)
	Limited	investment in properties and
		leasing of such properties
			Maximum	0.41	50.43
			Minimum	0.07	N/A
			Average	0.24	50.43
2288	The Company		214,851	0.25	N/A
				(Note 4)	(Note 5)

Notes:

Being the market capitalisation as at the Last Trading Day

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Calculated based on the market capitalisation as at the Last Trading Day and net assets value attributable to equity shareholders of the respective Comparables as reported in their latest published annual reports
Calculated based on the closing price as at the Last Trading Day and the earnings per share of the respective Comparables as reported in their latest published annual reports
Calculated based on the audited consolidated net asset value attributable to equity shareholders of the Company as at 31 March 2020, the total number of Shares in issue of 477,447,000 Shares as at 31 March 2020 and the Offer Price of HK$0.68
Since the company was loss-making, the price/earnings ratio is not available

We have compared the price/earnings ratio of the Group as implied by the Offer Price with those of other Comparables. Nevertheless, as the Group had recorded loss attributable to equity shareholders of the Company of approximately HK$77.3 million for the year ended 31 March 2020, and one out of two Comparables recorded loss on their latest available audited financial statements for the latest financial year, we are of the view that the price/earnings ratio does not provide sufficient information regarding the fairness and reasonableness of the Offer Price.

As also shown in the table above, the PB Ratios of the Comparables are approximately 0.07 times and 0.41 times, respectively with an average of approximately 0.24 times. Since the list of Comparables only comprises two companies and their PB Ratios were in a diverse range, which may be due to various factors including but not limited to the fundamentals of each of the Comparables, e.g. business scales, their respective share price performance, etc., and we do not consider the analysis particularly useful in making our recommendation and the comparison above is for additional information of the Shareholders as reference purpose. The PB Ratio of the Company as implied by the Offer Price (the “ Implied PB Ratio ”) is approximately 0.25 times which is higher than the PB Ratio of the Company as calculated based on the recent closing prices of the Shares (e.g. approximately 0.16 times as calculated based on the closing price of the Shares on the Last Trading Day), the Offer Price allows the Shareholders to realise their shareholdings, in part or in whole, at a smaller discount to the Group’s net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 when the recent market prices cannot reflect the underlying net asset value of the Group per Share attributable to equity shareholders of the Company in full. As such, we consider the Offer Price is fair and reasonable.

7. Financial effects of the Offer

The unaudited pro forma financial information of the Group upon completion of the Offer, illustrating the financial impact of the Offer on the net asset value per Share attributable to equity shareholders of the Company, total liabilities and working capital (expressed as net current assets) of the Group, is set out in Appendix III to the Offer Document.

It should be noted that the analysis based on the unaudited pro forma financial information of the Group is for illustrative purpose only and does not purport to represent how the financial position of the Group will be upon completion of the Offer.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Based on the unaudited pro forma financial information of the Group as set out in Appendix III to the Offer Document and assuming that the Offer took place on 31 March 2020, and the Maximum Number of Shares had been bought-back and cancelled in full by the Company, the total number of Shares in issue would have decreased from 477,447,000 Shares to 375,447,000 Shares,

a. the net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 would, as a result, have increased by approximately 20.2% from HK$2.77 per Share to HK$3.33 per Share;
b. the total liabilities as at 31 March 2020 would remain unchanged at approximately HK$462.9 million following completion of the Offer as the Offer will be paid in cash and funded by internal resources of the Group; and
c. the working capital (expressed as net current assets) as at 31 March 2020 would, as a result, have decreased by approximately 9.9% from approximately HK$752,185,000 to approximately HK$677,825,000.

Although the working capital as at 31 March 2020 would have decreased by approximately 9.9%, as the total number of issued Shares decreased upon completion of the Offer, net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 would have increased to the contrary. In addition, all Shareholders have equal opportunity to accept the Offer at their discretion. Those Shareholders who do not tender their Shares for acceptance under the Offer would enjoy an increase in their proportionate interests in shareholdings, net asset value per Share attributable to equity shareholders of the Company and any future earnings of the Group. Thus, we consider that the Offer would not confer material adverse effect to the Shareholders on the whole.

8. Changes in shareholding structure after the Offer

The table below shows the shareholding structure of the Company (A) as at the Latest Practicable Date and (B) immediately after the completion of the Offer on the assumptions that no additional Shares will be issued from the Latest Practicable Date up to and including the date of completion of the Offer and that (i) all Shareholders other than the Chan Concert Group accept the Offer in respect of all of their Shares; or (ii) neither the Chan Concert Group, Scenemay Holdings Limited nor NG Tak Kwan tender any Share for acceptance and the public Shareholders accept the Offer in full:

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

(A) As at the Latest Practicable Date

(B) Immediately after completion of the Offer

Name of Shareholders Tiger Crown Limited (Note 1 and 4) CHAN William (Notes 2 and 4) Aggregate number of Shares held by the Chan Concert Group Scenemay Holdings Limited (Notes 3, 4 and 5) Aggregate number of Shares held by the Controlling Shareholders NG Tak Kwan (Notes 6 and 7) Aggregate number of Shares held by the Controlling Shareholders and parties acting in concert with any of them Public Shareholders Total	Number of Shares 97,104,000 33,700,000 130,804,000 87,604,000 218,408,000 63,024,000 281,432,000 196,015,000 477,447,000	Approximate % 20.34 7.06 27.40 18.35 45.75 13.20 58.95 41.05 100.00	(i) Where all Shareholders other than the Chan Concert Group accept the Offer in respect of all of their Shares Number of Shares Approximate % 97,104,000 25.86 33,700,000 8.98 130,804,000 34.84 61,826,448 16.47 192,630,448 51.31 44,479,134 11.85 237,109,582 63.16 138,337,418 36.84 375,447,000 100.00	(ii) Where neither the Chan Concert Group, Scenemay Holdings Limited nor NG Tak Kwan tender any Share for acceptance and the public Shareholders accept the Offer in full Number of Shares Approximate % 97,104,000 25.86 33,700,000 8.98 130,804,000 34.84 87,604,000 23.33 218,408,000 58.17 63,024,000 16.79 281,432,000 74.96 94,015,000 25.04 375,447,000 100.00	(ii) Where neither the Chan Concert Group, Scenemay Holdings Limited nor NG Tak Kwan tender any Share for acceptance and the public Shareholders accept the Offer in full Number of Shares Approximate % 97,104,000 25.86 33,700,000 8.98 130,804,000 34.84 87,604,000 23.33 218,408,000 58.17 63,024,000 16.79 281,432,000 74.96 94,015,000 25.04 375,447,000 100.00
					100.00

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Notes:

Tiger Crown Limited is 100% owned by Rykadan Holdings Limited which in turn is 100% held by HSBC International Trustee Limited as the trustee of Rykadan Trust. CHAN William is the settlor and protector and one of the discretionary beneficiaries of Rykadan Trust. Each of HSBC International Trustee Limited and Rykadan Holdings Limited is therefore deemed to be interested in the 97,104,000 Shares beneficially owned by Tiger Crown Limited.
Tiger Crown Limited, which beneficially owned 97,104,000 Shares, is 100% owned by Rykadan Holdings Limited which in turn is 100% held by HSBC International Trustee Limited as the trustee of Rykadan Trust. CHAN William is the settlor and protector and one of the discretionary beneficiaries of Rykadan Trust. CHAN William is also the sole director of Tiger Crown Limited and Rykadan Holdings Limited. Therefore, in addition to the 33,700,000 Shares beneficially owned by CHAN William, he is deemed to be interested in the 97,104,000 Shares beneficially owned by Tiger Crown Limited.
As the entire issued share capital of Scenemay Holdings Limited is owned by LI Chu Kwan and LI Wing Yin in equal shares, each of LI Chu Kwan and LI Wing Yin is deemed to be interested in the Shares beneficially owned by Scenemay Holdings Limited, being 87,604,000 Shares as at the Latest Practicable Date.
Since Tiger Crown Limited, Scenemay Holdings Limited, CHAN William, LI Chu Kwan and LI Wing Yin are regarded as a group of shareholders acting in concert to exercise their voting rights in the Company and are parties to an agreement under section 317 of the SFO, pursuant to the provisions of the SFO, each of them is deemed to be interested in the Shares owned by the other parties to the agreement.
The number of Shares and shareholding percentage held by Scenemay Holdings Limited immediately after completion of the Offer will be (i) less/lower than those shown in the table if, for instance, Scenemay Holdings Limited accepts the Offer in respect of all the Shares beneficially owned by it but all valid acceptances received are fewer than the Maximum Number of Shares; or (ii) more/ higher than those shown in the table if, for instance, Scenemay Holdings Limited accepts the Offer in respect of only part of the Shares beneficially owned by it and all valid acceptances received are more than the Maximum Number of Shares, or it does not accept the Offer at all and valid acceptances are received from the other Shareholders. For illustration purposes only, (i) the number of Shares and shareholding percentage held by Scenemay Holdings Limited may at most drop to zero (assuming that it accepts the Offer in respect of all the Shares beneficially owned by it but no other valid acceptance is received) or (ii) its shareholding percentage may at most increase to 23.33% while maintaining its shareholding at 87,604,000 Shares (assuming that it does not accept the Offer and valid acceptances received in total equal to or exceed the Maximum Number of Shares).
The number of Shares and shareholding percentage held by NG Tak Kwan immediately after completion of the Offer will be (i) less/lower than those shown in the table if, for instance, NG Tak Kwan accepts the Offer in respect of all the Shares beneficially owned by him but all valid acceptances received are fewer than the Maximum Number of Shares; or (ii) more/higher than those shown in the table if, for instance, NG Tak Kwan accepts the Offer in respect of only part of the Shares beneficially owned by him and all valid acceptances received are more than the Maximum Number of Shares, or he does not accept the Offer at all and valid acceptances are received from the other Shareholders. For illustration purposes only, (i) the number of Shares and shareholding percentage held by NG Tak Kwan may at most drop to zero (assuming that he accepts the Offer in respect of all the Shares beneficially owned by it but no other valid acceptance is received) or (ii) his shareholding percentage may at most increase to 16.79% while maintaining his shareholding at 63,024,000 Shares (assuming that he does not accept the Offer and valid acceptances received in total equal to or exceed the Maximum Number of Shares).
NG Tak Kwan is a non-executive Director. As at the Latest Practicable Date, NG Tak Kwan is interested in 63,024,000 Shares.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

10. Other terms of the Offer

As set out in the Letter from Dongxing Securities, Shareholders may accept the Offer in respect of some or all of their shareholdings. If valid acceptances received are fewer than or equal to the Maximum Number of Shares, all Shares validly accepted will be bought-back. However, if valid acceptances received exceed the Maximum Number of Shares, the number of Shares to be bought-back by the Company from each Accepting Shareholder will be determined in accordance with the following formula, save that the Company may, in its absolute discretion, round such figure up or down to the nearest whole number with the intention of avoiding (as far as practicable) Shares being held by Accepting Shareholders in fractional entitlements of a Share:

==> picture [65 x 25] intentionally omitted <==

A = 102,000,000 Shares, being the Maximum Number of Shares
B = Total number of Shares tendered by valid acceptances received from all Accepting Shareholders under the Offer
C = Total number of Shares tendered by valid acceptances received from each Accepting Shareholder under the Offer

11. Odd lots

The Shares are currently traded in board lot of 1,000 Shares each. The Company has no intention to change the board lot size as a result of the Offer. Shareholders should note that acceptance of the Offer may result in their holdings of odd lots of Shares. The Company has appointed Philip Securities (Hong Kong) Limited as the designated broker to match sales and purchases of odd lot holdings of Shares in the market for a reasonable period after the completion of the Offer to enable Shareholders to dispose of their odd lots or to top up their odd lots to whole board lot. Shareholders should note that the matching of odd lots is not guaranteed. Further details of the related arrangements will be announced after the Offer has become unconditional, as and if appropriate.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

WHITEWASH WAIVER

Pursuant to Rule 32.1 of the Takeovers Code and Rule 6 of the Share Buy-backs Code, if as a result of a share buy-back, a shareholder’s proportionate interest in the voting rights of the repurchasing company increases, such increase will be treated as an acquisition for the purposes of the Takeovers Code. Consequently, depending on the level of acceptances received from the Accepting Shareholders pursuant to the Offer and taking into account the fact that each member of the Chan Concert Group has irrevocably undertaken to the Company that each of them will not, and will procure the holders of Shares whose Shares he or it is deemed to be interested in by virtue of the SFO (other than Shares in which either member of the Chan Concert Group is deemed to be interested by virtue of the agreement with Scenemay Holdings Limited, LI Chu Kwan and LI Wing Yin under sections 317 and 318 of the SFO) not to, accept the Offer, the aggregate interests in the total issued Shares held by the (i) Chan Concert Group may increase from the current level of approximately 27.40% to a maximum level of approximately 34.84%; (ii) Scenemay Holdings Limited may increase from the current level of approximately 18.35% to a maximum level of approximately 23.33%; (iii) the Controlling Shareholders may increase from the current level of approximately 45.74% to a maximum level of approximately 58.17%; and (iv) the Controlling Shareholders and parties acting in concert with any of them may increase from the current level of approximately 58.95% to a maximum level of approximately 74.96%, in each case upon completion of the Offer, thereby triggering an obligation by the Controlling Shareholders under Rule 26 of the Takeovers Code to make a mandatory general offer for all Shares not beneficially owned by them unless the Whitewash Waiver is obtained.

The Executive has agreed, subject to the approval of the Independent Shareholders for the Offer and the Whitewash Waiver at the EGM by way of poll, to waive any obligation of the Controlling Shareholders to make a mandatory general offer which might result from completion of the Offer. If the Whitewash Waiver is not granted by the Executive or if the resolution to approve the Whitewash Waiver is not passed by the Independent Shareholders, the Offer will not proceed and will immediately lapse.

Based on the foregoing and in particular the reasons for the Offer, we are of the opinion that the approval for the Whitewash Waiver, which is a Condition, is in the interests of the Company and the Shareholders as a whole and is fair and reasonable for the purpose of proceeding the Offer.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

SUMMARY OF ANALYSIS AND OUR RECOMMENDATION ON THE OFFER AND THE WHITEWASH WAIVER

Voting of the Offer and Whitewash Waiver

Having considered the principal factors and reasons as discussed above, and in particular the following:

(i) whilst the Offer Price represents a discount to the net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 as aforementioned, the purpose of the Offer, as stated in the Letter from the Board, being, among others, (a) provide an opportunity for the Shareholders either to sell their Shares at a premium to the prevailing market prices of the Shares and receive cash or to increase their proportionate interests in the Company by retaining their holdings of the Shares and participating in the future prospects of the Company; and (b) have the effect of increasing the consolidated net asset value per Share attributable to equity shareholders of the Company and, with less Shares in issue, the market price per Share, thus benefiting all Shareholders and enhancing the future financing capability of the Company through secondary issuances. Meanwhile, the Company would still be able to retain capital sufficiency for the continual operations and development of the Group as a going concern after the Offer. To this end, the Offer Price having taken into account the aforementioned factors, balances between the Group’s internal working capital requirements and the reasonable return on the Shareholders’ investments in the Shares which is in the interests of the Shareholders and the Company as a whole;
(ii) the Offer provides an immediate opportunity for the Shareholders to realise their investments in the Shares at the Offer Price, which represents premiums over the prevailing market prices and smaller discounts to the net asset value per Share attributable to equity shareholders of the Company;

The closing prices of the Shares have consistently been below the Offer Price after 27 September 2019, including the Post-Announcement Period, and traded below the net asset value per Share attributable to equity shareholders of the Company during the entire Review Period. Such Share price performance is a reflection of the market consensus on the valuation of the Company, suggesting the Shareholders may not be able to realise their investments in the Shares at the underlying net asset value per Share attributable to equity shareholders of the Company in full on the market in the recent years.

In view of the Offer Price representing (a) premiums over the recent market prices of the Shares; (b) a higher Implied PB Ratio of approximately 0.25 times as compared to the PB Ratio of the Company as calculated based on the recent market prices of the Shares; (c) a smaller discount to net asset value per Share attributable to equity shareholders of the Company as at 31 March 2020 than the discounts calculated based on the average closing prices of the Shares as quoted on the Stock Exchange for the three months, six months and the twelve months up to and including the Last Trading Day; and (d) a smaller discount than the

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

historical discounts to the then net asset value per Share attributable to equity shareholders of the Company during the majority of the Review Period, the Offer thus allows an immediate exit for the Shareholders who wish to realise their investments in the Shares at a price higher than the recent market prices of the Shares;

(iii) as a result of the Offer, the net asset value per Share attributable to equity shareholders of the Company would have been enhanced by approximately 20.2%, for the year ended 31 March 2020 as set out in the unaudited pro forma financial information of the Group in Appendix III to the Offer Document. Thus, both non-accepting Shareholders and Accepting Shareholders who retain part of their Shares will benefit from such financial enhancements;
(iv) as an intrinsic merit of the Offer, the Offer confers the Shareholders the flexibility and equal opportunity to participate in the Offer on the same terms at their own absolute discretion. Having considered their own circumstances and investment objectives, the Shareholders can choose to realise part or all of their shareholdings at the Offer Price effectively when compared to selling the Shares on-market given that there will be no brokerage commission or dealing charges payable under the Offer; or to continue to retain their shareholdings in the Company to increase their proportionate interests in the Company with enhanced net asset value per Share attributable to equity shareholders of the Company and further participate in the future developments of the Group;
(v) given the thin historical daily trading volume, it may indicate that any disposal of a large number of Shares through the market would be relatively difficult to accomplish within a short period of time without adversely affecting the Share price. The Offer therefore provides Shareholders who wish to realise their investments in the Company an opportunity and a viable alternate exit to sell their Shares at the Offer Price, and at the same time, there would be no adverse impact on the non-accepting Shareholders; and
(vi) given the global COVID-19 pandemic has severely impacted the macroeconomic environment in Hong Kong, the U.S.A and other markets in which the Group operates and the continuing uncertainties arising from those markets, the Group’s financial performance over the mediumto long-term may depend on the sustainability and recovery of the global and Hong Kong property markets. The Offer provides an immediate opportunity for the Shareholders to realise their investment in the Shares at the Offer Price.

We consider that the terms of the Offer and the Whitewash Waiver are fair and reasonable so far as the Independent Shareholders are concerned and is in the interests of the Company and the Shareholders as a whole. Accordingly, we advise the Independent Board Committee to recommend the Independent Shareholders to vote in favour of the resolutions to be proposed at the EGM in respect of the Offer and the Whitewash Waiver to provide an opportunity to all Shareholders their own choices to accept the Offer or not.

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LETTER FROM THE INDEPENDENT FINANCIAL ADVISER

Acceptance of the Offer

Based on our advice as to the fairness and reasonableness of the terms of the Offer above, we advise the Shareholders to accept the Offer at the Offer Price, which is at a premium over the prevailing market prices of the Shares and implies a smaller discount to the net asset value per Share attributable to equity shareholders of the Company (as compared to the discounts to the net asset value per Share attributable to equity shareholders of the Company calculated based on the recent market prices of the Shares) as they think fit having regard to their own circumstances.

The Shareholders are also reminded to monitor the market price of the Shares during the Offer Period. If during the Offer Period, it transpires that the market price of the Shares exceeds the Offer Price and the sales proceeds (net of the transaction costs) exceed the net proceeds to be received under the Offer, the Shareholders who wish to realise their investments in the Company in whole or in part should, if they are able to do so, seek to sell their Shares in the market instead of accepting the Offer.

For those Shareholders who after considering the information contained in the Offer Document are attracted by the future prospects of the Group or would like to enjoy any increase in their proportionate interests in shareholdings, net asset value per Share attributable to equity shareholders of the Company and any future earnings of the Group following the completion of the Offer, they should consider retaining all or part of their Shares. Considering that individual Shareholders would have different investment objectives and/or circumstances, we would recommend the Shareholders to seek advice from their own professional advisers prior to making any investment decision. Furthermore, details of the terms of the Offer are contained in the Letter from Dongxing Securities, Appendix I to the Offer Document and the Form of Acceptance. Shareholders are urged to read carefully and in their entirety the relevant sections in the Offer Document.

Yours faithfully, For and on behalf of Innovax Capital Limited Calvin Poon Ming Wong Managing Director Director

Mr. Calvin Poon and Mr. Ming Wong are licensed persons under the SFO to carry out Type 6 (advising on corporate finance) regulated activity under the SFO and regarded as responsible officers of Innovax Capital Limited. Mr. Calvin Poon and Mr. Ming Wong have over 15 and 9 years of experience in corporate finance industry, respectively.

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TERMS OF THE OFFER

APPENDIX I

Dongxing Securities makes the Offer to the Shareholders on behalf of the Company to buy-back Shares for cancellation, on the terms and subject to the conditions set out in this Offer Document. The terms and conditions of the Offer are set out below.

TERMS AND CONDITIONS OF THE OFFER

1 The Offer

The Company will buy-back Shares up to the Maximum Number of Shares, being 102,000,000 Shares, at the Offer Price.

2 Conditions

The Offer is conditional upon fulfillment of all of the following Conditions:

(a) the approval by more than 50% of the votes cast by the Independent Shareholders, voting in person or by proxy, by way of poll having been obtained at the EGM in respect of the Offer;
(b) the approval by at least 75% of the votes cast by the Independent Shareholders, voting in person or by proxy, by way of poll having been obtained at the EGM in respect of the Whitewash Waiver; and
(c) the Executive granting the Whitewash Waiver and the satisfaction of the conditions (if any) attached to the Whitewash Waiver and the Whitewash Waiver not having been revoked or withdrawn.

None of the above conditions can be waived, and none of them had been fulfilled as at the Latest Practicable Date.

The Offer is subject to all of the Conditions being fulfilled in full. If the resolution to approve the Offer is not passed by the Independent Shareholders, or if the resolution to approve the Whitewash Waiver is not passed by the Independent Shareholders or if the Whitewash Waiver is not granted by the Executive, the Offer will not proceed and will immediately lapse.

The Offer is not conditional as to any minimum number of Shares tendered for acceptances.

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TERMS OF THE OFFER

APPENDIX I

3 Maximum Number of Shares

The Maximum Number of Shares which will be bought-back by the Company pursuant to the Offer is 102,000,000 Shares, representing approximately 21.36% of the issued Shares as at the Latest Practicable Date.

4 Shareholders

The Offer is available to all the Shareholders whose names appear on the Register as at the Latest Acceptance Time.

5 Acceptance

5.1 Shareholders may accept the Offer in respect of some or all of their shareholding at the Offer Price (subject to the procedures for scaling down described under the section headed “ Buy-back of Shares under the Offer ” as set out below) by submitting to the Registrar a duly completed Acceptance Form, accompanied by the relevant Title Documents, by no later than the Latest Acceptance Time. Each Share may only be accepted for buy-back by the Company once.
5.2 The Offer Price will be paid in cash.
5.3 Acceptance Forms which have been duly completed and received by or on behalf of the Company will become irrevocable and cannot be withdrawn after the Offer has been become or declared unconditional unless in accordance with Rule 19.2 of the Takeovers Code.
5.4 The consideration under the Offer will be in cash, free of brokerage commission, Stock Exchange transaction levies and trading charges, save that the amount of seller’s ad valorem stamp duty due on the Shares bought-back attributable to the Accepting Shareholders and calculated at a rate of HK$1.00 for every HK$1,000 or part thereof of the market value of the Shares to be bought-back under the Offer or the consideration payable by the Company in respect of relevant acceptances of the Offer, whichever is the higher, will be deducted by the Company from the amount payable to the Accepting Shareholders and will be paid by the Company on behalf of the Accepting Shareholders. The Company will arrange for payment of the seller’s ad valorem stamp duty on behalf of the Accepting Shareholders in respect of the Offer.
5.5 Shares bought-back will be treated as cancelled in accordance with the memorandum and articles of association of the Company and the applicable laws of Cayman Islands and will not be entitled to any dividend or distribution declared for any record date set on or after the date of their cancellation. Accordingly, the issued share capital of the Company will be diminished by the nominal value of the Shares being bought-back.

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APPENDIX I

TERMS OF THE OFFER

5.6 Subject to the Offer becoming unconditional, the submission of an Acceptance Form by an Accepting Shareholder in the manner described in paragraph 5.1 above will be deemed to constitute a warranty of such Accepting Shareholder to Dongxing Securities and the Company that the Shares are being sold free from all liens, charges, encumbrances, equitable claims or adverse interests, rights of pre-emption or other third party rights of any nature and together with all rights attaching or accruing thereto (including the right to any dividend or distribution that may be declared for any record date set on or after the date of cancellation as referred to in paragraph 5.5 above).

6 Buy-back of Shares under the Offer

6.1 Shareholders may accept the Offer in respect of some or all of their shareholding. If valid acceptances received are fewer than or equal to the Maximum Number of Shares, all Shares validly accepted will be bought-back. However, if valid acceptances received in total exceed the Maximum Number of Shares, the number of Shares to be bought-back by the Company from each Accepting Shareholder will be determined in accordance with the following formula, save that the Company may in its absolute discretion round such figure up or down to the nearest whole number with the intention of avoiding (as far as practicable) Shares being held by Accepting Shareholders in fractional entitlements of a Share:

==> picture [65 x 25] intentionally omitted <==

A = 102,000,000 Shares, being the Maximum Number of Shares
B = Total number of Shares tendered by valid acceptances received from all Accepting Shareholders under the Offer
C = Total number of Shares tendered by valid acceptances received from each Accepting Shareholder under the Offer
6.2 As a result, it is possible that not all of such Shares tendered by an Accepting Shareholder will ultimately be bought-back.
6.3 Fractions of Shares will not be bought-back under the Offer and, accordingly, the number of Shares that the Company will buy-back from each Accepting Shareholder in accordance with the above formula will be rounded up or down to the nearest whole number at the discretion of the Company.
6.4 The total number of Shares which will be bought-back by the Company will not exceed the Maximum Number of Shares. The decision of the Company as to any scaling down of acceptances in accordance with the above formula and as to the treatment of fractions will be conclusive and binding on all Shareholders.

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TERMS OF THE OFFER

APPENDIX I

7 Odd Lots

7.1 The Shares are currently traded in board lot of 1,000 Shares each. The Company has no intention to change the board lot size as a result of the Offer. Accepting Shareholders should note that acceptance of the Offer may result in their holding of odd lots of Shares.
7.2 For this purpose, Phillip Securities (Hong Kong) Limited whose address is at 11th floor, United Centre, 95 Queensway, Hong Kong (telephone number (852) 2277 6769 or (852) 2277 6628 or (852) 2277 6615 during office hours (i.e. 8:30 a.m. to 4:30 p.m.)) has been appointed by the Company as the designated broker to match sales and purchases of odd lot holdings of Shares in the market for a reasonable period after the completion of the Offer in order to enable such Accepting Shareholders to dispose of their odd lots or to top up their odd lots to whole board lots. Shareholders should note that the matching of odd lots is not guaranteed. Further details of the related arrangements will be announced after the Offer has become unconditional, as and if appropriate.

8 Acceptance Period

8.1 The Offer is open for acceptance from the date of this Offer Document. If the Conditions are satisfied, the Offer will be open for acceptance for a further 14 days thereafter. In order to be valid, an Acceptance Form must be duly completed, together with the relevant Title Documents in respect of such number of Shares which represent not less than the number of Shares in respect of which the relevant Shareholder intends to tender for acceptance under the Offer, delivered to and received by the Registrar at or before the Latest Acceptance Time, which is currently expected to be 4:00 p.m. (Hong Kong time) on Monday, 7 December 2020, or such later date as the Company may, with the prior consent of the Executive, decide and announce.
8.2 The date when the last one of the Conditions is expected to be satisfied is Monday, 23 November 2020, being the date of the EGM (or any adjournment or postponement thereof, as the case may be). Such date may be deferred by the Company, subject to the prior consent of the Executive.

9 Irrevocable Acceptances

Acceptance Forms which have been duly completed and received by the Registrar will become irrevocable and cannot be withdrawn after the Offer has become or been declared unconditional unless in accordance with Rule 19.2 of the Takeovers Code.

10 General

10.1 Shares will be bought-back by the Company on the basis that they are fully paid, their legal and beneficial ownership will be transferred to the Company for subsequent cancellation on the Register and that the Shares are free from all liens,

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TERMS OF THE OFFER

APPENDIX I

charges, encumbrances, equitable claims or adverse interests, rights of pre-emption or other third party rights of any nature and together with all rights attaching or accruing thereto.

10.2 The Shareholders may accept the Offer by completing and returning the Acceptance Form in accordance with the instructions as set out in this Offer Document and printed on the Acceptance Form (which constitute part of the terms and conditions of the Offer). An Acceptance Form may be rejected as invalid if the procedures contained in this Offer Document and in the Acceptance Form are not complied with.
10.3 The Offer and all acceptances of it, the Acceptance Forms, and all actions taken or made or deemed to be taken or made pursuant to these terms will be governed by and construed in accordance with Hong Kong laws. Delivery of an Acceptance Form will constitute submission to the non-exclusive jurisdiction of the Hong Kong courts.
10.4 Failure of any person to receive an Offer Document and/or an Acceptance Form will not invalidate any aspect of the Offer. Extra prints of these documents will be available to any Shareholder at the office of the Registrar during office hours from the date of despatch of this Offer Document to the Latest Acceptance Time (both days inclusive), between 9:00 a.m. to 4:30 p.m. (Hong Kong time) from Mondays to Fridays (other than public holidays), and on the Stock Exchange’s website at www.hkexnews.hk and on the Company’s website at www.rykadan.com.
10.5 The Company reserves the right, subject to any applicable law or regulatory requirements, to amend the Offer Price. In the event of such amendment (which will not, for the avoidance of doubt, include an alteration of the Maximum Number), a supplemental document and new Acceptance Forms will be despatched to the Shareholders. Any revised offer will be kept open for at least 14 days following the date on which the revised offer document is posted. If in the course of the Offer, the Company revises the terms of the Offer, all Shareholders, whether they have accepted the Offer or not, will be entitled to the revised terms.
10.6 The right of acceptance of the Offer is personal to each Shareholder and is not capable of being assigned or renounced in favour of others or otherwise transferred by the Shareholders.
10.7 All questions as to the number of Shares bought-back, the price to be paid therefor, or any alteration of such price in accordance with the terms contained herein, and the validity, form, eligibility (including the time of receipt) and acceptance for payment of any acceptance will be determined by the Company in its sole discretion, which determination will be final and binding on all of the parties (except as otherwise required under the applicable law or by the Codes). The Company reserves the absolute right to reject any or all acceptances it determines not to be in proper form or the acceptance or payment therefor which may, in the opinion of the Company, be unlawful. The Company also reserves the

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APPENDIX I

TERMS OF THE OFFER

absolute right (provided that this is exercised consistently with the requirements of the Codes or otherwise with the Executive’s consent) to waive any of the terms of the Offer, except the Conditions, either generally or in a particular case and any defect or irregularity in the acceptance of any particular Share or any particular holder thereof. An acceptance may be rejected as invalid unless all defects or irregularities have been cured or waived. In the event of a waiver, cheques for the payment of consideration under the Offer will not be despatched until after the Acceptance Form is completed in all respects and the Title Documents satisfactory to the Company have been received. None of the Company, Dongxing Securities, the Registrar or any of their respective directors or any other person involved in the Offer is or will be obliged to give notice of any defects or irregularities in acceptances, and none of them will incur any liability for failure to give any such notice.
10.8 All communications, notices, Acceptance Form(s), Title Documents and remittances to be delivered or sent by, to or from any Shareholder will be delivered or sent by, to and from them, or their designated agents, at their own risks and none of the Company, Dongxing Securities, the Registrar or any of their respective directors or any other person involved in the Offer accepts any liability for any loss or any other liabilities whatsoever which may arise as a result.
10.9 Should any Shareholder require any assistance in completing the Acceptance Form or have any enquiries regarding the procedures for tendering and settlement or any other similar aspect of the Offer, the Shareholder may contact the Registrar at its hotline at (852) 2980 1333 during the period from Friday, 30 October 2020 to Friday, 4 December 2020 (both days inclusive) between 9:00 a.m. and 6:00 p.m. (Hong Kong time) from Mondays to Fridays (other than public holidays) and on the closing day of the Offer (i.e. Monday, 7 December 2020) between 9:00 a.m. and 4:00 p.m. (Hong Kong time).

PROCEDURES FOR ACCEPTANCE AND SETTLEMENT

1 General Procedures for Acceptance

1.1 In order to accept the Offer, Shareholders should complete and return the accompanying Acceptance Form in accordance with the instructions set out in this Offer Document and the instructions printed on the Acceptance Form. The instructions in this Offer Document should be read together with the instructions on the Acceptance Form (which instructions form part of the terms and conditions of the Offer).
1.2 In order to be valid, the completed Acceptance Form should be forwarded, together with the Title Documents for not less than the number of Shares in respect of which the relevant Shareholder wishes to accept the Offer, by post or by hand to the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong, in an envelope marked “ Rykadan Capital Limited – Buy-back Offer ” as soon as possible after receipt of the Acceptance Form but in any event so as to

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TERMS OF THE OFFER

APPENDIX I

reach the Registrar by no later than 4:00 p.m. (Hong Kong time) on Monday, 7 December 2020, or such later time and/or date as the Company may, subject to the Takeovers Code, decide and announce.

1.3 Unless the Offer is extended or revised in accordance with the Takeovers Code, no Acceptance Form received after the Latest Acceptance Time will be accepted.
1.4 If the Acceptance Form is executed by a person other than the registered holder, appropriate evidence of authority (e.g. a grant of probate or certified copy of a power of attorney) must be delivered to the Registrar with the completed Acceptance Form.
1.5 No acknowledgement of receipt of any Acceptance Form or Title Documents will be given.
1.6 The Company reserves the right, at its sole discretion, to investigate, in relation to any acceptance, whether the representations and warranties set out in this Appendix I could have been properly given by the relevant Shareholder and, if such investigation is made and as a result the Company determines (for any reason) that any such representation and/or warranty could not have been properly given, such acceptance may be rejected as invalid.
1.7 Only one Acceptance Form may be accepted from each Shareholder by the Registrar.

2 Nominee Holdings

2.1 If the Title Documents in respect of a Shareholder’s Shares is/are in the name of a nominee company (including those Shares held in CCASS) or some name other than its/his/her own, and such Shareholder wishes to accept the Offer (either in full or in respect of part of his/her holding(s) of Shares), it/he/she must either:
(a) lodge the Title Documents with the nominee company, or other nominee, with instructions authorising it to accept the Offer on its/his/her behalf and requesting it to deliver the Acceptance Form duly completed together with the Title Documents to the Registrar, on or before such deadline (which may be earlier than the deadline specified for the Offer) as may be stipulated by the nominee; or
(b) arrange for the Shares to be registered in its/his/her name by the Company through the Registrar, and send the Acceptance Form duly completed together with the Title Documents to the Registrar; or
(c) where its/his/her Shares have been maintained with its/his/her licensed securities dealer/custodian bank through CCASS, instruct its/his/her broker/ custodian bank to authorise HKSCC to accept the Offer on its/his/her behalf on or before the deadline set by HKSCC. In order to meet the deadline set

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TERMS OF THE OFFER

APPENDIX I

by HKSCC, that Shareholder should check with its/his/her broker/custodian bank for the timing on processing of its/his/her instruction, and submit such instruction to its/his/her broker/custodian bank as required by them; or

(d) if that Shareholder’s Shares have been lodged with its/his/her Investor Participant Account with CCASS, authorise its/his/her instruction via the CCASS Phone System or CCASS Internet System on or before the deadline set by HKSCC.
2.2 Shareholders with such a nominee holding of Shares should ensure that they undertake the above applicable course of action promptly so as to allow their nominee(s) sufficient time to complete the acceptance procedure on their behalf by the Latest Acceptance Time.

3 Recent Transfers

If a Shareholder has lodged transfer(s) of Shares for registration in its/his/her name and has not yet received the Share certificate(s) and wishes to accept the Offer, it/he/she should nevertheless complete the Acceptance Form and deliver it to the Registrar together with the transfer receipt(s) duly signed by it/him/her at or before the Latest Acceptance Time. Such action will be deemed to be an irrevocable authority to the Company and/or Dongxing Securities and/or their respective agent(s) to collect from the Company or the Registrar on its/his/her behalf the relevant Share certificate(s) when issued and to deliver such Share certificate(s), subject to the terms of the Offer, as if it was/they were delivered to the Registrar with the Acceptance Form.

4 Lost or Unavailable Share Certificates

4.1 If the Title Documents are not readily available and/or are lost and a Shareholder wishes to accept the Offer, the Acceptance Form should nevertheless be completed and delivered to the Registrar so as to reach the Registrar not later than the Latest Acceptance Time and the Title Documents should be forwarded to the Registrar as soon as possible thereafter and in any event before the Latest Acceptance Time.
4.2 Acceptances of the Offer may, at the discretion of the Company, be treated as valid even if not accompanied by the Title Documents but, in such cases, the cash consideration due will not be despatched until the relevant Title Documents have been received by the Registrar or in the case of loss of Title Documents, such Title Documents have been cancelled and the Register has been updated.
4.3 If a Shareholder has lost its/his/her Title Documents, it/he/she should write to the Registrar and request a form of letter of indemnity in respect of the lost Title Documents (as the case may be) which, when completed by it/him/her in accordance with the instructions given, should be returned, together with the Acceptance Form and any Title Documents which are available, to the Registrar either by post or by hand, so as to arrive not later than the Latest Acceptance Time. In such cases, the Shareholder will be informed of the fees payable to the Registrar for which it/he/she will be responsible.

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TERMS OF THE OFFER

APPENDIX I

5 Additional Acceptance Form

If a Shareholder has lost the accompanying Acceptance Form or such original has become unusable, and requires a replacement of such form, it/he/she should write to the Registrar or visit the Registrar at its office and request an additional Acceptance Form for completion by such Shareholder. Alternatively, its/he/she could download the Acceptance Form from the website of the Stock Exchange at www.hkexnews.hk or the Company’s website at www.rykadan.com.

6 Settlement

6.1 Subject to the Offer becoming unconditional and provided that a duly completed Acceptance Form, accompanied by the relevant Title Documents are received by the Registrar by not later than the Latest Acceptance Time and are or are deemed to be in order, the Registrar will inform the relevant Accepting Shareholder by ordinary post of the buy-back of its/his/her Shares. At the same time, the Registrar will send, by ordinary post at that Accepting Shareholder’s risk, a remittance for such total amount as is due to that Accepting Shareholder under the Offer, subject to deduction pursuant to paragraph 5.4 in the section headed “ Terms and Conditions of the Offer ” above, as soon as possible, but in any event within 7 business days (as defined in the Takeovers Code) following the close of the Offer.
6.2 If the Shares of an Accepting Shareholder have not been bought-back by the Company in full, the Title Documents in respect of the balance of such Shares or a replaced certificate therefor will be returned or sent to it/him/her by ordinary post at its/his/her own risk, as soon as possible, but in any event within 10 days following the close of the Offer.
6.3 If the Offer does not become unconditional, the Title Documents will be returned and/ or sent to each Accepting Shareholder (by ordinary post, at that Accepting Shareholder’s own risk) within 10 days of the lapse of the Offer. Where any Accepting Shareholder has sent one or more transfer receipt(s) and in the meantime one or more Share certificate(s) has/have been collected on that Shareholder’s behalf in respect thereof, that Accepting Shareholder will be sent (by ordinary post, at that Accepting Shareholder’s own risk) such Share certificate(s) in lieu of the transfer receipt(s).

7 New Shareholders

Any new Shareholder may collect a copy of this Offer Document, together with the form of proxy and Acceptance Form from the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong during business hours from Friday, 30 October 2020 to the closing date of the Offer, i.e. Monday, 7 December 2020 (both days inclusive). Such Shareholder may also contact the Registrar (through the enquiry general telephone line referred to in paragraph 10.9 under the section headed “ Terms and Conditions of the Offer ” above) and request a copy of this Offer Document, the accompanying form of proxy and Acceptance Form (as appropriate) to be sent to its/his/her registered address as recorded in the Register.

– I-9 –

TERMS OF THE OFFER

APPENDIX I

OVERSEAS SHAREHOLDERS

Based on the Register, as at the Latest Practicable Date, the Company had Overseas Shareholder(s) with registered addresses located in Australia and Canada.

As at the Latest Practicable Date, the Company has obtained advice from law firms qualified to advise on Australian law and Canadian law, and it had been advised that under the applicable legislations and regulations of these jurisdictions, there was no regulatory restriction of any regulatory body or stock exchange with respect to extending the Offer to these Overseas Shareholders in the relevant jurisdictions. Accordingly, the Offer will be extended to the Overseas Shareholders with registered addresses in Australia and Canada.

It is the responsibility of each Overseas Shareholder who wishes to accept the Offer to satisfy himself or herself as to the full observance of the laws of the relevant jurisdictions in that connection, including the obtaining of any governmental or other consents which may be required or compliance with other necessary formalities or legal requirements. Any acceptance of the Offer by any Shareholder shall be deemed to constitute a representation and warranty from such Shareholder to the Company that all applicable local laws and requirements have been observed and complied with. Shareholders should consult their professional advisers if in doubt.

EFFECT OF ACCEPTANCE OF THE OFFER BY SHAREHOLDERS

Each Shareholder by whom, or on whose behalf, an Acceptance Form is executed irrevocably undertakes, represents, warrants and agrees to and with the Company and Dongxing Securities so as to bind it/him/her, its/his/her personal representatives, heirs, successors and assigns) to the effect:

1 Representations and Warranties

that by delivery to the Registrar a duly completed Acceptance Form with the Title Documents, the Accepting Shareholder represents and warrants to the Company and Dongxing Securities:

(a) that it/he/she has full power and authority to tender, sell, assign and transfer all the Shares specified in such Acceptance Form for buy-back and that the Shares are fully paid, free from all liens, charges, encumbrances, equitable claims or adverse interests, rights of pre-emption or other third party rights of any nature and together with all rights attaching or accruing thereto; and
(b) that if it/he/she is an Overseas Shareholder, it/he/she has fully observed any of its/ his/ her applicable legal or regulatory requirements and that the Offer may be accepted by its/him/her lawfully under the laws of the relevant jurisdiction.

– I-10 –

TERMS OF THE OFFER

APPENDIX I

2 Appointment and Authority

that the execution of the Acceptance Form constitutes:

(a) the irrevocable appointment of any director or officer of the Company or Dongxing Securities, or such other person as any of them may direct, as such Accepting Shareholder’s agent (the “ Agent ”); and
(b) an irrevocable instruction to the Agent to complete and execute the Acceptance Form and/or any other document at the Agent’s discretion on behalf of such Accepting Shareholder and to do any other acts or things as may in the opinion of the Agent be necessary, expedient or desirable for the purpose of the Company buying-back some or all of the Shares (as the Company may in its absolute discretion determine) in respect of which such Accepting Shareholder has accepted the Offer.

3 Undertakings

that by executing the Acceptance Form, it/he/she:

(a) agrees to ratify and confirm each and every act or thing which may be done or effected by the Company or any Agent in the proper exercise of its or its/his/her powers and/or authorities under the terms of the Offer;
(b) undertakes to deliver to the Registrar the Title Documents in respect of the Shares for which the Offer is accepted, or an indemnity or indemnities acceptable to the Company in lieu thereof, or to procure the delivery of such document(s) to the Registrar as soon as possible thereafter and, in any event, no later than the Latest Acceptance Time;
(c) accepts that the provisions of the Acceptance Form and the other terms and conditions in this Offer Document are deemed to be incorporated into the terms and conditions of the Offer;
(d) undertakes to execute any further documents, take any further action and give any further assurances which may be required in connection with its/his/her acceptance of the Offer as the Company may consider to be necessary, expedient or desirable, including without limitation, to complete the buy-back of any Shares in respect of which it/he/she has accepted the Offer free from all liens, charges, encumbrances, equitable claims or adverse interests, rights of pre-emption or other third party rights of any nature and together with all rights attaching or accruing thereto and/or to perfect any of the authorities expressed to be given hereunder;
(e) authorises the Company or the Agent to procure the despatch by ordinary post of the consideration to which it/he/she is entitled at its/his/her own risk to the first-named holder at its/his/her registered address in Box 4 of the Acceptance Form; and

– I-11 –

TERMS OF THE OFFER

APPENDIX I

(f) submits to the jurisdiction of the courts of Hong Kong in relation to all matters arising out of or in connection with the Offer or the Acceptance Form.

TAXATION

Shareholders are recommended to consult their own professional advisers if they are in any doubt as to the taxation implications of their acceptances of the Offer. It is emphasised that none of the Company, its ultimate beneficial owners and parties acting in concert with any of them, Dongxing Securities, the Independent Financial Adviser, the Registrar or any of their respective directors or any persons involved in the Offer accepts responsibility for any taxation effects on, or liabilities of, any person or persons as a result of their acceptances of the Offer.

ANNOUNCEMENTS

Following the EGM (or any adjournment or postponement thereof, as the case may be) at which the Offer and the Whitewash Waiver are to be approved by the Independent Shareholders, the Company will announce through the Stock Exchange’s website the results of the EGM and whether or not the Offer has become unconditional.
By 6:00 p.m. (or such later time as the Executive may permit) on the closing date of the Offer, the Company shall inform the Executive and the Stock Exchange of its decision in relation to the closing and the results of the Offer and shall publish an announcement through the Stock Exchange by 7:00 p.m. on such date stating that the Offer has been closed. A draft of such announcement must be submitted to the Executive and the Stock Exchange by 6:00 p.m. for clearance and publication through the website of the Stock Exchange by 7:00 p.m. on the same day. The announcement shall, among others (except in the case of lapse of the Offer), specify the details as required under Rule 19.1 of the Takeovers Code.
In calculating the number of the Shares represented by an Acceptance Form, acceptances which are not in all respects in order or are subject to verification will be stated separately.

INTERPRETATION

A reference in this Offer Document to a Shareholder includes a reference to a person(s) who, by reason of an acquisition or transfer of Shares, is entitled to execute an Acceptance Form and in the event of more than one person executing an Acceptance Form, the provisions of this Offer Document apply to them jointly and severally.
A reference in this Offer Document and the Acceptance Form to the masculine gender includes the feminine and neuter genders, and a reference to the singular includes the plural, and vice versa.

– I-12 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

FINANCIAL SUMMARY

This following is a summary of the financial results of the Group for the year ended 31 March 2018, the year ended 31 March 2019 and the year ended 31 March 2020.

RESULTS Revenue Cost of sales and services Gross profit Other revenue Other net income/(loss) Selling and marketing expenses Administrative and other operating expenses Profit/(loss) from operations Increase/(decrease) in fair value of investment properties Finance costs Share of profit/(loss) of associates Share of loss of joint ventures Profit/(loss) before taxation Income tax expense Profit/(loss) for the year Other comprehensive income for the year (after tax and reclassification adjustments): Items that may be reclassified subsequently to profit or loss: – Exchange differences arising on translation of foreign operations – Share of translation reserve of joint ventures	Year ended 31 March 2018 HK$’000 408,144 (299,151) 108,993 14,613 40,485 (22,335) (104,572) 37,184 17,300 54,484 (13,176) – (91) 41,217 (6,541) 34,676 --------------- 17,944 3,263 21,207 ---------------	Year ended 31 March 2019 HK$’000 881,095 (463,733) 417,362 18,686 (22,932) (44,866) (73,147) 295,103 5,585 300,688 (23,563) 121,144 (27,097) 371,172 (48,531) 322,641 --------------- (14,390) (4,392) (18,782) ---------------	Year ended 31 March 2020 HK$’000 110,677 (67,458) 43,219 15,870 (23,904) (3,562) (63,713) (32,090) (13,471) (45,561) (13,524) (85) (19,772) (78,942) (5,998) (84,940) --------------- (11,067) (3,231) (14,298) ---------------

– II-1 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

Items that will not be reclassified subsequently to profit or loss: – Share of remeasurement of defined benefit liability of a joint venture – Surplus on revaluation of buildings held for own use upon transfer out to investment properties – Financial assets measured at fair value through other comprehensive income – movement in fair value reserve (non-recycling) Other comprehensive income for the year Total comprehensive income for the year Profit/(loss) for the year attributable to: – Equity shareholders of the Company – Non-controlling interests Total comprehensive income for the year attributable to: – Equity shareholders of the Company – Non-controlling interests Earnings/(loss) per share Basic and diluted Total equity attributable to equity shareholders of the Company Non-controlling interests	Year ended 31 March 2018 HK$’000 (744) 11,474 – 10,730 --------------- ----------------------------- 31,937 --------------- ----------------------------- 66,613 31,120 3,556 34,676 55,007 11,606 66,613 6.5 cents 1,153,133 43,673 1,196,806	Year ended 31 March 2019 HK$’000 (54) – (14,651) (14,705) --------------- ----------------------------- (33,487) --------------- ----------------------------- 289,154 329,957 (7,316) 322,641 302,393 (13,239) 289,154 69.1 cents 1,439,286 30,148 1,469,434	Year ended 31 March 2020 HK$’000 428 – (1,199) (771) --------------- ----------------------------- (15,069) --------------- ----------------------------- (100,009) (77,319) (7,621) (84,940) (87,254) (12,755) (100,009) (16.2) cents 1,323,385 17,393 1,340,778

– II-2 –

APPENDIX II

FINANCIAL INFORMATION OF THE GROUP

	Year ended	Year ended	Year ended
	31 March	31 March	31 March
	2018	2019	2020
	HK$’000	HK$’000	HK$’000
Dividend payable to equity shareholders
attributable to the year	14,323	28,647	Nil
Dividend per share (in HK cents)	3	6	Nil

Saved as disclosed above, there are no other items of income or expenses which are material. The auditor’s reports from KPMG, in respect of the Group’s audited consolidated financial statements for the year ended 31 March 2018 and the year ended 31 March 2019 and the auditor’s report from PricewaterhouseCoopers, in respect of the Group’s audited consolidated financial statements for the year ended 31 March 2020 did not contain any modified opinion, emphasis of matter or material uncertainty related to going concern.

CONSOLIDATED FINANCIAL STATEMENTS

The Company is required to set out or refer to in this Offer Document the consolidated statement of financial position, consolidated statement of cash flows and any other primary statement as shown in the audited consolidated financial statements of the Company for the year ended 31 March 2020 (the “ 2020 Financial Statements ”), together with the notes to the relevant published financial statements which are of major relevance to the appreciation of the above financial information.

The 2020 Financial Statements are set out on pages 49 to 123 of the annual report of the Company for the year ended 31 March 2020 (the “ Annual Report 2020 ”), which was published on 28 July 2020. The Annual Report 2020 is posted on the Company’s website www.rykadan.com and the website of the Stock Exchange at www.hkexnews.hk. Please also see below a direct link to the Annual Report 2020:

https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0728/2020072800446.pdf

The audited consolidated financial statements of the Company for the year ended 31 March 2019 (the “ 2019 Financial Statements ”) are set out on pages 49 to 125 of the annual report of the Company for the year ended 31 March 2019 (the “ Annual Report 2019 ”), which was published on 31 July 2019. The Annual Report 2019 is posted on the Company’s website www.rykadan.com and the website of the Stock Exchange at www.hkexnews.hk. Please also see below a direct link to the Annual Report 2019:

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0731/ltn20190731199.pdf

The audited consolidated financial statements of the Company for the year ended 31 March 2018 (the “ 2018 Financial Statements ”) are set out on pages 49 to 113 of the annual report of the Company for the year ended 31 March 2018 (the “ Annual Report 2018 ”), which was published on 18 July 2018. The Annual Report 2018 is posted on the Company’s website www.rykadan.com and the website of the Stock Exchange at www.hkexnews.hk. Please also see below a direct link to the Annual Report 2018:

https://www1.hkexnews.hk/listedco/listconews/sehk/2018/0718/ltn20180718273.pdf

The 2020 Financial Statements (but not any other part of the Annual Report 2020), the 2019 Financial Statements (but not any other part of the Annual Report 2019) and 2018 Financial Statements (but not any other part of the Annual Report 2018) are incorporated by reference into this Offer Document and form part of this Offer Document.

– II-3 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

STATEMENT OF INDEBTEDNESS AND CONTINGENT LIABILITIES

At the close of business on 31 July 2020, being the latest practicable date for the purpose of preparing this statement of indebtedness prior to the printing of this Offer Document, the Group had total borrowings of approximately HK$373,085,000, details of which are set out below:

Secured bank loans Loans from non-controlling shareholders Total borrowings	HK$’000 296,442 76,643
	373,085

As at 31 July 2020, the secured bank loans of the Group were secured by mortgages over certain assets of the Group with an aggregate carrying value of approximately HK$305,778,000, details of which are set out below:

Investment properties Building held for own use Properties for sale	HK$’000 160,140 38,445 107,193
	305,778

In addition, as at 31 July 2020, the Company has issued guarantees to banks in respect of banking facilities granted to certain indirect subsidiaries, an associate and a joint venture of HK$383,851,000, HK$20,000,000 and HK$54,400,000 respectively. Such banking facilities were utilised by its subsidiaries, the associate and the joint venture to the extent of HK$134,792,000 and HK$Nil and HK$20,000,000 respectively.

Save as aforesaid or as otherwise disclosed herein, and apart from intra-group liabilities and normal trade and other payables in the ordinary course of business of the Group, as at 31 July 2020, the Group did not have any debt securities issued and outstanding or agreed to be issued, bank overdrafts, loans or other similar indebtedness, liabilities under acceptances or acceptable credits, debentures, mortgages, charges, hire purchase or finance lease commitments, guarantees or other material contingent liabilities.

MATERIAL CHANGES

The Directors confirm that as at the Latest Practicable Date, there had been no material change in the financial or trading position or outlook of the Group since 31 March 2020, being the date to which the latest published audited consolidated financial statements of the Company were made up.

FINANCIAL AND TRADING PROSPECTS

The global COVID-19 pandemic has severely impacted the macroeconomic environment in Hong Kong, the U.S.A. and other markets in which the Group operates. However, the Group remains cautiously optimistic about the prospects for its current real estate development portfolio. In particular, the Group believes in the underlying strength of the commercial and industrial property markets in Hong Kong, which could be supported by

– II-4 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX II

ongoing trends including government policies to revitalise local industrial districts, as well as continued moving by multinational firms from traditional CBDs to emerging CBDs in Hong Kong where the Group focuses.

Outside of the short-to-medium term impact of COVID-19 pandemic, the Group has a cautious but positive outlook for its investment portfolio in the U.S.A..

With low-interest rates and supportive government policies likely to remain in place in the foreseeable future, the Group will keep on seeking high-potential and larger-scale projects in Hong Kong, overseas markets and the PRC’s Greater Bay Area, combining the capital contributions from its asset, investment and fund management business together with its other existing resources.

The Group will strive for opportunities to expand its asset, investment and fund management business to further diversify its investment portfolio and deliver quality performance to its Shareholders and project investors.

The above proactive but cautious strategy will be maintained to support the Group’s future performance and create further value for its Shareholders.

– II-5 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

For illustrative purposes, the financial information prepared in accordance with Rule 4.29 of the Listing Rules is set out here to provide further information about how the financial information of the Group might be affected by the assumption of the completion of the Offer as if the Offer had been completed as at 31 March 2020, 1 April 2019 or at any future date.

The following are illustrative and unaudited pro forma statements of adjusted consolidated net assets per Share and adjusted loss per Share (the “Unaudited Pro Forma Financial Information”) of the Group attributable to the equity shareholders of the Company which have been prepared on the basis of the notes set out below, for the purpose of illustrating the effect of the Offer as if it had taken place on 31 March 2020 for the unaudited pro forma adjusted consolidated net assets per Share attributable to the equity shareholders of the Company after completion of the Offer or 1 April 2019 for the pro forma adjusted loss per Share attributable to the equity shareholders of the Company after completion of the Offer. This Unaudited Pro Forma Financial Information has been prepared for illustrative purposes only and, because of its hypothetical nature, it may not give a true picture of the financial position or financial results of the Group had the Offer been taken place at 31 March 2020, 1 April 2019 or at any future date.

– III-1 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

Unaudited pro forma statement of adjusted consolidated net assets per Share

Non-current assets Current assets Current liabilities (Note 3) Net current assets (Note 3) Non-current liabilities (Note 3) Net assets Non-controlling interests Net assets attributable to the equity shareholders of the Company Including: Bank deposits and cash on hand Net assets per Share attributable to the equity shareholders of the Company	Audited consolidated net assets of the Group attributable to equity shareholders of the Company as at 31 March 2020 (Note 1) HK$’000 596,965 1,206,732 454,547 752,185 8,372 1,340,778 17,393 1,323,385 242,093 HK$ 2.77 (Note 4)	Estimated expenditure to be incurred under the Offer (Note 2) HK$’000 – (74,360) – (74,360) – (74,360) – (74,360) (74,360)	Unaudited pro forma adjusted consolidated net assets attributable to equity shareholders of the Company as at 31 March 2020 HK$’000 596,965
			1,132,372
			454,547
			677,825
			8,372
			1,266,418

			17,393
			1,249,025

			167,733

			HK$ 3.33

			(Note 5)

– III-2 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

Unaudited pro forma statement of adjusted loss per Share

		Unaudited
Audited		pro forma
consolidated	Loss per	adjusted loss
loss	Share	per Share
attributable	attributable	attributable
to the equity	to the equity	to the equity
shareholders	shareholders	shareholders
of the	of the	of the
Company for	Company for	Company
the year	the year	after
ended 31	ended 31	completion of
March 2020	March 2020	the Offer
(Note 1)	(Note 4)	(Note 6)
HK$’000	HK cents	HK cents

Share buy-back of 102,000,000 Shares at HK$0.68 per Share (77,319) (16.2) (20.6)

Notes:

The audited consolidated net assets of the Group attributable to the equity shareholders of the Company as at 31 March 2020 and audited consolidated loss attributable to the equity shareholders of the Company for the year ended 31 March 2020 are extracted from the published annual report of the Group for the year ended 31 March 2020.
The estimated expenditure to be incurred under the Offer is based on 102,000,000 Shares to be bought-back at the offer price of HK$0.68 per Share and the related expenses of approximately HK$5,000,000, assuming the Maximum Number of Shares to be repurchased by the Company shall be accepted in full under the Offer.
The estimated expenditure to be incurred under the Offer will be settled by cash and therefore the Offer will not have any effect on the liabilities of the Group, and the working capital (expressed as net current assets) as at 31 March 2020 would decrease by approximately HK$74,360,000 from approximately HK$752,185,000 to approximately HK$677,825,000.
The consolidated net assets per Share attributable to the equity shareholders of the Company as at 31 March 2020 and the loss per Share attributable to the equity shareholders of the Company for the year ended 31 March 2020 were approximately HK$2.77 and approximately HK16.2 cents respectively, which was based on the audited consolidated net assets of the Group attributable to the equity shareholders of the Company as at 31 March 2020 of approximately HK$1,323,385,000 and the audited consolidated loss attributable to the equity shareholders of the Company for the year ended 31 March 2020 of approximately HK$77,319,000 respectively, and on the basis that 477,447,000 Shares were in issue as at 31 March 2020 and throughout the year ended 31 March 2020.
The unaudited pro forma adjusted consolidated net assets per share attributable to the equity shareholders of the Company after completion of the Offer is arrived at after taking into account (i) the audited consolidated net assets of the Group attributable to the equity shareholders of the Company as at 31 March 2020 of approximately HK$1,323,385,000 (Note 1) deducted by the estimated expenditure to be incurred under the Offer of approximately HK$74,360,000 (Note 2) and

– III-3 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

(ii) on the basis that 477,447,000 Shares were in issue as at 31 March 2020 and 102,000,000 shares were bought-back under the Offer, resulting in 375,447,000 Shares, assuming the Offer had taken place on 31 March 2020 and that there is full acceptance of the Offer up to the Maximum Number of Shares.
The unaudited pro forma adjusted loss per Share attributable to the equity shareholders of the Company after completion of the Offer is arrived at after taking into account of the audited consolidated loss attributable to the equity shareholders of the Company for the year ended 31 March 2020 of approximately HK$77,319,000 (Note 1) and on the basis that 477,447,000 Shares were in issue as at 1 April 2019 and 102,000,000 Shares were bought-back under the Offer, resulting in 375,447,000 Shares throughout the year ended 31 March 2020, assuming the Offer had been taken place on 1 April 2019 and that there is full acceptance of the Offer up to the Maximum Number of Shares. The Directors confirm that the related expenses of approximately HK$5,000,000 will be capitalised in full to equity in accordance with the Company’s accounting policies.
No adjustments have been made to reflect any trading results or other transactions of the Group entered into subsequent to 31 March 2020.

– III-4 –

APPENDIX III UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

B. INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION

The following is the text of a report on the unaudited pro forma financial information of the Group received from PricewaterhouseCoopers, Certified Public Accountants, Hong Kong, for the purpose of incorporation in this circular.

==> picture [77 x 56] intentionally omitted <==

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

To the Directors of Rykadan Capital Limited

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Rykadan Capital Limited (the “Company”) and its subsidiaries (collectively the “Group”) by the directors of the Company (the “Directors”) for illustrative purposes only. The unaudited pro forma financial information consists of the unaudited pro forma statement of adjusted consolidated net assets per share attributable to the equity shareholders of the Company as at 31 March 2020, unaudited pro forma statement of adjusted loss per share attributable to the equity shareholders of the Company for the year ended 31 March 2020 and related notes (the “Unaudited Pro Forma Financial Information”) as set out on pages III-1 to III-4 of the Company’s offer document dated 30 October 2020, in connection with the proposed conditional cash offer by Dongxing Securities (Hong Kong) Company Limited to repurchase up to 102,000,000 shares of the Company (the “Offer”). The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described on pages III-1 to III-4 of the Circular.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the Offer on the Group’s financial position as at 31 March 2020 and the Group’s financial results for the year ended 31 March 2020 as if the Offer had taken place at 31 March 2020 and 1 April 2019 respectively. As part of this process, information about the Group’s financial position and financial results have been extracted by the Directors from the Group’s financial statements for the year ended 31 March 2020, on which an audit report has been published.

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

The Directors are responsible for compiling the Unaudited Pro Forma Financial Information in accordance with paragraph 4.29 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the “Listing Rules”) and with

– III-5 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

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”).

Our Independence and Quality Control

We have complied with the independence and other ethical requirements of the Code of Ethics for Professional Accountants issued by the HKICPA, which is founded on fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. Our firm applies Hong Kong Standard on Quality Control 1 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 Accountant’s Responsibilities

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

We conducted our engagement in accordance with Hong Kong Standard on Assurance Engagements 3420, Assurance Engagements to Report on the Compilation of Pro Forma Financial Information Included in a Prospectus , issued by the HKICPA. This standard requires that the reporting accountant plans and performs procedures to obtain reasonable assurance about whether the Directors have compiled the 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 purposes of this engagement, we are not responsible for updating or reissuing any reports or opinions on any historical financial information used in compiling the Unaudited Pro Forma Financial Information, nor have we, in the course of this engagement, performed an audit or review of the financial information used in compiling the Unaudited Pro Forma Financial Information.

The purpose of unaudited pro forma financial information included in 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 purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Offer at 31 March 2020 or 1 April 2019 would have been as presented.

– III-6 –

UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE GROUP

APPENDIX III

A reasonable assurance engagement to report on whether the unaudited pro forma financial information has been properly compiled on the basis of the applicable criteria involves performing procedures to assess whether the applicable criteria used by the directors in the compilation of the unaudited pro forma financial information provide a reasonable basis for presenting the significant effects directly attributable to the event or transaction, and to obtain sufficient appropriate evidence about whether:

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

The procedures selected depend on the reporting accountant’s judgment, having regard to the reporting accountant’s understanding of the nature of the company, 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 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.

PricewaterhouseCoopers

Certified Public Accountants Hong Kong, 30 October 2020

– III-7 –

PROPERTY VALUATION REPORT

APPENDIX IV

The following is the text of a letter and a valuation certificate prepared for the purpose of incorporation in this circular received from Colliers International (Hong Kong) Limited, an independent valuer, in connection with its valuation as at 31 August 2020 of the property interests of the Group.

Colliers International (Hong Kong) Limited Valuation & Advisory Services Company License No. C-006052

==> picture [69 x 37] intentionally omitted <==

Suite 5701 Central Plaza 18 Harbour Road Wanchai Hong Kong

30 October 2020

The Directors

Room 2701 & 2801, 27/F & 28/F Rykadan Capital Tower 135 Hoi Bun Road, Kwun Tong Kowloon

Dear Sirs,

Re: Portfolio Valuation

INSTRUCTIONS, PURPOSE AND VALUATION DATE

In accordance with the instructions for us to value the properties in which Rykadan Capital Limited (the Company ) and its subsidiaries (hereinafter together referred to as the Group ) have interests in Hong Kong, the United States of America (the US ), Italy and Bhutan, we confirm that we have carried out physical inspections, made relevant enquiries and searches and obtained such further information as we consider necessary for providing you with our opinion of the Market Value of the properties in their existing states, as at 31 August 2020 (the Valuation Date ) for circular purposes.

VALUATION STANDARDS

The valuation has been carried out in accordance with the prevailing RICS Valuation – Global Standards, incorporating the latest IVSC International Valuation Standards published by the Royal Institution of Chartered Surveyors and with reference to Chapter 5 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and Rule 11 of the Code on Takeovers and Mergers.

Colliers International (Hong Kong) Limited is regulated by the Royal Institution of Chartered Surveyors (RICS) which monitors regulated firms under its conduct and disciplinary regulations. In accordance with RICS regulatory requirements, Colliers International (Hong Kong) Limited maintains a complaint handling procedure, details of which are available upon request.

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION BASIS

Our valuations are on the basis of Market Value in its existing state, which we define as the estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

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

This estimate specifically excludes an estimated price inflated or deflated by special considerations or concessions granted by anyone associated with the sale, or any element of special value.

The outbreak of the novel coronavirus (Covid-19), declared a global pandemic by the World Health Organisation on 11 March 2020, has impacted global financial markets, and market activity is being impacted in many sectors. As at the valuation date, we consider that we can attach less weight to previous market evidence for comparison purposes to inform opinions of value. Indeed, the current response to Covid-19 means that we are faced with an unprecedented set of circumstances on which to base a judgement.

Our valuation is therefore reported on the basis of material valuation uncertainty as defined by the prevailing Royal Institution of Chartered Surveyors’ valuation standards. Consequently, less certainty – and a higher degree of caution – should be attached to our valuation than would normally be the case. Given the unknown future impact that Covid-19 might have on the real estate market, we recommend that you keep the valuation of the properties under frequent review.

VALUATION METHODOLOGY

We have adopted the Market Approach to assess the Market Value of the properties.

The Market Approach estimates the value of property by comparing recent sales of similar interests in the building or buildings located in their surrounding area.

By analysing such sales which qualify as ’arms-length’ transactions, between willing buyers and sellers, adjustments are made for size, location, time, amenities and other relevant factors when comparing such sales prices to assess the value of the subject property. This approach is commonly used to value properties when reliable sales evidence of property of a similar nature is available.

In valuing the property interests that are held for development, we have also taken into account the accrued construction cost and professional fees relevant to the stage of construction as at the valuation date and the remainder of the cost and fees expected to be incurred for completing the development.

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION ASSUMPTIONS

Our valuation has been made on the assumption that the seller disposes of the properties on the open market without the benefit of a deferred term contract, leaseback, joint venture, management agreement or any similar arrangement, which could serve to affect the value of the properties.

No allowance has been made for any charges, mortgages or amounts owing on the properties or for any expenses or taxations which may be incurred in effecting a sale.

In valuing the property interests held in Hong Kong, the US, Italy, we have made the following assumptions:

We have assumed that the properties are free from and clear of any and all charges, liens and encumbrances of an onerous nature likely to affect value.
We have assumed that any land premium or other fees payable for the acquisition, transfer, sale, letting or mortgage of the properties have been fully paid and settled.
We have assumed proper titles have been obtained, and the properties and the interests valued therein can be freely transferred, mortgaged and let in the market.
We are not aware of any easements or rights of way affecting the properties and have assumed that none exist.
We have assumed that all information, estimates and opinions furnished to us and contained in this report including all information provided by the Group, are true and correct, fit for valuation purposes, and from reliable sources.
We have assumed that the properties are free from any contamination and environmental problems or hazards.

In addition, in valuing the property interests that are held for development in Hong Kong and the US as at the valuation date, we have assumed that the properties will be developed and completed in accordance with the latest development schemes provided to us by the Company. We have relied on the accrued construction costs and professional fees information provided by the Company according to the different stages of construction of the properties as at the valuation date, and we did not find any material inconsistency from those of other similar developments.

In the course of our valuation of the Bhutan property, we have relied on the information and advice given by the Company’s legal advisor as to Bhutanese laws, regarding the title to the property and the interest of the Group in the property.

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PROPERTY VALUATION REPORT

APPENDIX IV

INFORMATION SOURCES

We have relied to a considerable extent on the information provided by the Company on such matters as tenancy schedules, tenure, floor areas, building plans and all other relevant matters. Dimensions, measurements and areas included in the valuation are based on information contained in the documents provided to us and are, therefore, only approximations.

We have also been advised by the Company that no material factors or information have been omitted or withheld from the information supplied and we consider that we have been provided with sufficient information to reach an informed view. We believe that the assumptions used in preparing our valuation are reasonable.

We would point out that the copies of documents of the properties in Italy and Bhutan provided to us are mainly compiled in Italian and Dzongkha, and the transliteration into English represents our understanding of the contents.

TITLE INVESTIGATIONS

In respect of the properties in Hong Kong, we have been provided with copies of the title documents relating to the properties and have made enquires and relevant searches at the Land Registry. In respect of the properties in the US, Italy and Bhutan, we have been provided with copies of the title documents relating to the properties. However, for all properties, we have not searched the original documents to verify ownership or to ascertain the existence of any amendments that may not appear on the copies provided to us.

In the course of our valuation of the Bhutan Property, we have relied on the information and advice given by the Company’s legal advisor as to Bhutanese laws regarding the title to the property and the interest in the property.

SITE INSPECTION

We have inspected the exterior and, where possible, the interior of the properties.

We were unable to carry out the site inspection of the property in Bhutan due to the emergency travel and movement restrictions currently prevailing relating to the current COVID-19 outbreak. We have made assumptions as to the surroundings, nature, appearance, quality and condition of the property. If on eventual inspection our assumptions turn out to differ from reality, we reserve the right to review our valuation accordingly.

We have not carried out investigations to determine the suitability of the ground conditions and the services for any future development of the properties we have inspected. Our valuations have been prepared on the assumption that these aspects are satisfactory. We are not, however, able to report whether the properties are free of rot, infestation or any other structural defects. No tests were carried out on any of the services.

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PROPERTY VALUATION REPORT

APPENDIX IV

SITE MEASUREMENT

We have not carried out detailed site measurements to verify the correctness of the site/ floor areas in respect of the properties but have assumed that the site/floor areas shown on the documents and official site/floor plans handed to us are correct. All documents and contracts have been used as reference only and all dimensions, measurements and areas are approximations.

CURRENCY

Unless otherwise stated, all sums stated in our valuations are in Hong Kong Dollars ( HKD ) for the properties in Hong Kong, United States Dollars ( USD ) for the properties in the US, Euros ( EUR ) for the properties in Italy, and Bhutanese Ngultrum ( BTN ) for the property in Bhutan.

POTENTIAL TAX LIABILITY

For the purpose of compliance with Rule 11.3 of the Code on Takeovers and Mergers, we have been advised by the Company that the property-related potential tax liabilities which might arise on disposal of the property interests (as property transfer) mainly comprise the followings:

(a) For the property interests in Hong Kong (Groups I, II and III)
(i) Ad valorem stamp duty ( AVD ) at progressive rates ranging from 1.5% to 8.5% on the transaction amount
(ii) Profits tax at progressive rates ranging from 8.25% to 16.5% on assessable profits
(b) For the property interests in the US (Group IV)
(i) Federal and State Corporate income tax rate at approximately 21% on gain
(c) For the property interests in Italy (Group V)
(i) Corporate income tax, known as imposta sul reddito sulle società ( IRES ), at 24% on gain
(ii) Regional production tax, known as imposta regionale sulle attività produttive ( IRAP ), at 3.9% on gain
(d) For the property interests in Bhutan (Group VI)
(i) Stamp duty at approximately 3% on the transaction amount
(ii) Corporate income tax rate at 30% on gain

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PROPERTY VALUATION REPORT

APPENDIX IV

For the property interests in Groups I and IV, the potential tax liabilities are likely to crystallise as the relevant property interests are held for sale or development, now or in the future, by the Company.

For those property interests in Groups II, III, V and VI, they continue to be held by the Company and/or its joint venture with no intention to offer them for sale. Hence, the likelihood of any potential tax liability of these property interests crystallising is remote.

Our valuations of the properties set out in the summary of valuations and valuation particulars attached hereto, together with this covering letter, form our valuation report.

Yours sincerely, For and on behalf of Colliers International (Hong Kong) Limited

Hannah Jeong MSc (Real Estate) MRICS MHKIS RPS (GP) Head of Valuation & Advisory Services

Note: Hannah Jeong is a Registered Professional Surveyor who has over 15 years’ experience in the valuation of the properties of this magnitude and nature. She is a Member of the Royal Institution of Chartered Surveyors and a Member of the Hong Kong Institute of Surveyors. Ms Jeong has sufficient knowledge of the market as well as the skills and experience to undertake the valuations competently.

The valuations of the properties in the US in Group IV were undertaken by Hannah Jeong in collaboration with David Ibarra (MAI), Valuation Services Director and Marcus Espinoza (MAI SRA CCIM ASA), Valuation Services Director of our office in Los Angeles, California in the US.

The valuations of the properties in Italy in Group V were undertaken by Hannah Jeong in collaboration with Alessandro Gravinese (MRICS), Head of International Clients and Cross Border Valuations in our office in Milan, Italy.

The valuations of the properties in Bhutan in Group VI were undertaken by Hannah Jeong in collaboration with Amit Chawla (MRICS), Director of Valuation and Advisory Services in our office in Gurgaon, India.

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PROPERTY VALUATION REPORT

APPENDIX IV

SUMMARY OF VALUATIONS

				Market value in
			Effective	its existing state
		Market value in	interest	as at 31 Aug
		its existing state	attributable	2020
		as at 31 Aug	to the	attributable to
Property		2020	Group	the Group
		(HKD)		(HKD)
Group I
(a) –	Property interests held for development in Hong Kong
1	The property under development	930,000,000	3.55%	33,015,000
	on The Remaining Portion of
	Inland Lot No. 3668, The
	Remaining Portion of Section A
	of Inland Lot No. 3669, The
	Remaining Portion of Section B
	of Inland Lot No. 3669, and The
	Remaining Portion of Inland Lot
	No. 3669, located at Nos. 216,
	216A, 218, 220, 222 and 222A
	Jaffe Road, Wan Chai
2	The property under development	1,750,000,000	22.82%	399,350,000
	on Section A of Aberdeen Inland
	Lot No. 282 and The Remaining
	Portion of Aberdeen Inland Lot
	No. 282, located at No. 23
	Wong Chuk Hang Road
(b) –	Property interests held for sale	in Hong Kong
3	Workshop 1 on 1st Floor	83,300,000	100%	83,300,000
	together with Open Yard on
	Ground Floor, the Private
	Shutter Area for First Floor, Flat
	Roof on 1st Floor and Flat Roof
	on 3rd Floor, Workshop 1 on
	2nd Floor together with the
	Private Shutter Area for Second
	Floor and Flat Roof on 3rd
	Floor, Workshop 5 on 25th
	Floor at KHORA, located at
	Nos. 124-126, 130, 132 and 134
	Bedford Road, Kowloon

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PROPERTY VALUATION REPORT

APPENDIX IV

				Market value in
			Effective	its existing state
		Market value in	interest	as at 31 Aug
		its existing state	attributable	2020
		as at 31 Aug	to the	attributable to
Property		2020	Group	the Group
		(HKD)		(HKD)
4	Lorry Parking Space Nos.	37,900,000	100%	37,900,000
	LGV1-LGV5, Car Parking
	Space Nos. P1-P11, Motor Cycle
	Parking Space Nos. M1-M2 on
	Ground Floor at KHORA,
	located at Nos. 124-126, 130,
	132 and 134 Bedford Road,
	Kowloon
5	Lorry Parking Space Nos. L1,	23,070,000	100%	23,070,000
	L2, L7 on Ground Floor, Car
	Parking Space Nos. P11, P12,
	P13, P14 on First Floor,
	Motorcycle Parking Space Nos.
	M1, M2, M4, M5, M6, M7, M8
	on Third Floor at Rykadan
	Capital Tower, located at No.
	135 Hoi Bun Road, Kowloon
Group II – Property interests held for		investment in Hong Kong
6	Unit No. 2702 on 27th Floor,	160,820,000	100%	160,820,000
	Unit Nos. 2802, 2803, 2804 on
	28th Floor, Car Parking Space
	Nos. P7, P8, P9, P10 on First
	Floor and P33 on Third Floor,
	Motorcycle Parking Space Nos.
	M3, M9 on Third Floor at
	Rykadan Capital Tower, located
	at No. 135 Hoi Bun Road,
	Kowloon

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PROPERTY VALUATION REPORT

APPENDIX IV

				Market value in
			Effective	its existing state
		Market value in	interest	as at 31 Aug
		its existing state	attributable	2020
		as at 31 Aug	to the	attributable to
Property		2020	Group	the Group
		(HKD)		(HKD)
Group III – Property interests held for owner occupation			in Hong Kong
7	Unit No. 2701 on 27th Floor,	130,200,000	100%	130,200,000
	and Unit No. 2801 on 28th
	Floor at Rykadan Capital Tower,
	located at No. 135 Hoi Bun
	Road, Kowloon
	Total of Properties	3,115,290,000		867,655,000
	in Hong Kong
	(Group I – III)
				Market value in
			Effective	its existing state
		Market value in	interest	as at 31 Aug
		its existing state	attributable	2020
		as at 31 Aug	to the	attributable to
Property		2020	Group	the Group
		(USD)		(USD)
Group IV
(a) – Property interests held for sale		in the US
8	A single family residential	4,800,000	100%	4,800,000
	dwelling located at 1135
	Winston Avenue, San Marino,
	CA 91108, the US
(b) – Property interests held for development in the US
9	The property under development	6,400,000	100%	6,400,000
	located at 960 Singing Wood
	Drive, Arcadia, CA 91006, the
	US
10	The property under development	30,000,000	100%	30,000,000
	located at 100, 120, 150, 200
	South Garfield and 114 East
	Garvey and City Parking Lot,
	Monterey Park, CA 91755, the
	US
	Total of Properties in the US	41,200,000		41,200,000
	(Group IV)

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APPENDIX IV

PROPERTY VALUATION REPORT

				Market value in
			Effective	its existing state
		Market value in	interest	as at 31 Aug
		its existing state	attributable	2020
		as at 31 Aug	to the	attributable to
Property		2020	Group	the Group
		(EUR)		(EUR)
Group V – Property interests held for		owner occupation	in Italy
11	Pescantina (VR) in Località	4,740,000	43.5%	2,061,900
	Ospedaletto, via Brennero 49,
	Verona, Italy
12	Via Napoleone 19, Frazione	5,340,000	43.5%	2,322,900
	Ponton, 37015, Sant’Ambrogio
	di Valpolicella, Verona, Italy
	Total of Properties in Italy	10,080,000		4,384,800
	(Group V)
				Market value in
			Effective	its existing state
		Market value in	interest	as at 31 Aug
		its existing state	attributable	2020
		as at 31 August	to the	attributable to
Property		2020	Group	the Group
		(BTN)		(BTN)
Group VI – Property interests held for investment in Bhutan
13	Wolakha Punakha 117, Bhutan,	NIL	50%	NIL
	Punakha 13001, Bhutan
	(Building and Lease Hold Right
	only)
	Total of Properties in Bhutan	NIL		NIL
	(Group VI)

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

GROUP I

(a) – Property interests held for development in Hong Kong

No. Property

Description and Tenure

Market Value of Particulars of Property as at 31 occupancy Aug 2020

1 The property under development on The Remaining Portion of Inland Lot No. 3668, The Remaining Portion of Section A of Inland Lot No. 3669, The Remaining Portion of Section B of Inland Lot No. 3669, and The Remaining Portion of Inland Lot No. 3669, located at Nos. 216, 216A, 218, 220, 222 and 222A Jaffe Road, Wan Chai

The property comprises four parcels of land with a total site area of 3,267.92 sq ft, which is currently under development into a commercial building (see Note (4)).

Upon completion of the development, the property will provide 27 storeys of office and retail space with a total gross floor area of 49,018.69 sq ft.

The land portion of the property is held under numerous Government Leases for a term of 99 years commencing from 25 May 1929, which are renewable for a further 99 years upon their expiry. The current Government rent payable for the property is HKD48 per annum.

The property is under HKD930,000,000 development as at the (Hong Kong Dollars valuation date and is Nine Hundred and expected to be Thirty Million) completed in June 2022.

As advised by the Company, the total development cost is HKD231,600,000, of which approximately HKD27,000,000 had been incurred up to the valuation date. The total outstanding costs (including costs expended but not yet paid) is HKD204,600,000.

Notes:

The property was inspected by Pureanae Jang (MRICS), Senior Manager of Valuation and Advisory Services of our Hong Kong Office on 27 August 2020. As evidenced during our inspection, the property was under development.
The ownership particulars of the property are as follows:

� Lot Numbers: The Remaining Portion of Inland Lot No. 3668 The Remaining Portion of Section A of Inland Lot No. 3669 The Remaining Portion of Section B of Inland Lot No. 3669 The Remaining Portion of Inland Lot No. 3669

� Tenure: All lots are held under numerous Government Leases for a term of 99 years commencing from 25 May 1929 and renewable for a further 99 years upon their expiry. � Registered Owner Delight Land Investments Limited (an associate of the Company) by (For all lots above): various assignments dated 11 May 2018, registered vide various Memorial Nos. (e.g. 18052902400206)

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APPENDIX IV

PROPERTY VALUATION REPORT

Government Rent: Portion Government Rent (HKD)
The Remaining Portion of Inland Lot No. 3668 12 The Remaining Portion of Section A of Inland Lot 12 No. 3669 The Remaining Portion of Section B of Inland Lot 12 No. 3669 The Remaining Portion of Inland Lot No. 3669 12 Total 48
� Major Encumbrances – Mortgage in favour of The Hongkong and Shanghai Banking (For all lots above): Corporation Limited dated 11 May 2018, registered vide Memorial No. 18060402340118
– Sealed Copy of Notice of Application to Lands Tribunal for an Order for Sale on behalf of Delight Land Investments Limited (Applicant) and Winfield Paint Limited (Respondent) dated 16 October 2018, registered vide Memorial No. 18101802150414 (Remarks: Under Land (Compulsory Sale for Redevelopment) Ordinance Land Compulsory Sale Main Application No. 26000 OF 2018, Discharged by Memorial No. 19082602070212)
– Sealed Copy of Order dated 2 August 2019, registered vide Memorial No. 19082602070212 (Remarks: LDCS 26000 of 2018 to discharge Memorial No. 18101802150414)
The property is zoned as “Commercial” under Hong Kong Planning Area No. 5 Draft Wan Chai Outline Zoning Plan No. S/H5/28 exhibited on 4 May 2018.
The details of the development of the property are as follows:–
(a) The latest development proposal of the property with a total gross floor area of 49,018.69 sq ft was approved by the Buildings Department on 29 April 2020;
(b) The property is currently under development and is expected to be completed in June 2022;
(c) The estimated market value of the property as if completed as at the valuation date according to the development proposal as described above and assuming it was freely transferred in the market is HKD1,451,000,000.

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

No. Property

Description and Tenure

Market Value of Particulars of Property as at 31 occupancy Aug 2020

2 The property under development on Section A of Aberdeen Inland Lot No. 282 and The Remaining Portion of Aberdeen Inland Lot No. 282, located at No. 23 Wong Chuk Hang Road
The property comprises two parcels of land with a total site area of 7,148.37 sq ft, which are currently under development into a 26-storey commercial building (see Note (5)).
Upon completion of the development, the property will provide office and retail space with a total gross floor area of 107,208.20 sq ft, erected over three basement levels designated for 46 private car parking spaces, 5 motorcycle parking spaces and various loading and unloading areas.

The property is under HKD1,750,000,000 development as at the (Hong Kong Dollars valuation date and is One Billion Seven expected to be Hundred and Fifty completed in March Million) 2022.

As advised by the Company, the total development cost is HKD451,600,000, of which approximately HKD126,400,000 had been incurred up to the valuation date. The total outstanding costs (including costs expended but not yet paid) is HKD325,200,000.

The land portion of the property is held under a Government Lease for a term of 75 years commencing from 10 December 1962, which is renewable for a further 75 years upon its expiry. The current Government rent payable for the property is HKD164 per annum.

Notes:

The property was inspected by Pureanae Jang (MRICS), Senior Manager of Valuation and Advisory Services of our Hong Kong Office on 27 August 2020. As evidenced during our inspection, the property was under development.
The ownership particulars of the property are as follows:

� Lot Number: The Remaining Portion of Aberdeen Inland Lot No. 282

Tenure: Aberdeen Inland Lot No. 282 is held under a Government Lease for a term of 75 years commencing from 10 December 1962, which is renewable for a further 75 years upon its expiry.

� Registered Owner Capital Universal Investment Limited (an associate of the Company) by (For all lots above): an assignment dated 17 March 2008, registered vide Memorial No. 08040101920105

Government Rent: HKD164 per annum (AIL No. 282)

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PROPERTY VALUATION REPORT

APPENDIX IV

Major Encumbrances – Modification Letter with Plan dated 25 February 2011, registered (For all lots above): vide Memorial No. 11030702450017 (Remarks: Re AIL 282)
- Modification Letter with Plan dated 28 October 2015, registered vide Memorial No. 15103002470010 (Remarks: From the Government of The Hong Kong Special Administrative Region by The District Lands Officer/ Hong Kong West and South Re AIL 282)
- – Debenture and Mortgage in favour of United Overseas Bank Limited dated 15 December 2017, registered vide Memorial No. 18010402430436 (Remarks: Re AIL 282)
In compliance with the requirements set out in the Modification Letter with Plan dated 25 February 2011 registered vide Memorial No. 11030702450017 (Remarks: Re AIL 282), the Remaining Portion of Aberdeen Inland Lot No. 282 was carved out from Aberdeen Inland Lot No. 282 by Deed Poll with plan dated 15 May 2020 registered vide Memorial No. 20060101230019 (Remarks: Re S.A. and R.P.). The Company shall, when called upon by the Director of Lands to do so, surrender the Remaining Portion of Aberdeen Inland Lot No. 282 with vacant possession to the Government.
The property is zoned as “Other Specified Uses (Business(2))” under Hong Kong Planning Area No. 15 & 16 Approved Aberdeen and Ap Lei Chau Outline Zoning Plan No. S/H15/33 exhibited on 31 August 2018.
The details of the development of the property are as follows:–
(a) The latest development proposal of the property with a total gross floor area of 107,208.20 sq ft was approved by the Buildings Department on 11 August 2020;
(b) The property is currently under development and is expected to be completed in March 2022;
(c) The estimated market value of the property as if completed as at the valuation date according to the development proposal as described above, and assuming it was freely transferred in the market, is HKD2,403,000,000.

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PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

(b) – Property interests held for sale in Hong Kong

				Market Value of
			Particulars of	Property as at 31
No.	Property	Description and Tenure	occupancy	Aug 2020
3	Workshop 1 on 1st Floor	The property comprises three	The property is	HKD83,300,000
	together with Open Yard	Workshops on 1st, 2nd and	partially leased to a	(Hong Kong Dollars
	on Ground Floor, the	25th Floors, two Flat Roofs	third party as at the	Eighty Three Million
	Private Shutter Area for	on 1st and 3rd Floor, two	valuation date.	and Three Hundred
	First Floor, Flat Roof on	Private Shutter Areas on 1st		Thousand)
	1st Floor and Flat Roof	and 2nd Floors and an Open	As advised by the
	on 3rd Floor, Workshop 1	Yard on Ground Floor at	Company, Workshop 1
	on 2nd Floor together	KHORA.	on 1st Floor together
	with the Private Shutter		with Open Yard on
	Area for Second Floor	KHORA is a 25-storey	Ground Floor, the
	and Flat Roof on 3rd	industrial building (including	Private Shutter Area
	Floor, Workshop 5 on	roof and lift machine room)	for First Floor, Flat
	25th Floor at KHORA,	completed in 2018.	Roof on 1st Floor and
	located at Nos. 124– 126,	Occupation Permit No.	Flat Roof on 3rd
	130, 132 and 134	KN28/2018 (OP) was issued	Floor is leased for a
	Bedford Road, Kowloon	on 23 August 2018. As per	term of three years
		the approved general	commencing from 25
	(1,218/11,500 undivided	building plans, the total	August 2020 and
	shares of and within The	gross floor area of KHORA	expiring on 24 August
	Remaining Portion of	is approximately 86,394 sq	2023 (both days
	Kowloon Inland Lot No.	ft.	inclusive) at a
	6371, Section A of		monthly rent of
	Kowloon Inland Lot No.	As per measurements scaled	HKD80,000 (inclusive
	6371, Kowloon Inland	from the approved building	of Government rent,
	Lot No. 7312, Kowloon	plans, the total saleable area	rates and management
	Inland Lot No. 7313)	of the workshops is 6,495 sq	fee).
		ft or thereabouts. The total
		area of the ancillary areas	Workshop 1 on 2nd
		including flat roofs and open	Floor together with
		yards is 2,420 sq ft or	the Private Shutter
		thereabouts.	Area for Second Floor
			and Flat Roof on 3rd
		The land portion of the	Floor and Workshop 5
		property is held under	on 25th Floor are
		numerous Government	vacant as at the
		Leases for a term of 75	valuation date.
		years commencing on 9
		February 1953, which are
		renewable for a further 75
		years upon their expiry. The
		current Government rent
		payable for the property is
		HKD330 per annum.

Notes :

The property was inspected by Hannah Jeong (MRICS MHKIS RPS(GP)), Head of Valuation and Advisory and Pureanae Jang (MRICS), Senior Manager of Valuation and Advisory Services of our Hong Kong Office on 27 August 2020. As evidenced by their inspection, the property appears to be newly completed and is in excellent condition.

– IV-15 –

PROPERTY VALUATION REPORT

APPENDIX IV

The ownership particulars of the property are as follows:
Lot Numbers: –
The Remaining Portion of Kowloon Inland Lot No. 6371 (KIL 6371 R.P.)
Section A of Kowloon Inland Lot No. 6371 (KIL 6371 S.A.)
Kowloon Inland Lot No. 7312 (KIL 7312)
Kowloon Inland Lot No. 7313 (KIL 7313)

� Tenure: All lots are held under numerous Government Leases for a term of 75 years commencing on 9 February 1953, which are renewable for another 75 years upon their expiry.

Registered Owner (For all portions of the property):
Wonder Ace Investments Limited (a wholly-owned subsidiary of the Company) by an assignment dated 29 January 2016, registered vide Memorial No. 16021902000030 (Re KIL 6371 R.P.)
Wonder Ace Investments Limited by an assignment dated 29 January 2016, registered vide Memorial No. 16021902000047 (Re KIL 6371 S.A.)
Wonder Ace Investments Limited by an assignment dated 29 January 2016, registered vide Memorial No. 16021902000057 (Re KIL 7312)
Wonder Ace Investments Limited by an assignment dated 29 January 2016, registered vide Memorial No. 16021902000061 (Re KIL 7313)

�	Share of the Lot	Portion	Share of the Lot
		Workshop 1 on 1st Floor together with Open Yard	644/11,500
		on Ground Floor, the Private Shutter Area for First
		Floor, Flat Roof on 1st Floor and Flat Roof on 3rd
		Floor
		Workshop 1 on 2nd Floor together with the Private	545/11,500
		Shutter Area for Second Floor and Flat Roof on
		3rd Floor
		Workshop 5 on 25th Floor	29/11,500
		Total	1,218/11,500
�	Government Rent (For
	all portions of the		Government Rent
	property):	Portion	(HKD)
		The Remaining Portion of Kowloon Inland Lot No.	124.6
		6371
		Section A of Kowloon Inland Lot No. 6371	81.4
		Kowloon Inland Lot No. 7312	62
		Kowloon Inland Lot No. 7313	62
		Total	330

– IV-16 –

PROPERTY VALUATION REPORT

APPENDIX IV

Major Encumbrances:

For all portions of the property

Deed of Mutual Covenant and Management Agreement with Plans in favour of Savills Property Management Limited (Manager) dated 29 October 2018, registered vide Memorial No. 18111202040322

For Workshop 1 on 1st Floor together with Open Yard on Ground Floor, the Private Shutter Area for First Floor, Flat Roof on 1st Floor and Flat Roof on 3rd Floor and Workshop 1 on 2nd Floor together with the Private Shutter Area for Second Floor and Flat Roof on 3rd Floor

Mortgage dated in favour of The Hongkong and Shanghai Banking Corporation Limited dated 12 June 2019, registered vide Memorial No. 19062702360466

Rent Assignment in favour of The Hongkong and Shanghai Banking Corporation Limited dated 12 June 2019, registered vide Memorial No. 19062702360472

The property is zoned as “Other Specified Uses (Business)” under Kowloon Planning Area No. 3 Approved Mong Kok Outline Zoning Plan No. S/K3/32 exhibited on 18 October 2019.
The breakdown of the areas of the property is as follows:

		Ancillary
Portion	Saleable Area	Accommodation
	(sq ft)	(sq ft)
Workshop 1 on 1st Floor together with Open Yard on Ground Floor,
the Private Shutter Area for First Floor, Flat Roof on 1st Floor and
Flat Roof on 3rd Floor	3,159	2,166
Workshop 1 on 2nd Floor together with the Private Shutter Area for
Second Floor and Flat Roof on 3rd Floor	3,159	254
Workshop 5 on 25th Floor	176	–
Total	6,495	2,420

– IV-17 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

				Market Value of
			Particulars of	Property as at 31
No.	Property	Description and Tenure	occupancy	Aug 2020
4	Lorry Parking Space Nos.	The property comprises five	The property is fully	HKD37,900,000
	LGV1-LGV5, Car	Lorry Parking Spaces, 11	licensed to a third	(Hong Kong Dollars
	Parking Space Nos. P1–	Car Parking Spaces and two	party as at the	Thirty Seven Million
	P11, Motor Cycle Parking	Motor Cycle Parking Spaces	valuation date.	and Nine Hundred
	Space Nos. M1-M2 on	on Ground Floor at KHORA.		Thousand)
	Ground Floor at KHORA,		As advised by the
	located at Nos. 124– 126,	KHORA is a 25-storey	Company, the property
	130, 132 and 134	industrial building (including	is licensed to a single
	Bedford Road, Kowloon	roof and lift machine room)	licensee for a term of
		completed in 2018.	two years
	(146/11,500 undivided	Occupation Permit No.	commencing from 1
	shares of and within the	KN28/2018 (OP) was issued	September 2019 and
	Remaining Portion of	on 23 August 2018. As per	expiring on 31 August
	Kowloon Inland Lot No.	the approved general	2021 (both days
	6371, Section A of	building plans, the total	inclusive) at a
	Kowloon Inland Lot No.	gross floor area of KHORA	monthly license fee of
	6371, Kowloon Inland	is approximately 86,394 sq	HKD45,000 (inclusive
	Lot No. 7312, Kowloon	ft.	of equipment and
	Inland Lot No. 7313)		installation, manpower
		The land portion of the	and other operational
		property is held under	expenses).
		numerous Government
		Leases for a term of 75
		years commencing on 9
		February 1953, which are
		renewable for a further 75
		years upon their expiry. The
		current Government rent
		payable for the property is
		HKD330 per annum.

Notes :

The property was inspected by Hannah Jeong (MRICS MHKIS RPS(GP)), Head of Valuation and Advisory and Pureanae Jang (MRICS), Senior Manager of Valuation and Advisory Services of our Hong Kong Office on 27 August 2020. As evidenced by their inspection, the property appears to be newly completed and is in excellent condition.
The ownership particulars of the property are as follows:

�	Lot Numbers:	– The Remaining Portion of Kowloon Inland Lot No. 6371 (KIL
		6371 R.P.)
		– Section A of Kowloon Inland Lot No. 6371 (KIL 6371 S.A.)
		– Kowloon Inland Lot No. 7312 (KIL 7312)
		– Kowloon Inland Lot No. 7313 (KIL 7313)
�	Tenure:	All lots are held under numerous Government Leases for a term of 75
		years commencing on 9 February 1953, which are renewable for another
		75 years upon their expiry.

– IV-18 –

PROPERTY VALUATION REPORT

APPENDIX IV

�	Registered Owner (For	–	Wonder Ace Investments Limited (a wholly-owned subsidiary of	Wonder Ace Investments Limited (a wholly-owned subsidiary of
	all portions of the		the Company) by an assignment dated 29 January 2016, registered
	property):		vide Memorial No. 16021902000030 (Re KIL 6371 R.P.)
		–	Wonder Ace Investments Limited by an assignment	dated 29
			January 2016, registered vide Memorial No. 16021902000047 (Re
			KIL 6371 S.A.)
		–	Wonder Ace Investments Limited by an assignment	dated 29
			January 2016, registered vide Memorial No. 16021902000057 (Re
			KIL 7312)
		–	Wonder Ace Investments Limited by an assignment	dated 29
			January 2016, registered vide Memorial No. 16021902000061 (Re
			KIL 7313)
�	Share of the Lot:	Portion Share		of the Lot
		Lorry	Parking Space Nos. LGV1-LGV5	65/11,500
		Car Parking Space Nos. P1-P11		79/11,500
		Motor	Cycle Parking Space Nos. M1-M2	2/11,500
			Total	146/11,500
�	Government Rent:	Portion Government Rent
				(HKD)
		The Remaining Portion of Kowloon Inland Lot No.		124.6
		6371
		Section A of Kowloon Inland Lot No. 6371		81.4
		Kowloon Inland Lot No. 7312		62
		Kowloon Inland Lot No. 7313		62
			Total	330
�	Major Encumbrances	–	Deed of Mutual Covenant and Management Agreement	with Plans
	(For all portions of the		in favour of Savills Property Management Limited (Manager) dated
	property):		29 October 2018, registered vide Memorial No. 18111202040322
		–	Mortgage dated in favour of The Hongkong and Shanghai Banking
			Corporation Limited 12 June 2019, registered vide Memorial No.
			19062702360466
		–	Rent Assignment in favour of The Hongkong and	Shanghai
			Banking Corporation Limited dated 12 June 2019, registered vide
			Memorial No. 19062702360472

The property is zoned as “Other Specified Uses (Business)” under Kowloon Planning Area No. 3 Approved Mong Kok Outline Zoning Plan No. S/K3/32 exhibited on 18 October 2019.

– IV-19 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

Market Value of Particulars of Property as at 31 No. Property Description and Tenure occupancy Aug 2020 5 Lorry Parking Space Nos. The property comprises three The property is vacant HKD23,070,000 L1, L2, L7 on Ground Lorry Parking Spaces on as at the valuation (Hong Kong Dollars Floor, Car Parking Space Ground Floor, four Car date. Twenty Three Nos. P11, P12, P13, P14 Parking Spaces on First Million and Seventy on First Floor, Floor and seven Motor Cycle Thousand)

5 Lorry Parking Space Nos. The property comprises three L1, L2, L7 on Ground Lorry Parking Spaces on Floor, Car Parking Space Ground Floor, four Car Nos. P11, P12, P13, P14 Parking Spaces on First on First Floor, Floor and seven Motor Cycle Motorcycle Parking Parking Spaces on Third Space Nos. M1, M2, M4, Floor at Rykadan Capital M5, M6, M7, M8 on Tower. Third Floor at Rykadan Capital Tower, located at Rykadan Capital Tower is a No. 135 Hoi Bun Road, 28-storey office building Kowloon completed in 2013. Occupation Permit No.
(82/20,000 undivided KN29/2013 (OP) was issued shares of and within the on 30 September 2013. As Remaining Portion of per the approved building Kwun Tong Inland Lot plans, the total gross floor No. 526) area of Rykadan Capital Tower is approximately 206,695 sq ft. The land portion of the property is held under a Government Lease for a term of 99 years commencing on 1 July 1898, which has been statutorily extended without premium until 30 June 2047 under the New Territories Leases (Extension) Ordinance. The current Government rent payable for the property is 3% of its rateable value per annum.

Notes :

The property was inspected by Hannah Jeong (MRICS MHKIS RPS(GP)), Head of Valuation and Advisory and Pureanae Jang (MRICS), Senior Manager of Valuation and Advisory Services of our Hong Kong Office on 27 August 2020. As evidenced by their inspection, the property appears to be maintained in good condition.
The ownership particulars of the property are as follows:

� Lot Numbers: The Remaining Portion of Kwun Tong Inland Lot No. 526 (KTIL 526 R.P.)

� Tenure: The Kwun Tong Inland Lot No. 526 is held under a Government Lease for a term of 99 years commencing from 1 July 1898, which has been statutorily extended without premium until 30 June 2047 under the New Territories Leases (Extension) Ordinance

– IV-20 –

PROPERTY VALUATION REPORT

APPENDIX IV

Registered Owner:

For Car Parking Space Nos. P11, P12, P13, P14 on First Floor

Win Expo Enterprises Limited (a wholly-owned subsidiary of the Company) by an assignment dated 16 January 2014, registered vide Memorial No. 14012900510108

For Lorry Parking Space Nos. L1, L2, L7 on Ground Floor, Motorcycle Parking Space Nos. M1, M2, M4, M5, M6, M7, M8 on Third Floor

Prime Talent Development Limited (a wholly-owned subsidiary of the Company) by an assignment with plans dated 16 January 2014, registered vide Memorial No. 14020400260091

� Share of the Lot: Portion Share of the Lot Lorry Parking Space Nos. L1, L2, L7 on Ground 47/20,000 Floor Car Parking Space Nos. P11, P12, P13, P14 on 28/20,000 First Floor Motorcycle Parking Space Nos. M1, M2, M4, M5, 7/20,000 M6, M7, M8 on Third Floor Total 82/20,000

Government Rent: 3% of the rateable value
Major Encumbrances: – For all portions of the property

Deed of Mutual Covenant and Management Agreement with Plans in favour of Savills Property Management Limited dated 16 January 2014 registered vide Memorial No. 14012900510110

For Car Parking Space Nos. P11, P12, P13, P14 on First Floor

Mortgage in favour of DBS Bank (Hong Kong) Limited dated 16 January 2014 registered vide Memorial No. 14020400260080

For Lorry Parking Space Nos. L1, L2, L7 on Ground Floor and Motorcycle Parking Space Nos. M1, M2, M4, M5, M6, M7, M8 on Third Floor

Mortgage in favour of DBS Bank (Hong Kong) Limited dated 16 January 2014 registered vide Memorial No. 14020400260105

The property is zoned as “Other Specified Uses (Business)” under Hong Kong Planning Area No. 14 (Part) Approved Kwun Tong (South) Outline Zoning Plan No. S/K14S/22 exhibited on 9 November 2018.

– IV-21 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

Group II – Property interests held for investment in Hong Kong

No. Property

Description and Tenure

Market Value of Particulars of Property as at 31 occupancy Aug 2020

6 Unit No. 2702 on 27th Floor, Unit Nos. 2802, 2803, 2804 on 28th Floor, Car Parking Space Nos. P7, P8, P9, P10 on First Floor and P33 on Third Floor, Motorcycle Parking Space Nos. M3, M9 on Third Floor at Rykadan Capital Tower, located at No. 135 Hoi Bun Road, Kowloon

(1,847/20,000 undivided shares of and within the Remaining Portion of Kwun Tong Inland Lot No. 526) (See Notes (3))

The property comprises one Office Unit on 27th Floor, three Office Units on 28th Floor, four Car Parking Spaces on First Floor, one Car Parking Space on Third Floor, and two Motor Cycle Parking Spaces on Third Floor at Rykadan Capital Tower.

Rykadan Capital Tower is a 28-storey office building completed in 2013. Occupation Permit No. KN29/2013 (OP) was issued on 30 September 2013. As per the approved building plans, the total gross floor area of Rykadan Capital Tower is approximately 206,695 sq ft.

As per measurements scaled from the approved building plans, the total saleable area of the office units is 9,368 sq ft or thereabouts.

The property is HKD160,820,000 partially leased to (Hong Kong Dollars third parties as at the One Hundred Sixty valuation date. Million Eight Hundred and Twenty As advised by the Thousand)

As advised by the Company, Unit 2702 on 27th Floor and Units 2802 and 2804 on 28th Floor are leased at a total monthly rent of HKD229,240 (exclusive of management fee, air– conditioning charges and Government rates) with the latest expiry date of 24 May 2023.

Car Parking Space Nos. P7, P8, P9, P10 on First Floor and P33 on Third Floor are licensed at a total of HKD20,500 (inclusive of Government rates and management fee).

The land portion of the property is held under a Government Lease for a term of 99 years commencing on 1 July 1898, which has been statutorily extended without premium until 30 June 2047 under the New Territories Leases (Extension) Ordinance. The current Government rent payable for the property is 3% of its rateable value per annum.

Unit 2803 on 28th Floor and Motor Cycle Parking Space Nos. M3, M9 on Third Floor are vacant as at the valuation date.

– IV-22 –

PROPERTY VALUATION REPORT

APPENDIX IV

Notes :

The property was inspected by Hannah Jeong (MRICS MHKIS RPS(GP)), Head of Valuation and Advisory and Pureanae Jang (MRICS), Senior Manager of Valuation and Advisory Services of our Hong Kong Office on 27 August 2020. As evidenced by their inspection, the property appears to be maintained in good condition.
The ownership particulars of the property are as follows:
Lot Numbers:

The Remaining Portion of Kwun Tong Inland Lot No. 526 (KIL 526 R.P.)

Tenure:

The Kwun Tong Inland Lot No. 526 is held under a Government Lease for a term of 99 years commencing from 1 July 1898, which has been statutorily extended without premium until 30 June 2047 under the New Territories Leases (Extension) Ordinance

Registered Owner: – For Unit 2702 on 27th Floor

Win Expo Enterprises Limited (a wholly-owned subsidiary of the Company) by an assignment with plans dated 16 January 2014, registered vide Memorial No. 14012900510108

For Units 2802, 2803, 2804 on 28th Floor, Car Parking Space Nos. P7, P8, P9, P10 on First Floor, Motorcycle Parking Space Nos. M3, M9 on Third Floor

Prime Talent Development Limited (a wholly-owned subsidiary of the Company) by an assignment with plans dated 16 January 2014, registered vide Memorial No. 14020400260091

– For Car Parking Space No. P33 on Third Floor Prime Talent Development Limited by an assignment with plan dated 31 March 2014, registered vide Memorial No. 14041100580099 � Share of the Lot: Portion Share of the Lot Unit 2702 on 27th Floor (See Note (3)) 905/20,000 Units 2802, 2803, 2804 on 28th Floor (See Note 905/20,000 (3)) Car Parking Space Nos. P7, P8, P9, P10 on First 35/20,000 Floor and P33 on Third Floor Motorcycle Parking Space Nos. M3, M9 on Third 2/20,000 Floor Total 1,847/20,000 � Government Rent: 3% of the rateable value

– IV-23 –

APPENDIX IV

PROPERTY VALUATION REPORT

Major Encumbrances:
For all portions of the property

Modification Letter with Plan dated 26 September 2011 registered vide Memorial No. 11092801340019 (Remarks: From The Government of The Hong Kong Special Administrative Region to The Chief Estate Surveyor/ Headquarters Re KTIL 526) Deed Poll with Plan dated 15 October 2012 registered vide Memorial No. 12101601490211 (Re KTIL 526 S.A and R.P) Deed of Mutual Covenant and Management Agreement with Plans in favour of Savills Property Management Limited dated 16 January 2014 registered vide Memorial No. 14012900510110

For Unit 2702 on 27th Floor

Mortgage in favour of DBS Bank (Hong Kong) Limited dated 16 January 2014 registered vide Memorial No. 14020400260080

Units 2802, 2803, 2804 on 28th Floor, Car Parking Space Nos. P7, P8, P9, P10 on First Floor, Motorcycle Parking Space Nos. M3, M9 on Third Floor

Mortgage in favour of DBS Bank (Hong Kong) Limited dated 16 January 2014 registered vide Memorial No. 14020400260105

The undivided shares of and within the lot for Office Unit 2702 on 27th Floor and Office Units 2802, 2803, 2804 on 28th Floor have been calculated based on whole floors of 27th and 28th basis, in respect of the Land Registry dated 21 August 2020.
The property is zoned as “Other Specified Uses (Business)” under Hong Kong Planning Area No. 14 (Part) Approved Kwun Tong (South) Outline Zoning Plan No. S/K14S/22 exhibited on 9 November 2018.

– IV-24 –

PROPERTY VALUATION REPORT

APPENDIX IV

Group III – Property interests held for owner occupation in Hong Kong

No. Property

7 Unit No. 2701 on 27th Floor, and Unit No. 2801 on 28th Floor at Rykadan Capital Tower, located at No. 135 Hoi Bun Road, Kowloon
(1,810/20,000 undivided shares of and within the Remaining Portion of Kowloon Inland Lot No. 526) (See Note (3))

Market Value of Particulars of Property as at 31 occupancy Aug 2020 The property is fully HKD130,200,000 leased by the (Hong Kong Dollars Company as at the One Hundred Thirty valuation date. Million and Two Hundred Thousand)

Description and Tenure

The property comprises one office unit on 27th floor and one office unit on 28th floor at Rykadan Capital Tower.

Rykadan Capital Tower is a As advised by the 28-storey office building Company, the property completed in 2013. is leased and occupied Occupation Permit No. by the Company for a KN29/2013 (OP) was issued term of two years on 30 September 2013. As commencing on 1 per the approved building April 2020 and plans, the total gross floor expiring on 31 March area of Rykadan Capital 2022 (both days Tower is approximately inclusive) at a 206,695 sq ft. monthly rent of HKD295,764 The land portion of the (inclusive of property is held under a management fee, Government Lease for a Government rent and term of 99 years rates).

Notes :

The property was inspected by Hannah Jeong (MRICS MHKIS RPS(GP)), Head of Valuation and Advisory and Pureanae Jang (MRICS), Senior Manager of Valuation and Advisory Services of our Hong Kong Office on 27 August 2020. As evidenced by their inspection, the property appears to be maintained in good condition.
The ownership particulars of the property are as follows:

� Lot Numbers: The Remaining Portion of Kowloon Inland Lot No. 526 (KIL 526 R.P.)

� Tenure: The Kowloon Inland Lot No. 526 is held under a Government Lease for a term of 99 years commencing from 1 July 1898, which has been statutorily extended without premium until 30 June 2047 under the New Territories Leases (Extension) Ordinance

– IV-25 –

PROPERTY VALUATION REPORT

APPENDIX IV

Registered Owner:

For Unit No. 2701 on 27th Floor

Win Expo Enterprises Limited (a wholly-owned subsidiary of the Company) by an assignment with plans dated 16 January 2014, registered vide Memorial No. 14012900510108

For Unit No. 2801 on 28th Floor
- Prime Talent Development Limited (a wholly-owned subsidiary of the Company) by an assignment with plans dated 16 January 2014, registered vide Memorial No. 14020400260091
Share of the Lot: Portion Share of the Lot

Unit No. 2701 on 27th Floor (See Notes (3)) 905/20,000 Unit No. 2801 on 28th Floor (See Notes (3)) 905/20,000

Total 1,810/20,000

Government Rent: 3% of the rateable value
Major Encumbrances – Modification Letter with Plan dated 26 September 2011 registered (For all portions of the vide Memorial No. 11092801340019 (Remarks: From the property): Government of The Hong Kong Special Administrative Region By The Chief Estate Surveyor/ Headquarters Re KTIL 526)
- Deed Poll with Plan dated 15 October 2012 registered vide Memorial No. 12101601490211 (Re KTIL 526 S.A and R.P.)
- Deed of Mutual Covenant and Management Agreement with Plans in favour of Savills Property Management Limited dated 16 January 2014 registered vide Memorial No. 14012900510110
- Mortgage in favour of DBS Bank (Hong Kong) Limited dated 16 January 2014 registered vide Memorial No. 14020400260080
The undivided shares of and within the lot for Unit No. 2701 on 27/F and Unit No. 2801 on 28/F have been calculated based on whole floors of 27th and 28th basis, in respect of the Land Registry dated 21 August 2020.
The property is zoned as “Other Specified Uses (Business)” under Hong Kong Planning Area No. 14 (Part) Approved Kwun Tong (South) Outline Zoning Plan No. S/K14S/22 exhibited on 9 November 2018.

– IV-26 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

Group IV

(a) – Property interests held for sale in the US

No. Property

8 A single family residential dwelling located at 1135 Winston Avenue, San Marino, CA 91108, the US

Description and Tenure

The property comprises a single-storey single family residential dwelling with a total gross floor area of 3,973 sq ft. The site area of the property is 20,546 sq ft.

Market Value of Particulars of Property as at 31 occupancy August 2020 The property is vacant USD4,800,000 as at the valuation (United States date. Dollars Four Million and Eight Hundred Thousand)

The property consists of 4 bedrooms, 4.5 bathrooms, foyer, dining, showcase kitchen, family room, office, laundry room, pool, spa, a courtyard and a two-car garage.

Built in 1928, the property was fully renovated in June 2020. The total renovation cost was USD1,400,000.

The land portion of the property is held under a fee simple interest.

Notes :

The property was inspected by Marcus Espinoza (MAI SRA CCIM ASA), Valuation Services Director of our Los Angeles Office, State of California, the US. As evidenced by his inspection, the property appears to be maintained in excellent condition.
According to the Buyer’s Final Settlement Statement provided by the Company, the acquisition of the property has been completed in August 2014, under the buyer name of Rykadan 001 LLC (a wholly-owned subsidiary of the Company). The property is acquired at a consideration of USD3,300,000 as recorded in Document No. 914269 of the Los Angeles County Deed Records. The land portion of the property is held under a fee simple interest.
The property is zoned under “Single Family Dwelling Zone (R-1)”, where the permitted uses include Single Family Residence. We understand that the property is compliant with the zoning requirements.
We have made reference to the latest development proposal of the property. According to the Single Family Addition Plan Review dated 8 October 2019 and Single Family New Plan Review dated 19 March 2019, the development permit has been granted to the property by the City of San Marino, CA.

– IV-27 –

PROPERTY VALUATION REPORT

APPENDIX IV

The general description and market information of the Property is summarised below.
Residential Market in The property is located in the City of San Marino, California in Los locality: Angeles County. While COVID-19 has impacted many types of real estate, the overall condition and appeal of the market area is generally good and is expected to see growth in the foreseeable future.
Transportation:

The property has frontage onto Winston Avenue and the accessibility of the property is considered good. It is close to several major freeways and to public transportation. The 210 freeway and 710 freeway are within two miles and three miles of the property, respectively.

Nature of Surrounding Area:

The property is primarily surrounded by single-family residential dwellings. Commercial developments are prominent in the immediate area, including offices, retail stores, industrial building, mixed-use developments and an auto dealership.

– IV-28 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

(b) – Property interests held for development in the US

No. Property

Description and Tenure

Particulars of occupancy

Market Value of Property as at 31 August 2020

9 The property under development located at 960 Singing Wood Drive, Arcadia, CA 91006, the US
The property comprises a parcel of land with a total site area of 26,651 sq ft, which is currently under development into a single-family residential dwelling (see Note (4)).

Upon completion of the development, the property will provide a 2-storey single-family residential dwelling with a total gross floor area of 9,124 sq ft.

The proposed development consists of four bedrooms, seven bathrooms, a theatre, wine cellar, wok kitchen, gym/wellness centre, library, pool, spa, guest quarters and a three-car garage.

The property is under USD6,400,000 development as at the (United States valuation date and is Dollars Six Million expected to be and Four Hundred completed in Thousand) December 2020.

As advised by the Company, the total development cost is USD3,600,000, of which approximately USD1,900,000 had been incurred up to the valuation date. The total outstanding costs (including costs expended but not yet paid) is USD1,700,000.

The land portion of the property is held under a fee simple interest.

Notes :

The property was inspected by Marcus Espinoza (MAI SRA CCIM ASA), Valuation Services Director of our Los Angeles Office, State of California, the US. As evidenced by his inspection, the property is currently under development.
According to the Buyer’s Final Settlement Statement provided by the Company, the acquisition of the property has been completed in May 2019, under the buyer name of MP Property One LLC (a wholly-owned subsidiary of the Company). The property is acquired at a consideration of USD3,000,000 as recorded in Document Number 496458 of the Los Angeles County Deed Records. The land portion of the property is held under a fee simple interest.
The property is zoned under “First One-Family Zone (R-O)”, where the permitted uses include Single Family Residence.
The details of the development of the property are as follows:
(a) We have made reference to the latest development proposal of the property with a total gross floor area of 9,124 sq ft dated 1 April 2019. According to the Single Family New Plan Review dated 10 June 2019, the development permit has been granted to the property by the City of Arcadia, CA.;
(b) The property is currently under development and is expected to be completed in December 2020;

– IV-29 –

PROPERTY VALUATION REPORT

APPENDIX IV

(c) The estimated market value of the property as if completed as at the valuation date according to the development proposal as described above, and assuming it was freely transferred in the market, is USD8,500,000.
The general description and market information of the Property is summarised below.
Residential Market in The property is located in the City of Arcadia, California in Los Angeles locality: County. While COVID-19 has impacted many types of real estate, the overall condition and appeal of the market area is generally good and is expected to see moderate growth in the foreseeable future.
� Transportation: The property is close to two major freeways and to public transportation. The 210 Freeway and 605 Freeway are within one mile and four miles of the property, respectively.
Nature of Surrounding The property is primarily surrounded by single-family residential Area: dwellings together with a mix of multi-family residential and commercial developments.

– IV-30 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

No. Property

10 The property under development located at 100, 120, 150, 200 South Garfield and 114 East Garvey and City Parking Lot, Monterey Park, CA 91755, the US

Market Value of Particulars of Property as at 31 occupancy August 2020 The property is USD30,000,000 partially improved and (United States includes a parking lot Dollars Thirty that will be Million) demolished as at the valuation date. The development is expected to be completed by in March 2024.

Description and Tenure

The property comprises a parcel of land with a site area of 95,429 sq ft, which is currently under development into a mixed– use development space (see Note (4)).

Upon completion of the development, the property will provide five storeys of multi-family apartment units and retail spaces with a total gross floor area of 458,245 sq ft, erected over two levels of basement car parking with a total of 518 spaces.

multi-family apartment units As advised by the and retail spaces with a total Company, the total gross floor area of 458,245 development cost is sq ft, erected over two levels USD105,300,000, of of basement car parking with which approximately a total of 518 spaces. USD6,400,000 had been incurred up to The land portion of the the valuation date. property is held under a fee The total outstanding simple interest. costs (including costs expended but not yet paid) is USD98,900,000.

Notes :

The property was inspected by David Ibarra (MAI), Valuation Services Director of our Los Angeles Office, State of California, the US. As evidenced by his inspection, the property is partially improved with a parking lot to be demolished as at the valuation date.
According to the Buyer’s Final Settlement Statement provided by the Company, the acquisition of the property has been completed in January 2018, under the buyer name of Rykadan 005, LLC (a wholly-owned subsidiary of the Company). The property is acquired via Quit Claim Deed as recorded in Document No. 39586 of the Los Angeles County Deed Records. The land portion of the property is held under a fee simple interest. The parcel nos. are: 5257-015-001, 5257-015– 002, 5257-015-003, 5257-015-004, 5257-015-005 and 5257-015-035.
The property is zoned under “Central Business Commercial/Planned Development Overlay (C-B/P-D)”, where the permitted uses include Retail, Barber Shop/Beauty Salon, Dry Cleaning, Restaurant, Museum, Mixed-Uses (Residential and Commercial).

– IV-31 –

PROPERTY VALUATION REPORT

APPENDIX IV

The details of the development of the property are as follows:
(a) We have made reference to the latest development proposal of the property with a total gross floor area of 458,245 sq ft dated 20 January 2020, as summarised in the table below.

Unit Types 1BR/1BA 1BR/1BA 1BR/1BA 1BR/1BA 2BR/2BA 2BR/2BA w/roof 2BR/2BA 2BR/2BA w/roof 2BR/2BA 2BR/2BA 2BR/2BA 2BR/2BA w/roof 2BR/2BA 3BR/3BA 2BR/2BA 2BR/2BA Total/Average Retail Space Total Net Rentable Area (NRA) Common Area Space/ Hallways/ Leasing Office Parking Garage Total Gross Floor Area (GFA)	No. Units 10 3 1 1 28 11 20 10 6 2 4 2 6 2 2 1 109	% of Total 9.2% 2.8% 0.9% 0.9% 25.7% 10.1% 18.3% 9.2% 5.5% 1.8% 3.7% 1.8% 5.5% 1.8% 1.8% 0.9% 100%	Unit Size (sq ft) 751 693 728 955 1001 999 999 999 982 1,156 1,158 1,158 1,146 1,430 1,380 1,460 1,003	Net Rentable Area (sq ft) 7,514 2,079 728 955 28,038 10,993 19,972 9,986 5,890 2,311 4,632 2,316 6,876 2,860 2,760 1,460
				109,370
				38,281
				147,651
				42,005 268,606
				458,245

With reference to the Precise Plan of Monterey Park Towne Centre, Monterey Park, California dated December 2004 and acknowledged by City of Monterey Park Community Development Department in January 2005, we understand that the latest development proposal of the property is in compliant with the permitted uses of the land and its associated development standards.

(b) The estimated market value of the property as if completed in March 2024 according to the development proposal as described above, assuming freely transferred in the market, is USD115,400,000. The prospective as stabilised value in March 2025 is USD122,400,000.

– IV-32 –

PROPERTY VALUATION REPORT

APPENDIX IV

The general description and market information of the Property is summarised below.
Residential Market in locality:
Monterey Park is a city located in the western San Gabriel Valley region of Los Angeles County, California. While COVID-19 has impacted many types of real estate, the overall condition and appeal of the market area is generally good, although the potential for growth is somewhat restricted by the lack of undeveloped sites in the immediate neighbourhood.
Retail Market in Over the past four quarters, between Q3 2019 and Q2 2020, the retail locality: market has experienced a moderate increase in supply as well as negative net absorption, an increase in vacancy rates and a decrease in asking rents in the marketplace. Due to the economic disruptions caused by COVID-19, we expect a material short-term revenue loss in the near– term for retail asset owners due to tenant concessions or outright defaults.
Transportation:
The property is centrally located and has good access to the wider network of regional and local freeways. Public transportation is provided by the Los Angeles County Metro, and access is readily available throughout the immediate area. Los Angeles International Airport is located approximately 18 miles southwest of the property and Hollywood Burbank Airport is located about 16 miles to the northwest.
Nature of Surrounding The surrounding area is predominately a mixed residential and Area: commercial area. Residential developments are primarily multifamily residences and commercial developments consisting of both office and retail space.

– IV-33 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

Group V – Property interests held for owner occupation in Italy

No. Property

Description and Tenure

Particulars of occupancy

Market Value of Property as at 31 August 2020

11 Pescantina (VR) in Località Ospedaletto, via Brennero 49, Verona, Italy
The property comprises an industrial complex with multiple warehouses of different building heights and ages. It has a site area of approximately 566,170 sq ft.

The property is fully EUR4,740,000 occupied by the (Euros Four Million Company as at the Seven Hundred and valuation date. Forty Thousand)

The total gross floor area and commercial area are 257,860 sq ft and 248,980 sq ft, respectively.

The warehouses of the property were built in different years, ranging from 1970 to 2005 and later connected to form a single complex. The property appears to have been maintained in adequate condition.

The property is held under a freehold interest.

Notes:

The property was inspected by Alessandro Ghezzi (MRICS), Head of International Client from our Italy office on 26 August 2020. As evidenced by their inspection, the property appears to be adequately maintained.
The property is currently owned by Q.R.B.G. S.r.l. (a joint-venture of the Company) held under a freehold interest, and recorded in the Building Registry of the Municipality of Pescantina with the following cadastral details:

Sheet		Parcel		Sub
6		1111		7
6		1111		4

The property is zoned under Zone “D1” in the Town Planning Regulation of the Municipality of Pescantina, where the areas are totally or partially occupied by productive, artisanal and commercial activities.
The general description and market information of the Property is summarised below.
Industrial Market in The industrial market has remained active despite a slowdown in locality: transactions of industrial properties since 2017. In the Province of Verona, there was 264 transactions of industrial properties in 2019, accounting for 16% of the total number of transactions in the Veneto region.

– IV-34 –

PROPERTY VALUATION REPORT

APPENDIX IV

Transportation:

The property is well connected to major public transportation networks. It is in proximity to state road SS12, which connects to Highway A22 (Modena-Brenner) and the E70 (Turin-Venice). Other transportation nodes include Pescantina Bus Stop No.173, Domegliara-S.Ambrogio Railway Station, and Valerio Catullo International Airport, which are 1.1 km, 3.6 km and 15 km from the property, respectively.

Nature of Surrounding The surrounding area consists primarily of industrial buildings and Area: agricultural land.

– IV-35 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

No. Property Description and Tenure

Market Value of Particulars of Property as at 31 occupancy August 2020

12 Via Napoleone 19, The property is an industrial The property is fully EUR5,340,000 Frazione Ponton, 37015, complex which consists of occupied by the (Euros Five Million Sant’Ambrogio di multiple warehouses of Company as at the Three Hundred and Valpolicella, Verona, Italy different building heights valuation date. Forty Thousand) and ages. It has a site area of approximately 645,834 sq ft. The total gross floor area and commercial area are approximately 289,474 sq ft and 261,208 sq ft, respectively.

The warehouses of the property were built in various years starting from the 1960s. The property appears to have been maintained in an adequate condition.

The property is held under a freehold interest.

Notes:

The property was inspected by Alessandro Ghezzi (MRICS), Head of International Client from our Italy office on 26 August 2020. As evidenced by their inspection, the property appears to be adequately maintained.
The property is currently owned by Q.R.B.G. S.r.l. (a joint venture of the Company) held under a freehold interest, and recorded in the Building Registry of the Municipality of Sant’Ambrogio Valpolicella with the following cadastral details:

Sheet		Parcel		Sub
17		156		4

The property is zoned under “D1” Zone in the Town Planning Regulation of the Municipality of Sant’Ambrogio Valpolicella, where the areas are totally or partially occupied by productive and artisanal activities.
The general description and market information of the Property is summarised below.
Industrial Market in The industrial market has remained active despite a slowdown in locality: transactions of industrial properties since 2017. In the Province of Verona, there was 264 transactions of industrial properties in 2019, accounting for 16% of the total number of transactions in the Veneto Region.
� Transportation: The property is well connected to major public transportation networks. It is in proximity to state road SS12, which connects to Highway A22 (Modena-Brenner) and E70 (Turin-Venice). Other transportation nodes include Bivio Ponton Bus Stop No.173, Domegliara-S.Ambrogio Railway Station, and Valerio Catullo International Airport, which are 1m, 2 km and 18km from the property, respectively.
Nature of Surrounding The surrounding area consists primarily of industrial buildings, some Area: commercial developments and some residential developments in the southern part.

– IV-36 –

PROPERTY VALUATION REPORT

APPENDIX IV

VALUATION PARTICULARS

Group VI – Property interests held for investment in Bhutan

No. Property

13 Wolakha Punakha 117, Bhutan, Punakha 13001, Bhutan (Building and Leasehold rights only) (Property interest in the building only)

Description and Tenure

The property is a 4-star resort named “Dhensa Boutique Resort” with a total gross floor area of 28,621 sq ft.

Market Value of Particulars of Property as at 31 occupancy August 2020 The property is NIL currently managed by (See Note (4)) Neptune Holidays under the brand of Dhensa Boutique Resort.

The property consists of 24 rooms spread across 6 cottages along with additional facilities including a restaurant, spa centre, business centre and a library.

The property was built in 2013.

The property is built on a land bearing No. 806 and Plot No. 24A situated in Walakha village, Guma Gewog, Punakha. We have been advised by the Company’s legal advisor as to Bhutanese laws that the land is held under a leasehold interest, for an initial term of 15 years from 16 December 2013 to 15 December 2028, which will be automatically renewed for a second term of 15 years ending 15 December 2043 upon end of the initial term. (Note (3)).

– IV-37 –

PROPERTY VALUATION REPORT

APPENDIX IV

Notes:

The property has been valued on a desktop basis. We were unable to carry out the site inspection of the property in Bhutan due to the emergency travel and movement restrictions currently prevailing relating to the current COVID-19 outbreak. We have made assumptions as to the surroundings, nature, appearance, quality and condition of the property. If on eventual inspection our assumptions turn out to differ from reality, we reserve the right to review our valuation accordingly.
The property comprises building, equipment and furniture of Dhensa Boutique Resort, which is currently owned by RS Hospitality Private Limited (a joint venture of the Company), subject to a Sale & Purchase Agreement executed between Shingkhar Private Limited as Seller and RS Hospitality Private Limited as Buyer dated 18 February 2014.
The property is built on a land bearing No. 806 and Plot No. 24A situated in Walakha village, Guma Gewog, Punakha. We have been advised by the Company’s legal advisor as to Bhutanese laws that the land is held under a leasehold interest, for an initial term of 15 years from 16 December 2013 to 15 December 2028, which will be automatically renewed for a second term of 15 years ending 15 December 2043 upon end of the initial term.
As advised by the Company’s legal advisor as to Bhutanese laws, according to the existing practice in the country, a property permanently attached to an immovable property cannot be sold independently of the immovable property. Therefore, in the course of our valuation, we have assigned no commercial value to the property. The estimated market value of the property, assuming that it can be freely transferable, as at the Valuation Date, is approximately BTN132,200,000 (Bhutanese Ngultrum One Hundred Thirty Two Million and Two Hundred Thousand).
The general description and market information of the Property is summarised as below.
Hospitality Market in In this part of Bhutan, the hospitality properties market is not very active locality compared to the more developed and densely populated areas such as Thimphu and Paro.
Transportation The property is accessible by an internal road which connects to the Thimphu Highway. It is approximately 65 km from Thimphu, the capital of Bhutan, and 130 km from Paro, a developed city.
Nature of Surrounding The surrounding area consist primarily of a small number of hotels and Area resorts and is sparsely populated.

– IV-38 –

GENERAL INFORMATION

APPENDIX V

RESPONSIBILITY STATEMENT

This Offer Document includes particulars given in compliance with the Listing Rules and the Codes for the purpose of giving information with regard to the Offer and the Company. All Directors jointly and severally accept full responsibility for the accuracy of information contained in this Offer Document and confirm, having made all reasonable inquiries, that to the best of their knowledge, opinions expressed in this Offer Document have been arrived at after due and careful consideration and there are no other facts not contained in this Offer Document, the omission of which would make any statement in this Offer Document misleading.

SHARE CAPITAL

The authorised and issued share capital of the Company as at the Latest Practicable Date and immediately upon completion of the Offer (assuming full acceptance of the Offer) are set out as follows:

Authorised 477,447,000 Shares as at the Latest Practicable Date Issued and fully paid or credited as fully paid 477,447,000 Shares as at the Latest Practicable Date (102,000,000) Shares proposed to be bought-back and cancelled 375,447,000 Shares upon completion of the Offer	HK$ 4,774,470 4,774,470 (1,020,000) 3,754,470

All the issued Shares rank pari passu with each other in all respects including the rights as to voting, dividends and capital.

No Shares had been issued or bought-back by the Company since the end of the financial year of the Company ended 31 March 2020 up to the Latest Practicable Date.

There had been no re-organisation of capital of the Company during the two financial years immediately preceding the commencement of the Offer Period on 28 September 2020.

During the 12-month period immediately preceding the date of this Offer Document, the Company did not buy-back any Shares.

None of the Shares to be bought-back were issued during the two-year period immediately preceding the date of the Offer, being 28 September 2020.

As at the Latest Practicable Date, save for the 477,447,000 Shares in issue, the Company did not have other class of securities, outstanding options, derivatives, warrants or other securities which are convertible or exchangeable into Shares.

– V-1 –

GENERAL INFORMATION

APPENDIX V

During the two-year period immediately preceding the date of this Offer Document, the Company declared cash dividends in the amount of HK$6 cents per Share for the year ended 31 March 2019. Depending on the future results and financial position of the Group, the Company may, on the recommendation of the Board, declare dividends as and when it considers appropriate taking into account the then financial performance of the Group as well as the amount of profits and/or reserves legally available for distribution. Based on the audited consolidated financial statements of the Company for the year ended 31 March 2020, the Directors did not recommend the payment of a final dividend.

DIRECTORS’ AND CHIEF EXECUTIVES’ INTEREST IN SHARES AND UNDERLYING SHARES

As at the Latest Practicable Date, the interests and short positions of each Director and chief executive of the Company in the shares, underlying shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) 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 and short positions which he was taken or deemed to have under such provisions of the SFO), or were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or were required pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers of the Listing Rules (the “ Model Code ”) to be notified to the Company and the Stock Exchange were as follows:

Long position

Name Nature of interest and capacity CHAN William Founder of a discretionary trust(1) Other interest(2) Beneficial owner NG Tak Kwan Beneficial owner LO Hoi Wah, Heywood Beneficial owner	Total number of Shares held as at the Latest Practicable Date 97,104,000 87,604,000 33,700,000 218,408,000 63,024,000 302,000	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date 20.34 18.35 7.05
		45.74
		13.20 0.06

– V-2 –

GENERAL INFORMATION

APPENDIX V

Notes:

Tiger Crown Limited, which beneficially owned 97,104,000 shares of the Company is 100% owned by Rykadan Holdings Limited which in turn is 100% held by HSBC International Trustee Limited as the trustee of Rykadan Trust. CHAN William is the settlor and protector and one of the discretionary beneficiaries of Rykadan Trust. CHAN William is also the sole director of Tiger Crown Limited and Rykadan Holdings Limited.
Since Tiger Crown Limited, Scenemay Holdings Limited, CHAN William, LI Chu Kwan and LI Wing Yin are regarded as a group of shareholders acting in concert to exercise their voting rights in the Company and are parties to an agreement under Section 317 of the SFO, pursuant to the provisions of the SFO, each of them is deemed to be interested in the shares of the Company owned by the other parties to the agreement. Hence, CHAN William is also deemed to be interested in the 87,604,000 shares of the Company owned by Scenemay Holdings Limited.
All the Shares shown in the table above are ordinary shares.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors and chief executives of the Company had any interests and short positions in the Shares, underlying Shares and debentures of the Company or any of its associated corporations (within the meaning of Part XV of the SFO) 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 and short positions which he was taken or deemed to have under such provisions of the SFO) or were required, pursuant to Section 352 of the SFO, to be entered in the register referred to therein or were required pursuant to the Model Code to be notified to the Company and the Stock Exchange.

INTERESTS OF SUBSTANTIAL SHAREHOLDERS

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

– V-3 –

GENERAL INFORMATION

APPENDIX V

Long position

Name Nature of interest and capacity HSBC International Trustee Limited Corporate Trustee(1)(2) Rykadan Holdings Limited Interest in a controlled corporation (1)(2) Tiger Crown Limited (1) Beneficial owner Other interest(2) Scenemay Holdings Limited Beneficial owner Other interest(2) LI Chu Kwan Interest in a controlled corporation(3) Other interest(2) LI Wing Yin Interest in a controlled corporation(3) Other interest(2)	Total number of Shares held as at the Latest Practicable Date 218,408,000 218,408,000 97,104,000 121,304,000 218,408,000 87,604,000 130,804,000 218,408,000 87,604,000 130,804,000 218,408,000 87,604,000 130,804,000 218,408,000	Approximate percentage of issued share capital of the Company as at the Latest Practicable Date 45.74 45.74 20.34 25.40
		45.74
		18.35 27.39
		45.74
		18.35 27.39
		45.74
		18.35 27.39
		45.74

Notes:

Tiger Crown Limited is 100% owned by Rykadan Holdings Limited which in turn is 100% held by HSBC International Trustee Limited as the trustee of Rykadan Trust. Each of HSBC International Trustee Limited and Rykadan Holdings Limited is therefore deemed to be interested in the

– V-4 –

APPENDIX V

GENERAL INFORMATION

97,104,000 shares of the Company beneficially owned by Tiger Crown Limited as well as the 121,304,000 shares of the Company in which Tiger Crown Limited is deemed to be interested as described in Note 2 below.

Since Tiger Crown Limited, Scenemay Holdings Limited, CHAN William, LI Chu Kwan and LI Wing Yin are regarded as a group of shareholders acting in concert to exercise their voting rights in the Company and are parties to an agreement under Section 317 of the SFO, pursuant to the provisions of the SFO, each of them is deemed to be interested in the shares of the Company owned by the other parties to the agreement.
As the entire issued share capital of Scenemay Holdings Limited is owned by LI Chu Kwan and LI Wing Yin in equal shares, each of LI Chu Kwan and LI Wing Yin is deemed to be interested in the 87,604,000 shares of the Company beneficially owned by Scenemay Holdings Limited.
All the Shares shown in the table above are ordinary shares.

Save as disclosed above, as at the Latest Practicable Date, so far as is known to any Director and chief executive of the Company, no other person (not being a Director or chief executive of the Company) or company had, or were deemed to have, any interests or short positions in the Shares and underlying Shares which would fall to be disclosed to the Company and the Stock Exchange pursuant to Divisions 2 and 3 of Part XV of the SFO.

OTHER INTERESTS IN THE COMPANY

As at the Latest Practicable Date:

(i) save as disclosed in the section headed “ Directors’ and Chief Executives’ Interest in Shares and Underlying Shares ”, the Company, the Directors and the persons acting in concert with them are not interested in any Shares or any convertible securities, warrants, options or derivatives in respect of any Shares;
(ii) save for the Irrevocable Undertakings, no persons have irrevocably committed themselves to accept or reject the Offer;
(iii) Scenemay Holdings Limited, which holds approximately 87,604,000 Shares (representing approximately 18.35% of the issued share capital of the Company), has not indicated to the Company any present intention whether or not to accept the Offer, after reasonable enquiry of the Company;
(iv) NG Tak Kwan, a non-executive Director, has not indicated to the Company any present intention whether or not to accept the Offer, after reasonable enquiry of the Company;
(v) CHAN William and NG Tak Kwan, being the only Directors who hold Shares, are required to abstain from voting on the resolutions in respect of the Offer and the Whitewash Waiver to be proposed at the EGM;

– V-5 –

GENERAL INFORMATION

APPENDIX V

(vi) save as disclosed in the section headed “ Interests of Substantial Shareholders ”, there are no Shareholders which holds 10% or more of the voting rights of the Company;
(vii) none of the Company, the Directors, the Controlling Shareholders and persons acting in concert with any of them have borrowed or lent any Shares or any convertible securities, warrants, options or derivatives in respect of any Shares;
(viii) none of the subsidiaries of the Company, nor pension funds of the Company or of any of the Company’s subsidiaries, nor any person who is presumed to be acting in concert with the Company by virtue of class (5) of the definition of “acting in concert” under the Takeovers Code or who is an associate of the Company by virtue of class (2) of the definition of “associate” under the Takeovers Code, but excluding exempt principal traders and exempt fund managers, had any interest in any Shares or any convertible securities, warrants, options or derivatives in respect of any Shares;
(ix) save for the Irrevocable Undertakings, no person had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with the Company or with any party acting in concert with it (including any person who is presumed to be acting in concert with the Company by virtue of classes (1), (2), (3) and (5) of the definition of “acting in concert”) or who is an associate of the Company by virtue of classes (2), (3) and (4) of the definition of “associate”;
(x) save for the Irrevocable Undertakings, no person had any arrangement of the kind referred to in Note 8 to Rule 22 of the Takeovers Code with the Controlling Shareholders or with any party acting in concert with any of them; and
(xi) no shareholding in the Company was managed on a discretionary basis by fund managers (other than exempt fund managers) connected with the Company.

SHAREHOLDINGS AND DEALINGS IN SECURITIES

The Company had not issued nor bought-back any Shares since 31 March 2020, being the end of the last financial year, and did not/will not conduct any on-market buy-back of Shares from the date of the Announcement up to and including the date at which the Offer closes, lapses or is withdrawn, as the case may be.

The Company had not bought-back or issued any Shares since 28 September 2018, being the date falling two years immediately preceding the commencement date of the Offer Period, up to the date of this Offer Document.

As at the Latest Practicable Date, save as disclosed in the section headed “ Directors’ and Chief Executives’ interest in Shares and underlying Shares ”, none of the Company or any Director had any shareholdings (as defined under Note 1 to paragraph 4 of Schedule I of the Codes) in the Controlling Shareholders (which are corporate entities), and none of the Company or any Director has dealt for value in the shareholdings in the Controlling Shareholders (which are corporate entities) during the Relevant Period.

– V-6 –

GENERAL INFORMATION

APPENDIX V

During the Relevant Period:

(i) the Company, the Directors and persons acting in concert with any of them did not deal for value in any Shares or any convertible securities, warrants, options or derivatives in respect of any Shares; and
(ii) the Controlling Shareholders and persons acting in concert with any of them did not deal for value in any Shares or any convertible securities, warrants, options or derivatives in respect of any Shares.

As at the Latest Practicable Date, the Company had no agreement, arrangement or understanding to transfer, charge or pledge any of the Shares acquired pursuant to the Offer to any other persons. No Shares will be acquired by the Controlling Shareholders pursuant to the Offer and accordingly the Controlling Shareholders had no such agreement, arrangement or understanding.

As at the Latest Practicable Date and save for the Conditions, there was no agreement or arrangement, to which any of the Company or the Controlling Shareholders is a party, which relates to circumstances in which it may or may not invoke or seek to invoke a pre-condition or a condition to the Offer or the Whitewash Waiver.

As at the Latest Practicable Date, save for the Irrevocable Undertakings, there is no understanding, arrangement or agreement which may constitute a special deal between any Shareholder on the one hand; and (i) the Company, its subsidiaries or associated companies; or (ii) the Controlling Shareholders or any party acting in concert with any of them, on the other hand.

As at the Latest Practicable Date, apart from the consideration calculated at the Offer Price payable by the Company in respect of relevant acceptances of the Offer, there is no other consideration, compensation or benefit in whatever form paid or to be paid by the Company or any member of the Controlling Shareholders or parties acting in concert with any of them to any Shareholder or any party acting in concert with any of them in connection with the Offer.

– V-7 –

GENERAL INFORMATION

APPENDIX V

MARKET PRICES

The table below shows the closing prices per Share on the Stock Exchange on (i) the Latest Practicable Date; (ii) 15 September 2020, being the Last Trading Day; and (iii) the last trading day of each of the calendar months during the Relevant Period.

	Closing
	price per
Date	Share
	HK$
31 March 2020	0.495
29 April 2020	0.485
29 May 2020	0.435
30 June 2020	0.425
31 July 2020	0.43
31 August 2020	0.445
Last Trading Day	0.45
30 September 2020	0.58
Latest Practicable Date	0.59

HIGHEST AND LOWEST CLOSING PRICES

The highest and lowest closing prices per Share as quoted on the Stock Exchange during the Relevant Period were HK$0.59 per Share on 6 October 2020, 7 October 2020, 8 October 2020, 9 October 2020, 22 October 2020 and 27 October 2020 and HK$0.405 per Share on 2 July 2020.

ARRANGEMENTS AFFECTING DIRECTORS

No benefit has been or will be given to any Director as compensation for loss of office or otherwise in connection with the Offer.

As at the Latest Practicable Date, there was no agreement or arrangement between any Director and any other person which was conditional on or dependent upon the outcome of the Offer or otherwise connected with the Offer.

Save for the Irrevocable Undertakings, as at the Latest Practicable Date, there was no agreement, arrangement or understanding (including any compensation arrangement) that existed between (i) the Company, the Controlling Shareholders or any parties acting in concert with any of them; and (ii) any of the Directors, recent Directors, Shareholders or recent Shareholders having any connection with or dependence upon the Offer.

– V-8 –

GENERAL INFORMATION

APPENDIX V

DIRECTORS’ INTERESTS IN CONTRACTS

As at the Latest Practicable Date, there was no material contract entered into by the Controlling Shareholders or the Company in which any Director had a material personal interest.

DIRECTORS’ SERVICE CONTRACTS

Save as disclosed below, as at the Latest Practicable Date, none of the Directors had entered into service contracts with any member of the Group or any associated companies of the Company which (i) (including both continuous and fixed term contracts) had been entered into or amended within 6 months before the date of the Announcement; (ii) are continuous contracts with a notice period of 12 months or more; or (iii) are fixed term contracts with more than 12 months to run irrespective of the notice period:

			Amount of
			remuneration
	Commencement	Expiry date of the	payable under the
	date of the service	service contract/	service contract/
	contract/letter of	letter of	letter of
Director	appointment	appointment	appointment
HO Kwok Wah,	10 February 2019	9 February 2022	HK$18,000 per
George			month without any
			variable
			remuneration
			payable to him

MATERIAL LITIGATION

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

MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business carried on or intended to be carried on by the Company or any of its subsidiaries) were entered into by the members of the Group within the two years immediately preceding the commencement date of the Offer Period, which were or might be material:

(i) the framework agreement dated 13 June 2019 (the “ Framework Agreement ”) entered into among Power City Investments Limited (“ Power City ”) (a 59%-owned indirect subsidiary of the Company), 美邦啓立光電科技（上海）有限公司 (Bestlinkage NHI Co., Ltd.) (“ Bestlinkage ”) (a then indirect non-wholly-owned subsidiary of the Company) and 上海美迪西生物醫藥股份有限公司 (Shanghai Medicilon Inc.) (“ Medicilon ”) in relation to, among other things, the disposal by

– V-9 –

GENERAL INFORMATION

APPENDIX V

Power City of its 100% equity interest in the Bestlinkage (the “ Disposal ”). The consideration for the Disposal is comprised of (i) the consideration for the sale and purchase of the entire equity interest of Bestlinkage, which should be determined in accordance with the terms of the Framework Agreement with reference to an audit report as at a specified reference date and subject to post-completion adjustment, which, for illustrative purpose only, would be approximately RMB252 million assuming the relevant reference date was 31 March 2019 and (ii) the repayment of the loan owed by Bestlinkage to Power City, including shareholder’s loan and other liabilities, which was approximately RMB112 million as at 31 March 2019; and

(ii) the formal agreement dated 30 June 2020 entered into between Power City as vendor, Medicilon as purchaser, and Bestlinkage pursuant to the Framework Agreement, for conducting the Disposal.

Please refer to the announcement of the Company dated 13 June 2019 and the circular of the Company dated 23 August 2019 for further details of the Framework Agreement, and the announcement of the Company dated 30 June 2020 for further details of the formal agreement referred to in (ii) above.

EXPERTS AND CONSENTS

The following is the qualification of the expert who has given opinion or advice contained in this circular:

Name Qualification Dongxing Securities a licensed corporation under the SFO, licensed to carry out Type 1 (dealing in securities), Type 4 (advising on securities) and Type 6 (advising on corporate finance) regulated activities Innovax Capital a corporation licensed to carry out Type 1 (dealing in securities) and Type 6 (advising on corporate finance) regulated activities under the SFO PricewaterhouseCoopers certified public accountants under Professional Accountants Ordinance (Cap. 50) registered public interest entity auditor under Financial Reporting Council Ordinance (Cap. 588) Colliers International (Hong professional property valuer Kong) Limited

– V-10 –

GENERAL INFORMATION

APPENDIX V

Each of Dongxing Securities, Innovax Capital, PricewaterhouseCoopers and Colliers International (Hong Kong) Limited has given and has not withdrawn its written consent to the issue of this Offer Document with the inclusion herein of its opinion or letter (as the case may be) and references to its name, in the form and context in which it is included.

DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection (i) on the website of the Company (www.rykadan.com); (ii) on the website of the Securities and Futures Commission (www.sfc.hk); and (iii) at the principal place of business of the Company in Hong Kong at Rooms 2701 & 2801, Rykadan Capital Tower, 135 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong during normal business hours from 9:00 a.m. to 5:00 p.m. on any weekday (except public holidays) from the date of this Offer Document for so long as the Offer remains open for acceptance:

(a) the memorandum of association and the articles of association of the Company;
(b) the annual reports of the Company for the financial years ended 31 March 2019 and 31 March 2020;
(c) the consent letters referred to in the paragraph under the heading “ Experts and Consents ” in this Appendix to this circular;
(d) the Letter from the Board, the text of which is set out on pages 6 to 17 of this Offer Document;
(e) the Letter from Dongxing Securities, the text of which is set out on pages 18 to 27 of this Offer Document;
(f) the Letter from the Independent Board Committee, the text of which is set out on pages 28 to 29 of this Offer Document;
(g) the Letter from the Independent Financial Adviser, the text of which is set out on pages 30 to 55 of this Offer Document;
(h) the report from PricewaterhouseCoopers on the unaudited pro forma financial information of the Group, the text of which is set out in Appendix III to this Offer Document;
(i) the property valuation report from Colliers International (Hong Kong) Limited, the text of which is set out in Appendix IV to this Offer Document;
(j) the Irrevocable Undertakings;
(k) the agreement under Section 317 of the SFO entered into among the Controlling Shareholders dated 3 August 2009;

– V-11 –

GENERAL INFORMATION

APPENDIX V

(l) the director’s service contract as disclosed under the section headed “ Directors’ Service Contracts ” in this Appendix; and
(m) the material contracts referred to in the section headed “ Material Contracts ” in this Appendix.

MISCELLANEOUS

(a) The registered office of the Company is situated at Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman, KY1-1111, Cayman Islands.
(b) The Hong Kong head office and principal place of business of the Company is situated at Rooms 2701 & 2801, Rykadan Capital Tower, 135 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong.
(c) The principal place of business of Dongxing Securities is situated at 6805-6806A, International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong.
(d) The office of the Independent Financial Adviser is at Room 2002 20/F Chinachem Century Tower, 178 Gloucester Road, Wan Chai, Hong Kong.
(e) The principal members of the concert group of (i) the Company and (ii) the Controlling Shareholders are:
(i) Tiger Crown Limited, whose correspondence address is at Rooms 2701 & 2801, Rykadan Capital Tower, 135 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong; and
(ii) CHAN William, whose correspondence address is at Rooms 2701 & 2801, Rykadan Capital Tower, 135 Hoi Bun Road, Kwun Tong, Kowloon, Hong Kong.
(f) The correspondence addresses of the following members of the concert group of the Controlling Shareholders are:
(i) the correspondence address of Scenemay Holdings Limited is at 21/F, Entertainment Building, 30 Queen’s Road Central, Hong Kong;
(ii) the correspondence address of LI Chu Kwan is at 21/F, Entertainment Building, 30 Queen’s Road Central, Hong Kong; and
(iii) the correspondence address of LI Wing Yin is at 21/F, Entertainment Building, 30 Queen’s Road Central, Hong Kong.
(g) Tiger Crown Limited is 100% owned by Rykadan Holdings Limited which in turn is 100% held by HSBC International Trustee Limited as the trustee of Rykadan Trust. CHAN William is the settlor and protector and one of the discretionary beneficiaries of Rykadan Trust. CHAN William is also the sole director of Tiger Crown Limited and Rykadan Holdings Limited.

– V-12 –

GENERAL INFORMATION

APPENDIX V

(h) The ultimate beneficial owners of Scenemay Holdings Limited are LI Chu Kwan and LI Wing Yin, and the directors of Scenemay Holdings Limited are LI Chu Kwan and LI Wing Yin. Save as disclosed in the section headed “ Interests of Substantial Shareholders ” above, the directors of Scenemay Holdings Limited are not interested in any shareholding of the Company.
(i) The English texts of this Offer Document, the form of proxy for the EGM and the Acceptance Form shall prevail over their respective Chinese texts.

– V-13 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this notice, 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 notice.

RYKADAN CAPITAL LIMITED 宏基資本有限公司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 2288)

NOTICE OF EXTRAORDINARY GENERAL MEETING

NOTICE IS HEREBY GIVEN that an extraordinary general meeting (the “ EGM ”) of Rykadan Capital Limited 宏基資本有限公司 (the “ Company ”) will be held at Room 1, 10/F, United Centre, 95 Queensway, Admiralty, Hong Kong on Monday, 23 November 2020 at 1:00 p.m. (or any adjournment thereof) for the purpose of considering and, if thought fit, passing with or without amendments, the following as an ordinary resolution and a special resolution of the Company, respectively:

ORDINARY RESOLUTION

” THAT , the conditional cash offer (the “ Offer ”) by Dongxing Securities (Hong Kong) Company Limited on behalf of the Company to buy-back up to 102,000,000 shares of nominal value of HK$0.01 each in the issued share capital of the Company (the “ Share(s) ”) at a price of HK$0.68 per Share and subject to the terms and conditions as set out in the offer document despatched on 30 October 2020 together with the accompanying acceptance form (copies of which marked “A” have been produced to the EGM and initialed by the chairman of the EGM for the purpose of identification) be approved, without prejudice and in addition to the existing authority of the Company under the general mandate to buy-back Shares granted at the annual general meeting of the Company held on 26 August 2020, and that the director(s) of the Company be authorised to execute all such documents (and, where necessary, to affix the seal of the Company thereon in accordance with the articles of association of the Company) and do all such acts as such director(s) consider desirable, necessary or expedient to give effect to or otherwise in connection with the Offer.”

SPECIAL RESOLUTION

” THAT , the waiver (the “ Whitewash Waiver ”) in respect of any obligation under the Codes on Takeovers and Mergers and Share Buy-backs of Hong Kong (the “ Codes ”) of Tiger Crown Limited, Scenemay Holdings Limited, CHAN William, LI Chu Kwan and LI

– EGM-1 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

Wing Yin to make a mandatory general offer for all the Shares not already beneficially owned by them and parties acting in concert (as defined under the Codes) with any of them, which may, but for the Whitewash Waiver, arise upon completion of the Offer be hereby approved, and that the director(s) of the Company be authorised to execute all such documents (and, where necessary, to affix the seal of the Company thereon in accordance with the articles of association of the Company) and do all such acts as such director(s) consider desirable, necessary or expedient to give effect to or otherwise in connection with the Whitewash Waiver.”

By Order of the Board Rykadan Capital Limited 宏基資本有限公司 CHAN William Chairman and Chief Executive Officer

Hong Kong, 30 October 2020

Notes:

All resolutions at the EGM will be voted upon by poll pursuant to the Rules Governing the Listing of Securities (the “ Listing Rules ”) on The Stock Exchange of Hong Kong Limited (the “ Stock Exchange ”) and the results of the poll voting will be published on the websites of Stock Exchange and the Company in accordance with the Listing Rules.
A member entitled to attend and vote at the EGM is entitled to appoint one or more (if he holds more than one Shares) proxies to attend and vote instead of him. If more than one proxy is appointed, the appointment shall specify the number of Shares in respect of which each such proxy is so appointed. A proxy need not be a member of the Company.
In order to be valid, the form of proxy together with the power of attorney or other authority, if any, under which it is signed or a certified copy of that power or authority, must be deposited at the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong not less than 48 hours before the time appointed for the holding of the EGM or any adjournment thereof. Delivery of the form of proxy shall not preclude a member of the Company from attending and voting in person at the EGM or any adjournment thereof and, in such event, the said form of proxy shall be deemed to be revoked.
For determining the qualification of members to attend and vote at the EGM, the register of members of the Company will be closed from Wednesday, 18 November 2020 to Monday, 23 November 2020, both days inclusive, during which period no transfer of shares will be registered. In order to be eligible as members to attend and vote at the EGM, investors are urged to lodge all transfers of Shares accompanied by the relevant share certificates with the Company’s Hong Kong branch share registrar, Tricor Investor Services Limited, at Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong for registration not later than 4:30 p.m. on Tuesday, 17 November 2020.

– EGM-2 –

NOTICE OF EXTRAORDINARY GENERAL MEETING

If a black rainstorm warning signal or a tropical cyclone warning signal no. 8 or above is in force in Hong Kong 2 hours before the scheduled time of the EGM, the EGM will be adjourned. The Company will post an announcement on the Company’s website and the Stock Exchange’s website to notify Shareholders of the date, time and place of the adjourned meeting. The meeting will be held as scheduled when an Amber or a Red Rainstorm Warning Signal is in force. Shareholders should decide on their own whether they would attend the meeting under bad weather conditions bearing in mind their own situations.
Due to the recent development of the COVID-19 pandemic, the Company will implement the following precautionary measures at the principal place of meeting of the EGM against the pandemic to protect the Shareholders from the risk of infection:
(i) Compulsory temperature screening/checks will be carried out on every attendee at the main entrance of EGM venue. Any person with a body temperature above the reference range quoted by the Department of Health from time to time, or is exhibiting flu-like symptoms may be denied entry into the EGM venue and be requested to leave the EGM venue.
(ii) Every attendee will be required to wear a surgical face mask throughout the EGM and sit at a distance from other attendees. Please note that no masks will be provided at the EGM venue and attendees should wear their own masks.
(iii) No distribution of gifts and no beverage and refreshments will be provided to attendees at the EGM.

7. The Company wishes to strongly advise the Shareholders, particularly Shareholders who are unwell, subject to quarantine in relation to COVID-19 or unable to travel to attend to EGM, that they may appoint the chairman of the EGM as a proxy to vote on the resolutions to be proposed at the EGM, instead of attending the EGM in person.

8. Due to the constantly evolving COVID-19 pandemic situation in Hong Kong, the Company may be required to change the EGM arrangements at short notice. Shareholders should check the Company’s website for future announcements and updates on the EGM arrangements.

As at the date of this notice, the Board comprises Mr. CHAN William (Chairman and Chief Executive Officer), Mr. YIP Chun Kwok (Chief Operating Officer) as executive directors, Mr. NG Tak Kwan as a non-executive director and Mr. TO King Yan, Adam, Mr. WONG Hoi Ki and Mr. HO Kwok Wah, George as independent non-executive directors.

– EGM-3 –

AI assistant

Rykadan Capital Limited — Proxy Solicitation & Information Statement 2020

50499_rns_2020-10-29_2f46e395-a533-4f45-ae9b-722097ae6878.pdf

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

RYKADAN CAPITAL LIMITED 宏基資本有限公司

Independent Financial Adviser to the Independent Board Committee and the Independent Shareholders

CONTENTS

Voting by proxy in advance of the EGM:

EXPECTED TIMETABLE

EXPECTED TIMETABLE

DEFINITIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

RYKADAN CAPITAL LIMITED 宏基資本有限公司

(Stock Code: 2288)

Executive Directors:

Registered Office:

Non-executive Director:

Independent Non-executive Directors:

To the Shareholders

INTRODUCTION

LETTER FROM THE BOARD

THE OFFER

THE OFFER PRICE

CONFIRMATION OF FINANCIAL RESOURCES

CONDITIONS OF THE OFFER

IRREVOCABLE UNDERTAKINGS

WHITEWASH WAIVER

LETTER FROM THE BOARD

CHANGES IN SHAREHOLDING STRUCTURES

LETTER FROM THE BOARD

LETTER FROM THE BOARD

REASONS FOR THE OFFER

LETTER FROM THE BOARD

FINANCIAL EFFECTS OF THE OFFER

Loss per Share

Net assets per Share

Liabilities

Working capital

INFORMATION ON THE GROUP

FUTURE INTENTIONS ON THE GROUP

LETTER FROM THE BOARD

EXTRAORDINARY GENERAL MEETING

RECOMMENDATION

FURTHER INFORMATION

Rykadan Capital Limited 宏基資本有限公司 Chan William

CONDITIONAL CASH OFFER BY DONGXING SECURITIES (HONG KONG) COMPANY LIMITED ON BEHALF OF RYKADAN CAPITAL LIMITED TO BUY-BACK UP TO 102,000,000 SHARES AT HK$0.68 PER SHARE AND APPLICATION FOR WHITEWASH WAIVER

INTRODUCTION

THE OFFER

LETTER FROM DONGXING SECURITIES

LETTER FROM DONGXING SECURITIES

THE OFFER PRICE

CONDITIONS OF THE OFFER

COMMON POOL METHOD FOR SCALING DOWN EXCESS ACCEPTANCES

ODD LOTS

IRREVOCABLE UNDERTAKINGS

LETTER FROM DONGXING SECURITIES

WHITEWASH WAIVER

LETTER FROM DONGXING SECURITIES

PROCEDURES FOR ACCEPTANCE

OVERSEAS SHAREHOLDERS

NOMINEE REGISTRATION OF SHARES

RESPONSIBILITY FOR DOCUMENTS

SETTLEMENT

TAX IMPLICATIONS

EGM

GENERAL

RYKADAN CAPITAL LIMITED 宏基資本有限公司

CONDITIONAL CASH OFFER BY DONGXING SECURITIES (HONG KONG) COMPANY LIMITED ON BEHALF OF RYKADAN CAPITAL LIMITED TO BUY-BACK UP TO 102,000,000 SHARES AT HK$0.68 PER SHARE AND APPLICATION FOR WHITEWASH WAIVER

CONDITIONAL CASH OFFER BY DONGXING SECURITIES

(HONG KONG) COMPANY LIMITED ON BEHALF OF RYKADAN CAPITAL LIMITED TO BUY-BACK UP TO 102,000,000 SHARES AT HK$0.68 PER SHARE AND APPLICATION FOR WHITEWASH WAIVER

INTRODUCTION

THE INDEPENDENT BOARD COMMITTEE

OUR INDEPENDENCE

BASIS OF OUR OPINION

PRINCIPAL FACTORS AND REASONS TAKEN INTO ACCOUNT

1. Information on the Group

2. Financial performance of the Group

FY2020 Results

Rykadan Capital Limited Proxy Solicitation & Information Statement 2020