APPENDIX VIII STATUTORY AND GENERAL INFORMATION

A. RESPONSIBILITY STATEMENT

1. This circular, for which the Joint Provisional Liquidators 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 (other than those in relation to the Target Group, the Proposed

Directors, Mr. Yang and Mr. Zhang). The Joint Provisional Liquidators, having

made all reasonable enquiries, confirm that to the best of their knowledge, this

circular (other than those in relation to the Target Group, the Proposed Directors,

Mr. Yang and Mr. Zhang) have been arrived at after due and careful

consideration, and there are no other matters the omission of which would

make any statement herein or this circular misleading. For the avoidance of

doubt, for the purpose of giving this responsibility statement, the Joint

Provisional Liquidators have acted on, to the best of their knowledge and

having made all reasonable enquiries, all available information to the extent

provided to them in their capacity as the Joint Provisional Liquidators subsequent

to their appointment on 22 December 2016, including any historical information

in respect of the Company prior to such date. The Joint Provisional Liquidators

note that the historical information provided by the Company is incomplete and

insufficient to establish a reliable view of historical transactions, trading and

financial position.

This circular, for which the Proposed 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 Target Group

(other than those in relation to the Group, Mr. Yang and Mr. Zhang). The

Proposed Directors, having made all reasonable enquiries, confirm that to the best

of their knowledge and belief the information contained in this circular (other

than those in relation to the Group, Mr. Yang and Mr. Zhang) 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.

This circular, for which Mr. Yang accepts full responsibility, includes particulars

given in compliance with the Listing Rules for the purpose of giving information

with regard to him (other than those in relation to the Group, the Proposed

Directors, the Target Group and Mr. Zhang). Mr. Yang, having made all

reasonable enquiries, confirm that to the best of his knowledge and belief the

information contained in this circular (other than those in relation to the Group,

the Proposed Directors, the Target Group and Mr. Zhang) is accurate and




APPENDIX VIII STATUTORY AND GENERAL INFORMATION

– VIII-1 –

THIS DOCUMENT IS IN DRAFT FORM, INCOMPLETE AND SUBJECT TO CHANGE AND THAT THE

INFORMATION MUST BE READ IN CONJUNCTION WITH THE SECTION HEADED ‘‘WARNING’’ ON

THE COVER OF THIS DOCUMENT.

This circular, for which Mr. Zhang accepts full responsibility, includes particulars

given in compliance with the Listing Rules for the purpose of giving information

with regard to him (other than those in relation to the Group, the Proposed

Directors, the Target Group and Mr. Yang). Mr. Zhang, having made all

reasonable enquiries, confirm that to the best of his knowledge and belief the

information contained in this circular (other than those in relation to the Group,

the Proposed Directors, the Target Group and Mr. Yang) is accurate and




2. [REDACTED]


– VIII-2 –




[REDACTED]

B. FURTHER INFORMATION ABOUT THE ENLARGED GROUP

1. Incorporation of the Company

The Company was incorporated in the Cayman Islands under the Cayman Islands

Companies Act as an exempted company with limited liability on 8 October 2002. The

Company is in provisional liquidation and the Joint Provisional Liquidators were

appointed by the Grand Court of the Cayman Islands on 22 December 2016. For

further details, please refer to the announcement of the Company dated 29 December

2016.

The Company was registered in Hong Kong under Part XI of the previous

Companies Ordinance (equivalent to Part 16 of the Companies Ordinance with effect

from 3 March 2014) as a non-Hong Kong company on 21 March 2003 and as at the

Latest Practicable Date, its principal place of business in Hong Kong is at 22/F,

Prince’s Building, Central, Hong Kong. In compliance with the requirements of the

Companies Ordinance, Mr. Fung Chi Ming will be appointed as the authorised

representative for the acceptance of service of process and any notice required to be

served on the Company in Hong Kong upon completion of the Acquisition.

The Company was incorporated in the Cayman Islands and is subject to the

Cayman Islands law. Its constitution comprises Memorandum and Articles of

Association. A summary of certain relevant parts of the Memorandum and Articles

of Association and certain relevant aspects of the Cayman Islands Companies Act is

set out in Appendix VII to this circular.

2. Changes in the share capital of the Enlarged Group

(a) The Company

As at the Latest Practicable Date, the authorised share capital of the

Company was HK$800,000,000 divided into 8,000,000,000 Shares.

Immediately upon Resumption, the issued share capital of the Company will

be [REDACTED] divided into [REDACTED] New Shares, all fully paid or

credited as fully paid, and [REDACTED] New Shares will remain unissued.


– VIII-3 –




Save as disclosed herein, there is no present intention to issue any of the

authorised but unissued share capital of the Company and, without the prior

approval of the Shareholders in general meeting, no issue of Shares will be made

which would effectively alter the control of the Company.

Save as disclosed herein, there has been no alteration in the share capital of

the Company within two years immediately preceding the date of this circular.

(b) Other members of the Group

As all existing subsidiaries of the Company, will be divested to the Creditors’

Scheme, no information is included in this circular regarding the change, if any, in

the share capital of the existing subsidiaries of the Company.

(c) Members of the Target Group

Save as disclosed in the section headed ‘‘History and Reorganisation of the

Target Group’’ in this circular and in the paragraph headed ‘‘Further information

about the Company — 4. Corporate reorganisation’’ of this appendix, there has

been no alteration in the share capital of each members of the Target Group

within two years immediately preceding the date of this circular.

(d) Founder shares

The Target Company has no founder shares, management shares or deferred

shares.

3. Resolutions to be passed by the Shareholders

Resolutions in relation to the Capital Reorganisation, the Acquisition, the

issuance of the Consideration Shares, the [REDACTED], the [REDACTED], the

[REDACTED], the Creditors’ Schemes (if required), the adoption of the Articles, the

change of the Company’s name and any other matters as required by law, the Listing

Rules, the Stock Exchange and/or the SFC, which are necessary to give effect to the

Proposed Restructuring and any transactions contemplated under the Restructuring

Agreement, Amended and Restated Restructuring Agreement and Second Amended

and Restated Restructuring Agreement will be proposed at the EGM for the

Shareholders’ approval. For details, please refer to the section headed ‘‘Letter from

the Joint Provisional Liquidators’’ and Appendices VII to this circular.

4. Corporate reorganisation

The companies comprising the Target Group underwent the Reorganisation for

the purpose of preparing its corporate structure for the Acquisition. For more details

regarding the Reorganisation, please refer to section headed ‘‘History and

Reorganisation of the Target Group — Reorganisation’’ in this circular.


– VIII-4 –




C. FURTHER INFORMATION ABOUT THE BUSINESS OF THE COMPANY

1. Summary of material contracts

The following contracts (not being contracts in the ordinary course of business)

have been entered into by the Company or members of the Target Group within the

two years preceding the date of this circular and are or may be material:

(a) the Pre-[REDACTED] Capital Increase Agreement;

(b) the Restructuring Agreement, the Amended and Restated Restructuring

Agreement and the Second Amended and Restated Restructuring Agreement;

(c) the equity transfer agreement dated 5 February 2021 entered into between

Shangshui Yuansheng and Mr. Lu Kaiqiang, pursuant to which Mr. Lu

Kaiqiang transferred 55% equity interest in Zhoukou Ganglian to Shangshui

Yuansheng;

(d) the equity transfer agreement dated 5 February 2021 entered into between

Shangshui Yuansheng and Mr. Li Xinmin, pursuant to which Mr. Li Xinmin

transferred 45% equity interest in Zhoukou Ganglian to Shangshui

Yuansheng;

(e) the equity transfer agreement dated 28 June 2021 between Mr. Yang and

Henan Renwei, pursuant to which Mr. Yang transferred 54.4016% equity

interest in Henan Rongyu to Henan Renwei;

(f) the equity transfer agreement dated 28 June 2021 between Mr. Zhang and

Henan Renwei, pursuant to which Mr. Zhang transferred 44.5104% equity


(g) the equity transfer agreement dated 28 June 2021 between Mr. Lam Kei and

Henan Renwei, pursuant to which Mr. Lam Kei transferred 1.088% equity


(h) the Deed of Indemnity;

(i) the Deed of Non-competition;

(j) the Placing Agreement; and

(k) the [REDACTED].


– VIII-5 –




2. Intellectual property rights of the Enlarged Group

As at the Latest Practicable Date, the Enlarged Group had the following

intellectual property rights which are material in relation to the business of the

Enlarged Group:

Trademarks of the Enlarged Group

As at the Latest Practicable Date, the Enlarged Group had applied for

registration of the following trademarks which are considered to be or may be

material to its business:

No. Trademark

Place of

registration Class(es)

Application

number

Application

date Applicant

1. PRC 35 56961516 17 June 2021 Shangshui Yuansheng

2. PRC 35 56997321 17 June 2021 Shangshui Yuansheng

Patents of the Enlarged Group

As the Latest Practicable Date, the Enlarged Group has not registered any

patents which are material to its business.

Domain name owned by the Enlarged Group

As at the Latest Practicable Date, the Enlarged Group was the registered

proprietor of the following material registered domain name.

Name of

registered proprietor Domain name Date of registration Expiry date

Shangshui Yuansheng ysrhc.com 8 November 2010 8 November 2021

The contents of the website(s) do not form part of this circular.

To the best knowledge of the Joint Provisional Liquidators and except as

aforesaid, the Joint Provisional Liquidators are not aware of any other trade or service

marks, patents, other intellectual or industrial property rights which are or may be

material in relation to the Enlarged Group.

3. Connected transactions and related party transactions

Save as disclosed in note 30 to the accountants’ report, the text of which is set out

in Appendix III to this circular, during the two years immediately preceding the date of

this circular, the Target Group has not engaged in any other material connected

transactions or related party transactions.


– VIII-6 –




D. [REDACTED]


– VIII-7 –




[REDACTED]


– VIII-8 –




[REDACTED]


– VIII-9 –




E. FURTHER INFORMATION ABOUT THE DIRECTORS, THE PROPOSED

DIRECTORS AND SUBSTANTIAL SHAREHOLDERS

(a) Disclosure of interests

1. Interests and short positions of the Directors, the Proposed Directors and the

chief executive of the Company in the Shares, underlying Shares, New Shares,

underlying New Shares or debentures of the Company and its associated

corporations

As at the Latest Practicable Date, to the best knowledge of the Joint

Provisional Liquidators, none of the Directors, the Proposed Directors nor the

chief executive of the Company had or was deemed to have any interests or short

positions in the Shares, underlying shares and debentures of the Company and its

associated corporations (within the meaning of Part XV of the SFO) which is

required to be notified to the Company and the Stock Exchange under Divisions 7

and 8 of Part XV of the SFO (including interests and/or short positions which

they were taken or deemed to have under such provisions of the SFO) or as

recorded in the register required to be kept under section 352 of the SFO, or

otherwise required to be notified to the Company and the Stock Exchange

pursuant to the Model Code for Securities Transactions by Directors of Listed

Issuers as set out in Appendix 10 to the Listing Rules.

Immediately upon Resumption, the interests and short positions of the

Proposed Directors and the proposed chief executive of the Company in the New

Shares, underlying New Shares or debentures of the Company and the associated

corporations of the Company (within the meaning of Part XV of the SFO) which

will have to be notified to the Company and the Stock Exchange pursuant to

Divisions 7 and 8 of Part XV of the SFO (including interests and short positions

in which they are taken or deemed to have under such provisions of the SFO) or

which will be required, pursuant to section 352 of the SFO, to be entered in the

register referred to therein, or which will be required to notified to the Company

and the Stock Exchange pursuant to the Model Code for Securities Transactions

by Directors of Listed Issuers contained in the Listing Rules, will be as follows:

Name of Director

Capacity/Nature of

interest

Number of New

Shares held(1)

Total Number of

New Shares held(1)

Approximate

percentage of

shareholding in

the Company

Mr. Yang Xiaoqi

(楊效其)

Interest of controlled

corporation(2)[REDACTED]

New Shares (L)

[REDACTED]

New Shares (L)

[REDACTED]%

Mr. Zhang Ruiping

(張瑞平)

Interest of controlled

corporation(3)[REDACTED]

New Shares (L)

[REDACTED]

New Shares (L)

[REDACTED]%


– VIII-10 –




Notes:

(1) The letter ‘‘L’’ denotes a person’s long position (as defined under Part XV of the SFO) in

the New Shares.

(2) Pleasant Bright is owned as to 100% by Mr. Yang. As such, Mr. Yang will be deemed to

be interested in the [REDACTED] New Shares to be held by Pleasant Bright upon

Resumption, pursuant to the SFO.

(3) Honor Creation is owned as to 100% by Mr. Zhang. As such, Mr. Zhang will be deemed

to be interested in the [REDACTED] New Shares to be held by Honor Creation upon

Resumption, pursuant to the SFO.

2. Interests and short positions of the Substantial Shareholders in the Shares,

underlying Shares, New Shares, underlying New Shares or debenture of the

Company and its associated corporations

As at the Latest Practicable Date, details of the persons (not being Directors,

Proposed Directors and chief executive of the Company) who had an interest (or

long positions) or short positions in the Shares or underlying shares of the

Company as recorded in the register required to be kept under section 336 of the

SFO which would fall to be disclosed to the Company under the provisions of

Divisions 2 and 3 of Part XV of the SFO, or who was, directly or indirectly,

interested in 10% or more of the nominal value of any class of share capital

carrying rights to vote in all circumstances at general meetings of the Company

are set out in the section headed ‘‘Letter from the Joint Provisional Liquidators —

Changes in Shareholding Structure’’ in the circular.

Save as disclosed herein, to the best knowledge of the Joint Provisional

Liquidators, the Joint Provisional Liquidators are not aware, as at the Latest

Practicable Date, of any person (who are not Directors and chief executive of the

Company) who had an interest (or long position) or short position in the Shares

or underlying shares of the Company as recorded in the register required to be

kept under section 336 of the SFO which would fall to be disclosed to the

Company under the provisions of Divisions 2 and 3 of Part XV of the SFO, or

who was, directly or indirectly, interested in 10% or more of the nominal value of

any class of share capital carrying rights to vote in all circumstances at general

meetings of the Company.


– VIII-11 –




So far as is known to the Proposed Directors, upon Resumption, the

following persons (other than the Proposed Directors and the proposed chief

executive of the Company) will have an interest or a short position in the New

Shares or underlying New Shares which would fall to be disclosed to the Company

under the provisions of Divisions 2 and 3 of Part XV of the SFO, or who are,

directly or indirectly, interested in 10% or more of the issued voting shares of any

other members of the Enlarged Group:

Interest in the Company

Name of Shareholder

Capacity/Nature of

Interest

Total Number of

New Shares held(1)

Approximate

percentage of

shareholding in

the Company

Pleasant Bright Beneficial owner [REDACTED]

New Shares (L)

[REDACTED]%

Ms. Wu Xiuying (吳秀英) Interest of spouse(2) [REDACTED]

New Shares (L)

[REDACTED]%

Honor Creation Beneficial owner [REDACTED]

New Shares (L)

[REDACTED]%

Ms. Wu Baoyun (吳寶雲) Interest of spouse(3) [REDACTED]

New Shares (L)

[REDACTED]%

Notes:

(1) The letter ‘‘L’’ denotes a person’s long position (as defined under Part XV of the SFO) in

the New Shares.

(2) Pleasant Bright is owned as to 100% by Mr. Yang. As such, Mr. Yang will be deemed to

be interested in the [REDACTED] New Shares to be held by Pleasant Bright upon

Resumption, pursuant to the SFO. Ms. Wu Xiuying (吳秀英) is the spouse of Mr. Yang.

By virtue of the SFO, she will be deemed to be interested in the New Shares held by Mr.

Yang.

(3) Honor Creation is owned as to 100% by Mr. Zhang. As such, Mr. Zhang will be deemed

to be interested in the [REDACTED] New Shares to be held by Honor Creation upon

Resumption, pursuant to the SFO. Ms. Wu Baoyun (吳寶雲) is the spouse of Mr. Zhang.

By virtue of the SFO, she will be deemed to be interested in the New Shares held by Mr.

Zhang.

Save as disclosed herein, the Proposed Directors are not aware of any person

who will, immediately upon Resumption, have an interest or short position in the

New Shares or underlying New Shares, which would be required to be disclosed to

the Company and the Stock Exchange under the provisions of Divisions 2 and 3 of

Part XV of the SFO, or, directly or indirectly, be interested in 10% of the issued

voting shares of any other member of the Enlarged Group.


– VIII-12 –




As all the existing subsidiaries of the Company will be divested pursuant to

the Creditors’ Scheme, no information is included in this circular regarding

persons having interest in the existing subsidiaries of the Company.

(b) Arrangement affecting the Proposed Directors

Each of Mr. Yang and Mr. Zhang is interested in the Reorganisation and the

transactions as contemplated under the material contracts as set out in the paragraph

headed ‘‘C. Further Information about the business of the Company — 1. Summary of

Material Contracts’’ in this appendix.

Save as disclosed in this circular, none of the Proposed Directors or their

associates [were engaged] in any dealings with the Enlarged Group during the two

years preceding the date of this circular.

(c) Particulars of service contracts and appointment letters

Particulars of service agreements

As at the Latest Practicable Date, so far as is known to the Joint Provisional

Liquidators, none of the Directors or the Proposed Directors had any service

contracts with the Company or any of its subsidiaries or associated companies in

force which:

(a) (including both continuous and fixed term contracts) had been entered

into or amended within six months before the date of the publication of

the announcement of the Company dated 24 December 2018 in relation

to, among other things, the decision of the Stock Exchange which agreed

to allow the Company to submit a [REDACTED] relating to the

Resumption Proposal (but not any other proposal);

(b) were continuous contracts with a notice period of 12 months or more;

(c) were fixed term contracts with more than 12 months to run irrespective

of the notice period; or

(d) were not determinable within 12 months without payment of

compensation (other than statutory compensation).

Proposed Executive Directors and Non-executive Director

Each of the proposed executive Directors and non-executive Director will

enter into a service contract with the Company for a term of three years

commencing from the Date of completion of the Acquisition, until terminated by

either party giving not less than three months’ notice in writing to the other.


– VIII-13 –




Proposed Independent non-executive Directors

Each of the proposed independent non-executive Directors will sign an

appointment letter with the Company for a term of three years commencing from

the Resumption Date, until terminated by either party giving not less than three

months’ notice in writing to the other. Each of the proposed independent non-

executive Directors is entitled to a director’s fee of HK$120,000 per annum. Save

for directors’ fees, none of the proposed independent non-executive Directors is

expected to receive any other remuneration for holding their respective offices.

The appointments are subject to the provisions of the Articles of Association with

regard to vacation of office of Directors, removal and retirement by rotation of

Directors.

Save as disclosed in this circular, none of the Proposed Directors has or is

proposed to have entered into any service contract or appointment letter with any

member of the Enlarged Group other than contracts expiring or determinable by

the any member of the Group within one year without the payment of

compensation (other than statutory compensation).

(d) Directors remuneration

The aggregate remuneration (including fees, salaries, contribution to pension

schemes, discretionary bonuses, housing and other allowances and other benefits in

kind) paid to the directors of the Target Company by the Target Group in respect of

the three financial years ended 31 December 2020 and for the four months ended 30

April 2021 were RMB0.3 million, RMB0.3 million, RMB0.2 million and RMB0.1

million, respectively.

Under the arrangements currently in force, the aggregate remuneration (excluding

discretionary bonuses) of the Proposed Directors (including the proposed independent

non-executive Directors in their respective capacity as Directors) for the financial year

ending 31 December 2021 are expected to be approximately RMB0.4 million.

None of the Directors or any past directors of any member of the Enlarged Group

has been paid any sum of money for the three financial years ended 31 December 2020

(i) as an inducement to join or upon joining the Enlarged Group; or (ii) for loss of

office as a director of any member of the Enlarged Group or of any other office in

connection with the management of the affairs of any member of the Enlarged Group.

There has been no arrangement under which a Director has waived or agreed to

any emoluments for the three financial years ended 31 December 2020.


– VIII-14 –




3. Disclaimers

Save as disclosed in this circular and as at the Latest Practicable Date:

(a) so far as is known to the Joint Provisional Liquidators and save as disclosed

in this circular, the Joint Provisional Liquidators are not aware of any other

person (not being a Proposed Director or the proposed chief executive of the

Company) who will, immediately following the completion of the

Acquisition, the [REDACTED], the issue and allotment of the Creditors

Shares and the Placing, have interests and/or short positions in the Shares or

underlying Shares of the Company which would fall to be disclosed to the

Company pursuant to the provisions of Divisions 2 and 3 of Part XV of the

SFO, or, who are, directly or indirectly, interested in 10% or more of the

issued voting shares of any members of the Enlarged Group;

(b) so far as is known to the Joint Provisional Liquidators and save as disclosed

in this circular, the Joint Provisional Liquidators are not aware of any

Directors, Proposed Directors or the proposed chief executive of the

Company has any interest or short position in the Shares, underlying

Shares or debentures of the Company, its subsidiary or any of its associated

corporation (within the meaning of Part XV of the SFO) which will have to

be notified to the Company and the Stock Exchange pursuant to Divisions 7

and 8 of Part XV of the SFO (including interests and short positions which

he/she is deemed to have under such provisions of the SFO), or which will be

required, pursuant to section 352 of the SFO, to be entered in the register

referred to therein, or which will be required to be notified to the Company

and the Stock Exchange pursuant to the Model Code for Securities

Transactions by Directors of Listed Issuers, in each case upon Resumption;

(c) save as disclosed in this circular, none of the Directors, Proposed Directors

or any of the parties listed in the paragraph headed ‘‘Other Information — 7.

Consents of Experts’’ of this appendix was interested, directly or indirectly,

in the promotion of, or in any assets which had been, within the two years

immediately preceding the date of this circular, acquired or disposed of by or

leased to the Company or any member of the Enlarged Group, or were

proposed to be acquired or disposed of by or leased to the Company or any

member of the Enlarged Group nor will any Proposed Director apply for the

[REDACTED] either in his own name or in the name of a nominee;

(d) so far as is known to the Joint Provisional Liquidators and save as disclosed

in this circular, none of the Directors, Proposed Directors or any of the

parties listed in the paragraph headed ‘‘Other Information — 7. Consents of

Experts’’ of this appendix was materially interested in any contract or

arrangement subsisting at the date of this circular which was significant to

the business of the Enlarged Group taken as a whole;


– VIII-15 –




(e) save in connection with the [REDACTED] and the Placing Agreement, none

of the experts referred to in the paragraph headed ‘‘Other Information — 7.

Consents of Experts’’ of this appendix;

(i) is interested legally or beneficially in any securities of any member of the

Enlarged Group; or

(ii) has any right (whether legally enforceable or not) to subscribe for or to

nominate persons to subscribe for securities in any member of the

Enlarged Group; and

(f) so far as is known to the Joint Provisional Liquidators and save as disclosed

in this circular, none of the Directors, Proposed Directors or their respective

close associates nor any Shareholders who held more than 5% of the total

Shares as at the Latest Practicable Date had any interest in the five largest

customers or the five largest suppliers of the Company.

OTHER INFORMATION

1. Estate duty, tax and other indemnities

The Controlling Shareholders (the ‘‘Indemnifiers’’) will enter into the Deed of

Indemnity with and in favour of the Company (for itself and for each of its subsidiaries)

with effect from the Resumption Date, to provide indemnities on a joint and several basis,

in respect of, among other matters:

(a) any liability for Hong Kong estate duty which might be incurred by any member

of the Enlarged Group by reason of any transfer of property (within the meaning

of sections 35 and 43 of the Estate Duty Ordinance (Chapter 111 of the Laws of

Hong Kong) or the equivalent thereof under the laws of any jurisdiction outside

Hong Kong) to any member of the Enlarged Group at any time on or before the

Resumption Date;

(b) tax liabilities (including all fines, penalties, costs, charges, expenses and interests

incidental or relating to taxation) which might be payable by any member of the

Enlarged Group in respect of any income, profits, gains, transactions, events,

matters or things earned, accrued, received, entered into or occurring on or before

the Resumption Date, whether alone or in conjunction with any other

circumstances whenever occurring and whether or not such tax liabilities are

chargeable against or attributable to any other person, firm, company or

corporation;

(c) any expenses, payments, sums, outgoings, fees, demands, claims, damages, losses,

costs (including but not limited to legal and other professional costs), charges,

liabilities, fines, penalties in connection with any failure, delay or defects of

corporate or regulatory compliance or errors, discrepancies or missing documents


– VIII-16 –




in the statutory records of any member of the Enlarged Group under, or any

breach of any provision of, the Companies Ordinance or any other applicable

laws, rules or regulations on or before the Resumption Date;

(d) all claims, actions, losses, damages, costs or expenses suffered or incurred by any

of the members of the Enlarged Group in connection with the social insurance and

housing provident fund contributions required to be made by the relevant laws

and regulations in the PRC, which any member of the Enlarged Group has failed

to make in accordance with such laws and regulations from their respective date

of establishment to the Resumption Date;

(e) all potential liability, losses and damages resulting from any suspension of

operation and/or relocation costs and expenses sustained or incurred as a result of

or in connection with the title defects as described in the section headed ‘‘Business

of the Target Group — Legal Proceedings and Compliance’’ in this circular; and

(f) all claims, payments, suits, damages, settlements, sums, outgoings, fees, losses and

any associated costs and expenses which would be incurred or suffered directly or

indirectly, from or on the basis of or in connection with the legal proceedings and/

or non-compliance matters by any member of the Enlarged Group as described in

the section headed ‘‘Business of the Target Group — Legal Proceedings and

Compliance’’ in this circular or in connection with any other non-compliance of

any member of the Enlarged Group which has occurred at any time on or before

the Resumption Date.

Each Indemnifier is under no liability under the Deed of Indemnity in respect of any

taxation:

(a) to the extent that provision or reserve has been made for such taxation in the

audited accounts of any member of the Enlarged Group for any accounting period

up to 30 April 2021;

(b) to the extent that such taxation or liability falling on any of the members of the

Enlarged Group in respect of any accounting period commencing on or after 1

May 2021 and ending on the Resumption Date, where such taxation or liability

would not have arisen but for some act or omission of, or transaction voluntarily

entered into by, any member of the Enlarged Group (whether alone or in

conjunction with some other act, omission or transaction, whenever occurring)

without the prior written consent or agreement of the Indemnifier, other than any

such act, omission or transaction:

(i) carried out or effected in the ordinary course of business or in the ordinary

course of acquiring and disposing of capital assets on or before the

Resumption Date; and

(ii) carried out, made or entered into pursuant to a legally binding commitment

created on or before the Resumption Date or pursuant to any statement of

intention made in this circular; or


– VIII-17 –




(c) to the extent that such taxation liabilities or claim arise or are incurred as a result

of the imposition of taxation as a consequence of any retrospective change in the

law, rules and regulations or the interpretation or practice thereof by the Hong

Kong Inland Revenue Department or the taxation authority of the PRC, or any

other relevant authority (whether in Hong Kong or the PRC or any other part of

the world) coming into force after the date of the Deed of Indemnity or to the

extent such claim arises or is increased by an increase in rates of taxation or claim

after the date of the Deed of Indemnity with retrospective effect; or

(d) to the extent that any provision or reserve made for taxation in the audited

accounts of any member of the Enlarged Group up to 30 April 2021 which is

finally established to be an over-provision or an excessive reserve, in which case

the Indemnifiers’ liability (if any) in respect of taxation shall be reduced by an

amount not exceeding such provision or reserve, provided that the amount of any

such provision or reserve applied referred to in this paragraph to reduce the

Indemnifier’ liability in respect of taxation shall not be available in respect of any

such liability arising thereafter.

Under the Deed of Indemnity, each Indemnifier has also undertaken to the Company

that it will indemnify and at all times keeps the Company fully indemnified, on a joint and

several basis, from any depletion in or reduction in value of its assets or any loss (including

all legal costs and suspension of operation), cost, expenses, damages or other liabilities

which any member of the Enlarged Group may incur or suffer arising from or in connection

with the implementation of the Reorganisation.

2. Litigation

As at the Latest Practicable Date, save as disclosed in the sections headed ‘‘Letter from

the Joint Provisional Liquidators’’ and ‘‘Business of the Target Group — Legal Proceedings

and Compliance’’ in this circular, each of the Company and the Target Group is not

involved in any material litigation, arbitration or administrative proceedings. So far as each

of the Company and the Target Group is aware, no such material litigation, arbitration or

administrative proceedings are pending or threatened.

3. Preliminary expenses

The preliminary expenses of the Target Company are approximately HK$6,000. All

preliminary expenses was borne by the Target Group.

4. Promoters

The Target Company have no promoter for the purpose of the Listing Rules.


– VIII-18 –




5. Agency fees or commissions paid or payable

Save as disclosed in the section headed ‘‘Letter from the Joint Provisional Liquidators

— Placing to Restore Public Float’’ in this circular, no commissions, discounts, brokerages

or other special terms have been granted in connection with the issue or sale of any share or

loan capital of the Company or any of its subsidiaries within the two years immediately

preceding the date of this circular.

6. Qualification of experts

The qualifications of the experts who have given opinions in this circular are as

follows:

Name Qualifications

RaffAello Capital Limited A licensed corporation engaging in Type 6

(advising on corporate finance) regulated

activity under the SFO

Crowe (HK) CPA Limited Certified Public Accountants

D & Partners CPA Limited Certified Public Accountants

Harney Westwood & Riegels Cayman Islands legal advisers to the Company

Frost and Sullivan Independent industry consultant

Beijing Dentons Law Offices,

LLP (Fuzhou)

PRC legal advisers to the Company

Dakin Capital Limited A corporation licensed to conduct Type 6

(advising on corporate finance) regulated

activity under the SFO

RHL Appraisal Limited Independent Property Valuer

7. Consents of experts

Each of the experts as referred to in the paragraph headed ‘‘Other Information — 6.

Qualification of Experts’’ in this appendix has given, and has not withdrawn, their

respective written consents to the issue of this circular with the inclusion of their reports

and/or letters and/or opinion (as the case may be) and the references to their names or

summaries of opinions included herein in the form and context in which they are

respectively included.


– VIII-19 –




Save as disclosed in this circular, none of the experts named above has any

shareholding interests in any member of the Company or the right (whether legally

enforceable or not) to subscribe for or nominate persons to subscribe for securities in any

member of the Enlarged Group.

8. Binding effect

This circular shall have the effect, if an application is made in pursuance hereof, of

rendering all persons concerned bound by all the provisions (other than the penal

provisions) of sections 44A and 44B of the Companies (Winding Up and Miscellaneous

Provisions) Ordinance so far as applicable.

9. No material adverse change

Save as disclosed in this circular, the Proposed Directors confirm that there has been

no material adverse change in the financial or trading position of the Target Group since 30

April 2021 and up to the date of this circular.

10. Taxation of holders of shares

(a) Hong Kong

Dealings in Shares and/or New Shares registered on the Company’s Hong Kong

branch register of members will be subject to Hong Kong stamp duty. The sale,

purchase and transfer of Shares and/or New Shares are subject to Hong Kong stamp

duty, the current rate of which is 0.26% of the consideration or, if higher, the value of

the Shares and/or New Shares being sold or transferred. Profits from dealings in the

Shares and/or New Shares arising in or derived from Hong Kong may also be subject

to Hong Kong profits tax.

(b) The Cayman Islands

No stamp duty is payable in the Cayman Islands on transfers of shares of Cayman

Islands companies except those which hold interests in land in the Cayman Islands.

(c) Consultation with professional advisers

Intending holders of Shares and/or New Shares are recommended to consult their

professional advisers if they are in any doubt as to the taxation implications of

subscribing for, purchasing, holding or disposing of or dealing in Shares and/or New

Shares or exercising any rights attaching to them. It is emphasised that none of the

Company, the Joint Provisional Liquidators, the Directors, the Proposed Directors or

the other parties involved in the [REDACTED] can accept responsibility for any tax

effect on, or liabilities of, holders of Shares and/or New Shares resulting from their

subscription for, purchase, holding or disposal of or dealing in Shares and/or New

Shares or exercising any rights attaching to them.


– VIII-20 –




11. Bilingual circular

The English language and Chinese language versions of this circular are being

published separately in reliance upon the exemption provided by section 4 of the Companies

(Exemption of Companies and Circulars from Compliance with Provisions) Notice

(Chapter 32L of the Laws of Hong Kong).

12. Miscellaneous

(a) Save as disclosed herein:

i. within two years preceding the date of this circular:

(aa) no share or loan capital of the Target Company or of any of its

subsidiaries has been issued, agreed to be issued or is proposed to be

issued fully or partly paid either for cash or for a consideration other

than cash;

(bb) no commissions, discounts, brokerages or other special terms have been

granted in connection with the issue or sale of any share or loan capital

of the Company or any of its subsidiaries; and

(cc) no commission has been paid or payable for subscribing or agreeing to

subscribe, or procuring or agreeing to procure the subscriptions, for any

shares in the Company or any of its subsidiaries; and

ii. no share or loan capital of the Company or any of its subsidiaries is under

option or is agreed conditionally or unconditionally to be put under option.

(b) To the best knowledge of the Joint Provisional Liquidators, the Joint Provisional

Liquidators confirm that there has been no material adverse change in the

financial or trading position or prospects of the Company since 30 April 2021

(being the date to which the consolidated financial statements of the Group were

made up) up to the date of this circular.

(c) There has not been any interruption in the business of the Target Group which

may have or has had a significant effect on the financial position of the Target

Group in the 12 months preceding the date of this circular.

(d) There is no arrangement under which future dividends are waived or agreed to be

waived.

(e) The Target Group has no outstanding convertible debt securities or debentures.

(f) No company within the Enlarged Group is presently listed on any other stock

exchange or traded on any trading system.


– VIII-21 –




(g) The Hong Kong branch share registrar and transfer office of the Company is

[REDACTED] at [REDACTED].

(h) The principal share registrar and transfer office of the Company is [REDACTED]

at [REDACTED].

(i) The business address of the proposed members of the senior management is of the

North Section of Zhoushang Road (North Side of Expressway), Shangshui

County, Zhoukou City, Henan Province（河南省周口市商水縣周商路北段）（高速

公路北側）.

13. Others

The English text of this circular shall prevail over the Chinese text.


– VIII-22 –




Date post:	04-Jan-2022
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APPENDIX VIII STATUTORY AND GENERAL INFORMATION

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