Common use of REASONS FOR AND BENEFITS OF THE TRANSACTION Clause in Contracts

REASONS FOR AND BENEFITS OF THE TRANSACTION. The transaction contemplated under the Fund Entrustment Agreement is principal-guaranteed upon maturity and enables Sany Heavy Equipment to enjoy higher return than demand deposits generally offered by PRC commercial banks. The Directors are of the view that (i) the transaction contemplated under the Fund Entrustment Agreement provided the Group with a better return than demand deposits generally offered by PRC commercial banks; (ii) the transaction contemplated under the Fund Entrustment Agreement was funded from the Group’s temporarily idle funds, which would not affect the working capital or the operation of the Group; and (iii) the investment return in connection with the transaction contemplated under the Fund Entrustment Agreement increases the Group’s earnings. Accordingly, the Directors (including the independent non-executive Directors) believe that the transaction contemplated under the Fund Entrustment Agreement is fair and reasonable and in the interests of the Group and the Shareholders as a whole. IMPLICATION UNDER THE LISTING RULES AND NON-COMPLIANCE WITH THE LISTING RULES As one or more of the applicable percentage ratios exceed 25% but none of them exceeds 100%, the transaction contemplated thereunder constitutes a major transaction of the Company and is subject to the reporting, announcement and Shareholders’ approval requirements under Chapter 14 of the Listing Rules. However, at the relevant time, as the transaction under the Fund Entrustment Agreement is principal- guaranteed in nature, accordingly the finance staff of Sany Heavy Equipment believed that the entering into of the Fund Entrustment Agreement was similar in nature to fixed deposits which do not constitute “transactions” under Chapter 14 of the Listing Rules. As a result of such belief, the finance staff of Sany Heavy Equipment did not seek internal or external legal advice or promptly report the entering into of the Fund Entrustment Agreement to the Company, which eventually caused the Company to fail to comply with the reporting, announcement and Shareholders’ approval requirements for major transactions under Chapter 14 of the Listing Rules.

REASONS FOR AND BENEFITS OF THE TRANSACTION. The transaction contemplated under Company is actively looking for a strategic partner with strong capital base and business presence in Hangzhou to cooperate with it in the Fund Entrustment Agreement is principal-guaranteed upon maturity and enables Sany Heavy Equipment to enjoy higher return than demand deposits generally offered by PRC commercial banksdevelopment of the Property Project. The Directors are Company believes that it will be able to leverage on the local market expertise and knowledge of such strategic partner which will be beneficial to the long-term development of the view that (i) Property Project and other future projects of the transaction contemplated under Company in Hangzhou. Upon Completion of the Fund Entrustment Agreement provided Transaction, the Group with a better return than demand deposits generally offered Property Project will become indirectly wholly-owned by PRC commercial banks; (ii) the transaction contemplated under the Fund Entrustment Agreement was funded from the Group’s temporarily idle fundsCompany, which would not affect will give greater flexibility for the working capital or Company to introduce any potential strategic partner to invest in the operation of Property Project. Based on the Group; and (iii) the investment return in connection with the transaction contemplated under the Fund Entrustment Agreement increases the Group’s earnings. Accordinglyabove, the Directors (including excluding the independent non-executive DirectorsDirectors who would render their views on the terms of the Transction after having been advised by the independent financial adviser) believe that consider the transaction contemplated under terms of the Fund Entrustment Agreement is and the Transaction are normal commercial terms, which are fair and reasonable and in the interests of the Group Company and the Shareholders as a whole. IMPLICATION UNDER THE LISTING RULES AND NON-COMPLIANCE WITH THE LISTING RULES IMPLICATIONS Sound Plan holds the entire issued share capital in the Target Company. The Target Company is the registered holder of a 30% interest in the Project Companies, which in turn are indirect subsidiaries of the Company. As one or more such, Sound Plan is a substantial shareholder of the indirect subsidiaries of the Company, and therefore a connected person of the Company. Accordingly, the Transaction constitutes a connected transaction for the Company under the Listing Rules. As the highest of the applicable percentage ratios in respect of the Transaction exceed 252.5% but none of them exceeds 100less than 25%, the transaction contemplated thereunder constitutes a major transaction of the Company and Transaction is subject to the reporting, reporting and announcement requirements under the Listing Rules and is also subject to independent Shareholders’ approval requirements under Chapter 14 at the EGM. A circular containing, among other things, further details of the Listing Rules. HoweverTransaction, at a letter from the relevant time, as the transaction under the Fund Entrustment Agreement is principal- guaranteed in nature, accordingly the finance staff of Sany Heavy Equipment believed that the entering into of the Fund Entrustment Agreement was similar in nature to fixed deposits which do not constitute “transactions” under Chapter 14 of the Listing Rules. As a result of such belief, the finance staff of Sany Heavy Equipment did not seek internal or external legal advice or promptly report the entering into of the Fund Entrustment Agreement Independent Board Committee to the Companyindependent Shareholders and a letter from the independent financial adviser to the Independent Board Committee and the independent Shareholders, which eventually caused together with a notice convening the Company EGM will be despatched to fail to comply with the reporting, announcement and Shareholders’ approval requirements for major transactions under Chapter 14 of the Listing RulesShareholders as soon as practicable.

REASONS FOR AND BENEFITS OF THE TRANSACTION. The transaction contemplated under Company considers that the Fund Entrustment Agreement is principal-guaranteed upon maturity Transaction will enable the Group to relocate its resources to its other business and enables Sany Heavy Equipment help streamline its businesses to enjoy higher achieve better return than demand deposits generally offered by PRC commercial banksand value to the Company and its Shareholders as a whole. The Directors are of (excluding those Directors who have abstained from voting on the view that (i) relevant resolutions at the transaction contemplated under Board approving the Fund Entrustment Amended and Restated Sale and Purchase Agreement provided and the Group with a better return than demand deposits generally offered by PRC commercial banks; (ii) the transaction contemplated under the Fund Entrustment Agreement was funded from the Group’s temporarily idle funds, which would not affect the working capital or the operation of the Group; Transaction and (iii) the investment return in connection with the transaction contemplated under the Fund Entrustment Agreement increases the Group’s earnings. Accordingly, the Directors (including the independent non-executive DirectorsDirectors who will express their views after considering the advice from the Independent Financial Adviser) believe consider that the transaction contemplated under terms of the Fund Entrustment Amended and Restated Sale and Purchase Agreement is are fair and reasonable and are on normal commercial terms, and the Transaction is in the interests of the Group Company and the Shareholders its shareholders as a whole. IMPLICATION UNDER THE As each of Xx. Xxxxx Xxxxxxx, Xx. Xxxx Xxxxxxx, Xx. Xxxx Xxxxxx, Xx. Xxxx Xxxxx and Xx. Xxxxx Xxxxxxxx holds positions within Shuifa Group Co., Ltd and its wholly- owned subsidiary, Shuifa Energy Group Limited, they are deemed to have material interest in the Amended and Restated Sale and Purchase Agreement and the Transactions contemplated thereunder. Hence, they have abstained from voting on the relevant resolutions at the Board meeting approving the Amended and Restated Sale and Purchase Agreement and the Transactions contemplated thereunder. USE OF PROCEEDS It is expected that the Consideration and the proceeds from the Transaction will be used as general working capital of the Group and for its future business development. LISTING RULES AND NONIMPLICATIONS Water Development (HK) Holding Co., Limited is a controlling Shareholder and it is an indirect wholly-COMPLIANCE WITH THE LISTING RULES owned subsidiary of Shuifa Group Co., Ltd.. As Lukong Water is an indirect wholly-owned subsidiary of Shuifa Group Co., Ltd., it is a connected person of the Company. The Transaction constitutes a connected transaction of the Company, and is therefore subject to the reporting, announcement, circular, independent financial advice and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules. The Transaction has been a discloseable transaction and is now a connected transaction, and is therefore subject to the reporting, announcement, circular, independent financial advice and Independent Shareholders’ approval requirements under Chapter 14A of the Listing Rules. While there are no substantial changes to the underlying target assets and consideration, as one or more of the applicable percentage ratios under Chapter 14 of the Listing Rules for the Transaction exceed 25% but none all are less than 75% as at the date of them exceeds 100%this announcement, the transaction contemplated thereunder constitutes Transaction may also constitute a major transaction of the Company if it is treated as a new transaction. The Company would consult the Stock Exchange and is subject to the reporting, announcement make further announcement(s) as and Shareholders’ approval requirements under Chapter 14 of the Listing Rules. However, at the relevant time, as the transaction under the Fund Entrustment Agreement is principal- guaranteed in nature, accordingly the finance staff of Sany Heavy Equipment believed that the entering into of the Fund Entrustment Agreement was similar in nature to fixed deposits which do not constitute “transactions” under Chapter 14 of the Listing Rules. As a result of such belief, the finance staff of Sany Heavy Equipment did not seek internal or external legal advice or promptly report the entering into of the Fund Entrustment Agreement to the Company, which eventually caused the Company to fail to comply with the reporting, announcement and Shareholders’ approval requirements for major transactions under Chapter 14 of the Listing Ruleswhen appropriate.

REASONS FOR AND BENEFITS OF THE TRANSACTION. The transaction contemplated under board of directors of NWCL believes that the Fund Entrustment Agreement disposal of the Property is principalin line with NWCL Group’s strategy to realise its investment and secure presales at suitable opportunity given the prevailing slow-guaranteed upon maturity down and enables Sany Heavy Equipment to enjoy higher return than demand deposits generally offered by PRC commercial banksunfavourable market sentiment in the property market. The Directors are of the view that (i) the transaction contemplated under the Fund Entrustment Agreement provided the Group with a better return than demand deposits generally offered by PRC commercial banks; (ii) the transaction contemplated under the Fund Entrustment Agreement was funded from the Group’s temporarily idle funds, which would not affect disposal will also enhance the working capital or the operation position of the NWCL Group; . The board of directors of NWDS considers that the Framework Agreement is expected to further enhance the influence of NWDS Group in the retail market in the PRC as well as to facilitate NWDS Group to lay a solid foundation for a retail roadmap in the PRC. The directors of NWDS believe that the Framework Agreement will further enhance the business of NWDS Group and (iii) enrich the investment return revenue stream of NWDS Group. The Framework Agreement will provide an opportunity for NWDS to increase its interests in connection with department store business in the transaction contemplated under northeastern part of the Fund Entrustment Agreement increases the Group’s earningsPRC. Accordingly, the Directors directors of NWDS believe that it is now an opportune time to proceed with the Framework Agreement which, upon completion, will further enhance the strategy of “multiple presences in a single city” in order to increase its market share and enjoy economies of scale and synergy effect within the northeastern region of the PRC. The terms of the Framework Agreement have been determined through arm’s length negotiations between the parties and reflect normal commercial terms. The directors (including excluding the independent non-executive Directorsdirectors of NWDS whose views will be contained in the circular to be despatched by NWDS after considering the advice from the independent financial adviser) believe of each of NWCL and NWDS consider that the transaction contemplated under terms of the Fund Entrustment Framework Agreement is are fair and reasonable and in the interests of the Group NWCL and the Shareholders NWDS, respectively, and their respective shareholders as a whole. IMPLICATION UNDER INFORMATION ON THE VENDOR The Vendor is principally engaged in the property investment, development and operation of hotels in the PRC. INFORMATION ON THE PURCHASER The Purchaser is principally engaged in the operation of department stores in the PRC. INFORMATION ON NWCL NWCL is principally engaged in property development, property related investments as well as rental and hotel operation in the PRC. INFORMATION ON NWDS NWDS is principally engaged in the operation of department stores in the PRC. LISTING RULES AND NON-COMPLIANCE WITH THE LISTING RULES IMPLICATIONS As at the date of this announcement, NWD held an approximately 70% attributable interest in NWCL. Since NWDS is a subsidiary of NWD, NWDS is a connected person of NWCL and the transaction contemplated under the Framework Agreement constitutes a connected transaction of NWCL under Chapter 14A of the Listing Rules. As each of the applicable percentage ratios (as defined in Rule 14.07 of the Listing Rules) is below 5%, the transaction under the Framework Agreement is subject to the reporting and announcement requirements, but exempt from the independent shareholders’ approval of NWCL under the Listing Rules. As at the date of this announcement, NWD held an approximately 72.29% attributable interest in NWDS. Since NWCL is a subsidiary of NWD, NWCL is a connected person of NWDS and the transaction contemplated under the Framework Agreement constitutes a connected transaction of NWDS under Chapter 14A of the Listing Rules. As one or more of the applicable percentage ratios exceed 25% but none (as defined in Rule 14.07 of them the Listing Rules) exceeds 1005%, the transaction contemplated thereunder constitutes a major transaction of under the Company and Framework Agreement is subject to the reporting, reporting and announcement requirements and Shareholdersthe independent shareholders’ approval requirements of NWDS under Chapter 14 the Listing Rules. In addition, based on the applicable percentage ratios, the transaction under the Framework Agreement also constitutes a discloseable transaction of NWDS under Rule 14.08 of the Listing Rules. HoweverNWD, its associates and any shareholder of NWDS who has a material interest in the Framework Agreement will abstain from voting on the resolution to approve the Framework Agreement at the relevant time, as the transaction under the Fund Entrustment Agreement is principal- guaranteed in nature, accordingly the finance staff of Sany Heavy Equipment believed that the entering into of the Fund Entrustment Agreement was similar in nature to fixed deposits which do not constitute “transactions” under Chapter 14 of the Listing Rules. As a result of such belief, the finance staff of Sany Heavy Equipment did not seek internal or external legal advice or promptly report the entering into of the Fund Entrustment Agreement to the Company, which eventually caused the Company to fail to comply with the reporting, announcement and Shareholders’ approval requirements for major transactions under Chapter 14 of the Listing RulesEGM.