Snack Empire Holdings Limited — Proxy Solicitation & Information Statement 2014

Dec 22, 2014

THIS SUPPLEMENTAL 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 supplemental 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 supplemental 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 supplemental 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)*

SUPPLEMENTAL CIRCULAR

MANDATE FOR POSSIBLE MAJOR TRANSACTION IN RESPECT OF THE POSSIBLE ACQUISITION OF THE SALE SHARES AND THE SALE LOAN

Financial adviser to the Company

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A letter from the Board is set out on pages 2 to 4 of this circular.

* for identification purpose only

22 December 2014

CONTENTS

			Page
Definitions . .	. . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
Letter from the Board. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .			2
Appendix I	–	Financial information of the Target Company . . . . . . . . . . .	5
Appendix II	−	Unaudited pro forma financial information of the
		Enlarged Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	17
Appendix III	−	General information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	24

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DEFINITIONS

Capitalised terms used in this Supplemental Circular shall have the meanings as those defined in the Circular unless the context requires otherwise. Moreover, in this Supplemental Circular, the expressions below have the following meanings unless the context requires otherwise:

“Circular”

the circular dated 7 July 2014 issued by the Company to the Shareholders in respect of, among other things, the Possible Acquisition

“Latest Practicable Date”

18 December 2014, being the latest practicable date prior to the printing of this Supplemental Circular for ascertaining certain information contained herein

“Supplemental Circular”

the supplemental circular issued by the Company for the purpose of providing the Shareholders with further information concerning the Target Company and the Enlarged Group

For the purpose of this circular, unless otherwise stated, conversion of RMB into HK$ is based on the approximate exchange rate of RMB1.00 to HK$1.25. 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.

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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) Ms. Li Li Hua Mr. Zuo Xingping Mr. Tang Jian

Registered office:

Canon’s Court 22 Victoria Street Hamilton HM12 Bermuda

Non-executive Directors:

Mr. Xu Xiaoliang Mr. Gong Ping

Independent non-executive Directors:

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

Head office and principal place of business in Hong Kong:

Unit 6108

61/F., The Center 99 Queen’s Road Central Hong Kong

22 December 2014

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

Dear Sir or Madam,

MANDATE FOR POSSIBLE MAJOR TRANSACTION IN RESPECT OF THE POSSIBLE ACQUISITION OF THE SALE SHARES AND THE SALE LOAN

INTRODUCTION

Reference is made to the announcements of the Company dated 23 June 2014 and 24 November 2014, and the Circular issued by the Company on 7 July 2014 in respect of, among other things, the Possible Acquisition. The Possible Acquisition was approved by the Shareholders at the SGM held on 23 July 2014.

On 24 November 2014, the Company announced that the PRC Subsidiary won the Tender for the Sale Shares and the Sale Loan at the consideration of RMB1,043.21 million (equivalent to approximately HK$1,304.01 million). Accordingly, the PRC Subsidiary has entered into the

* for identification purpose only

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LETTER FROM THE BOARD

Share Transfer Agreement with the Vendor on 20 November 2014, and the balance of the consideration (i.e. RMB943.21 million, equivalent to approximately HK$1,179.01 million, being the consideration after deducting the earnest money previously paid of RMB100 million, equivalent to approximately HK$125.00 million) has been paid by the PRC Subsidiary. Completion of the Share Transfer Agreement took place on 20 November 2014.

The purpose of this Supplemental Circular is to provide the Shareholders with further information concerning the Target Company and the Enlarged Group.

SUPPLEMENTAL CIRCULAR

As stated in the Circular, as a potential bidder at the Tender, the Company did not yet control the Target Company and did not have sufficient access to the Target Company’s financial systems to enable the Company’s auditors to conduct an audit on the Target Company’s financial statements in accordance with HKFRS for the purpose of preparing the accountant’s report of the Target Company nor does it have access to certain substantive confidential non-public information relating to the Target Company which is required by the Listing Rules to be provided in the Circular in respect of the Enlarged Group. Accordingly, the Company had applied for, and the Stock Exchange has granted the waiver from strict compliance with Rule 14.67(6)(a)(i) and Rule 14.67(6)(a)(ii) of the Listing Rules.

To fulfil its disclosure obligations under the Listing Rules, the Company set out the following information in this Supplemental Circular to supplement the information already disclosed in the Circular:

• i. the accountants’ report of the Target Company prepared in accordance with HKFRS for the relevant period commencing on the date of the establishment of the Target Company, i.e. 15 November 2013 to 30 June 2014 (set out in Appendix I to this Supplemental Circular); and

• ii. an unaudited pro forma statement of the assets and liabilities of the Company combined with the assets and liabilities of the Target Company being acquired on the same accounting basis (collectively referred to as the “Enlarged Group”) (set out in Appendix II to this Supplemental Circular).

Apart from the information disclosed in this Supplemental Circular and the announcement of the Company dated 24 November 2014 regarding the bidding results of the Tender, and the announcement of the Company dated 8 August 2014 regarding a profit warning of the interim results for the six months ended 30 June 2014, there has been no material change to the information previously disclosed in the Circular. Shareholders and potential investors should note that the despatch of the Supplemental Circular will not affect the implementation of the Possible Acquisition and the results.

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LETTER FROM THE BOARD

ADDITIONAL INFORMATION

Your attention is drawn to the information set out in the appendices of this Supplemental Circular.

By order of the Board

SHANGHAI ZENDAI PROPERTY LIMITED Dai Zhikang

Chairman

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

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

ACCOUNTANT’S REPORT

Accountant’s report on the Target Company

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22 December 2014

The 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 of 南京五道口置業有限公司 (Nanjing Wudaokou Property Limited) (“Target Company”), including the statements of financial position of the Target Company as at 31 December 2013 and 30 June 2014, the statements of comprehensive income, the statements of changes in equity and the statements of cash flows for the period from 15 November 2013 (the date of establishment of the Target Company) to 31 December 2013 and for the six months ended 30 June 2014 (the “Relevant Periods”) of the Target Company and notes thereto (hereinafter collectively referred to as the “Financial Information”), prepared on the basis of presentation set forth in note 3 of Section II below, for inclusion in the supplemental circular issued by Shanghai Zendai Property Limited (the “Company”) dated 22 December 2014 (the “Supplemental Circular”) in connection with the possible acquisition of the entire registered capital and shareholder’s loan of the Target Company (the “Possible Acquisition”). Upon completion of the Possible Acquisition, the effective interest of the Company in the Target Company will be 80%.

The Target Company was incorporated in the People’s Republic of China (the “PRC”) on 15 November 2013 under the Laws of PRC with limited liability and a capital of RMB10 million. During the Relevant Period, RMB10 million was paid as capital.

The Target Company is principally engaged in the property development in the PRC. The Target Company has not carried on any business since the date of establishment. The Target Company has adopted 31 December as its financial year end date. The statutory financial statements of the Target Company for the period from 15 November 2013 (date of

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

establishment) to 31 December 2013 and the financial statements for the six months ended 30 June 2014 were prepared in accordance with the relevant accounting principles and financial regulations applicable to enterprises in the PRC.

For the purpose of this report, the sole director of the Target Company has prepared the financial statements of the Target Company for the Relevant Periods (the “Underlying Financial Statements”) in accordance with the basis of presentation set out in note 3 of Section II below and 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 (the “HKICPA”). The Financial Information set out in this report has been prepared by the sole director based on the Underlying Financial Statements with no adjustments made thereon.

The sole director of the Target Company is responsible for the preparation and the true and fair presentation of the Financial Information in accordance with the basis of presentation set out in note 3 of Section II below, 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 (the “Listing Rules”), and for such internal control as the sole director of the Target Company determines is necessary to enable the preparation of the Financial Information that is free from material misstatement, whether due to fraud or error.

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 Target 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, gives a true and fair view of the state of affairs of the Target Company as at 31 December 2013 and 30 June 2014 and of the Target Company’s losses and cash flows for the Relevant Periods in accordance with HKFRSs.

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

I. FINANCIAL INFORMATION

STATEMENTS OF COMPREHENSIVE INCOME

Notes Other income and gains 5 Administrative expenses (Loss)/profit before tax expenses 6 Tax expenses 7 (Loss)/profit for the period Other comprehensive income Item that may be reclassified subsequently to profit or loss: Exchange differences arising on translation of foreign operation Other comprehensive income for the period, net of tax Total comprehensive income for the period	Period from 15 November 2013 (date of establishment) to 31 December 2013 HK$’000 1 (6) (5) – (5) 43 43 38	Six months ended 30 June 2014 HK$’000 15 (3) 12 – 12 (100) (100) (88)

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

STATEMENTS OF FINANCIAL POSITION

Notes Current asset Properties under development and for sales 8 Cash and cash equivalents Current liability Amount due to holding company 9 Net current assets and net assets CAPITAL AND RESERVES Paid-up capital 10 Reserves Total equity	At 31 December 2013 HK$’000 – 12,687 12,687 – 12,687 12,649 38 12,687	At 30 June 2014 HK$’000 875,721 132 875,853 863,254 12,599 12,649 (50) 12,599

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

STATEMENTS OF CHANGES IN EQUITY

At 15 November 2013 (date of establishment) Loss for the period Exchange differences arising on translation of foreign operation Total comprehensive income for the period Capital contribution At 31 December 2013 and 1 January 2014 Profit for the period Exchange differences arising on translation of foreign operation Total comprehensive income for the period At 30 June 2014	Paid-up capital HK$’000 – – – – 12,649 12,649 – – – 12,649	Foreign exchange reserve HK$’000 – – 43 43 – 43 – (100) (100) (57)	Accumulated (loss)/profit HK$’000 – (5) – (5) – (5) 12 – 12 7	Total HK$’000 – (5) 43 38 12,649 12,687 12 (100) (88) 12,599

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

STATEMENTS OF CASH FLOWS

Cash flows from operating activities (Loss)/profit before tax expenses Adjustment for bank interest income Operating loss before working capital changes Increase in properties under development and for sales Cash used in operations Interest received Net cash used in operating activities Cash flows from financing activities Increase in amount due to holding company Paid-up capital Net cash generated from financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Effect of foreign exchange rate changes Cash and cash equivalents at end of period	Period from 15 November 2013 (date of establishment) to 31 December 2013 HK$’000 (5) (1) (6) – (6) 1 (5) - - - - - - - - - - - - - - - - – 12,649 12,649 12,644 – 43 12,687	Six months ended 30 June 2014 HK$’000 12 (15) (3) (875,721) (875,724) 15 (875,709) - - - - - - - - - - - - - - - - - - - 863,254 – 863,254 (12,455) 12,687 (100) 132

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

II. NOTES TO THE FINANCIAL INFORMATION

1. CORPORATE INFORMATION

The Target Company is a limited liability company incorporated in the PRC on 15 November 2013. Its registered office is located at No. 550, Zhongshan North Road, Gulou District, Nanjing, Jiangsu Province, the PRC. The Target Company has not commenced any business since the date of establishment.

The sole director considers that the Target Company’s immediate and ultimate holding company was 南京臨 江老城改造建設投資有限公司, a limited liability company established in the PRC.

2. ADOPTION OF NEW OR AMENDED HKFRSS

During the Relevant Period, the Target Company has adopted all the new and amended HKFRSs issued by the HKICPA which are relevant to the Target Company and effective for the reporting period beginning on or after 1 January 2014.

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 Target Company.

The sole director of the Target Company anticipates that all of the pronouncements will be adopted in the Target Company’s accounting policy for the first period beginning after the effective date of the pronouncement. The sole director of the Target Company are currently assessing the impact of the new and amended HKFRSs upon initial application. So far, the sole director of the Target 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 and Listing Rules.

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

4. SIGNIFICANT ACCOUNTING POLICIES

(a) Properties under development and for sale

Completed properties and properties under development held for sale are stated at the lower of cost and net realisable value. Cost includes the cost of land, development expenditure, borrowing costs capitalised and other attributable expenses. Net realisable value is determined by prevailing market conditions.

(b) Financial Instrument

(i) Financial Assets

The Target 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.

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

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 Target 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) Financial liability at amortised cost

The Target Company’s financial liability including amount due to holding company, are initially measured at fair value, net of directly attributable costs incurred for the acquisition or issue of the financial liability and are subsequently measured at amortised cost, using the effective interest method. The related interest expense is recognised within “finance costs” in profit or loss.

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

(iv) Effective interest method

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

(v) Paid-up capital

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

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

(vi) Derecognition

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

(c) Revenue recognition

Interest income is recognised as it accrues using the effective interest method.

(d) Income taxes

Income taxes for the period comprise current tax and deferred tax.

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

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

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

(e) Foreign currency

Transaction entered into by the Target Company in currencies other than the currency of the primary economic environment in which they operate (the “functional currency”) are recorded at the rates ruling when the transaction 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 Target 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 transaction took place are used. All assets and liabilities of the Target Company are translated at the rate ruling at the end of reporting period. Exchange differences arising, if any, are recognised in other comprehensive income.

(f) Provisions and contingent liabilities

Provisions are recognised for liabilities of uncertain timing or amount when the Target Company has a legal or constructive obligation arising as a result of a past event, which 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.

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

(g) Related parties

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

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

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

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

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

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

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

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

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

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

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

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

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. OTHER INCOME AND GAINS

It represented bank interest income from bank deposits.

6. (LOSS)/PROFIT BEFORE INCOME TAX EXPENSES

No auditors’ remuneration and staff costs were incurred during the Relevant Period.

No compensation or any kind of benefit was paid to the Target Company’s sole director in respect of his services during the Relevant Period. There was no arrangement under which the sole director waived or agreed to waive any remuneration during the Relevant Period.

7. TAX EXPENSES

No provision for profits tax has been provided as the Target Company did not have any estimated assessable profit for the Relevant Period.

At the reporting date, there were no material unrecognised deferred tax assets or liabilities arising from any taxable temporary difference.

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

8. PROPERTIES UNDER DEVELOPMENT AND FOR SALES

Properties under development and for sales which are expected to be recovered in more than twelve months after the end of reporting period are classified under current assets as they are expected to be realised in the Group’s normal operating cycle. The amounts of properties under development and for sales that are expected by management to be realised after more than twelve months from the end of reporting period are HK$875,721,000 (2013: HK$ Nil).

9. AMOUNT DUE TO HOLDING COMPANY

The amount is unsecured, interest-free and repayable on demand.

10. PAID-UP CAPITAL

(a) Paid-up capital

At 15 November 2013 (date of establishment) Paid-up capital At 31 December 2013, 1 January 2014 and 30 June 2014	HK$’000 – 12,649
	12,649

The Target Company was established on 15 November 2013 with registered capital and paid-up capital of RMB10,000,000 (equivalent to approximately HK$12,649,000).

(b) Capital management policy

The Target Company’s objectives when managing capital are to safeguard the Target 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 Target 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 Target Company at 30 June 2014 was HK$12,649,000.

11. FINANCIAL RISK MANAGEMENT

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

Interest rate risk

The Target 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 Target 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.

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APPENDIX I FINANCIAL INFORMATION OF THE TARGET COMPANY

12. CATEGORIES OF FINANCIAL ASSETS AND LIABILITIES

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

Financial assets Loans and receivables: Cash and bank balances Financial liability Amount due to the holding company	At 31 December 2013 HK$’000 12,687 –	At 30 June 2014 HK$’000 132
		863,254

13. SUBSEQUENT FINANCIAL STATEMENTS

No audited financial statements have been prepared for the Target Company in respect of any period subsequent to 30 June 2014.

Yours faithfully,

BDO Limited

Certified Public Accountants

Chan Wing Fei Practising Certificate no. P05443 Hong Kong, 22 December 2014

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX II

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

Introduction

The following unaudited pro forma consolidated statement of financial position of the Enlarged Group as at 30 June 2014 (the “Unaudited Pro Forma Financial Information”) has been prepared in accordance with Rule 4.29 of the Listing Rules for the purpose of illustrating the effect on the financial position of the Enlarged Group as if the acquisition of entire registered capital and shareholder’s loan of the Target Company by the Group (the “Possible Acquisition”) had been completed on 30 June 2014. The Unaudited Pro Forma Financial Information has been prepared for illustrative purpose only, and because of its nature, it may not give a true picture of the Enlarged Group’s financial position following completion of the Acquisition.

The Unaudited Pro Forma Financial Information has been prepared based on:

• (a) the unaudited condensed consolidated statement of financial position of the Group as at 30 June 2014 which has been extracted from the interim report of the Group for the six months ended 30 June 2014;

• (b) the audited statement of financial position of the Target Company as at 30 June 2014 which has been extracted from Appendix I to this Supplemental Circular; and

• (c) after taking into account of the unaudited pro forma adjustments relating to the Possible Acquisition that are (i) directly attributable to the Possible Acquisition and not relating to future events or decisions; and (ii) factually supportable.

The Unaudited Pro Forma Financial Information is based on a number of assumptions, estimates and uncertainties. Accordingly, the Unaudited Pro Forma Financial Information does not purport to describe the actual financial position of the Enlarged Group that would have been attained had the Possible Acquisition been completed on 30 June 2014. The Unaudited Pro Forma Financial Information does not purport to predict the future financial position of the Enlarged Group.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX II

A. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP (continued)

Non-current assets Property, plant and equipment Investment properties Payment for leasehold land held for own use under operating leases Goodwill Interests in associates Interest in joint ventures Available-for-sale investments Current assets Properties under development and for sales Inventories Trade and other receivables Deposits for property development Amounts due from associates Amount due from a joint ventures Available-for-sale investments Amounts due from related companies Amount due from minority owners of subsidiaries Pledged bank deposits Tax prepayments Entrusted loans receivables Cash and cash equivalents Current liabilities Trade, notes and other payables Receipts in advance from customers Amount due to an associate Amount due to a joint venture Amounts due to related companies Amount due to minority owners of subsidiaries Amount due to existing shareholder of the Target Company Bank loans Tax payables Net current assets Total assets less current liabilities	The Group HK$’000 Note 1 697,781 2,834,680 636,561 37,322 256,942 1,373,335 67,183	The Target Company Pro forma adjustment Unaudited pro forma adjusted Enlarged Group HK$’000 HK$’000 HK$’000 Note 2 Note 3, 4, 5 – 697,781 – 2,834,680 – 636,561 – 37,322 – 256,942 – 1,373,335 – 67,183 – 5,903,804 - - - - - - - - - - - - - - - - - - - - - - 875,721 437,848 9,579,996 – 2,667 – (125,929) 525,500 – 10,726 – 1,256,225 – 1,039,182 – 2,645 – 16,322 – 31,734 – 1,129,685 – 131,819 – 125,929 132 1,352,763 875,853 15,205,193 - - - - - - - - - - - - - - - - - - - - - - – 1,187,772 2,282,899 – 1,380,243 – 152 – 777,610 – 14,856 – 573,037 863,254 (863,254) – – 2,791,679 – 903,392 863,254 8,723,868 - - - - - - - - - - - - - - - - - - - - - - 12,599 6,481,325 12,599 12,385,129 - - - - - - - - - - - - - - - - - - - - - -	Unaudited pro forma adjusted Enlarged Group HK$’000 697,781 2,834,680 636,561 37,322 256,942 1,373,335 67,183
	5,903,804 - - - - - - - - - - - 8,266,427 2,667 651,429 10,726 1,256,225 1,039,182 2,645 16,322 31,734 1,129,685 131,819 125,929 1,352,631
	14,017,421 - - - - - - - - - - - 1,095,127 1,380,243 152 777,610 14,856 573,037 2,791,679 903,392
	7,536,096 - - - - - - - - - - -		8,723,868 - - - - - - - - - - -
	6,481,325		6,481,325
	12,385,129 - - - - - - - - - - -		12,385,129 - - - - - - - - - - -

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX II

Non-current liabilities Amount due to minority owner of a subsidiary Bank loans Deferred tax liabilities Other payables Total net assets Capital and reserves attributable to owners of the Company Share capital Reserves Equity attributable to owners of the Company Non-controlling interests Total equity	The Group HK$’000 Note 1 790,000 4,338,874 578,471 157,273	The Target Company Pro forma adjustment Unaudited pro forma adjusted Enlarged Group HK$’000 HK$’000 HK$’000 Note 2 Note 3, 4, 5 – 790,000 – 4,338,874 – 578,471 – 157,273 – 5,864,618 - - - - - - - - - - - - - - - - - - - - - - 12,599 – 6,520,511 12,649 (12,649) 297,587 (50) 50 5,825,122 – 6,122,709 – 397,802 12,599 6,520,511	Unaudited pro forma adjusted Enlarged Group HK$’000 790,000 4,338,874 578,471 157,273
	5,864,618 - - - - - - - - - - -		5,864,618 - - - - - - - - - - -
	6,520,511		6,520,511
	297,587 5,825,122
	6,122,709 397,802		6,122,709 397,802
	6,520,511		6,520,511

Notes:

• (1) The amounts are extracted from the unaudited condensed consolidated statement of financial position of the Group as at 30 June 2014 as set out in the interim report published on 23 September 2014 of the Group for the six months ended 30 June 2014;

Assuming the Possible Acquisition was completed on 30 June 2014:

• (2) The amounts are extracted from the audited statement of financial position of the Target Company as at 30 June 2014 as set out in the accountant’s report of the Target Company in Appendix I to this Supplemental Circular.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX II

• (3) Under Hong Kong Financial Reporting Standards, the Possible Acquisition was accounted for as an acquisition of assets and liabilities as the Target Company proposed to be acquired by the Group does not constitute a business. Assuming that the Possible Acquisition is completed on 30 June 2014, an analysis of the additional cost being allocated to the assets and liabilities of the Target Company as at 30 June 2014 after the pro forma adjustment as disclosed in this circular are as follows:

Properties under development and for sales Cash and cash equivalents Amount due to existing shareholder of the Target Company	The Target Company HK$’000 Note 2 875,721 132 (863,254) 12,599	Pro forma adjustment HK$’000 Note 4 – – 863,254 863,254	Cost allocation adjustment HK$’000 437,848 – 437,848*	Carrying values of assets and liabilities HK$’000 1,313,569 132 –
				1,313,701

• The consideration was RMB1,043,210,000 (equivalent to approximately HK$1,313,701,000) (the “Consideration”), of which, an earnest money amounting to RMB100,000,000 (equivalent to approximately HK$125,929,000) was paid by cash, as set out in the section headed “INTRODUCTION’ under Letter from the Board of the Supplemental Circular.

• The amount represents the difference between the Consideration and the sum of the net assets of the Target Company and the shareholder’s loan to be acquired by the Group amounting to HK$875,853,000.

• (4) The adjustment represents the acquisition of shareholder’s loan pursuant to the Share Transfer Agreement (as defined in the Circular dated on 7 July 2014).

• (5) The adjustment represents the prepayment and accrual of the Consideration and elimination of the paid-up capital and pre-acquisition of reserves of the Target Company.

• (6) No adjustment has been made to reflect any operation results or other transactions of the Group and Target Company entered subsequent to 30 June 2014.

For the purpose of presentation of the unaudited pro forma consolidated statement of financial position, Renminbi is translated into Hong Kong dollars at the approximate exchange rate of RMB1 to HK$1.2593 on 30 June 2014.

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APPENDIX II UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

B. REPORT FROM THE REPORTING ACCOUNTANT ON UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP INCLUDED IN A SUPPLEMENTAL CIRCULAR

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

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INDEPENDENT REPORTING ACCOUNTANT’S ASSURANCE REPORT ON THE COMPILATION OF UNAUDITED PRO FORMA FINANCIAL INFORMATION INCLUDED IN A SUPPLEMENTAL CIRCULAR

TO THE DIRECTORS OF SHANGHAI ZENDAI PROPERTY LIMITED

We have completed our assurance engagement to report on the compilation of unaudited pro forma financial information of Shanghai Zendai Property Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”), and 南京五道口置業有限公司 (the “Target Company”) to be acquired by the Company (collectively referred to as the “Enlarged Group”) prepared 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 assets and liabilities as at 30 June 2014 and related notes (the “Unaudited Pro Forma Financial Information”) as set out on pages 17 to 20 of the Company’s supplemental circular dated 22 December 2014 (the “Supplemental Circular”), in connection with the possible acquisition of the entire registered capital and shareholder’s loan of the Target Company (the “Possible Acquisition”) by the Company. The applicable criteria on the basis of which the Directors have compiled the Unaudited Pro Forma Financial Information are described in Appendix II set out on page 17 of the Company’s Supplemental Circular dated 22 December 2014.

The Unaudited Pro Forma Financial Information has been compiled by the Directors to illustrate the impact of the Possible Acquisition on the Group’s financial position as at 30 June 2014 as if the Possible Acquisition had taken place at 30 June 2014. As part of this process, information about the Group’s financial position has been extracted by the Directors from the Group’s condensed consolidated financial statements for the six months ended 30 June 2014, on which an interim report has been published.

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX II

Directors’ Responsibility for the Unaudited Pro Forma Financial Information

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

Reporting Accountant’s Responsibilities

Our responsibility is to express an opinion, as required by Rule 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 complies with ethical requirements and plans and performs procedures to obtain reasonable assurance about whether the Directors have compiled the Unaudited Pro Forma Financial Information in accordance with Rule 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 Supplemental Circular is solely to illustrate the impact of a significant event or transaction on unadjusted financial information of the Group as if the event had occurred or the transaction had been undertaken at an earlier date selected for purposes of the illustration. Accordingly, we do not provide any assurance that the actual outcome of the Possible Acquisition at 30 June 2014 would have been as presented.

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:

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UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE ENLARGED GROUP

APPENDIX II

• 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 Group, the event or transaction in respect of which the Unaudited Pro Forma Financial Information has been compiled, and other relevant engagement circumstances.

The engagement also involves evaluating the overall presentation of the Unaudited Pro Forma Financial Information.

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

Opinion

In our opinion:

• (a) the Unaudited Pro Forma Financial Information has been properly compiled by the Directors of the Company on the basis stated;

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

• (c) the adjustments are appropriate for the purposes of the Unaudited Pro Forma Financial Information as disclosed pursuant to Rule 4.29(1) of the Listing Rules.

BDO Limited

Certified Public Accountants

Hong Kong, 22 December 2014

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GENERAL INFORMATION

APPENDIX III

1. RESPONSIBILITY STATEMENT

This Supplemental 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 Enlarged Group. The Directors, having made all reasonable enquiries, confirm that to the best of their knowledge and belief, the information contained in the Supplemental 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 the Supplemental Circular misleading.

2. EXPERT AND CONSENT

The following is the qualification of the expert who has been named in the Supplemental Circular or has given opinion or advice which are contained in the Supplemental Circular:

Name

Qualification

BDO Limited Certified Public Accountants

The above expert has given and has not withdrawn its written consent to the issue of the Supplemental Circular with the inclusion of its letter and/or reference to its name in the form and context in which it appears.

As at the Latest Practicable Date, the above expert did not have any shareholding in any member of the Enlarged 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 Enlarged Group, or any interests, directly or indirectly, in any assets which had been, since 31 December 2013, being the date to which the latest published audited financial statements of the Enlarged Group were made up, acquired, disposed of or leased to any member of the Enlarged Group, or were proposed to be acquired, disposed of or leased to any member of the Enlarged Group.

3. 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 Center, 99 Queen’s Road Central, Hong Kong.

• (c) The Hong Kong branch share registrar and transfer office of the Company is Tricor Secretaries Limited at Level 22, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong.

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GENERAL INFORMATION

APPENDIX III

• (d) The English texts of the Supplemental Circular form shall prevail over the Chinese texts in case of inconsistency.

4. DOCUMENTS AVAILABLE FOR INSPECTION

Copies of the following documents are available for inspection at Unit 6108, 61/F., The Center, 99 Queen’s Road Central, Hong Kong during normal business hours (except Saturdays and public holidays) for the period of 14 days from the date of this Supplemental Circular:

• (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 2013;

• (c) the accountants’ report on the Target Company prepared by BDO Limited, the text of which is set out in Appendix I to this Supplemental Circular;

• (d) the accountants’ report on the unaudited pro forma financial information of the Enlarged Group prepared by BDO Limited, the text of which is set out in Appendix II to this Supplemental Circular;

• (e) the written consent referred to in the paragraph under the heading “Expert and consent” in this appendix; and

• (f) a copy of the Supplemental Circular.

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