MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF 13% EQUITY INTERESTS IN DEVELOPMENT GOLDEN BEACH CO., LTD.

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1 Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, 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 announcement. (Incorporated in Bermuda with limited liability) (Stock Code: 472) MAJOR AND CONNECTED TRANSACTION IN RELATION TO THE ACQUISITION OF 13% EQUITY INTERESTS IN DEVELOPMENT GOLDEN BEACH CO., LTD. THE ACQUISITION On 25 April 2016 (after trading hours of the Stock Exchange), the Company entered into the Sale and Purchase Agreement with the Vendors pursuant to which the Vendors have conditionally agreed to sell and transfer, and the Company has conditionally agreed to acquire, the Sale Shares at the Consideration of KRW9,880,000,000 (equivalent to approximately HK$67,184,000). The Sale Shares represent 13% of the entire issued share capital of the Target Company. IMPLICATIONS UNDER THE LISTING RULES Pursuant to Rule of the Listing Rules, the transactions contemplated under the Initial Sale and Purchase Agreement, the Second Sale and Purchase Agreement and the Sale and Purchase Agreement will be aggregated and as a result of the aggregation, the highest of the applicable percentage ratios as calculated under Rule of the Listing Rules is more than 25% but less than 100%, constituting a major transaction for the Company under Chapter 14 of Listing Rules. As the Initial Sale and Purchase Agreement had already constituted a major transaction and Shareholders approval had already been obtained at the SGM, the transaction contemplated under the Sale and Purchase Agreement (which in itself when not aggregated does not constitute a notifiable transaction under Chapter 14 of the Listing Rules) will only be required to comply with the reporting and announcement requirements for a major transaction under Chapter 14 of the Listing Rules. 1

2 As the Sale and Purchase Agreement is entered into between the Company and connected persons at the subsidiary level on normal commercial terms, it is only subject to the reporting, announcement and annual review requirements but is exempt from the circular, independent financial advice and shareholders approval requirements under Rule 14A.101 of the Listing Rules. This is because (i) the Board has approved the Sale and Purchase Agreement; and (ii) the Directors (including the independent non-executive Directors) have confirmed that the terms of the Sale and Purchase Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. No circular will be issued in connection with the Sale and Purchase Agreement. Reference is made to the Company s announcements dated 13 August 2015 and 1 February 2016 and circular dated 4 December THE ACQUISITION On 25 April 2016 (after trading hours of the Stock Exchange), the Company entered into the Sale and Purchase Agreement with the Vendors pursuant to which the Vendors have conditionally agreed to sell and transfer, and the Company has conditionally agreed to acquire, the Sale Shares at the Consideration of KRW9,880,000,000 (equivalent to approximately HK$67,184,000). SALE AND PURCHASE AGREEMENT Date: 25 April 2016 Parties Purchaser: Vendors: The Company Mr. Lee and Mr. Yu, who are both Korean residents and substantial shareholders of the Target Company The Vendors were introduced to the Company during the negotiation of the Initial Sale and Purchase Agreement. Save as aforesaid, the Company does not have any prior business relationship with the Vendors. To the best of the Directors knowledge, information and belief and having made all reasonable enquiries, the Vendors are substantial shareholders of the Target Company (being a non wholly-owned subsidiary of the Company) and are therefore connected persons of the Company. Assets to be acquired As at the date hereof, the Company holds 59% equity interests in the Target Company. Following the Completion, the Company will hold 72% equity interests in the Target Company. The assets to be acquired under the Acquisition are the Sale Shares which represent 13% of the entire issued share capital of the Target Company. The original acquisition price of the Sale Shares paid by Mr. Lee and Mr. Yu were KRW400,000,000 (equivalent to approximately HK$2,720,000) and KRW60,000,000 (equivalent to approximately HK$408,000) respectively. 2

3 The Target Company is principally engaged in the Casino Business. Following the completion of the Initial Sale and Purchase Agreement, the Group is involved in the Casino Business and have good title to the Business Assets owned by the Target Company. Consideration The Consideration for the Sale Shares is KRW9,880,000,000 (equivalent to approximately HK$67,184,000), which has been arrived at after arm s length negotiation between the Company and the Vendors with reference to, among other things, the audited financial results of the Target Company for the year ended 31 December 2015, the Initial Sales and Purchase Agreement and the Second Sale and Purchase Agreement, and the fact that the Sale Shares are the minority interest in the Target Company. The Consideration for the Sale Shares shall be payable in cash, part of the Consideration in the amount of KRW3,800,000,000 (equivalent to approximately HK$25,840,000) will be payable to Mr. Lee on 12 May 2016 and the balance in the amounts of KRW3,800,000,000 (equivalent to approximately HK$25,840,000) and KRW2,280,000,000 (equivalent to approximately HK$15,504,000) respectively will be payable to Mr. Lee and Mr. Yu on Completion. The Company will finance the Acquisition by way of internal resources and/or financing (if necessary). Completion Completion is conditional upon satisfaction or waiver (as the case may be) of each of the following conditions: (a) the Vendors and the Company fully performed all necessary undertakings or obligations stipulated under the Sale and Purchase Agreement; (b) the Vendors and the Company s representations and warranties remain true and accurate; (c) all necessary approvals and consents are obtained from the government and regulatory authorities in Hong Kong and South Korea in connection with the Acquisition; and (d) no material change occurred on the Target Company. Completion shall take place on or before 23 May 2016 or any other date to be mutually agreed between the Company and the Vendors. INFORMATION ON THE COMPANY The Company is an investment holding company and, through its subsidiaries, is principally engaged in the production and sale of Chinese baijiu and wine under its own brands in the PRC, development and operation of real estate, cultural tourism and gaming business in Jeju, South Korea. 3

4 INFORMATION ON THE TARGET COMPANY The Target Company is a company incorporated under the law of South Korea on 15 December 2009 with limited liability and was issued with the Gaming Licence, which allows the Target Company to carry on gaming business including casino. The Target Company has been operating the Casino Business at KAL Hotel since KAL Hotel is a five-star business hotel located at the downtown of Jeju Special Self-Governing Province with 252 guest rooms. Being just about 5 kilometers away from Jeju Airport and Jeju Port, the hotel is easily accessible and well-equipped, making it one of the most popular hotels in Jeju. Set out below is the audited financial information of the Target Company prepared in accordance with the Hong Kong Financial Reporting Standards for the relevant years: For the years ended 31 December HK$ 000 HK$ 000 HK$ 000 Turnover 84, , ,866 (Loss)/Profit before tax (18,315) 23,821 60,376 (Loss)/Profit after tax (19,568) 18,732 47,538 At 31 December HK$ 000 HK$ 000 HK$ 000 Total assets 109, , ,700 Total liabilities 45,775 49,804 70,927 Net assets 63,615 86,697 70,773 As at 31 December 2015, the net assets of the Target Company amounted to approximately HK$64 million. REASONS FOR THE ACQUISITION As mentioned in the Company s circular dated 4 December 2015 and the announcement dated 1 February 2016, the Company intends to ride on the rapid growth of Jeju s tourism industry and is optimistic about the mid and long term development of the gaming industry in South Korea. By further increasing the Company s interest in the Target Company, the Company is able to maximize its future return and profitability from the Target Company. 4

5 IMPLICATIONS UNDER THE LISTING RULES None of the Directors has any material interest in the Acquisition and is not required to abstain from voting on the Board resolutions for approving the Acquisition. Pursuant to Rule of the Listing Rules, the transactions contemplated under the Initial Sale and Purchase Agreement, the Second Sale and Purchase Agreement and the Sale and Purchase Agreement will be aggregated and as a result of the aggregation, the highest of the applicable percentage ratios as calculated under Rule of the Listing Rules is more than 25% but less than 100%, constituting a major transaction for the Company under Chapter 14 of the Listing Rules. As the Initial Sale and Purchase Agreement had already constituted a major transaction and Shareholders approval had already been obtained at the SGM, the transaction contemplated under the Sale and Purchase Agreement (which in itself when not aggregated does not constitute a notifiable transaction under Chapter 14 of the Listing Rules) will only be required to comply with the reporting and announcement requirements for a major transaction under Chapter 14 of the Listing Rules. No circular will be issued in connection with the Sale and Purchase Agreement. As the Sale and Purchase Agreement is entered into between the Company and connected persons at the subsidiary level on normal commercial terms, it is only subject to the reporting, announcement and annual review requirements but is exempt from the circular, independent financial advice and shareholders approval requirements under Rule 14A.101 of the Listing Rules. This is because (i) the Board has approved the Sale and Purchase Agreement; and (ii) the Directors (including the independent non-executive Directors) have confirmed that the terms of the Sale and Purchase Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole. 5

6 DEFINITION Acquisition associates Business Assets Casino Business Company Completion connected person Consideration Directors Gaming Licence Golden Beach or Target Company Group Hong Kong Initial Sale and Purchase Agreement Korea or South Korea the proposed acquisition of the Sale Shares pursuant to the Sale and Purchase Agreement has the same meaning ascribed thereto under the Listing Rules business assets and undertakings owned by the Target Company as of completion of the Initial Sale and Purchase Agreement including but not limited to the Gaming Licence the casino business now carried out under the tradename of Golden Beach at KAL Hotel pursuant to the Gaming Licence New Silkroad Culturaltainment Limited, a company incorporated in Bermuda with limited liability, the issued Shares of which are listed on the Main Board of the Stock Exchange completion of the sale and purchase of the Sale Shares in accordance with the terms and conditions of the Sale and Purchase Agreement has the same meaning ascribed thereto under the Listing Rules consideration for the Sale Shares of KRW9,880,000,000 (equivalent to approximately HK$67,184,000) directors of the Company the Gaming Licence No. 8 issued by the Governor of Jeju local government on 28 December 1995 which allows the Target Company to carry on gaming business including casino in accordance with the Special Act on the establishment of Jeju Special Self-Governing Province and the development of Free International City Development Golden Beach Co., Ltd., a company incorporated under the law of South Korea on 15 December 2009 with limited liability, holding the Gaming Licence the Company and its subsidiaries the Hong Kong Special Administrative Region of the PRC the sale and purchase agreement dated 29 July 2015 (as varied on 30 October 2015) entered into between the Company and Blackstone Resort Co. # ( ) for the acquisition of 51.5% equity interests in the Target Company the Republic of Korea 6

7 Listing Rules Mr. Lee Mr. Yu PRC Sale and Purchase Agreement Sale Shares Second Sale and Purchase Agreement SGM Shareholder(s) Shares Stock Exchange substantial shareholder Vendors the Rules Governing the Listing of Securities on the Stock Exchange Mr. Lee Chul Man ( ), holder of 10% equity interests of the Target Company and a substantial shareholder of the Target Company prior to Completion Mr. Yu Cheng Kuo ( ), holder of 10% equity interests of the Target Company and a substantial shareholder of the Target Company prior to Completion the People s Republic of China which, for the purposes of this announcement, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan the conditional sale and purchase agreement dated 25 April 2016 entered into between the Company and the Vendors for the Acquisition an aggregate of 52,000 shares legally and beneficially owned by the Vendors, representing an aggregate of 13% of the entire issued share capital of the Target Company, of which 40,000 shares (representing 10% of the entire issued share capital of the Target Company) are legally and beneficially owned by Mr. Lee, and 12,000 shares (representing 3% of the entire issued share capital of the Target Company) are legally and beneficially owned by Mr. Yu the sale and purchase agreement dated 1 February 2016 entered into between the Company and Mr. Jung Hee Tae ( ) for the acquisition of 7.5% equity interests in the Target Company the special general meeting of the Company held on 22 December 2015 at which, among others, the Initial Sale and Purchase Agreement and the transaction contemplated thereunder were approved by the Shareholders the holder(s) of Share(s) shares of HK$0.01 each in the capital of the Company The Stock Exchange of Hong Kong Limited has the same meaning ascribed thereto under the Listing Rules Mr. Lee and Mr. Yu 7

8 HK$ KRW Hong Kong dollars, the lawful currency of Hong Kong Korean Won, the lawful currency of Korea % per cent. In this announcement, save as otherwise stated, figures in KRW are translated to HK$ at the exchange rate of HK$1 = KRW147 for illustration purposes only. No representation is made that any amount in HK$ or KRW would have been or can be converted at the above rate. Hong Kong, 25 April 2016 # the English name is not the official name and is translated for reference purpose only By order of the Board New Silkroad Culturaltainment Limited Ng Kwong Chue, Paul Executive Director As at the date of this announcement, the Board comprises six executive Directors, namely, Mr. Su Bo, Mr. Yan Tao, Mr. Ng Kwong Chue, Paul, Mr. Zhang Jian, Mr. Hang Guanyu and Mr. Liu Huaming, and three independent non-executive Directors, namely Mr. Ting Leung Huel, Stephen, Mr. Cao Kuangyu and Mr. Tse Kwong Hon. 8