Future Bright : A VERY SUBSTANTIAL DISPOSAL RELATING TO THE SALE OF THE ENTIRE EQUITY INTERESTS AND SHAREHOLDER LOANS IN BRIGHT SUCCESS - PROPERTY AGENCY COMPANY LIMITED

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

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

If you have sold or transferred all your shares in Future Bright Holdings Limited, you should at once hand this circular and the accompanying form of proxy to the purchaser or transferee or to the bank, licensed securities dealer or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

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

Future Bright Holdings Limited

佳景集團有限公司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 703)

A VERY SUBSTANTIAL DISPOSAL

RELATING TO THE SALE OF THE ENTIRE EQUITY INTERESTS

AND SHAREHOLDER LOANS IN

BRIGHT SUCCESS - PROPERTY AGENCY COMPANY LIMITED

AND

NOTICE OF SPECIAL GENERAL MEETING

A letter from the board of directors of Future Bright Holdings Limited is set out on pages 4 to 13 of this circular.

A notice convening the special general meeting of Future Bright Holdings Limited to be held at Golden Restaurant, Macau Jockey Club (HK) Club House, 1st Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong on 18 December 2019 at 11:00 a.m. is set out on pages SGM-1 to SGM-2 of this circular. A form of proxy for use at the special general meeting is enclosed with this circular. Whether or not you are able to attend the special general meeting, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the branch share registrar of Future Bright Holdings Limited in Hong Kong, Tricor Tengis Limited, on Level 54, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the special general meeting or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the special general meeting or any adjournment thereof should you so wish.

DEFINITIONS

In this circular, the following expressions have the following meanings unless the context

requires otherwise:

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For the purpose of illustration only and unless otherwise stated, conversion of RMB into HK$ and HK$ into MOP in this circular is based on the exchange rate of RMB1.00 = HK$1.0977 and HK$1.00 = MOP1.03 respectively. Such conversion should not be constructed as a representation that any amount has been, could have been, or may be, exchanged at such or any other rate.

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LETTER FROM THE BOARD

Future Bright Holdings Limited

佳景集團有限公司*

(Incorporated in Bermuda with limited liability)

(Stock Code: 703)

A VERY SUBSTANTIAL DISPOSAL

RELATING TO THE SALE OF THE ENTIRE EQUITY INTERESTS

AND SHAREHOLDER LOANS IN

BRIGHT SUCCESS - PROPERTY AGENCY COMPANY LIMITED

AND

NOTICE OF SPECIAL GENERAL MEETING

INTRODUCTION

The Board announced that on 28 October 2019, the Vendors - Bright Rich and Gain Success (both wholly-owned subsidiaries of the Company as vendors), the Company (as vendors' guarantor), the Purchaser (as purchaser), Bright Success and HQ Company (as target companies) entered into the Disposal Agreement, pursuant to which the Purchaser agreed, subject to obtaining the approval from the Shareholders, to purchase 100% equity interest in Bright Success, the existing sole shareholder of HQ Company, together with the related shareholder loans at the Consideration of RMB300.00 million (approximately HK$329.31 million) in cash. Bright Success holds a wholly-owned subsidiary incorporated in Mainland China - HQ Company which sole asset is the Property.

• For identification purpose only

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LETTER FROM THE BOARD

As one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Disposal exceeds 75%, the Disposal constitutes a very substantial disposal for the Company and is subject to the notification, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules. Mr. Chan and his associates together had an equity interest of approximately 41.31% in the Company as at the Latest Practicable Date, and have indicated that they would vote in favour of the Disposal if and when the Disposal is put forward for the approval by the Shareholders at the SGM.

The purpose of this circular is to give you further information of the Disposal, a valuation report on the Property, other information as required under the Listing Rules and the notice of the SGM at which resolution will be proposed to consider and, if thought fit, approve the Disposal Agreement and the transaction contemplated thereunder.

THE DISPOSAL AGREEMENT

A summary of the principal terms of the Disposal Agreement is as follows:

1. Date
   28 October 2019
2. Parties

The Company entered into the Disposal Agreement to guarantee the performance of the obligations of the Vendors thereunder.

3. Assets to be disposed of

Pursuant to the Disposal Agreement, the assets to be disposed of by the Vendors comprise 100% of the equity interest in Bright Success and the related shareholder loans.

Bright Success owns a wholly-owned subsidiary in Mainland China - HQ Company which sole asset is the Property which is located within the Guangdong-MacaoCo-operation Industrial Park in Hengqin New Area. The Property spans from Huandao East Road in the east to Ziqi South Road in the west and from Xiangjiang Road in the south to Haojiang Road in the north. The Property has a site area of approximately 19,939.94 sq. m. and a buildable gross floor area of approximately 49,849.85 sq. m.

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LETTER FROM THE BOARD

The Property has been designed to become an international food plaza with an intent that most of the units would on completion of its development be rented out, while a small portion of the units would be retained by the Group for self-use. The piling works and about 80% of the foundation works at the Property have been completed while the remaining 20% of the foundation works, which has to be done in line with some early construction works for the superstructure of the building, was suspended for the reasons set out below and has just following the signing of the Disposal Agreement been resumed.

As previously announced, the development progress of the Property has since its acquisition in January 2015 suffered serious delay for various reasons beyond the Group's control including unexpected soft soil treatment, unexpected long processing time for obtaining the approval of the building development and design plan for the Property which took approximately 10 months and suspension of foundation work caused by improper construction work at the adjacent site. The construction work had only been able to resume in January 2017, then got suspended again in March 2017, and resumed in February 2018, and got suspended again in May 2018 for 40 days, while extension for meeting the various development milestones under the Land Contract was granted in November 2017 after an idle land investigation by HQ Land Authority in May 2017. During that period, the economy of Macau has experienced a substantial downturn since 2015 with gradual improvement in 2016, and the economy of Hengqin Island performed much slower than expected. The Group's business has sustained losses since then and has since May 2016 started to review its resources as well as its benefits (both short and long terms), capital commitment, plan and work schedule for the development of the Property with all options and alternatives open for consideration.

Since then, the Group has looked for joint venture partners and undertaken negotiations with different potential buyers though without success. Many potential joint venture partners and potential buyers have indicated that the Property would have better marketability if part of it could be used for commercial serviced apartments. In view of such indication, HQ Company has pursued to apply for a change of the use of the Property to include commercial serviced apartments and suspended its construction work while keeping its ongoing negotiations with potential joint venture partners and buyers.

As previously disclosed in the announcement of the Company dated 5 June 2019, the Company's 2019 interim report of 26 August 2019 and the announcement of the Company dated 4 September 2019, HQ Land Authority has issued a letter to HQ Company reminding it to progress with its construction work at the Property on a timely basis to meet the next development milestone of completing the foundation and basement work (建設標高±0.00) by 31 July 2019, failing which HQ Company may face a daily penalty of some RMB0.63 million. It is currently estimated that it would take some 6-9 months to meet such milestone given that the construction work has been delayed for various reasons including but not limited to (a) suspension of construction work for over 40 days from May to June 2018 at the request of HQ Land Authority for improving site safety as previously announced, (b) unexpected long processing time for preparing the invitation for tender for the superstructure of the development project, (c) ongoing negotiation for the disposal of the development project to potential buyer, (d) heavy capital commitment involved in building the superstructure of the development project and difficulty in obtaining construction loan to finance the building of such superstructure under the

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LETTER FROM THE BOARD

current tight capital environment, and (e) current and anticipated weak demand for commercial shop spaces in Hengqin Island in the next few years and hence the likely resulting operational losses after completion of the development project.

To enhance the marketability of the Property, HQ Company has in mid-June 2019 submitted an application to HQ Land Authority seeking for (a) further extension of the remaining development milestones under the Land Contract, and (b) a change of use of some parts of the Property as serviced apartments and/or residential use. Management has in August 2019 held meetings with representatives of HQ Land Authority to discuss such application, during which it has been given to understand that a partial change of the land use of the Property to include commercial serviced apartments falls within the permitted land use right for commercial use, but not to include residential use. In September 2019, HQ Company received a reply letter from HQ Land Authority informing HQ Company that (a) it did not support such application of 18 June 2019; (b) HQ Company has seemingly stopped its construction works and might possibly be in breach of the Land Contract; and (c) HQ Company may face a daily penalty of some RMB0.63 million for any delay to meet the development milestone without good justifications, where any delay due to force majeure or government actions are considered as good justifications under the Land Contract. As of the Latest Practicable Date, HQ Land Authority has not imposed any penalty for delay to meet the development milestone under the Land Contract or any possible breach thereof. Management has since then been revising its application to HQ Land Authority seeking for its support for a partial change of the land use of the Property to include commercial serviced apartments without any residential use, and its related building milestone extension under the Land Contract. Negotiations with potential joint venture partners and buyers have also been ongoing until the Disposal Agreement was signed.

4. Consideration

It has been agreed under the Disposal Agreement that:

1. the Vendors will sell 100% equity interest in Bright Success together with the related shareholder loans to the Purchaser at the total consideration of RMB300.00 million (approximately HK$329.31 million) in cash;
2. the Purchaser has paid a deposit of RMB150.00 million (approximately HK$164.66 million) to the Vendors upon signing of the Disposal Agreement; and
3. the balance of the Consideration will be paid by the Purchaser on completion which shall take place within 6 business days after the Disposal Agreement is approved by the Shareholders at the SGM to be held in accordance with the requirements of the Chapter 14 of the Listing Rules.

The Consideration was determined after arm's length negotiations between the Vendors and the Purchaser with reference not just to the prevailing property market value of some HK$450.2 million of the Property as at 30 June 2019 but also all the circumstances surrounding the development of the Property as more particularly described under the

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LETTER FROM THE BOARD

paragraph headed "Reasons for, and benefits of, the Disposal" below. The Vendors and the Company shall bear their respective non-resident income tax of 10% under the Non-Resident Income Tax Rule, while the Purchaser will bear all the stamp duty and other taxes arising out of or in connection with the Disposal.

The Property (in its existing state) was valued at HK$450.20 million (equivalent to approximately RMB396.00 million) as at 30 June 2019 and HK$434.70 million (equivalent to approximately RMB396.00 million) as at 30 September 2019 by JLL, an independent property valuer appointed by the Group. In valuing the Property, JLL has assumed that the Property will be developed and completed in accordance with the latest development proposal provided to JLL by the Group which is to build a 7-storey commercial building with 4-level basement, comprising mainly retail shops, restaurants, exhibition centre and car parking facilities. In arriving at its opinion of value, JLL adopted the market approach by making reference to comparable land sales transactions as available in the relevant market and has also taken into account the accrued construction cost and professional fees relevant to the stage of construction as at the valuation date. JLL has relied on the accrued construction cost and professional fees information provided by the Group according to the stage of construction of the Property as at the valuation date and JLL did not find any material inconsistency from those of other similar developments.

The Purchaser acknowledges that there has been substantial delay in the construction of the Property as mentioned above and agrees to bear any liabilities and penalties (including any delay penalty and idle land penalty) which may be imposed by the relevant authorities in connection with such delay and suspension of construction work pursuant to the terms of the Disposal Agreement. The Vendors shall be responsible for the other liabilities of Bright Success and HQ Company incurred prior to the signing of the Disposal Agreement, which include (i) outstanding professional fees in connection with the construction of the Property, and severance payment to employees of Bright Success and HQ Company all of approximately HK$10 million, and (ii) repayment of the Bank Loan of approximately HK$36.81 million. The Bank Loan shall be fully repaid by the Vendors within 3 days after the Disposal Agreement is approved by the Shareholders at the SGM.

To meet the current development milestone as required under the Land Contract and to avoid any possible further liabilities for delay in meeting such current development milestone, the Vendors and the Purchaser have agreed that, after signing the Disposal Agreement, they will jointly procure HQ Company to continue with the remaining 20% of the foundation work and (if required) the application for the change of use of the Property to include use as serviced apartments, and the Vendors shall make available for use all documents and seals relating to the Property for such purpose. The Purchaser agrees to bear all the costs for the construction work to be carried on at the Property after the signing of the Disposal Agreement. However, if completion of the Disposal Agreement does not take place, the Vendors will have to bear all construction costs incurred after the signing of the Disposal Agreement. The Vendors have deposited with the Purchaser 's lawyer at signing of the Disposal Agreement the originals of all land title documents relating to the Property for their safe keeping, and all these documents shall be returned to the Vendors if the Disposal Agreement is terminated.

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LETTER FROM THE BOARD

5. Condition precedent

Completion of the Disposal will be conditional on the Disposal being approved by the Shareholders at the SGM to be held in accordance with the requirements of Chapter 14 of the Listing Rules. If the Shareholders' approval is not obtained within 90 days of signing of the Disposal Agreement (being 28 October 2019), the Disposal Agreement shall be terminated without further liabilities to any parties and the Deposit with interest thereon will be returned to the Purchaser unless the parties agree to extend such 90 days' period. The above condition cannot be waived by either the Vendors or the Purchaser.

6. Completion

Completion of the Disposal will take place within 6 business days after the Disposal is approved by the Shareholders in the manner as mentioned above. If the Company fails to obtain the approval of the Disposal by its Shareholders within 90 days from the date of the Disposal Agreement, the Vendors shall refund the Deposit with interest thereon to the Purchaser and reimburse the Purchaser for expenses paid by him (if any) for the development of the Property, and the parties shall have no further liabilities to each other.

If the Vendors breach or fail to perform their obligations under the Disposal Agreement after signing the Disposal Agreement, the Vendors are required to refund the Deposit with interest thereon and pay a penalty of RMB150.00 million (approximately HK$164.66 million) to the Purchaser, but no penalty shall be payable if the Vendors are unable to perform their obligations under the Disposal Agreement due to (a) the Company failing to obtain the approval of the Shareholders, (b) the occurrence of a force majeure event, (c) a breach of the Disposal Agreement by the Purchaser or (d) government action or requirement of any governmental authority. When the Deposit is required to be refunded, the interest payable thereon shall be calculated from the date on which the Purchaser paid the Deposit until the date of refund, at the rate of 24% per annum. The abovementioned penalty of RMB150.00 million (approximately HK$164.66 million) shall also carry interest at the rate of 24% per annum from the date when it is due and payable to the date of actual payment.

If completion of the Disposal is delayed as a result of the fault or default of the Purchaser, the Purchaser shall pay to the Vendors damages at the rate of 24% per annum on the amount payable to the Vendors under the Disposal Agreement, and if the delay continues for more than 20 days, the Vendors may terminate the Disposal Agreement and the Deposit paid by the Purchaser shall be forfeited by the Vendors without further liabilities on the Vendors.

REASONS FOR, AND BENEFITS OF, THE DISPOSAL

As mentioned above, Macau's economy has since mid 2014 experienced a substantial downward adjustment for over two years with gradual improvement since 2016. The Group has been subject to tough and challenging operating environment recording losses since 2015. The US and China trade dispute and the current civil unrest in Hong Kong have also materially and adversely affected the business performance of the

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LETTER FROM THE BOARD

Group. The continuous development of the Property would require heavy capital commitment of no less than RMB600.00 million (approximately HK$658.62 million) from the Group, and the Group has experienced difficulties in obtaining construction loans from banks to finance its continuous development of the Property due to the tight credit control for property development in Mainland China. In addition, as mentioned above, HQ Company may face a daily penalty of some RMB0.63 million for delay to meet the current development milestone under the Land Contract. In view of such circumstances, with its limited capital resources, and the failure of obtaining any construction loans from banks or finding a joint venture partner soon, the Group would have difficulties with continuing with the development of the Property, and has to look for alternate options. As disclosed above, the Group has since 2016 looked for joint venture partners and undertaken negotiations with different potential buyers but all without success. The offer under the Disposal Agreement is the best and most mature offer (in terms of pricing and timing) available so far with terms readily mutually agreed while the other proposals are still at preliminary negotiation stages and mainly involve joint-development of the Property rather than an outright disposal. Therefore, despite that the Consideration of RMB300.00 million (approximately HK$329.31 million) under the Disposal is some 24.24% discount to the valuation of RMB396.00 million (equivalent to approximately HK$434.70 million) as at 30 September 2019, the Directors are of the view that the terms of the Disposal (including the Consideration) are fair and reasonable as the Disposal would, immediately upon its completion, generate substantial cash inflow to the Group and relieve the Group from further capital commitment on the development of the Property. With substantial cash inflow upon completion of the Disposal, the Group would be able to reduce its bank borrowings, and to use such cash inflow to finance its food and catering business. It is the current intention of the Group that it will continue to focus on its existing markets without any plan to tap on the food and catering market of Hengqin Island as the economic growth of Hengqin Island is much slower than expected. If the Group did not enter into the Disposal Agreement now, it may or may not be able to get a better offer in the future.

As the Purchaser has agreed to bear any liabilities and penalties which may be imposed by the relevant authorities in connection with the delay and suspension of the development of the Property under the Disposal Agreement, and taking into account of the difficult circumstances relating to the Property which the Group is currently facing as mentioned above, the Directors (including the independent non-executive Directors) consider that the terms of the Disposal Agreement are on normal commercial terms, fair and reasonable and in the interests of the Group and the Shareholders as a whole.

FINANCIAL EFFECTS OF THE DISPOSAL

On completion of the Disposal, Bright Success and HQ Company will cease to be subsidiaries of the Company and the profit and loss and the assets and liabilities of Bright Success and HQ Company will no longer be consolidated into the Group's consolidated financial statements.

The unaudited consolidated total assets and total liabilities of the Group as at 30 June 2019 were approximately HK$2,070.77 million and HK$1,165.72 million respectively. Based on the unaudited pro forma financial information of the Remaining Group as set out in Appendix IV to this circular, assuming completion of the Disposal had taken place on 30

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June 2019, the unaudited pro forma consolidated total assets and total liabilities of the Remaining Group would be approximately HK$1,888.99 million and HK$1,085.42 million respectively and the unaudited pro forma consolidated shareholders' fund of the Remaining Group would be approximately HK$803.56 million.

On completion of the Disposal, the Group is expected to record an unaudited estimated gross loss of approximately HK$98.18 million, based on the calculation of the net Consideration of approximately HK$318.79 million (after deducting relevant estimated expenses of approximately HK$10.52 million) minus the followings:

1. the sale of shareholders' loans of the Vendors of approximately HK$388.42 million as at 30 September 2019;
2. the Bank Loan of approximately HK$36.81 million as at 30 September 2019; and
3. the unaudited consolidated net liabilities of Bright Success and HQ Company of approximately HK$8.26 million as at 30 September 2019 (including the accumulated fair value gain after deferred tax of approximately HK$43.26 million from the Property since its acquisition up to 30 September 2019 and the foreign exchange reserve of approximately HK$47.57 million as at 30 September 2019 in relation to Bright Success and HQ Company to be transferred to profit and loss).

However, the above estimated gross loss may be subject to adjustments after completion of the Disposal since the actual amount of the gross gain/loss from the Disposal can only be determined, based on the consolidated financial position of Bright Success and HQ Company as at the completion date of the Disposal.

For the six months ended 30 June 2019, the Group recorded an unaudited consolidated loss of approximately HK$68.77 million. Based on the unaudited pro forma financial information of the Remaining Group as set out in Appendix IV to this circular, assuming completion of the Disposal had taken place on 1 January 2019, the unaudited pro forma consolidated loss of the Remaining Group for the six months ended 30 June 2019 would be approximately HK$204.02 million.

On completion of the Disposal, the Company intends to use the net sale proceeds of some HK$318.79 million from the Disposal as to HK$150.00 million to repay its bank borrowings including the Bank Loan, as to HK$80.00 million to finance opening of new restaurants/shops for its food and catering business and as to the balance of HK$88.79 million for its working capital.

INFORMATION ON THE GROUP, BRIGHT SUCCESS AND THE PURCHASER

Information of the Group and Bright Success

The Company is principally engaged in the businesses of food and catering, sales of food souvenir and property investment. The Vendors are principally engaged in investment holding with their major asset being the Property.

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LETTER FROM THE BOARD

The sole asset of Bright Success is its equity interest in HQ Company. The audited consolidated total asset value of Bright Success as at 31 December 2018 was approximately HK$471.72 million (equivalent to approximately MOP485.87 million) and the audited consolidated total liability value of Bright Success as at 31 December 2018 was approximately HK$465.80 million (equivalent to approximately MOP479.78 million). The audited consolidated net asset value of Bright Success as at 31 December 2018 was approximately HK$5.92 million (equivalent to approximately MOP6.09 million).

The audited consolidated (loss)/profit before and after tax of Bright Success for each of the years ended 31 December 2017 and 2018 are as follows:

Note: For the years ended 31 December 2017 and 2018, (loss)/profit before income tax of Bright Success were derived almost entirely from fair value (loss)/gain of the Property.

The unaudited consolidated total asset value of Bright Success as at 30 September

2019 was approximately HK$471.52 million (equivalent to approximately MOP485.67 million) and the unaudited consolidated total liability value of Bright Success as at 30 September 2019 was approximately HK$479.78 million (equivalent to approximately MOP494.17 million). The unaudited consolidated net liability value of Bright Success as at 30 September 2019 was approximately HK$8.26 million (equivalent to approximately MOP8.51 million).

Information of the Purchaser

The Purchaser is at the age of 55 and is a local resident of Macau. He has more than 20 years of experience in property investment and investment holding in Macau and many cities in Mainland China. He is the controlling shareholder and director of 常州市金壇區翔 峰房地產開發有限公司, a company established in Changzhou City, Jiangsu which has since 2003 been engaged in property development in Mainland China.

To the best of the Directors' knowledge, information and belief after all reasonable enquiries were made, the Purchaser is a third party independent of the Group and its connected persons (as defined in the Listing Rules).

LISTING RULES IMPLICATIONS

As one of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) in respect of the Disposal exceeds 75%, the Disposal constitutes a very substantial disposal for the Company and is subject to the notification, announcement and shareholders' approval requirements under Chapter 14 of the Listing Rules. Mr. Chan and his associates together had an equity interest of approximately 41.31% in the Company as

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LETTER FROM THE BOARD

at the Latest Practicable Date, and have indicated that they would vote in favour of the Disposal if and when the Disposal is put forward for the approval by the Shareholders at the SGM.

To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, none of the Shareholders has any interest in the Disposal and therefore, no Shareholder is required to abstain from voting on the resolution to be proposed at the SGM to approve the Disposal contemplated under the Disposal Agreement.

SGM

A notice of the SGM to be held at Golden Restaurant, Macau Jockey Club (HK) Club House, 1st Floor, China Merchants Tower, Shun Tak Centre, 168-200 Connaught Road Central, Hong Kong on 18 December 2019 at 11:00 a.m. is set out on pages SGM-1 to SGM-2 of this circular.

In accordance with Rule 13.39(4) of the Listing Rules, the vote of the Shareholders at the SGM will be taken by poll.

A form of proxy for use at the SGM is enclosed with this circular. Whether or not you are able to attend the SGM, you are requested to complete and return the enclosed form of proxy in accordance with the instructions printed thereon to the branch share registrar of the Company in Hong Kong, Tricor Tengis Limited, on Level 54, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong as soon as possible and in any event not less than 48 hours before the time appointed for the holding of the SGM or any adjournment thereof. Completion and return of the form of proxy will not preclude you from attending and voting in person at the SGM or any adjournment thereof should you so wish.

RECOMMENDATION

The Directors consider that the terms of the Disposal (including the Consideration) are fair and reasonable and the Disposal is in the best interests of the Group and the Shareholders as a whole. Accordingly, the Directors recommend all Shareholders to vote in favour of the relevant resolution to be proposed at the SGM.

ADDITIONAL INFORMATION

Your attention is drawn to the additional information contained in the Appendices to this circular.

Yours faithfully,

For and on behalf of the Board

Chan Chak Mo

Managing Director

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1. AUDITED CONSOLIDATED FINANCIAL INFORMATION OF THE GROUP

The audited consolidated financial statements of the Group, together with the accompanying notes, for each of the three years ended 31 December 2016, 2017 and 2018 are disclosed in the annual reports of the Company for the financial years ended 31 December 2016 (pages 72 to 166), 31 December 2017 (pages 74 to 179) and 31 December 2018 (pages 80 to 211) respectively and the unaudited consolidated financial statements of the Group, together with the accompanying notes, for the six months ended 30 June 2019 are disclosed in the interim report of the Company for the six months ended 30 June 2019 (pages 41 to 82), and are incorporated by reference into this circular.

The said annual reports and interim report of the Company are available on the Company's website at www.fb.com.hk and the Stock Exchange's website at www.hkexnews.hk through the links below:

https://www1.hkexnews.hk/listedco/listconews/sehk/2017/0324/ltn20170324325.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2018/0406/ltn20180406715.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0404/ltn20190404986.pdf

https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0903/ltn20190903519.pdf

2. INDEBTEDNESS STATEMENT

As at the close of business on 31 October 2019, being the latest practicable date for the purpose of this statement of indebtedness, the Group's indebtedness includes secured bank loans and borrowings amounting to approximately HK$470,522,000 and unpaid contractual lease liabilities amounting to approximately HK$582,173,000.

The Group's bank loans and borrowings were secured by its assets, including investment property, land and buildings and bank deposits.

As at 31 October 2019, the total outstanding bank loans with specific performance covenant that Mr. Chan, being the controlling shareholder of the Company, and his associates have to hold not less than 37% equity interest in the Company, were some HK$449,872,000.

As at 31 October 2019, the Group, as a lessee, had outstanding unpaid contractual lease liabilities amounting to HK$582,173,000 in aggregate (excluding contingent rental arrangement) in relation to the remaining lease terms of certain right-of-use assets, which are unsecured and unguaranteed.

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The Directors confirm that save as disclosed above, there have been no material changes in the indebtedness or contingent liabilities of the Group as at the Latest Practicable Date, and as disclosed in the Letter from the Board above, HQ Company may face a daily penalty of some RMB0.63 million for delay to meet the current development milestone under the Land Contract which might, if so eventually be found to be payable, amount to approximately RMB57.96 million from 1 August to 31 October 2019.

The Directors confirm that as of 31 October 2019, being the latest practicable date for the purpose of this indebtedness statement, save as disclosed above, the Group did not have any issued and outstanding, or authorised or otherwise created but unissued debt securities, term loans, other borrowings, indebtedness, mortgages and charges, contingent liabilities and guarantees.

3. MATERIAL ADVERSE CHANGE

The Directors confirmed that save as previously announced in (i) the loss alert and business update announcement for the first quarter of 2019 dated 5 June 2019, (ii) the loss alert and business update announcement for the second quarter of 2019 dated 9 August 2019, (iii) the Company's 2019 interim report of 26 August 2019, (iv) the announcement in relation to the Disposal dated 28 October 2019, and (v) the loss alert and business update announcement for the third quarter of 2019 dated 11 November 2019, there was no material adverse change in the financial or trading position of the Group since 31 December 2018 (being the date to which the latest published audited consolidated financial statements of the Group have been made up) to the Latest Practicable Date.

4. WORKING CAPITAL STATEMENT

The Directors, after due and careful enquiry, are of the opinion that, after taking into account the financial resources presently available to the Group including the internally generated funds, the currently available facilities and the net sale proceeds from the Disposal, the Group has sufficient working capital for its normal business for at least the next 12 months from the date of this circular.

5. FINANCIAL AND TRADING PROSPECTS OF THE REMAINING GROUP

With the recent trade and currency disputes between United States and China posing threat and uncertainty to the global economy and the current civil unrest in Hong Kong, management expects the operating environment of the Remaining Group in the following few months to be tough and competitive. To cope with such challenging circumstances, the Group's current business strategy remains to be cautious and prudent in opening any new restaurants in the Greater China area, and management is also to tap on overseas distributors to distribute its food souvenir products in the overseas markets.

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APPENDIX II FINANCIAL INFORMATION OF THE DISPOSAL GROUP

Set out below are the unaudited financial information of the Disposal Group which comprises the unaudited consolidated statements of financial position of the Disposal Group as at 31 December 2016, 2017 and 2018 and 30 June 2019 and the related unaudited consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows for each of the years ended 31 December 2016, 2017 and 2018 and the six months ended 30 June 2018 and 2019 and certain explanatory notes (altogether referred to as the "Unaudited Financial Information").

The Unaudited Financial Information has been prepared in accordance with Rule 14.68(2)(a)(i) of the Listing Rules and the basis of preparation and presentation as set out in note 2 to the Unaudited Financial Information.

The Unaudited Financial Information is prepared by the Directors solely for the purpose of inclusion in this circular in connection with the proposed disposal of the entire equity interest in Bright Success together with the related shareholders' loans. The Company's auditors, BDO Limited (the "reporting accountants"), were engaged to review the Unaudited Financial Information in accordance with Hong Kong Standard on Review Engagements 2410 "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" and with reference to Practice Note 750 "Review of Financial Information under the Hong Kong Listing Rules for a Very Substantial Disposal" issued by the Hong Kong Institute of Certified Public Accountants. A review is substantially less in scope than an audit conducted in accordance with Hong Kong Standards on Auditing and consequently does not enable the reporting accountants to obtain assurance that the reporting accountants would become aware of all significant matters that might be identified in an audit. Accordingly, the reporting accountants do not express an audit opinion. The reporting accountants have issued an unmodified review report.

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APPENDIX II FINANCIAL INFORMATION OF THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

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APPENDIX II FINANCIAL INFORMATION OF THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

- II-3 -

APPENDIX II FINANCIAL INFORMATION OF THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

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APPENDIX II FINANCIAL INFORMATION OF THE DISPOSAL GROUP

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APPENDIX II FINANCIAL INFORMATION OF THE DISPOSAL GROUP

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

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APPENDIX II FINANCIAL INFORMATION OF THE DISPOSAL GROUP

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APPENDIX II FINANCIAL INFORMATION OF THE DISPOSAL GROUP

NOTES TO THE UNAUDITED FINANCIAL INFORMATION

1. GENERAL INFORMATION
   Bright Success is a limited liability company incorporated in Macau. The address of its registered office is at 1023 Avenida de Amizade, 2 andar P-V Edf. Nam Fong, Macau. Bright Success is engaged in investment holding.
   Bright Success's immediate holding companies are Bright Rich and Gain Success, which are incorporated in Macau, and the directors of Bright Success consider its ultimate holding company is the Company, a company incorporated in Bermuda and listed on the Main Board of the Stock Exchange.
   On 28 October 2019, Bright Rich and Gain Success (as vendors), the Company (as vendors' guarantor), Mr. Zhou Luohong (as purchaser), Bright Success and HQ Company, a company wholly owned by Bright Success and incorporated in Mainland China entered into an agreement for sale and purchase, pursuant to which the purchaser agreed, subject to obtaining the approval from the shareholders of the Company, to purchase the entire equity interest in Bright Success together with the related shareholders' loans.
2. BASIS OF PREPARATION AND PRESENTATION
   The Unaudited Financial Information of the Disposal Group has been prepared in accordance with Rule 14.68(2)(a)(i) of the Listing Rules and solely for the purpose of inclusion in the circular to be issued by the Company in connection with the Disposal. It does not contain sufficient information to constitute a complete set of financial statements as described in Hong Kong Standard 1 (Revised) "Presentation of Financial Statements" nor a set of condensed financial statements as defined in Hong Kong Accounting Standard 34 "Interim Financial Reporting" issued by the Hong Kong Institute of Certified Public Accountants and should be read in connection with the annual report of the Company for the year ended 31 December 2018 and the interim report of the Company for the six months ended 30 June 2019.
   The Unaudited Financial Information of the Disposal Group has been prepared in accordance with the accounting policies adopted by the Company as set out in its annual report for the year ended 31 December 2018 and its interim report for the six months ended 30 June 2019.
   The Unaudited Financial Information of the Disposal Group has been prepared under the historical cost basis except for investment property under construction which is measured at fair value. The Unaudited Financial Information is presented in Hong Kong dollars and all values are rounded to the nearest thousand (HK$'000) except where otherwise indicated.
   Notwithstanding that the Disposal Group had net current liabilities of approximately HK$408,372,000 as at 30 June 2019, the Company has undertaken to provide continued financial support to enable the Disposal Group to fulfill its financial liabilities when they fall due and accordingly, the Unaudited Financial Information has been prepared by the Directors on the assumption that the Disposal Group can be operated as a going concern.
   Should the Disposal Group be unable to continue in business as a going concern, adjustments would have to be made in the Unaudited Financial Information to write down the values of the assets to their recoverable amounts, to provide for any further liabilities which might arise, and to reclassify non-current assets and non-current liabilities as current assets and current liabilities respectively. The effect of such adjustments has not yet been reflected in the Unaudited Financial Information.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Following the Disposal, the Remaining Group will continue to carry out its existing businesses. Set out below is the management discussion and analysis of the Remaining Group for each of the three financial years ended 31 December 2016, 2017 and 2018 and the six months ended 30 June 2019.

For the year ended 31 December 2016

Operations review

During the year ended 31 December 2016, the Remaining Group's principal activities were in the sales of food and catering, food souvenir and property investment.

1. Food and catering business

During the year ended 31 December 2016, the Remaining Group's food and catering business contributed some HK$781.6 million turnover representing about 91.6% of the total turnover of the Remaining Group. The increase in turnover for the Remaining Group's food and catering business was mainly attributable to the Remaining Group's new restaurants opened during the year of 2016. During the year of 2016, the Remaining Group opened 14 new restaurants (including 6 self-owned restaurants and 8 franchise restaurants) but closed down 1 self-owned restaurant. The Remaining Group also opened 2 food court counters during the year of 2016. As at 31 December 2016, the Remaining Group had 55 restaurants (including 35 self-owned restaurants and 20 franchise restaurants) and 4 food court counters.

In 2016, the Remaining Group's industrial catering business was derived from its operations of providing the canteen services for universities and school with a modest turnover of some HK$45.3 million, representing a decrease of 6.2%, as compared to those of 2015 of HK$48.3 million. The decrease in turnover of industrial catering business was largely attributable to the decrease in turnover of Food Paradises at the University of Macau and the Macau University of Science and Technology.

The Remaining Group's wholesale business of Japanese food and materials in Macau has improved in 2016. This business was profitable in 2016 with some turnover of HK$50.5 million, representing a growth of some 38.7% as compared to those of 2015 of HK$36.4 million.

1. Food souvenir business

During the year ended 31 December 2016, the food souvenir business has recorded some HK$50.5 million turnover representing about 5.9% of the total turnover of the Remaining Group. The increase in turnover of the food souvenir business was mainly due to the increased sales from the existing Yeng Kee bakery kiosks and the 3 newly opened Yeng Kee bakery kiosks opened in Macau during 2016. The decrease in net loss of this business was mainly due to its increase in turnover, the decrease in its direct operating loss and its reduced impairment losses in 2016. During the year of 2016, the Remaining Group opened 2 new Yeng Kee bakery shops/kiosks in Macau but closed down 3 Yeng Kee bakery shops/ kiosks in Macau and Mainland China.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

1. Property investment business

During the year ended 31 December 2016, the Remaining Group's 6-storey commercial building in Macau has generated a steady rental income of some HK$21.1 million representing about 2.5% of the total turnover of the Remaining Group, with a decrease of approximately 30.4% as compared to those of 2015 of HK$30.3 million. The Remaining Group's net profit attributable to the Remaining Group's property investment business was some HK$10.8 million in 2016, representing a decrease of 48.1%, as compared to the year of 2015 of HK$20.8 million. Such decrease was mainly attributable to

(i) the decrease in rental income and (ii) the fair value losses from investment properties.

Liquidity and financial resources

The Remaining Group generally finances its operations with internally generated resources and banking facilities provided by its bankers. As at 31 December 2016, the Remaining Group had net current assets of HK$383.6 million (2015: HK$387.6 million). As at 31 December 2016, the Remaining Group had bank deposits, cash and bank balances totalling HK$192.1 million (2015: HK$220.0 million), while the Remaining Group's pledged bank deposits amounted to HK$33.8 million (2015: HK$28.1 million) in which HK$33.8 million (2015: HK$28.1 million) has been pledged to a bank in respect of the guarantee given in lieu of paying rental deposit.

As at 31 December 2016, the Remaining Group had interest-bearing bank loans of HK$308.5 million (2015: HK$156.8 million). The Remaining Group had six (2015: two) secured bank loans, including:

1. a secured mortgage loan of HK$106.0 million (2015: HK$120.0 million) was interest bearing at 1-month Hong Kong Inter-Bank Offered Rate ("HIBOR") plus 2.75% per annum, repayable within 15 years from 2011, which has been secured by the investment properties and freehold land and buildings of the Remaining Group with a covenant that Mr. Chan and his associates have to hold not less than 37% equity interest holding of the Company;
2. the second secured mortgage loan of HK$12.1 million (2015: HK$12.8 million) was interest bearing at HIBOR plus 1.75% per annum, repayable within 7 years from 2014 which has been secured by the leasehold land and buildings of the Remaining Group;
3. the third secured mortgage loan of HK$54.9 million (2015: nil) was interest bearing at the prime rate less 2.7% per annum, repayable within 7 years from 2016, which has been secured by the investment properties and freehold land and buildings of the Remaining Group with a covenant that Mr. Chan and his associates have to hold not less than 37% equity interest holding of the Company;

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

1. the fourth secured bank loan of HK$65.0 million (2015: nil) was interest bearing at the prime rate less 2.25% per annum, repayable within 8 years from 2018, which has been secured by the construction in progress of the Group with a covenant that Mr. Chan and his associates have to hold not less than 35% equity interest holding of the Company;
2. the fifth secured bank loan of HK$8.8 million (2015: nil) was interest bearing at HIBOR plus 1.8% per annum, repayable on demand which has been secured by the leasehold land and buildings of the Remaining Group; and
3. the sixth secured bank loan of HK$10.0 million (2015: nil) was interest bearing at HIBOR plus 1.75% per annum, repayable within 3 years from 2016 which has been secured by the leasehold land and buildings of the Remaining Group.

As at 31 December 2016, the Remaining Group had one unsecured bank loan of HK$51.7 million (2015: HK$24.0 million) which is repayable within 5 years from 2015 with maximum facility of HK$80.0 million. It bears interest at the prime rate less 1.5% per annum and is carried with a covenant that Mr. Chan and his associates have to hold not less than 37% equity interest holding of the Company.

During the year of 2016, the Remaining Group has obtained an overdraft facility with maximum facility of HK$38.8 million (equivalent to MOP40.0 million). It bears interest at the prime rate less 2.5% per annum. Such overdraft facility is secured by the freehold land and buildings and investment properties, with a covenant that Mr. Chan and his associates have to hold not less than 37% equity interest holding of the Company. As at 31 December 2016, the Remaining Group's bank overdraft is zero.

The Remaining Group's borrowings are made in Hong Kong dollars, Macau Patacas and Renminbi.

The Remaining Group's gearing ratio represented by the Remaining Group's net debts (total liabilities less cash and cash equivalents) to the Group's total equity as at 31 December 2016 was 29.7 (2015: 29.8). The decrease in the Remaining Group's gearing ratio as at 31 December 2016 was mainly due to the decrease of net debts. The ratio of the total assets against total liabilities of the Remaining Group as at 31 December 2016 was 5.52 (2015: 9.87).

Charges on the Remaining Group's assets

As at 31 December 2016, the Remaining Group pledged the investment properties and freehold land and building in Macau to a bank in Macau to secure two mortgage loans and a bank overdraft facility. The Remaining Group also pledged the construction in progress in Macau to a bank in Macau to secure a bank loan. The Remaining Group also as at that date pledged the leasehold land and building in Hong Kong to a bank in Hong Kong to secure a mortgage loan and two bank loans. Other than that, the Remaining Group did not have any charges on assets.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Contingent liabilities

As at 31 December 2016, the Remaining Group did not have any contingent liabilities (2015: nil).

Currency exposure

As at 31 December 2016, the Remaining Group did not have any outstanding hedging instrument. The Remaining Group would continue to monitor closely its foreign currency exposure and requirements and to arrange for hedging facilities when necessary.

Employees

The Remaining Group employed, as at 31 December 2016, a total of 1,885 (2015: 1,740) full time staff, in which 1,413 (2015: 1,298) full-time staff in Macau, 382 (2015: 413) full-time staff in Mainland China and 90 (2015: 29) fulltime staff in Hong Kong. The remuneration policy of the employees of the Remaining Group is set up by the remuneration committee on the basis of their merit, qualifications and competence, while the detail remuneration packages for the employees are determined by the management based on their performance.

An employee share option scheme of the Company was adopted on 8 June 2012 and effective for a period of 10 years since the date of adoption. Details of the retirement benefits schemes of the Remaining Group are set out in note 4(n) to the audited consolidated financial statements of the Company for the year ended 31 December 2016.

For the year ended 31 December 2017

Operations review

During the year ended 31 December 2017, the Remaining Group's principal activities were in the sales of food and catering, food souvenir and property investment.

1. Food and catering business

During the year ended 31 December 2017, the Remaining Group's food and catering business contributed some HK$894.6 million turnover representing about 93.5% of turnover of the Remaining Group. The increase in turnover for the Remaining Group's food and catering business was mainly attributable to the increases in sales from the Remaining Group's restaurants opened in late 2016 and during the year of 2017. During the year of 2017, the Remaining Group opened 16 new restaurants (including 6 self-owned restaurants and 10 franchise restaurants) but closed down 4 self-owned restaurants and 1 franchise restaurant. As at 31 December 2017, the Remaining Group had 66 restaurants (including 38 self-owned restaurants and 28 franchise restaurants) and 4 food court counters.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

In 2017, the Remaining Group's industrial catering business was derived from its operations of providing the canteen services for universities and school with a modest turnover of some HK$43.1 million, representing a decrease of 4.9%, as compared to those of 2016 of HK$45.3 million. The decrease in turnover of industrial catering business was largely attributable to the decrease in turnover of Food Paradises at the University of Macau.

The Remaining Group's wholesale business of Japanese food and materials was profitable in 2017 with some turnover of HK$31.3 million, representing a decrease of some 38.0% as compared to those of 2016 of HK$50.5 million.

1. Food souvenir business

During the year ended 31 December 2017, the food souvenir business has recorded some HK$62.5 million turnover representing about 6.5% of the total turnover of the Remaining Group. The increase in turnover of the food souvenir business was mainly due to the increased sales from the Yeng Kee retail outlets opened in Macau during 2017. The decrease in net loss of this business was mainly due to its increase in turnover and the decrease in its direct operating loss. During the year of 2017, the Remaining Group opened 1 shop and 1 kiosk for Yeng Kee bakery in Macau but also closed down 1 Yeng Kee bakery shop in Macau.

1. Property investment business

During the year ended 31 December 2017, the Remaining Group's 6-storey commercial building in Macau was left unoccupied resulting in no rental income to the Remaining Group, as compared to those of 2016 with a rental income of HK$21.1 million. The said 6-storey commercial building was valued at HK$505.0 million as at 31 December 2017 (2016: HK$513.0 million).

Liquidity and financial resources

The Remaining Group generally finances its operations with internally generated resources and banking facilities provided by its bankers.

As at 31 December 2017, the Remaining Group had net current assets of HK$356.2 million (2016: HK$383.6 million). As at 31 December 2017, the Remaining Group had bank deposits, bank overdraft, cash and bank balances totalling HK$117.8 million (2016: HK$192.1 million), while the Remaining Group's pledged bank deposits amounted to HK$33.1 million (2016: HK$33.8 million) in which HK$33.1 million (2016: HK$33.8 million) has been pledged to a bank in respect of the guarantee given in lieu of paying rental deposit.

As at 31 December 2017, the Remaining Group had interest-bearing bank loans of some HK$395.2 million (2016: HK$308.5 million).

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

The following loans and banking facilities were in existence during the year ended 31 December 2017 and were granted by Bank of China Limited, Macau Branch to certain wholly-owned subsidiaries of the Company:

1. a mortgage loan in an initial aggregate amount of approximately HK$236.81 million (equivalent to approximately MOP243.91 million). This mortgage loan is interest bearing at HIBOR plus 2.75% per annum, repayable within 15 years from February 2011 on the terms and conditions therein contained. As at 31 December 2017, the outstanding loan amount was approximately HK$91.6 million;
2. an unsecured bank loan with a maximum facility of HK$80.0 million. This bank loan is interest bearing at the prime rate less 1.5% per annum, repayable within 5 years from January 2016 on the terms and conditions therein contained. As at 31 December 2017, the outstanding loan amount was approximately HK$59.7 million;
3. a secured bank loan, with a maximum facility of approximately HK$124.3 million (equivalent to MOP128.0 million). This bank loan is interest bearing at the prime rate less 2.25% per annum, repayable within 8 years from January 2018 on the terms and conditions therein contained. As at 31 December 2017, the outstanding loan amount was approximately HK$116.8 million;
4. a mortgage loan in an aggregate amount of approximately HK$60.2 million (equivalent to MOP62.0 million). This mortgage loan is interest bearing at the prime rate less 2.7% per annum, repayable within 7 years from May 2016 on the terms and conditions therein contained. As at 31 December 2017, the outstanding loan amount was approximately HK$46.8 million; and
5. a bank overdraft facility with a maximum facility of approximately HK$38.83 million (equivalent to MOP40.0 million). It bears interest at the prime rate less 2.5% per annum. This bank overdraft has been updated and is repayable in April 2019 on the terms and conditions therein contained. As at 31 December 2017, the outstanding bank overdraft was some HK$38.6 million.

The Remaining Group's borrowings are made in Hong Kong dollars and Macau Patacas.

The Remaining Group's gearing ratio represented by the Remaining Group's net debts (total liabilities less cash and cash equivalents) to the Remaining Group's total equity as at 31 December 2017 was 54.8 (2016: 29.7). The increase in the Remaining Group's gearing ratio as at 31 December 2017 was mainly due to the increase of net debts. The ratio of the total assets against total liabilities of the Remaining Group as at 31 December 2017 was 4.28 (2016: 5.52).

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Charges on the Remaining Group's assets

As at 31 December 2017, the Remaining Group pledged its investment properties and freehold land and building in Macau to a bank in Macau to secure two mortgage loans and a bank overdraft facility. The Remaining Group also pledged the construction in progress in Macau to a bank in Macau to secure a bank loan. The Remaining Group has as at that date pledged the leasehold land and building in Macau to a bank in Macau to secure one mortgage loan. The Remaining Group has also as at that date pledged the asset held for sale in Hong Kong to a bank in Hong Kong to secure one mortgage loan and two bank loans. The Remaining Group has also as at that date pledged bank deposits to banks in respect of the guarantee given in lieu of paying rental deposit. Other than that, the Remaining Group did not have any charges on assets.

Contingent liabilities

As at 31 December 2017, the Remaining Group did not have any contingent liabilities (2016: nil).

Currency exposure

As at 31 December 2017, the Remaining Group did not have any outstanding hedging instrument. The Remaining Group would continue to monitor closely its foreign currency exposure and requirements and to arrange for hedging facilities when necessary.

Employees

The Remaining Group employed, as at 31 December 2017, a total of 2,108 (2016: 1,885) full time staff, in which 1,368 (2016: 1,413) full-time staff in Macau, 537 (2016: 382) full-time staff in Mainland China and 203 (2016: 90) fulltime staff in Hong Kong. The remuneration policy of the employees of the Remaining Group is set up by the remuneration committee on the basis of their merit, qualifications and competence, while the detailed remuneration packages for the employees are determined by the management based on their performance.

An employee share option scheme of the Company was adopted on 8 June 2012 and effective for a period of 10 years since the date of adoption. Details of the retirement benefits schemes of the Remaining Group are set out in notes 4(o) and 11 to the audited consolidated financial statements of the Company for the year ended 31 December 2017. The contributions to the retirement schemes charged to the consolidated income statement during the year was approximately HK$12.4 million (2016: HK$10.0 million), after deducting forfeitures of approximately HK$2.4 million (2016: HK$4.1 million). As at 31 December 2017, forfeited contributions available to reduce future contributions amounted to approximately HK$1.1 million.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

For the year ended 31 December 2018

Operations review

During the year ended 31 December 2018, the Remaining Group's principal activities were in the sales of food and catering, food souvenir and property investment.

1. Food and catering business

During the year ended 31 December 2018, the Remaining Group's food and catering business contributed some HK$1,054.9 million turnover representing about 93.1% of turnover of the Remaining Group. The increase in turnover for the Remaining Group's food and catering business was mainly attributable to the increases in sales from the Remaining Group's restaurants in Hong Kong. During the year of 2018, the Remaining Group opened 7 new restaurants (including 4 self-owned restaurants and 3 franchise restaurants), 7 food court counters and 1 food court with multiple cuisines, but closed down 9 self-owned restaurants and 7 franchise restaurants. As at 31 December 2018, the Remaining Group had 57 restaurants (including 33 self-owned restaurants and 24 franchise restaurants) and 12 food court counters.

In the year of 2018, the Remaining Group's industrial catering business derives from its provision of canteen services for universities and school with a modest turnover of some HK$48.7 million, representing an increase of 13.0%, as compared to that of HK$43.1 million for the year of 2017. The increase in turnover of industrial catering business was mainly attributable to the increase in customer visits.

The Remaining Group's wholesale business of Japanese food and materials was profitable in the year of 2018 with some turnover of HK$42.0 million, representing an increase of some 34.2% as compared to that of HK$31.3 million for the year of 2017. The increase in turnover of food wholesale business was mainly attributable to the increase of sales from existing and new customers in the year of 2018.

1. Food souvenir business

During the year ended 31 December 2018, the food souvenir business has recorded some HK$78.4 million turnover representing about 6.9% of the total turnover of the Remaining Group. The increase in turnover of the food souvenir business was mainly due to the increased sales from the Yeng Kee retail outlets and from overseas distributors. The decrease in net loss of this business was mainly due to its increase in turnover and the decrease in its direct operating loss. During the year of 2018, the Remaining Group opened 2 shops for Yeng Kee Bakery in Macau but also closed down 1 Yeng Kee Bakery shop in Macau.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

1. Property investment business

During the years ended 31 December 2018 and 2017, the Remaining Group's 6-storey commercial building in Macau was left vacant and hence without any rental income to the Remaining Group. The said 6-storey commercial building was valued at HK$505.0 million as at 31 December 2018 (2017: HK$505.0 million).

Liquidity and financial resources

The Remaining Group generally finances its operations with internally generated resources and banking facilities provided by its bankers.

As at 31 December 2018, the Remaining Group had net current assets of HK$689.7 million (2017: HK$356.2 million). As at 31 December 2018, the Remaining Group had bank deposits, bank overdraft, cash and cash equivalents totalling HK$83.4 million (2017: HK$117.8 million), while the Remaining Group's restricted bank deposits amounted to HK$24.2 million (2017: HK$33.1 million), all (2017: HK$33.1 million) of which has been pledged to a bank in respect of the guarantee given in lieu of paying rental deposit.

As at 31 December 2018, the Remaining Group had interest-bearing bank loans of some HK$420.9 million (2017: HK$395.2 million).

The following loans and banking facilities were in existence during the year ended 31 December 2018 and were granted by Bank of China Limited, Macau Branch and Hang Seng Bank Limited, Macau Branch to certain wholly-owned subsidiaries of the Company:

1. a mortgage loan in an initial aggregate amount of approximately HK$236.81 million (equivalent to approximately MOP243.91 million). This mortgage loan is interest bearing at HIBOR plus 2.75% per annum, repayable within 15 years from February 2011 on the terms and conditions therein contained. As at 31 December 2018, the outstanding loan amount was approximately HK$76.9 million (as at 31 December 2017: HK$91.6 million);
2. an unsecured bank loan with a maximum facility of HK$80.0 million. This bank loan is interest bearing at the prime rate less 1.5% per annum, repayable within 5 years from January 2016 on the terms and conditions therein contained. As at 31 December 2018, the outstanding loan amount was approximately HK$43.2 million (as at 31 December 2017: HK$59.7 million);
3. a secured bank loan, with a maximum facility of approximately HK$124.3 million (equivalent to MOP128.0 million). This bank loan is interest bearing at the prime rate less 2.25% per annum, repayable within 8 years from January 2018 on the terms and conditions therein contained. During the year ended 31 December 2018, the Remaining Group fully repaid this loan. As at 31 December 2018, the outstanding loan amount was nil (as at 31 December 2017: HK$116.8 million);

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

1. a mortgage loan in an aggregate amount of approximately HK$60.2 million (equivalent to MOP62.0 million). This mortgage loan is interest bearing at the prime rate less 2.7% per annum, repayable within 7 years from May 2016 on the terms and conditions therein contained. As at 31 December 2018, the outstanding loan amount was approximately HK$38.5 million (as at 31 December 2017: HK$46.8 million);
2. a bank overdraft facility with a maximum facility of approximately HK$38.83 million (equivalent to MOP40.0 million). It bears interest at the prime rate less 2.5% per annum. This bank overdraft has been updated and is repayable in April 2020 on the terms and conditions therein contained. As at 31 December 2018, the outstanding bank overdraft was some HK$25.5 million (as at 31 December 2017: HK$38.6 million);
3. a mortgage loan, with 3 tranches in an aggregate amount of approximately HK$222.0 million, pursuant to which two formal loan agreements with the same terms have been entered into. This mortgage loan is interest bearing at 1.8% per annum over HIBOR, repayable within 5-7 years after 3 months from the date of drawdown on the terms and conditions contained therein. As at 31 December 2018, the outstanding loan amount was approximately HK$167.0 million (as at 31 December 2017: nil); and
4. a mortgage loan in an aggregate amount of approximately HK$97.08 million (equivalent to MOP100.0 million). This mortgage loan is interest bearing at the prime rate less 2.55% per annum, repayable within 5 years from December 2018, on the terms and conditions therein contained. As at 31 December 2018, the outstanding loan amount was approximately HK$48.6 million (as at 31 December 2017: nil).

The Remaining Group's borrowings are made in Hong Kong dollars and Macau Patacas.

The Remaining Group's gearing ratio represented by the Remaining Group's net debts (total liabilities less cash and cash equivalents) to the Remaining Group's total equity as at 31 December 2018 was 79.5 (2017: 54.8). The increase in the Remaining Group's gearing ratio as at 31 December 2018 was mainly due to the increase of net debts and the decrease of the Remaining Group's total equity. The ratio of the total assets against total liabilities of the Remaining Group as at 31 December 2018 was 3.76 (2017: 4.28).

Charges on the Remaining Group's assets

As at 31 December 2018, the Remaining Group has pledged its investment properties and freehold land and building in Macau to a bank in Macau to secure three mortgage loans and a bank overdraft facility. The Remaining Group has also pledged two leasehold land and buildings in Macau to another bank in Macau to secure two mortgage loans. The Remaining Group has also as at that date pledged a bank deposit in Hong Kong to a bank in Hong Kong to secure one bank loan. The Remaining Group has also as at that date pledged bank deposits to banks in respect of its bank guarantee given in lieu of paying rental deposit. Other than that, the Remaining Group did not have any charges on assets.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Contingent liabilities

As at 31 December 2018, the Remaining Group did not have any contingent liabilities (2017: nil).

Currency exposure

As at 31 December 2018, the Remaining Group did not have any outstanding hedging instrument. The Remaining Group would continue to monitor closely its foreign currency exposure and requirements and to arrange for hedging facilities when necessary.

Employees

The Remaining Group employed, as at 31 December 2018, a total of 2,283 (2017: 2,108) full-time staff, in which 1,411 (2017: 1,368) full-time staff in Macau, 493 (2017: 537) full-time staff in Mainland China, 315 (2017: 203) full-time staff in Hong Kong and 64 (2017: nil) full-time staff in Taiwan. The remuneration policy of the employees of the Remaining Group is set up by the remuneration committee on the basis of their merit, qualifications and competence, while the detailed remuneration packages for the employees are determined by the management based on their performance.

An employee share option scheme of the Company was adopted on 8 June 2012 and effective for a period of 10 years since the date of adoption. Details of the retirement benefits schemes of the Remaining Group are set out in notes 4(o) and 35 to the audited consolidated financial statements of the Company for the year ended 31 December 2018. The contributions to the retirement schemes charged to the consolidated income statement during the year was approximately HK$11.8 million (2017: HK$12.4 million), after deducting forfeitures of approximately HK$3.6 million (2017: HK$2.4 million). As at 31 December 2018, forfeited contributions available to reduce future contributions amounted to approximately HK$0.8 million (as at 31 December 2017: HK$1.1 million).

For the six months ended 30 June 2019

Operations review

During the six months ended 30 June 2019, the Remaining Group's principal activities were in the sales of food and catering, food souvenir and property investment.

1. Food and catering business

During the six months ended 30 June 2019, the Remaining Group's food and catering business contributed some HK$525.0 million turnover representing about 93.2% of turnover of the Remaining Group. The increase in turnover for the Remaining Group's food and catering business was mainly attributable to the increases in sales from its restaurants in Hong Kong and Taiwan. As at 30 June 2019, the Remaining Group had 51 restaurants (including 26 self-owned restaurants and 25 franchise restaurants) and 12 food court counters.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

During the six months ended 30 June 2019, the Remaining Group's industrial catering business has derived from its operations of providing the 3 canteen services for universities and schools with a turnover of some HK$21.4 million, representing a decrease of 3.1% as compared to the same period of 2018 of HK$22.1 million. The decrease in turnover of industrial catering business was mainly attributable to the decrease in customer visits.

During the six months ended 30 June 2019, the Remaining Group's wholesale business of Japanese food and materials has achieved a turnover of some HK$23.8 million, representing a healthy increase of 21.4% as compared to the same period of 2018 of HK$19.6 million. The increase in turnover of food wholesale business was mainly attributable to an overall increase of sales in the period.

1. Food souvenir business

During the six months ended 30 June 2019, the Remaining Group's food souvenir business has contributed some HK$38.5 million turnover, representing about 6.8% of the Remaining Group's turnover. The increase in turnover of the food souvenir business was mainly due to the increase of turnover from the recently opened Yeng Kee bakery shop at Macau International Airport. The food souvenir business was still adversely affected by the high rental expenses and staff costs. As at 30 June 2019, the Remaining Group had 12 Yeng Kee bakery shops/kiosks in Macau (30 June 2018: 12).

1. Property investment business

During the six months ended 30 June 2019 and 2018, the Remaining Group's 6-storey commercial building in Macau was left vacant and hence without any rental income contribution to the Remaining Group. The Remaining Group's net loss attributable to Remaining Group's property investment business was some HK$26.2 million in the period, as compared to the net profit for the same period of 2018 of HK$14.5 million. Such loss for the period was mainly attributable to a net fair value loss of some HK$21.1 million derived from the Remaining Group's 6-storey commercial building in Macau. As announced, the Remaining Group has as landlord entered into a tenancy agreement with an independent third party as tenant, for a period of 8 years from commencement of the tenant's business or end of the rent free period (whichever is earlier) in respect of the Remaining Group's 6-storey commercial building in Macau including the self-use portion. The entering into of this tenancy agreement would generate rental income to the Remaining Group to enhance the revenue base of the Remaining Group.

The Remaining Group's 6-storey commercial building in Macau was valued at HK$481.0 million as at 30 June 2019 (31 December 2018: HK$505.0 million). During the six months ended 30 June 2019, a gross fair value loss of HK$24.0 million (six months ended 30 June 2018: nil) from the Remaining Group's 6-storey commercial building in Macau was recognised in the consolidated statement of comprehensive income.

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Liquidity and financial resources

The Remaining Group generally finances its operations with internally generated resources and banking facilities provided by its bankers.

As at 30 June 2019, the Remaining Group had net current assets of some HK$537.1 million (31 December 2018: HK$689.7 million). As at 30 June 2019, the Remaining Group had restricted bank deposits, bank overdraft, cash and bank balances totalling some HK$45.6 million (31 December 2018: HK$83.4 million), while the Remaining Group's restricted bank deposits amounted to some HK$24.9 million (31 December 2018: HK$24.2 million), of which HK$5.0 million has been pledge to a bank in Hong Kong to secure a bank loan and HK$19.9 million has been pledged to a bank in respect of bank guarantee given, in lieu of paying rental deposit.

As at 30 June 2019, the Remaining Group had interest-bearing bank loans of some HK$453.7 million (31 December 2018: HK$420.9 million).

The following loans and banking facilities were in existence during the six months ended 30 June 2019 and were granted by Bank of China Limited, Macau Branch and Hang Seng Bank Limited, Macau Branch to certain wholly-owned subsidiaries of the Company:

1. a mortgage loan in an initial aggregate amount of approximately HK$236.81 million (equivalent to approximately MOP243.91 million). This mortgage loan is interest bearing at HIBOR plus 2.75% per annum, repayable within 15 years from February 2011 on the terms and conditions therein contained. As at 30 June 2019, the outstanding loan amount was approximately HK$69.4 million (31 December 2018: HK$76.9 million);
2. an unsecured bank loan with a maximum facility of HK$80.0 million. This bank loan is interest bearing at the prime rate less 1.5% per annum, repayable within 5 years from January 2016 on the terms and conditions therein contained. As at 30 June 2019, the outstanding loan amount was approximately HK$34.9 million (31 December 2018: HK$43.2 million);
3. a mortgage loan in an aggregate amount of approximately HK$60.2 million (equivalent to MOP62.0 million). This mortgage loan is interest bearing at the prime rate less 2.7% per annum, repayable within 7 years from May 2016 on the terms and conditions therein contained. As at 30 June 2019, the outstanding loan amount was approximately HK$34.3 million (31 December 2018: HK$38.5 million);
4. a bank overdraft facility with a maximum facility of approximately HK$38.83 million (equivalent to MOP40.0 million). It bears interest at the prime rate less 2.5% per annum. This bank overdraft has been updated and is repayable in April 2020 on the terms and conditions therein contained. As at 30 June 2019, the outstanding bank overdraft was some HK$36.9 million (31 December 2018: HK$25.5 million);

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

1. a mortgage loan, with 3 tranches in an aggregate amount of approximately HK$222.0 million, pursuant to which two formal loan agreements with the same terms have been entered into. This mortgage loan is interest bearing at 1.8% per annum over HIBOR, repayable within 5-7 years after 3 months from the date of drawdown on the terms and conditions contained therein. As at 30 June 2019, the outstanding loan amount was approximately HK$160.3 million (31 December 2018: HK$167.0 million); and
2. a mortgage loan in an aggregate amount of approximately HK$97.1 million (equivalent to MOP100.0 million). This mortgage loan is interest bearing at the prime rate less 2.55% per annum, repayable within 5 years from December 2018, on the terms and conditions therein contained. As at 30 June 2019, the outstanding loan amount was approximately HK$97.1 million (31 December 2018: HK$48.6 million).

The Remaining Group's borrowings are made in Hong Kong dollars and Macau Patacas.

The Remaining Group's gearing ratio represented by the Remaining Group's net debts (total liabilities less cash and cash equivalents) to the Remaining Group's total equity as at 30 June 2019 was 127.7 (31 December 2018: 79.5). The increase in the Remaining Group's gearing ratio as at 30 June 2019 was mainly due to the increase in lease liabilities derived under HKFRS 16 and the decrease in the Remaining Group's total equity. The Remaining Group's ratio of the total assets against the total liabilities of the Remaining Group was as at 30 June 2019 at 2.28 (31 December 2018: 3.76).

Charges on the Remaining Group's assets

As at 30 June 2019, the Remaining Group has pledged its investment properties and freehold land and building in Macau to a bank in Macau to secure three mortgage loans and a bank overdraft facility. The Remaining Group has also pledged two leasehold land and buildings in Macau to another bank in Macau to secure two mortgage loans. The Remaining Group has also as at that date pledged a bank deposit in Hong Kong to a bank in Hong Kong to secure one bank loan. The Remaining Group has also as at that date pledged bank deposits to banks in respect of its bank guarantee given, in lieu of paying rental deposit. Other than that, the Remaining Group did not have any charges on assets.

Contingent liabilities

As at 30 June 2019, the Remaining Group did not have any contingent liabilities (31 December 2018: nil).

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APPENDIX III MANAGEMENT DISCUSSION AND ANALYSIS OF THE REMAINING GROUP

Currency exposure

As at 30 June 2019, the Remaining Group did not have any outstanding hedging instrument. The Remaining Group would continue to monitor closely its foreign currency exposure and requirements and to arrange for hedging facilities when necessary.

Employees

As at 30 June 2019, the Remaining Group has employed a total of 2,114 full time staff (30 June 2018: 2,202), in which 1,349 (30 June 2018: 1,365) full time staff in Macau, 392 (30 June 2018: 587) full time staff in Mainland China, 293 (30 June 2018: 250) full time staff in Hong Kong and 80 (30 June 2018: nil) full time staff in Taiwan. Remuneration packages including medical plan have been and are regularly reviewed with reference to market terms, individual qualifications, experience, duties and responsibilities. The remuneration policy of the employees of the Remaining Group is set up by the remuneration committee on the basis of their merit, qualifications and competence, while the detailed remuneration packages for the employees are determined by management based on their performance.

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1. UNAUDITED PRO FORMA FINANCIAL INFORMATION OF THE REMAINING GROUP
   Introduction

The unaudited pro forma financial information of the Remaining Group (the "Unaudited Pro Forma Financial Information") has been prepared by the Directors in accordance with Rule 4.29 of the Listing Rules and solely for the purpose of illustrating (a) the financial position of the Remaining Group as if the Disposal had been completed on 30 June 2019; and (b) the financial results and cash flows of the Remaining Group for the six months ended 30 June 2019 as if the Disposal had been completed on 1 January 2019.

The unaudited pro forma consolidated statement of financial position of the Remaining Group has been prepared based on the unaudited condensed consolidated statement of financial position of the Group as at 30 June 2019 which has been extracted from the Group's published interim report for the six months ended 30 June 2019, after taking into account the pro forma adjustment relating to the Disposal that are (i) clearly shown and explained; (ii) directly attributable to the Disposal and not relating to future events or decisions; and (iii) factually supportable, as explained in the accompanying notes, as if the Disposal had been completed on 30 June 2019.

The unaudited pro forma consolidated statement of comprehensive income and the unaudited pro forma consolidated statement of cash flows of the Remaining Group are prepared based on the unaudited condensed consolidated statement of comprehensive income and the unaudited condensed consolidated statement of cash flows of the Group for the six months ended 30 June 2019, which have been extracted from the Group's published interim report for the six months ended 30 June 2019, after taking into account the pro forma adjustments relating to the Disposal that are (i) clearly shown and explained; (ii) directly attributable to the Disposal and not relating to future events or decisions; and (iii) factually supportable, as explained in the accompanying notes, as if the Disposal had been completed on 1 January 2019.

The Unaudited Pro Forma Financial Information has been prepared by the Directors based on certain assumptions, estimates and uncertainties for illustrative purposes only and because of its hypothetical nature, the Unaudited Pro Forma Financial Information may not purport to predict what the financial position of the Remaining Group would have been if the Disposal had been completed on 30 June 2019 or at any future dates, or what the financial results and cash flows of the Remaining Group for the six months ended 30 June 2019 or for any future periods would have been if the Disposal had been completed on 1 January 2019.

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION OF THE REMAINING GROUP

As at 30 June 2019

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- IV-3 -

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME OF THE REMAINING GROUP

For the six months ended 30 June 2019

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UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF CASH FLOWS

OF THE REMAINING GROUP

For the six months ended 30 June 2019

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Notes:

1. The unadjusted unaudited consolidated statement of financial position of the Group as at 30 June 2019, and the unadjusted unaudited consolidated statement of comprehensive income and the unadjusted unaudited consolidated statement of cash flows of the Group for the six months ended 30 June 2019 are extracted from the published interim report of the Group for the six months ended 30 June 2019.
2. The adjustment represents the impact excluding the assets and liabilities of the Disposal Group as at 30 June 2019, assuming the Disposal was completed and the Group's control over the Disposal Group was lost on 30 June 2019; and the consequential impact on the Remaining Group's equity and the estimated financial position when the Disposal was completed on 30 June 2019.
   The assets and liabilities of the Disposal Group attributable to the Group have been presented as assets and liabilities of a disposal group classified as held for sale presented in the unaudited consolidated statement of financial position of the Group as at 30 June 2019.
   The cash consideration received from the completion of the Disposal amounted to RMB300,000,000 (equivalent to approximately HK$341,025,000). The adjustment reflects the estimated loss on the disposal of the Disposal Group before income tax of approximately HK$136,841,000.

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The calculation of the estimated loss on the disposal of the Disposal Group to be recognised in profit or loss, as if the Disposal had been completed on 30 June 2019, is as follows:

Notes:

1. The amount represented the total consideration, being an amount of RMB300.00 million (equivalent to approximately HK$341,025,000), which is payable by the Purchaser to the Company on the completion of the Disposal.
2. The amount represents the net assets of the Disposal Group as at 30 June 2019 as follows
   HK$'000

1. • The amounts represent the balances in the unaudited consolidated statement of financial position of the Group as at 30 June 2019 after elimination.
2. The amount represents the shareholders' loans due from the Disposal Group disposed in accordance with the Disposal Agreement as if the Disposal had been completed on 30 June 2019. The shareholders' loans due from the Disposal Group consist of amounts due to fellow subsidiaries, immediate holding company and ultimate holding company in the unaudited consolidated statement of financial position as at 30 June 2019 set out in Appendix II to this circular.

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1. The amount represents bank loans of the Disposal Group to be repaid by the Remaining Group three days prior to the date of completion of the Disposal in accordance with the Disposal Agreement as if the Disposal had been completed on 30 June 2019.
2. The amount represents the cumulative currency translation differences related to foreign operations of the Disposal Group to be released to profit or loss as if the Disposal had been completed on 30 June 2019.
3. The transaction costs represent professional fee directly attributable to the disposal of the Disposal Group which are estimated to be approximately HK$10,500,000 and it is assumed that the fees would be settled by cash.

Based on the difference between the Consideration and the investment cost of the Disposal Group recorded in the book of the Group, no income tax effect on the Disposal is expected.

1. The adjustment represents the impact excluding the financial performance and cash flows of the Disposal Group for the six months ended 30 June 2019, as extracted from the unaudited consolidated statements of comprehensive income and unaudited consolidated statements of cash flows set out in Appendix II to this circular, as if the Disposal had taken place on 1 January 2019.
2. The adjustment represents the consequential impact on the Remaining Group's financial performance and cash flows assuming the Disposal had been completed on 1 January 2019, including the effect of: i) disposal of the entire equity interests in the Disposal Group; ii) disposal of shareholders' loans amounting to approximately HK$382,756,000; iii) being responsible to repay bank loans of the Disposal Group amounting to approximately HK$41,648,000 in accordance with the Disposal Agreement.
   The cash consideration received upon completion of the Disposal amounted to RMB300,000,000 (equivalent to approximately HK$342,075,000). The adjustment reflects the estimated loss on the disposal of the Disposal Group before income tax of approximately HK$132,723,000.
   The calculation of the estimated loss on the disposal of the Disposal Group to be recognised in profit or loss, as if the Disposal had been completed on 1 January 2019, is as follows:

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Notes:

1. The amount represented the total consideration, being an amount of RMB300.00 million (equivalent to approximately HK$342,075,000), which is payable by the Purchaser to the Company on the completion of the Disposal.
2. The amount represents the net assets of the Disposal Group as at 31 December 2018 as follows