Snack Empire Holdings Limited - Proxy Solicitation & Information Statement 2012

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Shanghai Zendai Property Limited (the “ Company ”), you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee, or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

SHANGHAI ZENDAI PROPERTY LIMITED 上海証大房地產有限公司[] (Incorporated in Bermuda with limited liability) (Stock Code: 755)*

MAJOR TRANSACTIONS

Financial adviser to the Company

==> picture [32 x 27] intentionally omitted <==

* for identification purpose only

24 December 2012

CONTENTS

			Page
Definitions . .	. . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			4
Appendix I	–	Financial information of the Group . . . . . . . . . . . . . . . . . . .	15
Appendix II	−	Accountants’ report of Nanjing Zendai. . . . . . . . . . . . . . . . .	18
Appendix III	−	Property valuation report . . . . . . . . . . . . . . . . . . . . . . . . . . .	27
Appendix IV	−	General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	32

– i –

DEFINITIONS

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

“Announcements”
the announcements of the Company dated 19 November 2012 and 23 November 2012 in relation to the Framework Agreement and the transactions contemplated thereunder
“Bank”
the bank which acts as the agent of the Entrusted Loan on behalf of the Investment Fund
“Board” the board of Directors
“Company”
Shanghai Zendai Property Limited, an exempt company incorporated in Bermuda, the issued shares of which are listed on the Stock Exchange
“connected person(s)”
has the meaning ascribed to it under the Listing Rules
“Director(s)” the director(s) of the Company
“Disposal”
the disposal of the Sale Interest by the Vendor to the Purchaser pursuant to the Framework Agreement
“Entrusted Loan”
the loan in the estimated amount of RMB580.0 million but in any case not more than RMB630.0 million to be provided to Nanjing Zendai by the Bank on behalf of the Investment Fund
“Framework Agreement”
the agreement dated 16 November 2012 entered into among the Vendor, the Vendor’s Guarantors, Nanjing Zendai and the Purchaser in relation to the Disposal as supplemented by the Supplemental Agreement
“Golden Land International”
嘉聯國際發展有限公司 (Golden Land International Development Limited), an indirect wholly-owned subsidiary of the Company
“Group”
the Company and its subsidiaries
“Hong Kong”

the Hong Kong Special Administrative Region of the PRC

– 1 –

DEFINITIONS

“Investment Commencing Date” the date being the Investment Fund having made the payment of the consideration for the Sale Interest to the Vendor
“Investment Fund” a fund or the various funds which is/are managed and invested by Gefei Asset Management
“Land Parcel”
a parcel of land located in 江蘇省南京市雨花台區站中七路 (Zhanzhongqi Road, Yuhuatai District, Nanjing, Jiangsu Province, the PRC)* with site area of approximately 93,526.4 square metres, which is designated for integrated office, commercial, financial, hotel and cultural use
“Latest Practicable Date”
21 December 2012, being the latest practicable date prior to the printing of this circular for ascertaining certain information for inclusion in this circular
“Listing Rules”
the Rules Governing the Listing of Securities on the Stock Exchange
“Nanjing Zendai”
南京証大大拇指商業發展有限公司 (Nanjing Zendai Thumb Plaza Development Co., Ltd.)*, a private company established in the PRC with limited liability
“PRC”
the People’s Republic of China which, for the purpose of this circular, excludes Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan
“Purchaser” or “Gefei Asset Management”
蕪湖歌斐資產管理有限公司 (Wuhu Gefei Asset Management Co., Limited)*, a private company established in the PRC with limited liability
“Repurchase Rights”
the rights for the Investment Fund to request Golden Land International to repurchase the Sale Interest
“Sale Interest”
up to 10% equity interest of Nanjing Zendai
“SFO”
the Securities and Futures Ordinance (Chapter 571 of the laws of Hong Kong)
“Shanghai Zendai Land”
上海証大置業有限公司 (Shanghai Zendai Land Company Limited)*, an indirect wholly-owned subsidiary of the Company

– 2 –

DEFINITIONS

“Share(s)” share(s) of HK$0.02 each in the share capital of the Company
“Shareholder(s)” holder(s) of the Shares
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Supplemental Agreement” the supplemental agreement dated 27 November 2012 entered into among the Vendor, Vendor’s Guarantors, Nanjing Zendai and the Purchaser to supplement the Framework Agreement
“Transactions” collectively, the Disposal and the grant of Repurchase Rights
“Vendor” or “Haimen Zendai” 海門証大濱江置業有限公司 (Haimen Zendai Property Company Limited)*, an indirect wholly-owned subsidiary of the Company
“Vendor’s Guarantors” collectively Golden Land International, Shanghai Zendai Land and the Company
“HK$” Hong Kong dollars, the lawful currency of Hong Kong “RMB” Renminbi, the lawful currency of the PRC “%” per cent

For the purpose of this circular, unless otherwise stated, conversion of RMB into HK$ is based on the approximate exchange rate of RMB1 to HK$1.24. The exchange rate is for illustration purpose only and does not constitute a representation that any amounts have been, could have been or may be exchanged at this or any other rates at all.

* for identification purpose only

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LETTER FROM THE BOARD

SHANGHAI ZENDAI PROPERTY LIMITED 上海証大房地產有限公司[] (Incorporated in Bermuda with limited liability) (Stock Code: 755)*

Executive Directors:

Mr. Dai Zhikang (Chairman) Mr. Wang Fujie Mr. Zhu Nansong Mr. Zuo Xingping Mr. Tang Jian

Registered office:

Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Head office and principal place

Non-executive Directors:

Mr. Wu Yang Mr. Zhou Chun Mr. Dong Wenliang

of business in Hong Kong:

Unit 6108 61/F., The Centre 99 Queen’s Road Central Hong Kong

Independent non-executive Directors:

Mr. Lo Mun Lam, Raymond Mr. Lai Chik Fan Mr. Li Man Wai Mr. Cai Gaosheng

24 December 2012

To the Shareholders, and for information only, holders of options of the Company

Dear Sir or Madam,

MAJOR TRANSACTIONS

INTRODUCTION

The Board announced that on 16 November 2012, after trading hours of the Stock Exchange, the Vendor, Vendor’s Guarantors, Nanjing Zendai and Gefei Asset Management entered into the Framework Agreement, pursuant to which Gefei Asset Management has conditionally agreed to invest in Nanjing Zendai via the Investment Fund by way of (i) the

* for identification purpose only

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LETTER FROM THE BOARD

Vendor selling and Gefei Asset Management (as the fund manager of the Investment Fund) purchasing the Sale Interest on behalf of the Investment Fund, being up to 10% equity interest of Nanjing Zendai, at a consideration of RMB120.0 million (equivalent to approximately HK$148.8 million) and (ii) the Investment Fund extending the Entrusted Loan in the amount of RMB580.0 million (equivalent to approximately HK$719.2 million) to Nanjing Zendai.

The total amount of investment via the Disposal and the Entrusted Loan shall not exceed RMB750.0 million (equivalent to approximately HK$930.0 million) pursuant to the Framework Agreement, subject to the actual funds raised by the Investment Fund.

As the applicable percentage ratios calculated pursuant to Rule 14.07 of the Listing Rules in respect of the Disposal are above 5% but less than 25%, the Disposal constitutes a discloseable transaction for the Company under Chapter 14 of the Listing Rules and is therefore subject to the reporting and announcement requirements under the Listing Rules.

In addition, given the Repurchase Rights constitute an option under Rule 14.72(1) of the Listing Rules and since the consideration for the Sale Interest under the Repurchase Rights depends on the progress of development of the Land Parcel and the sales of properties thereon, and cannot be determined at this early stage, the Transactions shall constitute major transactions for the Company and are therefore subject to the reporting, announcement and shareholders’ approval requirements under the Listing Rules.

On 27 November 2012, the Vendor, Vendor’s Guarantors, Nanjing Zendai and Gefei Asset Management have entered into the Supplemental Agreement to supplement the Framework Agreement by way of addition of a term such that the Framework Agreement is conditional upon of the Shareholders’ approval.

The purpose of this circular is to provide you with, among other things, further details of the Framework Agreement and the transactions contemplated thereunder.

THE FRAMEWORK AGREEMENT

Dates

16 November 2012

27 November 2012 (in relation to the Supplemental Agreement)

Parties

Purchaser:

(1) Gefei Asset Management (as fund manager of the Investment Fund)
Vendor: (2) Haimen Zendai, an indirect wholly-owned subsidiary of the Company

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LETTER FROM THE BOARD

Vendor’s Guarantors:

(3) Shanghai Zendai Land, an indirect wholly-owned subsidiary of the Company;

Project company:

(4) Golden Land International, an indirect wholly-owned subsidiary of the Company; and (5) The Company (6) Nanjing Zendai

To the best of the Directors’ knowledge, information and belief, and having made reasonable enquiries, the Purchaser and its ultimate beneficial owners are third parties independent of the Company and connected persons of the Company.

Details of the Disposal

Pursuant to the Framework Agreement, the Vendor agreed to sell and Gefei Asset Management (as the fund manager of the Investment Fund) agreed to purchase the Sale Interest on behalf of the Investment Fund, being up to 10% equity interest of Nanjing Zendai.

Consideration

The consideration for the maximum amount of Sale Interest payable by the Investment Fund to the Vendor under the Framework Agreement of RMB120.0 million (equivalent to approximately HK$148.8 million), will be in cash and will be settled by the Investment Fund within one month after the conditions precedent to the Framework Agreement have been fulfilled or waived (as the case may be) or such other date as the parties to the Framework Agreement may agree.

Pursuant to the Framework Agreement, the Vendor, the Vendor’s Guarantors and Nanjing Zendai shall procure completion of the transfer of the Sale Interest to take place within 15 months from the Investment Commencing Date, with an extension of three months to such date upon discretion of the Investment Fund. Such extension is subject to a penalty of 0.005% of the consideration for the Sale Interest per day payable to the Investment Fund. In the event that completion of such transfer does not take place after the three-month extension, the Investment Fund has the right to terminate the Framework Agreement and request Nanjing Zendai, the Vendor and the Vendor’s Guarantors to refund the total investment amount contributed to Nanjing Zendai by the Investment Fund, with an interest rate of 18% per annum.

The maximum amount of consideration of RMB120.0 million for the Sale Interest, being 10% of the equity interests of Nanjing Zendai, was determined after arm’s length negotiation between the parties to the Framework Agreement with reference to the registered capital of Nanjing Zendai of RMB1,200.0 million.

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LETTER FROM THE BOARD

Share of profit/loss

Pursuant to the Framework Agreement, the Investment Fund will be entitled to 23% of the profit of Nanjing Zendai since the Investment Commencing Date. Pursuant to the Framework Agreement, commencing from the Investment Commencing Date, notwithstanding the transfer of Sale Interest has yet been registered with the relevant PRC authority, the Purchaser shall still be entitled to amount of profits derived from the aforesaid profit-sharing ratio. Golden Land International undertakes to incorporate the aforesaid arrangement in the articles of association of Nanjing Zendai or if such arrangement is not approved by the relevant PRC authority, Golden Land International and the Investment Fund will enter into separate agreement in relation to such arrangement.

Entrusted Loan

Pursuant to the Framework Agreement, the Investment Fund will provide the Entrusted Loan to Nanjing Zendai for the development of the Land Parcel in the estimated amount of RMB580.0 million (equivalent to approximately HK$719.2 million) but in any case not more than RMB630.0 million (equivalent to approximately HK$781.2 million) in cash. Based on the estimated aggregate loan amount of RMB580.0 million, RMB280.0 million (equivalent to approximately HK$347.2 million) and RMB300.0 million (equivalent to approximately HK$372.0 million) with a loan period of two years and two and a half years respectively will be available since the Investment Commencing Date. It is expected that a minimum amount of RMB200.0 million (equivalent to approximately HK$248.0 million) will be provided to Nanjing Zendai on the Investment Commencing Date.

The Entrusted Loan will bear interest rate of 10% per annum and early repayment of the Entrusted Loan can be made by Nanjing Zendai after 12 months from the grant of the Entrusted Loan. The Entrusted Loan will be secured by the charge on the 50% equity interest in Nanjing Zendai as held by Golden Land International.

Adjustment to amount of Sale Interest and Entrusted Loan

The total estimated investment amount by the Investment Fund would be RMB700.0 million (equivalent to approximately HK$868.0 million), being the aggregate of the consideration for the Sale Interest of RMB120.0 million (equivalent to approximately HK$148.8 million) and the estimated amount of the Entrusted Loan of RMB580.0 million (equivalent to approximately HK$719.2 million). Subject to the actual amount of the Entrusted Loan depending on the fund raising progress between Gefei Asset Management and the Bank, the total actual investment amount may vary and if the total actual investment amount is less than RMB700.0 million, the portions of the Sale Interest and the share of profit of Nanjing Zendai entitled by the Investment Fund will be adjusted respectively as follows:

A: Sale Interest (%)

B: Share of profit (%)

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LETTER FROM THE BOARD

C: the total actual investment amount (RMB)

C A = X 10% RMB700,000,000 C B = X 23% RMB700,000,000

No adjustment will be made to the portions of the Sale Interest and the share of profit/loss of Nanjing Zendai entitled by the Investment Fund if the total actual investment amount is more than RMB700.0 million (equivalent to approximately HK$868.0 million).

Repurchase of Sale Interest

Pursuant to the Framework Agreement, Golden Land International has the right to request the Investment Fund to sell its Sale Interest to Golden Land International and the Investment Fund also has the right to request Golden Land International to repurchase its Sale Interest (the latter being the Repurchase Rights) on the earlier of 45 months from the Investment Commencing Date and the date on which sales rate of all properties (including the pre-sale and delivered properties) on the Land Parcel reaches 90%. The consideration for the Sale Interest under such repurchase will be the sum of the registered capital of Nanjing Zendai contributed by the Investment Fund and 23% of all the distributable profit of Nanjing Zendai assuming Nanjing Zendai being liquidated, minus the profit already distributed to Nanjing Zendai during the period from the Investment Commencing Date to the date of such repurchase.

Conditions precedent to the Framework Agreement

Completion of the Framework Agreement are subject to the following conditions:

(a) Nanjing Zendai having duly established and obtained all relevant approvals from the governmental bodies in the PRC including but not limited to the approval certificate of foreign-invested enterprise, approval from relevant commerce committee, business licence, organisation code, tax registration code and foreign exchange registration;
(b) Nanjing Zendai having approved the articles of association and the joint venture contract which shall have taken into account the matters contemplated by the Framework Agreement and these having been passed resolution by the board of directors of Nanjing Zendai in respect of, among others, the Disposal and the appointment of directors of Nanjing Zendai by the Investment Fund;
(c) the parties to the Framework Agreement and the Investment Fund having entered into the investment agreement in relation to the matters of investment in Nanjing Zendai by the Investment Fund as stipulated under the Framework Agreement;
(d) Haimen Zendai and the Investment Fund having entered into the share transfer agreement in respect of the transfer of Sale Interest to the Investment Fund as stipulated under the Framework Agreement;

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LETTER FROM THE BOARD

(e) Nanjing Zendai, Shanghai Zendai Land, the Company, the Investment Fund and the Bank having entered into the entrusted loan agreement in respect of the provision of the Entrusted Loan as stipulated under the Framework Agreement;
(f) the Company and the Investment Fund having entered into the share repurchase agreement in respect of the repurchase of Sale Interest from the Investment Fund as set out in the paragraph under the section headed “Repurchase of Sale Interest” above as stipulated under the Framework Agreement;
(g) Shanghai Zendai Land, Nanjing Zendai and the Investment Fund having entered into the letter of irrevocable undertaking in respect of the provision of guarantee by Shanghai Zendai Land in the form of joint responsibility for the liabilities and obligations under the Entrusted Loan and the repurchase of Sale Interest as stipulated under the Framework Agreement;
(h) the Company, Nanjing Zendai and the Investment Fund having entered into the letter of irrevocable undertaking in respect of the provision of guarantee by the Company in the form of joint responsibility for the liabilities and obligations under the Entrusted Loan and the repurchase of Sale Interest as stipulated under the Framework Agreement;
(i) either (1) the registration of transfer of the Sale Interest under the Investment Fund having been completed, or, (2) Golden Land International and the Investment Fund and/or the Bank having entered into the share pledge agreement in respect of the provision of pledge of 50% interests of Nanjing Zendai held by Golden Land International for the liabilities under the entrusted loan agreement mentioned in condition (e) above, and Golden Land International having completed the registration of such pledge and the procedures of obtaining the compulsory enforcement certificate of such share pledge agreement;
(j) Nanjing Zendai, the Investment Fund and the relevant bank having entered into the account supervisory agreement in respect of the supervision of the income and expenditure of Nanjing Zendai by the Investment Fund as stipulated under the Framework Agreement;
(k) the representations and warranties made by Golden Land International, Haimen Zendai, Shanghai Zendai Land, the Company and Nanjing Zendai under the Framework Agreement shall be true, accurate and complete and remain the same since the Investment Commencing Date; and
(l) as reasonably considered by Gefei Asset Management, there being no material adverse change of Nanjing Zendai before the Investment Commencing Date.

The Investment Fund may, at its absolute discretion in writing, waive any of the above conditions. Pursuant to the Supplemental Agreement, the Framework Agreement shall become effective only upon the Shareholders’ approval having been obtained.

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LETTER FROM THE BOARD

INFORMATION ON THE PURCHASER

Gefei Asset Management is a company established in the PRC and is principally engaged in managing the investment portfolio of a number of property-related funds.

INFORMATION ON NANJING ZENDAI

Nanjing Zendai is a company established in the PRC with limited liability on 6 November 2012 with a registered capital of RMB1,200.0 million. On 29 June 2012, the Group succeeded in the bid for the Land Parcel at an aggregate price of RMB1,169.0 million (equivalent to approximately HK$1,449.6 million) and the land grant contract of which is expected to be entered into within six months from the date of publication of the tender results, further details of which are set out in the announcement of the Company dated 3 July 2012. Nanjing Zendai will be principally engaged in developing the Land Parcel and the major asset of the Nanjing Zendai will comprise the Land Parcel.

The Land Parcel is located in the commercial core area around Nanjing South Train Station, and covers a total site area of 93,526.4 square meters with planned above-ground spaces in the gross floor area of approximately 380,000 square metres and an additional 160,000 square metres of underground spaces. The Land Parcel is designated for integrated office, commercial, financial, hotel and cultural use. The terms for the grant of the land use right of the Land Parcel for office use and commercial use are both 40 years.

REASONS FOR AND BENEFITS OF THE ENTERING INTO OF THE FRAMEWORK AGREEMENT

The Group is principally engaged in construction of commercial and residential properties for sale, ownership and operation of hotel business, leasing, management and agency of commercial and residential properties.

The Group is a diversified property development company in the PRC, focusing on the development, investment and management of residential and commercial properties in the PRC. The Group currently has property projects under development in 12 cities which are located in the three regions including northern China, Shanghai city and its surroundings and Hainan province. The Group is committed to pursuing promising integrated commercial and residential property projects in the PRC. The Group will keep on enhancing its overall competence and push for continuous growth so as to bring satisfactory returns to the Shareholders.

The Board is of the view that the Land Parcel is of good development potential, and that the Framework Agreement would allow strategic cooperation with the Investment Fund to jointly develop the Land Parcel, enabling the Group to maintain the potential profit upon completion of the development while lowering the capital commitment required on the part of the Company for the development. The lower capital commitment, together with the cash inflow to be brought to the Group by the Disposal, is expected to enhance the financial flexibility of the Group for future investment opportunities.

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LETTER FROM THE BOARD

The net proceeds from the Disposal, being the consideration for the Sale Interest net of relevant expenses, are estimated to be approximately RMB120.0 million (equivalent to approximately HK$148.8 million). The Company intends to apply such net proceeds for the Group’s general working capital.

Based on the above, the Board considers that the entering into of the Framework Agreement is in the interests of the Company and the Shareholders as a whole and the terms of the Framework Agreement are normal commercial terms and are fair and reasonable.

EFFECTS ON EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

Upon completion of the Framework Agreement, the Company will be interested in 90% equity interest of Nanjing Zendai and Nanjing Zendai will become a jointly-controlled entity of the Company and the financial performance and financial position of Nanjing Zendai will be accounted for in the Group’s financial statement under equity method.

It is estimated that the loss arisen from the Disposal would be RMB300,000 (equivalent to approximately HK$372,000), which is calculated by reference to the consideration for the Sale Interest of RMB120.0 million (equivalent to approximately HK$148.8 million) minus the 10% registered capital of Nanjing Zendai of RMB120.0 million (equivalent to approximately HK$148.8 million) attributable to the Sale Interest and the relevant expenses of RMB300,000 (equivalent to approximately HK$372,000).

Save as disclosed above, the Transactions will not have any material impact on the earnings and assets and liabilities of the Group.

MANAGEMENT DISCUSSION AND ANALYSIS ON NANJING ZENDAI

Set out below is the management discussion and analysis on Nanjing Zendai for the period from 6 November 2012, being the date of its establishment, to 30 November 2012 (the “Relevant Period”):

Turnover

During the Relevant Period, Nanjing Zendai had no turnover.

Income tax expense

During the Relevant Period, there was no income tax expense for Nanjing Zendai as there was no assessable profit.

Profit/loss for the period

During the Relevant Period, Nanjing Zendai did not record any profit or loss.

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LETTER FROM THE BOARD

Liquidity and financial resources

During the Relevant Period, Nanjing Zendai funded its operation from its paid-up capital. During the Relevant Period, the paid-up capital of Nanjing Zendai was approximately HK$77.6 million.

As at 30 November 2012, the cash and bank balances of Nanjing Zendai amounted to approximately HK$77.6 million. Nanjing Zendai did not have any outstanding bank borrowing and banking facilities as at 30 November 2012.

Charges on assets

As at 30 November 2012, Nanjing Zendai did not pledge any assets.

Gearing ratio

As at 30 November 2012, the total liabilities of Nanjing Zendai is nil and the gearing ratio is not available.

Material acquisitions and disposals of subsidiaries and affiliated companies

Nanjing Zendai had not made material acquisitions and disposal of subsidiaries and affiliated companies during the Relevant Period.

Future plans for material investments

Nanjing Zendai will be principally engaged in developing the Land Parcel and the major asset of the Nanjing Zendai will comprise the Land Parcel. It is intended to develop the Land Parcel into commercial properties and the properties will be held for resale and/or rental purposes, subject to the then property market sentiment. Upon completion of the Framework Agreement, the Company and the Investment Fund will provide financial support to Nanjing Zendai to enable it to meet its financial obligations as they fall due for the foreseeable future.

Significant investments held

During the Relevant Period, Nanjing Zendai had not made any significant investment.

Contingent liabilities

As at 30 November 2012, Nanjing Zendai had no contingent liabilities.

Capital Structure

There was an increase of approximately HK$77.6 million in paid-in capital of Nanjing Zendai during the Relevant Period.

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LETTER FROM THE BOARD

Exchange risk and hedging

As Nanjing Zendai’s operations were principally in the PRC and most of Nanjing Zendai’s transactions, assets and liabilities were denominated in RMB, the operations of Nanjing Zendai were not subject to significant exchange risk. Accordingly, no financial instruments for hedging purposes were used by Nanjing Zendai during the Relevant Period.

Staff and remuneration policies

During the Relevant Period, there was no staff cost or directors’ remuneration.

Segment information

Nanjing Zendai will be principally engaged in property development.

LISTING RULES IMPLICATIONS

So far as the Company is aware after making reasonable enquires, none of the Shareholders has a material interest in, and would be required to abstain from voting on, the resolution to approve the Transactions and none of them would be required to abstain from voting if a general meeting of the Company were to be convened to approve the Transactions. The Company has received written approval of the Framework Agreement and the transactions contemplated thereunder, including but not limited to, the Transactions, for the purposes of Rule 14.44 of the Listing Rules from the closely allied group of Shareholders comprising Mr. Dai Zhikang, being the executive Director and the chairman of the Company, and Ms. Dai Mo Cao, being the daughter of Mr Dai Zhikang, which together were interested in 6,253,635,000 Shares, representing approximately 50.28% of the issued share capital of the Company as at the Latest Practicable Date. Accordingly, no general meeting of Shareholders will be held to consider and approve the Transactions.

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LETTER FROM THE BOARD

RECOMMENDATION

Having considered the reasons set out herein, the Directors are of the view that the Framework Agreement and the transactions contemplated thereunder, including but not limited to the Transactions, are on normal commercial terms, fair and reasonable and in the interests of the Company and the Shareholders as a whole. Therefore, the Directors recommend the Shareholders to vote in favour of the Transactions if a physical Shareholders’ meeting was to be convened for considering and, if thought fit, approving the Transactions.

ADDITIONAL INFORMATION

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

By order of the Board SHANGHAI ZENDAI PROPERTY LIMITED Dai Zhikang

Chairman

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

1. FINANCIAL INFORMATION OF THE GROUP

Details of the financial information of the Group for the financial years ended 31 December 2009, 2010 and 2011 and for the six months ended 30 June 2012 are disclosed in the Company’s annual reports for the financial years ended 31 December 2009, 2010 and 2011 and interim report for the six months ended 30 June 2012 respectively. All of these financial statements have been published on the website of the Stock Exchange at www.hkex.com.hk and the Company’s website at www.zendai.com.

2. INDEBTEDNESS STATEMENT

Borrowings

As at the close of business on 31 October 2012, being the latest practicable date for the purpose of this indebtedness statement prior to printing of the Circular, the Group has outstanding borrowings of approximately HK$3,675,943,000, details of which are set out below:

		HK$’000
Bank	loans, secured and guaranteed by a related company
–	current	1,832,021
–	non-current	1,668,159
Amounts due to minority owners of subsidiaries, unsecured		175,589
Amounts due to related companies, unsecured		174

Securities

As at 31 October 2012, property, plant and equipment of approximately HK$347,967,000, payments for leasehold land held for own use under operating leases of approximately HK$633,438,000, investment properties of approximately HK$2,298,916,000, properties for development and sales of approximately HK$994,147,000 and bank deposits of approximately HK$742,281,000 were pledged to secure the bank loans granted to the Group.

The Group also pledged 45% equity interest in 上海証大喜瑪拉雅置業有限公司 (Shanghai Zendai Himalayas Real Estate Company Limited)*, an associate of the Group, with attributable carrying amount of approximately HK$367,192,000 to Shanghai Forte Land Co., Ltd. (“Shanghai Forte”), an equity holder of Shanghai Haizhimen Property Management Co., Ltd. (“Shanghai Haizhimen”) which is a former associate of the Group, for securing Shanghai Forte’s interests in Shanghai Haizhimen.

– 15 –

FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Contingent liabilities

As at 31 October 2012, the Group provided guarantees to the extent of approximately HK$289,862,000 for customers in favour of banks in respect of mortgage loans provided by the banks to customers for the purchase of the developed properties of the Group. These guarantees provided by the Group to the banks would be released upon receiving the building ownership certificates of the respective properties by the banks from the customers as a pledge for security to the mortgage loans granted.

Save as aforesaid, and apart from intra-group liabilities and normal trade and other payables, the Group did not have any loan capital issued or agreed to be issued, debt securities issued and outstanding, authorised or otherwise created but unissued, term loans, other borrowings or indebtedness including bank overdrafts, liabilities under acceptances, acceptance credits, debentures, mortgages, charges, finance lease or hire purchase commitments, guarantees or other material contingent liabilities outstanding at the close of business on 31 October 2012.

3. WORKING CAPITAL

After taking into account the bases that (i) the Transactions can be completed as currently envisaged; (ii) no material change in general economic performance in the People’s Republic of China and the real estate sector maintains a steady sentiment in the consumption of properties; (iii) no material change in regulatory policies leading to adverse impact on the banks’ general lending policies to property developers; (iv) the Group’s present internal financial resources as well as the available banking facilities, the Directors are of the opinion that the Group has sufficient working capital for its present requirements, that is for at least the next 12 months from the date of this circular.

4. MATERIAL ADVERSE CHANGE

As at the Latest Practicable Date, the Directors were not aware of any material adverse change in the financial or trading position of the Group since 31 December 2011 (being the date to which the latest published audited consolidated financial statements of the Group were made up).

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

The Group (including any company which will become a subsidiary of the Company by reason of an acquisition which has been agreed or proposed since 31 December 2011, being the date to which the latest audited consolidated financial statements of the Company have been made up) will continue to focus on the development, investment and management of commercial and residential properties, which consist of various integrated commercial complex, grade A office buildings and residential buildings in Shanghai as well as other cities in the PRC.

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FINANCIAL INFORMATION OF THE GROUP

APPENDIX I

Seeing the growth potential of upmarket commercial and service integrated property, the Group is strengthening its development of large integrated properties under the development model of “Thumb Integrated Commercial Projects” to secure more diverse and balanced income streams. The Group will cautiously seek investment opportunities on the development of commercial properties in the PRC in order to enhance the Shareholder’s value. In addition, the Group will monitor closely the macro-economic control policy under the prevailing situation and adjust the development strategies as and when appropriate. The Directors will also from time to time closely monitor the financial position and liquidity position of the Group with a view to enhancing the capital management and treasury function of the Group and catering for any changes in the real estate market. As such, the Directors expect that the financial position of the Group would remain solid taking into account the financial resources available to the Group and the substantial assets base of the Group.

– 17 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

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

==> picture [76 x 61] intentionally omitted <==

==> picture [95 x 54] intentionally omitted <==

24 December 2012

The Board of Directors Shanghai Zendai Property Limited Unit 6108 61/F, The Centre 99 Queen’s Road Central Hong Kong

Dear Sirs,

We set out below our report on the financial information regarding 南京証大大拇指商業發展有限公司 (the “Project Company”), including the statement of financial position of the Project Company as at 30 November 2012, the statement of changes in equity and the statement of cash flows of the Project Company for the period from 6 November 2012 (date of establishment) to 30 November 2012 (the “Relevant Period”), together with the notes thereto (the “Financial Information”), for inclusion in the circular issued by Shanghai Zendai Property Limited (the “Company”) dated 24 December 2012 (the “Circular”) in connection with the proposed Disposal and the grant of Repurchase Rights.

The Project Company was established in the People’s Republic of China (the “PRC”) on 6 November 2012 with registered capital of RMB1,200 million.

The Project Company is engaged in the property development in the PRC. The Project Company has not commenced any business since the date of establishment.

For the purpose of this report, the directors of the Project Company have prepared the financial statements of the Project Company for the Relevant Period (the “Underlying Financial Statements”) in accordance with the accounting policies set out in note 4 of Section II below which comply with Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the Hong Kong Institute of Certified Public Accountants (“HKICPA”).

The Financial Information has been prepared by the directors of the Project Company based on the Underlying Financial Statements with no adjustment made thereon.

– 18 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

The directors of the Project Company are responsible for the contents of the Circular including the preparation and the true and fair presentation of the Financial Information in accordance with the accounting policies set out in note 4 of Section II below which comply with HKFRSs, the applicable disclosure requirements of the Hong Kong Companies Ordinance and the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and for such internal control as the directors of the Project Company determine is necessary to enable the preparation of the Financial Information that is free from material misstatement, whether due to fraud or error. The directors of the Company are responsible for the contents of the Circular in which this report is included.

Our responsibility is to form an opinion on the Financial Information based on our procedures and to report our opinion to you.

For the purpose of this report, we have carried out audit procedures in respect of the Underlying Financial Statements in accordance with Hong Kong Standards on Auditing issued by the HKICPA and have examined the Financial Information of the Project Company and carried out appropriate procedures as we considered necessary in accordance with Auditing Guideline 3.340 “Prospectuses and the Reporting Accountant” issued by the HKICPA.

OPINION

In our opinion, the Financial Information, for the purpose of this report, prepared in accordance with the accounting policies set out in note 4 of Section II below, gives a true and fair view of the state of affairs of the Project Company as at 30 November 2012 and of the cash flows of the Project Company for the Relevant Period.

I. FINANCIAL INFORMATION

(a) The statement of financial position of the Project Company as at 30 November 2012 is as follows:

		At
		30 November
	Note	2012
		HK$’000
Current assets
Cash and cash equivalents		77,647

Capital and total equity
Paid-up capital	5	77,647

– 19 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

(b) The statement of changes in equity of the Project Company for the Relevant Period is as follows:

	Paid-up capital
	HK$’000
At 6 November 2012 (date of establishment)	–
Paid-up capital	77,647
At 30 November 2012	77,647

(c) The statement of cash flows of the Project Company for the Relevant Period is as follows:

	From
	6 November
	2012 (date of
	establishment)
	to 30 November
	2012
	HK$’000
Cash flows from financing activity
Paid-up capital	77,647
Cash from financing activity and increase in cash and
cash equivalents	77,647
Cash and cash equivalents at end of period	77,647

– 20 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

II. NOTES TO THE FINANCIAL INFORMATION

1. CORPORATE INFORMATION AND BASIS OF PRESENTATION

The Project Company is a limited liability company established in the PRC on 6 November 2012. Its registered office is located at No.16, Shi Hua Street, Yu Hua Tai Qu, Nanjing, Jiangsu Province, the PRC. The Project Company is engaged in the property development in the PRC. The Project Company has not commenced any business since the date of establishment.

The Project Company did not have any revenue and expenses during the Relevant Period. Accordingly, no statement of comprehensive income is presented.

2. ADOPTION OF NEW OR AMENDED HKFRSs

During the Relevant Period, the Project Company has adopted all the new and amended HKFRSs issued by the HKICPA which are relevant to the Project Company and effective for the reporting period.

At the date of this report, certain new and amended HKFRSs have been published but are not yet effective, and have not been adopted early by the Project Company.

The directors of the Project Company anticipates that all of the pronouncements will be adopted in the Project Company’s accounting policy for the first period beginning after the effective date of the pronouncement. The directors of the Project Company are currently assessing the impact of the new and amended HKFRSs upon initial application. So far, the directors of the Project Company have preliminarily concluded that the initial application of these HKFRSs will not result in material financial impact on the Financial Information.

3. BASIS OF PREPARATION

(a) Statement of compliance

The Financial Information has been prepared in accordance with all applicable HKFRSs, Hong Kong Accounting Standards (“HKASs”) and Interpretations (hereinafter collectively referred to as the “HKFRSs”) and the disclosure requirements of the Hong Kong Companies Ordinance. In addition, the Financial Information includes applicable disclosures required by the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

(b) Basis of measurement

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

(c) Functional and presentation currency

The Financial Information is presented in HK$. The Project Company maintains its books and records in its own functional currency. The functional currency of the Project Company is RMB. The board of directors considered that it is more appropriate to present the Financial Information in HK$ as the shares of the Company are listed on the Stock Exchange.

– 21 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

4. SIGNIFICANT ACCOUNTING POLICIES

(a) Financial Instrument and equity instrument

(i) Financial assets

The Project Company classifies its financial assets at initial recognition, depending on the purpose for which the asset was acquired. Financial assets are initially measured at fair value plus transaction costs that are directly attributable to the acquisition of the financial assets. Regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

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

(ii) Impairment loss on financial assets

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

significant financial difficulty of the debtor;
a breach of contract, such as a default or delinquency in interest or principal payments;
granting concession to a debtor because of debtors’ financial difficulty;
a significant or prolonged decline in the fair value of an investment in equity instrument below its cost; and
it becoming probable that the debtor will enter bankruptcy or other financial reorganisation.

For loans and receivables

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

Impairment losses are reversed in subsequent periods when an increase in the asset’s recoverable amount can be related objectively to an event occurring after the impairment was recognised, subject to a restriction that the carrying amount of the asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

(iii) Effective interest method

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

– 22 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

4. SIGNIFICANT ACCOUNTING POLICIES – Continued

(a) Financial Instrument and equity instrument – Continued

(iv) Paid-up capital

Paid-up capital is classified as equity and is recorded at the proceeds from capital contributions made by the investors.

(v) Derecognition

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

(b) Foreign currency

Transactions entered into by the Project Company in currencies other than the currency of the primary economic environment in which it operates (the “functional currency”) are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the end of reporting period.

Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are recognised in profit or loss in the period in which they arise.

Income and expenses, if any, of the Project Company are translated into the presentation currency (i.e. HK$) at the average exchange rates for the period, unless exchange rates fluctuate significantly during the period, in which case, the rates approximating to those ruling when the transactions took place are used. All assets and liabilities of the Project Company are translated at the rate ruling at the end of reporting period. Exchange differences arising, if any, are recognised in other comprehensive income.

(c) Provisions and contingent liabilities

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

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

(d) Related parties

(a) A person or a close member of that person’s family is related to the Company if that person:
(i) has control or joint control over the Company;
(ii) has significant influence over the Company; or
(iii) is a member of key management personnel of the Company or the Company’s parent.
(b) An entity is related to the Company if any of the following conditions apply:
(i) The entity and the Company are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

– 23 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

4. SIGNIFICANT ACCOUNTING POLICIES – Continued

(d) Related parties – Continued

(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of the employees of the Company or an entity related to the Company.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of key management personnel of the entity (or of a parent of the entity).

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

(i) that person’s children and spouse or domestic partner;
(ii) children of that person’s spouse or domestic partner; and
(iii) dependents of that person or that person’s spouse or domestic partner.

5. PAID-UP CAPITAL

(a) Paid-up capital

	HK$’000
At 6 November 2012 (date of establishment)	–
Paid-up capital	77,647
At 30 November 2012	77,647

The Project Company was established on 6 November 2012 with registered capital of RMB1,200,000,000 (equivalent to approximately HK$1,481,116,000). On 29 November 2012, Golden Land International contributed RMB62,910,000 (equivalent to approximately HK$77,647,000) as paid-up capital of the Project Company.

(b) Capital Management Policy

The Project Company’s objectives when managing capital are to safeguard the Project Company’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Project Company will consider the macro economic conditions, prevailing borrowing rate in the market and adequacy of cash flows generating from operations and may raise funding through capital market or bank borrowings as necessary. Management regards total equity as capital, for capital management purpose. Total equity of the Project Company at 30 November 2012 was HK$77,647,000.

– 24 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

6. CAPITAL COMMITMENTS

	At
	30 November
	2012
	HK$’000
Commitments on property for development
– authorised but not contracted for	1,442,854

7. FINANCIAL RISK MANAGEMENT

Policy for managing interest rate risk, credit risk and liquidity risk is set by the directors of the Project Company. The directors of the Project Company considers the Project Company’s exposure to interest rate risk, credit risk and liquidity risk is minimal. The Project Company has not used any derivatives or other financial instruments for hedging purposes.

Interest rate risk

The Project Company is exposed to interest rate risk through its bank deposits. The management closely monitors the interest rate changes and takes appropriate action when necessary.

Liquidity risk

The Project Company’s policy is to maintain sufficient cash and cash equivalents and have available funding through advance from holding company to meet its working capital requirements, where necessary.

Credit risk

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

8. CATEGORIES OF FINANCIAL ASSETS

The carrying amounts of the financial assets as recognised at the reporting date are categorised as follows. See note 4(a) for explanations about how the categorisation of financial instruments affects their subsequent measurements.

	At
	30 November
	2012
	HK$’000
Financial assets
Loans and receivables:
Cash and cash equivalents	77,647

9. EVENTS AFTER THE REPORTING DATE

On 12 December 2012, Haimen Zendai contributed RMB44,020,000 (equivalent to approximately HK$54,332,000) as paid-up capital of the Project Company.

Save as disclosed above, no other significant event has been noted that should be disclosed for the Project Company subsequent to 30 November 2012.

– 25 –

ACCOUNTANTS’ REPORT OF NANJING ZENDAI

APPENDIX II

10. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared by the Project Company in respect of any period subsequent to 30 November 2012.

Yours faithfully,

BDO Limited

Certified Public Accountants Chan Wing Fai Practising Certificate no. P05443 Hong Kong

– 26 –

PROPERTY VALUATION REPORT

APPENDIX III

The following is the text of a letter and valuation certificate prepared for the purpose of incorporation in this circular received from DTZ Debenham Tie Leung Limited, an independent property valuer, in connection with its opinion of market value of the property interests in the PRC as at 16 November 2012.

==> picture [87 x 83] intentionally omitted <==

16th Floor Jardine House 1 Connaught Place Central Hong Kong

24 December 2012

The Directors Shanghai Zendai Property Limited Unit 6108 61/F, The Centre 99 Queen’s Road Central Hong Kong

Dear Sirs,

Re: A parcel of land located in 江蘇省南京市雨花台區站中七路 (Zhan Zhong Qi Lu, Yu Hua Tai Qu, Nanjing, Jiangsu Province, the PRC) with site areas of approximately 93,526.4 square metres, which is designated for integrated office, commercial, financial, hotel and cultural use

INSTRUCTIONS, PURPOSE & DATE OF VALUATION

In accordance with the instruction of Shanghai Zendai Property Limited (the “Company”) for us to carry out a market valuation in existing state of the caption property (the “Property”) to be held by 南京証大大拇指商業發展有限公司 (Nanjing Zendai Thumb Plaza Development Co., Ltd.)* in the People’s Republic of China (the “PRC”), we confirm that we have carried out inspection, made relevant enquiries and obtained such further information as we consider necessary for the purpose of providing you with our opinion of market value in existing state of the Property as at 16 November 2012 for your disclosure purpose.

DEFINITION OF MARKET VALUE

Our valuation of the Property represents its market value which in accordance with The HKIS Valuation Standards on Properties (First Edition 2005) of the Hong Kong Institute of Surveyors is defined as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

– 27 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION BASIS AND ASSUMPTION

Our valuation of the Property excludes an estimated price inflated or deflated by special terms or circumstances such as atypical financing, sale and leaseback arrangement, special considerations or concessions granted by anyone associated with the sale, or any element of special value.

In the course of our valuation of the Property situated in the PRC, we have prepared our valuation on the basis that transferable land use rights in respect of the Property for its specific term at nominal annual land use fee have been granted and that any premium payable has already been fully paid. We have relied on the information and advice given by the Company and the PRC legal opinion of the legal adviser, HHP Attorneys-at-Law (滙衡律師事務所) dated 24 December 2012, regarding the title to the Property and the interest in the Property. In valuing the Property, we have prepared our valuation on the basis that the owner has enforceable title to the Property and have free and uninterrupted rights to use, occupy or assign the Property for the whole of the unexpired terms as granted.

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

METHODS OF VALUATION

In valuing the Property which is held for development in the PRC; we have adopted Direct Comparison Approach by making reference to comparables sales evidence as available in the relevant market.

In valuing the Property, we have complied with the requirements set out in Chapter 5 and Practice Note 12 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, and The HKIS Valuation Standards on Properties (First Edition 2005) published by the Hong Kong Institutes of Surveyors.

SOURCE OF INFORMATION

We have relied to a very considerable extent on the information given by the Company and the opinion of the PRC legal adviser as to the PRC laws. We have accepted advice given to us on such matters as planning approvals or statutory notices, easements, tenure, identification of Property, particulars of occupancy, development scheme, site and floor areas and all other relevant matters.

Dimension, measurements and areas included in this valuation report are based on the information provided to us and are therefore only approximation. We have had no reason to doubt the truth and accuracy of the information provided to us by the Company which is material to the valuation. We were also advised that no material facts have been omitted from the information supplied.

We would point out that the copies of documents provided to us are mainly compiled in Chinese characters and the transliteration into English represents our understanding of the contents. We would therefore advise the Company to make reference to the original Chinese edition of the documents and consult your legal adviser regarding the legality and interpretation of these documents.

– 28 –

PROPERTY VALUATION REPORT

APPENDIX III

TITLE INVESTIGATION

We have been provided by the Company with copies or extracts of documents. However, we have not searched the original documents to verify ownership or to ascertain any amendments to any documents. We have not been able to cause title search for the Property in the PRC but we have made reference to the copies of the title documents which have been made available to us by the Company. All documents have been used for reference only and all dimensions, measurements and areas are approximate.

SITE INSPECTION

Our DTZ Shanghai Office valuer, Shirlin Qi, has inspected the exterior and, wherever possible, the interior of the Property on 12 December 2012. However, we have not carried out any soil investigations to determine the suitability of the soil conditions and the services etc. for any future development. Our valuation is prepared on the assumption that these aspects are satisfactory and that no extraordinary expenses or delays will be incurred during the construction period.

Unless otherwise stated, we have not been able to carry out detailed on-site measurements to verify the site and floor areas of the Property and we have assumed that the areas shown on the documents handed to us are correct.

CURRENCY

Unless otherwise stated, all sums stated in our valuations are in Renminbi, the official currency of the PRC.

We attach herewith our valuation certificate.

Yours faithfully,

For and on behalf of

DTZ Debenham Tie Leung Limited

Philip C Y Tsang

Registered Professional Surveyor (General Practice) Registered China Real Estate Appraiser

MSc, MRICS, MHKIS

Director

Note: Mr. Philip C Y Tsang is a Registered Professional Surveyor (General Practice) who has over 19 years’ experience in the valuation of properties in the PRC.

for identification purpose only

– 29 –

PROPERTY VALUATION REPORT

APPENDIX III

VALUATION CERTIFICATE

Property to be held for development in the PRC

Property

Description and tenure

Particulars of occupancy

Market Value in existing state as at 16 November 2012

A parcel of land located in 江蘇省南京市雨花台區站中七路 (Zhan Zhong Qi Lu, Yu Hua Tai Qu, Nanjing, Jiangsu Province, the PRC) with site areas of approximately 93,526.4 square metres, which is designated for integrated office, commercial, financial, hotel and cultural use

The Property comprises a piece of office commercial use land with a total site area of approximately 93,526.40 sq m.

According to the Company, the Property has a planned aboveground spaces gross floor area of approximately 380,000 sq m and an additional 160,000 sq m of underground spaces. The Property is designated for integrated office, commercial, financial, hotel and cultural use.

The Property is located at the east of Jinyangdong Street and south of Nanjing South Railway Station in Yu Hua Tai Qu, which is in urban area of Nanjing in Jiangsu Province. Developments nearby are mainly residential development and vacant lands. According to the information provided by the Company, there is no condition imposed as to construction of municipal road, drainage and other facilities for public use.

The Property is currently a vacant land pending for development.

RMB1,185,000,000

(On the assumption that the land purchase consideration has been fully paid and the Real Estate Title Certificate will be issued in due course.)

The land use rights of the Property to be granted for a term of 40 years for office and commercial use.

Notes:

(1) According to Purchase Confirmation Letter of State-owned Land Use Rights issued by 南京市國土資源局 (Nanjing Bureau of Land and Resources) on 29 June 2012, the land use rights of the Property have been confirmed to be purchased by 海門証大濱江置業有限公司 (Haimen Zendai Property Company Limited)* and 嘉聯國際發展有限公司 (Golden Land International Development Limited) at a total consideration of RMB1,169,000,000. 50% of the consideration was payable before 6 July 2012 (in which 20% was counted as deposit). Land Grant Contract would be processed before 10 July 2012. Foreign Capital can postpone the payment date and signing of Stated-owned Construction Land Use Rights Grant Contract by 6 months.

According to the information provided by the Company, a Project Company 南京証大大拇指商業發展有限公司 (Nanjing Zendai Thumb Plaza Development Co., Ltd.)* was established which will be principally engaged in developing the Land Parcel.

According to the information provided by the Company, 海門証大濱江置業有限公司 (Haimen Zendai Property Company Limited)* owns 10% interest and 嘉聯國際發展有限公司 (Golden Land International Development Limited) owns 90% interest.

– 30 –

PROPERTY VALUATION REPORT

APPENDIX III

(2) According to Nanjing State-owned Construction Land Use Rights Public Grant Announcement No. 2012 (04) issued by 南京市國土資源局 (Nanjing Bureau of Land and Resources) on 31 May 2012, the particulars of land grant are as follows.

Lot No. : No. 2012G15 Site Area : 93,526.40 sq m Composite Plot Ratio : 4.1 Land Use : Office, commercial Land Use Term : 40 years Land Premium : RMB1,169,000,000

(3) According to Business Licence No. 320100400052573 dated 6 November 2012, 南京証大大拇指商業發展有限公司 (Nanjing Zendai Thumb Plaza Development Co., Ltd.)* was established on 6 November 2012 with a registered capital of RMB1,200,000,000 with a valid operation period from 6 November 2012 to 5 November 2052.
(4) According to the PRC legal opinion:
(i) 海門証大濱江置業有限公司 (Haimen Property Company Limited) owns 10% interest and 嘉聯國際發展有限公司 (Golden Land International Development Limited) owns 90% interest of 南京証大大拇指商業發展有限公司 (Nanjing Zendai Thumb Plaza Development Co., Ltd.);
(ii) 海門証大濱江置業有限公司 (Haimen Zendai Property Company Limited)* and 嘉聯國際發展有限公司 (Golden Land International Development Limited) has obtained Purchase Confirmation Letter of State-owned Land Use Rights;
(iii) 南京証大大拇指商業發展有限公司 (Nanjing Zendai Thumb Plaza Development Co., Ltd.)* has legally obtained business licence;
(iv) 海門証大濱江置業有限公司 (Haimen Zendai Property Company Limited)* has been paid RMB58,450,000 of land premium on 9 October 2012; and
(v) When 南京証大大拇指商業發展有限公司 (Nanjing Zendai Thumb Plaza Development Co., Ltd.) obtain Certificate for the Use of State-owned Land and fully settled all the land premium, 南京証大大拇指商業發展有限公司 (Nanjing Zendai Thumb Plaza Development Co., Ltd.) has right to develop, occupy, use or other legal method to manage the Property.
(5) The status of the title and grant of major approvals and licenses in accordance with the information provided by the Company and the legal opinion are as follows:

Purchase Confirmation Letter of State-owned Land Use Rights Yes Real Estate Title Certificate No Land Grant Contract No Certificate for the Use of State-owned Land No Nanjing State-owned Construction Land Use Rights Public Grant Announcement Yes Business Licence Yes

– 31 –

GENERAL INFORMATION

APPENDIX IV

1. RESPONSIBILITY STATEMENT

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

2. DIRECTORS’ INTERESTS

As at the Latest Practicable Date, the interests and short positions of the Directors and chief executives of the Company in the shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) which 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 they were taken or deemed to have under such provisions of the SFO); or which were required pursuant to section 352 of the SFO to be entered in the register referred to therein; or which were required to be notified to the Company and the Stock Exchange pursuant to the Model Code for Securities Transactions by Directors of Listed Issuers (“Model Code”) as set out in Appendix 10 to the Listing Rules as adopted by the Company, were as follows:

			Approximate
			percentage of
	Number of Shares/	Capacity and nature	issued share
Name of Director	underlying Shares	of interests	capital
Mr. Wang Fujie (Note 2)	10,000,000 (L)	Beneficial owner	0.08%
Mr. Dai Zhikang	5,753,635,000 (L)	Interests of controlled	46.26%
(“Mr. Dai”) (Note 1)		corporations
Mr. Dai (Note 2)	10,000,000 (L)	Beneficial owner	0.08%
Mr. Zhu Nansong	50,000,000 (L)	Beneficial owner	0.40%
Mr. Wu Yang (Note 2)	30,000,000 (L)	Beneficial owner	0.24%
Mr. Tang Jian	10,000,000 (L)	Beneficial owner	0.08%
Mr. Tang Jian (Note 2)	5,000,000 (L)	Beneficial owner	0.04%
Mr. Lo Mun Lam,	5,000,000 (L)	Beneficial owner	0.04%
Raymond (Note 2)
Mr. Lai Chik Fan (Note 2)	5,000,000 (L)	Beneficial owner	0.04%

(L) denotes long position

– 32 –

GENERAL INFORMATION

APPENDIX IV

Notes:

Mr. Dai was deemed to be interested in an aggregate of 5,753,635,000 Shares held by Giant Glory Assets Limited, Jointex Investment Holdings Limited, Shanghai Zendai Investment Development (Hong Kong) Company Limited and Gold Lucky Investment Holdings Limited, respectively, where Mr. Dai being the director of each of the aforesaid companies, and each of the number of the Shares held is as follows:
(a) 2,326,560,000 Shares were held by Giant Glory Assets Limited which is wholly-owned by Mr. Dai;
(b) 2,932,000,000 Shares were held by Jointex Investment Holdings Limited which is owned as to 85% by Giant Glory Assets Limited;
(c) 455,175,000 Shares are held by Shanghai Zendai Investment Development (Hong Kong) Company Limited which is owned as to 60% by Mr. Dai; and
(d) 39,900,000 Shares are held by Gold Lucky Investment Holdings Limited which is wholly-owned by Mr. Dai.
These Shares represent the Shares to be allotted and issued upon the exercise of share option granted.

Save as disclosed above, as at the Latest Practicable Date, none of the Directors or 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 any such Director was taken or deemed to have under such provisions of the SFO); or which was required, pursuant to section 352 of the SFO, to be entered in the register referred to therein, or which was required, pursuant to the Model Code to be notified to the Company and the Stock Exchange.

At the Latest Practicable Date, except Mr. Zhu Nansong being the director of Jointex Investment Holdings Limited, and save as disclosed above, none of the Directors was a director or employee of a company which had an interest of short position in the shares and underlying shares of the Company which would fall to be disclosed to the Company under the provisions of Division 2 and 3 of Part XV of the SFO.

3. COMPETING BUSINESS

As at the Latest Practicable Date, none of the Directors and his associates had any interests which competes or was likely to compete, either directly or indirectly, with the Company’s business.

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GENERAL INFORMATION

APPENDIX IV

4. SERVICE CONTRACTS

As at the Latest Practicable Date, no Director had a service contract with the Company which is not determinable by the Company within one year without payment of compensation other than statutory compensation.

5. DIRECTORS’ INTEREST IN ASSETS

None of the Directors had any direct or indirect interest in any asset which had been, since 31 December 2011 (being the date to which the latest published audited consolidated financial statements of the Group were made up) and up to the Latest Practicable Date, acquired or disposed of by or leased to or are proposed to be acquired or disposed of by or leased to any member of the Group.

6. DIRECTORS’ INTEREST IN CONTRACTS

There was no contract of significance in relation to the Group’s business to which the Company, its subsidiaries, its fellow subsidiaries or its holding company was a party and in which a Director had a material interest, whether directly or indirectly, subsisting as at the Latest Practicable Date.

7. LITIGATION

Reference is made to the announcements of the Company dated 30 December 2011, 31 May 2012, 5 June 2012, 2 August 2012, 29 November 2012 and 30 November 2012. Zhejiang Fosun Commerce Development Limited, a wholly-owned subsidiary of Fosun International Limited (stock code: 656) has initiated a civil action (the “Claims”) against the relevant parties to protect its pre-emptive rights in the transaction involving the sale of equity interests in and shareholder’s loan of 上海証大五道口房地產開發有限公司 (Shanghai Zendai Wudaokou Property Company Limited, “Shanghai Zendai Wudaokou”) by 上海証大置業有限公司 (Shanghai Zendai Land Company Limited, “Shanghai Zendai Land”) pursuant to the agreement (the “VSD Agreement”) dated 29 December 2011, details of which are disclosed in the announcement and the circular of the Company dated 5 January 2012 and 28 February 2012 respectively. Shanghai Zendai Land, an indirect wholly-owned subsidiary of the Company, and Shanghai Zendai Wudaokou have been named as two of the defendants to the Claims. At the court hearing as regards the Claims on 29 November 2012, the court had awarded no judgment in relation to the Claims. At the final stage of the aforesaid court hearing, the parties to the Claims agreed to participate in mediation held by the court, whereupon the parties shall try to agree on solutions to the Claims and the court will further award a judgement if solutions may be reached. In the event no agreement has been reached by the parties to the Claims as regards the solutions, the court will finally award a judgment. As at the Latest Practicable Date, no agreement has been reached by the parties to the Claims.

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

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GENERAL INFORMATION

APPENDIX IV

8. EXPERTS AND CONSENTS

The following are the qualification of the experts who have been named in this circular or have given opinion or advice which are contained in this circular:

Name	Qualification
BDO Limited	Certified Public Accountants
DTZ Debenham Tie Leung Limited	An independent valuer
HHP Attorneys-at-Law	A PRC legal adviser

The above experts have given and have not withdrawn its written consent to the issue of this circular with the inclusion of its letter and reference to its name in the form and context in which it appears.

As at the Latest Practicable Date, the above experts did not have any shareholding in any member of the Group or the right (whether legally enforceable or not) to subscribe for or to nominate persons to subscribe for securities in any member of the Group, or any interests, directly or indirectly, in any assets which had been, since 31 December 2011, being the date to which the latest published audited accounts of the Company were made up, acquired, disposed of or leased to any member of the Group, or were proposed to be acquired, disposed of or leased to any member of the Group.

9. MATERIAL CONTRACTS

The following contracts (not being contracts entered into in the ordinary course of business) were entered into by members of the Group (including any company which will become a subsidiary of the Company by reason of an acquisition which has been agreed or proposed since 31 December 2011, being the date to which the latest audited consolidated financial statements of the Company have been made up) within two years immediately preceding the Latest Practicable Date and are or may be material:

(a) the VSD Agreement dated 29 December 2011 entered into among Shanghai Zendai Land, 浙江嘉和實業有限公司 (Zhejiang Jiahe Industrial Co., Ltd., “Greentown Jiahe”) and 上海長燁投資管理諮詢有限公司 (Shanghai Changye Investment Management Co., Ltd, “Shanghai Changye”) in relation to, among others, the disposal by Shanghai Zendai Land to Shanghai Changye of the entire equity interest in Shanghai Zendai Wudaokou and the shareholder’s loan payable to Shanghai Zendai Land by Shanghai Zendai Wudaokou, details of which are disclosed in the circular of the Company dated 28 February 2012;
(b) the agreement dated 29 December 2011 entered into between Shanghai Zendai Wudaokou and 上海磐石投資有限公司 (Shanghai Panshi Investment Co., Ltd.) in relation to the transfer of the entire equity interest in 上海盤石投資管理有限公司 (Shanghai Panshi Investment and Management Company Limited), details of which are disclosed in the announcement of the Company dated 5 January 2012;

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GENERAL INFORMATION

APPENDIX IV

(c) the first supplemental agreement dated 9 January 2012 entered into among Shanghai Zendai Land, Greentown Jiahe and Shanghai Changye to supplement the VSD Agreement, details of which are disclosed in the circular of the Company dated 28 February 2012;
(d) the second supplemental agreement dated 15 February 2012 entered into between Shanghai Zendai Land and Shanghai Changye to supplement the VSD Agreement, details of which are disclosed in the circular of the Company dated 28 February 2012;
(e) the land grant contract dated 13 September 2012 entered into between Changchun Land Bureau and 吉林省君誠房地產開發有限公司 (Jilin Juncheng Property Development Company Limited)*, an indirectly wholly-owned subsidiary of the Company, in relation to the acquisition of land use rights of a parcel of land located in Jingyue Economic Development Zone, Changchun City, Jilin Province, the PRC, details of which are disclosed in the announcement of the Company dated 17 September 2012;
(f) the agreement dated 9 October 2012 entered into between Shanghai Zendai Land and 杉杉控股有限公司 (Shan Shan Holdings Co., Ltd., “Shan Shan Holdings”) in relation to the disposal of 30% of the registered capital of 中科廊坊科技谷有限公司 (Zhongke Langfang Technology Valley Co., Ltd.) by Shanghai Zendai Land to Shan Shan Holdings, details of which are disclosed in the announcement of the Company dated 9 October 2012;
(g) the Framework Agreement;
(h) the cooperation agreement dated 22 November 2012 entered into between the Company and 煙台開發區宏遠物業有限公司 (Yantai Hong Yuan Property Company Limited)* in relation to the establishment of a project company for the development of a parcel of land located in Yantai Development Zone, Shandong Province, the PRC, details of which are disclosed in the announcement of the Company dated 22 November 2012; and
(i) the Supplemental Agreement.

10. MISCELLANEOUS

(a) The secretary of the Company and the qualified accountant of the Company is Mr. Wong Ngan Hung, who is a member of Hong Kong Institute of Certified Public Accountants.
(b) The registered office of the Company is situated at Canon’s Court, 22 Victoria Street, Hamilton HM12, Bermuda. The head office and principal place of business of the Company in Hong Kong is situated at Unit 6108, 61/F., The Centre, 99 Queen’s Road Central, Hong Kong.

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GENERAL INFORMATION

APPENDIX IV

(c) The Hong Kong branch share registrar and transfer office of the Company is Tricor Secretaries Limited at Level 26, Tesbury Centre, 28 Queen’s Road East, Wanchai, Hong Kong.
(d) The English texts of this circular and the accompanying proxy form shall prevail over the Chinese texts in case of inconsistency.

11. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at Unit 6108, 61/F., The Centre, 99 Queen’s Road Central, Hong Kong during normal business hours (except Saturdays and public holidays) from the date of this circular up to and including 7 January 2013:

(a) the memorandum of association and the bye-laws of the Company;
(b) the annual reports of the Company for the two financial years ended 31 December 2011;
(c) the account accountants’ report from BDO Limited in respect of the financial information of Nanjing Zendai, the text of which is set out in Appendix II to this circular;
(d) the letter and valuation certificate relating to the Land Parcel prepared by DTZ Debenham Tie Leung Limited, the texts of which are set out in Appendix III to this circular;
(e) the written consents referred to in the paragraph under the heading “Experts and consents” in this appendix;
(f) the material contracts referred to in the paragraph under the heading “Material contracts” in this appendix; and
(g) a copy of the circular of the Company dated 28 February 2012 and this circular.

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AI assistant

Snack Empire Holdings Limited — Proxy Solicitation & Information Statement 2012

50208_rns_2012-12-24_8ce1b781-0814-4517-85d0-6d1f419d51de.pdf

MAJOR TRANSACTIONS

DEFINITIONS

DEFINITIONS

DEFINITIONS

Executive Directors:

Registered office:

Head office and principal place

Non-executive Directors:

Independent non-executive Directors:

24 December 2012

MAJOR TRANSACTIONS

INTRODUCTION

LETTER FROM THE BOARD

THE FRAMEWORK AGREEMENT

Dates

Parties

LETTER FROM THE BOARD

Details of the Disposal

Consideration

Share of profit/loss

Entrusted Loan

Adjustment to amount of Sale Interest and Entrusted Loan

Repurchase of Sale Interest

Conditions precedent to the Framework Agreement

INFORMATION ON THE PURCHASER

INFORMATION ON NANJING ZENDAI

REASONS FOR AND BENEFITS OF THE ENTERING INTO OF THE FRAMEWORK AGREEMENT

EFFECTS ON EARNINGS AND ASSETS AND LIABILITIES OF THE GROUP

MANAGEMENT DISCUSSION AND ANALYSIS ON NANJING ZENDAI

Turnover

Income tax expense

Profit/loss for the period

Liquidity and financial resources

Charges on assets

Gearing ratio

Material acquisitions and disposals of subsidiaries and affiliated companies

Future plans for material investments

Significant investments held

Contingent liabilities

Capital Structure

Exchange risk and hedging

Staff and remuneration policies

Segment information

LISTING RULES IMPLICATIONS

RECOMMENDATION

ADDITIONAL INFORMATION

1. FINANCIAL INFORMATION OF THE GROUP

2. INDEBTEDNESS STATEMENT

Borrowings

Securities

Contingent liabilities

3. WORKING CAPITAL

4. MATERIAL ADVERSE CHANGE

5. FINANCIAL AND TRADING PROSPECTS OF THE GROUP

APPENDIX I

OPINION

I. FINANCIAL INFORMATION

APPENDIX II

II. NOTES TO THE FINANCIAL INFORMATION

1. CORPORATE INFORMATION AND BASIS OF PRESENTATION

2. ADOPTION OF NEW OR AMENDED HKFRSs

3. BASIS OF PREPARATION

(a) Statement of compliance

(b) Basis of measurement

(c) Functional and presentation currency

4. SIGNIFICANT ACCOUNTING POLICIES

(a) Financial Instrument and equity instrument

(ii) Impairment loss on financial assets

(iii) Effective interest method

4. SIGNIFICANT ACCOUNTING POLICIES – Continued

(a) Financial Instrument and equity instrument – Continued

(iv) Paid-up capital

(v) Derecognition

(b) Foreign currency

(c) Provisions and contingent liabilities

(d) Related parties

4. SIGNIFICANT ACCOUNTING POLICIES – Continued

Snack Empire Holdings Limited Proxy Solicitation & Information Statement 2012