MAJOR TRANSACTIONS IN RELATION TO (1) PROVISION OF FINANCE LEASE; (2) FACTORING FACILITY; (3) PROVISION OF GUARANTEE; AND

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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 Hong Kong with limited liability) (Stock Code: 668) MAJOR TRANSACTIONS IN RELATION TO (1) PROVISION OF FINANCE LEASE; (2) FACTORING FACILITY; (3) PROVISION OF GUARANTEE; AND (4) THE ENTERING INTO OF THE CONSULTANCY AGREEMENT (1) The Board announces that on 14 September 2015, the JV Company, an indirect non-wholly owned subsidiary of the Company, in which 77.58% of its equity interest is held by the Group, entered into the Finance Lease Agreement with Henan Jinli, an Independent Third Party, pursuant to which the JV Company agreed to purchase the Machinery and Equipment from Henan Jinli at a total consideration of RMB193,951, (equivalent to approximately HK$235 million), which would be leased back to Henan Jinli for a term of one year. (2) The Board further announces that on 14 September 2015, the JV Company entered into the Factoring Facility Agreement whereby the Lender agreed to provide certain factoring services by acquiring from the JV Company the Account Receivable(s). (3) The Board further announces that on 14 September 2015, the JV Company entered into the Guarantee Agreement with the Lender whereby the JV Company has agreed to provide a guarantee in an amount up to RMB200 million (equivalent to approximately HK$242 million) in favour of the Lender in respect of the payment obligations of Henan Jinli, a client of the financial leasing business of the JV Company under the Finance Lease Agreement, under the Loan. (4) The Board further announces that on 14 September 2015, the JV Company entered into the Consultancy Agreement with Henan Jinli whereby the JV Company has agreed to provide consultancy service to Henan Jinli in relation to, inter alia, machinery and equipment financial leasing and Henan Jinli has agreed to pay a fee of RMB0.6 million (equivalent to approximately HK$0.726 million) to the JV Company. 1

2 Each of the transactions in relation to (1) the Finance Lease Agreement; (2) the Factoring Facility Agreement; and (3) the provision of the Guarantee respectively constituted a major transaction of the Company and is therefore subject to the shareholders approval requirements under Chapter 14 of the Listing Rules. So far as the Company is aware, having made all reasonable enquiries, no shareholder of the Company has a material interest in, and would be required to abstain from voting on the resolution to approve the transactions in relation to (1) the Finance Lease Agreement; (2) the Factoring Facility Agreement; and (3) the provision of the Guarantee respectively if the Company were to convene a general meeting to approve them. The Company has received a written approval given by Money Success Limited (holding approximately 52.20% of the entire issued ordinary share capital of the Company) for each of the transactions in relation to (1) the Finance Lease Agreement; (2) the Factoring Facility Agreement; and (3) the provision of the Guarantee respectively in lieu of holding a general meeting in accordance with Listing Rule A circular containing further information about the transactions in relation to (1) the Finance Lease Agreement; (2) the Factoring Facility Agreement; and (3) the provision of the Guarantee respectively and other information required by the Listing Rules is expected to be despatched to the Shareholders on or before 7 October 2015 for information purposes only. As the relevant percentage ratios (as defined under the Listing Rules) in respect of the transaction of entering into the Consultancy Agreement are less than 5%, the Company is exempt from the announcement requirement and shareholders approval requirement under the Listing Rules. (1) FINANCE LEASE AGREEMENT The Board announces that, the JV Company, an indirect non-wholly owned subsidiary of the Company, in which 77.58% of its equity interest is held by the Group, and Henan Jinli entered into the Finance Lease Agreement on 14 September The principal terms of the Finance Lease Agreement are set out below. Finance Lease Agreement Date 14 September 2015 Parties Purchaser/Lessor: Vendor/Lessee: the JV Company Henan Jinli 2

3 To the best of the Directors knowledge, information and belief after having made all reasonable enquiries, Henan Jinli and its ultimate beneficial owners are Independent Third Parties. The Finance Lease Agreement comprised the arrangements for (i) the sale and purchase of the Machinery and Equipment and (ii) the lease back of the Machinery and Equipment to Henan Jinli, details of which are set out below. Sale and purchase arrangements Pursuant to the Finance Lease Agreement, the JV Company purchased the Machinery and Equipment from Henan Jinli for a total consideration of RMB193,951, (equivalent to approximately HK$235 million). The consideration in respect of the sale and purchase of the Machinery and Equipment was determined after arm s length negotiations between the parties to the Finance Lease Agreement by reference to the prevailing market price of the Machinery and Equipment. Lease back arrangements Pursuant to the Finance Lease Agreement, upon completion of the sale and purchase of the Machinery and Equipment, the JV Company agreed to lease the Machinery and Equipment back to Henan Jinli for a term of one year, commencing from the date on which acceptance of leased asset is issued by Henan Jinli to the JV Company. Subject matter of the lease back The Machinery and Equipment comprised certain machinery and equipment owned by Henan Jinli. Lease payments Pursuant to the Finance Lease Agreement, the lease rent to be paid by Henan Jinli to the JV Company was calculated based on the principal lease cost and the lease interest rate. The total principal lease cost under the Finance Lease Agreement was RMB193,951, (equivalent to approximately HK$235 million). Pursuant to the Finance Lease Agreement, Henan Jinli will repay the principal lease cost under the Finance Lease Agreement to the JV Company by three installments with the last installment payable on 17 August The lease rent is calculated at the interest rate of 4.24% per annum during the lease term. Based on the aforementioned interest rate, the total lease rent payable by Henan Jinli under the Finance Lease Agreement will be RMB202,173, (equivalent to approximately HK$245 million). In accordance with the Finance Lease Agreement, the lease rent will be payable by Henan Jinli by three installments with the last installment payable on 17 August The lease rent was determined after arm s length negotiations between the parties to the Finance Lease Agreement by reference to the principal amounts of the lease and the prevailing market interest rate for finance leases of comparable machines and equipment. 3

4 Lessee s option to purchase The legal title of the Machinery and Equipment under the Finance Lease Agreement will be vested in the JV Company throughout the lease period. At the end of the lease period and subject to payment by Henan Jinli of all amounts due under the Finance Lease Agreement, Henan Jinli will have the right to purchase the Machinery and Equipment as specified in the Finance Lease Agreement at a nominal purchase price of RMB1 (equivalent to approximately HK$1.21). (2) FACTORING FACILITY AGREEMENT The Board announces that, the JV Company, the Lender and Henan Jinli entered into the Factoring Facility Agreement on 14 September 2015 whereby the Lender agreed to provide certain factoring services for the sum of equivalent to the total principal lease cost of the Finance Lease Agreement. Set out below are the principal terms of the Factoring Facility Agreement: The Factoring Facility Agreement Date: 14 September 2015 Parties: (i) the JV Company (ii) the Lender (iii) Henan Jinli To the best of the Directors knowledge, information and belief after having made all reasonable enquiries, the Lender, Henan Jinli and their ultimate beneficial owners are Independent Third Parties. Factoring arrangements Pursuant to the Factoring Facility Agreement, the Lender will acquire from the JV Company and the JV Company will assign to the Lender the Account Receivable(s) for the Lender to provide the factoring service. (3) PROVISION OF GUARANTEE The Board announces that on 14 September 2015, the JV Company entered into the Guarantee Agreement with the Lender whereby the JV Company has agreed to provide a guarantee in an amount up to RMB200 million (equivalent to approximately HK$242 million) in favour of the Lender in respect of the payment obligations of Henan Jinli, a client of the financial leasing business of the JV Company under the Finance Lease Agreement, under the Loan. 4

5 The Guarantee Agreement Date 14 September 2015 Parties (1) the JV Company, as guarantor (2) the Lender, as creditor To the best knowledge, information and belief of the Directors having made all reasonable enquiries, the Lender, and its ultimate beneficial owners are third parties independent of the Company and its connected persons and their respective associates. Subject matter The JV Company shall provide the Guarantee in favour of the Lender pursuant to the Guarantee Agreement. The salient terms of the Guarantee are summarised as follows: Borrower: Henan Jinli To the best knowledge, information and belief of the Directors having made all reasonable enquiries, Henan Jinli, and its ultimate beneficial owners are third parties independent of the Company and its connected persons and their respective associates. Guaranteed obligations: Loan: Term of the Loan: Other security for the Loan: Payment obligations of Henan Jinli under the Loan up to RMB200 million (equivalent to approximately HK$242 million). RMB500 million (equivalent to approximately HK$605 million) loan facility provided by the Lender to Henan Jinli. RMB500 million (equivalent to approximately HK$605 million) will be for a term of 12 months from 13 March Pledges of the machineries provided by the JV Company with an estimated value of approximately RMB266 million (equivalent to approximately HK$322 million) The total amount of the Guarantee includes the aforesaid pledges of the machineries. The machineries to be pledged are the Machinery and Equipment under and subject to the Finance Lease Agreement. 5

6 (4) CONSULTANCY AGREEMENT The Board announces that on 14 September 2015, the JV Company entered into the Consultancy Agreement with Henan Jinli whereby the JV Company has agreed to provide consultancy service to Henan Jinli in relation to, inter alia, machinery and equipment financial leasing and Henan Jinli has agreed to pay a fee of RMB0.6 million (equivalent to approximately HK$0.726 million) to the JV Company. The Consultancy Agreement Date: 14 September 2015 Parties: (i) the JV Company (ii) Henan Jinli Consultancy fee: A fee of RMB0.6 million (equivalent to approximately HK$0.726 million) is payable by Henan Jinli to the JV Company for the provision of the consultancy service To the best of the Directors knowledge, information and belief after having made all reasonable enquiries, Henan Jinli and its ultimate beneficial owners are Independent Third Parties. INFORMATION ON THE COMPANY, THE GROUP AND THE JV COMPANY The Company is principally engaged in investment holding, and its subsidiaries are principally engaged in property investment business including operation of a shopping mall and financial leasing. The JV Company is a sino-foreign joint venture enterprise established under the laws of the PRC. It is an indirect non-wholly owned subsidiary of the Company, in which 77.58% of its equity interest is held by the Group. The JV Company is principally engaged in financial leasing. INFORMATION OF THE LENDER AND HENAN JINLI The Lender is a branch of China Minsheng in Shanghai. China Minsheng was incorporated in the PRC with limited liability and the H shares of which are listed on the main board of the Stock Exchange (Stock Code: 1988). China Minsheng is principally engaged in providing corporate and personal banking, treasury business, financial leasing, assets management and other financial services in the PRC. Henan Jinli was incorporated in the PRC with limited liability. Henan Jinli is principally engaged in manufacturing, sale, import and export of metals and precious metals; recycling of lead slag waste and wasted batteries; and manufacturing and sale of compressed and liquefied gas. 6

7 REASONS FOR AND BENEFITS OF ENTERING INTO (1) THE FINANCE LEASE AGREEMENT; (2) THE FACTORING FACILITY AGREEMENT; (3) THE GUARANTEE AGREEMENT; AND (4) THE CONSULTANCY AGREEMENT The Directors (including the independent non-executive Directors) consider that the entering into of the Finance Lease Agreement, the Factoring Facility Agreement, the Guarantee Agreement and the Consultancy Agreement is in the ordinary and usual course of business of the JV Company, on normal commercial terms which are made on an arm s length basis. The arrangements of the entering into of the Finance Lease Agreement, the Factoring Facility Agreement and the Guarantee Agreement by the JV Company for its client of financial leasing business under the Finance Lease Agreement, Henan Jinli, for financing in purchasing the machineries can enable the JV Company to develop good relationship with the Lender. This type of financial leasing and provision of Guarantee is within the business scope of the JV Company and can also help expand the financing channels of the JV Company itself, which is beneficial to the JV Company in obtaining facility from the banks. Besides, the JV Company can obtain revenue and cashflow stream from the fee pursuant to the Finance Lease Agreement and the Consultancy Agreement. By reason of the factoring arrangement, no proceed will be generated under the Finance Lease Agreement and the Group will use the proceeds under the Factoring Facility Agreement to purchase the Machinery and Equipment from Henan Jinli. The Group intends to use the proceeds generated under the the Consultancy Agreement as general working capital of the Group. The Directors (including the independent non-executive Directors) consider that the terms of the Finance Lease Agreement, the Factoring Facility Agreement, the Guarantee Agreement and the Consultancy Agreement are fair and reasonable and in the interests of the Company and its shareholders as a whole. LISTING RULES IMPLICATION The highest applicable percentage ratio in respect of each of the transactions in relation to (1) the Finance Lease Agreement, (2) the Factoring Facility Agreement and (3) the provision of the Guarantee respectively exceeds 25%. Accordingly, each of the transactions in relation to (1) the Finance Lease Agreement, (2) the Factoring Facility Agreement and (3) the provision of the Guarantee will constitute a major transaction for the Company and is subject to the shareholders approval requirements under Chapter 14 of the Listing Rules. So far as the Company is aware, having made all reasonable enquiries, no shareholder of the Company has a material interest in, and would be required to abstain from voting on the resolution to approve each of the transactions in relation to (1) the Finance Lease Agreement, (2) the Factoring Facility Agreement and (3) the provision of the Guarantee if the Company were to convene a general meeting to approve them. 7

8 Money Success Limited holds 665,013,018 Shares representing approximately 52.20% of the entire issued ordinary share capital of the Company as at the date of this announcement. Money Success Limited is wholly owned by Wealthy In Investments Limited, which in turn is beneficially and wholly owned by Mr. Lo Siu Yu (the chairman and executive Director of the Company). The Company has received a written approval given by Money Success Limited for each of the transactions in relation to (1) the Finance Lease Agreement, (2) the Factoring Facility Agreement and (3) the provision of the Guarantee in lieu of holding a general meeting in accordance with Listing Rule To the best of the Directors knowledge, information and belief, having made all reasonable enquiries, no Shareholder is required to abstain from voting if the Company was to convene a general meeting to seek Shareholders approval to each of the transactions in relation to (1) the Finance Lease Agreement, (2) the Factoring Facility Agreement and (3) the provision of the Guarantee. A circular containing further information of each of the transactions in relation to (1) the Finance Lease Agreement, (2) the Factoring Facility Agreement and (3) the provision of the Guarantee and other information required by the Listing Rules is expected to be despatched to the Shareholders on or before 7 October 2015 for information purposes only. As the relevant percentage ratios (as defined under the Listing Rules) in respect of the transaction of entering into the Consultancy Agreement are less than 5%, the Company is exempt from the announcement requirement and shareholders approval requirement under the Listing Rules. DEFINITIONS In this announcement, unless the context otherwise requires, the following terms have the following meanings: Account Receivable(s) Board China Minsheng Company Consultancy Agreement the total principal lease cost and interest payable by Henan Jinli under the Finance Lease Agreement to be assigned by the JV Company to the Lender pursuant to the arrangements set out in the Factoring Facility Agreement the board of Directors China Minsheng Bank Corp., Ltd., a company incorporated in the PRC with limited liability, the H shares of which are listed on the main board of the Stock Exchange (Stock code: 1988) Dowell Property Holdings Limited (Stock code: 668), a company incorporated in Hong Kong with limited liability, the issued Shares of which are listed on the main board of the Stock Exchange the consultancy agreement dated 14 September 2015 entered into between the JV Company and Henan Jinli 8

9 Director(s) Factoring Facility Agreement Finance Lease Agreement Group Guarantee Guarantee Agreement Henan Jinli HK$ Hong Kong Independent Third Party(ies) JV Company Lender Listing Rules Loan Machinery and Equipment the director(s) of the Company the agreement dated 14 September 2015 entered into between the JV Company, the Lender and Henan Jinli in relation to the provision of factoring services the finance lease agreement dated 14 September 2015 entered into between the JV Company and Henan Jinli the Company and its subsidiaries the corporate guarantee provided by the JV Company in favour of the Lender in relation to the Loan pursuant to the Guarantee Agreement the guarantee agreement dated 14 September 2015 entered into between the JV Company and the Lender (Henan Jinli Jinyuan Co., Ltd.*), a company established in the PRC with limited liability Hong Kong dollars, the lawful currency of Hong Kong the Hong Kong Special Administrative Region of the PRC (an) independent third party(ies) not connected with the Company and any Director, chief executive or substantial shareholder of the Company or any of its subsidiaries or their respective associate of any of them as defined in the Listing Rules (Dongkui Financial Leasing (Shanghai) Co. Ltd.*), a sino-foreign joint venture enterprise established under the laws of the PRC China Minsheng Bank Corp., Ltd., Shanghai Branch, a branch of China Minsheng in Shanghai the Rules Governing the Listing of Securities on the Stock Exchange a RMB500 million (equivalent to approximately HK$605 million) loan facility provided by the Lender to Henan Jinli certain machinery and equipment owned by Henan Jinli 9

10 major transaction percentage ratio(s) PRC RMB Shareholders Share(s) Stock Exchange as defined in the Listing Rules as defined in the Listing Rules the People s Republic of China and for the purpose of this announcement, excluding Hong Kong, the Macau Special Administrative Region of the PRC and Taiwan Renminbi, the lawful currency of the PRC shareholders of the Company ordinary share(s) of the Company with no nominal value The Stock Exchange of Hong Kong Limited % per cent By order of the Board Dowell Property Holdings Limited Cho Chun Wai Company Secretary Hong Kong, 14 September 2015 As at the date of this announcement, the Board comprises Mr. Lo Siu Yu (Chairman), Ms. Luo Shaoying (Vice Chairman) and Mr. Chen Yang (Chief Executive Officer) as executive Directors; Mr. Wang Xiaobo and Mr. Qin Hong as non-executive Directors; and Mr. Chan Ying Kay, Dr. Zhu Wenhui and Mr. Wang Jin Ling as independent non-executive Directors. For illustrative purpose of this announcement and unless otherwise specified, conversion of RMB into HK$ is based on the exchange rate of RMB1.00 = HK$1.21. * For identification purpose only 10