Mason Financial : (I) DISCLOSEABLE TRANSACTION INVESTMENT IN A REGIONAL SPECIALITY RETAIL CHAIN IN CHINA FOCUSING ON SALES OF MOTHER-INFANT-CHILDREN PRODUCTS (II) CONNECTED TRANSACTION PROVISION OF LOAN TO A CONNECTED PERSON AT SUBSIDIARY LEVEL (in PDF)

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Mason Financial Holdings Limited

民 信 金 控 有 限 公 司

(Incorporated in Hong Kong with limited liability)

(Stock Code: 273)

1. DISCLOSEABLE TRANSACTION

   INVESTMENT IN A REGIONAL SPECIALITY RETAIL CHAIN IN CHINA FOCUSING ON SALES OF MOTHER-INFANT-CHILDREN PRODUCTS

2. CONNECTED TRANSACTION

PROVISION OF LOAN TO A CONNECTED PERSON AT SUBSIDIARY LEVEL

THE INVESTMENT AGREEMENT

The Board is pleased to announce that on 30 December 2016 (after trading hours), the Investor (a wholly-owned subsidiary of the Company) entered into the Investment Agreement with Golden Metro, Cosmicfield, Shining Time and the Management Team Members, pursuant to which the Investor shall make the Investment in the amount of RMB550,000,000 (equivalent to HK$616,000,000) subject to the terms and conditions of the Investment Agreement.

Subject to the terms and conditions of the Investment Agreement, the Investor shall make the Investment in the amount of RMB550,000,000 (equivalent to HK$616,000,000) through the following manner:

1. RMB409,200,000 (equivalent to HK$458,304,000) in the form of a loan to Golden Metro which shall be drawn down by Golden Metro on the Completion Date and the burden of the Golden Metro Loan shall simultaneously be novated to Shining Time and settled by the allotment and issuance of the Investor Shares to the Investor by Shining Time at the Issue Price on the Completion Date. Notwithstanding the aforesaid, the proceeds of the Golden Metro Loan shall be advanced by the Investor in two tranches as follows:

2. RMB60,000,000 (equivalent to HK$67,200,000) shall be advanced to Golden Metro on the Completion Date by way of wire transfer to an account designated by Golden Metro and approved by the Investor or by way of issuing cheque to addressee designated by Golden Metro and approved by the Investor; and

3. RMB349,200,000 (equivalent to HK$391,104,000) shall be advanced to Golden Metro on the Completion Subsequent Date by way of wire transfer to an account designated by Golden Metro and approved by the Investor; and

4. RMB140,800,000 (equivalent to HK$157,696,000) as the Loan to Cosmicfield which shall have a maturity period of 36 months and carry interest at a rate of 8% per annum on and subject to the terms of the Loan Agreement which shall be entered into on the Completion Date, and Cosmicfield shall further lend the proceeds of the Loan to Golden Metro and the burden of the loan between Cosmicfield and Golden Metro shall simultaneously be novated to Shining Time and be settled by the allotment and issuance of Cosmicfield Shares to Cosmicfield by Shining Time at the Issue Price on the Completion Date. Notwithstanding the aforesaid, the Loan shall be drawn down by Cosmicfield on the Completion Subsequent Date and the proceeds of the Loan shall be advanced to Golden Metro on the Completion Subsequent Date by way of wire transfer to an account designated by Golden Metro and approved by the Investor.

   Immediately upon completion of the Restructuring and the Investment, the Company will indirectly hold 55% of the shareholding in Shining Time and Shining Time will become an indirect non-wholly-owned subsidiary of the Company. Shining Time will indirectly wholly own Zhuhai AYD which is the franchisor of a leading franchise in mother-infant- children products business in Southern China with a regional network of over 800

   corporate and franchise retail stores operating under the ''愛嬰島'' brand name, mainly in

   Guangdong, Jiangsu and Zhejiang provinces. The Board is of the view that the Investment is in line with the Group's strategy to take advantage of synergistic and complementary direct investment opportunities in the ''mother-infant-children'' sector.

   THE LISTING RULES IMPLICATIONS

   As one or more of the applicable percentage ratios (as defined under the Listing Rules) in respect of the Investment exceeds 5% but all of them are less than 25%, the Investment constitutes a discloseable transaction for the Company and is subject to reporting and announcement requirements under Chapter 14 of the Listing Rules.

   Upon Completion, Shining Time will become an indirect non-wholly owned subsidiary of the Company, and each of Cosmicfield and Golden Metro will become a substantial shareholder, holding 18.92% and 26.08% of the shareholding respectively, of Shining Time. The provision of the Loan to Cosmicfield pursuant to the Loan Agreement will therefore constitute financial assistance and hence continuing connected transactions under the Listing Rules.

   Since (i) each of Cosmicfield and Golden Metro is regarded as a connected person of the Company at subsidiary level; (ii) the Board (including all the independent non-executive Directors) has approved the transactions contemplated under the Loan Agreement; and

5. the independent non-executive Directors have confirmed that the transactions contemplated under the Loan Agreement are fair and reasonable, on normal commercial terms and in the interests of the Company and the Shareholders as a whole, the transactions contemplated under the Loan Agreement are subject to the reporting and announcement requirements but are exempt from circular, independent financial advice and shareholders' approval requirements pursuant to Rule 14A.101 of the Listing Rules.

The Board announces that on 30 December 2016 (after trading hours), the Investor (a wholly-owned subsidiary of the Company) entered into the Investment Agreement with Golden Metro, Cosmicfield, Shining Time and the Management Team Members, pursuant to which the Investor shall make the Investment in the amount of RMB550,000,000 (equivalent to HK$616,000,000) on and subject to the terms and conditions of the Investment Agreement.

THE INVESTMENT AGREEMENT

Date

30 December 2016 (after trading hours)

Parties

1. the Investor, a wholly-owned subsidiary of the Company

2. Golden Metro

3. Cosmicfield

4. Shining Time

5. Management Team Members, namely Mr. Yip Shing Fung, Mr. Ye Faduan, Mr. Ye Fachao, Mr. Lin Han and Ms. Gao Qin

To the best knowledge, information and belief of the Directors having made all reasonable enquiries, each of Golden Metro, Cosmicfield, Shining Time and their respective ultimate beneficial owner(s) and each of the Management Team Members is an Independent Third Party.

The Investment

Subject to the terms and conditions of the Investment Agreement, the Investor shall make the Investment in the amount of RMB550,000,000 (equivalent to HK$616,000,000) through the following manner:

1. RMB409,200,000 (equivalent to HK$458,304,000) in the form of a loan to Golden Metro (''Golden Metro Loan'') which shall be drawn down by Golden Metro on the Completion Date and the burden of the Golden Metro Loan shall simultaneously be novated to Shining Time and settled by the allotment and issuance of the Investor Shares to the Investor by Shining Time at the Issue Price on the Completion Date. Notwithstanding the aforesaid, the proceeds of the Golden Metro Loan shall be advanced by the Investor in two tranches as follows:

2. RMB60,000,000 (equivalent to HK$67,200,000) shall be advanced to Golden Metro on the Completion Date by way of wire transfer to an account designated by Golden Metro and approved by the Investor or by way of issuing cheque to addressee designated by Golden Metro and approved by the Investor; and

3. RMB349,200,000 (equivalent to HK$391,104,000) shall be advanced to Golden Metro on the Completion Subsequent Date by way of wire transfer to an account designated by Golden Metro and approved by the Investor; and

4. RMB140,800,000 (equivalent to HK$156,696,000) as the Loan to Cosmicfield which shall have a maturity period of 36 months and carry interest at a rate of 8% per annum on and subject to the terms of the Loan Agreement which shall be entered into on the Completion Date, and Cosmicfield shall further lend the proceeds of the Loan to Golden Metro and the burden of the loan between Cosmicfield and Golden Metro shall simultaneously be novated to Shining Time and be settled by the allotment and issuance of Cosmicfield Shares to Cosmicfield by Shining Time at the Issue Price on the Completion Date. Notwithstanding the aforesaid, the Loan shall be drawn down by Cosmicfield on the Completion Subsequent Date and the proceeds of the Loan shall be advanced to Golden Metro on the Completion Subsequent Date by way of wire transfer to an account designated by Golden Metro and approved by the Investor.

If any of 2016 Attributable Profit, 2017 Attributable Profit and 2018 Attributable Profit is less than RMB62,000,000, RMB85,000,000 and RMB120,000,000 respectively by 5% or more (i.e. less than RMB58,900,000, RMB80,750,000 and RMB114,000,000) respectively, Golden Metro and Cosmicfield shall transfer the relevant number of Shining Time Shares (the ''Adjustment Shares'') to the Investor at no cost within 10 Business Days after the respective dates of issue of the 2016 Financial Statements, 2017 Audited Accounts and the 2018 Audited Accounts. The number of Adjustment Shares to be transferred is calculated as follows:

1. if the 2016 Attributable Profit is less than RMB58,900,000, the number of Adjustment Shares to be transferred shall be calculated as:

   (RMB62,000,000 - 2016 Attributable Profit) x 12 Issue Price

2. if the 2017 Attributable Profit is less than RMB80,750,000, the number of Adjustment Shares to be transferred shall be calculated as:

   (RMB85,000,000 - 2017 Attributable Profit) x 10 Issue Price

3. if the 2018 Attributable Profit is less than RMB114,000,000, the number of Adjustment Shares to be transferred shall be calculated as:

(RMB120,000,000 - 2018 Attributable Profit) x 9 Issue Price

For the purpose of the aforesaid, the should be 1,788 Shining Time Shares held by Golden Metro (representing 17.88% shareholding in Shining Time) shall be transferred as Adjustment Shares before the transfer of any of the Shining Time Shares held by Cosmicfield. For the avoidance of doubt, notwithstanding the aforesaid, the number of Adjustment Shares to be transferred by Golden Metro shall be capped at should be 1,788 Shining Time Shares plus Bonus Shares (as defined below) to be transferred pursuant to the