Common use of REASONS FOR AND BENEFITS OF ENTERING Clause in Contracts

REASONS FOR AND BENEFITS OF ENTERING. INTO THE CONNECTED TRANSACTION Geely Holding and its subsidiaries are principally engaged in sales of CBUs and automobile parts and components wholesale and retail businesses. As the Group is not in the possession of certain automobile products catalogue issued by the National Development Reform Commission (the “NDRC”) in the PRC, the Assets were originally purchased under certain subsidiaries of the Geely Holding Group and used by the Group without consideration. Given that the purchase price for the Assets under the Assets Purchase Agreement will be at their respective net asset value, the Directors are of the view that the acquisition of the Assets from Geely Holding under the Assets Purchase Agreement, which has been and will continue to be used for the production of vehicles by the Group, is fair and reasonable and in the interests of the Company and the Shareholders as a whole. LISTING RULES IMPLICATIONS Geely Holding is a connected person of the Company for the purpose of the Listing Rules by virtue of the fact that it is an associate of Xx. Xx, an executive Director and a substantial shareholder holding approximately 42.62% interest in the issued share capital of the Company as at the date of this announcement. Accordingly, the Assets Purchase Agreement and the transactions contemplated thereunder constitute a connected transaction of the Company pursuant to Rule 14A.13 of the Listing Rules. As the applicable percentage ratios for the Assets Purchase Agreement are more than 0.1% but less than 5%, the Assets Purchase Agreement is subject to the reporting and announcement, but is exempt from the Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules. Xx. Xx, Xx. Xxxx Xxxx, Mr. Xx Xxxx Xxx and Mr. Xx Xxxx Xxx, Xxxxxx are considered to have material interests in the Assets Purchase Agreement by virtue of their directorship and/or interest in Geely Holding and they had abstained from voting on the Board resolution to approve the Assets Purchase Agreement.

REASONS FOR AND BENEFITS OF ENTERING. INTO THE CONNECTED TRANSACTION Geely Holding NEW TENANCY AGREEMENT Since the existing tenancy agreement will expire on 31 July 2020 and its subsidiaries are principally engaged will not be renewed by the current tenant, the Company will need to look for a replacement tenant for the Premises such that the Company can continue to receive recurring rental income in sales of CBUs and automobile parts and components wholesale and retail businessesconnection with the Premises. As the Group Fu Hop is not an associate of certain Directors in the possession manner as described below, the Company would prefer to rent the Premises to such company which shareholders the Company are familiar with and which it can ensure punctual payment of certain automobile products catalogue issued by rental and related charges. Due to the National Development Reform Commission reasons set out above, the Company agreed to lease the Premises to Fu Hop. The terms of the New Tenancy Agreement were negotiated on an arm’s length basis and the rental, air-conditioning charges and management fee chargeable under the New Tenancy Agreement were determined with reference to the rental of other premises of Melbourne Plaza as agreed amongst the Company and other tenants recently. The Directors (including the “NDRC”independent non-executive Directors) consider that the terms of the New Tenancy Agreement and the transactions contemplated thereunder are fair and reasonable, and are on normal commercial terms and in the PRC, the Assets were originally purchased under certain subsidiaries ordinary course of business of the Geely Holding Group Company, and used by the Group without consideration. Given that the purchase price for the Assets under the Assets Purchase Agreement will be at their respective net asset value, the Directors are of the view that the acquisition of the Assets from Geely Holding under the Assets Purchase Agreement, which has been and will continue to be used for the production of vehicles by the Group, is fair and reasonable and in the interests of the Company and the Shareholders shareholders of the Company as a whole. In view of the interests of Xx. Xxxxx, Xx. Xxxxxxxxx Xxxxx and Xx. Xxxxxx Xxxxx in Fu Hop as mentioned below and that Xx. Xxxxx, Xx. Xxxxxxxxx Xxxxx and Xx. Xxxxxx Xxxxx are also directors of Fu Hop, each of them had abstained from voting in respect of the resolutions proposed at the meeting of the Board to approve the New Tenancy Agreement, the transactions contemplated thereunder and the Annual Cap Amounts. Save as disclosed above, none of the other Directors had a material interest in the transactions contemplated under the New Tenancy Agreement. LISTING RULES IMPLICATIONS Geely Holding As Fu Hop is owned as to approximately 99.99% by Xx. Xxxxx who is an executive Director, it is an associate of Xx. Xxxxx. Further, as the shareholders of Fu Hop, namely, Xx. Xxxxx, Xx. Xxxxxxxxx Xxxxx (an executive Director), Xx. Xxxxxx Xxxxx (a non-executive Director) and Xx. Xxxxx Kin Xxx Xxxxxxx are all family members (as defined under the Listing Rules), Fu Hop is also an associate of each of Xx. Xxxxxxxxx Xxxxx and Xx. Xxxxxx Xxxxx. Accordingly, Fu Hop is a connected person of the Company for the purpose of under Chapter 14A the Listing Rules by virtue of and the fact that it is an associate of Xx. Xx, an executive Director and a substantial shareholder holding approximately 42.62% interest in the issued share capital of the Company as at the date of this announcement. Accordingly, the Assets Purchase New Tenancy Agreement and the transactions contemplated thereunder constitute a continuing connected transaction transactions of the Company pursuant to Rule 14A.13 under Chapter 14A of the Listing Rules. As more than one of the Annual Cap Amounts exceed HK$3,000,000 and some of the applicable percentage ratios for calculated in accordance with Rule 14.07 of the Assets Purchase Agreement Listing Rules are more than 0.1% but all applicable percentage ratios are less than 5%, the Assets Purchase transactions contemplated under the New Tenancy Agreement is are subject to the reporting reporting, announcement and announcement, annual review requirements but is are exempt from the Independent Shareholderscircular and independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. Xx. Xx, Xx. Xxxx Xxxx, Mr. Xx Xxxx Xxx and Mr. Xx Xxxx Xxx, Xxxxxx are considered to have material interests in the Assets Purchase Agreement by virtue of their directorship and/or interest in Geely Holding and they had abstained from voting on the Board resolution to approve the Assets Purchase Agreement.

REASONS FOR AND BENEFITS OF ENTERING. INTO THE CONNECTED TRANSACTION Geely Into the Construction Contracts Yuanyang Holding and its subsidiaries are principally engaged in sales of CBUs and automobile parts and components wholesale and retail businesses. As Group was awarded the Group is not in the possession of certain automobile products catalogue “First Class Qualification” certificate issued by the National Ministry of Housing and Urban-Rural Development Reform Commission of China. The Construction Contracts will contribute to the development of the brand and market image of the Company’s Hangzhou Canal Project and the Chongqing China South-western City Project. The Directors (including the “NDRC”independent non-executive Directors) considered that the Construction Contracts were entered into after arm’s length negotiations in the PRC, the Assets were originally purchased under certain subsidiaries ordinary and usual course of business of the Geely Holding Group and used by the Group without consideration. Given that the purchase price for the Assets under the Assets Purchase Agreement will be at their respective net asset value, the Directors are of the view that the acquisition of the Assets from Geely Holding under the Assets Purchase Agreement, which has been terms and will continue to be used for the production of vehicles by the Group, is conditions were fair and reasonable and reasonable. The transactions thereunder were in the interests of the Company and the Shareholders shareholders as a whole. LISTING RULES IMPLICATIONS Geely Holding Information on Chongqing Xinming Xxxxxxxxx Xxxxxxx is principally engaged in property development. Information on Hangzhou Xinming Xxxxxxxx Xxxxxxx is principally engaged in property development and property management. Information on Yuanyang Holdings Yuanyang Holdings is a modern integrated enterprise engaged in the construction general contracting, industrial investment and real estate development. Listing Rules Implications In mid-December 2016, the Company was informed that the shareholding structure of Yuanyang Holdings has been changed, and 51% equity interest in Yuanyang Holdings was acquired by Zhejiang Xinming Trading, a company which Xx. Xxxxx Xxxxxxxxx owned 90% of its equity interest. Xx. Xxxxx Xxxxxxxxx is the elder brother of Xx. Xxxx Xxxxxxxxx, an executive Director of the Company, and is a connected person of the Company for the purpose of the Listing Rules by virtue of the fact that it is an associate of Xx. Xx, an executive Director and a substantial shareholder holding approximately 42.62% interest in the issued share capital of the Company as at the date of this announcement. Accordingly, the Assets Purchase Agreement and the transactions contemplated thereunder constitute a connected transaction of the Company pursuant to Rule 14A.13 under Chapter 14A of the Listing Rules. As Therefore, Yuanyang Holdings has become a connected person of the Company after the change of its shareholding structure. Accordingly, the transactions under the Construction Contracts constitute continuing connected transactions of the Company. Pursuant to Rule 14A.60 of the Listing Rules, the Company is required to comply with the applicable percentage ratios for the Assets Purchase Agreement are more than 0.1% but less than 5%, the Assets Purchase Agreement is subject to the reporting and announcementdisclosure requirements under Chapter 14A of the Listing Rules regarding the Construction Contracts. The Company will fully comply with all applicable reporting, but is exempt from the Independent Shareholdersdisclosure and, if applicable, independent shareholders’ approval requirements under Chapter 14A of the Listing Rules. Xx. Xx, Xx. Xxxx Xxxx, Mr. Xx Xxxx Xxx and Mr. Xx Xxxx Xxx, Xxxxxx are considered to have material interests in Rules upon any variation or renewal of the Assets Purchase Agreement by virtue of their directorship and/or interest in Geely Holding and they had abstained from voting on the Board resolution to approve the Assets Purchase AgreementConstruction Contracts.

REASONS FOR AND BENEFITS OF ENTERING. INTO THE CONNECTED TRANSACTION Geely Holding NEW TENANCY AGREEMENT As Promising Realty is connected to two executive Directors, namely Xx. Xxxxx and its subsidiaries are principally engaged in sales of CBUs Xx. Xxxxxxxxx Xxxxx and automobile parts and components wholesale and retail businessesa non-executive Director, namely Xx. As the Group is not Xxxxxx Xxxxx, in the possession of certain automobile products catalogue issued by the National Development Reform Commission (the “NDRC”) manner set out in the PRCsection headed “Continuing Connected Transactions” below, the Assets were originally purchased under certain subsidiaries Company would prefer to rent the Premises to such company which the Company is familiar with and which it can ensure punctual payment of rental and related charges. Since the Existing Tenancy Agreement is due to expire on 31 July 2014 and due to the reason set out above, the Company has agreed to continue leasing the Premises to Promising Realty and has accordingly entered into the New Tenancy Ageement with Promising Realty. The terms of the Geely Holding Group New Tenancy Agreement were negotiated on an arm’s length basis and used by the Group without considerationrental, air-conditioning charges and management fee chargeable under the New Tenancy Agreement were determined with reference to the rental of other premises of Melbourne Plaza as agreed amongst the Company and other tenants recently. Given The Directors (including the independent non-executive Directors) consider that the purchase price for New Tenancy Agreement is entered into in the Assets under the Assets Purchase Agreement will be at their respective net asset value, the Directors are ordinary and usual course of business of the view that Company, and are on normal commercial terms and both the acquisition terms of the Assets from Geely Holding under New Tenancy Agreement and the Assets Purchase Agreement, which has been and will continue to be used for the production of vehicles by the Group, is Annual Cap Amounts are fair and reasonable reasonable, and the entering into of the New Tenancy Agreement is in the interests interest of the Company and the Shareholders shareholders of the Company as a whole. LISTING RULES IMPLICATIONS Geely Holding CONTINUING CONNECTED TRANSACTIONS Promising Realty is a company which is ultimately owned by two executive Directors, namely Xx. Xxxxx and Xx. Xxxxxxxxx Xxxxx and a non-executive Director, namely Xx. Xxxxxx Xxxxx and their associates. Accordingly, Promising Realty is a connected person of the Company for under the purpose Listing Rules and the New Tenancy Agreement constitutes a continuing connected transaction of the Company under Chapter 14A of the Listing Rules by virtue Rules. In light of the fact that it is an associate interests of Xx. Xxxxx, Xx. Xxxxxxxxx Xxxxx and Xx. Xxxxxx Xxxxx in Promising Realty as set out above, an executive Director Xx. Xxxxx, Xx. Xxxxxxxxx Xxxxx and a substantial shareholder holding approximately 42.62% interest in Xx. Xxxxxx Xxxxx had abstained from voting on the issued share capital resolutions proposed at the board meeting of the Company as at to approve the date of this announcement. Accordingly, the Assets Purchase New Tenancy Agreement and the transactions contemplated thereunder constitute a connected transaction and the Annual Cap Amounts. As the Annual Cap Amounts payable to the Company under the Existing Tenancy Agreement and the New Tenancy Agreement for the year ending 30 September 2014 and under the New Tenancy Agreement for each of the Company pursuant to Rule 14A.13 two years ending 30 September 2015 and 30 September 2016 exceed HK$3,000,000 but some of the Listing Rules. As the applicable percentage ratios for calculated in accordance with Rule 14.07 of the Assets Purchase Agreement Listing Rules are more than 0.1% but less than 5%, the Assets Purchase New Tenancy Agreement is only subject to the reporting reporting, announcement and announcement, annual review requirements but is exempt from the Independent Shareholdersindependent shareholders’ approval requirements under Chapter 14A of the Listing Rules. Xx. Xx, Xx. Xxxx Xxxx, Mr. Xx Xxxx Xxx and Mr. Xx Xxxx Xxx, Xxxxxx are considered to have material interests in the Assets Purchase Agreement by virtue of their directorship and/or interest in Geely Holding and they had abstained from voting on the Board resolution to approve the Assets Purchase Agreement.